Tuesday, January 10, 2012

Back At It

"The EIA’s latest report on energy sources and usage in the United States, which covers the nine months ended September, the nine-month total for both renewable production and consumption were higher than those for nuclear power. The EIA showed 6.944 quadrillion Btus, or “quads,” of energy generated from renewable sources in the first nine months of 2011, compared with 6.173 quads from nuclear power."

Here's just a couple of important considerations regarding the cost of the electricity.

We hear about the high cost of renewables...this is relatively NEW technology and NEW installations, compared to old nuclear power plants that were built 30-40 years ago. Those plants will soon reach the end of their lives and will have to be decommissioned. New nuclear power will be very much more expensive...so much so that we may only build 3-4 new reactors. So the real argument centers on what is the "current" cost of renewables vs nuclear. All that will be very different in the future.

The 6+ quads of electricity generated have a "current" cost. The renewables have finished generating their electricity...X cents per kilowatt/hour. The nuclear kw/hrs generated still have a "future" cost associated with them...decommissioning, high level and low level waste disposal and storage, and the clean up of the front fuel fabrication facilities. The cost of this is unknown...but is recognized to be very expensive down the road. It is not dealt with, because it is put off many years into the future, and WE won't have to pay for it...but SOMEONE (your kids, grandkids, great-grandkids, etc) will have to pay the price in the future.

A third consideration is that the cost of most renewables (most notably PV solar) is rapidly coming down, while the cost of new nuclear is escalating every year. ALL energy resources have been traditionally subsidized by the Federal government. The main point today is how level a playing field have we set up for these electricity generating technologies. We create subsidies and incentive policies for renewables that expire every couple of years and have to be renewed. This is not true for nuclear, and especially not true for the oil industry (we still have the oil depletion allowance policy that was enacted back in the '20's) We give the nuclear industry 40 year licenses (and for some 20 year extensions) to write down their debt; but we give the solar industry 15-20 years, even though these are intermittent generators, and plying them face to face on "traditional" economic values does not work.

The growth of the renewable industry is remarkable, even in today's economy; and the costs are coming down. It will soon come to a point where subsidies may net even be needed. Like any industry, the "market" plays of companies, the bankruptcies, the technological gains and failures are no different than the auto industry, the VHS/Beta debacle, the Olympus scandal, and Solyndra. Companies may come and go, but the technology is here today, and will only increase dramatically in the future.

Renewables have a place right now providing "peak power" electricity, and once we begin to seriously implement storage technologies (like hydrogen), they WILL become the mainstay of NEW electricity generation not only in the US, but the rest of the world.

A policy shift CAN occur fairly rapidly and at any time WE decide to create that change. As always, the potential for clean, sustainable, cost-effective, decentralized elect is huge. The problem is no one person or entity can own the sun or wind. But that one person or entity can sure buy their influence in policy making.


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