Green Energy and its Cost

English: The , also known as the Green Mountai...

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There have been of late, numerous articles and comments made about green energy, wind and solar in particular, and the viability of those energy sources to dominate the now prevalent natural gas and coal power generating plants.  Much of the concern is over the cost to generate equal amounts of green energy and the cost burden to the consumer.

According to the federal Energy Information Administration, the “levelized cost” of new wind power (including capital and operating costs) is 8.2 cents per kWh.  Advanced clean-coal plants cost about 11 cents per kWh, the same as nuclear. But advanced natural gas-burning plants come in at just 6.3 cents per kWh.

But a new report by George Taylor and Tom Tanton at the American Tradition Institute called “The Hidden Costs of Wind Electricity” asserts that the cost of wind power is significantly understated by the EIA’s numbers.

Taylor explains that he started with 8.2 cents per kWh, reflecting total installation costs of $2,000 per kw of capacity. Then backed out an assumed 30-year lifespan for the turbines, which increases the cost to 9.3 cents per kwh. Then after backing out the effect of subsidies (On January 1, 2013 the federal production tax credit on wind investments expired), allowing accelerated depreciation for wind investments you get 10.1 cents.  Next, add the costs of keeping gas-fired plants available, but running at reduced capacity, to balance the variable performance of wind — 1.7 cents. Extra fuel for those plants adds another 0.6 cents. Finally, tack on 2.7 cents for new transmission line investments needed to get new wind power to market. The whole shebang adds up to 15 cents per kwh.

Whether you stay with the costs offered by the Energy Information Administration or opt for the Taylor numbers, the bottom line is that it is still more expensive to develop green energy over the current natural gas natural gas technology.  That is, assuming that we continue to source enough natural gas to keep the cost as low as it is today.  As with anything else, the amount of supply –vs.- demand controls the price.

But, most people base their assumptions of the amount of available natural gas on the current demand rates and then use those numbers to predict the availability into the future, say 30 or 50 years.  What they don’t consider is population growth. It is predicted that by the year 2050 there will be over one billion persons living in the United States (possibly up to 5 billion if current legislation to lift immigration limits passes congress), and a total world population of ten billion.  That is a lot of people demanding a whole lot of energy.  Can the natural resources keep up –I don’t think so.

So how do you plan now for the future?  The obvious answer is green/renewable energy.  Large wind farms placed in the right areas (e.g. coastal areas and interior parts of the U.S. with natural thermal convection climates), can generate tremendous amounts of electricity.  But it is true that winds are not consistent so some sort of storage or back-up generation to augment wind generator inefficiency is needed. In addition, wind farms for the most part are in areas of sparse population so major infrastructure must be developed to move the electricity to populated areas.  With those pitfalls in mind, I ask; is the concept of generating electricity from a central power source and distributing it to the masses outdated?  Should we instead be concentrating on individual sources of electrical generation through the use of Photo Voltaic technology and placing systems on as many roofs as we possibly can in the next decade?  Perhaps a neighborhood or subdivision could co-op a system in the same way they pay homeowner fees for other amenities, and therefore eliminate long runs of distribution lines and the line-loss attributed. According to EIA data, national, annual electricity transmission and distribution losses average about 7% of the electricity that is transmitted in the United States.

No matter the solution, there is no doubt that there will be costs involved.  But, if we begin implementing changes now and continue to gradually increase the amount of green/renewable energy over time, the costs will be spread out and the pain to both the public utilities and the public will not be as great.  On the other hand, if one day twenty years from now you wake up and find that you are running out of natural gas and oil and must scramble to build new infrastructure, the costs will be nearly insurmountable.

Even if you begin using the current “inefficient” technology of today, you are miles ahead of the game then you would be to wait another ten years for technology to improve.  It is far easier to upgrade existing technology then it is to implement new technology and its accompanying infrastructure.

Part of the green energy debate also concerns government subsidy programs and many critics are against spending money on solar and wind projects or the associated research and manufacturing companies.  However, if you look back over time, the government has been the driving force behind many of the things that we take for granted today.  It was the Federal Government that funded the construction of the Trans Continental Rail Road. It was also the Federal Government that funded the construction of the interstate highway system and other minor highways that are used to deliver people and products from one area of the country to another. Take a look at all of the things developed by the government for military use or to explore space, that we now use every day as a matter of convenience (e.g. microwave cooking, cellular communications, GPS, high definition video, anything made of plastic, and so much more).  But all of this current technology and infrastructure took decades to become as affordable and efficient as they are today, and for the most part,the only reason these products did evolve is because their initial invention investment was either completely or partially funded by the government and then made available to the public.

It was our fathers and grandfathers and perhaps even our great grandfathers that we must thank, for it was those men who helped pay for and build the world that we live in today.

All in all, I find it very odd that we are in this day and age arguing about costs as opposed to how to move forward toward the future and advancing green technology.  But then again, it seems that today it is all about the “bottom line.”  Businesses today are making higher profits than they have ever posted in the past, but to get these profits they are eliminating or at least minimizing overhead costs to the detriment of the employees.  Companies are eliminating positions, as well as, paying lower wages (and in some cases eliminating benefits), to the existing workers to perform the same jobs.  And as we move toward the next decade there will be an even further decrease in available jobs as technology continues to advance beyond repetitive labor functions.  These company’s should start caring a little less about the bottom line and a little more about the future if they expect to continue doing business for another 50 or more years.

With all of that said, perhaps I should be asking myself; why should I really care if we start implementing green technology today?  In fact, perhaps it is good that you are not raising my electric bill to pay for wind or solar power.  I am 58 years old and I am still working but why should I be forced to pay for someone else’s future..  My wife and I do not have any children so why should it matter to us, what happens to this earth 40 or 50 years from now.

In reality it is hard to, in good conscious, to continue to focus a blind eye on the environment. Perhaps advocacy for sustainability will be my only legacy.

About craigruark

Craig A. Ruark is a freelance writer, journalist, and marketing and PR professional. Craig started his professional career in broadcasting; as a radio announcer, news reporter, and advertising account executive. He wrote and produced radio and television commercials, public service announcements, and gathered news stories. Since 2014, Craig has worked as a freelance writer providing newsletter and blog content for clients in various industries. From May 2018 to March 2019, he was the editor of bizNEVADA Magazine and has been a contributing writer for the Las Vegas Business Press and Las Vegas Review-Journal, producing over 200 in-depth articles on a wide range of subjects including technology, medical advances, economics, and local businesses. He has also interviewed some of Las Vegas’s most prominent individuals and written over two dozen business profiles. Craig is an avid fitness participant, sailor, SCUBA diver, enjoys singing Karaoke, listening to jazz, and is working on his next book.
This entry was posted in Business, Corporate Social Responsibility (CSR),, Environment, Ethics, Government Incentives, Green, Green Energy, Photo Voltaic, Price of Gas, Price of Oil, Solar Energy, Sustainability and tagged , , , , , . Bookmark the permalink.

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