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Don't Miss The Great Solar Debate: Where Does the Global Solar Industry Stand? ×

The Debate That Will Define America's Future

Tam Hunt, Renewable Energy Consultant
May 28, 2010  |  39 Comments

The Gulf of Mexico oil spill disaster, the Massey, West Virginia coal mine accident, the Tennessee coal ash disaster in 2008, the BP oil refinery disaster in Texas in 2006, and countless other fossil fuel disasters are finally having an effect on public opinion. And the sting of record prices from 2008 is still in the recent memory of American consumers. Fully 2/3 of Americans believe Congress needs to make our country's energy needs a top priority.

Recent polls have found, however, that a shrinking portion of America believes that climate change is a human-caused problem or that we need to take serious action to mitigate climate change. A May, 2010, poll by the Pew Research Center for People and the Press found that only 32% of Americans thought that climate change should be a “top priority” for Congress  (see chart, below).

This is the debate, revolving around energy and climate change, that will define America’s future. It is not the only debate that will do so, but I believe it is the most important debate we will have over the coming decades.

I’ve written frequently on peak oil and climate change. It is because of my fears about peak oil that I am heartened to see a solid two-thirds of Americans agree with me that addressing our energy needs should be a top congressional priority. This is a bipartisan area of agreement, with 75% of Democrats, 64% of Independents and 61% of Republicans agreeing that it should be a top priority.

No wonder then that the Kerry/Lieberman Senate bill introduced on May 12 is called the “American Power Act” and does not mention “climate change” in its title. However, this bill is very much an energy and climate change bill. The debate about its merits is complex and my early reaction is that it doesn’t go anywhere near far enough. But it’s a start and it may actually have a chance of passing in 2010 — albeit a slim chance as we go into major mid-term elections.

So why do I think the debate about energy and climate change is the debate that will define America’s future? It’s because the peak oil situation is actually more dire now than when energy prices were sky-high back in 2008. Prices are relatively low because of the ongoing global recession. Oil prices were rebounding steadily this year, up to almost $90/barrel before the euro crisis knocked them back down to about $70 (prices were as high as $147/barrel, leading to $5/gallon gasoline, in the middle of 2008 before the recession hit hard).

But there is now a growing consensus among energy economists and analysts that as soon as the global recovery gets under way in a serious way that prices will once again skyrocket. The situation is more dire now than before the recession, when prices were much higher, because the recession is leading to cancellation of many projects that would otherwise have gone forward. This means that we’re looking at major shortfalls in oil supplies as the global economy gains steam.

While I’m not a supporter of oil as an ongoing source of energy, due to the obvious problems of major spills — with the Gulf of Mexico tragedy as a stark reminder of this ever-present danger — air pollution, energy security and climate change, among other problems, I recognize that we can’t transition overnight to alternatives to oil. It is the largest source of our energy and the overwhelmingly dominant fuel source for transportation. It will take decades for a smooth transition to non-petroleum energy sources for transportation, as described in a major report commissioned in 2005 by the Department of Energy from Robert Hirsch and his associates.

As Hirsch writes, if we don’t get serious about the transition at least 20 years ahead of a peak in global oil production we are likely to see major problems emerge in the U.S. and abroad.

We are, however, probably at or near the peak now, at least for conventional oil supplies, which are the large majority of our current global production. 2005 was the peak year for conventional oil production thus far. July, 2008, was the peak month, right as the global recession hit (see figure, below). We won’t know for some time if these are all-time highs, but they may well be. And if not now, it’s likely to be not too far off, as a growing number of analysts are warning.

But haven’t people been predicting an impending peak in oil production for decades — and always been proven wrong? Well, some predictions have indeed been proven wrong. This time around, however, we have the major “official” organizations warning stridently of issues with energy security and supplies, which was not previously the case. The International Energy Agency, formed after the oil crises of the 1970s to ensure that that similar crises would never afflict the western nations (OECD), stated in their 2008  World Energy Outlook:

The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable — environmentally, economically, socially. But that can — and must — be altered; there’s still time to change the road we’re on. It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution.

The IEA concluded:

Securing energy supplies and speeding up the transition to a low-carbon energy system both call for radical action by governments — at national and local levels.

In August of 2009, the IEA was even more strident in its warnings. The UK’s Independent newspaper reported:

The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.

Later in 2009, two IEA whistleblowers went public and claimed that the situation was even worse than the IEA was stating publicly. The UK’s Guardian newspaper reported in November: “A … senior IEA source, who has now left but was … unwilling to give his name, said a key rule at the organization was that it was ‘imperative not to anger the Americans’ but the fact was that there was not as much oil in the world as has been admitted. ‘We have (already) entered the ‘peak oil’ zone. I think that the situation is really bad,’ he added.”

So what do we do?

I had the pleasure recently of attending the Heartland Institute’s 4th International Conference on Climate Change. This year’s topic was “reconsidering the science and economics.” This conference is well-known as the “skeptics’ conference” on climate change. And indeed it is, with very few speakers or attendees hewing to the mainstream scientific view that climate change is a very serious human-caused problem. I attended, however, because I am a firm believer in dialogue. (In the spirit of full disclosure I was provided a small honorarium to attend). Whether it’s international relations, family issues or energy and climate change policy, there is always room for dialogue.

