A comparison of both the Capital Cost and Energy Producing Effectiveness of the Renewable Energy investments of the USA, Germany and the UK.
Guest essay by Ed Hoskins
The summary diagram below collates the cost and capacity factors of Renewable Energy power sources compared to the cost and output capacity of conventional Gas Fired Electricity generation.
The associated base data is shown below:
In summary, these figures show that these three Western nations have spent of the order of at least ~$0.5trillion in capital costs alone, (conservatively estimated, only accounting for the primary capital costs ), to create Renewable Energy electrical generating capacity.
Nominally, this total nameplate generating capacity at ~153GW should amount to about ~26% of their total electricity generation, were it fully effective. However, because of there is an inevitable ~20% capacity factor applicable across the board for all renewables, the actual cumulative energy output by from these Renewable sources only results in ~5% of the total electricity generation for these nations.
Across the board overall solar energy is about ~34 times the cost of comparable standard Gas Fired generation and 9 times less effective.
Wind-Power is only ~12 times the comparable cost and about 4 times less effective.
The same total electrical energy output could have been produced using conventional natural gas fired electrical generation for ~$31 billion or ~1/16 of the actual capital costs expended on renewable installations. Had conventional Gas Fired technology had been used, the full ~31 GW generating capacity would have provided non-intermittent and wholly dispatchable electricity production generated as and when needed.
The following calculations only provide conservative estimates of Renewable Energy installation capital costs. They discount entirely the major additional costs of:
- supporting backup generation
- connection to the grid from remote locations
- the large differentials in ongoing maintenance costs.
As all Renewable Energy technologies are only viable with the support of costly government subsidies, market intervention and market manipulation, can this be a responsible use of public funds or a good reason for increasing energy costs for individuals or industry in the Western world ?
The following data sources for the USA, Germany and the UK were reviewed:
United States of America: data available 2000 – 2012
Germany: data available from 1990 to 2013
- http://en.wikipedia.org/wiki/Wind_power_in_Germany
- http://en.wikipedia.org/wiki/Solar_power_in_Germany
United Kingdom: data available 2008 – 2013
- http://en.wikipedia.org/wiki/Wind_power_in_the_United_Kingdom
- http://en.wikipedia.org/wiki/Solar_power_in_the_United_Kingdom
Note: the Wikipedia sources are used because they normally have a green orientation and are unlikely to be questioned by the advocates of Man-made Global Warming.
These data listed above provide installed “nameplate” capacity measured in Megawatts (MW) and energy output measured across the year in total Gigawatt hours, (GWh). Thus they do not provide directly comparable values as Megawatt nameplate capacity and the actual energy outputs achieved. For this comparative exercise the annual Gigawatt hours values were revised back to equivalent Megawatts, accounting for the 8,760 hours in the year, as indicated by Prof David MacKay in “Sustainable Energy – without the hot air”, page 334.
Although this measure eliminates the unpredictable and variable effects of intermittency and non-dispatchability that characterise Renewable Energy sources, it gives a conservative comparative value of the actual energy output and thus potentially available.
It allows for the calculation of capacity factors in relation to Renewable Energy technologies in each nation. The following graph shows the history of Renewable Energy (Solar and Wind power combined) installations and shows the progress year by year of actual electrical energy generated. 
The Energy Information Association provides the capital cost information in US$ for the USA. These capital costs are used for comparative purposes, but they take no account of currency variations and other local financial factors.
The USA Energy Information Association publishes comprehensive information on the capital costs of alternate electrical generation technologies, in Table 1 of their 2013 report. From that full list these notes consider three technologies:
- Large Scale Photovoltaic: this is the most economic of the PV technologies at ~$3.8 billion / GW.
- Combined Wind 80-20: merged onshore 80% and offshore 20% wind at ~$3.0 billion / GW.
- Natural Gas Advanced Combined Cycle: the costliest technical option at ~$1.0 billion / GW.
“Overnight Capital Cost”, (just as if an power generating installation has been created overnight), is the standard comparative measure for capital costs used in energy industries. The specific Overnight Capital Costs used include:
- Civil and structural costs
- Mechanical equipment supply and installation
- Electrical and instrumentation and control
- Project indirect costs
- Other owners costs: design studies, legal fees, insurance costs, property taxes and local electrical linkages to the Grid.
However for this comparison “Overnight Capital Costs” specifically do not include:
- Provision of Back-up power supply, “spinning reserve” for times when renewable power is unavailable.
- Fuel costs for actual generation and the spinning reserve
- Remote access costs
- Extended electrical linkages to the Grid
- Maintenance
- Financing etc.
These further costs for Renewable Energy excluded from Overnight Capital Costs mean that its use probably significantly less economic than the comparisons provided in these tables. In addition for these comparisons the Energy Information Association data denominated in US$ is used. These brief results are primarily for comparative purposes and do not purport to give precise actual expenditures in the various nations and by governments. However, they do clearly indicate the order of magnitude of the capital sums involved.
