Wednesday, November 23, 2011

Response to My Friend on Subsidies

Your article on wind energy in the Netherlands was interesting. I scanned it, and accidentally deleted it, and can’t seem to find it again via my searches., but as I recall, it shows the complexity of the technology…economics, resource availability, grid integration, environmental impact, etc…all things that have to be/will be sorted out in the future. The same is true of the complexity of nuclear power…construction costs, safe operation, decommissioning, waste storage, contaminated support infrastructure, etc. Right now the high subsidies are what has been in place for years…that can/will change. What is the true cost of any energy resource…oil depletion allowance, federal land leases, gas subsidies, solar subsidies…they all have required/will continue to require some government support…even the hugely profitable oil industry.

The point I’ve been making for many years is that Renewables, with all their unique aspects and problems, are consistently coming down in price. Wow! That should be startling news to any fiscal conservative. Oil was $30/bbl ten years ago, and now it has stayed around $90. Nuclear construction costs were $3-4 million/MW, and now around $8 million. Solar was $5/w and now around $1. Wind is experiencing the same Moore’s Law effect…the more we build, the more we learn how to make the technology better and cheaper. (Computers, cell phones, TVs, iPads, etc)

So it is a shame that we can’t compete in the technology that we invented. I blame that on the poor (deliberate) POLICY this country has thrown at the whole renewable energy industry for the past 30 years.

Fortunately, the rest of the world (China) will lead and benefit, as we soon add imported solar dollars to our imported oil outlay.

Pretty amazing when your product can’t compete with new and better technology.

This is true for the wind industry as well.

Your concern about tariffs and subsidies…ie. taxes…what about this:

And remember, when we discuss the true (real) price of energy, we need to consider all the components.

the transition is not going to be easy, and will take many years of hits and misses. It would be a whole lot easier if common sense were to prevail, rather than the greedy power plays that the energy industries have thrown in the way of development.

2016 seems to be a landmark year…I will get my steak dinner because there will be no new nuclear generation in the US, and that industry will be on its last leg because of economics.

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