US Wind Hits Record Low Price of 2.5 Cents Per Kilowatt Hour; 9-12 Gigawatts of Renewable Energy Additions Ramp up for 2014

The excuses for failing to rapidly adopt renewable energy systems grow thinner and more contorted with each passing day…

During 2013, costs for wind energy plunged to record low levels as both wind and solar set to make substantial new capacity gains in 2014 and 2015, according to a recent report from the US Department of Energy.

PPA (Power Purchase Agreement) pricing for wind during 2013 plunged to the very low range of 2.5 cents per kilowatt hour after levelized costs were included for new wind energy projects. For comparison, the average range of PPAs for all new energy sources in 2013 was 2.5 to 5 cents per kilowatt hour and included wind, solar, natural gas and coal. This made wind energy the least expensive source for new energy in 2013 following a long trend of overall falling prices.

Price of Wind at all time low

(Price of wind hits all time low in 2013 at 2.5 cents per kilowatt hour. Image source: US Department of Energy.)

Solar prices also fell to within competitive ranges, leading to record adoption rates for that energy source for the US in 2013.

New wind generation is expected to hit between 4 and 6 gigawatts in 2014 and between 5 and 9 gigawatts in 2015. Overall, 13 gigawatts of new wind energy capacity is now under construction, with the bulk focusing on the wind-rich region of the central US.

Solar is also expected to make strong gains in 2014 by adding between 5 and 7 gigawatts of new capacity. Rapidly increasing US growth in solar energy installations has been led by a combination of factors including plummeting prices and a rising adoption of home solar energy through rooftop leasing arrangements targeted to save consumers money on their power bills.

By end of 2014, total installed wind capacity is expected to hit around 74 gigawatts in the US. Meanwhile, US solar capacity is likely to climb above 18 gigawatts by year end. Altogether, these combined energy sources, when taking capacity factor into account, will have produced about 5% of the US’s electricity.

US renewables forecast 2

(US renewable energy net electrical generation from 2013 [historic] through 2018 [projected]. Image source: SUN DAY Forecast using US Energy Information Agency sources.)

With new construction projects continuing, total US renewable energy generation is expected to exceed 13.4 percent by the end of 2014 and 16.11 percent by the end of 2018.

Strong Gains Necessary to Mitigate Human-Caused Climate Change, Barriers to Adoption are Now Chiefly Political

Though the combined continued net price drop and cumulative substantial renewable energy generation gains are encouraging, they will need to advance at ever faster rates if we are to have much hope for rapidly mitigating the worst effects of human caused climate change. US generative capacity additions for renewables should probably be in the range of 2-4 times their present rate of adoption and goals should be set for the total replacement of US ghg emitting generation capacity by or before 2050.

With prices for renewable electricity generation now at levels competitive with traditional fossil fuels, and, in the case of wind, far less than fossil fuels, the primary barrier to adoption is now political. Fossil fuel related organizers have, through lobbying and media related efforts, worked on a number of fronts to water down renewable energy incentive legislation and slow or block policy measures that would speed their adoption. Many of these groups are aligned with conservative members and climate change deniers in Congress, but also include a broad array of outside organizations.

These groups represent a final, but strong road block to adoption of permanent mitigations to climate change with broad ranging benefits such as practically unlimited base fuel sources and freeing economic systems from the specter of energy scarcity and insecurity. Given both the lurking risks of human-caused climate change and the prospective benefits of widespread renewable energy generation, the time for a broad push for rapid adoption of renewable energy systems is now.


US Department of Energy Wind Energy Report for 2013

SUN DAY Forecast

Price of Wind at All Time Low of 2.5 Cents Per Kilowatt Hour

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Proposed Coal Export Terminal Suffers Major Setback


Solar Energy Costs in Free-Fall as World Climate Worsens; Opposition to Renewable Energy Now Mostly Political


The evidence just keeps flooding in. From 2005 to 2012 country after country reached solar grid parity until, at the end of this period, a total of 102 nations saw solar energy sources that were cost competitive with fossil fuels. Through 2013 prices kept falling. Now, an increasing number of regions have developed solar energy as least expensive new energy sources. Earlier this year First Solar opened a New Mexico plant in which solar energy produced electricity for 5.8 cents per kilowatt hour. These prices were 1/2 to 1/3 the cost of energy generated from a new coal fired plant. Now, a German Utility has opened a solar plant that produces electricity for less than 10 euro cents per kilowatt hour, also less than the cost of local new coal generation.

By 2020, total solar energy prices are, in the most conservative estimates, expected to fall by at least another 50% (in fact, the cost of new solar generation has fallen by 22% each year for the past five years!). More optimistic estimates show solar continuing to fall by between 4 and 15 percent each year through the next twenty years. These reductions will make solar energy the least expensive energy source in almost all cases within 4-20 years. What is absolutely astounding is that, should these reductions materialize, it will be less expensive to build a new solar facility than it will be to cover the operating costs of existing coal power plants.

A rough graph of the time horizon at which solar out-competes existing coal generation given various rates of price reduction from 4 to 15 percent per annum is available here:

Solar competitive time horizon

(Image source: Monetary Realism)

The various lines start on year 1 (2014) and continue all the way through 2034. In the most rapid cost reduction cases, new solar outcompetes existing coal from 2018 to 2022 and only the slowest advancement results in an outcompeting of existing coal generation by 2034. This graph doesn’t include likely increases in the costs for existing coal due to competition from wind and solar, depletion of the coal source, or requirements by governments to use costly carbon capture and storage technology.

