Thoreau was not the only Yankee to be shocked by the naked imperialism of the Mexican War. The Unitarian pastor and abolitionist Edmund Sears wrote the great hymn It came upon the midnight clear in December 1849. I wonâ€™t say it’s my favourite carol â€“ Mary MacDonald gets my vote for her gem-like Celtic lullaby â€“ because, being an inhibited Brit, I am embarrassed to shed tears in public.
Yet with the woes of sin and strife
The world hath suffered long;
Beneath the angel-strain have rolled
Two thousand years of wrong;
And man, at war with man, hears not
The love song which they bring:
O hush the noise, ye men of strife,
And hear the angels sing.
As a Unitarian, Sears was unconvinced by the paradoxical orthodox view that the redemption has strangely already happened, in the birth, life and legacy of Jesus of Nazareth, and in spite of his failure, martyrdom, and systematic betrayals by his followers up to our own time. Sears places his hope, as much as any Orthodox rabbi, in a remote eschatological future:
For now the days are hastening on,
By prophet bards foretold,
When with the ever-circling years
Comes round the age of gold;
When peace shall over all the earth
Its ancient splendors fling,
And the whole world give back the song
Which now the angels sing.
But what if we are looking for a more immediate hope today? Savagery continues in Iraq and Syria, the Arctic melts, and another Herod moves into the White House to prepare a larger rerun of the massacre of the innocents, to the complacent plaudits of conservative Pharisees?
I give you an unlikely gold-bearing Mage in the form of investment bankers Lazards. They have been surveying levelized US electricity generating costs for years, and have just published the 10th version. It’s a fat report, but this is the key chart. (Sorry for the poor resolution, go to the report link for a better image.)
The major takeaway is that in the USA the cheapest new coal generation is no cheaper than the most expensive wind and utility solar. (Footnote 1)
Add in the numerous risks for coal â€“ regulatory changes, reputational loss, construction delays, lower-than-expected capacity factors â€“ and it’s a no-brainer decision for utilities. No new standard coal plants are being started in the USA, and no more will be. The optimistic costs Lazards give for nuclear are based on a tiny dataset of reactors under construction, plus a fiddle on â€œunsubsidisedâ€, since they leave out decommissioning costs and the insurance break. They are irrelevant anyway as the utilities and their bankers have rightly decided that nuclear is too expensive and risky.
Wind and solar have won. I predicted it for solar four years ago. This did not require any brilliant insights on my part, just attention to historical trends on the costs. These trends show no sign of stopping.
There is no slowdown â€“ the appearance of one is an artefact, they should have used a semi-log chart.
The cost breakthrough is global, according to parallel work by BNEF. The US wind costs in the Plains reported by Lazard are about the lowest in the world â€“ it’s so flat and windy that an 80m tower is adequate, unlike the 100m+ needed in Germany – and American windjacks have got very good at the job. But solar is cheaper in the Gulf, with a contract signed in Dubai for 2.99c/kwh, and in Mexico, with an average price of 3.35c/kwh in a large auction. Solar is now competitive with coal in low-wage India. Even offshore wind is getting much cheaper: the latest auction in Denmark gave a price of 6.4â‚¬c/kwh. [Update 28/12] Denmark has also awarded a solar auction for 4.6$c/kwh. Danish solar![/update]
The change is emphatically happening in Trump’s Flyover Country. In ColoradoÂ and Texas, recent professional studies have shown that wind plus gas backup is cheaper than a lot of old coal capacity. The ageing US coal generating fleet has already fallen from a peak of 316 GW in 1998 to 280 GW in 2015, from substitution by gas and renewables, and grassroots opposition coordinated by the Sierra Club. The decline is speeding up. 13.6 GW closed in 2015 alone, with another 5.3 GW to come in 2016. The EIA expect coal production in 2016 â€“ almost all for electricity now – to have fallen by 15% in one year.Â Robert Murray, the last of the coal barons, fondly thinks that ending Obama’s regulatory â€œwar on coalâ€ will stop the bleeding. He is deluded. His Stalingrad is surrounded and his army doomed.
The open question is how fast (not whether) wind and solar will cut into not coal but gas. Wind and solar are also now substantially cheaper than both the big and efficient combined-cycle plants used for baseload and cheap, inefficient straight-through turbines used as peakers. In 2016, renewables represent almost all the new US capacity added in the second half of the year.
Trump’s team of oilmen cannot change these facts or turn back the tide. (It is unfair to King Canute to compare them to him: according to the later legend, the king was setting up his courtiers for an embarrassing and wet rebuke to their flattery.) In pure theory, there is some level of subsidy for coal and/or tax on wind and solar that could give Murray what he wants, but that would plainly not get past Ryan’s House of Representatives.
The transition to sustainability is now only a matter of time for electricity generation, all over the world.
As with all true victories, this one comes at a price. This is mainly the impending loss of millions of mining jobs: a claimedÂ 5 million in China, about 400,000 in India. The 65,000 coal mining jobs left in the USA are small potatoes on the world scale.