Those now in the scientific mainstream on climate change fought for decades to achieve their mainstream status. And like many mainstream thought trends, there is a reluctance by today’s mainstream climate scientists or policymakers to debate issues that they feel have been debated to death and have been resolved sufficiently well to allow for policy choices to be made.

What is clear, however, is that while there is a large majority of scientists and scientific bodies (like the National Academy of Sciences, World Meteorological Association, etc.) that believe that human-caused climate change is a major problem, there is no such consensus with the American public. In fact, the number of Americans who agree that climate change is a major problem has been going backwards in the last couple of years. So to pretend that a majority of the American public agrees with the mainstream scientific views on climate change, and thus to ignore the skeptics is, in my view, highly counter-productive. It is partly this attitude that has led to an erosion of support among the American public for making climate change mitigation a priority in Congress.

I spoke on “Renewable energy and the transformation of America” at the Heartland Institute conference in Chicago. I was not pressured or harassed in any way with respect to my presentation or its contents. I received many good questions after my presentation. My key point in this presentation and in every public presentation I’ve given over the last five years on these issues has been this: a rapid transition to energy efficiency and renewable energy is desirable and necessary for a number of reasons. Climate change is one of those reasons but we could entirely ignore the climate change debate and still have about ten compelling reasons to make this transition.

I focused on wind power as a good example because it is growing very fast in the U.S. and is currently the most cost-effective renewable energy technology. Wind power has grown over 30% each year in the US in the past decade and about the same globally. I discussed what I call law “Moore’s Law in renewable energy” and how we are in the middle of a quiet revolution right now. This is the case because with 30-40% growth rates the installed capacity of wind and solar doubles every two years. It doesn’t take long for this doubling effect to yield transformational change. I calculate that at even half this rate of growth through 2030 fully half of all electricity in the U.S. will come from wind and solar power, up from about 3% today.

My final point in Chicago was this: IEA and many others are calling for a revolution in energy to mitigate energy supply and climate change issues. We are in the middle of such a revolution right now and as long as we can “simply” continue the current growth rates of wind, solar, energy efficiency and other renewables we will have a good chance of transitioning away from oil without major problems.

I will end this rather long op-ed on this hopeful note and look forward to further productive dialogue in the future, whatever it holds.

Tam Hunt, J.D., is President of Community Renewable Solutions LLC, a company that develops medium-scale wind, solar and biomass projects. He is also a Lecturer in climate change law and policy at the Bren School of Environmental Science & Management at UC Santa Barbara.

39 Comments

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Coenraad Pretorius
Coenraad Pretorius
June 10, 2010
Tam,
I'm all in favor of wind and solar. I agree that wind projects should not be interrupted by on-again-off-again decisions regarding the subsidies they get. It would be great to see a politician come up with a long term plan that on the one hand gives the wind industry some certainty for the short-to-medium term and on the other hand don't just commit my $taxes to endless cycles of subsidies ala Big Ag.

I'm less certain that there is a coming electrification of personal transportation. Driving around a bunch of (still) heavy batteries with limited range is not something I see motorists anywhere, especially in the US, spending their (increasingly) hard earned cash on. The hybrid vehicle with its ability to use the strengths of different drivetrains is about as good as it gets for the foreseeable future. I also expect the Chevy Volt to be (another) big failure. We'll see soon enough.

As such, I don't see wind and solar protecting us form your much feared Peak Oil scenario. Using less coal would be fine, as far as the environment goes, but with all those reserves it is not such a pressing issue.

There is only one systen that IMHO can accomodate a switch from our current addiction to oil to a renewable energy future: an open-ocean (we really do need that much area) based algal gasification (not biodiesel) system. To work, such a system would require three elements:
1. Fertilizer system to get the algae growing.
2. Harvesting system to collect the bulk of the algal biomass - unharvested algae goes into the food chain, we hope.
3. Biomass gasification -> liquid fuel system, along the lines of the UDA's hydrothermal (wet) gasification technology.

#1 does not seem too chalenging. #2 would be. Perhaps USDA should award an X-prize for the development of an algae-harvester that concentrates the algae into a thick soup. Use the Dead Zone in the GOM to test and perfect the technology. Clean up the environment free of charge. #3 is already under development...
Tam Hunt
Tam Hunt
June 9, 2010
Coenraad, the solutions are what I outline in my article: ensuring that we "simply" continue the great growth rates in wind and solar over the next ten to twenty years. With dramatically higher prices for oil and other fossil fuels near on the horizon we can expect conservation and energy efficiency to largely take care of themselves (with some good policy support, to be sure). What we need to ensure, however, through gov. policies is that the 30-40% annual growth rate for wind, solar and other renewables continues. As we electrify transportation in coming decades, and build out better rail transport systems, we can then expect to have a functioning economy in 2030 - as opposed to the alternative status quo future that assumes fossil fuels are here to stay and will remain relatively cheap.
Coenraad Pretorius
Coenraad Pretorius
June 9, 2010
"And as you also surely know, we are "officially" out of recession because we have been growing for the last three quarters."
Wow! That's a relief. Unfortunately it would be news to my employer, where things are still looking bleak.