To this point, carbon capture and storage (CCS) is little more than an oft trotted out fossil fuel dog and pony show. Not one CCS plant has been put into anything more than experimental operation. Not one has demonstrated any cost competitiveness with a broader energy market. And not one has advanced further than the pilot stage making any estimated cost for actual systems little more than vapor.

By comparison, solar energy just keeps chugging along, marking gains, new milestones, and greater cost cuts with each passing year. In the US alone, more than 10 gigawatts of solar energy have now been installed. That number is predicted to surge by 80% over the next 18 months to reach 17 gigawatts by end of 2014.

These are massive and optimistic gains. Yet they will have to continue for years to decades if they are to significantly reduce and eliminate US net carbon emissions from electricity generation. With severe weather impacts and sea level rise ramping up from human caused climate change in the present day, it appears we are in a race both against time and against our own worst enemy and the cause of the whole trouble in the first place: ourselves.

A Massive Political Juggernaut Opposes Renewable Energy Adoption and Solutions to Climate Change

If we were rational, our government and policy systems would be rapidly aligning to support a major transition away from fossil fuels. If we were rational, we’d be leveraging the increasingly cost-beneficial energy production systems that renewables provide to stabilize economies harmed by the ravages of petroleum dependency and related economic exploitation. We could bring light to the darkened, non-grid-tied regions of the world. And we could give human civilization a fighting chance against the terrible ravages of climate change caused by our enforced dependence on a dangerous set of fuels. Fuels that must go if we are to have much hope of overcoming what is setting up to be an existential climate crisis.

Yet it is clear, at this point, that we are not rational. At best, we see government gridlock. At worst, entrenched corporations are able to manipulate government in such a way that the dangerous development of dirty fuels continues.

In one example, the US State Department paid reporting agencies with close ties to BP, Exxon Mobile, and Koch Industries to draft a climate impact assessment report for the Keystone XL Pipeline. A report that contained a high level of oil industry fluff and misinformation. One that arguably misled both the public as well as members of public government who would be making decisions on this critical issue. Thankfully, public outrage over this report has caused some reassessment. But the validity of any new report may suffer from similar corruption and is equally in doubt.

In another example, the halls of Congress itself is packed to the gills with a non-representative number of ignorant individuals who out-right deny the existence of human caused climate change. A recent report from Think Progress found that 127 members of the House and 30 members of the Senate denied human-caused climate change. Not surprisingly, a significant majority of republicans in Congress deny climate change. Equally unsurprising is the fact that these members receive vast sums from fossil fuel related donors. House climate change deniers received 242,000 dollars on average from fossil fuel industry coffers. While Senate climate change deniers receive a largess of nearly 700,000 dollars each for their climate change denial efforts. Further, a majority of these members sat on key science and environment committees or held leadership positions in their respective parties.

In a horrid example of the damage this kind of corruption causes, a new bill advanced by Republicans called the Weather Forecasting Improvement Act of 2013 would cut NOAA funding for climate change research. Indirectly, these cuts would also likely impact weather satellite coverage and sensors critical to weather prediction. To this point, it is impossible to separate weather from climate. Any efforts to cut climate research also negatively impact our ability to predict the weather. In this instance, as in many others, climate change deniers in Congress are actively harming our resilience to the extreme weather that is almost certainly on its way.

Given this fossil fuel industry stacked US political system, is it any surprise that almost daily proposals to expand coal, gas, and oil dependence hit the floors of Congress? Or that House Republicans are doing their best to kill off critical energy efficiency standards?

Sadly, many utilities themselves are entangled in a dark web of fossil fuel influence. Cosied up to fossil fuel special interests for more than a century, utilities are now fighting net metering laws that have led to more rapid adoption of solar in states like Arizona. These net metering laws allow homeowners to sell any excess energy produced, which utilities must purchase at cost. This policy, put in place in Arizona in 2009, helped rocket the state to number 2 in total solar energy generation, behind California. But now, the state’s largest utility, Arizona Public Service, is fighting to kill net metering. In an ironic change of fate, the son of Barry Goldwater is organizing political action to fight APS. Goldwater’s organization — Tell Utilities Solar Won’t Be Killed — is now involved in an epic political battle to keep solar energy alive for Arizona’s homeowners.

These are just a few highlights of a broad and ongoing war which fossil fuel special interests are fighting to deny citizens access to clean, alternative energy. It is a war, also, to preserve profits for some of the wealthiest corporations the world has ever seen. What this intensity of action on the part of fossil fuel companies, especially when viewed in light of an increasingly less expensive and competitive renewable energy source,  reveals is that barriers placed to renewable energy adoption are now entirely political and policy related from this point forward. Thus, we are in the midst of an ugly era in which the corporate fossil fuel special interests seem to use every dirty trick at their disposal to maintain their hold over markets, consumers, and governments.

It’s going to be tough, rough fight. But with climate change howling in the wings, the stakes couldn’t be higher.



World CO2 Emissions Set New Record in 2012 at 31.6 Gigatons; On Current Path, World Locks in Dangerous, 2 Degree + Warming Before 2029

According to a recent report from the International Energy Agency (IEA), world CO2 emissions hit an all-time high last year at 31.6 gigatons. This means that only a 532 gigaton cushion now remains between pushing the world above the dangerous 2 degree Celsius Equilibrium Climate Sensitivity threshold. At the current rate of emissions, we will run headlong into this threshold within a little more than 16 years. So before 2029, without major changes in the world’s energy structure, a civilization-endangering global warming of at least 2 degrees Celsius will be locked in.

In order to attempt to buy time to respond to this growing crisis, the International Energy Agency has published a policy paper containing recommendations for a path forward that is less damaging than the current one. The agency paper noted that the current emission path brings us to 3.6 to 5.3 degrees warming by the end of this century under Equilibrium Climate Sensitivity (Which measures about half of long-term warming). This pace of emissions is well above that needed to reach the safer goal of 2 degrees Celsius equilibrium warming or less by the end of this century. A level that climate scientists say human civilizations are better able to adapt to.

