The section of the article that says "Now comes the bad news" actually sounds like a good news.
More pressure from banks, insurances and legislation to limit the development and usage of coal to produce electricity? I can understand there's going to be job losses, and that's never good, but for the benefit of the rest of the world it's a pretty good news. Finally a change in attitude towards carbon intensive energy production.
> But, more and more, base-load coal plants have been squeezed out of the market as ever more renewable energy – particularly solar power – flooded the system.
And so the coal power plants needed more money to stay afloat, but:
> But Delta, in a letter written to the body that makes the rules in the market, said none of the 15 banks it had met had been willing to provide it the necessary coverage because of environmental concerns.
And so
> "The coal-fired generation is going to go out of business in Australia over the next 10 years," he said.
The good news here, and the big picture, is that coal is increasingly less financially sustainable.
It's being squeezed out of the market because of cheaper alternatives. Banks don't want to give loans because they see those loans as risky. Coal companies might go out of business and default on their loans. The risk of that is relatively high with coal. Which is why banks and investors are looking elsewhere for more lucrative or safer investments. It's hard to argue with that.
And the circumstances that make coal increasingly financially unsustainable are only going to get worse. Cheaper solar, wind, and battery means even coal plants that may still be profitable now aren't going to stay profitable much longer.
That seems to be true around the world. Even China is projected to reach peak coal in the next few years; after which it is projected to shrink there as well. World peak coal usage was last decade already. A lot of countries are pretty far done getting rid of it completely. Australia is late to that party.
> Banks don't want to give loans because they see those loans as risky
Banks may be easily not lending because the industry is not "green" and gives bad name to their brand. And since the industry may be getting smaller it's less of an issue for them. However it doesn't mean we may not need coal, since we still need peak energy production.
The big picture which everyone is missing is that we need 'peaking' gas plants to cover the shortfalls over the next 10-20 years until grid storage catches up. There's no commercial incentive for these to be built, so they'd be at the expense of the taxpayer, and they would be sending GHG into the atmosphere. The 'bad news' is if this capacity isn't built, renewable output will drop enough for blackouts to become common, potentially causing more coal/gas/nuclear to be built, and sending back the progress of renewables by a few years.
It may surprise you, but all energy production is or was heavily subsidized at one point or the other in virtually all states. I'm sure I don't have to spell out where nuclear power would be today if not for the billions of subsidies.
Just visit the Wikipedia page for Hinkley Point [1], read the section on economics, and weep. That's your money at work. And it has been the same for coal, oil, gas, and now solar and wind energy, all over Europe and the US.
On a level playing field without subsidies, where we can build solar and wind power generators at scale like today, they would pummel all the other energy sources on costs alone (just think of all the raw material you don't need to burn to make your turbines turn).
On a level playing field without subsidies, we'd be in underdevelopped shitholes. The idea that a modern economy can grow without some agency being brought in somehow is utopia.
> where we can build solar and wind power generators at scale
How do you build those, without the decades of subsidies to ramp up production and decrease costs?
> they would pummel all the other energy sources on costs alone
They would collapse the existing grid. There's a reason why Germany is investing €450bn in its grid to support continued growth [1]. Batteries could make up for it, but scaling batteries won't happen without subsidies.
I see where you are coming from and I could have been clearer. So let me put things straight.
I'm not arguing against subsidies, I'm arguing against ignoring the subsidies we provided and provide for older forms of energy generation while lamenting that we subsidize new forms.
On a level playing field where both are equally subsidized, solar and wind would still outcompete coal. Their point seems to be applicable to the degree to which harmful power generation is subsidized relative to regular power generation, not just the subsidies themselves.
If your accounting model is "build some production, plug it to the grid and let someone else worry about the details", sure, you're right. But if you factor in grid development costs, the picture is different.
For instance, you lften hear about Germany importing lots of energy, and usually there's always someone to say "But they export a lot, too". Well, these imports & exports require lines to happen, and these lines aren't cheap. The EU mandates that countries should develop interconnexion to facilitate the market, but this ruling mostly helps intermittent energy sources.
Another example in France, where the south-western region has a lot of solar, and not many industrial consumers. To make things worse, that region is close to an interconnexion with Spain, which has a lot of solar production. In order to move all that power to places where it can be used, new lines have to be built.
These costs are not factored in if you only price new production, but they're also significant.
This is also not factored into France utilizing ~10 GW of neighboring flexible fossil fueled flexibility to not have to turn down their nuclear reactors as much during the night.
The French grid would be even more uneconomical without the interconnections.
Shipping got containerized without a significant amount[1] of tax breaks or handouts for that purpose. Rail standards were developed without significant preferential treatment as were the early electrical standards. Without subsidies of specific tech we'd likely see more balkanization and partial standardization of the grid. Perhaps the grid would have remained less reliable longer. In all likelihood things would "mostly" be the same on a medium-long timeline.
Remember, prior to the 1960s and 1970s expansions of the federal bureaucracy the government didn't really get as proactively involved in this sort of thing as they are now. Though there were several cases in which they lit a pile of money on fire and kept feeding it until they got the results they wanted (I can't think of an example of this that wasn't directed at defense tech though).