But I guess we are just arguing what the statistics say vs the real world experience.

"Anyway, the bottomline is this: we are a in world of hurt with oil supplies and unless we get extremely serious as a society and as a globe we're going to see a lot more serious problems than the Great Recession that we went through over the last two years. The first step is acceptance. And then we can start working jointly on solutions."
OK, how about this: Let's say for a moment I buy the entire argument, just for argument's sake. Where do we go from here? Spend even more $taxes on foolish food-to-fuel schemes that still can't compete with oil, and as a side-benefit lead to food shortages? Dish out money to those algae-in-a-bag snake oil salesmen? Don't get me wrong: I love for us to "jointly on solutions", I just don't see us coming up with something that's worth the paper it is written on. And that's assuming we could "start working jointly on solutions." Big assumption.

There is a reason the "working jointly" thing doesn't work: No politician will get re-elected working on a real solution. Landfills and other wastes just don't have the political clout.

The alternative is simply this: leave it to the market. In due course the market will communicate any shortage via the age old signal of price. When that happens the field is open for the real contenders to challenge oil. Might take a while, sure. But at least it would be investors burning through their own money, not some lobbyist burning my $taxes courtesy of his hand prostitutian.

The price signal right now says there is no shortage. I know that makes you nervous, but perhaps the market is right. Perhaps we're good for now. We'll know soon enough if that changes...
Tam Hunt
Tam Hunt
June 9, 2010
Coenraed, I suspect further dialogue won't achieve much, but here's one more salvo: 4% decline in economic output is HUGE. Normal growth is 2-3% in the US, so a 4% decline puts us in negative economic territory. As you surely know, the standard definition of recession is two consecutive quarters of negative growth. And as you also surely know, we are "officially" out of recession because we have been growing for the last three quarters:

http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm

With both trends, Rubin's economic analysis is spot on.

As for TOD, as I mentioned the analysis is Rubin's (did you see the pdf link?), former chief economist at CIBC. The article breaking it down into a more comprehensible narrative is TOD.

Anyway, the bottomline is this: we are a in world of hurt with oil supplies and unless we get extremely serious as a society and as a globe we're going to see a lot more serious problems than the Great Recession that we went through over the last two years. The first step is acceptance. And then we can start working jointly on solutions.
Coenraad Pretorius
Coenraad Pretorius
June 8, 2010
Tam, that WSJ story is pretty weak.

Let's see: "Energy-price shocks can hurt an economy in different ways. First, they sap the disposable income of consumers, eroding their ability and willingness to spend on other goods and services, like cars or summer vacations. In the U.S., household spending on durable goods has tended to slow or decline in the past when energy outlays have risen sharply. Price shocks also can squeeze corporate profit margins, reducing the incentive of companies to invest and hire. And they can force consumers and businesses to make shifts -- such as switching to more fuel-efficient cars -- that can undermine the economy's productivity during the transition."

Disposable income? Americans are spending less (as a % of income) on energy than ever. While we all like to whine when gas goes for $4/gal, it really does not hurt, in the real world.

How does switching to fuel efficient transport result in LOWER productivity? Sounds like it should be the other way round.

Assuming Guerrieri's trend is linear a 500% increase in oil prices would reduce economic output by ALL OF 4% (in rough agreement with Figure 4 of the TOD article). If you blink you might miss it.

Rubin goes on to say: "If triple-digit oil prices are what started the recession, then $60 oil prices are what will end it."
Well, we've had oil around that level (or lower) for about two years now. So where is the end of the recession? Or do not believe that if high oil prices kill the economy, low oil prices will resuscitate it?

BTW, we're not going to pretent that TOD is an objective source of information are we?

"Convinced?"
As much as always. But I suspect that is not what you meant...

PS: My name is not THAT hard to spell, is it?
Tam Hunt
Tam Hunt
June 7, 2010
Mike, the Power Engineering article is not worth the pixels required to display it. It's riddled with errors and overgeneralization - a problem the article itself warns about with respect to traditional air pollution benefits from wind power. The actual data the article cites is thin, at best, and it completely ignores the dozens of actual rigorous studies competed on these issues.

Here's yet another report, which is accessible for non-engineers, summarizing the results of numerous grid reliability studies vis a vis wind and other renewables. As I mentioned above, the integration costs of wind power, up to about 20% of total grid power, average about 10% of the total cost of wind power - so about 1 c/kWh at today's prices.

http://eetd.lbl.gov/ea/ems/reports/2008-wind-technologies.pdf (see page vi for a short summary of integration costs)
Mike Holly
Mike Holly
June 7, 2010
Tam, that study is techno mumbo jumbo.

I am looking for a study of wind's costs and environmental benefits when integrated into the grid ie backed up by gas, like below:

http://www.wind-watch.org/documents/wp-content/uploads/Hewson-Wind-Benefits-Power-Eng-July-2009.pdf
Tam Hunt
Tam Hunt
June 7, 2010
Mike, numerous studies have found that integration of wind and other variable resources up to 20% or more of the grid will be quite cheap - costing no more than 10% of the total c/kWh price.

