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Whenever oil prices drop, everyone always wonders how it will affect wind and solar power.
It follows from the traditional assumption that renewables like these are only competitive when oil and natural gas prices are high.
After all, the early stages of wind and solar power came with a hefty front-loaded price tag, requiring massive government subsidies to both producers and end users to get off the ground.
Some states even introduced legal measures that required that utilities buy a certain percentage of their energy needs only from renewables.
All of this only added to the wider perception that renewables couldn't truly contend, especially if oil and natural gas prices fell.
But those days are now rapidly coming to an end…
The Key to All the Controversy Is Grid Parity
The larger truth is that the wind and solar landscape has changed significantly. Most of the subsidies have been phased out, and mandatory renewable energy purchases are now facing significant political opposition.
As utilities have argued for years, both the subsidies and the obligated energy buys have translated into higher costs to the consumer.
There is also the common problem built into renewable electricity production: Since the power cannot be stored, it's not always available when needed.
After all, the sun doesn't always shine and the wind can suddenly go calm. That has required energy producers to duplicate sourcing in a legal no man's land, adding to the effective expense.
Of course, environmentalists have long maintained that even some additional cost is worth the major advantage gained on the pollution side. Needless to say, solar and wind remain far less damaging to the environment, even though wind towers create dangerous impediments for birds, especially migrating fowl.
Yet it is ultimately price that will put an end to all of these controversies.
And in this case there's always one overriding consideration, often looked upon as the Holy Grail for renewables.
It's something called grid parity.
Grid parity refers to different sources of energy being able to deliver electricity at the same cost. Subsidies aside, everything from the family budget to broader economic recoveries hinges on the reliability and expense of electricity.
What's new and not that well-known is that solar power has reached grid parity in several regions of the West and Southwest, while wind is reaching that point in Texas – where more power is generated from wind than anywhere else in the country.
So if grid parity is practically here, how is the situation different now that oil prices are lower?
About the Author
Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.
Kent-
saw article about the necessary use of graphene in the production of lithium ion batteries. It was said that in one lithium battery, it requires 10x's the amount of graphene as lithium. I'm guessing they're speaking in terms of weight. Now graphene can be used in solar panel production (more efficient). You are now identifying it's use in filter medium.
Long story short, what is the best way to "play" the possible "phenomenon" of graphene?
I found out, with a little help from Google, the Countries that have deposits. Canada has supposedly some of the best formations of the most meterologically desirable deposits.
Got any specific plays you can share?
thanks..
Dr.Z
Windmills cause more environmental damage per unit of energy produced than Canada's oilsands oil.
Windmills kill more birds and bats than any other man made objects, and some of those birds are endangered species.
Windmills inject electricity into the ground which causes earthworms to leave the area. Without earthworms, soil becomes hard, crops won't grow, and rain water cannot filter down to replenish aquifers.
Windmills cause health problems in humans who live within 2 miles of windmills. And farm animals have health problems too such as milk cows producing less milk and milk that is chemically altered.
Windmills will continue to cause damage for their entire life-span of over 100 years.
Canada's oilsands operations remove oily substances from polluted soil that has been polluted for millions of years, then put the clean soil back complete with local plants, animals, and insects. (Similar soil remediation operations are called "Superfund sites" in the USA).
As more land is cleaned and turned back into pristine wilderness, the surrounding waterways become cleaner because there is less oil in the soil to leach out.
Oilsands operations will end in 40 or 50 years when most of the oil has been removed from the soil. At that point, the entire oil sands areas will be pristine wilderness.
But windmills will continue killing birds and bats, causing health problems in humans and animals, and destroying farmland for decades after oilsands operations have ended.
Will the "Alberta oil sands " be still competitive price wise to the newer shale and fracking?