Pace of Emissions Increase Slowed

Pace of emissions increase did, however, back off from 2011’s rapid growth, slowing to 1.4 percent. IEA noted that US switching from coal to natural gas and a Chinese energy policy that included greater focus on renewables were major contributors to this slower pace of emissions growth. US emissions fell by a total of 200 megatons, reaching a level last seen in the 1990s. Europe also saw significant reductions — cutting emissions by 50 megatons. Unfortunately, despite a stronger renewables policy, the Chinese still emitted 300 megatons more carbon than in the previous year, while Japanese carbon emissions also advanced by a total of 70 megatons. The loss of ground in Japan was primarily due to its switching away from nuclear power as a primary energy source and returning to more traditional fossil fuels — natural gas and coal.

The hiatus in US carbon emissions may also be somewhat temporary. Natural gas prices are rising and, traditionally, this has resulted in a whip-lash effect driving utilities back to coal generation. It is worth noting, however, that wind energy is now competitive with coal power, while long-term coal prices are increasing. Solar energy prices are also falling rapidly. So let us hope that the natural gas whip-lash effect is somewhat muted by more adoption of renewable energy sources.

IEA Policy Recommendations Both Modest and Ambitious

Despite a greater overall adoption of renewables and lower carbon energy sources, CO2 dumping into the atmosphere is still tracking along the worst case scenario for climate change projected by the IPCC. In order to meet this challenge of rising emissions, IEA urges a number of policy changes to be put in place immediately.

These policies include:

  • A partial phase-out of fossil fuel subsidies
  • Limiting construction of the least efficient coal-fired power plants
  • Increasing renewable energy’s percentage of total energy generation from 20% to 27%
  • Targeting energy efficiency measures for new buildings
  • Reduce methane releases from oil and gas industry activities by half

The IEA claims that these policies would reduce projected 2020 emissions by as much as 8%, preventing about 3.1 gigatons of additional carbon from entering the atmosphere. IEA Chief Economist Fatih Birol, the report’s lead author notes:

“We identify a set of proven measures that could stop the growth in global energy-related emissions by the end of this decade at no net economic cost. Rapid and widespread adoption could act as a bridge to further action, buying precious time while international climate negotiations continue.”

This IEA report can be viewed as a plea to slow the damage even as it provides a compromise plan that could be put in place. The plan is both modest and ambitious. Modest, because the initial changes are easy to incorporate into the current energy structure. Ambitious because long-term goals involve a phase-out of the use of fossil fuel assets.

This call for comprehensive policy-based fossil fuel stranding and phase-out is the first of its kind from a major world policy body. In total, about 5-6 percent of undeveloped oil and gas reserves are projected not to be used. Also implicit in the the report is a stranding of a large portion of the world’s coal reserves as a larger transition to renewable energy is constructed through 2035. The IEA recommends that oil, gas and coal companies can shift to carbon capture and storage if they wish to protect their assets.

In the end, though, the numbers provided by the IEA will require more clarity in order to add up. More than 2,800 gigatons of fossil fuel are on the books of the world’s fossil fuel companies and none of those assets are yet slated to be captured in order to prevent atmospheric release. Even worse, millions of tons of carbon are released into the atmosphere every year via the process of oil and natural gas extraction. These emissions are not listed as assets, but they still end up in the atmosphere. Cutting them in half, as the IEA recommends, will still leave half of this addition active.

Costs of Damage to Leap Higher If Action is Delayed Until 2020

The IEA’s recommended plan would, at best, keep world carbon emissions about stable through 2020. The result would be that 256 gigatons of carbon will be emitted by 2020 through fossil fuel burning, putting us about half-way on the path to 2 degrees Celsius (equilibrium warming) by that time. Such a plan would leave the world with only about 276 gigatons of carbon wiggle room, requiring a very rapid draw-down of carbon emissions post 2020.

That said, starting implementation now would reduce the costs of a long-term transition away from fossil fuels by $3.5 trillion dollars, according to IEA estimates. So beginning changes now would lay the ground-work for a smoother, more rapid transition post 2020. Also, failure to implement these policies through 2020 puts the world on a path for 2 degree Celsius warming to be locked in sometime around 2025. So it is doubtful the goal of preventing a 2 degree Celsius warming (equilibrium) could be achieved without taking on the modest policy changes recommended by the IEA now.

For these reasons, the IEA plan should be both applauded and looked at with caution. Applauded, because it begins to put in place the necessary framework for long-term emissions reductions world-wide. Applauded, because it barely keeps alive the goal of meeting a less than 2 degree (equilibrium) temperature increase by the end of this century. And looked at with caution because it sails very close to a dangerous climate change wind.

For more comfort, we should ask for a more ambitious set of policies. But given a major dearth of such, the IEA measures are among the most prudent yet advanced. Not really much cause for comfort during this late hour.


Four Energy Policies to Keep the 2 Degrees Celsius Goal Alive

Delaying Action Until 2020 Costs the World 3.5 Trillion

New US Wind and Solar Installations Beat Out Natural Gas, Coal

If you listened to the right wing media, you’d think that wind and solar energy had died a loud and ignominious death. Not true according to the latest reports from the Federal Energy Regulatory Commission. New installation reports show that rumor of the death of wind and solar energy is simply misinformation likely spread by journals and news sources aligned with oil, coal, and gas special interest groups which seek to retain energy market dominance.