Here's another recent study finding that the Southern Power Pool (SPP) could get to 40% wind without great expense:

http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBoQFjAA&url=http%3A%2F%2Fsppoasis.spp.org%2Fdocuments%2Fswpp%2Ftransmission%2FSPP_Constraint%2520Mitigation%2520in%2520Higher%2520Wind%2520Areas_10-17-06.pdf&ei=hD0NTL_kJ6b2MLLQqbUE&usg=AFQjCNGpp3lmGjDX5_yQLcvVRq2DyvHSWg&sig2=Mf0RmAwHyLieolqlnQDnLg
Mike Holly
Mike Holly
June 7, 2010
Tam, thanks for the study, but Mitch3 writes to me on another article: "I agree, the latest study WWSIS gives false hope for a wind/solar based energy platform. The Sandia Lab study is much more realistic because it includes the storage element."
Tam Hunt
Tam Hunt
June 7, 2010
Conraed, the Wall Street Journal wrote in 2004 that nine of the last ten US recessions were caused in large part by oil price spikes:

http://bigpicture.typepad.com/comments/2004/06/does_higher_oil.html

And here's an analysis of the most recent recession from Jeff Rubin, former chief economist of CIBC, a major Canadian bank:

http://www.theoildrum.com/node/4727

The key points are: 1) the last oil price spike involved a 500% price spike, far larger than any previous oil price spikes; 2) many major world economies were already in recession before the housing bubble burst; 3) the economic impact of this oil price spike was far larger than the housing bubble popping.

Convinced?
Coenraad Pretorius
Coenraad Pretorius
June 3, 2010
Tam,
If you really believe that the Great Recession was caused by oil prices, you are a devout believer in the church of Peak Oil. But perhaps reason can still reach you. Without doing a thesis on economic theory, I offer this:
"In a recent paper, Guerrieri (2005) finds that a 50% increase in the price of oil starting in the first quarter of 2004 causes output to fall about 0.4% below what it would otherwise be in the long run." -http://www.frbsf.org/publications/economics/letter/2005/el2005-31.html

Hard to believe that oil prices brought us the Great Recession, especially seeing the Great Housing Bubble that preceeded the event, and the role of all and sundry in assuring the public that "house prices never dropped year-on-year before..."

The problem I have with the Hirsch Report is that the system is too complex for a meaningful projection to be made, let alone project that a 20 year period would be required. As 2008 showed, with oil prices high enough even Americans discover ways to conserve.

Markets are shortsighted, but so are politicians. At least in a free market we all play by the same rules. Unlike what happens in Washington today.

And I have my doubts regarding the ability of politians to come up with sensible incentives. California under Schwarzenegger being the lone exception to the rule. In Washington, renewable energy subsidy is code for buying votes in the Midwest. I see little evidence of this changing any time soon.

An oil company windfall profits tax will be an unmitigated disaster, mark my words. You might have noticed that during huricanes service stations now keep prices low and run out, rather that bump up the prices, so that the supplies last a bit longer. Low prices do you no good when there is no product, as Mr. Nixon discovered in the 70s. Doing this at oil company scale would be a painful farce.

If renewable fuels ever take off, you'll be buying then from Big Oil. The enemy is not Big Oil. The enemy is our own laziness.
Tam Hunt
Tam Hunt
June 3, 2010
Mike, here's a brand new study looking at high penetration of wind and solar in West Connect, a portion of the Western Interconnection. Let me know if you'd like others:

http://www.nrel.gov/wind/systemsintegration/pdfs/2010/wwsis_final_report.pdf
Mike Holly
Mike Holly
June 3, 2010
Tam, I am looking for a study that determines the cost of integrating intermittent windpower into the grid, especially when backed up by natural gas.

I doubt Spain can provide many answers. In 2009, Spain reported that in 2006, they had only about 10% non-hydro renewables (mostly wind), 8% hydro, 28% gas, 20% coal, 20% nuclear and 8% oil.
Tam Hunt
Tam Hunt
June 3, 2010
Steven, these issues have been looked at exhaustively. Let me know if you'd like to see the reports. Each jurisdiction is different and Spain is in fact fairly isolated from the larger grid b/c they have just a relatively small connection to France. As such, they may already be bumping up against the limits for wind power penetration without major back up supplies. However, they're also adding a lot of concentrating solar power with molten salt thermal storage, which is a baseload power source for the most part, like geothermal and biomass. The goal for most progressive jurisdictions is to maximize renewable energy production for most peak needs and use the existing natural gas and nuclear infrastructure to provide back up power. Thus, relatively low backup expenses are incurred over time.

There's a lot of engineering work already done on these issues and I'm happy to point you in the right direction if you're curious.
ANONYMOUS
June 3, 2010
Spain generates perhaps 13% of its electricity from wind these days. However, on some days wind generates more than 50% of what is needed. Thus, if their wind industry doubles again, there will be periods when production exceeds demand and they have to engage in curtailment (certain base load facilities such as nuclear power cannot be shut down for short periods of time, and others would reduce power production while continuing to consume fuel, so they don't need to reach 100% of demand before curtailment would be required). This is yet another example of inefficiencies that will occur when intermittent resources constitute a large percentage of generation. These inefficiencies are not well reflected in current pricing models.
Steven
ANONYMOUS
June 3, 2010
SteveNulsun writes: "But many advocates correctly suggest that the Northeast is indeed a good place for solar, due to high electricity rates."

