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Posts tagged ‘feed-in-tarif’

Are renewables so expensive? Research about renewable electricity supply system costs

definanzas.com.wp-content.uploads.energias-renovablesThis very recent paper focuses in costs studies of a fully renewable electricity supply system based in part of EEUU states grid. It is very interesting and deserves a more profound reading but the main conclusion is that for 2030 (less than 20 years ahead) it is not only possible to supply 100% electricity in this part of the USA by renewables, it would even be profitable!.

The good news do not end there, another study says that new wind and solar are competitive in the long-term with new natural gas in Texas. And another study, based on Australian data shows wind is cheaper than fossil fuels in Australia, even without carbon tax.

OK, maybe some of those data have been analysed with a positive bias towards renewables (in the first one for example), and it is true that renewables always compete to already paid systems of energy production, so it is a difficult-to-win battle; (it is interesting the debate in England about the feed-in-tarif or similar to new nuclear, newborns have a hard time even with Uranium). Nevertheless, the good news are that renewables are reducing costs clearly, and have been for a long time, while fossil fuels are more fluctuating and nobody is really confident they will not increase in the near future, so the maths continue to be confusing but they are changing.

Of course, all this without considering the enormous costs of climate change effects, sooner or later they will be evident in the balance and then the doubts will simply disappear, the problem is that  by then it may be too late for some and will be more expensive for sure.

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Feed-in-Tarif stopped in Spain: some more fuel from against renewables.

Spain is in crisis, in a deep crisis, and one of the consequences is that feed-in-tarif for renewables (and other energy sources too) was stopped. But this was not an isolated maneuver, there were previous advises from the energy sector and it is justified after that even from leftist newspapers. The last justification is based on this article and even uncritically accepted in blogosphere.The idea is simple: energy in Spain is very expensive, this is terrible in crisis time and the guilty are the renewables.

The problem is that nothing is so simple. Beginning with the news. The first news says that Spain is the most expensive country in the EU regarding electricity prices. The source is more modest, it says that it is the third for households and expensive for industries too. If we go to the real source, eurostat, the ranking is effectively second for households and seventh for industries. Ok, we are improving. However, those data do not consider taxes, this source adds the tax effect, and with that Spain goes to the 6th in the household ranking and 12th in the industrial. The main conclusion is that the data are not so definitive and the differences low.

But going even further I dared to make a simple correlation graph with eurostat data. It is shown below and draws electricity costs for households and % of renewables in the generation. The result is really striking!!! The trend line is negative, the more renewables , the lower costs. Of course this is not true, first because the trend in the figure is completely unreliable, there is no trend, and second because the costs of electricity a quite complex with many subtle concepts deserving more posts.

Anyway, I think that renewables have been and still are in the first view more costly than some other sources, but in the long-term they are really profitable for the whole society. And, as a wise man told me today at work stopping all the promising renewable industry in Spain, in the verge of profitability seems a really short-term sort-view idea.

 

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Feed-in-Tarif Stopped in Spain

Image from Wikipedia

Spanish new conservative government has decided to stop feed-in-tarif for new renewable installations. The installed ones will continue to receive their feed-in-tarif. Although media coverage has not been too extensive the people around renewable energy are very disappointed.

The responsible minister, Soria, said that it is not definitive but this is impossible to say now. It is very important to contextualize this decision and to understand the possible causes:

  • Spanish economy is in a very bad time, and the government is desperately looking for any cost reduction. However the have not touch for the moment carbon subsidies
  • Spanish energy production will be higher than demand in a shrinking economy (it was last years with a better situation). So new installations would be redundant economically if others are not shut down, for example the ancient nuclear in Garoña, very similar to Fukushima.
  • There is a very-difficult-to-understand thing in the Spanish electric market called tarif-deficit. In two words, recognized costs to the companies are lower than allowed energy sale prices. And this creates a debt that want to stop (this issue deserves many post itself).
  • The powerful power companies were asking for something like this.
  • Feed-in-tarif has been very successful, with a lot of wind and solar power installed the last years.

But, at the same time the story of feed-in-tarif in Spain and its relationship with politics is neither simple nor free of contradictions. In a very simplistic and undeserved explanation: The former conservative government was the one to put it in practice and many local conservative governments applied it very effusively. During the last 8 years of progressive government the feed-in-tarif suffered some noticeable cuts and a lot of uncertainty, sometimes criticised heavily by conservative local governments. And the fathers have finally kill the baby.

Certainly, feed-in-tarif has helped to save a lot of tons of CO2, develop many new economy companies and jobs (now at severe risk) and for sure help to reduce production costs for windmills, solar panels,… So, it has been a story of success, but at the same time there are many lessons to learn as how to link it with the rest of traditional energy system cost, howto explain it, howto include the big energy players to get their compromise, howto invest in R&D enough of the income, howto plan the amounts of tarif, of installed power and tarif evolution and how to discuss the conditions with the renewable energy sector and howto offer enough stability not depending on the government in charge.

And the future? Uncertain, with some hopes in international markets for some companies, with hope in the not so far grid parity for some others whereas unemployment or great activity reduction will be inevitable for many others. And still with too much CO2 in the air and a changing climate menace in the way.

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