Utilities and companies need to recover their investments in renewable energy infrastructure. As mentioned earlier in this text, wrong or not thoroughly aligned calculations of electricity prices consequence of the investment will lead to prolonged higher electricity prices.
12. Legacy Costs:
Existing investments in fossil fuel infrastructure still need to be maintained and paid off, even as new investments in renewable energy are made.
Older assets require more maintenance capital than younger ones whilst coal of lower calorific value degrades the burners faster, and produces less electricity, and less efficiently.
Once shut down, the investment requires to closed them must be considered or added into other assets. Thus, new project will require a larger investment than the asset itself.
13. Geographic and Resource Limitations:
Not all regions have equal access to renewable resources, leading to variability in costs and efficiency across different areas.
Our planet is not a copper plate over which electricity can be transmitted everywhere, anytime. The energy sources must be reasonably close to the consumption points. Abandoned locations will therefore struggle to get renewable energy and/or energy at reasonable prices.
14. Energy Transition Costs:
The broader transition from fossil fuels to renewable energy involves various costs, including those associated with decommissioning old plants and retraining workforces.
The latter is probably the least contemplated cost in a our current global world. Specialized work force and or personnel that has been working in conventional energy must be retrained and or unemployed for long periods of time. The cost of the latter is normally born by governments whilst the former by new employers. These costs can be avoided and forgotten. They are this likely transferred to the consumers or taxpayers in one form or another.
15. Tariffs and Trade Issues:
Trade tariffs on imported renewable energy components, such as solar panels from certain countries, can increase costs.
Its hard to understand that minerals produced in Chile, are moved to China to convert into solar panels and mineral materials to be sold back to the Chilean market. Wouldn’t it be reasonable that Chinas main mineral battery manufacturers installed their factories in Chile and distributed their production to the world directly from the source? Trade issues such as these increase material costs and avoid “greening” mineral production. In effect, since minerals are all transported over large cargo ships or container ships fired with heavy fuel oil (a viscous residual product from crude oil refining) “green” transport is not possible.
In the end, every when countries may have free trade agreements supposedly facilitating commerce across the globe, and avoiding trades tariffs, the sole effect of global trade increase the costs of goods enormously.
