Renewable sources of energy are greatly misunderstood in public debate.
One misunderstanding is the idea that having more renewables supply our energy needs in the next decade or two is necessarily a public good. A second mistaken notion is that renewable energy sources can support the energy needs of a vibrant global economy without significant political, economic, or social costs. Perhaps the most serious misunderstanding is that “clean and renewable” energy resources such as biomass (e.g. ethanol), fuel cell, wind, solar, and geothermal can be exploited easily and freely sustained without tremendous costs to other resources.
Most of the proposed renewable energy resources take more energy and resources to produce than they supply. This fact is at the heart of the false notion of renewables as a sustainable form of energy that can provide for society energy needs essentially freely and indefinitely.
Recently Senator Jim Jeffords (I-Vermont) announced his plan to submit an amendment to the Daschle-Bingaman energy bill S. 517 (“The Energy Policy Act of 2002” also known as the National Energy Security Bill). The amendment was based on the so-called “20% Renewables Portfolio Standard (RPS)” and it would require energy suppliers to generate at least 20% of their power from non-hydroelectric “renewable sources” by 2020. That’s 10% more than the original bill called for. Thankfully, Jeffords’ amendment was defeated by a vote of 70-29 under S. 517. But the Vermont junior senator holds out hope: the renewables initiative is part of his own bill S. 1333 (“The Renewable Energy and Energy Efficiency Investment Act”).
Jeffords’ efforts beg an important question: Can renewable energies ensure 20% of our nation’s electricity needs, securely and inexpensively (or even 50 to 60% as some of its supporters suggest)?
A key factor would be the timing for a wholesale switch in America’s electrical energy generation to renewable supplies. According to the DOE’s Energy Information Administration (EIA) statistics, renewable energy, excluding hydroelectric power, accounted for no more than 2% of America’s electricity generation capacity for year 2000. Without any demonstrable technology that is both reliable and cheap, how is America is supposed to boost itself to be secure, self-sufficient and yet the “cleanest” nation on Earth, even with substantial personal sacrifice and governmental subsidies for generating more renewable energies?
Renewables enthusiasts offer the Renewables Portfolio Standard (RPS) as “a flexible, market-driven policy that can ensure that the public benefits of wind, solar, biomass, and geothermal energy.” And the Union of Concern Scientists released a major report in October 2001 to support Senator Jeffords’s proposed bill. The headline in UCS’s factsheet reads: “EIA Study: National Renewable Energy Standard of 20% is Easily Affordable.”
But the costs would be far from affordable. The actual EIA June 2001’s report says: “The development of the large amount of renewables needed to satisfy the RPS is projected to lead to higher electricity prices. To reach the assumed target of 20 percent of electricity sales generated from nonhydroelectric renewable sources by 2020, developers are expected to turn increasingly more to expensive renewables options. As a result, the renewable credit price — the subsidy needed to make the new nonhydroelectric renewables plants competitive with other generating options — is projected to be between 4 and 5 cents per kilowatt hour between 2010 and 2020, in order to provide sufficient incentive for the electric power industry to build new renewable capacity rather than less expensive natural-gas fired capacity.”
A subsidy of 4 to 5 cents per kilowatt hour: Is that too much to ask? Do the math: the current average price for electricity in the US ranges from about 4 to 8 cents per kilowatt hour. That means that extensive use of renewables would roughly double the cost of retail electricity, but the price increase would burden taxpayers.
High up-front capital costs are one of the major barriers to the adoption of renewable technologies. The costs are about 3 to 15 times those of conventional fossil-fuel power plant technologies. DOE’s Energy Information Agency recently assessed that “[t]he overall savings in fuel and annual operations [including transmission or delivery costs] and maintenance costs of the renewable technology must overcome the high front-end capital costs for the technology to become competitive. For virtually all the renewable technologies in central station applications, it is difficult to overcome the front-end capital cost disadvantage under current and projected economic conditions absent special circumstances or subsidies.” This is why in the US there have been some 11-12 major federal laws between 1978-1998 on financial incentives to help credit renewable energy and renewable-based transportation fuels. In other words, non-hydro renewables are not “easily affordable.”
Going Nuclear
On the reality of future energy needs and supplies, Professor Stanford Penner, a leading researcher in the field of energy, and the founding editor of Energy, the International Journal, recently concluded that: “Barring revolutionary new advances, the only realistic long-term (longer than 50 to 75 years) supply goal without the still not entirely certain climatic impacts of augmented fossil-fuel use is the near-term, large-scale application of nuclear breeder reactors.”
Despite the very expensive capital costs and the continued concerns on safety of nuclear power plants, there may be relatively good economic news here. Max Carbon and Michael Corradini — the former and current Dean of the College of Engineering at the University of Wisconsin, respectively — remind us that in “1999 production costs at US nuclear plants averaged 1.83 cents per kilowatt-hour, compared with 2.07 cents for coal plants, 3.18 cents for oil-fired plants, and 3.52 cents for natural gas plants.”
Missing from the current RPS consideration is the potential for nuclear energy that is essentially both “clean” and “renewable.”
The European Energy and Transport Commissioner Loyola de Palacio urged in a meeting of the EU energy ministers in Pamplona Spain on April 28, 2002, “We need to make an enormous effort to convince the public about the benefits of nuclear energy. We have to choose. If we give up nuclear energy, we will not comply with Kyoto.”
Still relying on fossil fuels
In the near- and intermediate-term, Professor Penner suggested that “[g]reatly augmented domestic oil and gas production are the obvious first steps that should be taken immediately. These production increases are certainly possible in Alaska and elsewhere while maintaining proper vigilance to protect wildlife reserves from harm. In order to regain control over the supply of low-cost electric power, it will be necessary to install new fossil-fuel plants that do not use oil or natural gas. New clean-coal technologies are in commercial operation in the U.S. and abroad on utility grids. Facilities that can use coal, heavy oil and gas are being operated in Europe and Asia. Low-cost heavy oil is available in abundance from South American sources. These facilities can be designed and operated in such a manner as to achieve better environmental performance than natural-gas-fired plants. We should also take into consideration the excellent performance of nuclear plants in the State during our self-imposed crisis. These have performed extremely well in helping to keep our lights lit. Coal and nuclear plants serve to diversify generation capacity and are not at risk from escalating natural gas prices that are out of control. Coal supplies have stable costs and are available in large amounts from Utah, Colorado, Nevada, and Eastern States. Clean-coal technology plants have been operated in California and have provided low-cost clean energy. Realistic evaluation and utilization of these facilities should ameliorate the intermediate-term problems while better long-term approaches are developed.”
Why do fossil fuels so stubbornly remain the dominant part of the world’s economy and energy portfolios? Again, consider the not-so-fuzzy math. It would take about 0.15 gallons of equivalent energy used to generate 1 gallon of gasoline, while it takes about 1.4 gallons of energy to make every gallon of the popular renewable known as ethanol.
The proposed Renewable Standard Portfolio embodied in S. 1333 appeases human emotions, but it avoids the reality of power generation. The real world energy demands must be met with real and reliable energy resources.
A realistic and powerful way forward may lie in the co-generation of energy relying mainly on nuclear and fossil sources and renewable sources as they make economic sense. That is why even the primary reason for an RPS to help “save” the environment is questionable.
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