Energy Policy — Looking for the Broad Side of the Barn
Wednesday morning as I was getting ready to conclude my participation in the Renewable Energy Finance Forum, I had a thought I wanted to share. It had been two-days of nitty-gritty financial talk — extremely precise language of tax lawyers and investment bankers, which left me more than ready to resume a discussion of the “broad side of the barn.” As important as all these issues of cost of capital, production tax credits, and Senate bills addressing master limited partnerships may be, this really had been, to some degree, an exercise in missing the forest for the trees.
Here are a few points that have received very little play here:
• We’ve begun to see how our on-going dependence on fossil fuels is ruining the planet, taking more lives, and destroying the health of more people each year.
• The degree to which we need renewables today can be debated, with cheap natural gas and a recession that has lessened demand for energy. But since these are temporary conditions, it’s shameful for us to be actively reducing our commitment to clean energy.
• The traditional energy industry spends tens of millions of dollars a year to convince those who don’t know any better that renewable energy is an unholy mixture of crony capitalism and socialism, that it’s based on bad science, and that it exists only as the product of a bloated and incompetent government. When you bust the myths, you see through this immediately, but who exactly has the resources to communicate the truth to the electorate?
The whole enterprise of clean energy and sustainability more generally comes down to morality. If you really don’t care about the health and safety of the people and other life forms who share the planet, now and in the future, you feel perfectly justified in using the absolute cheapest and dirtiest form of energy, i.e., burning coal, and then using that energy with grand extravagance. If, on the other hand, you have some level of feeling for the world around you (which, fortunately, the vast majority of people share), you look for a solution, and you make certain sacrifices to get there.
If Wall Street gets even richer in the process, that’s fine by me. In fact, I join many readers here when I say that I intend to be a part of that success. But the imperative to replace fossil fuels with renewables goes far beyond the fattening of our wallets.
One thing perhaps not widely known in the USA is that the installed cost of solar power there is very substantially higher than in Europe.
Domestic scale Solar arrays in the UK which usually run to between 3 and 4 kW capacity are now offered by some installers for £1.75 (around $2.60) per watt fully installed, whilst in Germany the average installed cost of PV arrays is $2.25 per watt though this does cover all scales (25 May 2012) On the same date, utility scale multi megawatt arrays in the USA cost between $3.00 and $3.80
I do not believe that labour costs are significantly higher in the USA than in Germany of the UK, therefore I have to say that the market and institutional factors such as planning and permits would appear to need work to match European financial efficiency. This is particularly so as the entire hardware requirements of even a large PV array can be purchased ex factory for around $1.30 per watt net of taxes.
The cost gap between PV and fossil generated power is narrowing rapidly – especially considering that peak solar generation is delivered at a time of day when utilities are paying the highest price for power.
An issue not so much discussed is how we can store electricity from wind in the night and solar during vacations. We now have technologies for capturing carbon atoms from the atmosphere (or from industrial emissions) and chemically combine them with hydrogen from water into the simplest hydrocarbon methane (CH4), alcohol methanol (CH3OH) or ether dimethylether DME (CH3OCH3). Thus we can change from fossils to renewables without changing our transportation and other conventional applications that much.
We are living beyond our means in both financial and environmental terms. It is like skating on a lake on which the ice is thinning at a steady, predictable rate, but instead of dealing with the problem we are calculating how long it will be before we fall through the ice. The general assumption is that we will not have a real problem until we actually crash through.
I like this comparison. The bottom line being that when we crash through, the cost to save ourselves as a viable society will be much higher, and there is a high risk of drowning.
Small advances can grow to vast changes. The new company which has introduced a means to inject hydrogen fuel into small engines can reduce more pollution than all the fuel cell cars of the next ten years and in the bargain create a large market for hydrogen fuel. HySolGenics portable hydrogen fuel generator stations are a perfect size fit for the small engine application.
Craig, thank you for those astute comments! You are exactly right, we are getting lost in the minutia and ignoring the big picture. What do we really want – then how do we get there. It’s like wanting to take a vacation, but getting stuck in the cost so you stay home instead of getting creative and having the time of your life.
How do we move people into starting with what they care for and what to see healthy? Once that gets clear, then we certainly have the creativity and will to achieve it.
This is a great analogy. The key lies in focusing on what we want, not on what’s not working. We tend to do minute analysis of problems, essentially asking the problems to give us the solutions. This keeps us stuck in the past. When we turn instead to what we want, suddenly we open up all sorts of creativity and innovation.
