A Free-Market Energy Blog

The Inhibiting Power of Dilute Energy

By Jon Boone -- July 2, 2012

“Let’s stop politicalizing our electricity supply. Let’s eliminate all tax credits for energy production. Let’s require that utility scale generators produce firm, dispatchable capacity, and eliminate those that don’t.

Let’s demand that electricity grids and their regulators provide abundant highly reliable and secure electricity consistent with the most informed notions of public health. Abundant electricity will offer consumers real choice, resulting in lower prices and increased value.”

The most recent effort by those seeking profit from “green energy” evidently presumes that rate and taxpayers, if not most of the country’s citizenry, were born yesterday. Which made me think of Billie Dawn’s wicked malaprop in the movie classic, Born Yesterday: “This country and its institutions belong to the people who inhibit it.”

Few initiatives better illustrate how the nation’s future is being seized by those who would inhibit it than last week’s plea to “stop politicizing green energy.” In the best black/white Owellian tradition, a rump organization calling itself the US Partnership for Renewable Energy Finance, or US PREF (Google search finds little), claims that renewables are being demonized by wrong-thinking politicians at the expense of the country’s progressive future.

Feigning disinterest, the group offers a number of white papers purporting to show “how crucial renewable energy is as part of the nation’s overall energy mix,” “dramatically” reducing energy costs, bolstering national security, improving the environment, and producing long term jobs. US PREF lauded the role of long-standing Congressional production and energy tax credits as they work together with large scale state renewable energy portfolio laws to increase mainly wind and solar installations throughout the land.

These reports come to demonstrably wrong conclusions. In fact, US PREF’s premise is oxymoronic, given that wind and solar exist almost solely because the electricity sector has become highly politicized over the last thirty years, a process abetted by

– careless journalists;

– irresponsible economists;

– captured regulators;

– engineers more interested in make work than they are in maintaining the highest standards of their profession; and

– profiteering investment groups, including Morgan Stanley, Goldman Sachs, Citibank Credit Suisse, and virtually all of the Big Energy corporations.

Together they have successfully cultivated the idea that electricity is a scarce resource in need of continual husbanding–and that renewables can help replenish the diminishing stores of electrical energy supply.

In short, US PREF is yet another advocacy operation designed to separate the public from its wallet while reducing its quality of life. Let’s examine how.

FOUR FACTS for US PREF

First, when US PREF casually discusses “energy,” what it really means is energy converted to produce electricity. It is silent about the other 60% of the nation’s energy use harnessed to provide heating and transportation. People should not be confused by the way the term energy is bandied about by such lobbyists. Renewables are almost wholly about electricity production, not how society moves, warms itself, or feeds its livestock, primarily because of oil.

Second, the only widely effective source of renewable power is hydro, particularly large reservoirs of impounded water. But the typical inventory of “approved renewables excludes impounded hydro. As I have written previously:

Biofuels, led by corn ethanol [and buttressed by such fare as reprocessed human and animal waste], degrade the soil, increase the price of food, and expand our carbon footprint. Geothermal is limited in range while large-scale excavation would have serious environmental implications. Even hydro, the technology that exemplified renewable success for much of the last century, has come up against both the rock of limited access and the hard place of environmentalism, since building huge impoundment reservoirs degrades millions of acres of sensitive wetlands habitat. Which is largely why it is not included as a player in contemporary renewables schemes.

Because their construction can proceed relatively quickly, wind projects comprise between 75–90% of most renewable portfolios.

Third, with more informed journalism, the public might better understand how contemporary machines vastly improve productivity by converting high energy densities into time saving power. Wind machines can achieve no modern power because they must rely upon dilute hit or miss “found” energy that is both inimical to demand cycles and difficult to reconcile with conventional, highly controllable and dispatchable machines that do all the productive work. As a consequence, wind machines significantly reduce productivity. And increase cost–and price. Imagine that government mandated that 20% of all air transport be in the form of gliders, which is what it is doing in the electricity sector.

Fourth, levelized cost estimates generally give wind and solar, those renewables of choice, such a makeover that they become a fictional character in US PREF’s promotional narrative success story. Such estimates don’t account for the extensive factors enabling, say, wind integration, such as entangled conventional generation used to smooth out wind’s continuous variability, the building of substantial and virtually dedicated transmission lines, and the augmentation of new voltage regulation networks.

Even more curiously, they don’t consider crucial issues of value. Credible economic analysis must explain how costs bear on price as they dovetail to provide value.

Perhaps the best way to clarify this issue of value is to ask how much people would pay for the cost of machines that rarely work when asked, that work best in the wee hours of the morning, and surge up and back even when they are working “normally.” Thinking that such performance has value in terms of modern expectations for machine behavior is burlesque economics, deserving of scornful parody.