They also allow for the calculation of comparative figures to be established between renewable energy generation and standard Gas Fired electricity generation. The results for the individual Nations in tabular form using the EIA Overnight Capital Cost data are shown below: 
In graphic terms the results for renewable Energy generation in each country is shown below.
Solar power is comparatively successful in the USA, because it is mainly installed in Southerly latitudes, but in Germany its very serious renewable investment in Solar amounting to more than 50% of all renewables is twice as expensive and half as effective as in the USA. Solar energy in the UK is 55 times more expensive and half as effective again as in Germany. Fortunately the UK only has about 25% solar generation in the Renewable mix. Wind power is about 26% effective in the USA and about 11 times more costly than Gas Fired generation. In Germany Wind power at less than 50% of its renewable commitment is 50% more expensive and substantially less effective in the USA. Wind power in the UK is also about 11 times more costly, similar to the USA, and rather more effective than in Germany, because of wind conditions.
In addition, there is also a very large discrepancy in maintenance costs shown in the Energy Information Association table 1. When compared to a standard Natural Gas plant, maintenance cost comparisons are as follows:
- Photovoltaics times ~1.6
- Onshore Wind-Power times ~2.6
- Offshore Wind Power times ~4.9
- Combined Wind 80 – 20 times ~4.0
- Coal (without CCS) times ~1.9 (included for reference)
- Nuclear times ~6.1 (included for reference)
There are also significant questions to be answered about the longevity and engineering robustness of the Solar and Wind-Power technologies: this is particularly problematical for off-shore wind farms.
In addition a more detailed analysis might well indicate that, in spite of the cost of fuel being essentially free, the development, fabrication and installation of both Solar and Wind-power installations involves the release of substantial amounts of CO2. The actual savings of CO2 emissions may be hardly exceeded over their installed working life of these Renewable technologies.
http://sunweber.blogspot.fr/2014/11/prove-this-wrong.htm
Intermittancy and Non-dipatchability
However there still remains a further major problem with all Renewable Energy sources. Their electrical output is intermittent and non dispatchable. Their electrical output cannot respond to electricity demand as and when needed. Energy is contributed to the grid in a haphazard manner dependent on the weather. This effect can seen from German electrical supply in the diagram below, for a week in August 2014, an optimum period for any solar energy input. Power certainly not necessarily available whenever required.
- http://notrickszone.com/2014/07/21/germanys-habitually-awol-green-energy-installed-windsolar-often-delivers-less-than-1-of-rated-capacity/
- http://www.agora-energiewende.org/service/recent-electricity-data/stromerzeugung-und-verbrauch/
- http://www.ukpowergeneration.info
Solar power inevitably varies according to the time of day, the state of the weather and also of course radically with the seasons. Solar power works most effectively in latitudes nearer the equator and it certainly cannot be seriously effective in Northern Europe. In the example above in August 2014 wind power input varied from 15.5 GW to 0.18 GW and the Solar contribution varied from nil to some 15 GW. Thus this Renewable Energy variability combined with the “Renewables Obligation”, which mandates that the electricity grid has to take energy from renewable sources preferentially, if available, resulted in demands on conventional generation in Germany varying from ~23GW to ~47GW over the period. In Germany, its massive commitment to solar energy can briefly provide up to ~20% of country wide demand for a few hours either side of noon on some fine summer days, but at the time of maximum power demand on winter evenings solar energy input is necessarily nil. But at the same time the output from wind power is equally variable as in the summer months.
Germany has similar insolation and cloudiness characterists as Alaska and the UK being even further North has an even worse solar performance. Electricity generation from wind turbines is equally fickle, as in the week in July 2014, clearly shown above, where Wind-Power input across Germany was close to zero for several days. Similarly an established high pressure system, with little wind over the whole of Northern Europe is a common occurrence in winter months, when electricity demand is at its highest. Conversely, on occasions Renewable Energy output may be in excess of demand and this has to dumped expensively and unproductively. This is especially so, as there is still no solution to electrical energy storage on a sufficiently large industrial scale. That is the reason that the word “nominally” is used throughout these notes in relation to the name plate capacity outputs from Renewable Energy sources.
Overall these three major nations that have committed massive investments to Renewable Energy. Conservatively this amounts to at least ~$0.5 trillion or ~2.2% of combined annual GDP.
This investment has resulted in a “nominal” ~31Gigawatts of generating capacity from an installed Nameplate Capacity of ~150Gigawatts. This is “nominally” almost a quarter of the total installed nameplate generating capacity.
But this nominal 31GW of Renewable Energy output is ~5.4% of the total installed generating capacity of ~570Gigawatts. Even that 31GW of Renewable Energy production is not really as useful as one would wish, because of its intermittency and non-dispatchability.
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Now, that’s all very true but it doesn’t include the costs of the externalities.