Maybe the way to get there is to continue to draw attention to a positive future vision that it’s hard to argue with. I for one would like to see energy efficiency a much more integral part of the discussion. That’s like ANWAR on steroids.
Unfortunately, in our economic system profit and/or savings is the prime directive that guides decisions, whether directly or indirectly. This includes investment in clean renewable energy. With regard to the environment, profit cannot be a prerequisite for change. The stakes are too high. The problem is not that Wall Street might profit, it’s that it won’t do anything until its sure that it WILL profit.
Morality is always important, but it takes excessive time to change a profit addicted industrialist’s moral compass. Finding/developing/promoting alternative means of energy production that are PROFITABLE and that will therefore enlist the PROFIT INCENTIVE into serving the environment is very likely the most effective way to swiftly wean the current energy production industry away from fossil fuel use and save the health of our environment.
I’m not sure you have it exactly right; my take on the issue is that government regulations stand in the way of clean development more so than any other effort. I don’t see the political side as others do; I see one faction trying to spend more tax dollars to prop up clean energy while the other side of the isle is trying to curb spending and reduce the size of government. I don’t see any effort to stymie clean energy for the sole purpose of slowing the development of that energy.
That said I see the ongoing effort by environmental groups to stop wind development and solar; hydro has long been frowned upon by environmental organizations. Very recently I was in Idaho and some billboards were stating sWINDle not clean, not for Idaho. So where is the effort by these NGO’s to support clean energy?
The mountain of red tape a developer must cut through is daunting, time consuming and very expensive; many times the effort though successful is still shelved due to NIMBYism. I think the enemy is ourselves and it may take higher rates and more profound evidence that we are killing ourselves before the general public buys in. When that happens and folks are pleading for a wind farm or solar field or maybe even some effect on their recreational opportunities to arrest clean air and water issues as well as lowering high costs of energy, then and only then will we see all involved get on the same bandwagon.
Some great metaphors here. Thanks for the creative thinking.
Craig,
For an explanation of the dilemma you pose take a (another?) look at “The Tragedy of the Commons”, written by ecologist Garrett Hardin and first published in the journal Science in 1968. For the Cliff Notes version, look it up with Wikipedia.
Lots of rational people acting in their own self interests will eventually deplete the “commons” of its resources even though these rational individuals realize that their actions will ultimately be detrimental to themselves.
The resulting self interests leads to both NIMBYism and to structural hoops that must be completed to get things done.
It would be nice if a simple analogy like skating on thin ice would motivate someone to conserve sufficient finite fuel reserves for future generations. But the root of the problem is far more intractable. Every dollar we expend to tap a readily accessible fossil reserve can produce $20-30 per month in “commerce”. Spending the same dollar on PV, rooftop water heaters, or wind turbines produces $0.002 – 0.02 of comparable value. It is easy to give up a few fossil fuel excesses but my salary and way of life depends on the commerce from rapidly depleting finite fuel reserves. And the pint or two of gasoline I provide my lawn mower or a chain saw can accomplish more work in a few hours than I can perform all year without power tools.
We take big risks with the planet because the rewards compensate for those risks. As soon as the risks outweigh the rewards we will change our approach with ease. The intractable part of the problem is that this happens when the ice cracks and we fall into ice water. If only the problem were that we could extract ourselves from warm water when we are prepared to do so.
If you want to change the world over to alternative energy, “Put your money where your mouth is,” that is invest in alternative energy only and “Just say NO” to all fossil fuels and start today.Don’t wait for someone else to do it for you. You say you believe and then go fill the tank with Gasoline or Diesel , or CNG (All Fossil Fuels) If it is to be it is up to me and you. Find another source, run on vegetable oil if use use Diesel, use Gasohol 85% if you can just have a few gaskets replaced, Buy an Electric, not a hybrid for your primary car. As I sometimes repeat, “Talk is Cheap, it tales Money to buy Land.” If you missed the broad side of the barn with a shotgun, open your eyes, point the right direction and fire, fire again ! Get with it !
Craig, I wish your spell checker worked better… Here is corrected copy.