This is an interesting argument; it suggests that noncompetitive technologies move to locations where consumers are already being overcharged because they won't mind the unreasonable rates as much.

Tam is predicting based on long range extrapolation (a perilous numerical technique) that wind and solar power will account for ~50% of US generation by ~2030. Optimists predict wind to be good for 20% of US generation; given that the South East have very poor wind resources this will require other regions getting probably 30+% from wind. That still leaves a very large chunk to be met by solar power. Solar intermittency is very different from that for wind. December insolation rates in Northern climates can be as low as 10% of that for July (this is, for instance the case for much of the UK where Winter nights are also the peak demand period). In lots of the Northern US ~20% of peak summer insolation might be a reasonable estimate. (And, of course, when your collectors are covered in snow you will experience some days with zero production.) If you are going to rely on a significant percentage of solar for that type of situation you would need huge reserve capacity; this is not an effect that is represented in the adoption rates when they are at 2% of total generation.
Steven
Aaron Moline
Aaron Moline
June 3, 2010
I tend to agree with Tam (as far as the gaps in the market mechanisms). To me it seems that we have built up most of our infrastructure over the past century based primarily on cheap, finite, fossil fuels. It just makes more sense to me that we take the steps to diversify our energy needs for various reasons. A good analogy I once heard was think of a chain smoker: it is very difficult for one to quit smoking overnight, much like to ease off of fossil fuels. A doctor will normally tell you to take PREVENTIVE measures when trying to quit smoking. Thus draw a comparison where renewable energy, although not guaranteed to meet our energy needs (such as quitting smoking will not guarantee the patient will not die of cancer) serves as an insurance policy. We may well discover the holy grail of our energy needs and be so fortunate to have a TREATMENT based economy. But until such time, the volatility of the energy market is so narrow, it makes renewables hard to ignore. Of course, this is all opinion. Good discussion none the less!!

-Consumer Energy Alliance
"A balanced approach towards America's energy future"
Mike Holly
Mike Holly
June 3, 2010
When the bidding started in the late 1990s in Minnesota, 125 MW of biomass was bid. We decided not to bid because of the exhorbitant fees along with our lack of trust in the fairness of the utilities, due to witnessing bidding corruption for gas generators in Wisconsin and Minnesota. Sure enough, the utility eliminated a lower cost bid on a technicality in favor of its own affiliate. The utility rejected all of our requests for bidding reforms: bid all capacity, all renewable technologies qualify, no subjective bidding criteria, public scrutiny of the bidding process, etc.
Tam Hunt
Tam Hunt
June 3, 2010
Mike, the government I was referring to is the US government, not California. Federal policies are generally even-handed for all renewables, including biomass, though there are some small differences in tax credits. As for the Midwest Renewable Portfolio Standards bidding process, I don't know much about it. But it seems strange that you claim it's all corrupt and favors wind but won't submit your own bids. How do you know if you haven't submitted bids?
Mike Holly
Mike Holly
June 3, 2010
Tam, I believe we have had this conversation before. We are victims of a disjointed US energy policy that allows all 50 states, and even hundreds of individual utilities, to set incomprehensible and incompatible energy policies.

Perhaps, like you say, California has not "picked" windpower as a winner. I wouldn't know since our technology is not applicable to that state. But neither should you be saying GOVERNMENT has put in place policies that apply to all renewables

ALL states in the Midwest, where we seek to locate, HAVE favored windpower. Some even have laws requiring windpower. Regardless, all bids are for windpower and we cannot bid against it. It has absolutely nothing to do with cost-effectiveness.

Even if there were bids for biomass we still wouldn't bid. Bids are often rigged and it is virtually impossible to determine if any bids are not rigged. Since bidding costs hundreds of thousands of dollars, it is too expensive to test each bidding process. The US has no bidding standards.

The US also doesn't have a method for comparing bids between intermittent windpower and other more reliable renewable technologies. A private study has indicated wind increases generation costs by more than twice, while reducing greenhouse gases by a mere 11%, because the intermittent supply must be inefficiently backed up by natural gas.

Worst of all, utilities can decide any time they want to just build renewables themselves. This gives independents little incentive to develop new superior technologies. The whole process is an exercise in rear end kissing, which allows utility monopolies to force independents to help them prove renewables don't work.

If you want to really help the development of renewables, you would learn about all the corruption before claiming states put in place policies that apply to all renewables.

I don't have the resources to study 50 states and no one else has the guts to report corruption. Our company is leaving.
Steve Nelson
Steve Nelson
June 3, 2010
Anonymous writes: "On a snowy winter night you cannot rely on solar PV to keep the lights on." So it only works on sunny winter nights?