The country has lemon laws to protect the public from such defective machines. US PREF asks that government protect the renewables portfolios against those lemon laws, since wind especially behaves just like a defective machine when it is performing as expected–and solar is not much better.

Policy Fail

I could endlessly enumerate why renewables as a class of energy providers cannot achieve the goals US PREF claims for them. Their huge physical footprint assaults any rational concept of informed environmentalism. Their need for large scale and continuous supplementation increases costs and price. Their raggedy performance decreases the quality of the electricity supply, in the process also reducing its quantity.

It should come as no surprise to learn that US CREF is mainly a creature of investment groups seeking to extend government subsidies so that the favored renewables, wind and solar, can continue–and expand upon–their real function as a mechanism to generate income via tax avoidance.

Using the tax code to bilk billions from millions with no performance accountability or even transparency is the very apotheosis of politicalized policy wrought by highly interested and vested capital. Some would even call it criminal if not for how the politics of renewables continues to craft laws enabling, legitimatizing, bunco, which is the craft of promising much and delivering nothing.

Billie Dawn also had the good sense to observe that “when you steal from the government, you’re stealing from yourself….” US PREF’s attempt to “inhibit” the nation’s federal treasury is rivaled only by its Orwellian perversity about what is political.

Conclusion

Despite US PREF’s attempt to rewrite history, those who weren’t born yesterday are not condemned to repeat it.

Yes, let’s stop politicalizing our electricity supply.

Let’s eliminate all tax credits for energy production. Let’s require that utility scale generators produce firm, dispatchable capacity, and eliminate those that don’t.

Let’s demand that electricity grids and their regulators provide abundant highly reliable and secure electricity consistent with the most informed notions of public health. Abundant electricity will offer consumers real choice, resulting in lower prices and increased value.

10 Comments


  1. jdroz  

    Since the logic of the argument presented here is inescapable, it will not likely be comprehended by PREF and their ilk.

    Even to a casual observer it should be apparent that the objectives of such agenda-promoting organizations have nothing to do with providing US citizens plentiful, affordable and reliable electricity.

    Further, any benefit to the environment from following the PREF ideology is strictly accidental.

    Our energy policies should be based on genuine science, not self-serving, whimsical fantasies.

    Reply

  2. Ed Reid  

    Jon,

    Comparing the cost of “source of opportunity” electricity from intermittent sources with the cost of reliable, dispatchable power is a game for fools, industry advocacy groups and NGOs.

    I would be interested in an estimate of the cost of wind power or solar power with the same reliability and dispatchability as fossil or nuclear generated power, based on current generation and storage technology.

    US EPA apparently has the ability to regulate emissions sufficiently to make solar and wind economically competitive with regulated fossil generation, though the resulting electricity would likely not be reliable or affordable.

    Reply

  3. Jon Boone  

    Ed:
    EPA evidently can legally regulate emissions from the conversion of pixie dust for powered flight in ways that would make pixie dust “competitive” with kerosine-based jet fuel. As you suggest, however, handicapping (rigging) such a competition would be absurd.

    Getting the public, its politicians, mainline media, and electricity regulators to believe that unreliable, uncontrollable machines are competitive with–as good as or better than–reliable, controllable machines is quite a PR coup. Such a cocktail requires vast ignorance, an utter suspension of reasoning abilities, and hyperglycemic economic punditry that relies on cherry-picked half truths to fashion a pack of lies.

    All this is made much easier by the forces who continually insist that electricity is a scarce resource–then work assiduously to make it so, in part by inflating demand by adding dysfunctional wind flux; in part by regulating demand itself; and in part by sundry differential–and highly regressive–pricing schemes.

    Added to this is the growing practice whereby utilities, to increase the yield to their investors, cut back on operating and maintenance budgets while skimping on infrastructure improvements. These chickens are coming home to roost with the recent power outages in the East in the wake of ten-year thunderstorms (which therefore should not be surprising). The media and the various electricity regulators will no doubt chalk these outages up to acts of God rather than investigating how such acts are abetted by willful policy in service to the warped idea that we serve up the least and most expensive electricity possible.

    Reply

  4. David Bergeron  

    Greetings Jon,

    Great article. I particularly appreciated that you pointed out how careless journalists, irresponsible economists, captured regulators, et.al. are aiding and abetting this plunder. I want to mention that some regulators understand the issues with wind and solar but are blocked from making real reforms to the policies because 1) the solar lobby will spend a lot of money to get them out of office if they speak-up and 2) there is a lot of misguided public support for renewables fostered by the careless journalist and irresponsible economist. We need a strategy to educate the public. This will free the politicians and regulators to make rational choices.

