Guest Post by Willis Eschenbach
Sounds like a scam, huh? But it’s real. Let me explain how people (no, not you or me, don’t be foolish) can make a guaranteed 29% return on their investment. However, to make it clear, I’ll need to take a short digression. I ran across a National Geographic article on where the world gets its electricity. Here are their figures:
Figure 1. World electricity production by fuel type. Renewables (defined by AGW activists as solar-, geothermal-, wind-, and biomass-generated electricity, but not hydroelectricity) are 2.7% of the total electricity use. Data from National Geographic
You can see why the AGW supporters’ heads are exploding as the Durban climate party approaches. It is obvious from the chart that years and years of subsidies and tax breaks and IPCC reports and various urgings by well-meaning but clueless pundits and billions in wasted taxpayer dollars have not succeeded in getting renewables up to even 3% of the total electricity generated. Less than 3%. It must drive them round the twist to contemplate their stunning lack of success at making water flow uphill.
Despite that history, you know how they say on those TV commercials, “But wait! There’s even more!”? In this case, it’s “But wait! There’s even less!”
The reason that its even less is that Figure 1 just shows electricity. It doesn’t show total energy consumed, which is a much larger number. Total global energy consumption is shown in Figure 2.
Figure 2. World energy consumption by source. “Renewables” are solar, geothermal, wind, and biomass. Note that the traditional use of firewood for cooking is not included. Data from the BP Statistical Review
So although renewables have (finally) gotten to 2.7% of the electricity production, they still only represent 1.3% of the global energy consumption. And this is with heaps of subsidies.
And I don’t mean just a bit of money to get them over the hump. Huge subsidies. Because of the total failure of renewables to penetrate the market, the AGW supporters are desperately throwing money at renewable technologies. The New York Times showed a graphic for one such power plant in California. Their graphic is reproduced below as Figure 3.
Figure 3. Federal and State Subsidies for the California Valley Solar Ranch.
Unfortunately, the Times didn’t really discuss the business implications of this chart, so let me remedy that omission.
First, how much money did the investors have to put in? Since the project will start earning money once the key is turned and the market is guaranteed, the investors only had to put up the total capital outlay of $1.6 billion. Less, of course, the generous government grant of nearly half a billion dollars. Total invested, therefore, is $1,170 million dollars.
On that money, the investors stand to make a net present value of $334 million dollars … which means that due to the screwing of the taxpayers and ratepayers, a few very wealthy investors are GUARANTEED A RETURN OF 29% ON THEIR INVESTMENT!!!
How is this fair in any sane universe? AGW supporters talk about the 1% having too much money, and here the same folks are shoveling the money into the one percenters’ pockets. The 1% weren’t rich enough already, so I have to foot the bill for them to get a GUARANTEED 29% RETURN on their investment?
Note also that a huge part of the money, some $462 million dollars, is coming from the California electricity ratepayers, including yours truly, through increased charges for electricity. This means that these solar scam artists are being allowed to sell their power at 50% ABOVE MARKET PRICES!!! Not just a little bit above market. Fifty percent above the market price! Where is the California Public Utilities Commission whose job is to protect the consumer? Oh, I see … the are the ones who agreed to the 50% above market rate hike … for shame.
Pardon my screaming, but this insanity angrifies my blood mightily. Ripping off both the consumer and the taxpayer to allow millionaires to make a guaranteed 29% return on a not-ready-for-market technology, and charging ratepayers 50% above market for the electricity? That is reprehensible and indefensible. In particular, the rate hikes hit the poor much harder than the wealthy, so we are billing the poor to line the pockets of the 1% … and all this in the name of enlightened carbon fears.
A few last numbers to consider. Without the layers and layers of subsidies, the investors would have had to put in $1.6 billion, and they would have suffered a loss of $1.1 billion dollars. The investors wouldn’t lose just a little, they’d lose their shirts, their pants and their ties … and seventy percent of the money they put in. That’s how far this technology is from being marketable. Not just a little ways short of profitability. A long, long, long ways from being marketable, more than a billion dollars short of making a profit.
Finally, the total subsidies for this plant were $1,430 million dollars. So this single “successful” green project will cost the consumer three times what Solyndra cost. And in return … we get energy priced at 50% above the market. Thanks, Energy Department, glad to know you have my back.
You can see why I’m screaming … the inmates have taken over the asylum. Steven Chu, the Secretary of Energy, says we need more successful green projects in order to survive the depression … me, I fear we won’t survive Secretary Chu.
I know we won’t survive if we follow Chu’s brilliant plan for ‘successful green projects’ that do nothing but line the pockets of the 1% with billions in subsidies. That path is the poster child for the concept “unsustainable”, and Secretary Chu is the poster child for the brilliant idiot. He is undoubtedly a genius in his scientific field, but whoever unlocked his ivory tower and let him loose on the business world has some serious explaining to do.
Here is the problem with Energy Secretary Chu. His failures are bad enough. But his successes are lethal.
w.
Our prosperity is getting chewed up.
Willis, you are right on target. I am screaming with you although I don’t live in CA. It would seem to me that the electricity users could choose which sources of juice they buy. I will take hydro, coal and nuclear, thank you. The people who are adamant about saving the planet can buy the “renewables”. I think that would be very fair,
“Here is the problem with Energy Secretary Chu. His failures are bad enough. But his successes are lethal. ”
Are you just now figuring this out???????????
[REPLY—Nope. Not sure why you’d think so. -w.]
If they are getting a large benefit ($205 million?) from the government-guaranteed lower interest rate, then they are financing a huge part of the capital outlay with debt instruments. So the equity investment that gets the return of $334 million will be much smaller than $1.6 billion.
The large benefit provided by the government-guarantee also means that these projects will try to max out on the amount of debt they use to finance the project. Which is probably why they are going bankrupt so fast and so often (when the economics don’t work quite as expected). And when they go backrupt, who picks up the loss (when there is a government guarantee).
it’s game on in australia, and it will end badly:
17 Nov: SMH: David Wroe: Winds of change for new energy investment
Australia’s gradual shift away from coal and towards cleaner energy has begun, government figures released yesterday showed, with nearly half of new energy investment being in wind, hydro and solar projects.
The Bureau of Resources and Energy Economics reported that new wind farms alone made up 41 per cent of the new energy investment either begun or committed in the year to October.
Gas, which is set to play a larger role under the government’s plan to shift towards cleaner energy, made up another 36 per cent of planned investment…
The Energy Minister, Martin Ferguson, welcomed the planned investment but warned it might not be enough to meet Australia’s future electricity demand. Just two major projects – both wind farms – were completed in the past year, he said, compared with 11 projects in the previous year.
The energy sector needed more certainty, he said – a broadside at the Coalition’s stated plans to repeal the carbon tax…
The director of emissions and environment at Westpac, Emma Herd, said the passage of the carbon pricing legislation would help investors make long-term decisions about energy projects. ”Renewable energy will become more attractive as the carbon price improves the economics of deploying renewable energy,” she said….
The Clean Energy Council policy manager, Tim Sonnreich, said: ”Plenty of people still have the view that renewable energy is a very small percentage of our energy mix.
”But in South Australia it’s already 20 per cent and that will be the model for the country by the end of the decade.”
http://www.smh.com.au/environment/winds-of-change-for-new-energy-investment-20111116-1njds.html
——————————————————————————–
And we thought “green energy” was a bad investment!
Well, okay, it is for most of us that aren’t Kennedys or most any other Zero (Obama) backer you could name.
Of course, there are folks from the right side of the aisle that take advantage of government largess in pursuit of zero population growth (cause that’s what it comes down to!) but Dims sure do lap this stuff up according to Schweizer’s new book “Throw Them All Out”.
Umm, wait a minute, Willis. Couple of quick questions–do ratepayers pay the higher rates or do the utilities make lower profits? Second, SunPower is a publicly traded company–couldn’t you buy shares in that company and participate in the extravagant returns? (Wouldn’t recommend it–they’re on a list of seven companies ‘most likely to go bankrupt.’) Lastly, have you ever done (or seen) a similar breakout on funding for a natural gas/coal/nuclear plant?
Will – here in Oz the government encouraged the installation of solar panels on people’s homes. To assist they would pay 60c per kWhr which is 3 times what the utilities were charging!! Not far from me is a storage shed complex and the owner has put 40 solar panels in two rows of 20. Assuming the panels are 180W panels it will produce 7,200W or 7.2kW. Over 6 hours per day that’s 43.2kW per day. @60c that’s $25.92 per day or $9,460.8 per year. Considering the storage sheds don’t consume electricity once the panels are paid for it’s all profit.
I think the pie chart is missing a major piece by not including natural renewables . A lot of homes in South America, India, China, Africa and Asia use wood, yak dung, or other animal dung dried or as methane for cooking and heating. This would make the wind/solar/geothermal even smaller proportionately. If the biomass piece included these options it would be a lot bigger and they’re all renewable.
I went on the level pay plan for electricity in California. They take your past year’s total bill and charge you 1/11 of that per month so your bill is less taxing during peak months. I have done this for the past two years. During this time my usage has not changed significantly, all my kids are still at home etc… My rates have gone up so much in the last two years, I recieved a settlement bill in addition to my regular level pay bill of over $750.00. They gave me one month to come up with $440.00 of it and I have a payment agreement that will allow me to pay the rest off over the next six months in addition to my regular payments. I live in an older mobile home that isn’t very energy efficient but I have natural gas heating, water heater, stove, and clothes dryer. My gas bill is about $50.00 per month but my electric is close to $300.00 per month.
Thanks Secretary Chu. Not only am I a victim of energy poverty, I have about $600.00 worth of energy debt. I am sure this makes the Greens giddy with joy that I am being punished for my crappy inneficient use of energy and I get to work two jobs to pay for it.
Power to the people. 🙂
Willis, as usual, an excellent commentary, just one reservation. Should “billing the poor to line the pockets of the 1%” not read “bilking the poor to line the pockets of the 1%”?
This is a very small taste of a very large meal that true believers think is what we need.
“Note also that a huge part of the money, some $462 billion dollars…”
Should be million, with an m.
[Thanks, Edvin, fixed. -w.]
Here in Canada, the provinces of Quebec and Manitoba have huge hydro-electric generating capacity. With more hydro electric generation capacity planned for the Maritime provinces, there could be more than enough (renewable) electricity for most of Canada and the USA. No need for these silly politically correct science projects.
This is my fundamental annoyance about scientists in general; they step outside their area of expertise. Scientists know very little about economics and politics, yet we revere them as saviours of the world. The same goes for politicians who try to step into the scientific world (Gore?), and promote propaganda to the average person. In Australia we have crap-loads of uranium, heaps of the stuff. Yet how many nuclear power plants do we have? One! And its tiny and only used for research. All because it was decided in the 70s by flower power hippies that nuclear power is immoral and you must never speak of it. But it doesn’t matter as we’ll have a carbon tax in about a year which will solve all our environmental problems and make solar power competitive.
What is the cost to maintain this equipment compared to a fossil fuel plant?
How is generation calculated? The sun does’nt shine every day and winter days are shorter.
Biased on current experience, can this project be expected to have a 25 year pay-back life?
Glad I’m not a California rate payer like you!
I like the 1% rhetoric… well not really. The Occucommies would probably hang you if you post these facts at one of the OWS rallies. Such as life when you deal with socialists.
Isn’t hydro renewable?? Greenies only seem interested in wind for some reason
cronyism in action. Those green tech “1%ers” were primary donors to the Obama and probably various congressional and state democrat campaigns. In return the politicians give them lots and lots of taxpayer dollars. If the “old media” was not so enamored of the green movement and leftism in general we wouldn’t hear about these things only in the blogs and a good bit of the insanity would have to stop. Hopefully enough folks are going to the new media that the insanity will be stopped soon in spite of the negligence of the MSM.
The division of rate payer advocates at the CPUC felt that the project (and a PV one recently approved) were not the best deal for CA ratepayer-
“Calif. Consumer Advocate Division Decries CPUC Approval of “Overpriced” CSP Project
POWERnews
The California Public Utilities Commission’s (CPUC’s) approval on Thursday of Abengoa Solar’s 250-MW Mojave Solar concentrating solar power (CSP) parabolic trough facility in San Bernardino County—the second “overpriced renewable contract” approved by the CPUC in recent weeks—was disappointing, the regulatory commission’s Division of Ratepayer Advocates (DRA) said in a statement.”
http://www.powermag.com/POWERnews/4169.html?hq_e=el&hq_m=2326952&hq_l=7&hq_v=bb09315ba5
“Let them have everything.”
(Then they’ll have no excuse when they fail.)
It’s worse than you thought. The company is SunPower (SWPR) and this only one of their efforts. There’s been a lot of shareholder value removed. Everybody is getting the short end of the stick.
Paying $1.6 billion for a plant that will only generate $925 million dollars worth of energy does not seem like a very winning proposition… in fact, the dollar value of the subsidies ($1.4 billion) is over 50% greater than the value of all the electricity produced. This project is much less an energy production production operation than it is a government subsidy production operation.
How does it work for the wind farms that have to turn the generators off at night so the bats won’t get killed? Do the owners or taxpayers pay for that?
Don’t worry – Chu’s plan-b is painting his roof white
“Here in Canada, the provinces of Quebec and Manitoba have huge hydro-electric generating capacity. With more hydro electric generation capacity planned for the Maritime provinces, there could be more than enough (renewable) electricity for most of Canada and the USA. No need for these silly politically correct science projects.”
Yes, but there’s nothing an environmentalist hates more than damming a river, so they don’t consider this a good form of renewable energy.
Does anyone know where the new Republican front runner stands on CAGW? He used to be a BELIEVER in CO2 and warming. Where does he stand now?
This sound like one of cheaper “job programs”.
It is a really long list of available subsidies. I mean, it is way beyond any kind of rational level.
How did all these uneconomic subsidies get approved in the first place? It is just begging to be reviewed by a government which is broke (even a government with money to burn should not be able to stomach this kind of irrationality).
Since it takes energy to create those solar panel “power plant” and since, according to the graphic above, 68% of that energy create CO2 (all fossil sources). Could we assume that around 68% of the money “spent” on that project produced CO2 even before the solar panels started producing electricity? And what about pollution from creating those high-tech devices?
And we did not even calculate the fossil fuel plants running while the sun is not shining!
And they have the audacity of calling this scam “green” that will “save” the economy!
This is insane… The world has gone mad!
I feel the “1.3%” for Renewables in Figure 2 is too small, since many developing countries still depend heavily on woods for energy.
AFAIK, it was (though stats for the year 2000) 80-90% in Nepal and Cambodia, ca. 50% in Viet Nam, ca. 40% in India, ca. 15% in Thailand, ca. 8% in China. Hard to believe these countries have significantly reduced the percentage in the past 10 years.
Are the woods excluded from “Renewables” in Figure 2? It may be OK if Figure 2 refers to the “energy for industry” only.