Should we feel sorrier for unemployed miners than for women who regularly lose jobs stacking shelves and cleaning toilets at WalMart? Mining, especially underground, is much more dangerous and physically demanding, manly you have to say. The jobs are concentrated in small single-industry communities. Historically, the extreme interdependence imposed by the work translated into strong unions and socialist activism. The historical debt of exploitation and suffering imposes a duty of sympathy and generosity on comfortably sedentary progressives like me, but it should not warp policy. All unemployed workers should get decent unemployment pay and retraining as of right. All distressed communities stranded by a declining industry of any kind should get development and cleanup assistance as of right, though it will often fail to regenerate them. Hillary Clinton deserves praise for her admirably honest statements and realistic policies on the decline of coal, even though they cost her votes.
The expected victory in electricity is one battle, not the war. It leaves five other wedges to get to net zero:
- heating in buildings and industrial processes
- the electrification of land transport
- shipping and aviation
- iron and cement
- land use.
Of these, the first is under way for buildings, and the second is advancing fast but still dependent on subsidies for early deployment. The federal EV tax credit must be be vulnerable to Trump vandalism, but the Chinese, Californian and European incentives would survive and be enough to secure the transition â€“ with weaker American companies.
Solutions for aviation, shipping, iron, and cement are still at the research stage. The bias against science of the GOP, combined with Trump’s denialism and oil bias, makes the American contribution to these problems very vulnerable. The immense depth of American science will make cuts here harder than financial incentives to replace in other countries.
And net zero won’t be enough. After that we will need to move into massive, multigigatonne sequestration, in forests, biochar, a changed agriculture, olivine weathering, chemical burial in basalt rocks, or technology X. These are also major challenges for research.
It’s not all good news then, even on climate change; and prospects under Trump are far worse on health, civil rights, and world peace. But enough for seasonal hope. In the end, “the light shines in the darkness, and the darkness did not overwhelm it”. Merry Christmas. (footnote 2)
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Footnote 1: LCOE and integration
LCOE â€“ levelised cost of electricity â€“ is the conventional stylised metric for comparing the costs of projects for new generators. It excludes externalities and system integration. Lazard explain their methodology on page 17 of their report.
My nitpick is that they use a high cost of capital: 8.4% for debt and 12% for equity. Berkshire Hathaway, a major wind investor, can borrow long-term at under 4%. Wind and solar developers need expensive risk capital to get projects up, but all the risks are upfront. When the farms are running, with a nice long-term offtake contract, developers often sell them on as low-risk assets to yieldcos or direct to long-term investors. (Solar panels and wind turbines are extremely reliable mechanically and their output highly predictable.) So over the whole project life the equity cost of capital should be lower too. Using lower and more realistic numbers lowers the LCOE of capital-intensive technologies like wind, solar and nuclear compared to those with fuel costs. Lazards are being conservative, not optimistic.
It costs money to integrate wind and solar farms intp a grid that must guarantee a reliable supply. The same holds for coal, gas and nuclear plants of course, but we never hear that. A true and minor point is regularly hyped up into a killer objection: “But the sun doesn’t always shine and the wind doesn’t always blow!â€ Wind and solar integration costs are in fact very low at current levels of penetration. This paper cites a study giving estimates for wind integration at 30% penetration of $3.5-4.5 per Mwh, about 10% of the wholesale wind price. Another report by German think-tank Agora gives a range of 5 to 20 EUR/Mwh for 50% penetration. Basically, the cost of voltage regulation is very low. The transmission grid needs work. For backup, the USA and many other grids have ample despatchable gas capacity.
The problem gets more interesting at really high penetrations above this. Denmark is already there, and their non-replicable solution is a fat cable to Norway’s practically limitless hydro dams. Further ahead, getting from say 90% renewable to 100% after 2030 will be an even greater challenge. The toolkit includes: overbuild of variables; storage from pumped hydro, and batteries; demand response (customers cutting demand by prearrangement); time-of-day pricing to create incentives for load smoothing; more despatchables (hydro, geothermal, and CSP); power-to-gas (converting excess wind and solar to hydrogen or methane); and trade. We have very little idea of the absolute and relative prices that far ahead, except that wind and solar will be even cheaper than now. There is no reason to think the solution won’t be affordable.
Footnote 2 : Non-apology for Merry Christmas
I’m not a corporation or other institution but an individual: a person, as they are not. In a multicultural society, institutions should be discreet in their cultural messages, and try to be neutral between the beliefs of their members, clients, and customers. Real people have â€“ some would say they have an obligation to have â€“ a full set of beliefs and affiliations, including negative ones. They should not be expected to deny these, and discretion is only imposed to the extent of common courtesy. My readers know me, and have never complained of proselytism. My “Merry Christmas” meets the Golden Rule: I would be delighted if others wished me a happy Chanukah, or Denali, or Up Helly Aa.
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If you were looking for something less polemic and more in tune with Mary MacDonald, try this older Christmas post, I fancy one of my better ones.