It’s like purchasing a solar powered car which only runs when the sun is shining and is pretty much useless in the UK winter, so you have to buy a second (reliable fossil fuel powered) car to run your life in a normal way, go to school, work, shops etc.
So you have two cars, two insurance, two depreciation, tyres, servicing, cleaning etc.
You shouldn’t have bothered with the solar car in the first place. If you can’t rely on it, it has no utility, it’s effectively worthless.
We are running our electricity grid with two entirely separate sources of generation, one unreliable (renewables) and virtually 100% backup for those renewables in terms of gas. No wonder electricity prices have gone up.
Another one I used in the past is that of a cafe manager who has staff who are reliable and loyal, then the owner pushes his kids and their friends in to get "work experience" - they don't need to be paid quite as much, but every so often after a night out they just don't show up - so the manager has to beg the reliable ones to come in at short notice, and eventually has to pay them a retainer to be on stand by.
Lots of good comments. Interestingly, in Ottawa we pay for water, and its not as cheap as I expected, our family of four in a decent sized house uses $100/month.
Yeah I am sure, getting a water bill when we moved from Montreal to Kanata was new to me. We have a meter with telemetry to the city, direct. We pay about $1200 a year and I know our consumption is average, I am not sure what it is, I can interrogate the city data system, but they don't include the units!
I don't think this analogy works at all. We don't have two separate energy infrastructures, one for renewables and one for other generation. Both use the exact same wires and are delivered to your house through the same meter. Yes, renewables can't produce electricity reliably and that can impose additional costs on the system depending on the amount of renewables and the configuration of the system. Your cafe manager analogy is much better.
And renewables generate electricity at a very low variable cost, which can reduce the total cost of operating a system if that use does not cause the premature retirement of more reliable conventional generation. Under your cafe manager analogy, it is cheaper to employ relatives and friends so long as the regular employees agree to come in on occasion at short notice, even if they want more money (depending on how much more they want). The real problem is when your regular employees get fed up with having to come in on short notice and quit, forcing you to hire someone else at much higher wages.
The concept of purchasing cheap energy and operating your more expensive generator only when the cheap energy is not available has been employed in the electric industry for many decades. That's what renewables can do.
Thanks Matt - it certainly wasn't meant to be a perfect analogy - but it just struck me that many people don't think about home plumbing, and that it is not silly to think that we would use clean water for taps and non-potable for other uses. The trade-off of cost is marginal compared to the capex. In the case of integrating renewables into the grid, I disagree on two points. Firstly, the distributed nature of wind and solar generation does require a different system - we don't use "the exact same wires" (nationally) - and a lot of the cost in the UK at the moment is about restructruing the grid to account for this (lots of wind generation in Scotland, demand in the SE and bottlenecks between). Secondly, the question of whether "cheap" renewabels can lower the total system cost. Because of the need to be able to manage 3 sigma events, back up is always required. Paying for two systems will always be more expensive than one. I'd be grateful if you can point me at a modern industrial society that has increased the use of renewables and lowered the cost of electricity to users. As I mentioned in the article, there are countries that have accidents of geography that have lots of geothermal and/or hydro and ccheap electricity - but these are not relevant to places like Germany or the UK - so examples of wind and solar replacing existing thermal plants and being cheaper?
Interesting reply, thanks. I realized that my real problem with your analogy is that there is no such thing as green electricity and dirty electricity. The clean and dirty labels instead apply to the generators that produce the electricity. And while the infrastructure changes for different types of generation, that mostly does not depend on the type of generation. The same wire issues you describe also would existg if, instead of wind generation in Scotland, several new nuclear reactors were constructed in Scotland to serve the demand in the SE.
As for costs, I entirely agree with you that, with today's technology, it is much more expensive to produce a certain amount of capacity with renewables and storage rather than thermal units. Germany's decision to do this while also shuttering its nuclear fleet is sheer madness. But those are not the costs I was referring to when I said that renwables can generate electricity at a lower cost than thermal units. Instead I was talking about the variable cost of producing electriticy.
Think of it this way. If you are thinking about buying a second car, you of course will consider the cost of purchasing the car plus other fixed costs like insurance, taxes, etc. But once you have purchased your car and are deciding which one to take on a long distance trip, the cost of your two cars is irrelevant. It will be cheaper to take the one with better gas mileage and, all things being equal, that is the one you will take.
Similarly, if you are trying to decide which of two generators to use to generate electricity, you will use the one with the lower variable costs, all things being equal. That is the way electric systems are operated in real time, with the units producing electricity at the lowest variable cost used first. And this is the way that renewables are less expensive than thermal units, because they do not consume fuel to generate electricity and have variable costs close to zero. And fuel costs are not negligible. In the US, the total cost of fuel used for generation of electricity in 2023 was about $23 trillion. I don't know how to access similar data for the UK where I think you live, but I do know that natural gas is considerably more expensive in the UK than it is here.
There are limits on how much of these fuel costs can be saved by generating electricity with renewables instead of thermal units because there are limits on how much renewable capacity can be added before system reliability is threatened. But that is what I was talking about. FYI, I have written a few posts on my substack, Explaining the Grid, about these issues, If you are interested, here is a link: mestes.substack.com.
Thanks. BTW I realized I made an error in decimal placement in my calculation of fuel costs for generation in the US. The actual number in more like $68 trillion.
I like your analogy.
I describe it slightly differently.
