The Wall Street Journal has recently posted an article regarding the consumption of Renewable Energy around the world. As of 2013, we were at 22.1% Renewable Energy of the overall energy mix and growing. The United States of America ranked second, after China, for annual investment in renewable energy and for generating electricity from renewable sources. However, USA has a lower percentage of energy generated from renewable sources, based on total consumption. Currently renewables make up 13% of the US energy mix. Countries such as Austria, Costa Rica and Brazil that get the majority of their energy from Renewable Sources, helped to supplement the average.
Because the technology surrounding renewable energy is somewhat new, and there is ongoing Research & Development, the costs to cover these initiatives are incorporated into the price of renewable electricity, making it more expensive than other forms of electricity. However there is hope. As the technology ages and is developed more frequently by more people, the law of economics holds true that the price will fall over time. The local economy also plays a major factor, for example: In Southern Ontario where there are many sources of power generation and base load comes cheaply from nuclear and or hydro, renewable energy could be expensive. But the total price of electricity would be offset because of inexpensive base. In another economy where base load is more expensive than Southern Ontario’s, renewable energy would drive the total price of electricity higher and total cost of electricity would be higher than in southern Ontario. Let’s take for example the two scenarios below:
Example 1: Southern Ontario
|Grand Total||$0.42 KW|
In the energy mix, renewables is the most expensive source of electricity in Southern Ontario. Now if the same amount of electricity were generated over a year, the cost would be higher in New England. This is because the costs of hydro and nuclear are higher, despite cheaper renewables in New England. The total price of the energy mix in New England is more because of these factors.
Example 2: New England
|Grand Total||$0.45 KW|
One other factor that affects the price of electricity (there are many but we will only discuss generation prices), is the amount of Megawatts/Gigawatts actually generated by each source. This is a function of how often each source is ‘on’ and generating electricity to the grid.