Tam, you say that "no advocate is suggesting that solar is good for all places. Rather, analysts focus on the South and Southwest as the best places for solar." Best in the Southwest, yes, and especially for utility-scale PV installations. But many advocates correctly suggest that the Northeast is indeed a good place for solar, due to high electricity rates.
Larry Bulloch
Larry Bulloch
June 3, 2010
There's a good reason the American public has moved climate change down on their priority list. The climate change scientific community has conducted business in a manner similar to Wall Street. In both cases, there's a credibility gap due to a lack of DISCLOSURE.

The science of climate change is inexact. It's built on an extremely complex data set and contains hundreds of assumptions. Sound anything like Wall St.'s mortgage backed CDOs?

While I, personally, believe that anthropogenic GHG emissions are a great danger, the cc community (as in IPCC) has shot itself in the foot by failing to maintain objectivity, the first principle of the scientific process. Scientists report findings, all of them, whether they like the results or not. These guys have crossed the line and become advocates.

If you, like me, are concerned about CO2 emissions, you may find the following information interesting:

According to the Energy Information Association, anthropogenic CO2 emmissions are sourced from three broad categories:

Electric Power Generation: 39%

Transportation: 34%

Direct use in homes, buildings and industry: 27%.

Electric power generation is the largest emitter of CO2 in the country. Coal is used to generate over 50% of the nations' electricity and accounts for 83% of CO2 emissions, not to mention SOX, NOX and mercury.

While I can't speak for transportation or direct use, I can comment on electric power generation. We need 3 things ASAP:

1) National RE Standards for every state (including coal states)

2) National policy on electric grid development (including the power of eminent domain) to bring RE from remote locations to load centers

3) A moritorium on building any new coal fired plants to produce electricity.

All of these things are attainable if we create a populist, grass roots movement to get politicians to focus. It's up to US.
Tam Hunt
Tam Hunt
June 3, 2010
Steven, location has little to do with the installed cost of solar power for large installations (for smaller installations it is important). But you're right that northern climates are of course not as good in terms of production from solar facilities. But no advocate is suggesting that solar is good for all places. Rather, analysts focus on the South and Southwest as the best places for solar. Wind, biomass and hydro are good in northern states. Check out the Renewable Energy Atlas for more on this.

As for growth rates petering out over time, this is my point: we need to do what we can to maintain the renewable energy growth rates at or near where they've been in the last ten years. That won't be easy as we move forward for a lot of reasons, but it's certainly doable with the right mix of market forces, good policies and public will.
Tam Hunt
Tam Hunt
June 3, 2010
Coenrad, you're misunderstanding a number of things. The Hirsch Report is a best estimate of the scale of the problem. Nothing more. And this is the case with ALL projections into the future. The degree to which you heed it depends on how well you think they've captured the complexity of the system and how well their experience guides them in making sweeping judgments. It's not gospel. It's projection.

I also did not say peak oil is a classic market failure, I said that markets being shortsighted in a general sense is a classic market failure. Peak oil is one example of this classic market failure.

As for recessions, research the literature and you'll find that just about every recession in our history was prompted by spiking oil and energy prices - including in my view the one we're currently in, with of course the added layer of the housing and credit crisis.

If you agree that markets are shortsighted you should also agree that some intervention in markets is warranted vis a vis peak oil. If that is the case, then the debate revolves around how much intervention and what kind of intervention. I've argued in this article that we "simply" need to maintain growth rates for renewables at what they have been over the last ten years, with a mix of subsidies, mandates and financing tools.

I'm heartened to hear that the Obama administration is planning an aggressive push for an oil company windfall profits tax, with much of this revenue going to help renewable energy and energy efficiency. I suspect the American public will be all for this at this point in our history.
Coenraad Pretorius
Coenraad Pretorius
June 2, 2010
Well, Tam, your trust in the Hirsch report is touching. I can't say I have faith that these guys can get all the uncertainties certain enough to tell us we need a 20 year preparation for Peak Oil. 20 years is a generation for crying out loud.

Also, not sure what makes you so confident that this is a "classic market failure". Based on how you EXPECT Peak Oil to play out? Based on what you would LIKE to see happening in renewable energy markets? Based on the frustrating inability of renewables to replace oil?

We really don't know how this movie ends, in spite of the near-religious certainty of the faithful believers in Peak Oil.

I'll admit that markets tend to be short-sighted. I still prefer the shock-treatment of a Free Market over the mess you get when "wise and honest" (wink-wink) politicians step up to the plate to serve their own... I mean their community's interests... Exhibit A: Corn ethanol. Exhibit B: The mythical, but non-existent cellulosic ethanol.

Perhaps our most fundamental difference is the way we see Peak Oil playing out. I suspect (correct me if I'm wrong) that you see oil prices spiking, causing recession, causing low oil prices, causing a resumption of growth, causing high oil prices,... etc. etc.

I tend to see oil prices as a factor, not THE factor determining economic growth. High oil prices does not necessaily lead to recession, and certainly not a world-wide recession, politically inconvenient as it may be. A strong future world economy will PROBABLY mean high oil prices, but not NECESSARILY volatile oil prices (some volatility is of course unavoidable). Under those conditions the Free Market leads to a pretty good solution.

