How much does the environmental cost? Although it has an inestimable value, comparable to that of the survival of our species an article published last December 1st Our World in Data analysis is reported on the sustainability, not only environmental but also economic, of renewable energies compared to those from fossil fuels (coal, oil, and gas), which today represent about 79% of world energy production and about 87% of total CO 2 emissions.
A world powered by fossil fuels is obviously not sustainable for the environment: it endangers the livelihoods of future generations and the biosphere of which we ourselves are part. But although possible alternatives, such as renewable energy, are much safer and cleaner, coal remains the main source, providing about 37% of electricity, and gas is in second place, providing about 24% of electricity. power.
We know that the world has long relied on fossil fuels. If we take the case of oil, until a few decades ago the extraction did not require expensive and sophisticated technologies, and all in all, it was a rather cheap process. Then due to the depletion of the simpler fields to exploit the oil reserves not to be confused with the resources, which, as Jeremy Rifkin suggests in his dated but again current book Hydrogen Economy represent only a theoretical estimate quantity of oil in a given area have gradually decreased over time, to the point that today we are talking about having to search for oil in areas of the planet that are difficult to access, for which more advanced technologies are required that contribute to increasing extraction costs.
It is therefore evident that the convenience of a given energy source is not only due to environmental safety but also to the expense involved in its use. If we want the world to be powered by safer and cleaner alternatives, we must therefore ensure that those alternatives are also cheaper than fossil fuels. The leveled energy cost (LCOE) is a measure that allows you to compare the average cost of energy produced by the different types of plants, taking into account their average life and the energy sources they exploit and is measured in units monetary units divided by a unit of measurement of energy produced (for example, euro/kilowatt hour). The LCOE includes, that is, the cost of construction and maintenance of the plant, the operating cost, that of the fuel, and the return on investment. By comparing the costs related to different energy sources, just ten years ago it was much cheaper to build a fossil fuel power plant rather than a new photovoltaic or wind power plant: the latter was 22% more expensive than coal and solar 223%.
But, while in 2009 the electricity produced by photovoltaics on an industrial scale that is, the energy produced by photovoltaic plants with a power greater than one megawatt-hour – cost 359 dollars per MWh (megawatt hour, i.e. 1,000 kilowatt-hours), in just ten years the price it decreased by 89%, reaching a cost of $ 40 per MWh. The price of electricity from wind power also went from $ 135 per MWh to $ 41 per MWh, a decrease of 70%. A slight decrease in prices also occurred for gas (from 83 to 56 dollars per MWh), while coal maintained a cost of around 110 dollars per MWh. Instead, the cost of nuclear power has increased (from 123 to 155 dollars per MWh), for the safety reasons we all know and for the consequent decrease of nuclear power plants in recent years. In other words, in just ten years the situation has been reversed: the average cost of electricity produced by a coal-fired power plant is now significantly higher than that of the energy produced by wind or photovoltaic plants. What is the reason for such a rapid decrease in the costs of renewable energy?
While the production of electricity from fossil fuels and nuclear energy has to deal with the prices of the sources and with the operating costs of the plants, in the case of renewable energy plants these are relatively low and also no matter has to be paid. first their sources are in fact the wind and the sun, which certainly must not be extracted from the ground. Instead, what determines the cost of renewable energy is the development of the technology necessary for efficient operation, except for hydroelectricity, which requires low technology even though it is alternative and renewable energy, but which requires adequate holography and the presence of regular rainfall. The reduction in photovoltaic prices, which occurred in the last decade, in fact, depends on a sudden decrease in the costs of the technology used. An economic advantage that we have seen in recent years, but which comes from afar.
The first price of solar energy reported in the Our World in Data article dates back, in fact, to the year 1956, when the cost of a single Watt was equivalent to the 1,865 dollars of 2019. If we think that today a single panel installed on the A house roof produces about 320 Watts of power, meaning that at the 1956 price point it would cost $ 596,800 (more than half a million dollars). A particularly onerous cost, due to the most modern and sophisticated industrial processes of the time: it was, in fact, a kind of technology that was used in the USA and the USSR to supply electricity to satellites in space, the first of which was Vanguard I in 1958.
However, the growing demand has triggered over the years an increase in production which, in addition to an improvement in technological efficiency, has led to a consequent drop in prices, which in turn has produced an increase in demand. Making low-carbon technology cheap is a policy goal that not only reduces emissions in your own country, but everywhere, as the greatest growth in demand in the coming years will not come from developed, but from developing countries. development. The good price must also be accompanied by a moderate increase in the efficiency of the materials used and in the conversion techniques into electricity. A problem that requires further technological progress.
Technologically sophisticated systems, however, require trained personnel, capable of managing the inevitable technological complexity, and, as already mentioned, relatively low operating costs. Could it mean that the use of advanced technologies and the lack of need to extract and refine the raw material lead to a decrease in the workforce? In other words, could we reach the paradox theorized by Karl Marx? Son of other times, of course, but the contradictions he spoke of were precisely linked to technological progress: to increase productivity, the capitalist system would have invested more and more in technology, requiring less and less labor, which however is the only source that produces surplus value, and in doing so the system would have progressively decreased profit. Beyond the provocation.
Last but not least, we will also have to take into account the conversion of the entire energy distribution network, ensure its expansion in certain areas, guarantee interconnections between countries and ask ourselves what a distributed generation would entail on the world market. If the intention were to keep it centralized, that is, to provide for the construction of large power plants that sell and distribute energy just like now, the markets would in all likelihood be able to overcome the transition without excessive upheavals: think of the giant Shell, whose new plan is to reduce oil and gas production costs and focus on the renewable energy and electricity market or to Eni,2, but also to develop new technologies for renewable energies. In other words, as large oil and gas companies prepare for the energy transition, the environment becomes the new profit domain for financial capitalism.
If, on the other hand, we opted for a distributed generation, that is, no longer large power plants connected to large networks but a multitude of small and medium production units distributed throughout the territory at low voltage and directly connected to the final user, such a transition would result in a total revolution for the world market. We are facing an epochal change, an unprecedented step, and that must generate questions and find answers. An indispensable energy transition for us and for the earth system, which will require a paradigm shift.