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Solar and Wind Outshine Fossil Fuels

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A major U.S. investment bank's latest analysis shows that even without subsidies, wind and solar energy are on track to be competitive with fossil-fuel and nuclear power sources in the U.S.

Investment firm Lazard says some renewable technologies such as solar energy are on track to be competitive with fossil fuels even without subsidies.
Photo credit: Shutterstock

Financial advisory and asset management firm Lazard released its eighth annual report Levelized Cost of Energy Analysis, showing that renewable energy can compete with coal, natural gas and nuclear power plants on a cost basis. Couched in the cautious language of risk/benefit analysis, it said, "Certain alternative energy generation technologies are cost-competitive with conventional generation technologies under some scenarios."

The report warned that unpredictable factors they could nor or did not examine "could have a potentially significant  effect on the results," including things like "the social costs and rate consequences for those who cannot afford distribution generation solutions, as well as the long-term residual and societal consequences of various conventional generation technologies that are difficult to measure (e.g., nuclear waste disposal, environmental impacts, etc.)." But its findings suggest that defenders of fossil fuel power generation will have a harder and harder time falling back on the economic costs and "it's too expensive" to justify resistance to renewable energy.

The report said that while U.S. federal tax subsidies are "an important component of the economics of alternative energy generation technologies," they may not be essential, as the cost of wind- and solar-generated power continues to decline, especially in areas of strong sun or wind. It found that energy costs for some renewable technologies have dropped about 15 percent in the last year and about 60 percent in the last five years, and predicts that advances in technologies like battery storage will continue to drive cost declines. The falling costs will likely encourage more investment in renewable technologies on its own even without subsidies, according to London's Financial Times.

"We find that alternative energy technologies are complementary to conventional generation technologies, and believe that their use will be increasingly prevalent for a variety of reasons," said the report.

“We used to say some day solar and wind power would be competitive with conventional generation," George Bilicic, global head of power, energy and infrastructure at Lazard, told the Financial Times. "Well, now it is some day.”

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On Thursday, the U.S. Drought Monitor said nearly 60 percent of the state was abnormally dry, up from 46 percent just last week, according to The Mercury News in San Jose.

The dry winter has included areas that have seen devastating fires recently, including Sonoma, Napa, Lake and Mendocino counties. If the dry conditions continue, those areas will once again have dangerously high fire conditions, according to The Mercury News.

"Given what we've seen so far this year and the forecast for the next few weeks, I do think it's pretty likely we'll end up in some degree of drought by this summer," said Swain, as The Mercury News reported.

Another alarming sign of an impending drought is the decreased snowpack in the Sierra Nevada Mountain range. The National Weather Service posted to Twitter a side-by-side comparison of snowpack from February 2019 and from this year, illustrating the puny snowpack this year. The snow accumulated in the Sierra Nevadas provides water to roughly 30 percent of the state, according to NBC Los Angeles.

Right now, the snowpack is at 53 percent of its normal volume after two warm and dry months to start the year. It is a remarkable decline, considering that the snowpack started 2020 at 90 percent of its historical average, as The Guardian reported.

"Those numbers are going to continue to go down," said Swain. "I would guess that the 1 March number is going to be less than 50 percent."

The National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center forecast that the drier-than-average conditions may last through April.

NOAA said Northern California will continue deeper into drought through the end of April, citing that the "persistent high pressure over the North Pacific Ocean is expected to continue, diverting storm systems to the north and south and away from California and parts of the Southwest," as The Weather Channel reported.

As the climate crisis escalates and the world continues to heat up, California should expect to see water drawn out of its ecosystem, making the state warmer and drier. Increased heat will lead to further loss of snow, both as less falls and as more of it melts quickly, according to The Guardian.

"We aren't going to necessarily see less rain, it's just that that rain goes less far. That's a future where the flood risk extends, with bigger wetter storms in a warming world," said Swain, as The Guardian reported.

The Guardian noted that while California's reservoirs are currently near capacity, the more immediate impact of the warm, dry winter will be how it raises the fire danger as trees and grasslands dry out.

"The plants and the forests don't benefit from the water storage reservoirs," said Swain, as The Mercury News reported. "If conditions remain very dry heading into summer, the landscape and vegetation is definitely going to feel it this year. From a wildfire perspective, the dry years do tend to be the bad fire years, especially in Northern California."

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