If the politicians stay out of the ring, and low the market to work it out, that is...
ANONYMOUS
June 2, 2010
Growth rates from low levels tend to be pretty high but usually taper off after a few years. For example, the German wind industry has benefited from strong backing, yet for the last 3 years annual growth rates for installed capacity have been below 8%. Intermittency costs are nominal at low installation rates but become more burdensome as a large fraction of generation comes from such sources, especially with regard to transmission capacity and backup generation (storage not yet being a viable option).

I think Tam's suggestion that the US wind market would build up substantially more turbine production capacity than is needed in the long term and rely on exports in later years to be unlikely. All the major players (Europe, China, India,...) are ramping up turbine production and will be in a similar situation of having more capacity than needed for long term replacement rates. This is not a recipe for the makings of a good export market. It seems to me the wind market is headed for a slowdown within the next 5 years.

Tam points out that published cost estimates, especially for solar, have dropped significantly in recent years. There is a certain amount of truth to this claim, but solar still isn't competitive, and the estimates tend to be for optimal installation sites (sunny equatorial climates). In northern climates solar has a large seasonal variability that is going to limit market penetration. On a snowy winter night you cannot rely on solar PV to keep the lights on.
Steven
Tam Hunt
Tam Hunt
June 2, 2010
Mike, the government has not "picked" wind power as a winner. In fact, they've done pretty much what you advocate: put in place policies that apply to all renewables. It just so happens that wind power has been the most cost-effective and prevalent renewable technology for some time now, which is why it dominates new installations in the US and many other countries.
Mike Holly
Mike Holly
June 2, 2010
We need to trust markets. Deregulate energy markets fairly to create a level playing field and foster actual competition. The government should not be allowed to pick winners and losers, like mostly only intermittent windpower for electricity, and corn and cellulose for ethanol.
Tam Hunt
Tam Hunt
June 2, 2010
Coenrad, you're assuming way too much. I did not state that Congress needs to lead the way. I cited a public survey about what should be Congressional priorities. The solutions we need will be partly Congressional, partly state-led, but probably mostly community-led.

I did not say we simply need to calculate when peak oil will occur and calibrate our response. I stated that it has very likely already happened and that we need to take aggressive action now. We can never know with any specificity when oil will or has peaked b/c our data isn't that good. The best way to tell will be the next big oil price increase, followed by the next big recession and price reduction, and so on.

We can't "leave it to the markets," as you suggest because the whole point of the Hirsch Report, and the reason I cited the Hirsch Report, is that we need at least 20 years to mitigate the impacts of peak oil before it happens. Market forces are shortsighted. This is a classic market failure and is an area where government should step in to correct this classic market failure. And that's why we have subsidies, tax breaks and mandates in many areas. In this case, we need to massively scale up our efforts to transition away from oil and other fossil fuels in light of a likely global oil peak about now or in a few years maximum.
Tam Hunt
Tam Hunt
June 2, 2010
As for replacement turbines and bubbles, don't forget the rest of the world's markets or the fact that technologies continue to improve today and will continue to improve into the foreseeable future. Thus, there will always be a replacement turbine market.
Tam Hunt
Tam Hunt
June 2, 2010
Steven, you're right that an annual growth rate of 41% is required for 2-year doubling - the 35% doubling rate is for instantaneous growth. My mistake on that. But, frankly, this doesn't change my message at all. As I mentioned, I assumed 17.5% growth rates in my projections, to be conservative. And at this rate doubling is achieved in a bit more than four years, as I wrote above.

As for exorbitant prices, you apparently haven't seen wind and solar prices for a while. Wind farms are now less than $2 million per MW as an all-in cost, which is about the same as coal. Of course, coal plants have a much higher capacity factor, but they also have fuel costs, which will surely return to their relatively high levels once the global recovery renews in earnest (as they did during the runup in all fossil fuel prices during the boom until July 2008). Not to mention the many other harmful impacts coal power brings, such as loss of life, black lung disease (we all pay these costs through subsidized funds for black lung victims), air pollution, greenhouse gas pollution, and env. damage from mining more generally.

Solar power is about twice the installed cost of wind, at about $4 million per megawatt, down by 50% from just a year or so ago. This trend is expected to continue such that all-in costs are about $2 million per megawatt in 5-10 years. Wind prices aren't expected to come down much further because it's a more mature technology.

All these prices do not reflect tax credits or other incentives. Many fossil fuel resources also receive tax credits and other incentives, including integrated gasification combined cycle coal, CO2 sequestration, as well as nuclear (huge subsidies), etc.

To see a comparison of levelized costs for all technologies, see the California Energy Commission's 2009 report at:

http://www.energy.ca.gov/2009publications/CEC-200-2009-017/CEC-200-2009-017-SD.PDF
Coenraad Pretorius
Coenraad Pretorius
June 2, 2010
While I agree with the author that in broad terms it would be beneficial for the US to move towards using more renewable energy, I disagree with a LOT of the specifics:
1. We need Congress to lead us to the Promised Land? Oh no! Such a jouney would make Israel's trek through the desert look like a Sunday afternoon stroll. Just look at how Big Ag is using Ethanol to rip us all off (What is it about Ethanol that makes Uncle Sam act so silly?). You want more of that empty retoric, along with $billions from tax payers disappearing down that rabbit hole?
2. We just need to calculate when Peak Oil did (or will) occur, and then we can properly calibrate the proper response? You've been reading too many Superman comics! A problem this large is best lest to that chaotic institution known as the Free Market. Anybody else is guaranteed to screw it up. No amount of debate (assuming it was even possible to have a civil debate on these issues) would end with a meaningful conclusion of how much we need to spend on doing what to promote which replacement of oil on what schedule. For example, should we deny some folks' social security or Medicare so that we can spend that money looking for replacements for oil, only to discover that (OOPS!) we had another 10 years' worth of (relatively) cheap oil. No thanks! Not my $tax!

