How Do Costs Compare between Renewable and Traditional Energy Sources?

A: Dick, I appreciate your sincerity with this question, but I am going to use it as the example of the challenges in energy use and pricing. Most of the data does not make even comparisons of $US/MWh among conventional and non-conventional energy generation technologies.

Let us take a hypothetical 300 MW combined renewable energy plant composed equally of geothermal or microhydro/tidal, photovoltaics or concentrated solar power, and wind -- all with 20-year warranted output -- able to produce electricity 24 hours, 7 days per week.

Now I probably can provide a combined cost including operations and maintenance over these 20 years. But now comes the challenge. Can I find a conventional technology which can provide energy, without any fuel escalation, with zero emissions, and no waste to compete against this plant? Can IGCC [integrated gasification combined cycle], coal, natural gas, or nuclear produce the same product and output? Virtually all our electric power in the U.S. is provided by merchant plants, but even under the old monopoly system, these plants can pass on the fuel escalation to the utility, which can pass it on to their customers.

Not only does the consumer bear the cost of fuel increases, but also power outages (they either lose productivity or have to buy backup generators) as well as power quality (surges, sags and transients in the electric grid) where the customer also has to bear the costs of surge protection.

We have a system in which all of the uncertainties are actually borne by the consumer. And the energy producer can also hide or pass on these uncertainties and extra costs such as pollution control, entombment and waste disposal on to the taxpayer. In the U.S., the mature energy producers receive billions of dollars of tax subsidies as well as waiver from pollution laws. So again, the consumer not only bears the costs of the uncertainties but also pays their subsidies out of their taxes (federal and state) and bears the added health costs from the pollution and wastes.

The natural gas pipeline industry received 16 years of tax credits and the nuclear industry 20 years of tax credits in the Energy Policy Act passed by Congress in 2005. In that same bill, the renewables received two years of tax credits that effectively knocked out the larger wind, geothermal, biomass, and concentrated solar generation plants that require longer project development lead times than two years. In addition, we have not had a new nuclear power plant in North America for at least a decade and we don't have any cost track record on IGCC "clean coal" plants, so cost comparison here are all conjecture.

We need to develop a new analytical rigor that incorporates all the 'real' costs in our energy decision making. This added analysis actually needs to be at the State Public Utility Commission level. Most State decision making is not very inclusive and not very transparent. And while I have seen increased professionalism by State energy regulators over the last 20 years, capabilities vary greatly by State.

There needs to be greater public participation at all levels of energy decision making. There are many reports from state and federal government on energy prices and comparisons. I have listed just two below. And I am sorry to use your sincere question to air this issue, but frankly how could I just pick and choose numbers from various reports when they are not equal comparisons?

-- Scott Sklar