
In the US, it's cheaper to build and operate wind farms than buy fossil fuels - anandaverma18
https://arstechnica.com/science/2019/08/wind-power-prices-now-lower-than-the-cost-of-natural-gas/
======
idoubtit
> In the US, it's cheaper to build and operate wind farms than buy fossil
> fuels.

This is currently HN's title, and the article's subtitle. But the article
makes no statement to prove this assertion.

It does not even make sense to me. I guess the author meant that for firms
that have high energy needs. But it is stupid to imply that the electricity
provided by fossil fuel can always be replaced by wind turbines. If the need
is for regular bursts, high volumes on short periods, wind won't be of much
use.

Moreover, the article is a digest of a report that is less emphatic. The US
Department of Energy expects a slow-down of wind capacity after 2020, once the
tax credit will end. For a project that would start now, there would be no tax
credit, so it would be hard to reach a competitive price.

~~~
Retric
You’re close to the situation at hand. Wind does not match the demand curve,
but it’s _vastly_ cheaper than natural gas.

This means wasting a significant percentage of wind generation is still a net
savings. Currently curtailment aka excessive wind production is relatively low
percentage of generation, but based on current prices it’s cheaper to build
more wind just to offset more natural gas use.

You end up needing to pay for the generators either way. So, currently the
breakpoint ends up being when 1/2 of all wind power is wasted resulting in 2 x
10$/MWh your at breakeven with fuel costing $20/MW-hr.

However, current natural gas prices are market driven. Reduced demand will
lower prices, but that’s still a net win for power companies. In the coming
years as new wind power comes online the economic situation will change, but
for now massive investments look like a very good deal.

~~~
heyflyguy
vastly cheaper than natural gas?

Natural gas has negative pricing right now due to being stranded in
production!

~~~
Retric
I am currently seeing: 2.20 USD/MMBtu for Aug 16 2019 which is greater than
zero. [http://www.infomine.com/investment/metal-prices/natural-
gas/...](http://www.infomine.com/investment/metal-prices/natural-gas/1-year/)

The article translated whatever the price was when they wrote it into 20$/MWh.
I assume it’s still reasonably accurate as it was published yesterday and the
price has been fairly consistent recently.

~~~
heyflyguy
Good to use data. What I am referring to are the pre-wellhead prices which
can't even be measured because the gas producers will not _pay_ to put it on
the pipeline. Ergo the negative pricing.

~~~
delinka
"negative pricing" sounds like they'll pay _me_ to use it, if only I would
just use it. I can see that's not your intent, but I suspect that's the first
reading of many.

~~~
whatshisface
They literally would pay you to use it, if you would go to the trouble of
taking it off their hands. There are legal restrictions on those gas flares
now, so they can't just burn all of it like they used to.

------
Brakenshire
It’s going to be interesting as wind and solar gets consistently cheaper than
even the marginal fuel cost of gas. i.e. even if you already own a gas plant,
it would be cheaper to build a wind farm just to be able to reduce fuel use.
We’re approaching a world where the primary energy drivers will be renewable,
and fossil fuels will be competing with energy storage.

~~~
achow
> _..fossil fuels will be competing with energy storage_

Since fossil fuels are energy dense, it would be interesting if we come back
full circle by producing hydrocarbon fuels for energy storage by recycling
atmospheric carbon using cheap renewable electrical energy.

Edit to clarify, there are more energy dense substance than hydrocarbons (ex.
Hydrogen), but hydrocarbons would have advantage of having ability of being
useful in existing infra (IC engines, gas pumps, storage containers, etc.)

~~~
adrianN
Unless you want to cover really significant amounts of land in solar panels
wind farms, you shouldn't use synfuels unless absolutely necessary. Not only
do you use half of the energy just making the fuel, all applications where you
burn it have terrible efficiency compared to electric alternatives. ICEs have
an efficiency of maybe 30%, heat pumps easily produce two or three Joules of
heat for every joule of electricity.

~~~
thinkcontext
We already devote really significant amounts of land to energy in the form of
corn for ethanol, ~10% of total US cropland. Corn only captures 1% of incoming
light vs ~20% for PV solar, so it would be a huge gain in land efficiency to
replace corn ethanol with an energy equivalent amount of PV.