In the UK we have real problems with the elderly sufferingfrom fuel poverty and having the choice between starving or feezing to death. So a new bumper sticker is needed:
KILL A PENSIONER – BUY A SOLAR PANEL
WIllis, you are spot on to be screaming angry about this. Here in the UK despite two decades of government subsidy wind power delivers just 1.4% of our electricity (EXCELON official figures for the year April 2010 to March 2011. I have plotted them out here:
http://www.TheTruthAboutClimateChange.org/UKElectricalEnergy.html).
Yet back in the spring Chris Huhne, our hapless Energy Minister, told Parliament proudly that wind power was contributing 7%, a figure five times larger than the reality. How did he get away with this grossly misleading statistic? Well, either by design or through ignorance, he had used the ‘aggregate name plate’ figure. This is the totally fictitious power output tgat would be available from all wind farms if the wind blew everywhere at optimum speed and all the time, on and on for ever! Nobody picked him up on this so our elected representatives were successfully indoctrinated with the myth that UK wind power was a rollicking success when, in fact, it is an abject failure.
So with wind farms operating at only one fifth of design capacity and, additionally, requiring a huge additional capital investment in extra standby conventional power generating equipment for those days when the wind fails to blow, it is clear that the whole idea of using wind as a major power source is completely busted. Yet does that stop the politicians making asses of themselves? Does it heck!
I dislike that you parrot the 99% meme by the OWS folks because they play the old trick of the Bolsheviks calling themselves the Bolsheviks all over again… but with regard to the subsidies you are of course right. It’s the same scheme in Germany – the ROI is not as outrageous, though, more like 6% a year. But entirely risk-free, and paid for by the rate payers; poor folks paying rich folks, in the end. And promoted by leftist Greens. Which goes to show that socialism is all about self-enriching of the righteous revolutionaries.
Oh! One of these days I am going to write my expose of the Superfund. If you think that energy subsidies are a waste of money, you should work for 30 years in the environmental remediation business. There has NEVER been such a money waster, time waster, resource waster, energy waster, such a pocket liner for law firms, engineering firms, accounting firms, the Army Corps of Engineers, the USGS, Green peace, Earthfirst, EDF – in short you name it – than the Superfund.
Collassal sums of money have been thrown at “environment contamination” billions have been spent on research, trillions have been spent on ‘remediations’ almost ALL of which have done NOTHING to reduce any risk to human health and the environment – for the simple reason that most Superfund sites pose precious little risk to human health or the environment – if any at all.
Well, that’s yet another story.
Bill Illis says:
November 18, 2011 at 3:55 pm
Sad but true. However, I didn’t have information on the size of the loan, so I decided not to comment on that. However, you are quite right that the real return on their cash-out-of-pocket investment is likely to much larger than 29%,
I can’t tell you how opposed I am to this entire process. Neither the federal nor the state government nor the Public Utilities commission should have anything to do with this kind of sweetheart deals for the uber-wealthy.
I scratch around for some investment where my few dollars can make a few percent, and my taxes and my electricity costs are making them absurd rates of return.
Disgusting … and more to the point, economically suicidal. What business will locate where electric rates are 50% above market?
w.
Willis Eschenbach says:
“Disgusting … and more to the point, economically suicidal. What business will locate where electric rates are 50% above market?”
Groups like boeing… and others that will be told to due so or be shut down by the government… just like whats happening where the fascists are telling boeing it can’t move to SC because its a non-union state.
We have same moronic but Green policies here in the UK. There are new houses being built with solar panels on the roof, windmills on every hilltop and the BBC banging on at every opportunity about AGW, all subsidised by the taxpayer I have just fixed our energy costs at £256 PCM until 2015 because I know that the cost of energy will go through the roof in the next few years due to the exorbitant cost of subsidised renewable energy.
would hydro be considered a renewable energy source?
The solar project capital cost covers only to build the specific solar plant. However the fluctuating solar and wind power generation must be backed up with generation that is ready to compensate for the sudden variation in generation due to variation in wind speed and sun light. I.e. to show the full cost impact it should also show the cost of this backup need and also if wind and solar (PV) is a big share of the power generation on a grid they have very low inertia compared to regular generators with big rotating masses the cost impact on the transmission side that needs quick voltage compensation in form of capacitor banks etc. should also be considered.
@Thomas Fuller: Yes, nuclear has gotten lots of subsidies. And hydro was almost entirely built by government. But there’s a difference. Nuclear and hydro are actual sources of reliable power, while solar is unreliable and wind is a net consumer of electricity.
By building those nuke and hydro plants, the government assured stable economic growth in large parts of the country and good jobs for millions of people. Especially true with hydro, which was genuinely cheap before the anti-Darwinian and anti-scientific “”””endangered”””” “”””species”””” nonsense interfered with it. The government received plenty of taxes from the aluminum smelters and other industries that dominated the NW for many decades, thus paying back its initial investment in hydro many times over.
There will be no payback for wind and solar, only continued cornucopial welfare payments to the obscenely grotesquely rich “investors” and to the members of Congress who made the laws to enrich themselves.
You didn’t have to be too rich to use a similar ploy to keep from getting quite as keel-hauled by Obanomics. I added some solar panels to our installation, Sunpower in fact. The USGov. chipped in 5200, PA chipped in $3500, and the electric company contributed another $4500 Total cost of the addition was $13000, on top of the $27000 for the original 18 panels. My total final cost $26000. The panels essentially zero out the electric bill over the year. We use a little more than 10,000 kwh. The kicker is we get a check for $250 for every 1000 kwh, about $2500 a year for Solar Renewable Energy Credits sold on some sort of exchange. All the subsidies put the payback period somewhere around 10 years, if the SREC’s don’t go away. I would have done it anyway for personal reasons(I hate uncontrollable electric bills), but the payback would have been more like 30 years.
Anyway, thanks for the help y’all. Too bad most of the subsidies have gone away. Guess the big O didn’t like the idea of ordinary folks getting a direct benefit.
Willis Eschenbach;
Disgusting … and more to the point, economically suicidal. What business will locate where electric rates are 50% above market?>>>
…and what businesses that are already there and are energy intensive will pick up and move for the same reason? Worse, if you’ve decided to move, you may as well consider all the options. Texas, Nevada, China…
Yet another case of not learning history’s lessons. We’ve heard this story before, just not necessarily spurred by global warming. If it isn’t that, it is something else. Every time governments decide that they can change the economy by subsidizing it, the big money interests do what they are paid to do. Figure out how to leverage the programs. It distorts the markets and business moves from a business model of providing cost effective goods and services to a business model of efficiently collecting government program money.
I have seen the enemy. and they are us.
Thomas Fuller says:
November 18, 2011 at 3:57 pm
Hey, Tom. Interesting questions all. The California Valley Solar Ranch is getting half a billion extra dollars out of the deal. Price to the consumer will rise. It already has. California pays $0.15 per kWh where states like Idaho and Utah pay only half of that. This is because of the asinine law requiring the CPUC to get 30% of its energy from renewables. So it has to pay through the nose, and in turn, the customer has to pay through the nose. Short answer? Ratepayers pay, as always.
I find this from December 2010, indicating that SunPower no longer owns CVSR.
That’s a curious setup. SunPower must have the on-the-ground knowhow, while NRG has the capital. NRG’s sales in 2010 were only $1.3 billion, down from 2.2 billion in both 2008 and 2009 … may be why they needed to cook up this sweetheart deal.
Interestingly, if they did indeed “invest $450m of equity in the next four years”, that would make their return 334 / 450 or about a 75% return on their money … not bad at all.
I didn’t do this breakout, the document says:
And no, I haven’t seen any others. I would like to, however.
w.
uan says:
November 18, 2011 at 5:09 pm
would hydro be considered a renewable energy source?>>>
Depends on who you ask. The really rabid CAGW alarmists will tell you that CO2 will raise temperatures which will raise the amount of water vapor generated, and in the same breath claim that the result will be droughts and increased desertification, so we can’t rely on it. Apart from the fact that the more water vapour there is the more rain there should be as a result, they claim that depending on hydro is risky because there might be no more rain. Right. There might be no more wind too… lol.
But the rabid warmists are in many cases also rabid environmentalists. You see, hydro dams are “not natural” and so are “harmfull” to the environment. Therefore, they are bad too even if they are renewable. You see, if a beaver builds a dam, it is natural. If we build a dam, well shame on us for alterning the landscape just so people can have heat and light and clean water and stoves to cook on and power tools. Goodness grascious, leave power tools in the hands of the people and they might build a park bench to sit on, or maybe a kitchen cabinet. That’s just dangerous!
Mike Hebb says:
November 18, 2011 at 4:00 pm
Thanks, Mike. While you are correct, unless you are advocating the increased use of yak dung, it is not relevant to the attempts by well-meaning folks to artificially increase the use of renewables … they’re not attempting to increase use of yak dung as fuel, they want to decrease it.
w.
Look on the bright side, Anthony, the totalitarian Gillard regime in OZ is planning to “hook up” their new CO2 Tax Market with the People’s Republic of California–since no one else will give them the time of day.
Maybe that will reduce your costs.
Then again, it will probably just add more lining to certain pockets.
Here is OZ and ONLY due to the Government subsidies and feed-in tariffs, I have a 4.8KW solar system on my house that is returning better than 19% over the past 16 months.
As my wife and I are self-funded retirees, I cannot get this sort of return from any bank account so it is in my interest to outlay the $15.5K rather than leave it invested, even though I know I am being subsidised by every other user without solar power.
FYI, some figures for electricity price rises in South Australia PLUS 10% GST and do not factor in the ‘tax that shall not be named’ which is expected to increase electricity prices by another 20% or more (is that the sound of the carbon cops pulling up in my driveway?):
Since 9th Feb 2011 (ex-GST in c/KWh):
Summer peak (01Jan – 31Mar)
1st 1,200KWh/annum – 17.93 to 25.3 – up 41.1%
next 2,800KWh/annum – 20.15 to 27.97 – up 38.8%
next 6,000KWh/annum – 23.32 to 30.76 – up 31.9%
all additional KWh/annum – 23.68 to 31.34 – up 32.4%
Winter peak (01Apr – 31Dec)
1st 1,200KWh/annum – 19.43 to 24.82 – up 27.74%
next 2,800KWh/annum – 19.79 to 25.08 – up 26.73%
next 6,000KWh/annum – 23.34 to 27.83 – up 19.24%
all additional KWh/annum – 23.62 to 28.41 – up 20.3%
“would hydro be considered a renewable energy source?”
It is IMO – that’s why they keep claiming that China is leading the world in renewables as China has 192GW of Hyrdro power equal to the US and Canada combined.
Would never happen here because the greens won’t allow dams.
A few cost driver are not included in the calculation.
As the power is not generated 24 hours / 365 days per year, backup power generation has to remain in place. With increasing solar generation, such backup runs increasingly only at less than 100% or has to be switched on and off. All of this costs money.
In Germany around midday on some sunny days, prices at the electricity stock exchange go towards zero or sometimes even negative. That means, there is no sufficient infrastructure to distribute or store, and it has to be given away for nothing or money has to be paid that someone takes it. Huge amounts of money will have to be spent to upgrade the networks and storage, And for storage, no solution has yet been found (flooding valleys is no option in central Europe, air pressure storage is inefficient and costly, batteries are extremely expensive, etc…).
Willis Eschenbach;
That’s a curious setup. SunPower must have the on-the-ground knowhow>>>
Well they do have a long history in solar cells, I believe they supplied NASA for some of the satellites. But it seems to me the real know how is that they “know how the system works”.
My understanding is that they hired a lobbyist by the name of George Miller IV to help them get the loans from the DOE. George Miller IV got his daddy to come for a tour of the plant. His daddy would be Senator George Miller (D). Of course Senator Miller dragged along his good friend Ken Salazar. Well, more correctly, Interior Secretary Ken Salazar.
Now if the DOE were to directly fund SunPower under those circumstances, somebody might cry fowl. So, one needs a layer of plausible deniability…
All this going on. It’s as if the Svensmark experiments at CERN never even happened. All that empirical evidence and then the confirming experimental proofs told us that “Clouds drive our climate and stars give our clouds their orders”, as one scientist put it. The magnetic fields protecting Earth from the cosmic rays that give us the low level clouds involved have been weakening. In 2009 NASA told us that more cosmic rays got through than at any time in the last 50 years. There is going to be a lot of death if humanity doesn’t start making practical adaptations fast.
On that money, the investors stand to make a net present value of $334 million dollars … which means that due to the screwing of the taxpayers and ratepayers, a few very wealthy investors are GUARANTEED A RETURN OF 29% ON THEIR INVESTMENT!!!
29% on an investment like this in the private market is less than borderline. The screwing of the taxpayers is the only thing that makes it even remotely attractive. Taking the NPV/investment is not the same as IRR, as I’m sure you know. When I did cash flow analysis, I used to advise against anything less than about 30% IRR, unless there was virtually no risk, and the time horizon was short. If it was easy and quick, great, do it. Longer term and difficult or risky, we have better places to put money.
In the private market, the cost of capital is easily 15% after tax, so getting 30% is really messing with pennies. In some industries, that’s almost OK (older, stable, predictable ones, with very predictable future cash flow). New ones or high risk ventures, I’d be looking for north of 40 or 50%. Really volatile or unpredictable (high risk), better than 100% per year.
No wonder only folks with unlimited free money (the government) ponders such foolish enterprises. I would love to see Chu’s supposed politically neutral cash flow analysis. The notion that Solyndra was worth investing in is preposterous under almost any private sector scenario.
Total credit market debt in the USA currently stands at about 350% of GDP after a three decade long debt fueled spending spree. Early on in this process each one dollar of debt resulted in 1.6 dollars of GDP growth. Immediately prior to the 2007 recession each one dollar of debt resulted in about 1.15 dollars of GDP growth due to the decreased marginal utility of that debt.
These green projects are spending one dollar to add (much) less than one dollar to GDP. We know this because they raise the price of power but do not increase its economic utility so they must be a net cost to the economy. We are destroying useful capitol in these projects………..this is basic economics. This is a bad idea at all times in any economic cycle but it will probably prove disastrous now.
So what will be the result? Hyperinflation to inflate away these debts, as has happened in other countries, or depression style asset deflation that will erase debt, and ruin lives, via default. This will not end well I think.
Which brings me to this:
http://www.blinkx.com/watch-video/funniest-movie-line-ever/mt_HJ2mH_qCA-OdRoYr2EA
This is what you get with command and control mechanisms. The State is in charge. They took over ostensibly to protect consumers from evil corporations. With their bait-and-switch, the game is now to protect the environment we consumers live in and not our pocketbooks. Yes, indeed, what is a healthy environment worth? Apparently, our jobs, our houses, our ability to buy food, and take care of our families. In short, we have to give up everything so the government can protect us.
Roger Knights probably has the right idea: Give them everything. When the consumers who fall for the con game finally realize it is a scam, maybe it won’t be too late to turn it all around. And if California can’t be saved, well, maybe that is what is required to save the nation. Idiots are in charge. Clearly, the propaganda is still working on voters.
