Monday, June 28, 2010

Why is 'renewable' energy so damn expensive?

In for breakfast and out for dinner - that's how many natives of Rhode Island describe the terrifying storms the state is famous for. They're quick, powerful and destructive.

The tiny north eastern state is a common target of these fearsome storms - which can see winds whipping up to 130 miles an hour at their worst.

That’s why buying Rhode Island home insurance isn’t exactly cheap and Rhode Island auto insurance doesn’t often doesn’t cover flood damage.

But some clever wag realized that there might be a plus point to these terrific winds.

Environmentalists believe that Rhode Island's bona fide ‘hurricane season’ and weeks of driving wind every year make it ideally suited to reap the benefits of natural energy. That's why they’re currently in negotiation to build a $200 million, eight-turbine wind farm off Block Island specifically for that reason (that reason - and a healthy serving of government pork.)

Developers from New Jersey are keen to ride the wave of ‘alternative energy’ subsidies flowing from Washington and create a ‘wind farm’ that they can use to sell power to the National Grid – the state’s largest energy distributor.

But although I’m quite an advocate of ‘alternative energies’, I foresee an enormous obstacle to Rhode Island’s attempts to ‘go green.’ The National Grid normally buys kilowatt/hours of electricity from gas-fired plants in the region for $0.08. The brains behind Rhode Island’s wind farm are tentatively trying to strike an agreement for the National Grid to buy their electricity for $0.24 per kilowatt/hour.

Therein lies the problem – not just with the Rhode Island wind farm, but with many other ‘alternative energy’ sources. At the moment, they’re simply not competitive. Compounding the problem is the fact that wind farms take millions to erect (the cable linking the farm to the mainland hasn’t even been costed in yet – Rhode Islander’s are going to be expected to pony up $35 million for it) and wind farms don’t work so well when the wind doesn’t blow.

(Although that’s not going to be a problem this year. Experts at the National Weather Service have already predicted an 85% chance of an ‘above normal’ hurricane season and Rhode Island business insurance providers are being warned that a season like that could impact the state’s economy by as much as $3.1 million.)

For most Rhode Islanders, the issue is simply how much more the electricity will cost them – and how they might better spend the money providing for their own electricity needs. Toray Plastics, for example, is the biggest user of electricity in Rhode Island and they're not to happy with the Wind Farm scheme.

Shigeru Osada, Toray’s senior vice president for engineering and maintenance, estimated they'd be charged an additional $260,000 in energy costs in the first year if the Rhode Island Wind Farm’s contract with the National Grid were approved. “We’re not against renewables,” he argued, even outlining plans to install a solar-power system and a wind turbine at the facility in Quonset Point, “we’re just against extremely high costs.”

And ultimately, that’s the issue with so-called ‘green’ energy. Nobody has found a way to make it cost-effective – or, at least, competitive with traditional energy production. Given that more and more states are insisting that a percentage of their electricity comes from renewable sources (in Rhode Island, I believe the figure is 15% by 2020) higher energy costs are likely to be something we all ‘just have to live with’ in the pursuit of 'green' energy.


One Salient Oversight said...

Of course the reply to this is that the cost of environmental damage caused by carbon emissions, as well as the cost of fixing them, is not seen in the price of oil/gas/coal based energy sources.

Think of crystal meth. Just how costly is crystal meth? One way to cost it is to simply work out the street value and state "that's how much it costs". But then you need to factor in the costs involved in crime and funding law enforcement and jails to find out its "true" cost.

So when it comes to oil/gas/coal based energy sources, remember that all you're looking at is the "street value", not the total cost to society and the economy.

Eric said...

I have to agree with you, One Salient Oversight... It may seem to cost a lot for these renewable energy sources on the surface, but in the long run, it's going to make life a whole lot easier for us. We won't have to constantly worry about the tolls our energy usage is taking on the Earth. The disaster in the Gulf is a prime example of this. That whole ecosystem is now destroyed because we can't seem to shake our addiction to oil. It's downright shameful that we, as a community, have let it come to this point. And it's all because humans have become so greedy and refuse to believe that the Earth and it's resources won't last forever.

I think people need to get over their egos and start to look at the world as a home for everything that exists on it, not just for us humans. It starts with our energy consumption. If we have to pay more to sustain life in a way that is healthy for the whole planet, then so be it. We are the most advanced organisms on this planet, and we require more form the Earth to sustain life. With that status comes a responsibility to not only preserve ourselves, but to do so in a way that will sustain and promote life for other organisms as well. I'm sure if we cut out all of these ridiculously lavish and extreremly wasteful lifestyles we'll find the money to afford these things that we NEED the most.

Andy said...

I'm all for wind/solar/alternative energy.

But let's face it...most of it is currently just a scheme that enriches the developers with taxpayer dollar subsidies.

Nuclear, clean coal, and natural gas are where we should be moving in the US. Cheap, plentiful, and right here!

Maybe one day wind and solar will be viable. Personally, I don't live an extravagant lifestyle like Eric seems to believe that we all do. And, I am not of a mind to pay more of my hard earned dollars in utility costs, or taxes to fund projects that will raise those costs.

I guess that's because I'm "selfish." Sheesh!

Andy said...

BTW Roland, OSO, and Eric. I read a thoughtful piece the other day, and had to go back and find it.

It's a bit lengthy, but if you're interested...

One Salient Oversight said...


Nuclear is a bit too dangerous if we want the developing world to use it. Zimbabwe with nukes? Thorium nuclear power sounds interesting though.

Clean coal is a mirage, set up by coal companies to encourage business as usual.

Natural gas burns less CO2 than coal but still contributes a heckuva lot of CO2.

Geothermal power seems to be the way to go. Like a lot of "Green" power, it is capital intensive but the ongoing costs are very cheap. If we can dig wells reasonably easily 4-8km below the surface, geothermal power can be available anywhere.

Andy said...

OSO, I have read quite a bit about thorium. It is very promising.