> So the solution is really that simple. Do not build power plants that burn fuels. The economics will push the next cheapest solution to the top.
That's not strictly accurate. It'll push the next most profitable solution to the top. If there's no solution that offers the desired rate of return, at acceptable risk levels, then private capital simple doesn't bother to arrive at all.
Govts don't need a reasonable rate of return, so they can fill that gap, assuming that it doesn't cost too much political capital. Yes we need base load, but that message gets lost when the opposition are complaining about high govt spending etc.
Storage is the holy grail here. That allows for more provision of wind and solar.
Governments have always intervened into energy markets to implement policy goals.
German Coal penny
The coal levy was a surcharge on electricity prices levied by energy suppliers in the Federal Republic of Germany to finance hard coal mining . Consumers in the former West Germany paid the coal levy from 1974 to 1995, and it was abolished after the Federal Constitutional Court ruled it an unconstitutional special levy (electricity generation levy).
The Federal Constitutional Court argued that the coal levy was unjustifiable because it burdened the general public of electricity customers who had no particular financial responsibility for hard coal from Germany. The coal levy was therefore abolished at the end of 1995. Since then, hard coal mining has been subsidized from the state budget. Between 1975 and 2002, the total amount of subsidies was approximately 80 to 100 billion euros (in 2003 prices).
"The Renewable Energy Sources Act or EEG (German: Erneuerbare-Energien-Gesetz) is a series of German laws that originally provided a feed-in tariff (FIT) scheme to encourage the generation of renewable electricity."
Storage could be a solution, but it is not what politicians are right now putting their weight behind (remember, election here is ongoing and will finish in a few weeks. They are very open about their politics). For example, the platform of the green party writes that thermal power plants are a critical part of the Swedish energy grid in order to enable wind and solar. In debates they said that the oil power plant is a natural part of the energy grid and essential for keeping prices low and the grid stable.
That is the left side of the debate. The other side pushes for nuclear, but there is no actually ongoing construction for that. What is actually being constructed and supported by both side is more thermal power plants.
When you need multiple months worth of capacity to cover the winter, rather than hours to cover a day-night cycle, storage is a very expensive strategy. There are experimental tests, like the one in Finland that will heat a small number of buildings in a small town, but there is no political party that is going to the election on a platform with storage as the solution. The closest you will get is the far future plans in the green party platform that current oil and other plants could (in theory) be switched to burning green hydrogen, but the political capital in that area has been significant decreased in the last decade when cost of infrastructure and production has shown to be prohibitively expensive. The biggest project, intended to produce green steel, has been significantly delayed and costs increased, and is continuously demanding more and more subsidizes. To burn green hydrogen for electricity is about as close to becoming economical as fusion is.
You are indeed right that if we were to ban the construction of new thermal power plants, the result will likely be that private capital will simple not bother to do anything unless significant government capital is put on the table. Everything is simply too expensive and if you allow the market price to spike without limit, citizens will go and vote for government to step in. When electricity market spikes by 100x for a single month, the outcome is not that the market steps in and invest in more expensive power plants. Citizen instead goes to the government and elect one that will provide a stable energy market. That was the outcome of the 2020 energy crisis. That is how the economics of nuclear could become viable, or storage, but it is also why thermal power plants is the thing being built right now.
And that's with still quite a lot of coal and ever more gas in the grid, both for the plenty of times the intermittent don't deliver and for grid stability (see also: Spainout), which means we have the 3rd worst specific emissions in the EU (down from 4th worst last year), and the highest total CO₂ emissions in the EU.
After about €1 trillion spent on our "Energiewende", our "green" energy transition.
Comments
That's not strictly accurate. It'll push the next most profitable solution to the top. If there's no solution that offers the desired rate of return, at acceptable risk levels, then private capital simple doesn't bother to arrive at all.
Govts don't need a reasonable rate of return, so they can fill that gap, assuming that it doesn't cost too much political capital. Yes we need base load, but that message gets lost when the opposition are complaining about high govt spending etc.
Storage is the holy grail here. That allows for more provision of wind and solar.
Governments have always intervened into energy markets to implement policy goals.
German Coal penny
The coal levy was a surcharge on electricity prices levied by energy suppliers in the Federal Republic of Germany to finance hard coal mining . Consumers in the former West Germany paid the coal levy from 1974 to 1995, and it was abolished after the Federal Constitutional Court ruled it an unconstitutional special levy (electricity generation levy).
The Federal Constitutional Court argued that the coal levy was unjustifiable because it burdened the general public of electricity customers who had no particular financial responsibility for hard coal from Germany. The coal levy was therefore abolished at the end of 1995. Since then, hard coal mining has been subsidized from the state budget. Between 1975 and 2002, the total amount of subsidies was approximately 80 to 100 billion euros (in 2003 prices).
https://de.wikipedia.org/wiki/Kohlepfennig
German Renewable Energy Sources Act
"The Renewable Energy Sources Act or EEG (German: Erneuerbare-Energien-Gesetz) is a series of German laws that originally provided a feed-in tariff (FIT) scheme to encourage the generation of renewable electricity."
https://en.wikipedia.org/wiki/German_Renewable_Energy_Source...
German coalition agrees to subsidised power price for industry
https://www.reuters.com/business/energy/german-coalition-agr...
Storage could be a solution, but it is not what politicians are right now putting their weight behind (remember, election here is ongoing and will finish in a few weeks. They are very open about their politics). For example, the platform of the green party writes that thermal power plants are a critical part of the Swedish energy grid in order to enable wind and solar. In debates they said that the oil power plant is a natural part of the energy grid and essential for keeping prices low and the grid stable.
That is the left side of the debate. The other side pushes for nuclear, but there is no actually ongoing construction for that. What is actually being constructed and supported by both side is more thermal power plants.
When you need multiple months worth of capacity to cover the winter, rather than hours to cover a day-night cycle, storage is a very expensive strategy. There are experimental tests, like the one in Finland that will heat a small number of buildings in a small town, but there is no political party that is going to the election on a platform with storage as the solution. The closest you will get is the far future plans in the green party platform that current oil and other plants could (in theory) be switched to burning green hydrogen, but the political capital in that area has been significant decreased in the last decade when cost of infrastructure and production has shown to be prohibitively expensive. The biggest project, intended to produce green steel, has been significantly delayed and costs increased, and is continuously demanding more and more subsidizes. To burn green hydrogen for electricity is about as close to becoming economical as fusion is.
You are indeed right that if we were to ban the construction of new thermal power plants, the result will likely be that private capital will simple not bother to do anything unless significant government capital is put on the table. Everything is simply too expensive and if you allow the market price to spike without limit, citizens will go and vote for government to step in. When electricity market spikes by 100x for a single month, the outcome is not that the market steps in and invest in more expensive power plants. Citizen instead goes to the government and elect one that will provide a stable energy market. That was the outcome of the 2020 energy crisis. That is how the economics of nuclear could become viable, or storage, but it is also why thermal power plants is the thing being built right now.
Storage makes the already expensive intermittent renewables even more expensive.
Germany has the highest electricity costs among the G20.
https://www.zeit.de/wirtschaft/2026-08/strompreise-g20-deuts...
And that's with still quite a lot of coal and ever more gas in the grid, both for the plenty of times the intermittent don't deliver and for grid stability (see also: Spainout), which means we have the 3rd worst specific emissions in the EU (down from 4th worst last year), and the highest total CO₂ emissions in the EU.
After about €1 trillion spent on our "Energiewende", our "green" energy transition.