The justification for renewables is that they save money that would be spent coping with climate change.
That may not be a strong argument but it is the justification that is used.
When the argument in favor of renewables is predicated on CO2 emissions substantially affecting the climate system, there’s a hell of a lot of proving models to do before we commit to them as our main source of power.
Come on man. Green scams have made almost difference in the yearly world increase in CO2 and have only resulted in small reductions in the countries where the renewables are installed. There is therefore almost no reduction in ‘climate change’ due to spending trillions of dollars on the green scams.
What climate change in the last 18 years?
And since the externalities are fabricated in both extent and cost, you only underscore how much of a scam the climate industry is getting away with.
But this the lie behind it all.
Since renewables require 100% backup from conventionally fossil fuel powered generation, and since such generation when used in ramp up/ramp down mode uses just as much fuel as it would if it were run at steady full output, there is in practice no reduction in CO2 emissions. The only reason that there has been a reduction in UK CO2 emissions is because the spare capacity/surplus capicity of the UK national grid has been reduced down from about 16% to 6 to 8%. If the UK had not installed any wind or solar, and simply scaled back surplus/safety capacity down from about 16% to about 8% there would have been the same reduction in CO2 emissions.
The is not difficult to understand since the position is similar to fuel usage in a car. A car uses least fuel when run at a steady freeway/motorway speed (say 56mph) and uses most fuel when run in urban/in town usage, with stop/start acceleration even though the car may then be averaging only about 15 to 20mph. Considerable fuel is used in the ramp up process.
“The justification for renewables is that they save money that would be spent coping with climate change.”
WHAT saved money?!
Even Zuckerburg’s scientists agree:
http://www.bishop-hill.net : Google: renewables “simply won’t work”
Nov 21, 2014
Energy: solar Energy: wind
Via The Register we learn that some of Google’s top engineers have been tasked with making renewable energy cheaper than fossil fuels. We also learn that they have given up.
At the start…we had shared the attitude of many stalwart environmentalists: We felt that with steady improvements to today’s renewable energy technologies, our society could stave off catastrophic climate change. We now know that to be a false hope …
Renewable energy technologies simply won’t work; we need a fundamentally different approach.
Original article at The Register (El Reg) is here:
http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
The origignal IEEE article is quite different from the quote-mined Register version
http://spectrum.ieee.org/energy/renewables/what-it-would-really-take-to-reverse-climate-change
I ended my own experiment with Solar power today as my second Fronius inverter died in 3 years. They cost $2000 each, though the first one was replaced under warranty. With my 3600W system, I never saw an electrical savings of more than $1/day or so. And, I live in Southern California and have clear days most days of the year. The inverters are the weak point in the system, and keeping one working eats up all the potential money the generated power would save. Complete waste of $15,000.
Wally being trained as a Electronic tech when I penciled solar out I quickly ascertained that it would never pay for itself, even with the “rebates and subsidies”, I have little faith of electronic running any kind of power last much over ten years, let alone the twenty to thirty that would be needed to get a decent rate of return.
AGW is not real therefore there are no externalities from that source. In terms of real pollution renewables can hold their heads high in terms of their polluting output.
An easy argument to counter, but it is not the one I hear.
I basically get incessant arguments that often are based on government green energy lies, name plate capacity, no accounting for intermittency other then “hey often when the sun does not shine, the wind blows”, the work together.
I have to agree on reflection though. They do not listen to any argument, no matter how well constructed.
So our governments have squandered billions on a dream that any engineer could show to be a waste of time, effort and money. A sobering thought.
Thanks for a good post.
What amateurs don’t get is “non-dispatchability”.
The true measure of the value of renewable energy is how many votes it gets for its political supporters. As they keep getting re-elected, I’d say renewable energy is very effective.
… and don’t forget the effectiveness of getting those same politicians elected with our tax dollars… now routed to green energy
scamsinvestments run by Democrat party donors and therefore right back into the politicians pocket. That is also “effective.” All based on the ignorance of their hippy wannabe (or has been) tree hugging, medical marijuana infused supporters and the equally uneducated Hollywood left… all whooped up by the scientifically scatterbrained, mathematically challenged cheerleaders in the “news” media.In related news we have Google.
Thanks for that drastic insight into the deceitful benefits of RES. Just let us assume that of these 0.5 trillion the yield nowspentwasted was put aside for the improbable case of a necessary enforced adaptation in, let us say 40 years, this yield alone would be sufficient to pay for that adaptation, I presume. The RES systems will be written off and scrapped for long and the taxpayer/consumer will pay and pay and pay for ever. That RES system will never ever reach the break even point,
Attributing a capacity number to an intermittent source is fraudulent in a marketplace that requires continuous availability.