~~~
jacobolus
This is a result of corn subsidies, not a naturally economically efficient
land use.

~~~
mapt
Specifically, corn subsidies and the Iowa Caucus.

------
8bitsrule
The sad part is that it would have been cheaper for decades ... had someone
been willing to make that move. Big windmills had been built by the 1880s
(e.g. Charles Brush), and a century later the technology was well within
reach. But 'alternative energy' (as it was known) couldn't get heard about
(Carter tried).

~~~
im3w1l
How important are batteries to windmill success? Good batteries are very
recent.

~~~
oliwarner
Geographic batteries (potential energy sinks, eg storing water in a reservoir
at a higher altitude and releasing it through turbines to a lower one) have
operated for decades.

Dinorwig in Wales operates a 9GWh capacity at 1.7GW. Far from insignificant,
much cheaper (and safer) than the equivalent lithium cells.

[https://youtu.be/6Jx_bJgIFhI](https://youtu.be/6Jx_bJgIFhI)

To be clear, Dinorwig is _not_ only powered by green methods, but it could.

~~~
mschuster91
> Far from insignificant, much cheaper (and safer) than the equivalent lithium
> cells.

Pumped storage "batteries" have one disadvantage though, they are nowhere near
as reactive as solid-state batteries can be - think of milliseconds instead of
dozens of seconds.

~~~
oliwarner
You can chain in a relatively small lithium battery to smooth load.

------
diafygi
> Better grid management also helped the economics of wind. At times, strong
> winds can cause wind farms to produce an excess of power relative to demand,
> causing a farm's output to be reduced.

I think this part is particularly relevant to the HN community. As we reach
higher and higher penetration of renewables on the grid, we will need to dead
with the intermittency more and more. A common phrase I hear at utility
conferences nowadays is, "We used to forecast load and deploy generation, but
in the future, we will be forecasting generation and deploying load."

I think this area will be the next wave of innovation that needs to happen in
the energy transition, and it's going to be primarily software driven. Smart
load management will be key to avoiding huge storage and infrastructure
capital expenses. For example, in Hawaii, they are starting to explore new
utility business models that don't just rely on a fixed rate of return for
capital spent.

Anyway, as we cross 50%+ penetration of renewables, I think software is going
to take a leading roll in connecting and managing everything so we can have
the flexibility we need on the grid.

~~~
formercoder
What does “don't just rely on a fixed rate of return for capital spent” mean
precisely?

~~~
diafygi
In exchange for providing an essential service to everyone, utilities are
typically given monopoly protections and regulated by their local jurisdiction
(e.g. a public utility commission). This means the business model for
privately owned utilities must be pre-approved.

Up until now, the typical pre-approved business model was where the utility
would go to the commission and say they needed to build something (e.g. a new
substation), the commission would approve it, and the utility could then
charge their customers for the cost to build plus a fixed rate of return (e.g.
$300m + 7%).

However, that business model breaks down when you start moving away from a
centralized grid, since customers are able to start using alternatives to your
infrastructure (e.g. solar on their roof and batteries in their garage).

So, commissions are trying to figure out new business models that will ensure
the continued operation of utilities while still imcentivizing reduction of
carbon emissions. One way being explored in Hawaii is called "performance-
based ratemaking" but is still being figured out. However, the interesting
going (to my company, at least) is the increasing need for software and
communication in these new business models. For performance-based returns to
happen, you need to measure performance, which means software.

Anyway, it's a very interesting time in the utility sector, and I think
there's a lot of opportunity for the tech sector to come in and have a big
part of it. Unfortunately, most tech entrepreneurs are allergic to regulated
sectors.

------
roel_v
Does anyone know at what point fossil fuels will start to feel the shrinking
economies of scale, ie when fossil will get more expensive because there is
less scale? Does this point exist at all, or doesn't it matter any more
because we have the tech developed already anyway?

~~~
thinkcontext
Norway will be the canary in the coal mine for the fossil fuel industry. With
half of new car sales electric they'll be the first place where we can observe
at what penetration gas stations start to close.

------
gandalfian
I favour just declaring a national holiday whenever it's both dark and still.
Throttle everything back, everyone take a rest. It might really improve
societies standard of living.

~~~
rayiner
As a kid in Bangladesh, where random power outages were a regular occurrence,
I’d never have imagined people in the west actually seriously proposing to
adopt what was for us a poverty-driven behavior.

