TimG Posted August 14, 2013 Report Posted August 14, 2013 (edited) The problem is that the biggest cost reductions come from scale of production, not just research.Wrong. Reductions in costs from economies of scale is a predictable outcome that businesses will invest in and does not require government involvement. If your view had any merit we would have no cell phones or computers today. The only reason governments have to subsidize solar/wind is because the business executives know the technology is not cost competitive even after accounting for plausible cost reductions due to 'economies of scale'. Commercialization should be left to the private sector. If the private sector does not think a technology will be viable without subsidies then we should not be using it. Edited August 14, 2013 by TimG Quote
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 How does one even consider "plausible cost reductions due to economies of scale" without reciprocal demand? That's pretty much the point of the subsidies. Nudge along that process that efficiencies and cost reductions that increased production brings. Are you assuming these subsidies to continue ad infinitum? If so, why is it so outrageous for society to decide that said technology deserves merits based on its extenuating circumstances. We aren't discussing some mainstream consumer staple here. Quote
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 And can I ask that you must also be opposed to all subsidies that involve "commercialization" (which I assume is a code-word for demand/production), correct? Quote
TimG Posted August 14, 2013 Report Posted August 14, 2013 (edited) How does one even consider "plausible cost reductions due to economies of scale" without reciprocal demand?Manufacturing processes are well understood. Most of the cost reductions comes from the investment in expensive equipment that requires a large volume to pay off. Business can estimate the cost of this equipment and can determine if the resulting price/unit is low enough to make the investment worthwhile. Are you assuming these subsidies to continue ad infinitum?That is the problem: they will continue ad infinitum because there is no process to determine when the subsidies have failed. If the subsidies appear to be failing the response from activists is to demand more subsidies. My challenge for people who believe that production subsidies make sense: please explain what has to happen to convince you that renewables are a failure and production subsidies for the current generation of tech should be terminated. I suspect most advocates can't accept the possibility that renewables are a dead end technology. Edited August 14, 2013 by TimG Quote
GostHacked Posted August 14, 2013 Report Posted August 14, 2013 How much effect does Big Oil lobbyists have on keeping these kinds of new renewable technologies down? Oh right, money and control. Quote
dre Posted August 14, 2013 Report Posted August 14, 2013 (edited) Wrong. Reductions in costs from economies of scale is a predictable outcome that businesses will invest in and does not require government involvement. If your view had any merit we would have no cell phones or computers today. The only reason governments have to subsidize solar/wind is because the business executives know the technology is not cost competitive even after accounting for plausible cost reductions due to 'economies of scale'. Commercialization should be left to the private sector. If the private sector does not think a technology will be viable without subsidies then we should not be using it. Sorry this is pure fantasy. Youre describing your own utopian view of how things SHOULD work, but its not how things DO work. You mentioned telecommunications for example... There was massive public investment in all that infrastructure and in many cases the private companies that run them now were handed fully functioning networks that had previously been run by public utilities. In most cases public utilities actually DELIVERED these services for years before they were privatized. For example... Telus took over "Alberta Government Telephones" which was a public utility in Alberta, and BC Tel here in BC. Same thing goes things like launching telecom sattelites. The private sector is involved in this now, but for a long time the government had to do all of it. Same thing goes for delivering services like transportation, energy etc. Nuclear energy is another example... Before the private sector ever invested in a single nuclear plant the government had already invested billions of dollars in the technology, developed plant designs, built reactors and run them through public utilities. Early implementation, and development of production methods IS part of the R&D process. You can wish it wasnt but it is and it always has been. And the government WILL keep subsidizing these technologies just like it always has. Some of them will fizzle out and go nowhere, and some of them wont. You will surely stomp your feet the whole way, but that wont matter in the end. Edited August 14, 2013 by dre Quote I question things because I am human. And call no one my father who's no closer than a stranger
