In case you haven't read this, Bill McKibben has another nice article in The Nation: http://www.thenation.com/doc/20091207/mckibben. A lot of it is about Al Gore's new book, which I will get to one of these days, once it is available in a public or other library (assuming those public ones still exist for long, which is looking more and more to be a less likely prospect these days...state and local taxes are dropping, and libraries are feeling the brunt of that, as per usual, along with lots of other worthwhile services that make for a civilized society).
Anyway, here is some comments on that story, reflecting on why so many environmentally motivated folks will accomplish so little compared to the task at hand. And in particular, renewable energy installations in the USA.
I believe there is a better way...and that is to make renewables economically viable. It also works well with energy efficiency, climate stabilization and job creation and economic stimulation, and from the bottom up, no less...so how cool is that? For that, we need some states to have renewable energy feed-in laws, similar to Germany's, or better yet, what Ontario has recently started with their Green Energy Act (http://www.greenenergyact.ca). Granted, Vermont is so far the only state with a FIT, though that is better labeled as FIT Lite. Once a state or 2 implements something like Ontario's GEA, just get out of the way of the stampede. Rumor has it, economic stimulation/job creation, new manufacturing, etc are very much sought after these days. Well, the proof is in the bottle, so to speak.. and we need more than the "3.2 beer" approach.
So, the letter:
After reading Bill McKibben's take on Al Gore's recent book, there is a glaring omission of BOTH of these fine people in their plans and hopes to make our world a better place. It concerns the LACK of a way to make renewable energy economically viable.
First of all, we need Feed-in Laws/Feed-In Tariffs (FITs), such as the ones operating in Germany. In case these are unfamiliar to the reader, check out here: http://www.allianceforrenewableenergy.org/endorse-reps.html. FITs work better than any other system designed to date for getting lots of renewable installed at the lowest real cost, and they also integrate nicely into Keynesian Stimuli, job creation (at core, FIT's are just a job creation policy, not an environmental policy) and energy efficiency programs. These separate the price of renewable electricity from the price of non-renewables, which may or may not be related to the cost of electricity production form these non-renewables. And in this age of financial insecurity, where increased financial risk has lots of costs, FITs are just what the doctor ordered.
One of the virtues of renewable energy is predictable energy production costs. But in much of the US, and especially NY State, the electricity pricing is based on fossil fuel prices, which are inherently unpredictable, and becoming more so as the effects of peak Oil/Peak natural gas get more pronounced. Tying renewable energy pricing to fossil fuel pricing is just plain lunatic, unless you want to hinder the development of renewables, in which case it's just plain brilliant. For technologies with wind turbines, there is essentially no fossil fuel component in the Operation and Maintenance (O&M) or Capital repayment (the largest cost component) - so why should the price of renewable electricity be tied to the price of coal or natural gas?
Many well meaning environmentalists try the subterfuge approaches: "money for nothing" trick of cap and trade, "carbon (dioxide) credits", "carbon (dioxide) offsets", and above all, subsidies for renewables based on bribing the uber-rich with tax deductions and tax credits. These don't work that well; "better than nothing" is just not good enough. These, as well as sufficient CO2 pollution taxes (how about the Stern's "social cost of fossil fuel combustion waste products" value of $85/ton for fossil fuel derived CO2), raise everybody's electricity price. Why not just raise the price that renewable generators receive to a cost of production plus a reasonable profit rate, leaving the prices of electricity made by polluters (nukes and fossils) in the dirt cheap range/and low profit range. As fossils/nukes are phased out by replacement with renewables, prices for electricity will gradually rise to an unsubsidized value, so that electricity consumers are paying the real, full price for this very valuable and useful energy. The FIT strategy of dispersing the extra cost (or extra benefits) of non-polluting electricity among all consumers of electricity on a per-unit of energy consumed basis encourages energy efficiency, and rapidly develops renewables on a lower cost per unit of energy produced than the tax subsidy and quota system used in the US and Britain. Maybe this way, people could actually get a job....,which is really not that probable with the current subsidy systems in the US, and especially to the extent needed.
We need to double renewable energy installations every year in the US for the next 6 years.. For wind, this means going from 8 GW/yr to 128 GW/yr (up to a rate of ~ $250 to $300 billion/yr in largely private investment) within the space of 5 years, and then staying at this level for another 10. You will find that during this interval, the amount of electricity needed will increase significantly, as we will need to replace the natural gas used for home and commercial heating with electricity. Anyway, with about $2.5 trillion invested in wind in the next 13 years, no more need for coal, oil and natural gas burners as well as nukes. Adding in sufficient short term resiliency via pumped hydro and longer term resiliency via reducing CO2 or N2 with hydrogen (from wind turbines and a bit of water) to make storable fuels will also make lots of jobs/require lots of investment/make for lots of new businesses.
But, that won't get done without FITs. Try doing that with the existing tax subsidies (PTC/MACRS)... and you would further bankrupt the federal government, since about 70% of the cost to install wind (about $2 billion per GW of capacity) gets rebated to the investors - but those investors must be rich enough to use them - only the richest of the upper tax bracket types need apply. Thus, the existing wind subsidies (solar ones are even more grotesquely expensive) would mean that a $2.5 trillion of investment in the next 13 years results in $1.75 trillion in less taxes paid by the upper 2% of the income distribution. That's really cute. I doubt that even those folks even will have sufficient "tax appetite" to accommodate a decent renewable energy build out.
The other reason such investments can't happen without FITs is the need for a sufficiently secure investment. The centerpiece of FIT's is a 20 yr fixed price for the energy produced - thus, a known cash flow, and a defined ability to pay back the investment over the 20+ years that these systems will be operating. This allows the renewable energy investments to be amortized over a long time (20+ years), and with lower cost capital and lower interest loans (due to low financial risk). Making electricity prices connected to fossil fuel prices (a central feature of "competitive" and "deregulated" electricity markets like NY's NYISO) means that future electricity prices are unpredictable, and thus investments based on repayment of loans and capital via sales of electricity is really risky. Such "connected" prices will lunge from excess during oil and natural gas price spikes to the pits, where NO new generation plant investments are justified - as in 2009, where average electricity prices for generated power in much of NY state have has been 3 cents/kw-hr.
So, no Feed-In Law, no renewable energy installations of any significance, let alone what is required. It's that simple. Maybe that is why so many enviros who are so well meaning just seem to radiate stupid when it comes to replacing non-renewables in a prompt and economically viable manner. If environmentalists would focus on FITs (which also leads to massive job creation in the millions- and that is just considering the US) instead of moaning and groaning about coal use (been there, done that, and it doesn't seem to do much good, but, if it chimes your bells, go for it), something might get accomplished. But, when crunches come, and people are left with the lose-lose proposition of either no electricity or coal derived electricity (since renewables presently can't be installed because loans for them are TOO financially risky/the cost that the energy is made at can't compete with coal derived electricity, even at an $85/ton of CO2 pollutant tax), people will choose coal (and natural gas is NOT a long term option - way too scarce and once it thermally equilibrates in price to oil, way too expensive - and it is also a CO2 polluter). There is not much future to a lose-lose choice, though in the short term it does avoid freezing to death in what passes for winter these days.
Oh well, so much for trying to inform a public that seems to go out of its way to remain butt-ugly ignorant with respect to renewable energy. Well, I expect no less for the MSM... after all, they tend to be bought and paid for by the highest bidders - in this case, the nukes, fossil fuelers and their Wall St buddies. When will progressive media step up and do the right thing? Got any ideas? Say, within a decade, once it is officially too late? Questions, questions, questions.....Dave Bradley