World's Cheapest Energy Source Will Be Renewables Within Three Years (qz.com)

Morgan Stanley researchers predict renewable energy will become the world's cheapest form of power within three years. An anonymous reader quotes Qz: Renewable energy is simply becoming the cheapest option, fast... "We project that by 2020, renewables will be the cheapest form of new-power generation across the globe," with the exception of a few countries in Southeast Asia, the Morgan Stanley analysts said in a report published Thursday... Globally, the price of solar panels has fallen 50% between 2016 and 2017, they write. And in countries with favorable wind conditions, the costs associated with wind power "can be as low as one-half to one-third that of coal- or natural gas-fired power plants." Innovations in wind-turbine design are allowing for ever-longer wind blades; that boost in efficiency will also increase power output from the wind sector, according to Morgan Stanley.
The researchers also predict America will reach its Paris Climate Accord targets in 2020 -- five years early -- simply because renewables are already becoming the cheapest option for power.

Comments

Re:Free market FTW.

[Anonymous Coward]

No, technology, science, and engineering FTW. "free market" parasites show up after the fact and guilt us into giving THEM credit.

Re:Bye bye, Middle East

[dbIII]

Funny thing is that was Nixon's plan way back, and then Carter's after the oil shock.
A huge amount of foreign oil money got donated to both parties to stop that sort of energy independence so now we spend a far larger amount giving free military support to the Saudis.

One small problem

[Synon]

What about the cost of energy storage? Producing it is not enough if you can't use it at-will.

tax deducations

[OrangeTide]

The oil industry becomes less profitable as the tax breaks they have had in the past began to close. All things being equal, expect renewables to get cheaper and fossil fuels to get more expensive just on the tax benefits.

(tax deductions are not a subsidy in the strictest sense of the word)

Re:tax deducations

[bferrell]

The thing to understand, is that while you CALL them oil companies, THEY think of themselves as energy companies and have been morphing themselves as rapidly as they can... Inventing and building renewables farms.

Re:tax deducations

[meglon]

And the oil industry has been getting subsidized for over 100 years. I'd rather subsidize something that doesn't cause pollution, illness and death.

Re:tax deducations

[nealric]

I am a tax attorney for an oil company. It's a lot more complicated than that. Overall, the oil industry actually bears one of the highest effective global tax rates- much higher than tech companies. Many countries where we do business have extremely high taxes specifically targeted at the oil industry. We don't have a ton of intellectual property that can be easily shifted between jurisdictions with the stroke of a pen so there are fewer aggressive planning opportunities.

The biggest "tax break" in the U.S. for the upstream oil industry (exploration and production of oil as opposed to transport and refining) is the expensing of intangible drilling costs ("IDC"). These costs would lead to a deduction in almost any income tax regime, but allowing such costs to be expensed accelerates the deduction. The industry would argue that expensing better matches the underlying economics of the transaction than having to capitalize the costs (deducting a portion over time). Many companies are actually capitalizing IDC voluntarily because they've been operating at a loss for the past few years. You don't pay any tax at all if you don't make any money.

Long story short, tax breaks are not what is driving profitability in the oil industry. It's commodity prices first, second, and third that drive profitability. Right now, they are in the tank. I'd also note that renewable sources also have considerable tax benefits- arguably more aggressive than those available for the oil industry, it's unlikely that tax makes a big difference on a comparative basis.

Re:Probably not

[ChrisMaple]

The Middle East, Israel excepted, is a "resourceless dump of poverty" because of the people and their self-destructive beliefs. Israel, like Hong Kong, is essentially resourceless and has become relatively rich through intelligent human action.

Re: Bye bye, Middle East

[Gavagai80]

No, actually it's the abundance of oil that makes the middle east a mess. Just as the abundance of natural resources have fueled so many wars in Africa. It's called the paradox of plenty.

Re:Bye bye, Middle East

[jabuzz]

Except that is bulshit

https://www.eia.gov/tools/faqs...

In the USA in 2016, 48% for motor gasoline aka what goes in cars, 20% was distillate fuel aka heating oil and diesel fuel, and 8% was jet fuel. That makes at least 74% being burnt for fuel.

Only about 5% of oil is used to produce petrochemicals. Stop using oil for transportation and domestic production more than covers usage in both North America and Europe (even excluding all the ex USSR states). At that point the middle east is largely fucked.

Free market destroys them. They blame EPA.

[140Mandak262Jamuna]

The researchers also predict America will reach its Paris Climate Accord targets in 2020 -- five years early -- simply because renewables are already becoming the cheapest option for power.

And the coal miners will be blaming EPA, regulation and government conspiracy for their loss of jobs. Their "drill baby drill" chants crashed the natural gas prices and made coal unviable economically. People who tell this stark truth unvarnished are pilloried by them.

In fact EPA is what has kept most coal jobs alive till now. All the old coal powered power stations were grand-fathered from most EPA regulations. So even when natural gas becomes cheaper than coal, the new plants have to comply with the latest standards. So the cost of gas plants were high and gas has to become significantly cheaper to make retiring old coal plants viable economically. This was the reason why the old coal plants continued to survive, at least maintaining some level of demand for coal.

Cost of new generation of renewables is within striking distance now, but gas prices can keep falling and stretch the transition period.

Re:Bye bye, Middle East

[140Mandak262Jamuna]

It will not. All the renewables are attacking fixed point energy consumption, homes, businesses, offices and factories. They do nothing to transportation sector.

In transportation sector, (kerosene for jets, furnace oil for ships, diesel for trucks and most trains, gasoline for cars) there is no alternative in three or even 10 years. Electric trains are the only thing in transportation sector that could benefit by renewables.

Iceland has geothermal electricity so cheap that 15% of the world aluminum is made there. (Aluminum can not be separated from the ore, bauxite, by melting, you need electrolysis, no electricity no aluminum). Despite that cheap electricity, there is smog and pollution in Reykjavik, because of all the cars and trucks.