As indicated the upfront costs for wind and solar, for the nominal, not name plate outputs look like poor investments. What would the numbers look like over 5/10/15 years when cost of fuel, connection costs, and maintenance is thrown into the numbers? A net present value calculation for the time periods above might be interesting to look at. At some point there will have to be investment in load leveling storage capacity be it pumped storage or large scale chemical energy storage systems such as V redox flow batteries. These costs should be included as well. If the ultimate goal were to do away with fossil fuel based generation these storage options would no longer be options rather they would be essential components of low to no carbon based energy generation.
look on the bright side , its kept the cement industry happy.
225,000 wind turbines x 800 tons of cement per turbine/foundations.
You mean: 225 000 Wind turbines x 1000 tons of CO2…LOL!
Thats 225 millon tons of CO2.
Wow!
1,000 tons of CO2 from 800 tons of cement. Now that’s a good trick.
And, oh by the way, despite your magical (tax payer funded) climate models, Mother Nature does not appear to think “warming” is driven by CO2 in Earth’s ecosystem.
The carbon tax on cement manufacturing in my province (British Columbia) means that cement is imported instead, bypassing the carbon tax.
That will be true anywhere that such a tax is applied.
An enlightening and thoroughly researched factual article. Great visuals. Thank you Ed.
Any business faced with incredibly poor ROCE figures like that would face bankruptcy. To survive, they would need to borrow lots and lots of money. Actually, come to think of it . . . .
(ROCE – Return on Capital Employed).
Uh…my personal experience is I paid $34,000 for 11,000W residential PV system. Within 90 days, I received a $20,000 politically-mandated rebate from my utility plus a $10,200 Federal tax credit. So net cost is $34,000 – 20,000 – 10,200 = $3,800.
I save about $2,500/year on my electric bill
My TPR&RPR ROE is somewhere in the neighborhood of 65%.
(TPR & RPR = Tax Payer Rip-off & Rate Payer Rip-off)
Living in Phoenix, Arizona, we thought Geo-thermal might be a good alternative, so last year we had someone come over and give an estimate. When the cost turned out to be more than a third of the value of our home, we decided to look at solar. Unfortunately, they wanted us to cut down ALL of the trees which provide shade to the south side of our house (3 pines, 2 palms, 1 each of ficus, grapefruit, lemon, and tangerine), so we decided to pass on that also.
We did not fail to note the irony in having to cut down our trees so we could “go green”.
So in other words you are being subsidized by me and other taxpayers, what do you do when we finally say “to hell with that.”
Yes, it is a “beggar thy neighbour” benefit. Everyone else’s taxes pay for your returns.
I had a landowner in West Texas where we were producing oil and gas ask me to review his “wind rights’ proposal.The calculations showed that a 1 megawatt windmill would take 17 years to return its capital cost assuming no maintenance. Having looked at the mechanics of the system-gear box, bearings,generator, etc., it is doubtful that the useful mechanical life would exceed 10 years in the best circumstances, much less in the dusty abrasive conditions of West Texas.
Billy Jack , did you factor in aux power back to the turbine when it is not turning to keep it from seizing.
No, I didn’t consider that, but driving from Dallas to Midland I drive through several massive installations that I’d guess two out of ten mills are not rotating. I was more interested in calculating the hydraulic capacity of the support structures, when they are all shut down once the tax credits are used up and we begin taking them down to use as pipeline material or as housing for “undocumented workers”.
Conventional power turbines require internal inspections every 9 months with boroscopes (a very short outage of 3-4 days), and routine minor maintenance every quarter (every 3 months). Open-and-inspection outages every 18 months, and major re-open-inspect-and-replacement dis-assemblies every 36 months (3 years). A “Throwaway” small wind turbine is much, much more highly stressed with vibrations, corrosion, and damage from oscillating forces up at the tall end of a long pendulum being shook every 1.5 seconds every minute of the year. True, a wind turbine is lighter, but that also means that it cannot enjoy the large bearings and heavy mass around the moving parts that provide redundancy and increase wear life.
Net? Few wind turbines last longer than 7 seven years. But they are not INTENDED to last longer than 7-9 years. They ONLY need to last long enough to get the renewable energy tax credits and tax write-off’s and construction subsidies for their corporate-CAGW-funded start-up money spongers (er, sponsors)!
NO wind turbine has been funded by private money for return-of-investment from the power produced over the 20, 30, or 40 long term lifetime of a conventional power plant. And many, many power plants are still generating money and power usefully after 50 years.
In the US, there are no construction subsidies. The only subsidy is based on actual power produced. If the machine goes out of production, the subsidy stops.
http://www.spiegel.de/international/business/wind-power-investments-in-germany-proving-riskier-than-thought-a-946367.html
Good points.
Have you a source for the 7 year longevity? That would be useful.
Chris is incorrect about construction subsidies. They are called “investment tax credits” and accrue to the owner when the facility is “substantially complete.”
@oeman50: Thank you for that, I was not aware of the program. However, for wind it only applies to units smaller than 100kW. Not utility scale. For solar it apparently applies to all sizes.