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 Manufacturing processes are well understood. Most of the cost reductions comes from the investment in expensive equipment that requires a large volume to pay off. Business can estimate the cost of this equipment and can determine if the resulting price/unit is low enough to make the investment worthwhile. And these production numbers are based on projections of what? I'll wait. That is the problem: they will continue ad infinitum because there is no process to determine when the subsidies have failed. If the subsidies appear to be failing the response from activists is to demand more subsidies. My challenge for people who believe that production subsidies make sense: please explain what has to happen to convince you that renewables are a failure and production subsidies for the current generation of tech should be terminated. I suspect most advocates can't accept the possibility that renewables are a dead end technology. Besides the PTC, what other subsidy is based on production? I think it's pretty obvious that subsidies end when they are cost competitive without them. That is a point in the future. I literally have zero understanding of how you think renewables are "dead". Literally zero. Quote
dre Posted August 14, 2013 Report Posted August 14, 2013 Heres a pie chart of global energy subsidies. See those tiny little colored slivers? Thats the portion that Tim goes on and on and on and on about. See the gigantic blue swath? Those are the subsidies for fossil fuel and nuclear. In his on going diatribe about energy subsidies Tim somehow forgets to mention the sectors that get almost all the subsidies. Oops! Quote I question things because I am human. And call no one my father who's no closer than a stranger
TimG Posted August 14, 2013 Report Posted August 14, 2013 And these production numbers are based on projections of what? I'll wait.Businesses look at the market determine what they can sell a product for. They will then develop a plan to manufacture the product at volume. They can then estimate whether they can expect to make a profit after the invest in the technologies/equipment required to produce in volume. It is not 100% but it is not speculative efforts that require government subsidies. Besides the PTC, what other subsidy is based on production?Feed in tariffs, renewable mandates, or any other regulation which attempts to get the market to do what bureaucrats want instead of what makes economic sense. I think it's pretty obvious that subsidies end when they are cost competitive without them. That is a point in the future.And your response proves my point: you simply cannot accept the possibility that renewables may be a dead end technology and if we want to get off fossil fuels we need something like nuclear. Quote
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 Businesses look at the market determine what they can sell a product for. They will then develop a plan to manufacture the product at volume. They can then estimate whether they can expect to make a profit after the invest in the technologies/equipment required to produce in volume. It is not 100% but it is not speculative efforts that require government subsidies.So it's based off perceived demand. Thanks for taking the long route to that.Feed in tariffs, renewable mandates, or any other regulation which attempts to get the market to do what bureaucrats want instead of what makes economic sense. FIT is only a production subsidy if its greater than than the given rate of electricty. Renewable mandates, if binding, have nothing to do with the production on the manufacturing side. This isn't some consumer item we are talking about or a naturally occurring market. We are talking about legally allowed AND highly regulated monopolies for utilities that are given their market and profits by the people of the municipality they serve. People have decided they'd rather not have coal. People have decided that residents that have rooftop systems don't have to go off the grid. And your response proves my point: you simply cannot accept the possibility that renewables may be a dead end technology and if we want to get off fossil fuels we need something like nuclear. How does it prove your point? Make a graph and line up the data. There is a point in the future where the intersection occurs. Depending on the source and location, its already happened and if it hasn't it will. Probably within the next ten years. Heck, Germany has already set its limit and will reach it soon. If you are so concerned about cost, why are you pushing nuclear? It isn't cost competitive AT ALL. Quote
TimG Posted August 14, 2013 Report Posted August 14, 2013 Heres a pie chart of global energy subsidies.As they say: there are lies, damned lies and [sic] pie charts. First, the lion's share of IEA fossil fuel subsidies are spent by developing countries on subsidies for their consumers. Second, the fossil subsidies **PER KWH** spent by developed countries are tiny and have no effect on the market for fossil fuels. If they were eliminated fossil fuels would still be be cheapest option around. Third, fossil fuels are huge money maker for governments and that negates the effect of the tiny subsidies that are in place. The trouble with renewables is the subsidies required to make them viable are huge and are basically unsustainable. Europe tried to subsidize solar and is basically admitting failure and rolling back these subsidies. It is expected that renewable deployment will drop accordingly. Quote
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 FWIW. I dont think its anymore necessary to have coal replaced with natural gas and renewables where it works, especially for Canada who get so much hydro. Everyone wins. Cheaper and cleaner than previous mixes that included coal. Quote