    Reply

  5. James Close  

    I will largely agree with you, but take exception to this:
    “I could endlessly enumerate why renewables as a class of energy providers cannot achieve the goals US PREF claims for them. Their huge physical footprint assaults any rational concept of informed environmentalism. Their need for large scale and continuous supplementation increases costs and price. Their raggedy performance decreases the quality of the electricity supply, in the process also reducing its quantity.”

    By painting energy supply (and how it is achieved) with so broad a brush, your argument is diminished because it contains imperfections (realized or not) that cannot meet the standard you set with your all-encompassing painter’s brush:
    You already told us that renewables were all about electricity generation, but I’m not sure that you’ve asterisked that in your comments, above, or maybe you meant to limit the applicability of that statement and simply forgot to; or, maybe you got carried away with your rhetoric and said, “hey, why not?”.

    As a result, you leave out, for instance, the clear, compelling argument that can be made for renewables that don’t generate electricity, but, say, avoid the generation of electricity: I’m talking solar thermal systems, for example. Broadly implementing through the types of programs that you apparently despise (government subsidies, rebates, etc) the wholesale, incentivized replacement of electricity/fossil-fuel fired hot water heaters with solar thermal systems on a large scale could derive huge environmental and energy-conserving benefits to the nation. The nature of the solar thermal beast is that it makes hot water, and stores it. It can be made while the sun shines, and then used when the sun doesn’t shine – in that sense, very much not the imperfect machine that you so rightly rail against using wind turbines as an example.

    But you throw the baby out with the bath water with your comments, and you should, instead, draw distinctions where they should be drawn. All renewables are not created the same, and some have very real benefits that we ought to subsidize and give otherwise preferential treatment to, with no apologies.

    Reply

  6. Jon Boone  

    James Close:
    Thanks for sharing your comments. One could write a book on parsing distinctions among so-called renewables. If I seem to come on heavy handed about renewables, it’s because the public believes them, falsely, to be a collective of effective superheros.

    As you suggest, although the law seems to make all renewables equal, some are in fact more equal than others. In my effort to be concise, however, perhaps I didn’t achieve the clarity I sought. At utility scale, and for many persuasive reasons, I think the only generation that matters comes from firm capacity machines and their various fuels. This disqualifies wind and, I believe, most solar machines. (But impounded hydro, geothermal, and even some forms of biowaste would count.)

    Further, unpredictably variable machines may merit public research dollars. But not a dime of public funds should be earmarked for their development. I don’t despise government subvention of technology, which can take many forms (although increasingly I think using the tax code to do so is unwise–and not just for electricity incentives). However, I’m appalled at the hucksterism at work in virtually all state renewable portfolio laws, particularly as they don’t differentiate among firm and non capacity generation or among grid-based and local applications, and are without accountability or even transparency. Renewables as a group are simply not what they’re cracked up to be, as I tried to explain in the article.

    Passive solar and good architectural design make a great deal of sense at local levels, if one can afford the upfront costs. Solar technology offers off grid performance promise for heating water, transportation signalment, and short term energy storage, among many other uses. But private sector investment, as it has with telecommunications and networked computing, should work through the marketplace to determine winners in this area. If some solar applications prove to be time and long run money savers, they will surely be rewarded by finding a market, without public subvention.

    Government does not have the capability to pick such winners, despite all that taxpayer gelt. Besides, a much better investment at this time would be paying off the national debt. And perhaps helping to “develop” higher powered particle accelerators, helping to get knowledge of the basis science (since there is so much more to learn).

    Reply

  7. S Pfeiffer  

    James;

    I recently reviewed a large solar thermal installation installed using ARRA funds in a local public housing development to produce domestic hot water. Large collector array, lovely large storage tanks, new piping to distribute the hot water produced to five separate buildings, nice web based controls and monitoring. A nice installation, well designed and constructed.

    The simple payback for the system….62 years, assuming it all works properly.

    Do you consider that to be a good investment of resources? If so I have a number of investment ideas to sell you.

    Reply

  8. Jon Boone: The Inhibiting Power of Dilute Energy | JunkScience.com  

    […] MasterResource Share this:PrintEmailMoreStumbleUponTwitterFacebookDiggRedditLike this:LikeBe the first to like this. This entry was posted in Clean energy and tagged energy infrastructure, energy subsidies, government subsidies, solar power, Wind power. Bookmark the permalink. ← Eugene Robinson: Feeling The Heat: It’s Too Hot To Be A Global Warming Skeptic […]

    Reply

  9. MaineWind Concerns  

    Thank you, Jon for a fair and rational criticism of grid-scale wind power that makes no mention of visual impact.

    Reply

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