William Burke-White is Professor of Law at the University of Pennsylvania Carey Law School. He’s got a long string of other academic distinctions, and he has written extensively on international criminal law, international economic law, and human rights.
He’s also the author of forthcoming book How International Law got Lost, due to be published next year.
It’s not so long since wind and solar power were seen as the Cinderella of the of the energy world. The didn’t have the heft of their two big, ugly polluting sisters, coal and oil. That might not be the case for so much longer.
The first article I saw on this was about UK electricity production. Remember that Britain was the first country in the world to have an industrial revolution, which was fired by its coal production, the world’s first real electricity generation plant was built in London in 1882, and of course coal fuelled the British Navy for much of the time it was conquering half the world.
That’s why it’s startling to read that coal, along with all other fossil fuels combined have been overtaken by renewables – mostly wind power – as the main source of electricity in the UK. In the first quarter of 2020,
In that period, 45 per cent of all the electricity was generated by renewables, while only 33 per cent was generated by burning fossil fuels. That’s a gigantic modal shift in quite a short time. Most of the balance came from nuclear power, by the way.
But the really striking thing is not the speed with which renewables are taking off, it’s the speed at which their price is dropping. Renewable energy in all the main world markets, including the U.S., Europe, China and Russia, renewables are now cheaper than coal. It’s not so surprising that we would have got to that point, given that whether you are building a windfarm or a coal power plant, you have to pay for building the infrastructure, but with the windfarm, once you’ve built it, the fuel is free. With coal, even if it’s dirty and dirt-cheap, it can never be as cheap as free.
But, the argument went, we already have hundreds of coal-fired power plants around the world, and there’s nothing to stop them from burning cheap, dirty coal until they fall apart. If they’re already built, that sunken cost can’t be retrieved, so the owners are likely to keep running them.
A report recently from Energy Innovation think tank said that, since 42 per cent of the world’s coal plants are unprofitable, it’s there’s an increasing economic incentive to close them down, and that’s just what is happening. The Colorado utility Xcel will ‘retire’, that means shut down, 660 megawatts of coal capacity before their planned end-of-life dates and switch to renewable sources and battery storage, because it’s simply cheaper to do so.
That’s because electricity from new windfarms is cheaper than existing coal capacity. Get that. If you own a coal-fired power plant – if you have it already built and paid for – the cheapest way to generate electricity is to close it down and pay to build a new windfarm.
This isn’t so surprising. Most of the development of a technology occurs in its early years. The Dutch might disagree with the windmills on their polders, but serious wind power is a pretty new technology, so it’s natural that it’s getting more cost-effective and efficient right now. As I said, coal has been used for electricity generation for nearly 140 years by now, so any improvements to the technology, or efficiencies that make it cheaper have probably already been thought of. And money talks, so you can get used to seeing a lot more windmills on the horizon.