Make 29% On Your Money, Guaranteed!

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.

Advertisements

  Subscribe  
newest oldest most voted
Notify of
Interstellar Bill

Our prosperity is getting chewed up.

R Barker

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,

Steve in SC

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.]

Bill Illis

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).

pat

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
——————————————————————————–

Nick Shaw

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?

janama

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.

Mike Hebb

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.

Scott Covert

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%”?

Tom Jones

This is a very small taste of a very large meal that true believers think is what we need.

Edvin

“Note also that a huge part of the money, some $462 billion dollars…”
Should be million, with an m.
[Thanks, Edvin, fixed. -w.]

PaulH

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.

Tim

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.

John Runberg

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!

temp

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.

Alan

Isn’t hydro renewable?? Greenies only seem interested in wind for some reason

TeresaV

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.

Mark M

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

Roger Knights

“Let them have everything.”
(Then they’ll have no excuse when they fail.)

Cecil Coupe

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.

Thomas

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.

lenbilen

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

A. Opinion

“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.

DonB

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?

gbaikie

This sound like one of cheaper “job programs”.

Bill Illis

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!

tokyoboy

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.

Philhippos

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!

DirkH

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.

Tom G(ologist)

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.

Willis Eschenbach

Bill Illis says:
November 18, 2011 at 3:55 pm

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.

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%,

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).

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.

temp

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.

Andrew Harding

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.

uan

would hydro be considered a renewable energy source?

epolvi

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.

George M

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.

davidmhoffer

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.

Willis Eschenbach

Thomas Fuller says:
November 18, 2011 at 3:57 pm

Umm, wait a minute, Willis. Couple of quick questions–do ratepayers pay the higher rates or do the utilities make lower profits?

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.

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.’)

I find this from December 2010, indicating that SunPower no longer owns CVSR.

NRG Energy acquires 250 MW California Valley Solar Ranch Project from SunPower.
The total project cost is estimated to be $1,800m of which NRG plans to invest $450m of equity in the next four years. To finance part of the project NRG is seeking a loan guarantee from the US Department of Energy’s Loan guarantee program office for the project. In this regard, the DOE has provided a draft term sheet for the project. NRG will be the owner of the project and SunPower will be developer and operator of the project.

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.

Lastly, have you ever done (or seen) a similar breakout on funding for a natural gas/coal/nuclear plant?

I didn’t do this breakout, the document says:

Source: Booz & Company analysis of materials provided by NRG, Department of Energy, and state public utility commissions

And no, I haven’t seen any others. I would like to, however.
w.

davidmhoffer

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!

Willis Eschenbach

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.

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.

John Trigge

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%

janama

“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.

Manfred

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…).