Total US wind and solar installations through September of 2012 were 5 gigawatts. In contrast, total installed new natural gas capacity was 4.5 gigawatts and total new installed coal capacity was 2.2 gigawatts. This is very good news and shows enormous progress on both the climate and energy front for the US. However, for the US to begin to make an appreciable dent in carbon emissions, new wind and solar installations will have to continue to pick up. In total more than 8 times the current installed capacity for wind and solar are needed within the next 10-20 years. So the pace of new installation will also have to increase.

Below is a table from the FERC report:


Obama Fights For Renewable Energy Future, Runs on Superb Energy Record

Today, in a campaign speech at Colorado State University, Obama stated:

“You believed we could use less foreign oil and reduce the carbon pollution that threatens our planet. And in just four years, we have doubled the generation of clean, renewable energy like wind and solar. We developed new fuel standards for our cars so that cars are going to get 55 miles a gallon next decade. That will save you money at the pump.  It will reduce greenhouse gas emissions by a level roughly equivalent to a year’s worth of carbon emissions from all the cars in the world put together.”

“If your friends or neighbors are concerned about energy, you tell them, do we want an energy plan written by and for big oil companies?”

“Or do we want an all-of-the-above energy strategy for America — renewable sources of energy. Governor Romney calls them ‘imaginary.’ Congressman Ryan calls them a ‘fad.’ I think they’re the future. I think they’re worth fighting for.”

And Obama is correct. Correct in that he has achieved a stunning transformation in US energy policy. Correct in that he has increased US energy independence since taking office. And Correct in that Romney’s energy plan is one drafted entirely to cater to the interests of oil, gas, and coal companies.

Taking a look at the data, we can find evidence of this amazing progress. Since 2008, the US capacity for alternative energy generation has nearly doubled from 10,508 gigawatthours in 2008 to 18,777 gigawatthours by the end of the first half of this year. In total, renewable energy generation now accounts for 14.76% of all US power sources. This is more than nuclear but less than coal and natural gas.

New installations for wind and solar energy have soared over the period. Solar energy grew by 285% and wind energy grew by 171%. New installations for renewable energy are outpacing every energy source except natural gas. As a share of new energy installations, renewable energy accounts for 38% of the total while natural gas accounts for 42%.

This stunning surge in renewable energy capacity and its ability to compete, increasingly, with coal, gas, and nuclear, can be credited, in large part, to Obama’s energy policy. Obama pushed for measures to encourage new alternative energy installation. He pushed for stimulus funds for alternative energy programs. And he risked severe political backlash from powerful fossil fuel industries as he pushed for these new sources.

And the backlash came. It came from campaign contributions from oil special interests to republican rivals. It came in the form of an endless series of advertisements aimed at spreading oil, gas, and coal focused messaging. It came in the form of a republican party transformed to almost entirely represent fossil fuel interests even as it has denied climate change. Last of all, it came in the form of vicious attacks directed at the wind, solar, and electric vehicle industries.

But Obama’s push didn’t end with alternative energy. Obama provided a major push for increasing US fuel efficiency standards. Pushing competitiveness of US automakers in key areas while vastly reducing US dependence on foreign oil. These new efficiency standards have already taken a bite out of oil imports. Under Obama US oil imports have plummeted by 2 million barrels per day from 12.9 million barrels per day in 2008 to 10.9 million barrels per day this year. These reductions in oil imports are bound to continue as Obama’s policy results in fuel efficiency standards rising to 55 miles per gallon by the 2020s. It results in more electric and plug in hybrid electric vehicles on the road. It results in the US auto industry becoming leaders in this key new technology. All these results are signs of progress Americans can feel proud of. All these results are signs of a burgeoning independence that, if continued, will result in a far stronger America.

By contrast, Obama’s rival would cut renewable energy incentives and slash efficiency standards. This would not only increase dependence on fossil fuels at a time of amplifying global warming. It will also increase US dependence on foreign energy sources at a time when the world is increasingly competing for every available export. Romney’s policy will result in higher emissions, higher energy prices, and higher profits for oil, gas, and coal companies. It is a policy that aims to rig the game in favor of those interests and turns a blind eye to all the external harm such a policy would cause. It is a policy that will result in a weaker America that will likely attempt to dominate other countries in order to pursue energy security. It is a policy that will likely result in more costly foreign wars. It is a policy that will result in the expansion of both the trade deficit and the current public debt.

Obama, on the other hand, can proudly show that he fought for America’s energy future. A future with the potential for both energy independence and independence from the dirty, dangerous, and depleting fossil fuels. A future that may give us a glimmer of hope for being leaders against the powerful forces of climate change. A difficult future we may equip ourselves to navigate if we continue in the example set by Obama.


The Economic Advantages of Running A Wind Farm

Over the past few years, much misinformation has been distributed by fossil fuel interests wrongfully denigrating the value of wind and solar energy. Outrageous claims have included the notion that wind and solar energy contribute to global warming. That the energy sources are uneconomical and overly expensive. That they require fossil fuels to support them because they are intermittent. That they can never contribute more than marginal capacity to the grid. And that operators and owners cannot profit from these energy sources.

In this article, we will focus on wind energy, debunking these false claims and demonstrate that wind energy is far more valuable, flexible and resilient a resource than coal, oil, or natural gas.

Zero Cost Fuel

All energy sources require infrastructure to harness the fuel. Billions every year are spent on oil and gas rigs. Coal mining requires massive digging machines and processing equipment. And all forms of fossil fuel require generators to turn fossil resources into electricity or mechanical energy.