Leave it to the markets, conterintuitive as that seems. Expensive oil will justify its own replacements, and the right time. Short term, oil producers will sure make some money. But unless they bury it in the desert, the global economy will survive.

And, who knows? Those countries that don't export oil might even develop some good old fashioned leadership. Imagine that.
Mike Holly
Mike Holly
June 2, 2010
The US government caused the oil spill by capping damages at only $75 million. America and the world are a total mess. Financial chaos and staggering debt. Get government out of the market. Get rid of lobby payoffs. Get rid of monopolies. No more picking winners and losers. No more housing-type disasters. No more energy and health care crises. Free markets should determine just about everything, including energy sources.
ANONYMOUS
June 2, 2010
"The Gulf of Mexico oil spill disaster, the Massey, West Virginia coal mine accident, the Tennessee coal ash disaster in 2008, the BP oil refinery disaster in Texas in 2006, and countless other fossil fuel disasters are finally having an effect on public opinion."

Great summary, Tam. Just a pity the (short-term) victims of those accidents are essentially poor people, and essentially without a voice in Congress.

Nothing of measureable effect will happen until the folks in Martha's Vineyard, The Hamptons, etc, up to the hills of Palo Alto --you know, the rich peeople with power?-- find themselves on the business end of those accidents.

Cheers,

VMH
Les Blevins
Les Blevins
June 2, 2010
Or maybe we could use far less petroleum oil by converting coal resources to electric power and transport fuels via AAEC's coal, biomass and waste-to-energy technology in county scale distributed energy installations.

Les Blevins
President/CEO
Advanced Alternative Energy
http://aaecorp.com/ceo.html
Russ Finley
Russ Finley
June 2, 2010
Liquid fuels are typically used for transportation because of their density and portability. Natural gas can be used for both, and coal is for electricity. The only way out is to electrify transport (electric and plug-in hybrids) while simultaneously replacing coal for electricity.

We have to use far less liquid fuel and coal.
ANONYMOUS
June 1, 2010
The author writes: "This is the case because with 30-40% growth rates the installed capacity of wind and solar doubles every two years."

Not quite. To double in two years you need 41.4% annual growth, which is above the stated range. This is, alas, but one error among many in the authors arguments.

The author also writes: "I calculate that at even half this rate of growth through 2030 fully half of all electricity in the U.S. will come from wind and solar power..."

This is overly optimistic. At current installation levels wind, solar, and other renewables represent only a portion of generation capacity needed for plant replacement and increased generation needs. Even if--and it is a huge if--technical limitations for intermittent resources and exorbitant prices can be overcome, growth rates for renewables will drop as they begin to approach 100% of needs for replacement and additional capacity. No rational company is going to want to decommission a facility early just to replace it with expensive renewables (nor should they).

Those optimistic about wind often quote a 20% generation share as being an achievable goal. The DOE 20% plan predicts that after this level is reached we will need ~16000 MW of new wind capacity each year to cover turbine replacement and demand growth. This is only 60% more than last year's installations. Thus, if the industry continues to grow at current rates they will be creating turbine production capacity that exceeds long term expected needs--as those needs are estimated by wind optimists. Such things can happen, but this would lead to a market bubble, which suggests the strong likelihood that growth rates are about to slow very significantly (even in the absence of the current market downturn).

In short, market projections based purely on extrapolation of current growth rates should be considered very unreliable....
Steven
John Dye
John Dye
June 1, 2010
Whichever nation or consortium solves the renewable energy puzzle will become THE dominant global force over the coming decades. The USA wasted 2001-2008 on a misguided (putting it kindly) Middle Eastern crusade. We must sprint to catch up. The foot-dragging in Congress is only putting us further behind. Just look at the progress being made in Europe and China. Yes, wind is growing rapidly in the USA, but wind is just one facet of the renewable puzzle, which should include hydro, solar, biomass, geothermal, *storage*, and whatever innovations that have yet to be discovered. The USA desperately needs to re-direct a significant portion of the ~30% of tax revenues spent on "defense" (the war machine) toward a Manhattan Project-like push for renewable energy.
Adrian Akau
Adrian Akau
May 28, 2010
I think that we must direct our emphasis to building up renewable sources so as to indirectly impact oil demand. By producing more electricity without fossil sources, then electric transport becomes a realistic alternative to gasoline and diesel.

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Tam Hunt

Tam Hunt

Tam Hunt is managing member of Community Renewable Solutions LLC, a renewable consulting and project development company focused on community-scale wind and solar. He is also a lecturer at UC Santa Barbara’s Bren School of Environmental...
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