Solar and Wind exponential cost declines

[LongHaul]

 

What is really fascinating is how much solar and wind have declined in cost in the last 10 years, etc.   I find it really amazing actually - and if one projects out 5-15 years - solar and wind will likely be much cheaper than even natural gas.  Essentially the solution to the carbon/fossil fuel problem was found by the ingenuity of humans.  Betting against extreme innovators is not a good bet.  This will obviously take decades but combine cheap electricity with cheap battery storage and electric transport and carbon emissions should really come down substantially.      

 

Some info I liked:

 

Pg 8 (vii) Utility Scale Solar Cost 

https://www.nrel.gov/docs/fy21osti/77324.pdf

 

Ramez Naam

https://rameznaam.com/2020/05/14/solars-future-is-insanely-cheap-2020/

https://www.youtube.com/watch?v=Yl0VtxAbt40

Figure 2: Global LCOE benchmarks – PV, wind and batteries

https://www.renewableenergyworld.com/wind-power/bnef-says-solar-and-wind-are-now-cheapest-sources-of-new-energy-generation-for-majority-of-planet/#gref

 

[JRM]

At my company we were told cost parity would occur around 2023 (this was in the 2015 time period), and I think we are probably a year or two early (surprisingly).  However, unless there are continued technological breakthroughs the costs will be dependent on material and labor costs and difficult to reduce meaningfully.  There are location\climate factors that impact the cost benefit calculation, so its not quite as easy as x vs y, unfortunately.  Also, many locations that are strong advocates for anti-nuclear, coal, and natural gas also suffer from NIMBY-ism when it comes to solar farms or wind farms.  

 

I still find it strange that we export LNG to China and import solar panels, but whatever.

[SharperDingaan]

Almost never talked about is the performance of solar panels as it gets hotter (rapid decline). The metric should be cost/Kw versus cost/solar panel - 'cause to double production from an EXISTING facility, it is often merely a matter of periodically misting the panels - to both cool them down and remove the dust.

 

Never mentioned in the wind bucket are the 'tornado's in a silo' which are continuous power generation and more reliable. Contained in a concrete silo, garbage burned at the bottom, hot water produced at the top, and power generation in the middle. Hotter the burn, the better it works, and they can be put in the city itself (dressed up to look like office buldings). Paid for the garbage, paid for the incineration, paid for the hot water, quick to ramp power generation up/down.

 

SD

 

[JRM]

Perhaps by 2040 we'll have this instead of all the mis-allocation of scarce metals and minerals:

 

https://oilprice.com/Latest-Energy-News/World-News/UK-Looks-To-Support-Rollout-Of-Nuclear-Fusion-Energy.html

[JRM]

8 hours ago, SharperDingaan said:

Never mentioned in the wind bucket are the 'tornado's in a silo' which are continuous power generation and more reliable. Contained in a concrete silo, garbage burned at the bottom, hot water produced at the top, and power generation in the middle. Hotter the burn, the better it works, and they can be put in the city itself (dressed up to look like office buldings). Paid for the garbage, paid for the incineration, paid for the hot water, quick to ramp power generation up/down.

 

That sounds like a giant redneck burn barrel.  What are the carbon emissions related to methane capture in a landfill?

[perulv]

It seems like we are at the tipping point where the cheapest energy is renewable, and the best cars are electric (and most economically sensible, depending on the subsidies and taxes. But we are getting there, at least in Europe). But given that premise, what should we invest in? One thing is avoiding companies that have no earnings and nothing more going for them than "being a green/ESG stock".

 

I bought shares in First Solar and Solar Edge in 2015/2016. Both (had) made money , had little debt, and seemed to me to qualify as a value investment. And marked leaders in a growing segment. They have had a very different development, both in earnings and in stock-price. Solar Edge has been growing their earnings steadily, and the stock-price went from 15 to 300. Which probably makes it highly over-priced now, but even just looking at the earnings these companies took a different path. 