For wind energy, this process is simplified. Energy is generated at the source. In short, a turbine is a mining, transportation and generation operation all wrapped into one. From the point of view of a utility, this vastly simplifies the process of electricity generation by removing the fuel extraction and the fuel transportation operation in one step. Wind generators do not require a constant train of freight filled with coal or natural gas to keep their turbines spinning. All that is required is, well, wind.

The result is that wind facilities free themselves from the burden of having to manage fuel costs. And since fossil fuels can be very volatile, this liberation makes them much more stable economically. A wind facility that is competitive with fossil fuels today, will become ever more profitable over time. This is due to the fact that the sunk cost of construction and maintenance are the only two cost-sets wind operators need to worry about. And because these costs can be planned for and forecast, the potential for risk is drastically reduced.

In many cases, levelized costs for wind turbines assume a 20 year life expectancy. However, as an infrastructure, these turbines have the potential to last 30, 35, 40 years or more. Well constructed and maintained turbines may come close to tripling initial life expectancy. In these cases, wind power becomes vastly less expensive than fossil fuels. And all these benefits come from having zero-cost fuel available at point of source.

Rising Capacity Potentials

Fossil fuel-funded articles have often derided wind for its intermittency, noting that it would be unwise to have wind contribute more than 5 or 10 percent to any power grid. However, this flies in the face of current realities on the ground. Iowa, for example, now receives an average of 19 percent of its energy from wind generators. North Dakota receives 22 percent. This is not name-plate capacity, but electricity flowing to grid. Colorado and Oklahoma now also receive more than 10 percent of their electricity from wind.

Overseas, the potentials have also proven higher than warnings may have indicated. In Denmark, the entire country received more than 26 percent of its energy from wind in 2011. Portugal, Spain, and Ireland each produce over 18 percent of their electrical energy through wind.

Capacity factor, the difference between nameplate capacity and amount of energy generated has remained at around 30 percent. New turbines have also become more efficient. And systems using higher towers and larger blades are able to tap steadier winds at higher levels. But many regions without ideal wind patterns have seen new wind development. The fact that capacity has not fallen, however, shows that advances in technology can continue to expand the area in which turbines can operate economically while further enhancing returns in regions with more ideal wind resources. Capacity factor would certainly rise for the US should we begin to build more wind farms off-shore, where winds are both stronger and more reliable.

Because fears about limited capacity and intermittency haven’t risen to the level of hype, many countries are now exploring expanding wind production further. Denmark, for example, is pushing to have 50% of its energy provided by wind power before 2020. When one considers that 37% of US energy is currently provided by coal, a 50% contribution from wind to Denmark would render most concerns about the ability of this renewable source to overcome intermittency and capacity problems moot.

Intermittency: More Bark Than Bite

As alluded to in the paragraphs above, many states and countries have already been able to overcome intermittency challenges to establish wind generation contributions to total energy as high as 26%. Overbuild, diversification of the power grid, flexible grid management, multiple regions operating wind turbines, and improvements in turbine technology all aid in the management of wind energy. Some of these practices were already in place for traditional utilities, so the changes haven’t been as disruptive to operations as first expected. Other new practices increase the overall resiliency of the grid and the reliability of power sources as well.

A common claim by renewable energy detractors has been that wind power facilities require an ‘alarming level’ of stand-by fossil fuel generation capacity. Nothing could be further from the truth. In fact, there is not one documented case of a fossil fuel plant being idled for the single purpose of substituting for wind systems. Because of grid overbuild, idle sources often exist and these can be brought on line as need be for any emergency. The same is true with wind and solar resources as it is for fossil fuel resources.

Most utilities hold to the standard of planning for weather events and managing wind’s capacity factor. And this has served to make wind far more reliable than previously expected.

More Economic Storage Becoming Available

A recent article in Wired Magazine highlighted a revolutionary new energy storage technology. Eccentric Genius Danielle Fong has invented a revolutionary compressed air energy storage device. The device is currently being produced and sold by Light Sail Energy. The Light Sail storage device overcomes the obstacles of previous compressed air devices by spraying a fine mist of water vapor into the compression chamber. Water stores far more energy than air, so the water/air medium allows for a much higher energy storage capacity by volume at much lower temperatures. And this drastically increases the efficiency of such energy storage while reducing costs. The result is the efficiency factor for Light Sail’s compressed air is 70 percent, roughly double previous compressed air storage systems ratings of 35 percent.

This storage technology advance provides utilities with a new tool to further erode the barriers posed by intermittency constraints.  It will also likely provide a basis for continued innovation in this area.

Costs Now Competitive With Fossil Fuels

Often, fossil fuel special interests will deride wind energy due to the fact that it receives a small degree of subsidy support from the US government. For these interests, this is the height of hypocrisy. For there are few interests within the United States as highly subsidized as the fossil fuel industry. Over the past decade, oil interests alone have received over $45 billion in subsidies. And despite record profits, the industry has deployed powerful lobbying groups to make certain they remain on the taxpayer’s dole year after year. Just last year alone, oil and gas interests received over $4 billion dollars in federal subsidies and incentives. This does not include the massive level of state and foreign interest support these industries receive.

On the other hand, wind energy does not enjoy similar support. Its subsidy program is reviewed most years and is sporadically included or excluded depending on political winds, economic pressure, and the whims of governing bodies. Last year, wind received $1.6 billion dollars in supports. But this year such funding may not materialize.

Despite the unevenness of federal support for wind energy, new wind installations for last year were 6.1 gigawatts, only second to natural gas installations. Furthermore, the cost of wind energy per kilowatt hour has fallen to levels putting it in the range of traditional power sources. Levelized costs for wind energy plants under construction are 96.8 dollars per megawatt hour. This is less than new coal, nuclear, and biomass. The only energy source that costs less for new installation is natural gas. However, natural gas includes a number of external costs including climate change, damage to water supplies via fracking, and through the burning of a resource that may have harmful health impacts (Marcellus Shale gas has been shown to be radioactive in a number of studies). And as mentioned above, these levelized costs assume turbine life-spans of 20 years, which with proper maintenance can be extended much longer.

