Spanish solar CSP farmSpanish CSP (concentrated solar power) farm using molten salt as the transfer medium (these are not my photos)

Spanish solar CSP farm 3

Spanish solar CSP farm 4


Spanish solar CSP farm aerial

Spanish solar CSP farm diagram


LONDON — Are renewable energy technologies really less competitive than non-renewables? And, given the recent uptake of renewables, is there still a business case for other forms of power generation?

New onshore and offshore wind and large solar photovoltaic (PV) plants still require policy support to bridge the gap between generation costs and market prices of electricity. But this may change in the near future, finds a new report from the International Energy Agency’s Renewable Energy Technology Deployment group. Technology and market dynamics are driving down the costs of renewable power generation while increasing the costs involved in non-renewable generation, the report found. Before long, it said, best-in-class onshore wind and large-scale PV plants should be able to offer attractive business cases to investors in regions with a high proportion of thermal generation without resorting to incentives.

The report, which focused on Canada, France, Germany, Japan, Norway, Sweden and Spain, noted that policies and regulations can significantly affect the business cases of both renewable and non-renewable power sources. Although the high cost of generation for new renewable energy technologies means policy support is currently needed, the report noted that generation costs for renewable power are falling, approaching the costs for gas- and coal-fired plants — especially if the hidden subsidies that thermal generation plants may receive are taken out of the equation.  

Onshore wind generation is already competitive in the report’s focus countries. Large-scale PV’s rate of cost reduction is higher, though, due to technology breakthroughs, the emergence of lower-cost suppliers and component oversupply.

At the same time, the report stated, the cost of gas- and coal-fired plants is increasing because they are being used less — largely due to policy support for renewables, construction delays, higher financing rates, and the increasing cost of fuel in some European countries and Japan. Most crucial is the higher capital costs involved in some new-build thermal plants due to emission reduction systems, the report argued. “The future competitiveness of thermal generation is going to be positively or negatively influenced by the shape and provisions of future policies for control of emissions,” it said.

One unsurprising conclusion is that there is no unique cost of renewable or non-renewable power generation. Cost ranges associated with any power generation technology are relatively large and highly dependent on the regulatory and market contexts, the report said. It pointed to best-in-class plants — those with high utilisation rates, low capital costs, and low rates of financing — rather than to any particular technology as having generation costs up to 50 percent lower than average plants. It singled out the case of large-scale PV, where comparing plants built several years apart and based on different technologies showed big differences in cost. Policies in some regions also significantly affect generation costs by offering a variety of reward mechanisms, such as R&D grants, assumption by the TSO of the cost of connecting to the grid, tax breaks and reduction of administrative burdens. 

Both new renewable and new non-renewable power plants find it difficult to compete in regions where the market prices of electricity remain low, said the report. This is driven in part by excess capacity, and also by an installed base that includes depreciated plants.

In general, the costs of both new renewable power plants and new non-renewable generation are higher than the market price of electricity, because of which the report stressed the necessity of maintaining current incentives in order to provide business cases that will interest investors. However, it noted that when incentives do not exist or are not appropriately defined, “the business case of new generation does not hold.”


About kingstonrenewableenergy

Kingston Renewable Energy (KRE), Hydropower products, wind energy, renewable energy products, We manufacture, supply and install. Richard Kingston KRE is the home of Fluxy, a beautiful Irish made wind turbine designed to last several life-times, and a host of other Hydro products branded under KRE hydro. KRE HYDRO- KRE are currently installing a range of Hydro products including high head low flow systems and low head high flow. These are pelton and Turgo types for high head, crossflow Banki turbines for medium to low head and Powerpal for Ultra low head. We also plan to introduce a custom timber/steel/aluminium waterwheel service for those of you who are lucky enough to have disused mills on their land and who would like to restore them to their former glory (and make a healthy profit in the process). All hydro installations are custom designed. This is necessary because everybody's land and water resource is different and to benefit from the highest efficiency and lowest payback time the hydro system must be customized according to what flow, penstock length required, and what head is available. Hydropower is currently by far the most cost effective renewable resource in Ireland under the existing Feed in tariff structure and export rate of 9c per unit (wholesale rate for bigger systems is €0.087/kWh). It is surprising how much energy is to be harvested from even a small stream and we are offering 4 to 7 year payback times on average and high profits thereafter. KRE FLUXY- It has been a long journey from when I originally set out to buy a wind turbine to power my own house in 2007 and discovered that the existing machines on offer in the market failed to meet my desires as a customer; that is, to possess an aesthetically designed machine with a low embodied carbon footprint and a long design lifespan. This led to my resolve to make this a possibility as I knew there were other like minded folks out there who had the same needs when buying into renewable energy. I have always been a keen environmental activist and had a strong understanding of engineering and material sciences which enabled me to see failings in the high tech electronically controlled machines commonly available today. These weaknesses come from over complicating the wind system with servo motors, sensors, gear trains, relays and logic circuits; fine for large utility scale turbines which are constantly monitored and have continual maintenance on site but not for a small wind turbine in the back yard to run the house. I could see that wind turbines needed to be brought back to a less complicated yet modern design that would withstand time and the turbulent and violent winds we see in Ireland and fulfilling the old engineers adage of ‘KISS’ or ‘keep it simple stupid’. With less component parts, there are less things to go wrong. My vision was to create a machine that offered the benefits of being an economic investment, a positive for the environment and also to be a design piece that our customers are proud to have flying in their grounds. And so, I present you with the fully mechanical Kingston Renewable Energy Fluxy wind turbine. Please feel free to contact us at any time if you have any questions or think you may have a good wind site. We will happily do a site assessment come rain or shine. Stay posted for the monthly blogs from our inspirational team here at KRE. Check out our latest installments in our crusade to get higher feed-in tariffs in Ireland so that we can compete with the rest of Europe in the micro-generation stakes. The Hydro section of our website will be updated shortly to show our newest installations and showcase our products. Yours sincerely, Richard Kingston

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