Chris4692,
That’s bull, here in Maryland, we are being hit with a surcharge to help off set the cost of a wind farm to be built off the coast of Ocean City MD about 10 miles out. So we’re already paying higher energy costs because of RES.
The insanity is maddening!
ouch.
Even at a conservatively estimated 16x the cost of conventional power, the energy expenditure to build and run renewables exceeds by far the energy they will produce in their lifetime.
They are ruinously expensive, waste energy, increase CO2 emissions, and are generally all pain, no gain, regardless of whether one believes in manbearpig or not.
Tagerbaek, good point. But to our community, remember that it matters not one jot that renewables ‘increase CO2 emissions’. We already know that this incy-wincy microscopic amount of atmospheric gas is not a threat. I agree with ‘ruinously expense’ and ‘waste energy’ though. Adding, intrusive, ugly, intermittent, self-righteous, subsidy-grabbing, energy-bill-increasing, rip-off would be more fitting.
Can you point me to a site that quantifies the cost to run renewables?
This may be of interest : (referenced on WUWT a few months back):
http://festkoerper-kernphysik.de/Weissbach_EROI_preprint.pdf
“Energy intensities, EROIs, and energy payback times of electricity generating plants “. H Weissbach et al
Abstract
“The Energy Returned on Invested, EROI, has been evaluated for typical power plants representing wind
energy, photovoltaics, solar thermal, hydro, natural gas, biogas, coal and nuclear power. The strict energy
concept with no “primary energy weighting”, updated material databases, and updated technical procedures
make it possible to directly compare the overall efficiency of those power plants on a uniform mathematical
and physical basis. Pump storage systems, needed for solar and wind energy, have been included in the
EROI so that the efficiency can be compared with an “unbuered” (?) scenario. The results show that nuclear,
hydro, coal, and natural gas power systems (in this order) are one order of magnitude more effective than
photovoltaics and wind power.”
( I copied the abstract from my pdf copy in Open Office , so some words were a bit mangled , like “unbuered” which is presumably unburdened or unbundled – but I think that the context is clear)
You might find it here somewhere :
http://www.nrel.gov/electricity/transmission/western_wind.html
I’ll note that they place the fuel cost savings at $28 /MWhr of renewable energy produced, and the cost of the added maintenance in conventional plants due to increased variability of the wind at around $1 /MWhr of renewable energy produced. I’ve not encountered the total maintenance cost of wind or solar.
you can also look for the studies and reports concerning Ivanpah solar facility, a recent report showed that it has produced about half of what it was “supposed to because clouds etc…” also it has been burning birds of all sizes out of the sky and another study showed that instead of the one hour a day of the boilers being “warmed up” by burning natural gas it has been burning natural gas for about 5 hours a day. I might add that since it is not a combined cycle gas generator its use of gas is much less efficient than an actual combined cycle gas generator to generate electricity, so all the “carbon credits” given to it are even more of a sham. There are also reports of pilots being “blinded” by the glare of the reflectors.
“renewables” don’t ever seem to measure up to their “supposed to” performance numbers yet the scammers.. oops politicians keep ramming them down the tax payers throat.
Joe!
@JoeCivis
The second image on the following page includes Ivanpah in the distance (the three pairs of very bright lights to the right of the freeway (I15)):
http://spaceweather.com/archive.php?view=1&day=15&month=11&year=2014
It also shows to unwary Californians that the amount of radiation you continually receive in a jet at 39,000 feet is 29 times what you receive on the golf course. If you’re frightened of radiation – beware: those in Business and First get the same.
Ed Hoskins;
Your diagram seems made by a functional illiterate, with terminology such as “5 times less effective” Does this mean 20%?
Should have read your comment… I posted exactly the same thing below.
Yea, I hate the “5 times less” construct, too.
I guess “5” is a more impressive number than “0.20”.
the opposite of 5 x more (read the otherside of the Bar Chart) is 5x less or a fifth. To write 20% on the left would mean writing up to 55,500% more on the right, which would be equally correct but less elegant on the chart. I would have gone along with nitpicking of 1/5th but not 20%. I’m bored and at my computer so am prepared to answer…..your excuse??
If I may…
1/5 as much is not five times less. -4 is five times less than 1.
Well my Ga Tech physics and math education says “bovine excrement”. That’s my excuse.
My previous comment intended for MWH
So 5 x more is 6 times as much.
It does mean that.
But is this a question of style or substance?
Personally, I’m not stylish (according to the fiancé).
I agree! one times less is zero. 5 or 9 times less is a negative number.
Renewable energy is yet another manifestation of the human yearning for Utopia, in this case a Gaia-compliant Utopia where unicorns traverse the capital cost burden by jumping from a pot of gold to a pot of fiat money.