I think it would likely be a lateral move, or close enough to lateral that we can't really say with a high degree of certainty whether it would have turned out better or worse. I think it's very possible that without tax breaks we'd have gotten more solar earlier but with a slower adoption curve after that if none of this stuff was subsidized.
[1] I know of none but I don't want some nit picker to find some case where someone got a $2k research grant in 1961 and act like that invalidates the point here.
There's lots of demand when the payback is very quick and easy. Batteries being built right now make tons of money on grid stabilization services. But once those easy gains have been taken, making the less certain investment scaling up the batteries to handle that cold snap that happens a few days a year etc will not happen in the free market.
In a free market, where everyone is free to ignore consequences, coal would be the obvious solution - but if the climate change costs are priced in - then batteries do become attractive.
Lightweight ultrapower batteries are high tech. A simple batterie for the grid, that can be big, is not and quite simple to build.
We started to price in the CO2 externalities - and demand is skyrocketing.
Subsidies are more of a geopolitical/welfare thing in this context.
> Why not? There is a worldwide and increasing demand for them.
That demand is created by the variations in prices created by renewables, which are themselves subsidized. In a world with coal, gas, nuclear or hydro, there simply is not enough demand to develop batteries.
So, in a world with no subsidies, how do you pay for batteries, not good ones but bad ones for decades until the industry ramps up? It simply doesn't happen.
It's not an indictment either. Subsidies are simply the way heavy industrial investments work, and in the electricity sector investments are so massive that without subsidy, barely anything happens.
CFDs are a "collar trade". They pay the difference between the market price and a "strike price". If the market price is above the strike price, the CFD is a refund. So the CFDs have been returning money to the taxpayer lately.
Australia's coal industry isn't even all that big. McDonalds employs more people in Australia than the entire coal industry does.
It employs around 40,000 people in total, most of those are in mining, and that is mostly an export industry. Very few are involved in coal power generation.
Mostly replacing old inefficient plants with modern plants with better load following capacity. Essentially, ensuring the energy security while banking on renewables.
The latest news is that China is likely to enter structural decline on their emissions since the renewable buildout exceeds the electrical demand growth.
yeah, they seem to be planning on using them like gas peaker plants (because they have little gas). For backup and filling in load gaps. If their renewables keep growing like they are today, the coal peakers will barely ever be used. They wouldn't make sense economically in the west, but they dont have to in china - the single state apparatus can socialize the cost without consequences. A dictatorship fears disruption, so they build them as a backup.
Capacity and usage are two different things. China are using their new coal stations as redundancy (and because of a weird disconnect between national and local governance which means each local government is incentivized to make this redundancy)
Atleast in india, we have good subsidies on residential solar, and need to bring as much capacity (blue,green,black, whatever) online for a country whose electricity demand is growing rapidly (most villages now have access to electricity)
I assume that even if you're extremely good at it, it's half a day of work. So I'm not sure about the economics of it once you include labour, rent, machine expenses etc...
>So I'm not sure about the economics of it once you include labour, rent, machine expenses etc...
Especially not at western levels of wages and commerical space rental costs.
Such services might be economically feasible in places like Taiwan or China where these skills and equipment is abundant at every street corner, but if you have to pay someone in the west where these skills are specialized with high hourly wages, to do all that for your laptop, the cost could be higher than if you would flip your existing machine on the used market and add another couple of hundred bucks on top to buy a new laptop with the exact specs you need.
Honestly, I think the biggest barrier in the West is just simply access to components and consumables, especially since places like the US are so geographically spaced out. It's much cheaper to do just-in-time inventory and walk across the neighborhood to buy (say) DRAM, BGA balls, and BGA stencils, than (in the West) to have to worry about ordering and stocking them yourself.
(Trust me, I'd be learning how to do these repairs if the costs weren't almost doubled by shipping alone in the US.)
Focusing on reducing emissions is important, but it's only the first step of the plan. If we want to be anywhere near the 2°C scenario, starting from 2050, we need to be sequestering carbon directly from the atmosphere.
So I'm okay with people spending a little effort on step 2 of the plan now, especially given that we don't have yet proven technology to realise it.
The actual electricity production and consumption of the UK is declining [0]
The UK is also rapidly deploying renewables, and adding more and more interconnection to mainland Europe.
So as the capacity goes up the consumption goes down (for now). It's completely fair to decommission all coal plants.
I assume the energy consumption will go up at some point, as there's only so much you can save with energy efficiency, an delocalisation, and as we shift primary energy usage onto electricity (what's currently being imported in the form of gas and petrol).
But hopefully by this point the continued growth of production means will cover the increase
I had understood that one of the reasons for the reduction in consumption was related to having one of the highest priced electricity in the world. With more being deployed it should bring prices down too to allow increased consumption. Hopefully.
It really does make things uneconomic here, and painful for the poorer folks in society.
Maybe it's because i'm distorted by my profession but I like articles that describe facts in chronological order.
Here's it's as if there was a montage for an action movie with flashbacks and scenes and you're supposed to put the story back together
reply