Slicing and re-slicing a limited pie
There’s a little-noticed and remarkable fact about American energy use that helps explain some of the bitter policy fights we’re seeing right now: The United States actually uses less electricity today than it did back in 2007, even as the population keeps growing.
There are a few reasons for that: American homes have gotten far more energy-efficient with the spread of LED light bulbs and energy-saving appliances. And industrial electricity use fell significantly after the financial crisis and hasn’t fully rebounded.
Why does this matter? If electricity consumption is flat, then all the different sources of energy we use — coal, natural gas, nuclear, solar, wind — are locked in zero-sum competition with one another. If a new natural gas plant or wind farm goes up, something else has to get pushed off the grid.
That’s exactly what we’ve seen. The rise of fracking has made natural gas incredibly cheap. Solar and wind, already subsidized by Congress, have seen their costs drop dramatically. As a result, coal and nuclear power are losing market share fast.
Same in Canada? Does it matter in B.C.?
“If a new natural gas plant or wind farm goes up, something else has to get pushed off the grid.”
One would assume that any utility would look for the lowest cost option in the long term. Wind and solar are dropping in cost while conventional sources are steady or in flux, but not trending lower over the long term. Cost overruns for recent hydro projects are well documented. Furthermore, climate change may present huge challenges for hydro in areas where snow packs are shrinking and precipitation is falling (pun not intended) or becoming more concentrated, both of which we are seeing in BC.
Intermittent solar and wind need a backstop, but we already have huge backstops in place. Battery and mechanical storage is also likely to get cheaper and more prevalent.
If either solar or wind become cheaper than hydro (and it’s getting close) it will ultimately be the taxpayers who lose out on the folly of Site C. Even if they are not actually cheaper they scale better and can be more localized which has economic advantages that will see increased adoption – pushing the need for Site C, if ever, into a more distant future.
There is also geothermal (constant and dependable) and tidal (predictable) that are in their infancy but offer huge potential. The jury is still out whether they can or will be cost competitive but are more likely to fall in cost than rise.
Yes, it matters in BC.
Complementary to Ron’s post is the recent record low cost of renewables registered in Canada.
The Alberta Renewable Energy Program – Round 1 reported last month that they delivered 600 MW of renewable electricity through wind turbines at a weighted average of $37 / MWh, which is the lowest renewable electricity price ever achieved in Canada. This was accomplished through a competitive market bidding process with no less than 12 proponents.
https://www.aeso.ca/market/renewable-electricity-program/rep-round-1-results/
Anyone who has travelled through the Crows Nest Pass and Pincher Creek knows that this quadrant of the province is so windy it can tear your hair out to the roots, and is an ideal region for wind power. With recent and continually evolving advances in wind generator technology that results in greater output in slower winds, and per turbine, the world (or at least the continent) is their oyster.
There is so much potential in wind and solar in the southern Prairies it makes you wonder why they are sticking to bitumen extraction and export at a time the world is about to embark on an internal combustion replacement project with clean electricity.
I look forward to the Canadian orange grown in southern Alberta greenhouses.