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November 19, 2007

In Energy Sector, Renewables Get Less Federal Support

by Carl Levesque, American Wind Energy Association

A report from the Government Accountability Office (GAO) comparing federal electricity subsidies by fuel type shows that renewables such as wind still get only a small share of the overall subsidies awarded to the energy sector.

"This report shows that technologies that have existed for 50 years or more continue to receive significantly more federal support than recent renewable technologies that are better suited to solving the nation's electricity supply, energy security, and environmental challenges."

-- Elizabeth Salerno, Manager of Policy Analysis, AWEA

The GAO report looks specifically at research and development (R&D) and tax expenditures for fossil fuels, nuclear, and renewable energy from fiscal year (FY) 2002 through FY 2007. The report's cover letter — addressed to Senators Thomas Carper (D-Del.) and Lamar Alexander (R-Tenn.), who requested the analysis — notes the importance of federal subsidies in light of energy's crucial role within society.

"Because of electricity's importance to producers, consumers, and businesses, the federal government has undertaken a wide range of programs to develop the electricity sector, which includes fuel suppliers, electric utilities, and others in the electricity industry," the letter states.

The report shows total R&D expenditures from FY 2002 to FY 2007 to be $11.5 billion, which was distributed among nuclear ($6.2 billion), fossil fuel ($3.1 billion) and renewable energy ($1.4 billion). Total tax expenditures for the energy sector from FY 2002 to FY 2007 were $18.2 billion, with fossil fuel receiving $13.7 billion and renewable energy receiving $2.8 billion.

"These programs have sought to, among other things, develop the nation's electrical infrastructure, influence the types of fuels used to produce electricity, increase the use of renewable energy, and limit the harmful effects of electricity production," the report states.

"This report shows that technologies that have existed for 50 years or more continue to receive significantly more federal support than recent renewable technologies that are better suited to solving the nation's electricity supply, energy security, and environmental challenges," said AWEA Manager of Policy Analysis Elizabeth Salerno.

The report does not include the value of subsidies that were received by generation prior to FY 2002 or subsidies provided beyond R&D and tax measures, such as limited liability insurance or loan guarantee and grant programs. A discussion of federal electricity subsidies other than R&D and tax expenditures is provided in the 67-page report.

"It's clear that the subsidies and incentives provided by the federal government vary widely depending on the energy technology, with conventional fossil energy continuing to receive the lion's share of federal support," said Charlie Niebling, General Manager of New England Wood Pellet. "For example, biomass used in thermal energy such as pellet fuels receives no subsidy whatsoever, while biomass used in ethanol production and electric generation receives significant federal support. A comprehensive, technology-neutral energy policy must correct these inequities."

A portion of this article first appeared in Wind Energy Weekly, and was republished with permission from the American Wind Energy Association.

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November 19, 2007
Jim,
You've got your units wrong...

Good run though!

It's kW, not kWh.

It's $0.30/W,($300/kW).

More correctly, it's the nominal rated capacity of the generator, usually expressed in kW.

This is less than the base plate cost of coal,(traditional) of $1.00/w, ($1,000/kW).

The base plate cost of "clean coal" is closer to $4.00/w. Which is, more or less, the same cost as everyone else's solar.

The cost of electricity is a product of capital cost, fuel adjustment, O&M, taxes, and the equipment's useful life. PV has no fuel adjustment, no appreciable O&M, a long useful life, (40 yrs vs. 25 yrs for coal), and taxes are not technology specific, (usually). PV electric rates and economics are driven by capital cost.
Comment 1 of 40
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November 19, 2007
Nanosolar is"$0.30/watt TODAY. That's less than a coal fired plant/watt"

According to everything I have read here and in industrial mags, coal is less than $.10 per kwh and regularly below $.08 per kwh which is 1/3 the cost of that solar system.

One poster from Texas even commented that retail electrical power was $.11/12 per kwh for fossil and $.14 for renewable/wind. (God I wish I lived and worked there - CA can be up to $.39 per kwh)

Do you have a cross reference for coal being over substantially higher than I have stated? I am willing to correct myself.
Comment 2 of 40
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November 19, 2007
I've Given Up On Washington

I've given up on Washington, their behind the times I fear,
They want to keep us in the past, they've made it very clear,
With funds galore to techs with more than fifty years of age,
The wind and sun don't count compared to fossils which engage.

Yes the interest of the lads in Washington,
Are coal and nuclear, not wind and sun,
For the politician brew seems not for me and you,
Oh they listen to the tune of long ago.