If you want to change the world over to alternative energy, “Put your money where your mouth is,” that is invest in alternative energy only and “Just say NO” to all fossil fuels and start today. Don’t wait for someone else to do it for you. You say you believe and then go fill the tank with Gasoline or Diesel , or CNG (All Fossil Fuels) If it is to be it is up to me and you. Find another source, run on vegetable oil if you use Diesel, for gasoline, use Gasohol 85% if you can just have a few gaskets in your engine changed to update the fuel permitted, Buy an Electric, not a hybrid for your primary car. As I sometimes repeat, “Talk is Cheap, it tales Money to buy Land.” If you missed the broad side of the barn with a shotgun, open your eyes, point the right direction and fire, fire again ! Get with it !
garth complains about enviros being in the way perhaps b/c he has only heard the voices of industry who have the ears, hearts and minds of our decisionmakers and media. i have been boots on the ground with the efforts of “enviros” who have been willing to share their expertise and knowledge about the layers of land protection in the california desert and who back in 2007 created and offered gis maps for more appropriate [degraded, private] lands for solar projects. problem is industry didn’t want any help/partners when it came to siting, i.e. brightsource at their ivanpah solar project/boondoggle. if industry had kept their eye on the bigger pix, instead of being dazzled with the almost free price-tag of public lands, it would have dawned on them to ask “what is the catch?”. turns out that these free lands were never free and carried a lengthy payment schedule: the federal nepa process. both california and federal govts created energy mandates way without the benefit of parallel planning for renewable energy zones. that absence has created a horrible confusion/frustration for everyone involved: taxpayers, residents, business folks, industry, governments etc. would you want an architect to build a house just “winging” it, or would you expect a plan/blueprint? now what we have in place is a “figure-it-out-as-we-go-along” approach. i’m not alone in publicly expressing fear about a future of serious unintended consequences, similar to the scenario that mr. tolme describes. hope someone is listening out there this time and takes our decisionmakers to task.
Craig:
Currently, about 6.9 billion people inhabit the earth – of which 60% to 65% (Christians & Muslims) believe that life on earth is just a phase of existence to test our metal for the hereafter. More often than not, they also believe that propagating the species is a moral obligation that will enable more souls to have a shot at displaying their eligibility to enjoy the splendor of an eternal existence with their respective Gods of death. Then, of course, there are those un-tabulated millions or billions who haven’t the foggiest notion of why babies appear, but they still contribute to the growing number of “gifts of God” that become voracious consumers of energy.
In your recent article (06/12/12) you stated that: “If, on the other hand, you have some level of feeling for the world around you (which, fortunately, the vast majority of people share), you look for a solution, and you make certain sacrifices to get there.” While I applaud your enthusiasm & faith in the level of understanding held by the “vast majority”, I fear your position is not in accord with reality. The truth of the matter is that the “vast majority” of Homo sapiens throughout the world, when confronted with knowledge of the physical world that is in conflict with the comfort-zone of their religious tenets, their faith trumps knowledge and any call for sacrifice will be ignored.
As if the swelling population numbers spawned by ignorance and religious tenets were not enough to thwart progress of renewables, the rise of unregulated corporate influence within developed countries serves to tilt the ecological balance in favor of those established energy industries. I would modify your words to describe the “vast majority” as those who: “really don’t care about the health and safety of other people and the other life forms who share the planet”. While they give lip-service to noble causes such as sustainability, in reality they: “feel perfectly justified in using the absolute cheapest and dirtiest form of energy, i.e., burning coal, and then using that energy with grand extravagance.”
Craig, I share your hope about what can & should be done, but history speaks all too clearly about what it takes to bring about meaningful social change. If we are lucky, the harsh consequences of the “vast majority’s” denial of the need to commit ourselves to clean energy & sustainable life-styles will provide a wake-up call before the destructive processes have advanced beyond any chance of reversal.
Let’s hope for the best,
E2
Claudia, I too have “boots on the ground” my job is to get local government and NGOs on board when we have a project, which by the way are small hydro, pump storage and transmission that accompanies energy development. The biggest obstacle is the stonewalling efforts by our mid level government service agencies,(government works on a different time line then does the private industry) followed by bleeding heart enviros and nimbies, those who just flat don’t want any development period. The NEPA, though time consuming and expensive is much easier than dealing with folks who want the advantages of clean energy but want it “else where” as long as it isn’t in their backyard.Ironically, these nimbies will use any and all environmental blockades just so they have an argument. In spite of the mitigation effort, which is usually more than adequate and in fact usually improves the habitat, they still fight and stonewall the project. As I stated it’s not government per se rather it is us that makes clean energy development expensive and time consuming.
Very well said. Your seeds are spawning critical thinking and conversation. Will the core of a critical mass develop into ‘something more?’ One can hope.
Leadership will be key.
Thank you.