Energetica India Magazine October-November 2021

Utilities Debate the Already High Cost of Renewable Energy RENEWABLE POWER Utilities are complaining about the high cost of generating power from wind and solar and want to charge custom- ers more for these types of power sources, while environmentalists say that renewable energy is much cheaper in the long run. 28 energetica INDIA- Oct-Nov_2021 Without a doubt, renewable energy is the future. It’s cleaner, more sustainable, and can create thousands of job opportunities compared to fossil fuel. However, despite the many benefits re - newable energy offers, the battle of en- ergy is heating up. Utilities are complaining about the high cost of generating power from wind and solar and want to charge customers more for these types of power sources, while environmentalists say that renew- able energy is much cheaper in the long run. So why is renewable energy more ex- pensive? Well, that’s exactly what we will cover in this article. In this article, we will go through some of the key factors that contribute to the high cost of renewable energy. So without further ado, let’s jump right into the first one. 1. Capital While renewable energy will be cheap- er in the long run, building a renewable power station isn’t particularly cheap. In fact, it costs $0.812 per watt to con- struct a natural gas power plant while it costs around $1.75 and $1.03 per watt for wind and solar farms construction re- spectively. Many argue that renewable generators require no fuel, which makes them ac- tually cheaper to run and maintain com- pared to fossil power plants that around 40-70% of their total cost is for operation and maintenance. However, the problem with constructing solar or wind farms is that almost 75% of the cost has to be paid upfront, which makes them very vulnerable to changes in the cost of capital and harder to invest. Overall, what all investors look for is the best ROI in the shortest period of time, and with the amount of upfront capital re- quired, it becomes harder to attract new investors. 2. Land Renewable energy plants require a huge amount of land to create very little ener- gy. Coal and gas-fired power plants, on the other hand, need very little space, especially when compared to the unbe- lievable amount of land required to build renewable generators. For instance, to build a 1-megawatt solar farm, you need around 7.5 acres of land and for the same capacity wind farm, you need about 85.25 acres! Yes, you can argue that the windmills themselves only take a small part of the Kami Turky Founder Solar Energy Hackers