Energy, energy,
Coming from the coal and atoms not from the foamy sea,
Where the currents could conspire and break DC's desire,
That prevents us from becoming fossil free.

adrianakau2aol.com
Comment 3 of 40
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November 19, 2007
Nice to hear that Nanosolar may be able to produce cells for $.30/watt. But how much $/W do they sell it for? And how much does balance-of-system and installation cost? I doubt that it's cheaper than coal yet. Then there's capacity factor. Still, I'm hopeful that solar will become competitive in cents/KWH in a decade or two. Then federal funding will become less important.
Comment 4 of 40
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November 19, 2007
George,
I don't agree.
For less money, we could invest in companies like Nanosolar,that say they can produces cells @ $0.30/watt TODAY. That's less than a coal fired plant/watt.
Why wait? Evidently, we're there.

I don't know about you, but I would love to have the ability to be the lowest energy bidder.

We get more bang for our buck with low cost solar than any other technology. I will be working to get some investors to jump this direction in the next couple of weeks.

Besides, I've given up on the fools on the hill.
Comment 5 of 40
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November 19, 2007
I think we all support more R&D funding for RE.
But what will RE replace first? Coal fuels 50% of our grid, nuclear 19%, and wind and solar well under 1%. For the forseeable future, those percentages won't change much, as RE will barely be able to meet the forecast GROWTH in electric demand(US).

We replace aging plants routinely. Given coal's 50% share of the grid, new plants have to be guided by the very best science has to offer. (CGCC, CSS, other?) Too, the US is collaborating with Australia, China, Japan, S. Korea and India; advanced coal technologies will be applied globally.

Aging nuclear plants will also have to be replaced long before RE can assume their 19%. Here again, we must employ the very best designs available. We have already crossed the bridge. Nuclear waste will have to be secured for millenia; another 50-100 years of use hardly matters.

I doubt we want to skimp on either coal OR nuclear R&D.
Comment 6 of 40
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November 20, 2007
I'm sure we do.
That's why we're on this site, instead of myspace.
Comment 7 of 40
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November 20, 2007
John -

We have more in common than not.
Quote:

"We don't need to pit one energy against the other. It's a fight that everybody loses. We need to focus on a smooth transition. This means NOT robbing oil companies pockets to fund renewables, no matter how tempting. They need to make that decision for themselves."

Quote:

"The current set of politicians produced a plan that, (and completely ignores the fact), leads us into major fuel shortages within 10-15 years, without a single plan to transition. They have tied themselves to the global warming ship, when they should be engaged in a rational, bipartisan, fuel transition planning."

Recognize those words?
Comment 8 of 40
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November 20, 2007
The point is, this is great news for everyone.

Your primary complaint has been that PV is not cost effective, and should not be subsidized.

Evidently, times are changing.
Comment 9 of 40
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November 21, 2007
Rick,
I live in Austin. We have a system that allow us to put electricity back into the grid. Thus, we don't have to store it with batteries. Thus, we can sell it to the utility during "peak usage and buy it back at night.
Also, another area of electrical freedom comes from increase efficiency. If we can raise national standards for residences and buildings along with retrofitting existing structures we can reduce the need for more power plants.
Comment 10 of 40
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November 21, 2007
What you live in apartment and they will not let you install solar panels. This is not a hopeless sutuation. Some power companies have green energy programs We Energies in Wisconsin does offer a energy for tomorrow program were you can purchase renewable energy for an additional cost of 2 cents per Kilo watt hour. They also buy solar energy from me for the program. This also helps recoupe the cost of the solar system.
Comment 11 of 40
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November 21, 2007
Mr. Carr,

Thank you for information. I will reexamine my unit figures before making any more negative remarks on solar pv.

I do fully support any and all renewable energy sources that are cost effective, or nearly so, when compared to traditional sources of power
Comment 12 of 40
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November 21, 2007
There is HOPE if we accept the inevitable and do what right for our race and not measure profit margins only.
WE need to all move together to solve the self-created energy crisis so we can focus on other growing needs!

(not yelling, only emphasis)
THERE IS NO ENERGY CRISIS, only the crisis of our WILL to COLLECT FREE FUEL THAT FLOWS in abundance for all.
Comment 13 of 40
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November 21, 2007
Respectfully counter with:

"Whatever the various merits of solar, wind, nuclear, et al, they have nothing to do with reducing our oil dependence"

Yes it does if using NON-petrol fueled vehicles (PHEV,EV,Fuel cell,etc.) and utilities do NOT burn oil for electricity(as much so in Florida),
and the list goes on...for ways it is connected to oil.