~~~
pfdietz
I remember when AT&T made arguments against splitting up Ma Bell because the
new system wouldn't have "five 9s" reliability.

It turns out the optimal reliability/cost tradeoff, from the consumers' points
of view, isn't necessarily what the entrenched incumbent producers want to
provide.

~~~
rayiner
Note that telephone service today sucks compared to the gold-plated Ma Bell
network. It’s nearly unusable, especially VoIP.

------
oaiey
I like to read news like this. Shows positive progress in the world.

There should be a minimum percentage of positive news every day :)

~~~
benj111
This submission currently on the front page would suggest that wouldn't work
out as planned.

[https://news.ycombinator.com/item?id=20730324](https://news.ycombinator.com/item?id=20730324)

------
bryanlarsen
If this trend continues, perhaps we don't need the storage breakthrough that
we've been assuming we'd need.

There are a quite a few industrial processes which have energy as their
primary cost. Aluminum is one example.

If a region needs 10GW average, one could build a wind installation with 10GW
average output and a lot of storage to match supply and load.

Or one could build a 100GW installation, a little bit of storage and an
aluminum smelter. During normal operation the smelter gets 90GW and the region
gets 10GW. During peak operation the smelter gets a lot more than 90GW. During
a trough the region gets 10GW and the smelter gets nothing. You'd still need
storage or a peaker to handle periods when there is absolutely no wind or low
wind and high demand, but those needs would be much less.

I don't know if aluminum can operate with such fluctuating power, but there
are processes that can. At worst, bitcoin.

~~~
xoa
> _I don 't know if aluminum can operate with such fluctuating power_

In case you're curious, this came up a few years ago in a discussion and at
least at the time I checked a typical Hall-Héroult electrolysis smelter could
last without power for something like 4 hours or so, maybe 5, and some
countries did in fact use them as part of their electrical grid control. But
they can't have power interrupted indefinitely because the pots are
permanently damaged and require replacement or extremely expensive repair if
the liquid metal completely solidifies in them. The molten state represents a
significant thermal mass hence the hours of lag time, but it can't just be
remelted from total cool down either.

I do wonder if an economical design could be made that specifically tried to
enhance this aspect as a core design feature, some sort of vacuum insulation
or the like perhaps to reduce passive thermal loss and bring outage time more
towards 12 hours? But even at 4 apparently it can be good enough for
moderation of some intermittent demand (which in turn means extremely cheap
electricity). Using something like this as "energy storage" that is also
directly economically productive seems worth pursuing though. Another
possibility would be to investigate direct carbon extraction from the air,
either for storage or to turn into fully synthetic net-neutral hydrocarbons.
If the electricity is essentially free anyway, even enormously consuming
processes like that could make sense.

~~~
Gibbon1
Aluminum is one thing. Another is electrowinning iron which unlike Hall-
Héroult is a wet electrolytic process. One assume you could stop the process
indefinitely. And iron takes a lot less energy than aluminum. Capital cost are
probably really low as well.

At residential rates the cost is a few hundred a ton for energy. So not
economic vs carbon reduction. But if you could get the energy for nearly free.
It would be.

------
rmetzler
Something I miss from reading those articles: what are you doing when the wind
doesn't blow for a few days or even weeks? And in case of solar farms, the sun
doesn't shine (like at night)? How do you store the energy efficiently?

If you think batteries, how long does the battery of your smartphone or laptop
works? 5 years max? Maybe 10? Is this the timespan you plan your reliable
infrastructure for? And how "green" is it to build these batteries?

If you think pumped-storage hydroelectricity, how much places do you have
where you can have two pools (one uphill, one downhill) to store the water?
How much energy can store in there?

The thing is, you'll build all these solar and wind farms and then still build
and run the fossil plants, because you aren't able to store the energy to make
it reliable enough.

~~~
stanmancan
Between wind, solar, and storage, you would be hard pressed to “run out” of
energy in a well designed system. Stating otherwise is nonsense.

~~~
rmetzler
I don't understand how to design such a system.

The sun doesn't shine in a lot of places for less than 12 hours a day. In the
winter, a lot of places have much less sunlight.