dre Posted August 14, 2013 Report Posted August 14, 2013 Businesses look at the market determine what they can sell a product for. They will then develop a plan to manufacture the product at volume. They can then estimate whether they can expect to make a profit after the invest in the technologies/equipment required to produce in volume. It is not 100% but it is not speculative efforts that require government subsidies. Feed in tariffs, renewable mandates, or any other regulation which attempts to get the market to do what bureaucrats want instead of what makes economic sense. And your response proves my point: you simply cannot accept the possibility that renewables may be a dead end technology and if we want to get off fossil fuels we need something like nuclear. Nuclear is the best example possible of an energy source that will never work without massive subsidies. Not only does the government have to run the entire fuel cycle, we are going to be on the hook for the massive cost of decommissioning all the plants will reach EOL over the next couple of decades because the nuclear industry doesnt have enough money to do it themselves. The private sector wont invest in them unless the government guarantees their loans. And the cost of building plants is exploding. Quote I question things because I am human. And call no one my father who's no closer than a stranger
TimG Posted August 14, 2013 Report Posted August 14, 2013 (edited) FIT is only a production subsidy if its greater than than the given rate of electricty. Renewable mandates, if binding, have nothing to do with the production on the manufacturing side.Renewable mandates are a subsidy because power companies are forced to pay premium prices for certain sources of power. The only difference is consumers are taxed on their hydro bills to pay for these subsidies. How does it prove your point? Make a graph and line up the data. There is a point in the future where the intersection occurs.No. There is no rational reason to believe that there will ever be an intersection with the currently available technology. A game changing breakthrough may happen in the future but we can't know when or if that will occur. Edited August 14, 2013 by TimG Quote
TimG Posted August 14, 2013 Report Posted August 14, 2013 (edited) Nuclear is the best example possible of an energy source that will never work without massive subsidies.Unlike wind/solar - nuclear is a viable replacement for base load power. I also said *if we want to get off fossil fuels*. as long as we have fossil fuels we don't need nuclear. But what we should be doing is investing heavily in cleaner thorium power but we sit and let the Chinese and Indians do the work because the green movement has succeeded making too many people irrationally fear nuclear. Edited August 14, 2013 by TimG Quote
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 Renewable mandates are a subsidy because power companies are forced to pay premium prices for certain sources of power. The only difference is consumers are taxed on their hydro bills to pay for these subsidies. No offense, but that is asinine logic to rationalize as a "subsidy". Hate to break it you, but these mandates are decided and these prices and profits allowed. No. There is no rational reason to believe that there will ever be an intersection with the currently available technology. A game changing breakthrough may happen in the future but we can't know when or if that will occur. You mean besides accelerating demand that will mean increased efficiencies and lower price points due to greater economies of scale. That's inevitable. It's going to happen. Solar panels are getting cheaper and more efficient. Wind turbines are doing the same thing. Quote
dre Posted August 14, 2013 Report Posted August 14, 2013 The green movement has nothing to do with the fact nobody wants to invest in nuclear plants in north america. The economic reality is if you are an investor building a natgas plant is a more lucritive and less risky investment. Nobody will invest in nuclear energy here without massive government incentives. Unlike wind/solar - nuclear is a viable replacement for base load power. Both wind and solar are viable replacements if more storage is added to the grid, which is why we are seeing a paralell push to develop storage technologies, and that push has resulted in a host of promising technologies and drastically reduced prices. And the reality is that the government is not giving renewable energy anwhere near as much help as it gave conventional energy sources or nuclear. According to a report from DBL Investors, a San Francisco-based venture capital fund... The report calculates that, in the U.S., nuclear subsidies accounted for more than one percent of the federal budget in their first 15 years, and that oil and gas subsidies made up one-half of one percent of the total federal budget in their first 15 years. Subsidies for renewables, in contrast, have constituted only about one-tenth of a percent, the report concludes. Even with the meager ammount of help rewables are getting prices are coming down fast, in response to capital investment. Quote I question things because I am human. And call no one my father who's no closer than a stranger
TimG Posted August 14, 2013 Report Posted August 14, 2013 You mean besides accelerating demand that will mean increased efficiencies and lower price points due to greater economies of scale. That's inevitable. It's going to happen.It is NOT inevitable. Quote
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 It is NOT inevitable. Alright boss. Whatever you say. Quote