There are many factors to blame, but a big one is term limits. Term limits eliminate the incentive for electeds to worry about the long-term consequences of their votes. They will be termed out first. They can give away lots of goodies paid for by tax payers, and leave much richer than they came. Elected office staff are often 20-somethings making decisions with no perspective at all. A few older staff run the operation, moving from official to official, completely unaccountable to the voters. Electeds have no idea what regulators are doing in practice. You barely come up to speed and then you leave office. State government is completely out of control. Until the voters understand the waste, it will just keep happening. Too many voters don’t have a direct connection to the costs of government so they buy the line that the “rich” don’t pay their fair share. The people who don’t pay taxes suffer by paying higher prices for goods and services, by losing jobs, and not being rehired due to high unemployment in economic conditions produced by government policy (and the folly of voters).
It all has to come crashing down to fix this mess. We hope there will be a chance to fix it.
Michael D Smith;
In the private market, the cost of capital is easily 15% after tax, so getting 30% is really messing with pennies.>>>
Really? Pennies?
There is capital, then there is venture capital, and then there is high risk venture capital. In all cases, there is some element of risk, I’ve listed from lowest to highest. In any investment scenario, you can lose some or all of your money. Most venture capital projects fail, and high risk venture capital projects nearly all fail. This is a high risk venture capital project…. with no risk.
Find me a no risk investment that pays more than bank interest rates. Pennies my *ss.
Grrrrr.. OCCUPY CHU’S OFFICE!
(for the 99%)
Subsidies that support groups favored by many Republicans or conservatives are evil and are responsible for the exploitation of man and the earth. Subsides that support groups favored by many Democrats or liberals are enlightened and necessary and are our only hope for a brighter tomorrow. That is part of the genius of the liberal indoctrination. They found a way to convince people that those who don’t believe or practice what they do are evil.
There’s one thing you haven’t mentioned. The electricity grid was built relying on a stable load and supply.
To modify the grid to cope with brown outs and surges is a significant cost factor that the grid owner also passes on to the consumer.
I believe it used to be called a ‘tragic moral choice.’ Do I do what’s good for me, or what’s good for the community? I shouldn’t have to make such a choice, but the politicians have set me up for it. In this case, I decided I’ve had enough; I’m paying taxes for these programs and I’m not going to make myself a further victim by refusing to take advantage of them. So I installed solar photovoltaic. My apologies to my neighbors who are I not in a position to do likewise, and who are subsidizing my power. If the politicians had any sense, they might have subsidized installations on public buildings (schools, libraries, clinics…) that would benefit everybody.
So how is it working for me? Better than anticipated. The panels (yeah, they’re Sunpower) are kicking out the rated power and have produced all of our electricity since turn-on last June 17. Plus about 300kwh extra. Azusa Light and Power paid about a third of the cost, and Uncle
Sam promises about a third of the remainder at tax time. My net outlay is somewhere between 8-9 thousand; estimated payback at present prices is 15-20 years. But that is savings–it is _tax free_.
And present prices are certain to go up, given the situation in CA. (So I claim self-defense on the moral question.)
There is a big difference between Solyndra and Sunpower. Sunpower produces real hardware that really works. And there is a big difference between rooftop installations that do not need two hundred mile long transmission lines and that do not flatten large areas of undeveloped countryside. As I drove down to Pick-a-Part to get a cheap junkyard tire for my car this morning
I saw the crew constructing S. Cal. Edison’s new Tehachapi transmission line. $2 billion, I think they are spending on it. And I share your anger.
The greens are walking contradictions. Useful idiots to the end. If that was an oil company subsidized to the same effect (by evil Reps no doubt) there would be no end to the “scandal” coverage by the MSM.
Disgusting.
Because of the weather, California energy bills are lower, so the political impact is small.
If they tried that in other states further north, I think they’d be in some trouble.
If oil companies are making profits of $40 billion per year, does it make sense to subsidize them $4 billion per year or is it also a big waste of money?
Will.
The scams never end even when the last dollar is stolen from the exhausted taxpayer, they will still won’t more.
In the midnight hour they want more ,more ,more.
Billy Idol.
Jim D says:
November 18, 2011 at 7:56 pm
“If oil companies are making profits of $40 billion per year, does it make sense to subsidize them $4 billion per year or is it also a big waste of money?”
Oil companies only get green energy subsidizes, some smaller oil companies get some subsidizes but mostly the same type that all small businesses get. If you remove the green energy subsidizes big oil would get zero money from the government… of course the green movement secrets loves giving money to big oil.
Here in Australia the article was followed by this advertisement.
A significant proportion of the biomass in the developed world is peat.
Peat is a fossil fuel, albeit a recent one. Yet they have classified it as renewable biomass and you can even get carbon credits for using it as a fuel.
http://www.peatresources.com/peat_fuel.htm
In some countries it used to generate electricity, Ireland for example. Making the electricity from biomass misleadingly high.
Exclude fossil fuel peat and the renewables electricity is likely under 2%.
@temp Can you support that claim? It flies in the face of just about every study on subsidies to energy companies, although you only mention oil and not coal.
In any case, seel link below for a study on US gov’t subsidies to energy companies from 2002-2008
http://www.elistore.org/Data/products/d19_07.pdf
In California, hydro is not considered a renewable energy. Our PUD uses hydro exclusively, and has to diversify to meet the new requirements for “green energy.” Ridiculous!
More on peat
It is particularly inefficient as a fuel and requires drying before burning. It produce more CO2 per unit of electricity than any other source of fuel.
Then you have to drain the peat bogs to get to it, which by itself is a major source of CO2 emissions.
From wikipedia,
Losing 5% of the 2.7m hectares of peatland in Britain, would equal UK’s annual carbon emissions and risk its climate targets (IUCN).
Nothing better illustrates the lunacy of ‘renewable energy’ than carbon credits for using peat as a fuel.
Rosco says:
November 18, 2011 at 6:34 pm
There’s one thing you haven’t mentioned. The electricity grid was built relying on a stable load and supply.
To modify the grid to cope with brown outs and surges is a significant cost factor that the grid owner also passes on to the consumer.
Autoresponse is the “solution” to handle variations in supply – by cutting demand. Smartgrid in homes and businesses will monitor devices. These devices will be turned off when they receive a command from the utility. The consumer will pay higher prices for power and will lose privacy. Smartgrid is a bidirectional communications system that has no limit on what it can report. Any data collected is fair game.
Smartgrid is also planned to be another source of broadband. That prospect has hooked the utilities, now expecting to profit one day on a new revenue stream. One by one, companies and smaller public agencies that might otherwise oppose a crazy scheme are bought off with promises of cash. When the cash fails to materialize, the government will still have its monitoring equipment in everyone’s home and in businesses. Everything that can have its own IPV6 address can potentially be a reporting device.
A water agency was just attacked via the internet by Russian hackers. Smartgrid will be the alternative of choice when the internet is deemed too risky to be allowed to operate as it does now. Then we will be using the more “secure” government provided powerline broadband. Our data sniffed and stored, our comments traced, and searches directed, we will be so much safer. All of our communications will be scoured for threats. What do we have to fear if we aren’t doing anything illegal? Why should our lives not be completely open for all to see? It just won’t be America anymore.
OT, but somewhat relevant.
Chu, as far as I know having never seen an oil well, made the call to stop the first attempt ( 3-4 weeks after initial expolsion, I think) to plug the Deepwater Horizon oil leak using a technique called ‘top kill’. After a few months of leaking oil the well was plugged using the very same technique called ‘top kill’. The precautionary principle caused a lot of oil to be dumped into the Gulf of Mexico at the US government’s hand and blamed on BP. Seems that if you hide under the umbrella of the government and make bad calls there will be no repercussions, just call it policy.
Incorrect. It was the BP engineers who abandoned the “top kill” after about 3 days without success. Chu said in an interview that it probably should have been tried earlier.
The second attempt at a top kill was only successful because TWO relief wells, one of which was started on May 2nd, had been drilled
ann r says:
November 18, 2011 at 8:50 pm
In California, hydro is not considered a renewable energy. Our PUD uses hydro exclusively, and has to diversify to meet the new requirements for “green energy.” Ridiculous!
The fear is if they counted large hydro (>30 MW), it would encourage developing more water impoundments.
Four small dams on the Klamath River, producing clean power, could be torn down. Is that really necessary to “save the salmon”? Are toxic algae behind these dams truly a serious concern? Cyanobacteria can be controlled by balancing nutrients (typically, nitrogen needs to be added) instead of adding agents like CuSO4. The dam tear-down is funded by yet another bogus “jobs” bill. The money for the projects, over $500 million, could be given to 10,000 people instead, which amounts to about $50,000 each. Our government in action. Brilliant.
http://www.energy.ca.gov/2010publications/CEC-300-2010-007/CEC-300-2010-007-CMF.PDF
http://legalplanet.wordpress.com/2011/11/15/klamath-dam-removal-bill-introduced-in-congress/
John Trigge mentions getting 19% return. In Oz there are various schemes which assists what one would call upper & upper middle class (including those leftish proverbial Doctors wives and environmentalists in Government paid jobs). The Government gives a subsidy for the first 1.5kW of PV panels. This works out to be about 40% of the capital cost. This only replaces some of your usage which in my area is $0.20/kWhr. Allowing for average sunlight hours and an efficiency factor. I get about 20% return on investment.
This is only available to a) house owners with roof space in the right orientation b) people who do not mind an untidy roof space or a roof which can not be seen (my panels can not be seen from ground level anywhere on the property) and b) people with some cash and intelligence to invest
In some areas there is a feed in tariff benefit for larger systems but no additional capital subsidy. In my area anyone putting in a 3kW system will get a return on investment only around 11% (including a small contribution from feed in tariff). Anyone putting in 10kW has to be stupid or a dyed-in-the-wool environmentalist who does not mind throwing money away. That is why there are plenty of 1.5kW systems in better off areas and very few larger systems.
The capital subsidy for PV panels is a waste of money for a token demonstration the the government is doing something.
DMarshall says:
November 18, 2011 at 8:46 pm
@temp Can you support that claim? It flies in the face of just about every study on subsidies to energy companies, although you only mention oil and not coal.
In any case, seel link below for a study on US gov’t subsidies to energy companies from 2002-2008
http://www.elistore.org/Data/products/d19_07.pdf”
I’m going to read the whole thing but from the 3rd page they already are merging and hiding what a subsidize is… Subsidies are direct payments not tax deductions… The fact that the whole number (1) listed is not subsidies already makes me question this study and number (2) Looks to be doing everything to merge green subsidies, R&D, etc as fossil fuel subs with the green subs
“The subsidies examined fall roughly into two categories: (1) foregone revenues, mostly in the
form of tax expenditures (provisions in the U.S. Tax Code to reduce the tax liabilities of particular
entities), and lost government revenue from offshore leasing (through the under-collection of royalty
payments); and (2) direct spending, in the form of expenditures on research and development and
other programs.”
The report looks to be classic green propaganda playing on people’s lack of knowledge about the tax code and that oil companies spend billions on green tech and thus get millions in funding from government.
Something is off. It maybe the NYT. My understanding is thaT NPV of the project is the TOTAL profit expressed in current dollars. It does not take into account that it is earned over a number of years. If the operational life of the solar plant was mentioned, I missed it. Assuming 25 years, the annual return on investment is just over 1%. This is a bad deal even with all the subsidies. Even at ten years, this project makes sense only if someone is scammin; kickbacks or something.
Manfred makes a valid point.
What is the market value of this renewable power. Much of the time its close to zero, because its power no one wants because the infrastructure can’t handle it.
The best use I can think for solar and wind energy is heating underground shale oil and gas to increase flows, because there is no time criticality.
Willis, I commend you on ferreting out something of the truth about this project. The whole truth is much worse than your figures indicate because of leveraging, The actual discounted, after tax cash flow for this project produces an astronomical I.R.R. for its politically connected equity investors. As near as I can determine, the project is *80% or so financed by a bank loan that is guaranteed by the U.S. government. That means equity investor put up 20% of capital costs. That guarantee means the bank has no “skin in the game” and has no vested interest in the long term financial viability of the project.
Equity investors really have no “skin in the game” once the plant achieves “commercial operation”. That’s because those investors receive a tax credit (or optional cash from the U.S. Treasury) equal to 30% of their share of the entire capital cost of the project, including the financed portion. That, in turn, means the lucky investors receive $150 back for every $100 dollars they invested THE DAY THE PLANT ACHIEVES COMMERCIAL OPERATION.
Then it gets even better. Thanks to accelerated depreciation, that same investor receives a share of depreciation on the plant of $250 for every $100 invested DURING THE FIRST YEAR OF PLANT OPERATION. If this heavy-hitting investor is in a 50% marginal tax bracket (state and federal), that first year depreciation amounts to an additional $125 in his pocket of every $100 invested. First year return in such case is ($150 tax credit + $125 reduction in personal tax bill =) $275 dollars return for every $100 invested.
Finally, here’s the really ominous part. First, the bank has no financial interest in seeing to it the plant continues to operate at any time, thanks to the federal loan guarantee. Second, the equity investors receive nearly all the return on their investment they will ever receive during the first five years of plant operation, thanks to a the investment tax credit and the five-year depreciation schedule. Since there is no provision in the federal tax code for recapture of either the investment tax credit or the depreciation benefits equity investors have received at any time after the plant achieves commercial operation, no one has any vested interest in seeing to it the plant continues to operate after five years, other than possibly the plant operating personnel who do not have financial resources to pour into the project in the event of almost inevitable problems.
Finally, please note that the guaranteed power sale rate of between 15 and 18-cents at the fence being touted as “only” 50% above fossil rates is misleading. It is based on the assumption that fossil rates will escalate madly over the next few years. Note that the spot wholesale rate quoted at the Palos Verde trading hub this morning was 3.38-cents per Kwh. The whole thing is a recipe for failure at enormous expense to tax payer and rate payers.
So reviewing the doc about the only thing that maybe considered a sub would be
Strategic Petroleum Reserve ($6,183)
and thats questionable at best… Plus alot of the subs were costing the oil companies money.
They count Black Lung Disability Trust Fund ($1,035) as a sub but yet its really a tax on the coal companies… they in some twisted logic say because the coal companies are not fully taxed on the fund that its a sub… its a tax and a fund setup from that tax and has nothing to do with the coal companies.
The other very very retarded argument they make is that heating homes
The Low Income Home Energy Assistance Program (LIHEAP) ($18,309) this isn’t a sub for coal, oil etc I’m sure a good amount goes to “green” energy as well. This shouldn’t be listed along with most other stuff they have listed is questionable at best.
I’ll also note for say ethanol they don’t list farm subs or anything along that line or countless other subs.
Basically it throws everything and then some as a “fossil fuel” sub and nothing for the green tech like forced usage or any of a host of other subs along with the reduced loan interest rates and a host of other things.
Think the NPV reasoning has gone a little off. If a project has an NPV of 30 and capital costs of 100, it does not follow that it is giving a 30% return.
The NPV formula takes the cash in and out, and discounts them by the applicable interest rate. The result is the amount that a rational investor would pay now for the cash flow stream forecast. You cannot take this amount, divide it into the total capital, and then say that the result is the percentage return on the capital investment.
You could figure payback in years. That is, take the cash out and then figure out how many years it takes to get to breakeven. Not very illuminating because it leaves out interest. You could do IRR. Better, but you have to know the timing of the cash flows to take account of interest.