Liberals who scold us often on the topic of “sustainability” demand schemes whose economic models cannot be sustainable. Wind and solar power are only economically sustainable when the cost of conventional power is artificially boosted by regulations for which there is little scientific basis. Thus the demands for “clean air” that are never satisfied by compliance with the previous round of emission reductions.
Most of the capital costs of solar and wind is borne by government, which in turn gets that money far more by creating it out of thin air, or by issuing perpetual debt, than by tax revenues. Particularly in the case of the US (who is also paying for the strategic defense of Germany) government has the power to create near infinite amounts of money with which it pays for near-infinite amounts of government.
One of the best ways to force energy costs to be rationalized with respect to the total economic efficiency of the technology is to revoke the ability of government to create near-infinite money. This would terminate government’s appetite for subsidies. People would have to have “sustainable” project economics.
The left has long scolded us that we are not paying the “full cost of oil”. Yes indeed! The cost of having a navy to protect Gulf oil should be levied on imported oil. And fair is fair. The full cost of wind (including a reserve for decommissioning of abandoned turbines), and the full cost of solar must be acknowledged in the cost of power. Let us have that level of transparency. Otherwise we have based our economic decisions on spreadsheets built of lies, all lies.
“Most of the capital costs of solar and wind is borne by government,”
In the US this is false. There is no US Government subsidy of capital costs of utility scale wind or solar. The subsidy is based on electricity actually produced. Revenue produced by sale of renewable energy credits can be said to be a regulatory subsidy, but that also depends on electricity actually produced and is not a construction subsidy.
There are tax credits for construction of home scale renewable generation, but that is a small fraction of the total.
There were extensive grants from the federal government and tax credits for such equipment. I personally have had discussions on this very topic with executives of wind power companies. The federal government has granted permits to wind and solar companies to use federal lands, often without paying the same lease or use fees they would pay on the open market.
Case in point, a few years ago, a business that processed walnuts in central Missouri was flooded and millions of pounds of walnuts were rendered useless for use as food. These walnuts were eventually sold to a nearby utility for use in their coal fired power plant. The article from the utility boasted that if they used at least 5% of the walnut hulls in their coal feed, by federal regulation **they could count all the power produced as being “green” power**. This type of fraud is also a subsidy since “green power” sold for more on the market than non-green power.
All of these factors have the effect of a subsidy. Sadly subsidies cost us far more than we can possibly know.
Chris says…”In the US, there are no construction subsidies?
Then please tell Google to stop asking for the Fed govt to throw good money after bad regarding the pay back of the building costs of the Ivanpah Solar facility. (I never found clarity regarding if this was a government loan, or a government loan guarantee, but the tax payer is being asked to foot the bill for the poor wag, since electrical output is 1/2 of predicted (about like warming, models vs. reality)
I also recall a whole bunch of rich green folk contributed to Obama’s campaign and received government loans that were not paid back, (Solyndra plus a host of other failed investments.)
Of course the greens will argue and show bogus statistics of how much conventional producers and oil is subsidized. They will assert, “big oil gets ten to 20 times the subsidies of wind and solar}
(They get the same tax write offs, applied to PROFITS any international company gets) Wind and solar is massively subsidized, top to bottom.
Ask your green friend how much tax wind and solar paid vs. conventional? Not only is “Big Oil” and conventional power production not subsidized, it (all three nations) pays about between 200 to 400 billion every year in taxes, after tax write offs. (What greens call subsidies) So the taxes paid by for profit equal what over the 15 years of build up to get to 5% wind and solar? Five trillion maybe? Do not forget all the individual tax paid by all the workers, and all the companies that work for big Oil, that manufacture well heads, ship the product etc, etc.
The 500 billion wasted is about likely ten times that, minimum, when you consider the tax revenue that all the subsidized green is NOT generating,, plus the Government imposed inefficiencies on regulating conventional power to the back seat, thus raising the cost of power on every poor slob with a utility bill, or who buys ANY product made with something we call ENERGY, the life blood of EVERY economy.
The full cost of that fleet or only part?
It could be argued that the parts of the US Navy stationed in the Indian Ocean have more than one role.
The costs of running a country are not subsidies to its industries.
MCourtney
The cost of oil is paid by consumers; the cost of the Navy is paid by tax payers and Chinese loans.
Combining the 2 as the cost of fuel would be a regressive tax (Ayn Rand would like it, though).
This is always a burr under my saddle…
What is ‘x times less’? Is that 1/x as much? Then say that.
“x times less” is so vague as to be meaningless. I pass it by.
Exactly… when I read that, I know I’m reading something by someone who’s bad at math.
Only half times less works as intended. Well, 0 too.
It’s a real pity you did not include solar hot water heating. Solar water heating was so effective that it paid for itself in 2-5 years (in Scotland) and there was absolutely no need for a subsidy.
What this very clearly demonstrates is that none of this renewable subsidy had anything really to do with saving energy use. It was instead a get rich quick scheme dreamt up by wind scamsters and gullible greens.