We know that true Renewables will be soon be dollar for dollar "cost competitive" even when only measured by ROI standards, and is today cost competitive if you add all the TRUE costs when you "level the energy field" subsidies/loans,etc. And add the short and long term environmental, geo-political problems, war budgets, and lost lives ,etc. costs for fossil fuel and other non-renewables.

Denial seems to be America's biggest challenge! We know that TRUE Clean sustainable energy must prevail or all of us will perish fighting over energy BEFORE we can solve the problems from OTHER limited resources.
Comment 14 of 40
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November 21, 2007
Barbara
What is the point? That GE shouldn't be making turbines or what?

From their , GEs , financials . rounded numbers

Their revenue was 163 billion
The profit from this was 20 billion
Return on this is 12 %
Total assets of the company 697 billion
Return on assets 2.8 %

Profit generated per person 66,666 dollars. This is not all that good

The company I work for does about 10 times that.

It is not illegal to make a profit.
This is not a socialist society here.

One thing that really annoyes me is this mentality that we should take profits from any company that does its job properly. There are just too many people who think that way . Chavez would be proud.
Comment 15 of 40
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November 21, 2007
Food for thought:

NRDC 2/1/06: "Whatever the various merits of solar, wind, nuclear, et al, they have nothing to do with reducing our oil dependence."

Investors Business Daily May 7, 2007:

"The fact is that after more than 30 years and billions of dollars of government subsidies, neither wind nor solar power is economically competitive."

RE: Jeffrey Immelt, CEO and Chairman of the Board of GE, operating in more than 100 countries, employing over 300,000 people, with revenues of over $131 billion in 2002; by Thomas Donlan (5/16/05 issue of Barrons):

"It is shameful that GE, a highly profitable company, has decided to take advantage of faulty federal and state wind energy policies by producing turbines for "wind farms. Jeffry Immelt understands this, but he provided the executive's counter argument":

"The customers want it, so it's GE's job to produce it."
Comment 16 of 40
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November 21, 2007
Subsidys do not create anything other than an industry dependant on subsidys. There is no incentive to develop viable alternatives and in general distract us from the real solutions.

Notice I said solutions because the world is not one huge homogonized thing . There are too many variables for any one solution to work and for some the status quo may be right.
Comment 17 of 40
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November 21, 2007
Yes Andrew you can dream but from experience when a person starts out with goals that any realistic person knows are not attainable in the near future they are setting themselves up for failure.

When ideology gets in the way of practical solutions failure is inevitable.

There are solutions that have been developed over the past 50 ish years that can produce all of our power, nuclear, but there are too many people who are against it for reasons which for them are legitimate.

I know that we will solve our energy problems and without a great change in our lifestyles but it will take another 50 years. It will happen faster if the governments gets out of the way.
Comment 18 of 40
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November 21, 2007
I appreciate you reply... you produce 90% of YOUR power and utilities cover the 10%. Respectfully, you misread...I never said we could do without grid, as quoted:

"wind, hydro, wave, geothermal, etc. that UTILITIES can (actually "could")provide for remaining "sun-down"(~20%)portion of power to our grid"
AND
"from the UTILITIES to 20%, then THEY can use renewables and advanced clean storage technologies...for balance!"

Oh, I am dreaming of the BEST future for AMERICA that MUST become reality, all great events start as a dream.

Happy Thanksgiving!!
Comment 19 of 40
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November 21, 2007
Andrew
I hate to criticize you but you are dreaming in technicolor.
Please tell me how a person in Eugene OR can use PV without storage.

How do you propose someone living in a condo on the 14 floor downtown New York can set up a wind generator.

There will always be a need for large scale commercial energy production and in the forseeable future unless we start producing more nuclear power the options are limited to what we have.

I produce 90 % of my power but know that in the winter I am out of luck here unless I crank up the generator. I really hate sitting in the dark.
Comment 20 of 40
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November 21, 2007
Imagine reducing our demand from the utilities to 20%, then they can use renewables and advanced clean storage technologies(if even needed) for balance!
Half the roofs await PV and wind above to meet vast majority of our ever increasing demand for electricity.
WE NEED TO START NOW,or it will take decades or more dirty energy if we keep waiting on someone else to do it. Yes, it will cost more IN THE SHORT RUN, but save us and our planet for centuries...
Anything worthwhile is...now, is our country and future?

Let's get started! An EXCITING challegne,for we have great clean renewable electric generators to build.
The technology is here and will only improve, why wait?

