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The Economist Explains Why Renewable Energy Is Expensive

published: 2014-01-06 13:27

As most people are convinced that carbon emission counts as a serious factor for climate change, ways to deal with it is a fiercer argument we face now. The Economist has a report for “The Economist Explains” column, discusses a considerable question when countries try to generate more power from renewable sources: the cost.

Wind turbines, solar farms, hydroelectric and geothermal plants are so-called “green power.” Countries with larger amounts of energy generated from the green powers, such as Denmark and Germany, have to pay more to the energy in the rich world. Similarly, Britain’s price of wind electricity is twice higher than traditional sources while solar power is even more expensive. Why? The Economist’s report offers a point of view: “there are still too few companies making renewable kit.”

Although wind turbines have been used to generate electricity for almost 150 years, very large wind farms didn’t exist until late 1970s. “Utility-scale solar and other renewable generation is more recent still,” written in the report. Scale is always a crucial fact for an industry’s benefit in the long run and renewable energy is not an exception. “Supply chain bottlenecks have frustrated governments scrabbling to install new renewable capacity. And compared to traditional power stations renewable generators are cheap to run but costly to build, which makes them particularly vulnerable to changes in the cost of capital,” indicated by The Economist.

Aside from building, electricity grid is also an important part of the cost as it fundamentally imposes costs to build wider grids. In order to have the best efficiency, grids are better to be connected at places far from big cities which makes the works expensive to do. Moreover, green ways to generate electricity are usually intermittent – which means that the government (or the owner of the systems) still has to pay for maintenance even the systems aren’t working. Renewable ways may not run at full-blast so “energy from these stations also becomes more expensive.”

To conclude, the scale of these infrastructures, remoteness and their maintenance costs are main reasons of why renewable energy is so expensive according to The Economist’s report. Additionally, as we try to reduce carbon emissions by generating more power from renewable ways, the high cost may be a counter of a better world as “sharp rises in energy prices will drive manufacturers to set up in less ‘green’ countries, which might mean citizens end up consuming more carbon, through imports.” It is also worried that governments would build more coal plants as renewable energy stations’ back-ups. However, there are hopes – although traditional ways like nuclear power is still much cheaper than renewable ways, we can find better alternatives to replace the dirtiest resources. “Building more of them could provide a cheaper way for countries to cut emissions in the short term, and buy renewable operators time to bring their costs under control,” expressed in the report.

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