Just to emphasise the point. If the aim really had been to reduce carbon, then the first scheme that anyone would have chosen would have been solar hot water heating. This shows that the aim was not to reduce carbon – but instead to create a market for “renewable electricity”
@richard What you say about cement is especially interesting. The production and installation of a ton of concrete creates about zero point nine tons of CO2. Thus the pad for an industrial wind turbine adds nearly 720 tons of CO2 in one fell swoop. How much does the equivalent production via natural gas create during its installation?
Underneath every wind turbine park is a city of concrete in pristine ground.
From the moment the first part of a wind turbine is built, to its final days of dismantling for the scrap heap, it is reliant on fossil fuels.
Interesting Jardinero, I’ll add your 720 tonnes (1 tonne of CO2 is about the size of a three-bedroom house) to my list of CO2 emitters . . . .but, (I’ll keep saying this until I’m blue in the face), to us, it doesn’t matter how much CO2 is added. We all know it represents a microscopic amount of inert atmospheric gas and is not a threat. The warmists think otherwise of course – which is the main reason why we’ve been left with their legacy of renewable rip-offs.
Focusing on capital costs is of course entirely misleading, since the direct financial savings from renewables comes from fuel (operating) costs, not to mention environmental and human health externalities. And what a lot of people don’t realize (or admit) is that fossil fuels, despite being “mature” industries, are subsidized to the tune of $500 billion a year:
http://en.wikipedia.org/wiki/Energy_subsidies
This is a very highly questionable statement.
The problem with every assertion of fossil fuel subsidies that I have found does not give enough detail to be able to tell what is being counted as a subsidy. If a coal plant (or other equipment) is given an accelerated depreciation schedule, the subsidy is the interest saved, not the capital cost deducted, it’s never stated how this is calculated. If an oil well is given a depletion allowance: the subsidy is the difference between the allowance and the development cost, not the total of the allowance. Studies I’ve seen report the total of the depletion allowance as a subsidy.
These studies are mostly for propaganda. They cannot be counted as serious work.
Chris4692,
You are right, it is propaganda. It neglects to mention that _all_extractive industries: mining, minerals, timber, etc. are entitled to a depletion allowance and this corresponds to capital depreciation in other businesses such as wind turbines, solar panels, etc.
A fact ignored by the left is that the oil depletion allowance was eliminated for major producers in 1975. Other minerals, etc remain in effect. The lie about oil subsidies is touted to confuse the issue of huge subsidies for renewables..
That fossil fuel subsidy claim has been effectively and lengthily rebutted several times on WUWT, most recently within a couple of months.
Let’s get rid of all subsidies and see renewables compete on their own merits.
There is a second problem with intermettant, non controllable ‘green’ power sources. They produce power at times when power is not required.
Utilities use highly efficient combined cycle gas turbines for base power. Single cycle gas turbines are use for peak and variable demand. There is roughly 30% net difference in efficiency between combined cycle and single cycle. Combined cycle power plants take almost a day to start up and can not hence be turned on/off.
Wind turbine power output varies as the cube root of wind speed. A wind farm power output can change 60% in 20 minutes. Large wind turbine for utilities to turn off combine cycle power plants and use more in efficient single cycle power plants. This problem limits wind turbines maximum possible reduction in CO2 emission to about 10%, in cases where there is not hydro electric power to handle the swings.
Green scams do not work for basic engineering reasons.
I followed your link. Great piece of disinformation. Go down to the US section. it says that
The three largest fossil fuel subsidies were:
1.Foreign tax credit ($15.3 billion)
2.Credit for production of non-conventional fuels ($14.1 billion)
3.Oil and Gas exploration and development expensing ($7.1 billion)
Every corporation doing business outside the US get a Foreign tax credit. If a company makes money in another country and that country taxes that profit, then this tax is a credit against that profit. IT the foreign tax credit was not issued, then the US and the foreign country would tax the same bit of profit. This would make it so that US companies could not operate internationally.
#2 does anyone know what this is? maybe ethanol.
#3 says oil companies can expense the cost of doing business. novel concept.
On the other hand, it says
The three largest renewable fuel subsidies were:
1.Alcohol Credit for Fuel Excise Tax ($11.6 billion)
2.Renewable Electricity Production Credit ($5.2 billion)
3.Corn-Based Ethanol ($5.0 billion)
If you propose that all energy companies get treated as any other company and not get direct tax dollar subsidies. I would agree with that.
A tax credit is not a subsidy. It merely is less tax paid. To think it is a subsidy is to think that the government owns all money.
Indeed, please ask any green friend how much tax all of the wind and solar companies paid. Do not forget to include the dozen plus Solyndra’s out there.
This is completely ignorant. To make it simple, governments do not tax total revenue, they tax profits. The so called subsidy is the cost to produce the fossil fuels, Labor, equipment,etc.are extracted from the gross revenue before taxes. All businesses are taxed the same way or there would be far fewer businesses. .
