Notable:
"And these prices do not represent just a few one-off, left field offers. All told, there were more than 100 bids combining wind and solar, or both, with battery storage, and 20 gigawatts of such capacity.
The “median” means that half the bids were cheaper than the median price cited above."
I realize most readers of HN know what a median is, but the fact that this was not just the lowest bid in each group was worth highlighting.
This appears to have come before the recent 30% Solar panel import tariff. Can anybody else confirm that the bids that include solar would not be possible today?
These bids are for projects that go into service by 2023.
It's extremely unlikely that this tariff will last even two years. Similarly enacted section 201 tariffs get squashed the next time the WTO considers them. If, by some implausible and disastrous series of events we are taken into a trade war and the current tariffs stand, they decrease by 5% each year, to 10%.
So its safe to say that they will have as little impact on the bids 5 years from now as they do on increasing US manufacturing.
Also worth noting that even a 30% tariff on panels just makes them cost about what they did in 2015. It does nothing to the other significant costs of solar tech - inverters, supporting structures, land, installation labor.
At worst it will delay solar adoption by a couple of years.
I am no economist, but the tariff could end up accelerating the decrease in prices as the foreign producers have a steeper gradient to overcome. If they are indeed dumping at below cost, they could also respond by lowering prices by the tariff amount.
If the tariff is applied to foreign assembled units, they could onshore the final assembly. Or start bundling non-tariffed systems so they are still cheaper in the end.
I could envision a cargo container with the panels and strandbeest-accordian support structure, plant on end in the ground and it would automatically unfurl (high school bleachers but with an alternating Z pattern) as the container moves along. Even with a lower pack density, deployment in hours would save the overall system cost.
The proposed tariff allows for only 2.5GW of cell imports that are assembled into full modules in the US. Manufacturers are already lining up to see who is going to be allowed to get into that small quota.
Given that it's going to take a bare minimum of 18 months and probably several years to build a new cell manufacturing facility, and the length of life of such a facility, somebody looking at building new capacity would get a year or two of tariff protection, and then have to survive another few decades without it.
And prices continue to drop precipitously. Given the tariff phase out, the market will probably return to 2017 equivalent in short order, and then continue to get cheaper in spite of the tariffs.
Yes. These bids are usually for a "power purchase agreement", which is a bid to deliver X amount of power over some period of time. All of the maintenance, fuel, wear/replacement costs are included with the bid since it's just a raw end power delivery contract.
The interesting thing that's new about this is that these bids are for "dispatchable" renewables. Up until this point, most renewables were not dispatchable since they didn't have cost competitive storage. This means that renewables now can bid for much higher levels of grid penetration in capacity markets.
Note that coal is also not a dispatchable power source. Mostly they're base load plants [1], best case they're load following power plants [2]. No way for them to respond quickly to demand changes like natural gas, hydroelectric, or batteries can.
One last reference, these are in contrast to peaker power plants [3] which can quickly start up and shut down as needed to cover high demand periods. Gas, hydro, and grid tied batteries fit into this category.
At least in the US, the grid runs as a market where as demand rises, plants bid their price to meet the demand. The energy price that they charge for these peaks is substantially higher than the base load price because you have to build enough power plants to meet the highest demand (else you get brownouts) and the peaker plants are only going to run for a small fraction of the time. The price they charge for that small time still has to cover all of the infrastructure cost.
Since the peak energy price is so high, that makes a good opportunity for batteries to jump in. Tesla's recent Australian battery project is a great showcase of that.
The “median” means that half the bids were cheaper than the median price cited above."
I realize most readers of HN know what a median is, but the fact that this was not just the lowest bid in each group was worth highlighting.