Need to look up the formulas.
The point is still entirely valid in one sense: the subsidies are huge, the success of them even at these levels in converting power generation to anything but conventional sources is minimal. The write who cites the UK is correct, their tariffs and those of their European counterparts are truly insane, because what they are doing is to favor small scale inefficient production. In the UK for example, you are paid 43p per kWh generated from the smallest sort of solar power installation, whereas the going rate for wholesale electricity is one tenth of that. The larger your installation, the lower the rates. By the way, you are paid in the UK for generating, not for actually supplying. Generate power which no-one wants, you still get paid. This is total madness.
Social engineering at its best.
Surprisingly, the US has a trade surplus in solar energy, exporting manufacturing expertise and importing mass-produced products. Manufacturing expertise developed overseas has in turn been imported back into the U.S. in the most recent manufacturing plants.
On the whole, government subsidies to energy development are not large compared to the earlier subsidies, and ongoing subsidies, to aircraft development and airlines. At policy level, the betting is (so to speak) that continuous development will drive down the cost of the alternatives, and reduce demand on the fossil fuels sufficiently to prevent them rising in price too much. When the govts of the world had been subsidizing aircraft manufacturers and airlines for 30 years, most people (99%) still traveled by boats and railroads.
I am happy to see more development of coal, oil and natural gas, but they are gradually becoming more expensive (with alternations of price declines and price inclines), and if they last longer than 2100, even at high cost, it will mean that economic growth has slowed considerably and all the poor people of the earth will have remained poor.
So, yes it’s a bite, and it’s a big bite. And like all previous human progress it is messy and haphazard. As always, a few people benefit first. Neither the free market nor the government has all the successes and all the failures. These homilies are as true now as always.
Willis
I wrote a long post, went off the check the NYT source and came back to find that michael has said more or less the same thing I wanted to say. Your first two charts are fine. Keep em around. You’ll probably need them from time to time. The third chart (from the NYT) looks to be not so great. It depends on a lot of unstated assumptions about future interest rates, electric rates, etc. It is unclear what timespan it projects over and that’s important because electricity generation projects tend to have a very long lifespan. The biggest assumption — a 1.6B project will be built at estimated cost. It’s hard to tell because the chart is kind of a mess, but I think that a 20% cost overrun in construction would probably make that 334M NPV zero or less — assuming that the “NPV” is actually Return On Investment — which is anything but clear. Hardly a guaranteed profit.
I also agree with michael that the one thing the chart does accomplish is to show that the subsidies involved are very large compared to the scale of the project, and are probably a bad idea.
I see that Claude Harvey has done what I couldn’t, and possibly made some sense out of the economics. He seems to think that the project as proposed is more or less a scam. He could well be right.
But do keep in mind that the costs of solar have been dropping over time which is not true of other energy sources. And solar does not have wind’s unfortunate impacts on the (inadequate) power grid. This year’s dubious investment may well look pretty good in a decade or three even without the probably ill advised subsidies.
I am very much against windfarms and solar in Northern latitudes due to their high cost and inefficient returns, I am against subsidising these industries so no doubt whilst I desire to be objective, it may be that I am biased.
It seems to me that the position is far more complicated.
The investors invest $1.1billion but are able to write down a substantial percantage of this over 5 years and of course they get a low interest loan. Both of which act as sweetners.
But the real issue is over what period of time do the investors earn $334million? Is it over 5 years (the tax write down period) or over 25 years? or over some other period?
The period over which the investors make their net profit makes a substantial difference to the assessment of the real return on their initial outlay of $1.1billion. That is the question that needs to be addressed, although I agree with the political comment that the poor are being forced to subsidise the investment returns of the rich. In the UK this is doubly unfair since the poor never really get a shot at getting their hamds on any of the subsidies that are available. First, by definition, they are poor so do not have the financial means to invest in expensive solar equipment and hence cannot get subsidies on their own energy bills or get the inflated feed in tarriffs. Second, since they are poor they tend to live in rented accomodated so cannot make the property changes required to fit solar to the property (the landlord could but not the tennant) or they live in flats and therefore do not have the roof space etc for solar. Morally, the subsidy system is very wrong and unfairly works against the less well off and unfairly enriches the the landed rich or ootherwise wealthy citizens. It is about time that governments stopped this scam.
Fascinating considerations, Willis. But in this case the main conclusion is not showing the whole picture. The NET PRESENT VALUE of 334 million is not the PROFIT for the investors.
I think this post is closer to the reasoning of the investors: Claude Harvey – November 18, 2011 at 10:55 pm
“The whole truth is much worse than your figures indicate because of leveraging. … That means equity investor put up (only) 20% of capital costs.” They get huge tax deductions for the whole 100% of the the debt.
That is the reason why it is attractive to invest in a project that is directly burning 675 million $ or 42% of the invested capital. If tax credits are taken into account the project is probably burning close to 70% of the invested capital over it’s lifetime.
Actually the capital is not all destroyed. Most of it is recycled. It is taken from tax payers and rate payers and funneld into the pockets of the investors. We all now recycling is good…
Whenever reality is shrouded, there’s always big bucks to be made for those who can see through. What are we waiting for? Electricity powered solar cells, anyone?
In the UK we have Chris Huhne an equally stupid Secretary for Climate Change and Energy, neither of which he knows anything about, who stated that to keep warm we all need more insulation in our houses. He forgets that insulation will keep out any warmth on the outside, which might be vital given that you can’t heat your house at all. Any building at 0C inside will remain at 0C if well insulated. And insulation only delays heat loss so heating is still required. If you can’t afford the minimum heating, as many in the UK can’t, you will probably die.
Where the British will get their energy from according to Chris Huhne, the Huh who spoilt Christmas…
http://fenbeagleblog.wordpress.com/2011/11/15/the-huh-who-spoilt-christmas/
Same in the UK, prices going crazy and subsidies being given out left right and centre, although there are signs on a pullback, prices for electricity generation are going to only be about 50% above going rate guaranteed 25 years. These policies are going to kill people as they turn off the the heat & power at home. Perhaps that is the idea, cull the old and infirm, quietly. Genocide by green inflation, thats a tag if I ever saw one.
A great deal of us find ourselves struggling financially. It gets really old living paycheck to paycheck. Must be a better way. We already work 40 hours or more a week just to stay afloat. Well, there are alternative money-makers than what you’re probably used to.
http://www.squidoo.com/is-amazon-losing-money-on-the-kindle
Bio-mass makes up a significant portion (40%) of the graph’s 3.3 percent “electricity produced.” The total “electricity consumed” from renewables is 1.3 percent – only 40%. Wind and Solar are inherently intermittent, variable and unpredictable. Bio-mass is consumed as a hydrocarbon boiler fuel and the electricity it produces is reliable and constant. Geo-thermal likewise. The numbers in the graph probably indicate only a tiny fraction of the 1.3% “renewables – electricity consumed” is from wind and solar. On the face of it the numbers indicate wind and solar at <ZERO. Amazing.
Which is why 2012 will be a horrible econ year for the Western democracies. No way to reverse things to get cheap energy – even breaking even. For the non-econs, it means as the economies “improve”, energy becomes a huge throttle sucking income away from all other sectors.
Get used to it. Check lead times for building anything.
PaulH says:
November 18, 2011 at 4:05 pm
Here in Canada, the provinces of Quebec and Manitoba have huge hydro-electric generating capacity. With more hydro electric generation capacity planned for the Maritime provinces, there could be more than enough (renewable) electricity for most of Canada and the USA. No need for these silly politically correct science projects.
____________________________________
Here in the USA we are tearing out the hydro electric dams thanks to the eco-nuts.
http://mcclintock.house.gov/2011/09/klamath-claptrap.shtml
I just do not like the word ‘renewable.’ In a sense everything is renewable, even the solar system, somewhere, sometime. Perhaps ‘sustainable’ would be a better term indicating, in the case of energy, that a given resource was either available in such abundance that it could never be exhausted or that it is being continuously replaced at our rate of usage. Also, this term implies that the continuous use of that resource would not make our world uninhabitable.
Ralph Nadir has declared that nuclear power is ‘poison power,’ which would eventually contaminate the planet with deadly radioactive waste, also a former vice president of the United States has declared a scientific consensus now exists that the burning of carbon has reached a point where the climate is about to spin out of control, boiling away the oceans and make the Earth a twin of Venus.
For those who accept these proclamations, solar, bio-solar, wind, and hydropower are the only politically correct, sustainable sources of energy, even though these energy sources would only support a small fraction of today’s population living a Charles Dickens era lifestyle.
I am not quite ready to say that these views have been promoted because of some plot, as I believe the simplest explanation is a bias and sensitive concern caused by environmental indoctrination. Perhaps some have, unknowingly, reverted to an atheonic worship of Nature after losing faith in a traditional religion.
However, there is at least one undeveloped source of energy on this planet that does appear to be indefinitely sustainable at current usage rates.
At some point, someone has to invent a technology which more efficiently converts solar photons into additional electron energy. The problem is, they are two different things – photons versus electrons.
The subsidies are given on the basis that economies of scale and continued small incremental improvements in the solar panels will eventually make them efficient enough.
But that looks to have been a false assumption. They will NEVER be efficient enough.
Mother nature did invent an efficient method billions of years ago. Solar photons get converted into chemical potential energy allowing plants to grow and reproduce. Some of that chemical potential energy got buried, transformed chemically again and it resulted in fossil fuels. Now we are converting that chemical energy into electricity and heat by burning it with oxygen. It is 10 times more efficient, because the plants carried out most of the work hundreds of millions of years ago.
Some kind of new process or new methodology looks like it will be needed since the current technologies, solar panels and reflective mirrors concentrating the solar radiation, just doesn’t look like it will ever be efficient enough.
The money should be going into research of new methods which will be efficient enough rather than continuing to use this assumption that economies of scale and small incremental improvements will reach the goal – because it won’t.
Just for “the hell of it” I googled in the question: “Is 1 billion 1000 million or is it 1 million – million.” – The answer came back as follows:
“Long scale is the English translation of the French term échelle longue. It refers to a system of large-number names in which every new term greater than million is 1,000,000 times the previous term: billion means a million millions (1012), trillion means a million billions (1018), and so on.[1][2]
Short scale is the English translation of the French term échelle courte. It refers to a system of large-number names in which every new term greater than million is 1,000 times the previous term: billion means a thousand millions (109), trillion means a thousand billions (1012), and so on.[1][2]“
“”
Maybe it is possible to ‘hide the cost” as well as the decline?
Alan says:
November 18, 2011 at 4:13 pm
Isn’t hydro renewable?? Greenies only seem interested in wind for some reason
Alan says:
November 18, 2011 at 4:13 pm
Isn’t hydro renewable?? Greenies only seem interested in wind for some reason
_______________________________________
Hydro might hurt the little fishes. Also the USA passed the scenic rivers bill
Never forget that the actual plan is to “De-develop the USA”
“de-development presents our economists with a major challenge. They must design a stable, low-consumption economy in which there is a much more equitable distribution of wealth … Redistribution of wealth both within and among nations is absolutely essential”” John Holdren, Obama’s Science Czar – Human Ecology: Problems and Solutions (1973)
President Bush’s pal Maurice Strong stated at the Rio Conference, Earth Summit II, in 1992:
“It is clear that current lifestyles and consumption patterns of the affluent middle class — involving high meat intake, consumption of large amounts of frozen and convenience foods, use of fossil fuels, appliances, home and work-place air-conditioning, and suburban housing — are not sustainable. A shift is necessary toward lifestyles less geared to environmentally damaging consumption patterns.”
What they both forgot to tell you is this ONLY applies to the poor and the middle classes (serfs) and not to the “Master Class” You do not see them leading by example now do you????
The other part is the “Save the environment for the children” Again they left out something. It should be “Save the environment (and resources) for OUR children not yours.” Obama’s Science Czar makes that clear in the book Ecoscience (1977)
They are summerized :
The follow-up is the recent USDA funding of Epicyte to develop a spermicidal corn by inserting into corn the gene manufacturing a class of human antibodies that attack sperm. Epicyte has folded and was bought out by a company in Pittsboro NC.
Prohibited Gene-Altered Corn [StarLink] Found in Latin American & Caribbean Food Aid Shipments: http://www.organicconsumers.org/ge/caribbean21705.cfm
The Roots of Racism and Abortion An Exploration of Eugenics by John Cavanaugh-O’Keefe
Table of Contents:http://www.eugenics-watch.com/roots/index.html
Chapter 10: Eugenics after World War – IIhttp://www.eugenics-watch.com/roots/chap10.html
US Sterilization Program: http://www.ratical.org/ratville/sterilize.html
Note that it is the WEALTHY who are the power behind this movement. As they are always the power behind most “grass-roots” movements that catch on in the modern world. Maurice Strong is sometimes credited with coming up with the idea of international NGOs thanks to his work with YMCA international in his early days.
“Very few of even the larger international NGOs are operationally democratic, in the sense that members elect officers or direct policy on particular issues,…. Arguably it is more often money than membership that determines influence, and money more often represents the support of centralized elites, such as major foundations, than of the grass roots.” ~ Hofstra University law professor Peter Spiro http://www.bibliotecapleyades.net/sociopolitica/sociopol_tavistock04b.htm
Anthony somehow you manged to become the exception. I do not think very many really appreciate just how rare that makes you or how much we owe you. ~ Thanks again.
O H Dahlsveen says:
November 19, 2011 at 5:39 am
Just for “the hell of it” I googled in the question: “Is 1 billion 1000 million or is it 1 million – million.”
Here’s the real logic:
Bi means two
Tri means three
Bi-illion is two lotts of 6 zeros tri means three lots of 6 zeros.
As Mr spock would say I can see no logic in the The American system in which bi- illion means a thousand million?
****
PaulH says:
November 18, 2011 at 4:05 pm
Here in Canada, the provinces of Quebec and Manitoba have huge hydro-electric generating capacity. With more hydro electric generation capacity planned for the Maritime provinces, there could be more than enough (renewable) electricity for most of Canada and the USA. No need for these silly politically correct science projects.
*****
It would be nice, but unless the required new transmission systems could decrease line losses (by upping the voltage, converting to HV DC, etc) by a significant amount over current designs, it becomes problematic transmitting electricity more than (guessing) ~1000 miles — too much line loss and mounting KVARS (reactance) to deal with.
And, at least in the east US, state applications for any new transmission lines are always targeted by organized & funded Eco-zealots for denial, and at the very least they deliberately tie-up the legal process for many years. Not sure about Canada…..
So, if the world gets 41% of its electricity from coal, but only 30% of its energy from coal, does that mean that switching to electric vehicles will increase coal use?
So, since coal produces more CO2 per unit of energy than other fuels, doesn’t this mean that electric vehicles will increase CO2 as compared to oil based vehicles?
Just asking.
Several studies and tests have concluded that your average EV, run entirely on coal-generated electricity, will be roughly the same for emissions as a very fuel-efficient petrol auto.