As always, numbers can be explained in so many ways.
Certainly the carbon fuel industry is not without it’s subsidies. Let’s assume that all numbers in the article are correct and so is wikipedia’s $500 billion. How much tax is being levied in your country for each litre/gallon of petrol you stick in your car? In some countries, Europe in particular, it tops 50% of the price at the pump. That turns into a lot of $ being paid to the government. That some of that comes back as subsidy is not totally unfair.
Europe is now closing in on 300 million cars registered. Assume each car is using an average of 20 litres a week. At a total tax rate of close to US$1 per litre that is US$6 billion per week, and that is just for petrol use in the EU. Makes US$500 billion worldwide subsidy seem like chicken you know what to me.
chicken
dropping
residue
detritus [Pratchett has Detritus as a troll. Do we know any trolls? ]
Auto
http://wattsupwiththat.com/2014/11/21/renewable-energy-solar-and-wind-power-capital-costs-and-effectiveness-compared/#comment-1795428
Wiki is very wrong here.
Solar is a viable source of energy. It works very well for space heating and domestic hot water, particularly when designed into the structure. It doesn’t do very well in the production of electricity except in very remote areas where some electricity is better than none. Off grid as a supplement it is OK, on grid, not so much. The same can be said for wind. It works well for pumping of water in an off grid application, on grid, again not so much.
Intermittancy and efficiency kill wind and solar when coupled to the grid.
Those running the grid already know how to manage the intermittancy.
The big problem in having lots of small sources connected to the grid is safety of the workers when the power goes out. All these independent sources must be isolated from the system before linemen can work on the power lines or before firemen can work around the burning structure.
Chris4692 says:
“Those running the grid already know how to manage the intermittancy.”
They can manage it only within certain ranges. The larger the penetration of renewables into the grid, the greater the amount of conventional, dispatchable generation that must be kept available.
oeman50
November 21, 2014 at 8:50 am
The larger the penetration of renewables into the grid, the greater the amount of conventional, dispatchable generation that must be kept available.
=======
That cannot happen! Large scale implementation of intermittent energy MUST lead to blackouts.
The greater the penetration of renewables, the less financially viable the backup generation will become. The less an asset is used, the more difficult it becomes to justify it. In extremis, no one is going to build a plant to be run 5% of the time. And that will lead to interesting “unforeseen,” unintended, consequences.
Chris4692 as someone who works with “those running the grid..” they have a significant problem managing the intermittency and it is at greatly increased cost to those who use electricity. As others have stated conventional generation must wait in standby mode waiting for “renewables” to either produce or not produce and so even if the renewables produce when they are scheduled to the standby gets paid for playing back up.
Reblogged this on SiriusCoffee and commented:
What matters the economics of a thing, when the faith of true believers is at stake?
+1. Especially when the true believers get to tap other people’s money to sustain their work of faith.
+1 also
Noting the need to hoover up other peoples’ money to make a chance of vertebracy.
Auto
It should be noted that the people who claim renewables are competitive also claim that oil companies that pay billions of dollars in taxes (“royalties” are a tax) are “subsidized”. Math is not their strong suit.
John E.
Be realistic, please.
Some of the greenies can manage a multi-million dollar/teuro/pound/etc. subsidy perfectly well.
I am sure their income tax returns are models of transparency, accuracy and veracity.
Auto
PS – Mods – this is meant seriously. Greenies are arrow-straight, and will pay to the cent their dues [legal – and morally constrained . . . . . . . . .]. Sarc/
Royalties are paid to the owner of the mineral rights, either public agency or private landowner. Royalties are not a tax, it is more of “cost of goods sold” in accounting terms.
The problem in the US is that government subsidies produce malinvestment. It also stifles innovation. There are so many fingers in the pie that almost impossible to stop. Once you get involved in politics you get all sorts of stupid decisions – like the congressman who makes sure that contracts to build planes and helicopters in his district is funded even though the navy does not want the planes.
What is sad it that if all the money that is being spent on alternative energy was diverted into fusion research, we might actually come up with the energy supply of the future.
Ed Hoskins,
Thank you for so patiently and logically laying out the situation with full supporting method and data. Please keep doing posts like this.
My view is that the ” ~$0.5trillion in capital costs alone, (conservatively estimated, only accounting for the primary capital costs )” was authoritarian intervention which distorted the free marketplace. This will cause three results which increases non-productivity thus reducing the wealth per capita: 1) it makes the free marketplace economic calculation, to best use capital productively, incorrect; 2) it prevents capital from freely flowing to better use of the capital as determined by the free market place’s private values; 3) the inefficiencies of return on the capital investment destroys wealth as compared to better efficiencies in other investments.
Such central planning inspired intervention in the free marketplace is as stupid as its basis in the collectivist philosophy of Marx that sought the demise of both individual freedom in the market and the private ownership of capital.
John