It’s like purchasing a solar powered car which only runs when the sun is shining and is pretty much useless in the UK winter, so you have to buy a second (reliable fossil fuel powered) car to run your life in a normal way, go to school, work, shops etc.
So you have two cars, two insurance, two depreciation, tyres, servicing, cleaning etc.
You shouldn’t have bothered with the solar car in the first place. If you can’t rely on it, it has no utility, it’s effectively worthless.
We are running our electricity grid with two entirely separate sources of generation, one unreliable (renewables) and virtually 100% backup for those renewables in terms of gas. No wonder electricity prices have gone up.
Another one I used in the past is that of a cafe manager who has staff who are reliable and loyal, then the owner pushes his kids and their friends in to get "work experience" - they don't need to be paid quite as much, but every so often after a night out they just don't show up - so the manager has to beg the reliable ones to come in at short notice, and eventually has to pay them a retainer to be on stand by.
Great analogy. When you dress it up in a way that people can relate to, they see the folly. Almost nobody in the media asks these questions however…
Lots of good comments. Interestingly, in Ottawa we pay for water, and its not as cheap as I expected, our family of four in a decent sized house uses $100/month.
I guess we pay for it also via direct taxation rather than a water bill… no free lunch!
Yeah I am sure, getting a water bill when we moved from Montreal to Kanata was new to me. We have a meter with telemetry to the city, direct. We pay about $1200 a year and I know our consumption is average, I am not sure what it is, I can interrogate the city data system, but they don't include the units!
I don't think this analogy works at all. We don't have two separate energy infrastructures, one for renewables and one for other generation. Both use the exact same wires and are delivered to your house through the same meter. Yes, renewables can't produce electricity reliably and that can impose additional costs on the system depending on the amount of renewables and the configuration of the system. Your cafe manager analogy is much better.
And renewables generate electricity at a very low variable cost, which can reduce the total cost of operating a system if that use does not cause the premature retirement of more reliable conventional generation. Under your cafe manager analogy, it is cheaper to employ relatives and friends so long as the regular employees agree to come in on occasion at short notice, even if they want more money (depending on how much more they want). The real problem is when your regular employees get fed up with having to come in on short notice and quit, forcing you to hire someone else at much higher wages.
The concept of purchasing cheap energy and operating your more expensive generator only when the cheap energy is not available has been employed in the electric industry for many decades. That's what renewables can do.
Thanks Matt - it certainly wasn't meant to be a perfect analogy - but it just struck me that many people don't think about home plumbing, and that it is not silly to think that we would use clean water for taps and non-potable for other uses. The trade-off of cost is marginal compared to the capex. In the case of integrating renewables into the grid, I disagree on two points. Firstly, the distributed nature of wind and solar generation does require a different system - we don't use "the exact same wires" (nationally) - and a lot of the cost in the UK at the moment is about restructruing the grid to account for this (lots of wind generation in Scotland, demand in the SE and bottlenecks between). Secondly, the question of whether "cheap" renewabels can lower the total system cost. Because of the need to be able to manage 3 sigma events, back up is always required. Paying for two systems will always be more expensive than one. I'd be grateful if you can point me at a modern industrial society that has increased the use of renewables and lowered the cost of electricity to users. As I mentioned in the article, there are countries that have accidents of geography that have lots of geothermal and/or hydro and ccheap electricity - but these are not relevant to places like Germany or the UK - so examples of wind and solar replacing existing thermal plants and being cheaper?
Interesting reply, thanks. I realized that my real problem with your analogy is that there is no such thing as green electricity and dirty electricity. The clean and dirty labels instead apply to the generators that produce the electricity. And while the infrastructure changes for different types of generation, that mostly does not depend on the type of generation. The same wire issues you describe also would existg if, instead of wind generation in Scotland, several new nuclear reactors were constructed in Scotland to serve the demand in the SE.
As for costs, I entirely agree with you that, with today's technology, it is much more expensive to produce a certain amount of capacity with renewables and storage rather than thermal units. Germany's decision to do this while also shuttering its nuclear fleet is sheer madness. But those are not the costs I was referring to when I said that renwables can generate electricity at a lower cost than thermal units. Instead I was talking about the variable cost of producing electriticy.
Think of it this way. If you are thinking about buying a second car, you of course will consider the cost of purchasing the car plus other fixed costs like insurance, taxes, etc. But once you have purchased your car and are deciding which one to take on a long distance trip, the cost of your two cars is irrelevant. It will be cheaper to take the one with better gas mileage and, all things being equal, that is the one you will take.
Similarly, if you are trying to decide which of two generators to use to generate electricity, you will use the one with the lower variable costs, all things being equal. That is the way electric systems are operated in real time, with the units producing electricity at the lowest variable cost used first. And this is the way that renewables are less expensive than thermal units, because they do not consume fuel to generate electricity and have variable costs close to zero. And fuel costs are not negligible. In the US, the total cost of fuel used for generation of electricity in 2023 was about $23 trillion. I don't know how to access similar data for the UK where I think you live, but I do know that natural gas is considerably more expensive in the UK than it is here.
There are limits on how much of these fuel costs can be saved by generating electricity with renewables instead of thermal units because there are limits on how much renewable capacity can be added before system reliability is threatened. But that is what I was talking about. FYI, I have written a few posts on my substack, Explaining the Grid, about these issues, If you are interested, here is a link: mestes.substack.com.
Great comments Matt, and thanks for linking your substack - I've subscribed !
Thanks. BTW I realized I made an error in decimal placement in my calculation of fuel costs for generation in the US. The actual number in more like $68 trillion.