The only link I can find at the moment is a rather old one from Slate:
http://www.slate.com/articles/health_and_science/the_green_lantern/2007/12/the_electric_vehicle_acid_test.html
It’s probably worth pointing out that, even if you consider EVs to have a “long tailpipe”, their emissions would be confined to generation plants, where they could be better managed or sequestered, and there would be no emissions, such as ground-level ozone, sulfur dioxide, etc in population centers that are typically well away from coal plants.
Also, in most of the Western world, the power generation capacity is more than enough to handle the most optimistic adoption of electric vehicles. What does need considerable effort, in many places, is the local grid
Gail Combs says: (November 19, 2011 at 6:08 am)
“Obama Signs Landmark Wild & Scenic Rivers Bill”
I wonder if some future president might need to have an act passed by congress that allows him to clear-cut and strip-mine national forest and park lands to pay off the national debt? According to Bill O’Reilly, the Governor of California might need that type of authority very soon.
Redistribution of wealth both within and among nations is absolutely essential”” John Holdren, Obama’s Science Czar – Human Ecology: Problems and Solutions (1973)
Does that mean the 250+ millionaires in congress are going to give the rest of us some of their money?
“Bill Illis says:
November 19, 2011 at 5:15 am
The money should be going into research of new methods which will be efficient enough rather than continuing to use this assumption that economies of scale and small incremental improvements will reach the goal – because it won’t.”
Theoretical efficiency is limited by physical laws, and our current understanding of them. Nature has been working on solving this problem for quite a long time and so far hasn’t come up with anything more efficient than photosynthesis.
Maybe some day someone will discover a low cost paint that you can spray on your roof that will generate electricity. The current approach appears to be centered on solar panels that can over their 20 year lifespan generate as much energy as it took to produce them.
However, with subsidies this can be improved – not so they generate more power – but to reduced the costs and thereby hide the amount of power it took to produce the panels.
Cecil Coupe says:
November 18, 2011 at 4:19 pm
It’s worse than you thought. The company is SunPower (SWPR) and this only one of their efforts. There’s been a lot of shareholder value removed. Everybody is getting the short end of the stick.
Not everyone. The folks that made it happen, with friends in high places, they made out like bandits.
Kelvin Vaughan says:
November 19, 2011 at 6:56 am
Maybe so. But if somone says “quadrillion”, I have a fair notion of what they mean. Is someone says “billiard”, I get out my cue.
Mr. Spock had very little real world experience.
Do we have a dollar for dollar comparison on all coal and oil vs energy produced with renewables? Comparing what $1 produces in renewables vs $1 of oil or coal would be the best way to compare. Comparing subsidized renewables with what the free market spends doesn’t give an honest look at renewable’s shortcomings. It still makes a great point: Government subsidies can’t even make a dent.
I would love to see a complete cost-benefit analysis, including all “externalities” of fossil fuels, renewables and nuclear.
Do any such studies exist?
ferd berple: So, if the world gets 41% of its electricity from coal, but only 30% of its energy from coal, does that mean that switching to electric vehicles will increase coal use?
So, since coal produces more CO2 per unit of energy than other fuels, doesn’t this mean that electric vehicles will increase CO2 as compared to oil based vehicles?
maybe. maybe. It depends on whether a conversion to electric vehicles occurs faster than a conversion away from coal. Personally, I doubt that purely electric vehicles will ever make up a large share of vehicles. But I am sure that I can not “see” further than 10 years into the future, if that.
ferd berple: The current approach appears to be centered on solar panels that can over their 20 year lifespan generate as much energy as it took to produce them.
You are behind the times. Current generation pv panels produce more electricity than they have consumed after about 1 1/2 years. They produce at least 80% of rated peak power for at least 30 years. The estimated rate of energy return (energy harvested divided by energy input) is greater than with the Canadian tar sands; but the latter produces a nice liquid fuel.
Steven Chu, Energy CEO
Bill Illis: The subsidies are given on the basis that economies of scale and continued small incremental improvements in the solar panels will eventually make them efficient enough.
But that looks to have been a false assumption. They will NEVER be efficient enough.
How efficient is “efficient enough”? The high temperature (concentrated solar) PV cells are about 40% efficient. As they are mass produced (just starting) there will be continuous improvements in the manufacturing processes (as there are every year in almost all manufacturing, and specifically in producing pv panels) that reduce labor and material input and reduce overall cost. “Never” is too absolute a concept.
John Runberg says:
What is the cost to maintain this equipment compared to a fossil fuel plant?
How is generation calculated?
With solar (as well as wind) rather a lot of the equipment is likely to be outside in all weathers probably requiring all sorts of vehicles for people to even get to it.
Whereas using steam turbines. (Regardless of if the steam is produced by burning coal, methane, oil, wood, etc. Even a nuclear reactor.) Means that the plant is inside a building. Which eliminates the equipment having to cope with weather. Access to machinery which needs servicing also tends to be easily available.
Much of the same also tends to apply to hydro-electric, including pumped storage plants.
The sun does’nt shine every day and winter days are shorter.
The power output is likely to vary even from minute to minute. Probably not too big a problem if you are heating water (or even a battery powered illuminated road sign.) But a big problem if the aim to to generate electricity. The same applies to wind power.
Throughout history animals, slaves, steam engines, internal combustion engines and electricity have wound replacing wind power because “reliable” beats “free”.
Mike Hebb says:
A lot of homes in South America, India, China, Africa and Asia use wood, yak dung, or other animal dung dried or as methane for cooking and heating.
Presumably the dung is a by product. If it wasn’t being used as a fuel it would probably be waste which would cost money for disposal.
@Willis
“billions in wasted taxpayer dollars have not succeeded in getting renewables up to even 3% of the total electricity generated. Less than 3%. It must drive them round the twist to contemplate their stunning lack of success at making water flow uphill.”
“Hydro” is renewable and is 16% which brings the total for renewables to about 19% of the total. Duh.
What drives me around the twist is how little thought you put into what you write.
Mark says:
November 19, 2011 at 8:30 am
“Throughout history animals, slaves, steam engines, internal combustion engines and electricity have wound replacing wind power because “reliable” beats “free”.”
Actually Mark it’s hard to think of anything more reliable than the sun. It’s been rising on time every single day for billions of years.
You are confusing “reliable” with “on demand”. Solar and wind power are very reliable but they aren’t available on demand without some sort of buffer.
There’s a windmill a few hundred feet from away from me that still spins nearly every day pumping water uphill into a holding tank where the water is then available on-demand. It’s extremely reliable. The wind energy is thus buffered into gravitational potential energy. One could, if one wanted, use that gravitational energy to (for instance) drive a water-wheel that might be attached to a mill that grinds grain or the shaft of a generator shaft that supplies electricity. Then it would be both reliable and available on-demand.
Septic Matthew
As they are mass produced (just starting) there will be continuous improvements in the manufacturing processes (as there are every year in almost all manufacturing)
Here is the manufacturing productivity trend for the US for the last 20 years.
http://www.bls.gov/news.release/prod5.t01.htm
A couple of percent a year productivity increase is about normal. Various industries go thru rapid productivity increase then the increases slow to a trickle.
Regarding “billing” (bilking)” the poor on their electricity…more than likely in Commiefornia there is a generous subsidy for low-no income people. The hardest hurt are the working middle class.
Let’s start a ” We are the 50%ers movement” (the 50% who pay taxes), we’ll need to change our name often to reflect the current %, but…
janama says: November 18, 2011 at 3:59 pm
Will – here in Oz the government encouraged the installation of solar panels on people’s homes. To assist they would pay 60c per kWhr which is 3 times what the utilities were charging!! Not far from me is a storage shed complex and the owner has put 40 solar panels in two rows of 20. Assuming the panels are 180W panels it will produce 7,200W or 7.2kW. Over 6 hours per day that’s 43.2kW per day. @60c that’s $25.92 per day or $9,460.8 per year. Considering the storage sheds don’t consume electricity once the panels are paid for it’s all profit.
Jamama, I recently installed a 5kW system, AGL have a 5kW limit but pay $0.68 kWh but your estimation of output is way opimistic, my system puts out between 1.3 and 18Kw per day averaging 12kW per day for the last 7 weeks. Inefficient is one way to describe solar, rort is another.
One giant problem in our capitalist system of business is that investors won’t invest unless they get 20% or higher return on their money. Developers play all sorts of games with their financial models to show what the investors want to see. If the project comes up short, they look to the government subsidies to make up the difference. Any time there is a government subsidy, what it really means is a tax on the people. Why can’t our corporations be happy with a 10% return on investment for a while?
michel says:
November 18, 2011 at 11:46 pm
The NPV measures (theoretically) what I could sell the future income stream of a project for in cash today.
So to use your example, when the project is completed, in theory, they will be able to sell the finished plant for 130% of what they have into it.
How is that not a return of 30% on their investment? What am I missing? Yes, this is not the IRR, but where is the error in my calculations?
w.
Septic Matthew says:
November 19, 2011 at 12:33 am (Edit)
Thanks, Matt. Man, I’d have to see a citation for that claim, because it truly is surprising (and not all that believable).
Again, cite? Which “earlier subsidies” are you comparing to which “current subsidies”? Your claim is meaningless as it stands.
w.
Bill Illis says:
November 19, 2011 at 5:15 am
Never say never, Bill. It isn’t a matter of efficiency, per se. It’s a matter of cost efficiency and more than that it’s a matter of competitive cost efficiency. I went through the numbers. I’d have photovoltaics supplying all my electricity and selling excess generation back to the grid at a profit if it were going for $0.44kWh. Can’t do it when I can buy off the grid at $0.11/kWh. I figure breakeven (absent any calculation for maintenance cost over 25yr service life) is about $0.22/kWh.
“Mther nature did invent an efficient method billions of years ago. Solar photons get converted into chemical potential energy allowing plants to grow and reproduce.”
Yes, but it isn’t really all that efficient. Sugarcane, one of the most efficient at converting solar to chemical energy, is about 8%. That’s about mid-range for production solar panels (6-10%) and just a fraction of highest achieved laboratory panels (40%). The advantage plants have is they’re self-reproducing, self-reparing, and built out of air, water, and dirt. So cost efficiency even for a cultivated crop like sugar-cane is higher than photovoltaics.
The remaining problem with plants is that starches, sugars, and even wood isn’t really desireable as an energy source without further processing which vastly decreases the competitive cost efficiency relative to fossil fuels. No one’s looking for more expensive sources of energy except misguided environmentalist whackos.
The thing of it that nature does provide the basic technology we need. The end products we want like fuel-oil and ethanol are metabolic by-products and/or products the plant only needs in small proportions for survival value. Evolution doesn’t reward waste. Genetic engineers however can reward whatever genetic engineers want so if we want an algae that produces far more oil than it needs and grows in an unnaturally poisoned environment that no wild competitors can tolerate then we’ll have a renewable source that’s far cheaper than digging progressively more difficult to reach fossil fuels out of the ground.
Here is everyone’s chance to have a direct say:
Being a large landowner (in a wind corridor), the windmill people were quick to approach me regarding the erection of large 4MW generators. I sent them packing as I could not agree with the business model. Now I am the only area for miles NOT looking at windmills (also the only one not receiving subsidized income).
Now the solar panel people have arrived. All I have to do is sign on the line, and with government guaranteed loans and a 30yr guaranteed contract, I would be in the solar “business”. The business model makes no more sense than windmills, but hey, subsidies are money… are they not. The promise is a 6 yr payback on the initial capital outlay.
So the question is:
Should I send these people packing also or suck up to the public teat, like everyone else??
What would you do, fellow skeptics, and more importantly… why?
What would y’all advise? GK
@Bill illis
“Some kind of new process or new methodology looks like it will be needed since the current technologies, solar panels and reflective mirrors concentrating the solar radiation, just doesn’t look like it will ever be efficient enough.”
They’re efficient enough right now. The manufacturing and maintenance cost is too high. Manufacturing has a history of constant cost decline. This is true for just about everything but it’s particularly true for solid state electronics and photovoltaics are mostly solid state electronics. Electrical energy storage cost is the thornier problem. Electrical storage is expensive and progress is glacial with no conceivably practical breakthroughs in sight. That’s why hydrocarbon fuels are going to be with us for a very long time to come IMO. They’re very cheap and practical for energy storage and vast infrastructure is already in place to do it. We just need to produce those fuels directly from air, water, and sunlight via synthetic biology instead of digging it up out of the ground where natural biological processes accumulated it.
Philhippos says:
November 18, 2011 at 4:44 pm
“So a new bumper sticker is needed”
KILL A PENSIONER – BUY A SOLAR PANEL
You could print this off and apply it with some clear adhesive backed plastic (Fablon in the UK).
http://www.maxfarquar.com/wp-content/uploads/2011/11/Kill-a-pensioner-Buy-a-solar-panel.jpg
davidmhoffer says:
November 18, 2011 at 5:29 pm
“…and what businesses that are already there and are energy intensive will pick up and move for the same reason? Worse, if you’ve decided to move, you may as well consider all the options. Texas, Nevada, China…”
Texas has over 25% of the US total installed wind turbines. Over 3 times as much as California.
There’s nothing inherently wrong with wind power. It works out fine in states with conservative governments. Evidently the inherent, intrinsic wrongness in all this is giving the looney left a seat at the government table.
Re:Jesse says:
November 19, 2011 at 9:52 am
“One giant problem in our capitalist system of business is that investors won’t invest unless they get 20% or higher return on their money….Why can’t our corporations be happy with a 10% return on investment for a while?”
I believe you are confusing “risk capital” with corporate returns on capital investment. Most corporations would be quite pleased to see a 10% return on their capital investment. Investments cobbled together by investment bankers and sold through unregistered security offerings is where you’ll see expectations of higher returns because of investor perceptions of higher risk. The problem with such investments being underwritten by the U.S. government is that the investor risk disappears while the fancy return remains intact. The risk for which such rewards are rationally exchanged have been shifted to the U.S. taxpaying public.
@davidhoffer
“They” say that, huh? Do you have a link or is that just more of the crap you constantly make up out of thin air to support your stupid rants?
Dave Springer says:
November 19, 2011 at 10:15 am
Manufacturing has a history of constant cost decline. This is true for just about everything but it’s particularly true for solid state electronics and photovoltaics are mostly solid state electronics.
Photovoltaic s are mostly glass and metal frames. The ‘solar part’ is maybe 1/6th of the total installed cost right now. The last I checked plate glass was a fairly mature industry.
Tim says
All because it was decided in the 70s by flower power hippies that nuclear power is immoral and you must never speak of it
Henry@Tim
They were right. Nuclear energy is no good.
http://www.letterdash.com/HenryP/nuclear-energy-not-save-and-sound
Isn’t hydro renewable?? Greenies only seem interested in wind for some reason
Green activists are only interested in a technology until it becomes economic; at that point it becomes anathema. Their real goal is not to maintain our current energy consumption (and hence, lifestyles, since energy consumption is an almost perfect proxy for standard of living) in a “sustainable” way – it is to reduce our standard of living. Their OWN standard of living (qv, Gore, Suzuki, Moore and their houses) – well, not so much.
