When looking at the article about the threats made by Aspiravi to tear down windmills when they get more than 10 years old (see previous post) I found on the same page two links to other stories titled Green power becomes unaffordable and Extremely low electricity prices because of wind and sun. It looks a bit comical and contradictory having links to those two articles on the same page. How can solar and wind be at the same time be unaffordable as well as giving extremely low electricity prices? Which one of the two is correct?
After digging a bit deeper I came to the conclusion that both are correct. The articles are about two different things.
- Green power becomes unaffordable
This is about the yearly cost of subsidies for wind, solar and biomass energy in Flanders (about half the area of Belgium). This cost is rising and this year it will rise above 1 billion euro. I was really surprised by this number. I knew it was high, but I did not realize it was THIS high. This is for an energy source of about 7% of the electricity production. We only are with 6.4 million people in Flanders, so if one wants to mathematically spread this evenly over our population this would mean about €150 for every man, woman and child … only on subsidies. This only to get the extent clear (I know children don’t really pay individually and there is also the industry and businesses that pay for it).
In 2012 there was 626 million of subsidies for solar panels … for a share that for convenience mostly is rounded to zero! Biomass gets €223 million, wind on land another 69 million. Offshore wind is not taking into account because they get federal support (but which will be paid by the Belgian taxpayer anyhow).
That is a lot of money for an energy source that is, ahem, free and supposedly beats coal, gas and nuclear energy.
The cost will still grow until at least 2020. Until last year there was an oversubsidising. The subsidy rules changed drastically last year, but existing contracts will keep on being oversubsidized until the end of their contract.
- Low prices because of wind and sun
The low prices are because of a bigger energy production by wind and solar on Sunday October 27, 2013. So it is basically a snapshot in time when wind and solar were optimal. But they don’t talk about the rest of the year when this for the largest part isn’t optimal. Wind and Solar are intermittent energy sources. They depend on the sun and the wind. No problem with that on that Sunday. Also not much of consumption on that day, so there was more energy production and not so much consumption, which means a surplus of energy. In the energy market this low demand and a high supply means lower prices.
Although it is true that there was a low price on the energy market because of the extra production, this will not affect the electricity bill of the ordinary consumers. They don’t buy the electricity on the price of the moment, but have a contract with a fixed price with their supplier. Basically, the target group of this newspaper has no connection with this lower price, only the big industry benefits from it. Therefor the title is misleading for this target group.
Also nothing could be done with this surplus energy. Our neighbor countries had the same problem, so exporting it was not an option. In this case it seemed not a big issue, but when the surplus is more extreme it could overload the grid with a potential brownout or blackout as a result.
Basically it is a not so good property of wind and solar was brought as a nice thing. Ignoring that fitting an intermittent energy source in a continuously working system is not for the faint hearted and can disrupt the grid completely. We have been there several times before (see for example too much green power).
Concluding: wind and solar can be dirt cheap and unaffordable at the same time.
Unaffordable because of sky high subsidies given to green energy (especially solar) and this billion is not the end of it. Even more to come in the near future.
Dirt cheap because of the intermittent nature they can produce a lot of energy at certain times which make it cheap on the energy market (only at that moment). But this doesn’t mean that the ordinary consumer will gain from it.