It's not CAN we do it, it's are WE WILLING TO SACRIFICE a little today for a much BRIGHTER TOMORROW for ALL...
ALL will BENEFIT from a sustainable energy future!
Comment 21 of 40
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November 21, 2007
There are all kind of solutions thru new technology,
wind, hydro, wave, geothermal, etc. that utiliities can provide for remaining "sun-down"(~20%)portion of power to our grid-tied solar homes WITHOUT using dirty storage systems. 24 renewables can meet this balance.

With a renewable system at home (e.g. less than half of existing roofspace in PV, & durign PEAK demand times)

TODAY, SOLAR ALONE CAN POWER 70 TO 85% OF AMERICA's ENTIRE ELECTRIC NEEDS, then the balance can be powered by more clean 24 hour renewables such as wind, wave, & geo for this ~20% balance.
Comment 22 of 40
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November 21, 2007
We use 100 % solar here suplimented by gasoline generator.

The one thing most people don't mention is that the power must be stored and that is old dirty technology.

It causes polution somewhere but not here.

The batteries I use last at most 5 years and cost about 2000 to replace. My inverter has gone south more times than I have. Another 2 grand every time it quits.

PV is not an install and forget it system. And is definitally great if cost isn't an issue and independance is.
Comment 23 of 40
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November 21, 2007
WHY SPEND BILLIONS on a TEMPORARY Solution (trying to "clean" dirty energy and use NON-sustainble systems)
WHEN WE (all energy industries and OUR government) COULD and SHOULD use our time, money & resources that we have remaining to LAUNCH AMERICA to CLEAN FUEL TODAY.

It more important than going to the Moon, less costly and more important to our survival!
remember JFK "Ask not what your country can do for you..."

Focus on the SOLUTION, TRUE Renewables, Clean Energy NOW! DO your part, get a RE system(sell you SUV!!), join an RE organization, revive a dormant factory to make RE products, support a local clean energy company,

be part of the solution. WE CAN DO IT AMERICA !!!
Comment 24 of 40
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November 21, 2007
LONG TERM THINGING, please!!

We need to move TODAY to true CLEAN energy, the mature industries have enough $$$ TO STAND ON THEIR ON, as they have been telling renewables to do, AND WE WILL!
They are "milking" US for all they can until they convert on their terms & control and not allow clean to lead, as AMERICA needs!

Cut of the the FREE LUNCH to Dirty energy so we can breath.
AMERICANS need to LEAD the way to Clean energy before China and rest of world owns most of the world's Clean Tech and we are just dependants at mercy of foreign suppliers of energy and energy products...

LET's move to true renewable NOW, tell your neighbor, make it a priority in the media(not obcession with oil prices), stop catering to dirty energy leading the discussions away from what needs to be done now...
Comment 25 of 40
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November 21, 2007
How is reducing subsidies to oil companies "robbing them"? The job of government is (supposed to be) to do what is right for the country; not molly coddle particular industry sectors, just because that is what it has always done.
Comment 26 of 40
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November 21, 2007
GREAT discussions...
don't forget the TRUE costs of continued use of fossil fuels & waste, what cost do you ADD for pollution now migrating from China to NW U.S.? Mercury in our water?

If someone offered you a 30 year car with no fuel costs, would you buy it even if price TODAY was close?
In the long run all the pollution from it is going to COST MANY TIMES MORE than the initial cost!

The old addage: "A ounce of prevention, pound of cure"
simple but forgotten sometimes in our culture...
trying to save a dime today, in this case, is going to cost us INCREASINGLY more in the future, cleaning up the mess from the cheap dirty fuel bought today.
Comment 27 of 40
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November 21, 2007
Wake up America!

Get over the denial of the fact renewable energy works, and start using a sustainable technology that has been in exsistence since before the nuke and oil age. Please help this great nation to regain some sort of sort of stability in the global marketplace through efficiency and sustainablity.

jb
www.nrgmanager.com
Comment 28 of 40
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November 21, 2007
This report comes at a time when the existing tax incentives for renewables (solar ITC and the Wind/Biomass PTC) are in grave danger of expiring without reauthorization. Your representatives in Washington, especially Senators, need to hear that their failure to act this year to reauthorize the renewable tax credits will undo much recent progress and set our country on a path to economic disruption and environmental catastrophe.


Business as usual is not a vi
Comment 29 of 40
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November 21, 2007
Last I heard, even nanosolar doesn't work at night.
Baseload grid power will still be necessary, unless of course wind capacity is so dense as to pick up all nightime loads, INCLUDING transportation load shifted from fuel to grid (plug-in hybrids, EVs). Given wind's capacity factor issues, that's ambitious and then some.

