Bjorn Lomborg’s excellent piece in yesterday’s Australian highlights the flawed economics of solar and wind power.
It also complements a recent Bloomberg article about how the increasing footprint of wind and solar in energy markets is eating into the economics of existing fossil fuel plants. It’s a great read – not so much for its apparent endorsement of crony capitalism as for its clear illustration of how government subsidized and mandated renewable energy policies are actively seeking to make commercial fossil fuel power stations uneconomic, so that renewables can compete.
While this article doesn’t talk directly about Australia, the recently announced closure of Alinta Energy’s South Australian operations is an example of this in practice and its intended outcome here.
Fossil fuel power stations are the backbone of world electricity networks. As referenced in the article, coal, oil and gas are typically able to generate electricity 24 hours a day, 7 days a week, (and for 40-50 years according to the International Energy Agency (IEA) needing only occasional down time for maintenance. This usually equates to about 80-90% of their capacity.
Solar power stations however typically deliver 20% of their capacity (night, clouds and winter are a problem) and wind 33% (no wind or too much wind is a problem). According to the IEA, wind and solar power stations also typically have half the plant life of fossil fuel plants. What is also never included in the comparative economic cost of wind and solar is that a fossil plant usually has to be on standby somewhere to generate power in calm or non-sunny conditions.
If fossil fuel power stations were being displaced by better fuels, technology or processes, it would be creative destruction and a normal part of capitalism. However this is using the financial power of government to cripple commercial products and replace them with less productive alternatives, which we will all pay for in the long run.