The U.S. Environmental Protection Agency defines hydroelectric as a renewable energy source:
http://www.epa.gov/cleanenergy/energy-and-you/glossary.html#R
“Renewable Energy”
“The term renewable energy generally refers to electricity supplied from renewable energy sources, such as wind and solar power, geothermal, hydropower, and various forms of biomass. These energy sources are considered renewable sources because they are continuously replenished on the Earth.”
The proper term, the one used by the EPA, for renewables other than hydro is (big surprise) “non-hydroelectric renewables”.
For example:
http://www.epa.gov/cleanenergy/energy-and-you/affect/non-hydro.html
Interestingly enough the dimbulb who wrote the non-hydro article above classified “landfill gas” as a renewable. Like nature what generates the trash that goes into them. Duh. Where do they find these people?
Re:Dean Cardno says:
November 19, 2011 at 11:05 am
“Green activists are only interested in a technology until it becomes economic; at that point it becomes anathema.”
As a former “renewable energy” developer, I can attest to that one. So long as we were pouring money down a research rat-hole trying to get geothermal power into the economically viable range, environmentalists were cheering us on. We easily got a “negative declarations” on potential environmental impacts for most anything we chose to do. However, at the precise moment we developed the technology to the point where profit-making geothermal plants were possible they turned on us like mad dogs. The last geothermal plant I built was tied up for 5-1/2 years by “environmental intervenors” and it was a binary, “zero emissions” plant; the most environmentally benign plant I ever constructed.
Dean Cardno says:
November 19, 2011 at 11:05 am
“Their real goal is not to maintain our current energy consumption (and hence, lifestyles, since energy consumption is an almost perfect proxy for standard of living) in a “sustainable” way – it is to reduce our standard of living. Their OWN standard of living (qv, Gore, Suzuki, Moore and their houses) – well, not so much.”
I don’t believe that’s quite right. The real goal is to have fewer humans in the world. These people are all Paul R. Erlich disciples only without the stones to admit it because Erlich is so widely discredited.
Like minded people were behind the eugenics movement which was quite the fad in the United States around the time of Erlich’s birth. The name changes but the sentiment remains the same – the earth is being overrun by “useless eaters”. These days the useless eaters are anyone who questions the catastrophic climate change narrative. Oh, and old people with terminal illnesses. This is where the so-called “death panels” that Sarah Palin so aptly named come from. In that case it’s people uselessly consuming health care resources that are better spent on younger people with more to gain per public health care dollar spent. In the climate change game the unwashed masses are uselessly eating fossil fuels that should be conserved for a smaller world filled with enlightened people and descendnents of the elite liberal left. The Nazis called their scapegoats “Life unworthy of life”. I hate to run afoul of Godwin’s Law but there’s an exception for cases where it really is appropriate and I (naturally, as predicted by a corrollary to the law) think the case I made is one of the exceptions. These people are Nazis!
🙂
Dave Springer;
“They” say that, huh? Do you have a link or is that just more of the crap you constantly make up out of thin air to support your stupid rants?>>>
Obviously it was made up out of thin air due to my inferior intellect which produces a constant stream of stupidity. If only I was as smart as someone like you who got 100% on the math part of their SAT. If only I was as smart as someone like you who sat on a very important committee at a very large company evaluating ideas for patents. If only I was as smart as someone like you who can shoot a hole in something from 100 yards. If only I was as smart as you and could carry a gun and brag about how tough I am.
You are my hero. I’m blowing you a kiss.
Jesse says:
November 19, 2011 at 9:52 am
“One giant problem in our capitalist system of business is that investors won’t invest unless they get 20% or higher return on their money.”
As Claude Harvey points out you are mixing apples and oranges! Given that this project is 80% guaranteed by the U.S. Government, the returns should be equal to Treasuries. The risk on the 80% is not very high? Their are lots of people buying Treasuries, which are yielding 2% (10ys)! As Claude mentions, once the government gets involved all market logic disappears!
would it be snide for me to remark that the only thing “green” in “green energy” is the public dollar bills being abused ?
Claude Harvey says:
@November 19, 2011 at 10:35 am
Claude, you are correct. I was talking about venture capital. I worked for an engineering and construction management company and we were happy with a 10% profit. We often did estimates for start-ups in ethanol and gasification and those start-ups were the ones looking for subsidies. Worked out well for ethanol but not so good for the gasification people.
Dave Springer says:
November 19, 2011 at 9:01 am
Dave, I’d be overjoyed if people classed hydro with the renewables. That would be wonderful. But they don’t, hydro is not green enough for them or something. Duh.
California has a goal of 33% renewables by 2020 … and if you think they count hydro as a renewable, think again, my short-sighted friend. Check out the California Independent Systems Operator web site, they handle almost all the power in California. You can explain to them how wrong they are for saying large hydro is not renewable, I didn’t have much luck convincing them.
i suppose I should have mentioned why hydro is not counted as a renewable, to keep people like yourself from going off on a wild goose chase … hang on a minute, wait, I did mention that very fact, and you still didn’t get it. I said:
I took the trouble to point out exactly why hydro is not counted among the renewables, it’s because of AGW activists like you. … and despite that, in your pathological urge to attack me, you didn’t even read what was written. Here’s a whole post on the subject of renewables, please try to catch up, you’re holding up the rest of the parade.
Dave, your desire to find something, anything at all with which to attack me is leading you down strange paths of inanity. What drives me round the twist is how little thought you put into what you write. If you entered the conversation looking to make a contribution rather than looking to make an attack, you might even be able to convince folks that you should be listened to.
As it stands, though, all you’ve convinced us of is that you are not paying attention and you’re not here to make a contribution, you’re just looking to bite someone. Unfortunately, to date all you’ve managed to bite is your own posterior …
w.
Jesse says:
November 19, 2011 at 9:52 am
Say what? Most corporations in the US make about a 10% profit on their sales. So your claim that they are “not happy” with a 10% return is, quite simply, wrong.
w.
PS—Investors, quite reasonably, want a higher return because of the risk involved in the investment. But it’s not “20% or higher”. The return required depends on the risk, so you can’t set a certain figure.
Spector says:
November 19, 2011 at 7:17 am
Gail Combs says: (November 19, 2011 at 6:08 am)
“Obama Signs Landmark Wild & Scenic Rivers Bill”
I wonder if some future president might need to have an act passed by congress that allows him to clear-cut and strip-mine national forest and park lands to pay off the national debt? According to Bill O’Reilly, the Governor of California might need that type of authority very soon.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NAH, They already sold it outright to China. That is why Hilary was over there…. (Just kidding …I hope)
Dave Springer;
The real goal is to have fewer humans in the world. These people are all Paul R. Erlich disciples>>>
Do you have links to prove this? Or is it more of the stupid crap you make up?
Dave Springer;
Texas has over 25% of the US total installed wind turbines. Over 3 times as much as California.
There’s nothing inherently wrong with wind power.>>>
Your comment above was in response to a discussion of the reaction of businesses in regard to locating in jurisdictions with dramatically higher electricity rates. If rates are 50% higher in one jurisdiction than in another, businesses will act accordingly, and it makes no difference if their electricity comes from 100% windmills or 0%. As for the thought that there is nothing inherantly wrong with wind power, the fact is that windpower is intermittant, and when supplied directly to the grid, imposes huge costs on other generation methods to deal with the fluctuating wind power. The loss in efficiency in the balance of the generation systems, plus the need to provision the rest of the generation systems with additional peak capacity that is not used when wind is being used makes the costs of the entire system higher across the board. Maintenance of a large number of widely disrtributed small generation points is also much higher, and the extended grid costs to carry their output are also much higher, than the costs for centralized infrastructure with stable output. You’re idea to buffer the wind production by, for example, pumping water into a resevoir is not new, and has been shown to have value in small local implementations. Scaling such an approach to serve thousands of windmills has considerable additional challenges.
Dave Springer;
The manufacturing and maintenance cost is too high. Manufacturing has a history of constant cost decline. This is true for just about everything but it’s particularly true for solid state electronics and photovoltaics are mostly solid state electronics. Electrical energy storage cost is the thornier problem. Electrical storage is expensive and progress is glacial with no conceivably practical breakthroughs in sight.>>>
I see. The breakthrough in manufacturing cost of PV is obviously in sight, but the similar breakthrough in electrical storage costs is impossible. Got it.
Dave Springer;
Never say never, Bill. >>>
Ah, yes. Other people can’t generalize becaue they aren’t as smart as you, but it is OK for you.
Dave Springer;
Actually Mark it’s hard to think of anything more reliable than the sun. It’s been rising on time every single day for billions of years.
You are confusing “reliable” with “on demand”. >>>
The sun may be reliable, but the amount of sunshine available to a PV isn’t. Unless you live somewhere that the sun shines exactly the same every single day, one would think you would know that. Please do not confuse what you think shines out of your *ss with the actual sun. The logistics behind bulding a storage resevoire such as a water resevoir to produce hydro for a highly dispersed, highly variable energy source are far from trivial.
Dave Springer;
blah blah blah genetic engineering blah blah blah>>>
Yeah, genetic engineers can whip up plants that produce oil and grow like mad in a toxic waste dump. Gotta link for that? Or just another of your brilliant rants?
Did you catch my kiss?
Gail Combs;
NAH, They already sold it outright to China. That is why Hilary was over there…. (Just kidding …I hope)>>>
She tried, but insisted they take Arnie along with it, and they said no way. I heard she also tried to sell them Guam, but they heard it was “tippy”. Then she tried to sell them Taiwan, but they said they already own that. I heard she was going to try and sell them Alberta next.
Dave Springer says:
November 19, 2011 at 10:35 am
Texas has over 25% of the US total installed wind turbines. Over 3 times as much as California.
There’s nothing inherently wrong with wind power. It works out fine in states with conservative governments
ERCOT allows 8% for wind reliability in Texas. So basically you have to have 92% backup. It’s all fine and dandy if the backup already exists. If the backup doesn’t exist then you have to build an additional facility for backup plus the windmills.
T Boone Pickens, the guy who built most of Texas’s wind farms isn’t stupid. He is in the Natural Gas Business. Build a windfarm…need to build a Natural Gas ‘peaker’ for backup.
http://www.boonepickens.com/
So how much actual energy did the investment in Solyndra produce and would it have been more efficient to simply convert the cash to $1 bills and burn the currency to produce power?
Mark says:
November 19, 2011 at 8:41 am
Mike Hebb says:
A lot of homes in South America, India, China, Africa and Asia use wood, yak dung, or other animal dung dried or as methane for cooking and heating.
Presumably the dung is a by product. If it wasn’t being used as a fuel it would probably be waste which would cost money for disposal.
_______________________________________
No it would be made into compost and used to produce food.
Horse is the least “Valuable” of the manures but it can be used “Fresh” if you do not mind the weed seeds.
G. Karst says:
November 19, 2011 at 10:07 am
I have the same opportunity here, and I haven’t taken it. Why? Because forcing PG&E to buy power from me at way over market value just drives the price up for everyone else. That kind of “I’ve got mine, who cares what it does to your costs” attitude doesn’t sit well with me.
So to date I’ve passed up my chance to be a solar magnate at the people’s expense … doesn’t seem right.
w.
Anthony and Willis,
Have you run the numbers to see at what price point it becomes cost effective to run your own portable 5 or 10 kw generator on gasoline or nat gas or diesel ?
GW
That is assuming the “conventional” load. I have an idea that could change things dramatically if it were adopted on a wide scale. Part of the problem is that wind power is fickle and erratic. You can get 100 megawatts of power one day and none the next or even 30 minutes later the wind might go dead calm.
Now imagine I have a system on my property that works basically like an off-grid energy storage system. I can charge the batteries (lets say AGM deep cycle batteries) at night and not use any power during the day or charge them at a constant rate day and night regardless of my load. I basically convert my home from a demand load to a base load. Now lets say with the new smart meters the power company can adjust power rates in real time according to supply and demand. Lets say it is the middle of the day, the wind comes up, they have power to spare, they send a signal over the power grid that says “the price of power just went down” so my system responds by buying a little more of it. I slightly increase my charge rate to take advantage of the cheaper power. So the grid operator sees the electricity demanded respond to the supply. This allows me to buy power when it is cheap and store it for use when it is more expensive. So on a hot summer day power might be scarce, the utility broadcasts over the grid that the price of power just went way up, and my system responds by significantly backing off on the charge rate off the grid.
Such a system would use plain old ordinary free market supply and demand principles to modulate the demand in accordance with the supply. Currently, when the wind comes up, an operator might have to scramble to find a buyer for the power, maybe they sell it to the state next door for a few hours. This way they would see their own customer demand increase in response to a price reduction and could actually take advantage of that surplus. And it works just as well in the other extreme when they might see loads reduce when there is no wind but demand is high for climate control.
Additionally, if I want to install my own turbine or PV panels, all the infrastructure is there. I simply need to hook them up to the charge controller. We already have all of the technology required to make this work. No real major R&D is required.
Dave Springer says:
November 19, 2011 at 10:15 am
Sign me up if it can work. I suspect that synthetic photosynthesis (photosynthetisis?) may well be one of the future energy sources. The over-riding problem with sunlight is that it is so dispersed, both in time and in space, and cities need gigawatts of power 24/7.
I lived quite happily off the grid on solar power for some years, so don’t get me wrong, solar has its place. But then … I didn’t even use a kilowatt, and certainly not 24/7, while the world uses terawatts and definitely 24/7.
My point is simple. The only current options are fossil and nuclear. Period. Might change in the future, assuredly will change if we wait long enough, but for a while those are our choices.
w.
Dave Springer says:
November 19, 2011 at 9:11 am
……….There’s a windmill a few hundred feet from away from me that still spins nearly every day pumping water uphill into a holding tank where the water is then available on-demand. It’s extremely reliable. The wind energy is thus buffered into gravitational potential energy. One could, if one wanted, use that gravitational energy to (for instance) drive a water-wheel that might be attached to a mill that grinds grain or the shaft of a generator shaft that supplies electricity. Then it would be both reliable and available on-demand.
________________________________________
On my property I have a hundred foot drop in elevation and a high water table (clay). I am sitting on the top of a hill with decent wind so I have considered this idea for my own energy requirements. The biggest hurdle is the blasted planning board and EPA and not the engineering. If I recall correctly, the generation of power from water in my area is forbidden to individuals on top of everything else.
After my last couple go rounds with the cement head in planning, I am not even going to try to get her to understand an innovative concept. Arguing with an inspector is like mud wrestling with a pig……
GW says:
November 19, 2011 at 1:43 pm
Because I live in a small house and heat and cook mostly with gas, my electric bill is small. Around here, cost per kWh depends on how much you use. As a result, I get the cheapest level of power available, about 12.2¢ per kWh. Note that in Idaho and Utah power costs about 6¢ per kWh.
From memory, fuel, maintenance, and replacement/lease costs are something like 20¢ per kWh for a large (10 Mw) diesel plant. Call it 30¢-40¢ per kWh for a small (5-10 kW) diesel (or petrol) power plant. That’s all from memory, any corrections welcome.
w.
Nor does it me, but looking down the road, I see outrageous power bills, and perhaps a unstable grid. Receiving compensation to offset such outrage, makes a soothing salve to treat a slightly bruised morality.