TimG Posted August 14, 2013 Report Posted August 14, 2013 Alright boss. Whatever you say.Look. I prefer to avoid getting into religious arguments but your belief that the currently subsidized renewables will eventually be cost effective is nothing but a blind belief - much like a belief in Jesus. The evidence is that despite massive subsidies over the last 15 years renewables are a long way away from being viable. This largely due to cost imposed on the grid by the intermittent nature of the power. A large scale deployment of grid connect batteries could change these economics but I see no evidence that is going to happen soon (no one is buying electric cars). Quote
FutureCanadian Posted August 14, 2013 Report Posted August 14, 2013 Look. I prefer to avoid getting into religious arguments but your belief that the currently subsidized renewables will eventually be cost effective is nothing but a blind belief - much like a belief in Jesus. The evidence is that despite massive subsidies over the last 15 years renewables are a long way away from being viable. This largely due to cost imposed on the grid by the intermittent nature of the power. A large scale deployment of grid connect batteries could change these economics but I see no evidence that is going to happen soon (no one is buying electric cars). What does one call someone who keeps doing the same thing expecting a different result? Wind is already viable and more cost competitive than every source but natural gas. Residential solar on a regional scale is as well. Utility is not. Intermittency is not a huge problem if the mix is correct and capacity is compensated for. You can keep banging your fists on the table in Denali, by its not only the right solution, its not really that difficult or expensive as you believe. And you still continue to ignore this misplaced notion of the market for electricity production l, but what competition and viability really entails. By the way---and just like the trend of renewables---EV sales are small but growing with a positive market potential. Just like renewables, the cost and efficiency of EVs are improving as demand increases. There's your economics brah. I still can't decide whether your incontinence is just a logical reaction based on a financial or lively investment in some fossil fuel. Did you short mobile telephones too because of the DynaTAC? Quote
TimG Posted August 14, 2013 Report Posted August 14, 2013 (edited) Wind is already viable and more cost competitive than every source but natural gas.No it is not. It is not even close. If I was wrong then we could drop the subsidies and wind would be deployed. You are fooling yourself if you believe the wind industry propoganda. Intermittency is not a huge problem if the mix is correct and capacity is compensated for.It is a huge problem and compensating for it imposes large costs on the grid. That is why renwables are not viable without subsidies. Basically, every time you rationalize subsidies for renewables you are implicitly acknowledging that I am correct. If you are right then lets end subsidies now or put a deadline (5 years). I can tell you what would happen to wind/solar if that happened. Edited August 14, 2013 by TimG Quote
TimG Posted August 14, 2013 Report Posted August 14, 2013 (edited) By the way---and just like the trend of renewables---EV sales are small but growing with a positive market potential. Just like renewables, the cost and efficiency of EVs are improving as demand increases. There's your economics brah.What demand? There is none to speak of: http://www.theglobeandmail.com/globe-drive/driving-it-home/whats-behind-the-dismal-sales-of-electric-vehicles/article4170750/ In a Canadian new vehicle market of 1,585,519 in sales for 2011, the EV share came to 468. The vast, vast majority of those were not retailed through dealers. ... Despite thousands of dollars in direct subsidies to EV buyers, only a handful of hard-core early adopters have taken the EV plunge. Despite billions in subsidies and cheap loans to the companies creating EVs, they remain outrageously overpriced compared to the most fuel efficient gasoline-only vehicles. ... The hard truth is EVs can only be expected to take off with buyers when you and I can get one for about the same price as a Honda Fit or a Hyundai Accent or a Ford Fiesta or a Kia Rio or a Chevy Sonic or any number of $16,000 or so runabouts with good fuel economy and low emissions. Until then, EVs will occupy a tiny niche of the marketplace, one dependent on taxpayer subsidies. Nothing will change until someone comes up with a cheaper battery and "economies of scale" are not enough (lithium batteries are already produced on a massive scale). We need a game changing technical breakthough and no one can predict when or even if that will happen. Edited August 14, 2013 by TimG Quote
FutureCanadian Posted August 15, 2013 Report Posted August 15, 2013 No it is not. It is not even close. If I was wrong then we could drop the subsidies and wind would be deployed. You are fooling yourself if you believe the wind industry propoganda. Forgive me again because I'm not used to doing research using Canadian institutions, but is the US EIA considered wind industry propaganda? Basically, every time you rationalize subsidies for renewables you are implicitly acknowledging that I am correct. If you are right then lets end subsidies now or put a deadline (5 years). I can tell you what would happen to wind/solar if that happened. I already stated that I'd be ok with a deadline. Quote
FutureCanadian Posted August 15, 2013 Report Posted August 15, 2013 What demand? There is none to speak of: http://www.theglobeandmail.com/globe-drive/driving-it-home/whats-behind-the-dismal-sales-of-electric-vehicles/article4170750/ Considering that Tesla alone has sold 342 Model S in Canada alone in the first seventh months of 2013. I'd say its a bright future. Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.