Tag: costs of energy

Things have gotten more complicated in this area over the last several years. Policies have shifted, as have public opinions. Data centers are a hotly debated topic (which won’t be covered in this post). It’s safe to say that this is definitely NOT the same world we were living in 6 years ago!

This post serves primarily as an overview, where I can only present facts as I understand them. There are links listed at the end of the post, to provide additional and more detailed information from expert sources. I encourage you to dig into the complexities of this topic yourself to better inform your own perspective on it.

Types of Energy Sources and Their Eco-Friendliness:

There are two main fundamental types of energy: Potential (stored until activated, like a battery) and Kinetic (generated by motion, like a water wheel). Both are employed in energy generation, albeit in different ways. It’s a fascinating topic to explore, if you’re interested in how these things work. For now, let’s get into the energy sources that fuel our homes, cars, etc. specifically.

So, where does it come from?

The general categories of energy generation are: non-renewable, renewable, and alternative. Renewable and alternative have some overlap, though they also have factors that differentiate.

Please bear in mind that, when referencing solar and wind, I mean utility-scale energy production. While the roof panels you see on people’s homes are viable in their own right, I’m not suggesting they are a collective source as a community-level utility.

• Non-renewable energy is generated by burning materials that are finite. That means once they’re gone, they’re gone. Fossil fuels (such as oil, natural gas, and coal) fall into this category.

• Renewable energy is made from sources that are infinite (continually available), such as the sun, wind, and water. While these are often considered alternative energy sources, they’re becoming more mainstream.

• Nuclear energy, on the other hand, could be firmly labeled Alternative due to being neither from fossil fuels or necessarily renewable. It’s generated through the heat created by splitting the atoms found in uranium rocks.

And what does it cost to produce?

There are two big costs to consider with any energy source: financial cost and the cost to the planet. Sometimes these will coordinate and, other times, they’ll contradict. This is one reason why energy policy debates can be so confusing; the discussions are rife with complexities to consider and balance out.

The table below provides a range of costs by type of energy. Please bear in mind this isn’t an exhaustive list, nor does it dive into the factors creating the financial variance.

Energy Sources	Financial Costs	Costs to Planet
Non-Renewables
Oil/Natural Gas	USD $48-109, per MWh (new combined-cycle plant) USD $24-39, per MWh (existing plant)	Relies heavily on drilling and hydraulic fracturing (fracking), which have been shown to cause major damage to the surrounding areas.
Coal	USD $31-114, per MWh (existing plant) USD $71-173, per MWh (new plant)	Relies on mining, including mountaintop removal mining, which has been shown to cause major damage to surrounding areas.
Renewables**
Onshore Wind	USD $37-86, per MWh	Requires use of large swaths of land, which can displace wildlife and/or farmers from using said land. Also, the carbon footprint of building the turbines.
Utility-Scale Solar	USD $38-78, per MWh	Requires use of large swaths of land, which can displace wildlife and/or farmers from using said land. Also, the carbon footprint of building the photo-voltaic (PV) panels.
Hydropower	USD $54-64, per MWh	Requires the damming up of large amounts of water, which can displace land and wildlife, and affect habitats.
Geothermal	USD $67-111, per MWh	Requires deep-well drilling, which can affect the land. Also, different plants may release gasses into the atmosphere, though the carbon footprint is notably low, compared to other energy sources.
Biomass	USD $60-140, per MWh	Can temporarily emit more carbon into the atmosphere than oil/gas, which creates a net-warming penalty for the planet and can potentially take up to a few decades to offset, in the case of burning trees. Burning wheat-straw, by comparison, produces a lower carbon footprint.
Alternative
Nuclear	USD $175-255, per MWh	Requires mining uranium rocks, which is very expensive and damaging to the land. It also carries the potential for nuclear meltdown. While the risk is statistically very low, a meltdown event in one plant could be catastrophic to regions across the globe.

To summarize, the cost of renewables are competitive even without government subsidies (which are increasingly being withdrawn). By comparison, they do require more upfront, but cost significantly less to operate over time. The raw data used to calculate these initial costs doesn’t account for the implementation of grid storage and back-up generation. These increase both the upfront and ongoing costs, and also affect grid reliability, which can be an issue with some renewable sources.

Existing fossil fuel plants are economically competitive to renewables plants, which is a consideration going forward as to how to transition from dirty to clean energy sources. The cost of building new non-renewable power plants, along with the volatility of the markets of these sources, means they are likely to become increasingly non-viable going forward.

It would be interesting to see how starting new facilities, maintaining existing ones, and the on-going costs of operation for each would affect energy generation costs going into the future. Removing gas/oil subsidies, for example, may certainly affect its ability to keep up with renewables, and position renewables as the go-to source for the future.

As you can see, there’s much to consider regarding the trade-offs that just having access to energy requires. And modern life pretty much demands we have access. Even our most fundamental activities require it to function, unless you’re living full-on “primitive” (in which case, you wouldn’t be reading this right now).

Links for Sources Used & For Further Research:

Council of Foreign Relations – Comparing Global Energy Sources

U.S. Energy Information Administration – Forms of Energy & Sources of Energy

Scientific American – Wind & Solar Energy Are Cheaper Than Electric From Fossil Fuel Plants

Lazard – Lazard Releases 2025 Levelized Cost of Energy+ (LCOE) Report

Smart Energy – Comparing Renewable Energy vs. Fossil Fuels

International Renewable Energy Agency – 91% of New Renewable Projects Now Cheaper Than Fossil Fuels Alternatives

Imperial College London – How Cost Effective is a Renewables-Dominated Electricity System In Comparison to One Based on Fossil Fuels?