As to earlier comment(#2) that "nanosolar says....":
Cold fusion: STILL "40 years away"...
Electricity from nukes "too cheap to meter"... uhuh.
Synfuels: Whtever happend to synfuels...?
Hydrogen: And where are all the hydrogen companies now?

Point: nobody puts their hand out for subsidies proclaiming their solution won't work...

Grid: 50% coal
19% nuclear, w/90% capacity factor 24/7
18% natural gas

Fund RE, no question. But it's premature to pull the rug(plug?) out from under conventional sources.
Comment 30 of 40
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November 21, 2007
So yes, I feel very strongly that that research funds should be chanelled to renewable energy rather than fossil fuel research. And subsidies to fossil fuels should most definitely be channeled to renewable energy forms like solar power: it's a MUCH better deal for consumers, long term, than stuffing the money down the rat-holes of nuclear and coal. After decades of that nonsense, you'd think the government would recognize this mistake and correct it.
Comment 31 of 40
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November 21, 2007
That system should last for 30 years, with production declining slightly over time. By the end of its system life you should have between 50,000 and 55,000 kilowatt hours....for $3000. At 50,000 kilowatt hours, that's $0.06 per KWh: 6 cents per KWh. At that price, even Jim Berry should be running out to install a PV system.

Unfortunately, Carolyn L. is right: you still have to account for costs other than Nanosolar's production costs - like the dealer's margin, financing charges, etc. But even if that *doubles* the cost, it's still only 12 cents per KWh over the life time of the system and that cost is FIXED. The sun doesn't increase it's prices every year. Electrical utilities DO.
Comment 32 of 40
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November 21, 2007
John,

Sorry, but I think *you* have your numbers wrong too. That price from Nanosolar is not $/Watt but "$/Watt peak" ($/Wp). That means they can produce a one KW peak system for $3000. A one KW peak system can produce 1000 KW hours (KWh) of electricity per year in a "standard" area where the solar radiation level is 1000 KWh per KWp. But Jim Berry lives in California where it is undoubtedly sunnier, probably more like 2000 KWh per KWp.
Comment 33 of 40
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November 24, 2007
Yeap, about as lopsided as I figured.
http://greyfalcon.net/energyresearch.png

Perhaps they could get some parity with expenditures on all types of renewable electricity combined, versus nuclear.
Comment 34 of 40
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November 24, 2007
Yeap
Geothermal and Hydro for baseload.
Solar for Day, Wind for Night (Rather complimentary)
Offshore wind can also do pretty well for baseload.

And of course Solar Thermal, with heat storage is ideal compared to Solar PV.
Comment 35 of 40
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November 24, 2007
Hey everyone. Great Discussion. Here's a link to how Germany IS MAKING Renewables HAPPEN NOW!!


http://www.worldchanging.com/archives/007518.html

Using Geo-thermal as base-load
http://thefraserdomain.typepad.com/energy/geothermal/index.html
Comment 36 of 40
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November 25, 2007
Great discussion!

BTW, Andrew, keep dreaming, and learn as much as you can! There's a lot of smart, well informed people on this website who share your dream. This is a good place to start. Make some contacts off site.
Comment 37 of 40
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November 25, 2007
I hope everyone had a good Thanksgiving! I did.

Jim,
I tnink solar is very close to cost effective in most places with rates above 14 cents/kWh with comparable feed-in revenue. With the proper manufacturing scale, Nano-Solar looks like they could easily come in cheaper than wind, and competitive with natural gas.

However, Brian and Carolyn's comments are reasonable. We have to get a better grip on the mounting and installation costs. And, there's the storage issue (as Rick is painfully aware).

There is a solution for storage. It primarily applies to midsize and large scale installations. It's not, and may never be, cost effective on a small scale.

It's flow batteries.

www.vrbpower.com/

I'm sure many of you know about flow batteries.
If you don't, learn. Get a tutor if you have to.

Their equipment works today. Again, they are a small company, with hand built equipment, ergo, high cost. And again, scale, scale, scale.
Comment 38 of 40
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November 26, 2007
For the Appalachians the use of coal means more mountains destroyed by the insane mountain top removal strip mining. Around 500,000 acres of mountains and 1000 miles of streams have already been destroyed. Mountain top removal may be the world's worst environmental disaster. What other mountain range has lost 800 square miles of mountains? For more information and pictures go to www.wvhighlands.org and www.ohvec.org
Comment 39 of 40
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November 26, 2007
don't forget v2g for storing excess energy / providing it back to the grid.

Also storing up hydrogen / converting it to other gaseous or liquid fuels.

Make hay when the sun shines!
Comment 40 of 40
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