When men needed wind to sail the sea, there were situations when the wind
didn't blow for weeks.

How much energy would your "well designed system" need to store and what is
possible?

Yes, I read about that Tesla battery in Australia. Then I calculated how many
Tesla walls a city like Munich would need to be able to survive for 1 week. I
don't believe it is possible.

People rely on electric power. If the grid goes down in places like Germany
like once every month, there would be uproar.

~~~
hef19898
You don't need to survive for a week but max. a day or so. Anything longer and
electricity will come from somewhere else in the grid, either a different
region or a back-up conventional plant being gas or nuclear or even coal.

At least in Germany even large industrial energy consumers are for years now
an active part of grid balancing. Either they can stop and resume production
as needed or continuous processes serve a similar function as your base power
plants. The silver bullet to get them there was money, it became financially
viable and profitable and all of a sudden businesses jumped at the
opportunity.

Disclaimer: Worked at two of these power hungry places and know of of another
one making quite some money on the electricity exchanges by just timing his
production runs properly.

------
gridlockd
> "In the US, it's cheaper to build and operate wind farms than buy fossil
> fuels."

That's not the headline. The headline is _cheaper than natural gas_ , which is
a relatively expensive fossil fuel, but also historically cheap at the moment.

However, natural gas is great at providing power _on-demand_ and at small
scale, which is exactly what you need to even out the highly volatile output
of wind energy. Natural gas and wind energy are complements, not competitors.

------
cjbenedikt
Just to add to the confusion: [https://www.ucsusa.org/clean-energy/coal-and-
other-fossil-fu...](https://www.ucsusa.org/clean-energy/coal-and-other-fossil-
fuels/environmental-impacts-of-natural-gas) While I know it isn't something
averybidy is concerned about. But maybe should?

------
spenrose
HN discussion yesterday comparing wind and nuclear:
[https://news.ycombinator.com/item?id=20724676](https://news.ycombinator.com/item?id=20724676)

------
AtlasBarfed
Assuming trump loses, these expiring credits need to be extended or at least
eetooled. By the next Congress and administration

------
anandaverma18
and same goes for solar farm as well.

------
ThomPete
Its not cheaper once you factor in the need for backup energy and thats the
only fair way of calculating the cost of wind and solar for that matter.

~~~
diafygi
Then why is wind + storage winning bids as the cheapest resource?

[https://www.utilitydive.com/news/xcel-solicitation-
returns-i...](https://www.utilitydive.com/news/xcel-solicitation-returns-
incredible-renewable-energy-storage-bids/514287/)

~~~
ThomPete
It's not. Factor in the need for backup energy and remove subsidies and it
will loose.

------
littlestymaar
Caveat, it works well if you don't mind not having power for several days in a
row.

~~~
Brakenshire
This is talking about using wind in conjunction with gas.

~~~
littlestymaar
This was a sarcastic comment about the title of the submission, because gas is
a fossil fuel…

------
DrNohj
Wind power requires subsidies to work. Meaning shafting the end consumer.
Period [https://www.forbes.com/sites/chuckdevore/2019/02/21/texas-
ta...](https://www.forbes.com/sites/chuckdevore/2019/02/21/texas-taxpayers-
pay-the-french-government-for-wind-power-and-then-pay-the-grid-to-take-
it/#3cb2f63046e9)

~~~
ben_w
This article explicitly mentions the cost without subsidies:

”””The levelized cost of electricity, which eliminates the impact of
incentives and subsidies on the final prices, places wind below $40/MW-hr in
2018. The cheapest form of natural gas generation was roughly $10 more per
MegaWatt-hour. Note that, as recently as 2015, the US' Energy Information
Agency was predicting that wind's levelized cost in 2020 would be $74/MW-
hr.”””

------
heyflyguy
So much wrong with this line of thinking. Natural gas prices in west Texas are
actually negative right now because there is no infrastructure to move it to
refining and distribution hubs.

Wind power experienced a renaissance due to subsidized infrastructure
construction.

Natural gas is clean burning and a byproduct in most cases of crude drilling.
If we were really wanting clean cheap energy we'd build bigger and better
pipelines to move the gas to the major distribution networks. Instead
lawmakers want to install more of these structures that ruin the view, obscure
the horizon, and take massive amounts of harmful chemicals to produce.

