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Figure 2.23: Price of Renewable and Non-Renewable Energy Sources (2009 vs. 2019)
Figure 2.23 presents a comparison of the costs of generating electricity from various renewable and fossil fuel sources over the decade from 2009 to 2019. The chart illustrates a dramatic shift in the relative costs, with wind and particularly solar power moving from being the most expensive options to the least expensive.
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The Economy 2.0 Microeconomics @ CORE Econ
Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
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Figure 2.22: The Price of Photovoltaic Cells (1976–2019)
A government policy advisor makes the following statement: 'The main reason that building new renewable power generation is now more cost-effective than building new fossil fuel plants is the successful global implementation of heavy carbon taxes, which have significantly increased the cost of fossil fuels.' Based on the typical economic understanding of this shift, how would you evaluate this advisor's statement?
Energy Strategy for a Developing Nation
Analyzing the Economics of Replacing Power Plants
Given that building a new renewable energy plant is now generally less expensive than building a new fossil fuel plant, it logically follows that it is always economically optimal for utility companies to immediately shut down their existing, operational fossil fuel plants and replace them with new renewable facilities.
Drivers of the Renewable Energy Cost Tipping Point
Match each energy investment scenario with the most likely economic outcome, considering the historical and recent cost trends for renewable and fossil fuel energy generation.
Arrange the following events in the correct chronological and causal order that best explains the economic shift where new renewable energy facilities became cheaper to build than new fossil fuel plants.
The economic 'tipping point' in energy production is the moment when the cost to build a new renewable energy facility falls below the cost to build a new fossil fuel plant. A direct consequence of reaching this point is that the majority of global investment in new electricity generation capacity has shifted towards ______ sources.
An energy market analyst observes that in a region where building a new utility-scale solar farm is cheaper than building a new coal-fired power plant, an established utility company continues to generate electricity from its 30-year-old, fully depreciated coal plant rather than immediately replacing it. Which of the following provides the most accurate economic explanation for the utility company's decision?
Evaluating National Energy Policy Strategies
Figure 2.23: Price of Renewable and Non-Renewable Energy Sources (2009 vs. 2019)
Analysis of Corporate Earnings Reports in the Energy Sector
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Source for Figure 2.23: Lazard's Levelized Cost of Energy Analysis (2019)
Cost Inversion of Renewables Led to Dominance in New Global Capacity (2019)
Analyzing Production Input Assumptions
Consider the following data on the cost of generating electricity from new power plants: In 2009, the cost per unit of electricity from solar power was the highest, followed by wind, with coal and gas being the least expensive. By 2019, this situation had reversed; the cost for solar and wind had fallen dramatically, making them the least expensive sources for new electricity generation, cheaper than new coal or gas plants. Based on this information, which of the following is the most logical economic consequence?
Evaluating Energy Investment Strategy
Energy Infrastructure Investment Decision
Energy Infrastructure Investment Decision
Consider the economic trend from 2009 to 2019, where the cost to build and operate a new solar or wind power facility dropped significantly, becoming lower than the cost to build and operate a new coal or gas power facility. Based solely on this information, it is a valid conclusion that by the end of 2019, it was more expensive to continue operating an existing, fully constructed coal plant than to replace it with a new solar facility.
In 2009, the cost of generating electricity from new power plants was highest for solar, followed by wind, with gas and coal being the least expensive. By 2019, technological advancements had dramatically lowered the cost of renewables, reversing this order. Based on this information, arrange the following energy sources from MOST expensive to LEAST expensive for building a new power plant in 2019.
Based on the major economic trends observed between 2009 and 2019, match each energy source with the description that best characterizes the change in its cost for building new electricity generation capacity.