Resetting misdirected energy policy after 40 years

Academic journal sets a possible path forward

Bill Opalka | Apr 26, 2012

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Climate change legislation may be dead and crafting a national energy policy may seem futile, but developing a future powered by clean energy is still possible.

The American Academy of Arts & Sciences dedicated its Spring 2012 Journal, Dædalus, to the alternative energy future, which was released April 25.

“There are a few things you can do. It turns out that people don’t think about the climate problem, but they do think a lot about local environmental problems that affect them,” Robert Fri, guest co-editor of the journal and senior fellow emeritus at Resources for the Future told RenewablesBiz.

Environmental policy, as a result, has influenced energy production and use. So while cap-and-trade may be futile an alternative policy like performance standards may have a similar effect.

An example of a performance standard would be corporate average fuel economy (CAFE) for automobiles, but they aren’t as efficient sending price signals.

Another recommendation is finding ways to close the commercialization gap for new technologies. “We spend a lot of time subsidizing technologies like wind, which actually work, but we’re not very good at closing the gap for really innovative technologies, where venture capital leaves off and where utilities and others pick up,” Fri said.

The final tool is better use of social science, as existing technologies aren’t being used to the fullest extent. “Getting people and institutions to use the technology in order to get a good energy outcome is a problem and we need to learn more about how to solve it. That’s better addressed by social scientists rather than physical scientists and engineers,” he said.

A prime example is programmable thermostats, which are a marketing and commercial success, but research has shown few consumers understand how to use them for their maximum benefit.

The journal tackles these and other energy issues.

The lead article, “The Alternative Energy Future,” was written by Fri and Stephen Ansolabehere of Harvard University. Ten other contributors examine initial steps the country could take toward achieving affordable, reliable, and clean energy.

The essays document a multi-decade record of misdirected policy initiatives and a history of underpricing energy relative to its societal costs. Two of the largest impediments to a successful national energy policy are political resistance to allowing energy prices to reflect their true, all-in costs and inadequate public understanding of the link between energy consumption and climate change, according to the Fri and Ansolabehere.

Other pieces include:

In “Paying Too Much for Energy? The True Costs of Our Energy Choices,” Michael Greenstone and Adam Looney draw from their Hamilton Project research to calculate that the “true social cost” of current energy consumption is nearly three times the amount that appears on utility bills.

Kassia Yanosek contends in “Policies for Financing the Energy Transition” that a transition to a low-carbon economy requires innovations and new technologies that can compete with conventional energy on cost and scale.

The editorial staff at RenewablesBiz.com is passionate about exchanging ideas and dedicated to promoting ongoing conversation about renewable and sustainable energy issues. We invite you to join and contribute to our online community. If you have an idea for an article or editorial contribution, please contact me via email, bopalka@energycentral.com, or phone, 860.633.0090.

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Comments

Energy policy

Renewable energy policies exist because of a belief that man-made carbon dioxide causes dangerous global warming and the belief that they could make a difference (which, quite clearly, is not true).

The fact that the world has not warmed significantly in the last 10 to 15 years and this proves that carbon dioxide doesn't cause dangerous global warming. All the evidence from sunspots and history tells us that the world is almost certainly headed for a cooling phase which, in reality, will be worse than the promised warming.

 If you look at the actual evidence, the world has ample resources of fossil fuels and huge resources in nuclear power. This can provide the world with all the energy it needs at low cost for the foreseeable future.

 Hydropower and steam driven geothermal apart, new energy technologies are waste of time and an enormous waste of valuable resources. Money being one of them.

 The sooner this nonsense ends the better.

Cost/Performance Gap

Perhaps more important than closing the commercialization gap is closing the cost and performance gaps first.  Throwing subsidy money at large scale deployments of technologies that are not competitive is a waste.  At a fraction of the cost, government could fund R&D that is specifically directed toward reducing costs and improving performance.  There was no reason to deploy small, inefficient wind turbines that could be supplantd by larger, more efficient and less expensive (on a cost per kkw basis) within two or three years.

Jack Ellis, Tahoe City, CA

A pretty good way to express the real need, Mr. Ellis

Right now, if one looks at the cost of rooftop solar PV, it comes in at roughly $4000 to $5000 per KW installed.  over the course of a 20 year life, the unrebated cost disregarding any maintenance is $114 to $142 per MWh.  One can get a 12 month fixed rate residential service agreement in ERCOT for about $92/MWh and round the clock wholesale power market is running about $43.50/MWh.

It is my understanding windfarms in ERCOT cost roughly $2500 per KW installed.  This does not include the cost of long distance transmission lines to get the power to the load centers  nor the cost of installing simple cycle gas turbines to back up the wind power which is rarely available when load is highest--in fact, it is most available when load is the lowest.  This makes the capital investment for the wind farm alone roughly $44.60 per MWh (remember that does not include the cost of the long distance transmission lines being paid for by ratepayers in ERCOT).  The wholesale cost of power when wind is typically most available is generally in the mid-$20s.

Mr. Ellis is correct in my opinion, the only legitimate place to spend taxpayer dollars is in the R&D to get the costs down--and investment that leverages well--rather than wasting the taxpayers' money building uncompetitively priced power facilities.

Mark Wooldridge

What's really needed to be able to move forward....

I agreed with a lot of what the above article had to say, but think that they missed the single biggest tool that we can utilize to get past the end of our nose mentality that is present in terms of energy policy today.

That is, we need to take a page out of the conservative movement's playbook in that we need to truly approach gaining support for this issue on a grassroots basis.

A long time ago in a galaxy far, far away, I worked at an AM radio station.  This was during the time when FM stations were coming on line with the album oriented rock format.  FM offered much better reception, sounded better and could be broadcast in STEREO! 

It didn't take long before AM stations were relegated to crop reports and (ehhh) "talk radio". 

For the most part, AM was dead; until the conservative movement started utilizing them to rally support for their cause.  These stations might have only had small audiences, but they had audiences and they were cheap and even free to influence the tone of the stations.  There were also a whole bunch of them.  The end result was that a large number of people started to coalesce around their cause and a movement was born.

Renewable energy and sustainability needs to do something similar.  We might not be as entertaining as Rush Limbaugh screaming at us, but at least we could start building a movement from the bottom up as opposed to the top down as it's now being attempted.

 

Bob "The Clean Energy Guy" Mitchell

Electricity Cost Important than the Environment

Bill - A successful renewable energy policy is critically dependent on cost. For example, In a blog post of February 4, 2012, I wrote, “In spite of extensive incentives from U.S. federal and state governments…, renewable energy consumption of solar and wind from 2006 to 2010 has been underwhelming at best.”

 

That observation was confirmed in a recent article in the Boston Globe (January 31, 2012), “Green electricity finds few customers in Mass:”

“Five years after NStar became the first Massachusetts utility to allow customers to buy electricity supplied by a wind farm, its Green program has failed to catch on. Less than 1 percent of the company’s nearly 900,000 customers have enrolled.”

“The dismal response resembles lackluster participation in similar renewable energy programs offered by other utilities, worrying state officials as they push toward a goal of generating 20 percent of electricity from renewable energy by 2020.”

“The NStar program has faltered because of the recession and falling fossil fuel prices, which resulted in a greater surcharge for wind energy. Environmental activists are frustrated and question whether utilities have done enough to publicize the programs.”

Electricity from renewable energy makes sense from environmental impact and domestic accessibly perspectives. However, cost to the consumer is more important. 

Dr. Jeffrey Everson

www.jheversonconsulting.com

jeff@jheversonconsulting.com