 

My theory is that First Solar is suffering from what is shown in the graphs in the first post here, making less and less money per solar panel. But Solar Edge seems to have avoided this somehow, being more in a "selling shovels in a gold rush" situation, selling a small (?) but essential component in the solar-setup.

 

Is it possible to identify companies with the "Solar-Edge characteristic", companies that participate in a growing market/megatrend with some ability to keep their profit-margin? Or is it just luck, and will be evened out by competition, and I should know this if I had studied economics?

[SharperDingaan]

Much more sophisticated burn barrel ... 

and partly a version of this https://www.wish.com/product/5ddcca1ed691bc1d59935c1f?from_ad=goog_shopping&_display_country_code=CA&_force_currency_code=CAD&pid=googleadwords_int&c={campaignId}&ad_cid=5ddcca1ed691bc1d59935c1f&ad_cc=CA&ad_lang=EN&ad_curr=CAD&ad_price=29.00&campaign_id=6493229759&exclude_install=true&gclid=EAIaIQobChMIlILgosGh8QIVx8DICh3CXgeyEAQYAiABEgLHQPD_BwE&hide_login_modal=true&share=web

 

Thermal difference creates an electric current. Within the tower, constantly blow air over the flame (in the same direction), and you will also get a rotating rising air mass  (tornado) that can drive turbines. Recirculate some of the hot exhaust air over the flame, and you both wind speed acceleration, a much cleaner burn, and high volumes of super hot dry air for downstream use. Build out of concrete, inject the hot exhaust air deep underground, minimal net CO2 production.

 

Very, very usefull for SAGD oil extraction. Burn garbage vs gas for heat, inject super hot air + steam down hole, generate enough electricity to power your complex, lower your carbon footprint, and get paid for safe garbage incineration. Concrete silos are cheap to build, the tech is off the shelf, and 24/7 reliable production.

 

SD

 

 

[lnofeisone]

The cost declines are real and it's great to see. Two things to keep in mind when it comes to these curves:

1) ITC - this one is easy. NREL shows a good chart showing the impact of ITC.

2) For homeowners, PV is a phenomenal proposition as they are getting tax-free energy and tax-free SREC sales. I live in DC where local utility net-meters (i.e., they charge me $0.12 for fuel + delivery for electricity and they must pay me the same when I pump into the grid) so I get substantial boost from tax savings. Similarly, because of the DC-specific market, the SRECs I generate go for $400/MW so I get that tax-free too.

 

Without the ITC and tax subsidies my PV calculations are nowhere near what NREL or any other curves.

[no_free_lunch]

On 6/18/2021 at 8:27 AM, perulv said:

It seems like we are at the tipping point where the cheapest energy is renewable, and the best cars are electric (and most economically sensible, depending on the subsidies and taxes. But we are getting there, at least in Europe). But given that premise, what should we invest in? One thing is avoiding companies that have no earnings and nothing more going for them than "being a green/ESG stock".

 

I bought shares in First Solar and Solar Edge in 2015/2016. Both (had) made money , had little debt, and seemed to me to qualify as a value investment. And marked leaders in a growing segment. They have had a very different development, both in earnings and in stock-price. Solar Edge has been growing their earnings steadily, and the stock-price went from 15 to 300. Which probably makes it highly over-priced now, but even just looking at the earnings these companies took a different path. 

 

My theory is that First Solar is suffering from what is shown in the graphs in the first post here, making less and less money per solar panel. But Solar Edge seems to have avoided this somehow, being more in a "selling shovels in a gold rush" situation, selling a small (?) but essential component in the solar-setup.

 

Is it possible to identify companies with the "Solar-Edge characteristic", companies that participate in a growing market/megatrend with some ability to keep their profit-margin? Or is it just luck, and will be evened out by competition, and I should know this if I had studied economics?

 

I don't know but if we invert maybe the economies that don't benefit from high fossil fuel prices, Europe and Asia, will do better as that headwind is levelled.