Are renewables uneconomical? NOPE!

Richard Wilson richarda at wfeca.net
Sat Dec 7 13:06:48 MST 2002


There's been much debate on exactly how economical renewable are. However, I
believe they are far more economic than fossil fuels? Why? Because
capitalist accounting of costs and benefits do not include the potential
cost of future global warming resulting from the burning of those energy
sources, the lumber killed, statues and buildings eroded, health costs
associated with smog & acid rain are not included in the costs, get the
picture? It's hard to measure the 'price' cost of environmental degradation,
which is why under capitalism, oil, coal and natural gas do not reflect the
losses. However, over the long term the costs are there - Global Warming
could cost the world economy trillions of $ by 2075.

Hydroelectric and geothermal are already competitive with most fossil fuel
sources, with hydro being the 3rd cheapest source of energy in the world
today. Hydroelectric failed to take off in the United States for many
reasons, including the subsidizing of nuclear energy (which is really quit
expensive) and the subsidizing of coal, oil and natural gas.

Here's some facts on energy in the current market environment which receives
tax money and which does not take environmental degradation into the
consideration when charging prices:


Fossil Fuels
Nuclear power plants average 1.83 cents per kilowatt-hour.
Coal is 2.07 cents/kwh.
Natural  gas plants is 3.52 cents/kwh.

vs.

Hydroelectric which is only 3 cents/kwh.


Wind
 energy is cost-competitive with new plants fired with fossil fuel. Utility
contracts have been signed recently with a levelized price of less than 4
cents per kilowatt-hour.


Geothermal
 The cost of producing this power ranges from 4¢ to 8¢ per kilowatt hour.
The geothermal industry is working to achieve a geothermal life-cycle energy
cost of 3¢ per kilowatt hour.


Solar
Solar cells right now have high costs -- $0.30 per kilowatt hour.


Biomass
Using conventional combustion technology without cogeneration, the estimated
cost to generate electricity from biomass ranges from 5.2 to 6.7 cents per
kilowatt-hour.

Ethanol
Because a gallon of ethanol contains less energy than a gallon of gasoline,
the production cost of ethanol must be multiplied by a factor of 1.5 to make
an energy-cost comparison with gasoline. This means that if ethanol costs
$1.10 per gallon to produce, then the effective cost per gallon to equal the
energy contained in a gallon of gasoline is $1.65. In contrast, the current
wholesale price of gasoline is about 90 cents per gallon.

Biodiesel
A major hurdle facing commercial biodiesel production is the cost of
producing the fuel. Vegetable oil seed procurement, transport, storage and
oil extraction accounts for at least 75 percent of the cost of producing
biodiesel. The cost varies depending on the feedstock used. For example,
based on the market price for industrial rapeseed grown in Washington and
Idaho, the estimated cost of producing biodiesel is $2.56 per gallon of
rapeseed methyl ester. Recent estimates put the cost of production in the
range of $1.30 per gallon (using waste grease feedstock) to $2.00 or more
per gallon using soybean oil.A blended fuel of 20-percent biodiesel and
80-percent petroleum diesel could reduce the production cost to about $1.10
per gallon, assuming a petroleum diesel cost of 90 cents per gallon and a
soybean biodiesel cost of $1.80. Use of lower-cost organic oil feedstock,
such as waste food-processing oil or tallow, would further reduce the
production cost of biodiesel and biodiesel-blended fuel.




So as you can see, alternative sources aren't as expensive as some would
make out and the amazing fact is, since 1980, the cost of producing solar
energy has declined by by more than half, as a result of research &
development efforts, other sources have also declined in price because we
are still in the first stages of renewable technology, just like oil and
natural gas were expensive in the early stages. We need to quicken the
efforts by subsidizing renewable the same way the government subsidized (and
still does) to make fossil fuels economical.

So what would be the cost of reaching some basic goals? To supply another 5%
of American energy using hydroelectric, we should need $295 billion (2 years
of the Bush tax cut), this would bring us to 14% of US energy supplied by
hydroelectric. Now, assume we used the entire tax cut $1.3 trillion, to
boost production of hydroelectric, than 31% of our energy would be supplied
by hydro @ a lower price than natural gas fired plants, of course some of
the dams would need be constructed in Canada cause we do not have the
potential to raise domestic production by such an amount and it still be
dirt cheap.

Ocean Energy
For now, the best wave generator technology in place in the United Kingdom
is producing energy at an average projected/assessed cost of 7.5 cents kWh.
It has been estimated that improving technology and economies of scale will
allow wave generators to produce electricity at a cost comparable to
wind-driven turbines, which produce energy at about 4.5 cents kWh.





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