by kublikhan » Thu 16 Jun 2022, 15:47:51
$this->bbcode_second_pass_quote('C8', 'B')ut is that b/c of govt. subsidies? If so, then it won't scale up well worldwide
It varies by region. Globally renewables are cheaper than fossil fuels without subsidies because of falling renewable costs and rising fossil fuel costs. But this is not the case in every single country. For example, Southeast Asia has long had substantial fossil fuel subsidies that undermined a large scale renewable transition there. Then there is the intermittency issue that becomes more and more problematic as renewables increase their grid penetration. This problem is not properly captured in current cost estimations so they must be taken with a grain of salt.
$this->bbcode_second_pass_quote('', '*') It is now cheaper to switch from coal to clean energy, compared to switching from coal to gas. That’s thanks to the falling cost of renewables and battery storage, coupled with the rising volatility of gas prices.
Record-high coal and gas prices have been pushing prices higher for consumers and businesses alike, but there could be a silver lining. It is now cheaper to switch from coal to clean energy, compared to switching from coal to gas — thanks to the falling cost of renewables and battery storage, coupled with the rising volatility of gas prices. “The carbon price needed to incentivize the switch from coal generation to renewable energy for storage has dipped to a negative price. So essentially that means that you can actually switch to renewables at a cost saving.”
The report claims that the global average cost of switching from coal to renewable energy has plunged by 99% since 2010, compared to switching from coal to gas. The company measured the carbon price level it takes to motivate 25 countries to switch fuels, from existing coal to renewables such as new onshore wind or solar photovoltaics plus battery.
The coal-to-clean carbon price varies across regions, and the picture isn’t “as rosy” in Asia compared to the European Union due to differences in market structure and fuel price mechanisms. Southeast Asian countries like Indonesia, Philippines and Vietnam still face a relatively high cost of transitioning directly to renewables from coal. According to Tao, these countries have traditionally lagged in the renewable energy transition due to fossil fuel subsidies for domestic producers of coal and gas.
“Banks are increasingly finding it risky to lend to these fossil fuel assets in the concern that they will become stranded assets in the near term down the road due to the global energy transition. That’s going to mean that there’s going to be limited upstream supply that’s going to come online, and we are going to see increasingly tight gas markets and fossil fuel markets in general that will be prone to demand and supply shocks.”