Why will Electricity become more expensive in the future?

Producing electricity from oil cost about $120 a barrel in 2012, while the price of natural gas equivalent was about $8.50.That is, anyone using natural gas had 14 times less energy production costs.

Electricity is only one part of total energy use. Fossil fuels provide over 80% of the world’s energy, while electricity is only about 20% of the world’s power today.

With the “electrification of everything” strategy in place, its demand is skyrocketing worldwide, a trend expected to continue due to the decisions of many governments to electrify transport, heating, as well as energy-intensive industrial processes such as iron production, steel, concrete, chemical etc.

Five times more energy will be required to charge electric vehicles, heat homes and for various industrial processes.

When electric cars are widely used they will mostly be charged at night at home, when there is less demand on the grid. In many neighborhoods, however, the existing facilities (transformers, cables, etc.) cannot cope with the overnight demand. For a shared charger to approach the ease of filling a car with petrol (say it takes 20-40 minutes to charge) it needs to operate at power levels of 250 – 300 kW. Thus, each individual fast charger must operate at approximately 100 times the power level of a typical home.

CAR fast chargers cost about $200,000 each to install, and despite being fast-charging, they’re still slower than filling a car’s gas tank. To avoid long queues – a car charging station would need 3-4 superchargers to replace each decommissioned petrol pump. Such a supercharger installation at a site creates an energy demand on the grid comparable to a small town or a steel mill.

Synchronous energy grids, due to the intermittent generation of RES, require large battery storage units connected to the grid to smooth the supply. But a huge amount of mining is required to produce the minerals that go into the batteries, with all the costs that this entails.

The way electricity is produced, the locations of generating stations and the way energy is transported to homes are expected to change immediately. Wind turbines and solar panels will not be placed where the conventional power plant they are replacing is located, but where the wind is strongest (the turbines) and where the sun shines the most (the panels). The green energy will then have to be transported to the areas where the populations live.

For this reason, in some areas more electricity is produced than the grid can carry. So sometimes new RES projects have to be stopped or postponed because the infrastructure can’t carry any more electricity. Most of the areas with the best sun and air are far from cities and existing grids. Thousands of kilometers of new high-voltage transmission lines are needed to connect them. There are costs involved in obtaining rights-of-way and government permits to operate these cables. Landowners and nearby communities often do not want huge pylons installed on their land or near their homes.

Another cost is the supply of the required materials. Because in addition to building new high-voltage transmission lines, the existing ones will also have to be upgraded to be able to carry much more electricity. Millions of kilometers of copper wire are needed to build the most complex networks to transport the new energy. Copper is also needed for the upgraded wiring in the houses.

In addition to batteries, transmission lines, solar and wind farms themselves use much more copper per unit of power output than central coal and gas-fired power plants. Also, electric vehicles use more than twice as much copper as gasoline vehicles. As a result, annual demand for copper is projected to double to 50 million metric tons by 2035. The scarcity of copper deposits as well as increased scrutiny of the social and environmental impacts of mining poses barriers to expanding production and increases production costs.

The conclusion drawn is that the cost of electricity will have to increase to finance the new infrastructure and address the above problems.

US researchers estimate that if new distribution networks are not built at a faster rate, about 80% of the emissions reduction expected may not happen at all.

Anyway we have to save our planet from pollution and climate change. But perhaps new innovations that reduce the machines’ energy requirements will help the problem more directly. The electricity demand for air conditioning e.g. expected to triple in the coming decades. Could some of the green transition funds be allocated to inventing new systems that use materials called desiccants? These systems could cool more efficiently, even in extreme temperatures and humidity, reducing demand on the power grid.

Electricity is the most important asset of our civilization. But without cheap energy, households cannot survive, neither can small businesses, nor can a country’s economy grow.

About the author

The Liberal Globe is an independent online magazine that provides carefully selected varieties of stories. Our authoritative insight opinions, analyses, researches are reflected in the sections which are both thematic and geographical. We do not attach ourselves to any political party. Our political agenda is liberal in the classical sense. We continue to advocate bold policies in favour of individual freedoms, even if that means we must oppose the will and the majority view, even if these positions that we express may be unpleasant and unbearable for the majority.

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