Fossil Fuels’ High Risk of Volatility

One other point to consider is the fact that natural gas prices are now on the rise. Much drilling in gas basins has been put on hold as drilling companies struggle to maintain solvency. Just last week, ATP filed for bankruptcy after being unable to maintain operations under an ongoing regime of natural gas glut and low prices in the US. Drilling rigs have been shifted, instead, to oil. With so few rigs operating and with the depletion rates for the new fracked wells so high, it seems likely that prices will whip-saw back into a much higher range over the next few years. This volatility will likely reduce the profitability of natural gas generators and harm the prospects of any utility who is overly reliant on this resource.

Coal, now an international commodity, also suffers from similar problems. Sky-high demand has been cutting into profits for coal-burning facilities around the world. Further, requirements to reduce emissions of both carbon dioxide and the plethora of other toxic chemicals contained in coal are pushing prices even higher. The fact that new build wind is already less expensive than new-build coal should give a good idea as to trends in this area.

Electricity — Future Fuel for Ground Transport

One would not think that wind could compete directly with oil as a source of liquid fuel. But with the increasing availability of electric and hybrid electric vehicles, this is indeed the case. Utilities using wind energy can boast of the fact that they provide clean electricity to electric vehicles at a cost equaling about 70 cents per gallon. This is less than five times the cost of traditional gasoline, drastically belying the notion that oil is an economic fuel source. And with most electric and plug in hybrid electric vehicles able to make 99 miles or more on an equivalent gallon of electricity, the cost, in practice, is actually more than 15 times less even for a comparable ‘economy’ vehicle. Again, the removal of harmful externalities reduces climate change damage and health care costs as well.

Benefits For Stable Communities, Long-Term Growth

Overall, it is sad to see so much effort being spent in this country by interests bent on demonizing and destroying such a valuable new energy source. In short, these attacks harm not only those who would profit from this new energy source, but the health and well-being of the American people as a whole. Utilities, states, and municipalities falling prey to this harmful stream of misinformation will pay the price in increasing environmental and health costs to their communities and constituents. Increased costs for repairing electrical grids after major storm events. And increased costs for generating energy due to the inherently volatile and depleting nature of fossil fuels.


GOP Budget — An Exercise in Looting Public Resources to Benefit the Wealthy

This week, the GOP issued its annual budget proposal. It is a plan that flies directly in the face of all recommendations for responsible action. Unable to focus on what is needed to help the American economic system, a plan that includes both revenue generation and spending cuts, the republicans have returned to their wasteful program of looting public resources, raiding programs that help the poor and middle class, cutting taxes for the wealthy, and attacking solutions to current energy and climate problems.

Part #1: End Medicare, Affordable Health Care, Cut Medicaid

For years, the GOP has targeted Medicare. The program, which grants seniors a degree of security and medical assistance during old age, has been particularly critical in keeping many out of poverty during the recent great recession. But republicans seem to be happy to target any program within government that actually provides help to the less fortunate in order to transfer the largess to those who are already very well off. In the case of the Ryan Budget, the proposal again attempts to turn Medicare into a voucher program that would dump seniors into a predatory and privatized system.The result is that medical expenses for seniors would rise dramatically, increasing by as much as $6000 per year.

The GOP plan is also aimed directly at dismantling the Affordable Care Act. Demonizing the program from the beginning, primarily because it aids the uninsured and holds the insurance industry to a higher level of accountability, the GOP plan to remove the program would result in more than 30 million Americans being dropped from insurance roles. It would also continue the trend toward rapidly increasing medical expenses.

Finally, the Ryan plan intends to cut more than $800 billion from Medicaid over ten years. This would directly impact the most vulnerable members of society — the disabled. But it would also harm poor seniors who rely on Medicaid to supplement their support via Medicare.

Part #2: Cut Taxes for the Rich, Again

Following in the footsteps of the infamous Bush Tax Cuts, the Ryan plan pushes another 3 trillion dollars in tax cuts for the wealthy onto the backs of American citizens. This bid to increase the concentration of wealth at the top of the economic spectrum comes at the cost of harm to our seniors and requires wide-ranging cuts throughout the budget. On the chopping block include public roads and other infrastructure, science, alternative energy and education. These cuts are so deep that they endanger key infrastructure. For example, weather forecasting will likely be degraded and many of the nation’s bridges and roads will be at increasing risk of failure.

Part #3 Create a Requirement to Raise Taxes on the Poor and Middle Class

According to the Tax Policy Center, the Ryan Budget would reduce federal revenues by an additional $900 billion dollars per year (in addition to current deficits). Yet Ryan claims the budget is deficit neutral. So, in order to make up the gap, his budget would likely require closing a number of tax loopholes that benefit the poor and the middle class. Though Ryan has made no specific claims as to how this lost revenue would be made up, most rational analysts note that a rise in taxes on the poor and middle class is a likely result of the Ryan plan.

Part #5 Extend Subsidies to the Oil Industry While Cutting Alternative Energy

In addition to increasing unnecessary military spending, the Ryan budget extends more than $40 billion in subsidies to the oil industry. These subsidies come at a time when profits for the oil industry are at record levels. So Ryan’s proposal is simply to throw public money on top of private profits for his oil industry buddies. Meanwhile, as China prepares to eat the US solar energy industry for lunch and then jack the cost of solar panels worldwide, the Ryan budget slashes US public subsidies that provide a hope for a US future in solar manufacturing. The result, when combined with Chinese solar panel dumping, would be that the US solar industry will not exist within five years. Furthermore, the combination of republican budget cuts and Chinese dumping are likely to result in far less American innovation in this critical new technology.