Obviously, I am not close to a decision, which is why I wanted to throw it out there for discussion. GK
G. Karst says:
November 19, 2011 at 10:07 am
Here is everyone’s chance to have a direct say:
__________________________________________________
I would be VERY VERY careful.
Land owners are usually the Rubes that eventually get the shaft. If the bottom falls out in say ten years, YOU get stuck cleaning up the mess. Even if you have a “Contract” it does not mean diddley if the company goes belly up.
Talk to a lawyer and make sure there is an escrow account (up dated annually) for the removal costs and environmental impact costs.
We have good water and had the chicken factory people approach us. After investigating we found it makes lots of money for Tyson, Pdue et al but is slavery for the farmer.
The catch is having to mortgage your land to pay for the buildings only to find out that every time the buildings are close to being paid off the regulations changed and you need new buildings or renovations. Turns out the money maker is the MORTGAGE not the chicken produced!
Your neighbors with those windmills are going to be stuck in about ten years when the maintenance costs go up and the government money runs out.
crosspatch says:
November 19, 2011 at 1:46 pm
If such a storage were available that was 1) cheap, 2) durable, and 3) did I say cheap?, we wouldn’t be having this discussion. Lead/acid storage batteries that you suggest are none of the above. In addition, they are toxic and caustic.
Here’s the real problem, though. A deep-cycle truck battery is typically around 80 ampere-hours nominal capacity. Generally, you don’t want to cycle them more than about halfway, so call it 40 amp-hrs usable. That’s about a half of a kilowatt-hour of stored, usable power per battery.
We don’t drink much power here at chez Willis. we used 280 kilowatt-hours of electricity last month. Thats about 10 kWhs per day. So I would need no less than twenty deep-cycle truck batteries to power me for one day … oh, and I forgot two things. The inverter (from 12 volts to 120 volts) is not 100% efficient, and neither are the batteries.
So we’ll likely need 25 car batteries for my household. But I draw lightly on the electric wires, the average household in the US likely uses twice the juice I do. Call it four people per household, 300 million folks in the US, maybe 75 million households, 50 batteries per household, that’s almost four billion batteries needed, cut it in half for a safety factor …
We’d need two billion batteries just to start with … and of course, they’d get overcycled and would be run dry and need to be transported and replaced and recycled and …
Your idea works in theory, but doesn’t account for the size/scale of the problem.
w.
Dave Springer says:
November 19, 2011 at 11:07 am
…….nterestingly enough the dimbulb who wrote the non-hydro article above classified “landfill gas” as a renewable. Like nature what generates the trash that goes into them. Duh. Where do they find these people?
_______________________________
Affirmative Action
Dave Springer says:
November 19, 2011 at 9:01 am
@Willis
“billions in wasted taxpayer dollars have not succeeded in getting renewables up to even 3% of the total electricity generated. Less than 3%. It must drive them round the twist to contemplate their stunning lack of success at making water flow uphill.”
“Hydro” is renewable and is 16% which brings the total for renewables to about 19% of the total. Duh.
What drives me around the twist is how little thought you put into what you write.
Dave Springer, your irrational relationship with Willis causes you to lose credibility with many excellent to decent posts. Hydro was not counted becase the eco fanatics do not count Hydro. This was all made clear but your emotional advesity to Willis caused you to miss it.
Yes, I too, have run off chicken scheme people, pig scheme people, spring water scheme people, paint ball scheme people, rock concert scheme people, etc. There is no end to it. Thanks for the input and advice. GK
Easily the most energy efficient way of generating electricity from fossil fuels is home generation of electricity from natural gas, in places where the waste heat is used to heat the home.
Combine this with an electric car that charges overnight when home heat demand is greatest, and you have an off grid solution that makes sense.
And were there a real time pricing system for feeding into the grid then you could take advantage of high prices at peak demand times.
beng says:
November 19, 2011 at 7:16 am
It would be nice, but unless the required new transmission systems could decrease line losses (by upping the voltage, converting to HV DC, etc) by a significant amount over current designs, it becomes problematic transmitting electricity more than (guessing) ~1000 miles — too much line loss and mounting KVARS (reactance) to deal with.
============
Hydro-Quebec generates power near James Bay and in Western Labrador and delivers power to Quebec, the maritimes, Eastern Ontario, New England and New York. It uses a mix of 735KV AC and 450KV DC. Transmission distances are around 400-800 miles. Total power delivered to consumers seems to be about 25,000MW.
I thought I said AGM batteries. You can shoot at them, break them open with a hammer, over charge them, charge them wrong, whatever. They don’t explode and they don’t leak. They were originally designed for fighter aircraft and as far as I know are the only storage battery you can ship that isn’t considered HAZMAT. You can turn them sideways, upside down, overheat them, whatever. I would sleep with them under my bed and not worry.
And with the new smart meters, people ARE going to be charged different rates for power according to time of use. That is the purpose for them and why PG&E here in California has been installing them. In the middle of the day in summer you might pay twice the rate for electricity as you will pay in the evening. The old mechanical meters had no way of reporting power usage per minute. The new “Smart Meters” do and they all have an IPv6 network connection back to the power utility.
The NYT numbers in graph 3 considers tax deductions for depreciations as profit. If you consider this tax write-off as a gift or grant from the government, the governments’ commitment goes from $1431M to $1816M.
The numbers in Graph 3 are obviously one-time, annual, five-year and whatever else. Classic mixed numbers. The $334M to the company from various government action of $1431M or $1816M or more (property tax?) makes my government pension appear cost-effective.
I’ll bet that these investors (millionaires) are the same ones that are requestion higher taxes on the rich to keep their investiments alive. Do we know who they are?
G. Karst says:
November 19, 2011 at 2:18 pm
I understand. And I would not say that my mind was made up either. Our rates have been up for a while, and I’ve been paying them. So if they want to make the grid so expensive, I can certainly see somebody saying hey, I’d be crazy not too. Why should I sign up for ever increasing prices when they will pay me not to do so?
Good questions all … I hate to admit it, but it wouldn’t break my heart to have PG&E send me a check every month instead of the current system.
w.
RE: Willis Eschenbach: (November 19, 2011 at 1:49 pm)
“My point is simple. The only current options are fossil and nuclear. Period. Might change in the future, assuredly will change if we wait long enough, but for a while those are our choices.
w.”
I have no basic disagreement with this, as long as ‘fossil’ includes any hypothetical abiotic carbon stores, and ‘nuclear’ includes thorium nuclear, which to me, appears to be the only plausible candidate for an indefinitely sustainable energy source.
Here is a reference to the Wikipedia article (of unknown objectivity) describing a private corporation (Delaware, USA) founded to develop the thorium energy resource. I understand that China has a similar project underway based on the test results from our successful demonstration model built at the Oak Ridge TN facility forty years ago.
Flibe Energy
From Wikipedia, the free encyclopedia
“Flibe Energy is a company that intends to design, construct and operate small modular reactors based on liquid fluoride thorium reactor (LFTR) technology.”
http://en.wikipedia.org/wiki/Flibe_Energy
That’s Kirk Sorenson’s company; he’s probably the key person in the revival or rediscovery of thorium nuclear energy.
http://energyfromthorium.com/
http://www.facebook.com/EnergyFromThorium
FLiBe is a molten salt, a mixture of Lithium Fluoride and Beryllium Fluoride.
Definite potential but I fear he’s too optimistic about what it’ll take and how long for a reliable, commercial reactor to be developed.
Spector says:
November 19, 2011 at 4:55 pm
Agreed as to both sides of the equation.
w.
Willis: … forcing PG&E to buy power from me at way over market value just drives the price up for everyone else.h
Are the utilities really forced to pay above-market prices? If so, Azusa Light and Water hasn’t got the word; what they pay for my surplus power production is significantly less than their residential rates.
I think we agree that giving these subsidies to prosperous individuals at the expense of everyone else is fundamentally unjust. I have pondered the ethics of taking advantage of the offer, but I can’t say it keeps me awake at night. After all, I am putting up a third of the capital to put up an installation which remains experimental and may go completely bust.
DMarshall;
I would love to see a complete cost-benefit analysis, including all “externalities” of fossil fuels, renewables and nuclear.
Do any such studies exist?>>>
Of course they do, but how are you going to compare them? Every time a jurisdiction changes environmental regulations, the cost analysis changes for all of them. You can’t even compare between jurisdictions unless their laws are the same. Even then you can’t compare because a jurisdiction with large amount of local coal reserves is going to have a completely different economic analysis than one in which there is no coal for large distances.
The ultimate answer however is to look at the market and see what companies are willing to invest in provided their only incentive is to sell the electricity they generate for a profit. I’d guess coal would come out number one. As for “renewables”, I challenge you to find a single instance of a private company investing in wind mills or solar farms unless they have gauranteed prices and/or massive subsidies from government to do so.
“You can see why the AGW supporters’ heads are exploding as the Durban climate party approaches. It is obvious from the chart that years and years of subsidies and tax breaks and IPCC reports and various urgings by well-meaning but clueless pundits and billions in wasted taxpayer dollars have not succeeded in getting renewables up to even 3% of the total electricity generated. Less than 3%. It must drive them round the twist to contemplate their stunning lack of success at making water flow uphill.”
Not to worry ….. when kindly suggestions don’t work a gun to the head will suffice.
@davidmhoffer The ultimate answer is a completely level playing field – a difficult thing in this complex global village that we’ve become.
But apart from its abundance, coal dominates only because the burdens of mining, processing and combusting can be shifted elsewhere.
Bi-directional electric utility meters that enable the solar home generators to “unwind” the charges for incoming utility power during the night with excess, self-generated solar power generated during the day may seem fair to all concerned, but they are far from it. The solar owner is not only “unwinding” the energy component of his bill, but he is unwinding the fixed costs and utility overhead it took to get that power to and from him and to provide backup generating capacity. Those fixed costs typically make up 2/3 of the residential utility bill and are pro-rated among all paying customers (note that the “energy component”, the current wholesale price of electric power at the U.S. trading hubs, is in the range of 4-cents per Kwh). Since those fixed costs are not reduced by the solar user’s arrangement, his avoided share of those costs must be piled onto the bills of his non-solar neighbors. Good deal for him. Bad deal for everyone else.
DMarshall says:
November 19, 2011 at 6:21 pm
@davidmhoffer The ultimate answer is a completely level playing field – a difficult thing in this complex global village that we’ve become.
But apart from its abundance, coal dominates only because the burdens of mining, processing and combusting can be shifted elsewhere.>>>
The ultimate answer CHANGES over time. Even tax laws will alter the equation. As for coal dmoinating because mining, processing and combusting can be shited elsewhere, I’m not sure I understand your reasoning. Coal is going to be most cost effective when it is close to the production point.
@davidmhoffer.
Up to 25% of the cost of coal is transportation.
Coal is the cheapest fossil fuel by BTU in North America.
90% of coal is burned to generate electricity.
@DMarshall.
The real importance of coal is the fact that it is reliable. Coal works. It is abundant. Unlike solar and wind. And the long term contracts ensure a predictable price and guaranteed supply.
People under-estimate the importance of keeping warm. Coal works. Come to northern Canada in the winter time and I will explain the importance of staying warm.
@Steve Isn’t coal the most polluting by BTU, as well? Solar and wind are abundant too, but intermittent. At the current percentage they hold in market share, that’s easily manageable.
I know what cold is like – I worked outdoors for about 8 years, right through the winter..
So you heat with coal in northern Canada? Most of the cold places I’ve lived used wood, heating oil, or natgas for heat, not electricity.
GW says:
November 19, 2011 at 1:43 pm
Anthony and Willis,
Have you run the numbers to see at what price point it becomes cost effective to run your own portable 5 or 10 kw generator on gasoline or nat gas or diesel ?
**********************************
Reply; I have a small 4Kw gasoline generator for back up use when storms take out the REA power. With a 5 gal tank it will run 11 hours with an intermittent load running from about 20% to 80% of maximum capacity. My bill says I pay about $.12/Kwh when on line so the back even point would be when the price of gasoline drops to $1.05 a gallon. No other costs included in the calculations.
Good stuff Willis.
Any technology that requires life-of-project subsidies is fundamentally uneconomic, and I would argue, fundamentally anti-environmental.
Here is a paper we published nine years ago when Canada was about to adopt the nonsensical Kyoto Protocol..
Please note our final point, on energy:
“The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but this would result in a catastrophic shortfall in global energy supply – the wasteful, inefficient energy solutions proposed by Kyoto advocates simply cannot replace fossil fuels.”
Reviewing all our points, I would suggest that our predictive track record is infinitely better than that of the IPCC and the global warming movement.
But then, every dire prediction the “global warmists” have made has failed to materialize.
I submit that most reasonable people will ultimately accept our first point:
“Climate science does not support the theory of catastrophic human-made global warming – the alleged warming crisis does not exist.”
Some of our other predictions did not fully materialize in Canada, because our country did not adopt all the lunacies of the Kyoto Protocol, but those countries that did so, particularly the UK and Western Europe, have experienced all these downsides of global warming mania,
So where do we go from here?
I wrote in 2003 that Earth would be entering a natural global cooling cycle by about 2020-2030. Global warming has now been absent for about a decade, so we’ll see. Based on more recent data, global cooling could commence sooner. Maybe it already has.
In 2008, I discovered that the (annualized) rate of change of CO2 with time, or dCO2/dt, occurs at about the same time as changes in temperature, and CO2 inflections LAG temperature inflections by about 9 months. I recorded this observation at http://icecap.us/images/uploads/CO2vsTMacRae.pdf
You may recall Willis that my finding was first condemned as “false correlation”, but was later accepted as valid. Then, the observed phenomenon was dismissed as a “feedback”, with no evidence provided to support that claim – essentially, a religious argument that said “We KNOW CO2 causes global warming, so it MUST BE a feedback”. I think that within a decade or two we will agree that changes in CO2 are primarily a result of global temperature change, not a cause thereof. There may or may not be a significant humanmade component to the current increase in atmospheric CO2 – it could be largely natural, or partly humanmade – we don’t’ even know that with any certainty.
Best regards to all. and Happy Thanksgiving to all our American friends.
– Allan
*******************************************************************************************
http://www.apegga.com/members/Publications/peggs/Web11_02/kyoto_pt.htm
Kyoto has many fatal flaws, any one of which should cause this treaty to be scrapped.
Climate science does not support the theory of catastrophic human-made global warming – the alleged warming crisis does not exist.
Kyoto focuses primarily on reducing CO2, a relatively harmless gas, and does nothing to control real air pollution like NOx, SO2, and particulates, or serious pollutants in water and soil.
Kyoto wastes enormous resources that are urgently needed to solve real environmental and social problems that exist today. For example, the money spent on Kyoto in one year would provide clean drinking water and sanitation for all the people of the developing world in perpetuity.
Kyoto will destroy hundreds of thousands of jobs and damage the Canadian economy – the U.S., Canada’s biggest trading partner, will not ratify Kyoto, and developing countries are exempt.
Kyoto will actually hurt the global environment – it will cause energy-intensive industries to move to exempted developing countries that do not control even the worst forms of pollution.