Part #6 Sell off National Parks

The final insult inserted into the Ryan budget is a direct assault on the US park system. Ryan recommends selling public lands to private special interests who would, in turn, monetize these public treasures through the sale of their resources. Ryan’s plan flies in the face of Teddy Roosevelt’s vision for a national park system that husbanded the nation’s vast, but still limited, natural resources. It would also result in an America far less resilient to the impacts of resource depletion and climate change.

The Republican Moai Builders

Given all these myopic and decidedly unequal recommendations, one would not be surprised if the GOP recommended a new subsidized program to pay industry vast sums of money to construct enormous useless, yet self-gratifying, monoliths lining the coast so that future civilizations journeying to our shores could wonder at our stupidity, decadence, inequity, and wasteful use of resources.


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Who is to Blame for High Gas Prices?

As the presidential election’s silly season continues, as the most outrageously pandering promises are made to all people across the political spectrum, a single issue seems to have outdistanced the rest — who is to blame for high gas prices?

Republicans, for their part, seem to enjoy blaming Obama who, supposedly, is keeping millions of magical drilling rigs hostage. If only freed from their bondage, republicans claim these rigs all alone, all by themselves, could, in a puff of faerie dust, reduce the price of gasoline to $2.50 per gallon.

But do the republicans have a rational leg to stand on in their endless drill, baby, drill diatribe? To find out, we’ll have to examine some facts.

Obama brings massive increase in drilling

Since Obama entered office, there has been a massive increase in US drilling. And the sad truth, despite republican rhetoric, is that the US would be engaged in increased drilling regardless of who held the office of president. The US is so addicted to oil that it can’t afford, at this time, not to exploit every economic source. As a result, drilling has increased by over 350% under Obama.

Huge drilling efforts result in only moderate supply increases

Considering tripling US extraction efforts, one would think that US oil production would rise dramatically. In truth, production has risen, but by only a small amount. The net result of a massive 350% increase in drilling has only been a moderate bump in oil production of 14%. US crude oil production increased from a 2008 level of about 5 million barrels per day to today’s level of 5.7 million barrels per day.

Moderate increase in supply does not result in oil price drops

So all out drilling under Obama has resulted in some increase in supply. And you would think, all things being equal, that the price of oil would also fall. But all things are not equal. Oil is traded on the world market and there are an expanding number of factors keeping the price of oil high.

First, Saudi Arabia has claimed that $100 per barrel is a ‘fair’ price for oil. Saudi Arabia produces more than 10 million barrels each day and is the world’s second largest oil exporter. They are the only country in the world left with substantial spare capacity. This means that Saudi Arabia is the only oil producer with much influence on supply or price. But Saudi is saying it will defend $100 oil. And the means Saudi has to defend this price is through cutting supply. So should oil prices decrease, Saudi will cut production. In fact, it did this during 2009-2010. And since Saudi cut production at that time, prices have risen from $40 per barrel to over $105 per barrel now. As the world economy recovered in 2010-2011, Saudi Arabia brought production back. But demand was so high that the new oil didn’t result in substantially reduced prices.

Second, the reason Saudi Arabia is the only producer with spare capacity is the fact that all other oil producers are pumping oil flat out. And despite this all-out production, the world’s supply of crude oil has remained flat at around 74-75 million barrels per day (blue line on graph) since 2004. This means that despite the highest average price for oil ever, for eight years running, world crude oil production has structurally leveled off. The reason for this plateau is that new production of crude oil is only enough to keep pace with the rate of production decline from existing wells. In short, when it comes to crude oil production, the world is running to stand still.

Third, high cost unconventional oil fills in the gap. Today, the world produces 18 million barrels per day of unconventional oil along with other substances such as wet gas and condensate (condensate is usually included in the crude oil figure, but it’s a different substance altogether). This includes supplies of tar sands from Canada, deep water oil, natural gas liquids, and biofuels. Much of this oil costs $50 dollars per barrel or more to produce. And the fact that the world is reliant on this ‘oil’ means prices will never fall below the high cost of a marginal barrel.

Most unconventional oil isn’t really oil at all. For example, Canada uses 8% of its entire natural gas supply to hydrogenate tar and ship it to us as ‘oil.’ The fact that we are calling hydrogenated tar ‘oil’ is a certain sign of how desperate we’ve become. And biofuels certainly aren’t oil. They’re fuels interchangeable with oil derived from crops. And it is through the production of these very expensive and difficult to produce fuels that the world has been able to increase production at all.

Fourth, the nominal demand for oil is about 98 million barrels per day, this is ten million barrels per day higher than the combined total production of crude oil plus unconventional oil. What this means is if prices go down, demand will keep going up until we hit a level of consumption of around 98 million barrels per day. The reason for this very high nominal demand is the fact that so many machines using so much oil are operating around the world. Oil-consuming automobiles alone are being produced at a rate of 80 million each year with more than one billion of these machines in existence around the world. With so many hungry machines, any new oil produced will be rapidly snatched up.

These combined issues mean that the US would have to produce more than ten million barrels per day of additional low-cost oil in order to create a situation where long-term gas prices of $2.50 cents per gallon or less were possible. But, in truth, achieving this feat is a bald impossibility.

All new oil is expensive oil

The reason why drilling cannot dramatically bring down the price of gasoline is that the cost of producing all the new oil is dramatically high. ‘Conventional’ oil from fracked wells costs $50 per barrel just to produce. Prices for biofuels, deep water drilling, polar drilling and Canada’s hydrogenated tar are about the same. But even the most wildly optimistic projections from all these sources show only slow increases in production requiring massive expense and effort.