Kyoto’s CO2 credit trading scheme punishes the most energy efficient countries and rewards the most wasteful. Due to the strange rules of Kyoto, Canada will pay the former Soviet Union billions of dollars per year for CO2 credits.
Kyoto will be ineffective – even assuming the overstated pro-Kyoto science is correct, Kyoto will reduce projected warming insignificantly, and it would take as many as 40 such treaties to stop alleged global warming.
The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but this would result in a catastrophic shortfall in global energy supply – the wasteful, inefficient energy solutions proposed by Kyoto advocates simply cannot replace fossil fuels.
*******************************************************************************************
Richard Holle says:
November 19, 2011 at 8:19 pm
GW says:
November 19, 2011 at 1:43 pm
Anthony and Willis,
Have you run the numbers to see at what price point it becomes cost effective to run your own portable 5 or 10 kw generator on gasoline or nat gas or diesel ?
**********************************
Reply; I have a small 4Kw gasoline generator for back up use when storms take out the REA power. With a 5 gal tank it will run 11 hours with an intermittent load running from about 20% to 80% of maximum capacity. My bill says I pay about $.12/Kwh when on line so the back even point would be when the price of gasoline drops to $1.05 a gallon. No other costs included in the calculations.
**************************************
Gentlemen,
Please note that in North America, natural gas now costs about 1/3 to 1/4 as much as crude oil on an energy-equivalent basis. So simplistically, if your above numbers are correct, and capital costs are not too great, generating your own electricity, heat and hot water by burning natural gas could be highly economic.
A fundamental question is how long will this energy-cost imbalance between oil and natural gas exist?
**************************************
Allan MacRae says:
November 19, 2011 at 11:43 pm
Allan, that’s quite interesting. The same BP Statistical Review cited below Figure 2 says that 1000 cubic feet of natural gas is the energy equivalent of 0.18 barrels of oil.
The EIA puts the residential price of natural gas at $16 in August. Combing these two gives a natural gas price of $16 / 0.18 = $88 per barrel of oil equivalent. Since oil right now is about $100 per barrel, these are not too different.
However, the EIA (op. cit.) also says that the industrial price for natural gas is only about $5,10 per 1000 cubic feet, or an $5.10 / 0.18 = $28 for the amount of energy in a barrel of oil. This puts it right in the 1/3 to 1/4 range you specified above.
Curious.
In any case, if I could get natural gas at industrial prices it would be worth it … but likely, being a residence, I’ll be charged residential prices.
w.
PS—Your point about cogeneration, particularly in colder climates, is an area we haven’t touched on but which is important.
>>Alan says: November 18, 2011 at 4:13 pm
>>Isn’t hydro renewable?? Greenies only seem interested in
>>wind for some reason.
There are vast swathes of the world, like the UK, where hydro simply does not work. Either the hills are too low, or there are too many people living in the valleys.
.
Willis, I think your proposed treatment is like this. Take the total invested until the project starts to return cash. That is the investment. Then take the NPV at some discount rate, what we don’t know. The NPV is considered to be the return on the investment.
But it isn’t. The NPV is unrelated to the investment. The NPV is the result of all the cash flows in and out for whatever reason. So marketing expenses will be in there – that is cash out. Depreciation will not be in there, its not cash out, what will be in there will be forecast cash out to buy or replace capital assets. Purchases of parts, supplies all that stuff will be in there.
In any capital project, cash is going in and out all the time, and the NPV is the result of discounting all those cash flows. Capital and investment is only part of it.
You might be able to say in pure cash terms, the capital requirement to get started to steady state is X, then when you are running it your profit is y per year, so (not accounting for interest) you will get back a return of Z% a year on your capital once the thing is running.
But its not a very useful way to think about it. The best way to think about it is the actual NPV that is being generated. Read Brealey and Myers. Its more complicated in practice and simpler in theory than people usually think.
What you really should not do is take the NPV and divide it into some investment number, that doesn’t tell us much of anything.
I agree with most of the piece by the way – this is just a technical point. The fact is that the subsidies are nonsense. No question about that.
Gentlemen:
One standard, 42-gallon barrel of crude oil contains 5,848,000 btu.
Natural gas is selling this morning on Nymex for $3.32/MM btu.
Therefore, natural gas is selling at wholesale in the U.S. for the equivalent of $19.48 per barrel oil.
The guaranteed heat rate for a GE, combined-cycle-gas-turbine (CCGT) plant is 5,690 btu/Kwh.
Therefore, the fuel cost for CCGT at the quoted Nymex price is 1.9-cents per Kwh.
The capital cost of CCGT is $550 per installed Kw.
The capacity factor of CCGT is 92%.
The above information should be the starting point for evaluating ANY competing form of electric power generation, because CCGT is, hands down, the cheapest commercial form of new electric power generation in the U.S. today (not appropriate for in-home installation). The astronomical capital cost of solar when capacity factor is included leaves the technology beyond rational consideration.
Claude Harvey,
It’s nice to see a Global Enterprise doing something right 🙂
Mike Hebb says:
November 18, 2011 at 4:00 pm
I think the pie chart is missing a major piece by not including natural renewables . A lot of homes in South America, India, China, Africa and Asia use wood, yak dung, or other animal dung dried or as methane for cooking and heating. This would make the wind/solar/geothermal even smaller proportionately. If the biomass piece included these options it would be a lot bigger and they’re all renewable.
I think that my Housing Association would have something to say if I kept a Yak and burnt its dung 🙂
But it would also save on the grass cutting.
Re:Robert of Ottawa says:
November 20, 2011 at 5:33 am
“Claude Harvey,
It’s nice to see a Global Enterprise doing something right :-)”
Yes it is. I have no vested interest in “Global Enterprise”. I just quoted their machine figures because I happened to have them at hand. In the case of CCGT, the heart of the thing is a booming-big, aero-derivitive gas turbine and GE is huge in that business.
Willis:
So to date I’ve passed up my chance to be a solar magnate at the people’s expense … doesn’t seem right.
Hmm. Did I read above that you use REA power? Us city slickers might have an opinion about that…. : > )
The complete failure of windmills:
http://blogs.dailymail.com/donsurber/archives/46519#more-46519
I think everyone will agree with your logic. However, the question can boil down to: What side of the equation does one want to be – “the good deal for him” or the “bad deal for everyone else”. I have never enjoyed being “everybody else”. GK
A bit off topic here, but I hope Dave Springer is still around?
Henry@Dave Springer
You remember that thing we discussed some time ago?
You said that the oceans only gives up 20% of its solar heating which would explain matters with the CO2.
I did some checking and testing on this. It did not work out as you predicted.
I think you are wrong.
In the case of the leaf chart here:
http://wattsupwiththat.com/2011/03/24/the-earths-biosphere-is-booming-data-suggests-that-co2-is-the-cause-part-2/
I am finding an extraordinary correlation between warming in the red areas and actual cooling in the blue areas. In other words, if you pick a blue area, you will find mean temperatures declining,
if you pick a red area you will mean temperatures rising.
So, seeing that the overall chart shows more red (the earth is blooming) it explains the extra warming noted of the past decades. It is more vegetation that traps more heat.
I was struck by the cost of replacing all the energy generating equipment in the world by installations like California Valley Solar Farm, which turns out to be $101.9T, $19.4T just for the US. That’s on a US GDP of about $15T, and a world GDP of about $75T.
That number assumes an equivalence of solar and conventional power, which we know is not true. After paying to make it equivalent, the numbers are going to be a lot higher. The last time that there was that kind of expenditure, it was WWII, and the US spent $228B on a GDP that was between $100B and $200B. Do you suppose there is the same sort of commitment now? Among true believers, undoubtedly, but among the rest of us? Polls certainly don’t say so.
There is no plan to overhaul the way we get energy, and for good reason. If people at large saw and understood those numbers, they would rebel in no uncertain terms. But without a plan, installations like that are going to end up as expensive white elephants in the not very distant future. It goes without saying that, as much as politics will allow, the taxpayer is going to end up holding the bag. How many of those do we really want?
Claude Harvey says:
November 20, 2011 at 4:49 am
That’s the bottom line that folks just don’t seem to get.
w.
juanslayton says:
November 20, 2011 at 6:52 am
I don’t think the local area was originally wired by the REA, but I suppose it’s possible. I know that wiring a place now out here is hideously expensive if you have to put in the poles and all.
w.
Hi Willis,
Hope you are well.
I general agree with Claude Harvey’s comment at November 20, 2011 at 4:49 am.
Re your comment: “The same BP Statistical Review cited below Figure 2 says that 1000 cubic feet of natural gas is the energy equivalent of 0.18 barrels of oil.”
That is correct – in the North American energy industry, which commonly uses some English units, the oil:gas energy ratio is often referred to as ~6:1.
Conversion:
1000 cubic feet of pipeline-quality natural gas contains about 1 MMBtu (~1.05 GJ) of energy.
Natural gas is commonly selling on the Nymex at less than $4 per MMBtu (or per 1000Ft3 or per GJ) .
http://www.bloomberg.com/energy/
Oil is selling on the Nymex at almost $100 per barrel, so the wholesale price ratio is roughly 25:1 when energy equivalence is 6:1. Hence wholesale gas is now priced at less than 1/4 the energy-equivalent price of wholesale oil, on the Nymex. This is true in North America but generally not elsewhere in the world, where the shale gas revolution has not yet taken hold and gas is often priced at a factor much closer to energy-equivalence with oil.
I don’t understand the EIA residential gas price of $16/Mcf, which is almost 4 times the reported US wholesale price. It may be that your local gas distribution utilities are doing too well.
In Calgary, our fixed-rate price for residential gas is $6.59/GJ and that includes a very healthy profit for the local utility.
http://www.enmax.com/easymax/residential/questions/Current+Prices/Current+Prices.htm
Our fixed rate for residential electricity is 8 cents/kWh (and that includes a huge subsidy for mandatory-included, worthless wind power) .
Both rates are locked-in for 5 years.
As long as our electric utilities insist on forcing us “non-believers” to subsidize worthless wind and solar power, it makes increasing economic sense for North American residential and industrial consumers to seek off-grid alternatives, powered by natural gas.
Best regards, Allan
Does “biomass” on the first chart include animal dung?
Looks like the taxpayers are kicking-in about $1.4B for this one project. Why don’t we just kill it and give Secretary Chu the $334M he wants, let him cut checks to his buddies and we save over $1B.
If we can get them to come up with 1000 projects like this and kill them all we could save over $1,000,000,000,000 (one trillion dollars.)
Now that’s thinking like a true green politician.
I should be in charge of the “Super Committee” in Washington.
Willis, I was unable to get to the National Geographic data page (for your Figure 1).
Guide me there please. Thank you!
tokyoboy says:
November 20, 2011 at 6:55 pm
Not clear what the problem is. It works for me, I click on the link and wait. It’s an “interactive graphic”, takes a minute to load.
All the best,
w.
RE Claude Harvey: (November 19, 2011 at 11:28 am)
Ref: Green Support of Impractical Energy Projects
“However, at the precise moment we developed the technology to the point where profit-making geothermal plants were possible they turned on us like mad dogs.”
I am guessing that was when they saw you as threatening to clutter a beautiful natural landscape with ‘ugly’ concrete structures. I would expect the same kind of resistance to actually paving the Mojave Desert with solar cells.
I’m no financial expert, so you’ll have to forgive me for asking…
Isn’t this just an elaborate, government run, money laundering scheme to transfer tax/rate payer money to a group of investors without people knowing what’s going on?
John T says:
November 21, 2011 at 9:33 am
My vote is absolutely not. It certainly turned out that way, but I put that down to the usual greed that comes into play whenever the gov’t hands out money.
I don’t know about your government, but the tipoff that it’s not a US project is that I doubt greatly the US government could actually put together an “elaborate, government run, money laundering scheme” that actually works. It’s disqualified from being a government scheme by its very success.
w.
RE:John T: (November 21, 2011 at 9:33 am)
“Isn’t this just an elaborate, government run, money laundering scheme to transfer tax/rate payer money to a group of investors without people knowing what’s going on?”
It may have that effect, but I suspect this happens when those who believe that preservation of nature is a primary duty of all mankind wake up from a ‘Noble Dream’ to see that the real thing will have detrimental environmental consequences if it is exploited to any practical extent.
Re:John T says:
November 21, 2011 at 9:33 am
“I’m no financial expert, so you’ll have to forgive me for asking…
Isn’t this just an elaborate, government run, money laundering scheme to transfer tax/rate payer money to a group of investors without people knowing what’s going on?”
Actually, you are close to the truth. Congress has found that tax credits and souped up depreciation schedules are a nifty, roundabout way to camouflage a subsidy. While the public might object to the government paying out taxpayer money to build certain “do-good” projects (let’s amuse ourselves and say, for example, “a brothel for handicapped veterans”), the public does not generally recognize that allowing investors in such projects to avoid paying taxes otherwise due on profits accrued from unrelated sources amounts to the same thing. Instead of taxes flowing into the public till and then back out to the “do-good” project in a manner transparent to public scrutiny, the diverted tax money never arrives at the federal coffers the first place and it takes a battery of “financial whiz-bangs” to even figure out how much taxpayer subsidy was actually paid out.
You might be interested in the fact that most such investor opportunities are offered through “unregistered security offerings” where it is illegal under SEC regulations for any but “sophisticated investors” to participate. Translation: “Rich folks”. You must meet certain “minimum net worth excluding the value of home and personal automobiles” requirements to become eligible to participate. The hypocrisy of certain politicians you may hear bellowing “tax the rich” while legislating loopholes for the rich such as these into alternate energy programs is almost too much to bear. Fortunately for most of the voting public, they do not understand what goes on here and are spared that blistering headache I get every time I think on the subject.
I should follow up my last post with a “tip-of-the-hat” to Willis’ reasoning that such a successful “laundering scheme” as solar subsidies approach would not be characteristic of government where nothing seems to succeed. The answer to that puzzling outcome is that most government legislators and bureaucrats do not remotely understand how what they have wrought actually works. They simply understand the outcome. That’s because the bright boys and girls in Wall Street investment banking dreamed up the scheme, worked out the details, handed the required legislation to Congress on a platter and then managed its execution.
I think it should be patently obvious that the currently politically correct wind and solar power methods would never be accepted by the Green Earth people as a replacement for ‘Carbon Power’ because the huge installations required would necessarily entail a massive destruction of a precious natural environment. That presumes this could be made practical.
“Note that the traditional use of firewood for cooking is not included. ”
Say what?? With 3 billion people using biofuels for cooking daily, why on earth would it not be included. This sounds like a discussion of bourgeois energy, not energy consumed by the masses. For example, ALL biomass used as fertilizer is part of the energy inputs for agriculture, and all that energy is solar in origin, ultimately. This business of who uses energy and how much is so incomplete as to render the first and second pie charts moot.
For those touting thorium reactors, check into how long the circulation and containment pipes etc. for the ‘molten salts’ last, and what it takes to replace them. Nasty, aggressive stuff.
Henry@BrianH
http://www.letterdash.com/HenryP/nuclear-energy-not-save-and-sound?page=2
BTW: How did you figure out or knew (on one of your previous comments) that a slightly lower pH is better for coral?