Options for drastically increasing production do exist, however, if you’re willing to pay much more for gas. Oil shale contains 1.5 trillion barrels of potentially recoverable goop called kerogen. The US kerogen, however, is even less energy-dense than Canada’s tar. So the cost of producing this ‘oil’ is around $100 per barrel. And this cost hides the fact that a huge amount of natural gas would be needed to hydrogenate the kerogen. Furthermore, the oil shale is in a water poor region. Massive volumes of water would be needed to produce this goop. But the water doesn’t exist in the high volumes needed, so it would have to be piped in.

The result is that a immense and terrifying industrial effort would be needed to rip an enormous hole in America’s heartland to produce this ‘oil.’ And the irony is that, if we are forced to produce the oil shale, it will only result in even higher prices than today.

New drilling can’t dramatically lower prices, even though that’s what oil companies want you to believe

So, in short, the republicans are either misinformed, or they’re not telling the truth. This is hardly surprising considering that oil companies paid 18.5 million dollars into republican campaigns this year alone. Money to democrats from oil companies was substantially lower — only 2 million dollars. And what this oil company money is going to is keeping us all dependent on increasingly expensive oil.

Oil companies don’t want us to realize that even more drilling can’t radically reduce prices. But they do want to continue their dominance in the energy markets. They do want to continue their position as the dominant provider of transportation fuels. And in order to do this, they must convince us that the best solution to high gas prices is more drilling, even if it is not.

Real solutions — increased efficiency, alternatives

The only real solution to the oil depletion problem is switching away from fossil fuels and dramatically increasing efficiency. And even though republicans aren’t very good at proposing sustainable solutions, they are very good at demonizing policies and technologies that actually help.

This was recently demonstrated by republican efforts to demonize the Chevy Volt. Number 1 in customer satisfaction in 2011, the Volt dramatically reduces dependence on oil by making commutes all-electric. Since 80% of all gasoline consumption occurs in commutes, a transition to electric vehicles like the Volt would drop US oil consumption by 7 million barrels per day. If these vehicles became common-place around the world, oil consumption could fall by as much as 35 million barrels per day. And that would dramatically lower oil prices as well as eliminate the need for new oil production. This powerful new technology represents a potential future oil companies and republicans most definitely do not want. A future, however, that would be dramatically more prosperous for the rest of us.

But republican attacks aren’t limited to demonizing revolutionary American technologies like the Volt. Republicans have also worked to de-fund all government incentives to produce solar energy, wind energy, and to increase vehicle efficiency. Solar and wind energy reduce dependence on fossil fuels and since gas and coal are increasingly interchangeable with oil, they indirectly reduce oil prices. Finally, republicans attacks on energy efficiency directly increase the price of oil by increasing demand.

Republican policies push high prices higher

Only a dummy or someone bought and paid for would make the argument that civilization should remain dependent on an increasingly expensive and scarce resource like oil. And that’s just what republicans are doing. Though republicans aren’t to blame for the fact that oil itself is more expensive because it is depleting, they are to blame for pushing policies that enforce dependence on oil, for fighting at every turn to reduce efficiencies, and for doing their best to demonize and destroy any alternatives to oil.

Foremost, the republican push for drilling as the only solution is doomed to failure. At best, new drilling is a temporary stop-gap. Long term, without alternatives, it dooms the world economy to spiraling increases in energy prices. This policy is one born out of the myopic special interests of oil companies and their continued drive for dominance and outrageous profits. A true allegory to this failed policy was the conservative/republican push for deregulating the banks and the housing market in the 1990s. The result was a world financial collapse in 2008. We don’t want to see the same thing happen in energy. But blinded by profits and donations, republicans are,once more, trying to force us down a dangerous path.


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Rush, Romney in Denial over Renewable Energy

Mitt Romney, in a recent tirade against the clean energy industry, gave progressives another gift today.  “You can’t drive a car with a wind mill on it,” he said, clownishly. One wonders what Romney’s fixation with cars sporting various things strapped to the top is. I suppose the dog wasn’t enough for him and now he’s trying wind mills? If he were smart, he might have first tried a solar panel:

Behold, Romney, your worst nightmare — a solar Prius. Dog kennel not included…

Romney’s own tirade follows directly on the heels of Rush Limbaugh who, after losing many of his advertisers for his mad dog slut-shaming of Sandra Fluke, has shifted his eyes to fresh meat — the U.S. renewable energy industry. But this particular attack involves a rhetorical disappearing act.

The problem with the Volt is just like all of Obama’s green energy, there’s no business there yet. There’s no solar energy business yet. There’s no wind energy yet,” Rush said on his radio show today.

I suppose Rush missed the 50 gigawatts of wind energy capacity the US now boasts. Or, perhaps, Rush is unaware of the 5 gigawatts of solar energy systems now in place? That 71 billion dollars worth of solar power sales in 2010? Nada, according to Rush. Or the Chinese dumping of solar panels in an attempt to bankrupt a rocketing U.S. alternative energy market? Rush says it all never happened.

As for no business for the Volt — it sold more than 1000 units last month, more than the comparatively priced Corvette. Rush must also have missed the millions of hybrid electric vehicles on the road worldwide or the 150,000 all-electric vehicles now on highways in California.

It seems that Rush and Romney would both like to deny the existence of an industry that now produces more energy than all the nuclear power plants in the world. Much like climate change, they’re trying to hide something that is undeniably real with another smoke and mirrors act.

Pay no attention to the oil man behind the curtain…


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