Why the shift to alternate energies continues, despite shale boom

By Richard Schiffman
June 26, 2014

Thousands of solar panels are pictured generating electricity used at Nellis Air Force Base in Las Vegas

Oil prices are rising as uncertainty grows over the fate of major producers like Russia and Iraq. Everything from transportation to manufacturing to a petroleum-intensive agricultural system is a puppet flailing on the strings of this volatile commodity.

Meanwhile, increased production of alternative power is finally making prices more competitive, particularly for solar energy, as former Vice President Al Gore recently pointed out in Rolling Stone. Costs have declined dramatically — 20 percent a year since 2010. This is not yet reflected in energy prices, however, largely because of the major tax breaks still extended to the dirty technology of the past.

Yet this shift to alternative energies is inexorable. The recent boom in natural gas from shale, which has glutted the market with cheap fuel, has delayed it. But as oil costs rise, the transition to alternative energy is again poised to accelerate.

Roughly 49 percent of new U.S. electrical-generating capacity in 2012 came from renewables. Battery storage and other aspects of solar technology are also now cheaper and far more efficient.

Wind turbines are seen in the distance beyond hills, blackened by the Silver Fire near BanningSolar still accounts for a small percentage of U.S. energy use. The United States currently produces 10 gigawatts of solar a year, powering about 2.4 million homes. But in the past five years, solar-power consumption has increased at a compound annual growth rate of 63.2 percent.

“Solar can easily maintain its current fast growth rate through the year 2020,” energy analyst Gregory MacDonald predicted. “Assuming this is the case, and also projecting strong annual growth in overall global power consumption at 3.4 percent per year, solar will be making a meaningful contribution to total global power supply by 2020.”

Excess solar electricity generated by individuals is now being sold back to power companies in 44 states through a system called “net metering.” Instead of electricity being produced solely in a central power plant and then distributed to customers, renewables like wind and solar allow for a decentralized system in which energy is produced wherever the sun is shining and winds are blowing, and then sent into the grid for distribution where it is needed.

This democratization of the power system is not exactly welcomed by the utilities. It is also under attack by some free-market advocates, including the American Legislative Exchange Council, which is funded by Charles and David Koch, whose fortune is built on fossil fuels. In their view, it seems, the free market must not include open competition from solar and wind power. These groups have fought against subsidies for renewable energy companies. In some states, they are even pushing for higher taxes on homeowners who install rooftop solar panels.

Arizona, which has the highest per-capita solar potential of any state, charges its citizens $5 a month for the privilege of producing their own clean energy. The state public utility commission is considering adding a monthly charge for sending power to the grid.

Critics of renewables contend that citizen power generation is a nuisance. The U.S. electrical system, they insist, won’t be able to cope with the addition of intermittent individual power sources like wind and solar.

Solar panels are pictured in the Nevada Desert as U.S. President Barack Obama visited the Copper Mountain Solar Project in Boulder City, NevadaThere are legitimate concerns about how to effectively integrate alternative energy sources into the grid while maintaining the stability of the system. But are we to believe that a country that created the Internet and launched the Human Genome Project can’t figure out how to incorporate solar and wind power into the power grid?

Germany has already done so. Italy, Belgium, the Czech Republic and other European nations are all well on their way.

However difficult and expensive it may be at the outset to green the U.S. power system, it won’t take long before our initial investment begins to pay off in lower electric bills — which are no longer a hostage to global oil prices — and a cleaner environment. A 25 percent renewable energy standard by 2025, according to a study by the Union of Concerned Scientists, would result in 7.6 percent lower electricity prices by 2030.

The same analysis found that switching to 25 percent renewables would create more than three times as many jobs as producing an equivalent amount of electricity from fossil fuels, an additional 202,000 new jobs within 10 years.

Economically depressed areas in the Midwest are already reaping the benefits of renewables. Not only are payments by turbine owners allowing thousands of farmers on the high plains to stay on their land, but the wind power revolution has also “reinvigorated old-line manufacturing,” according to the Midwest Governors Energy Coalition.

An old style windmill is pictured at a wind farm near MilfordOhio, for example, has more than 600 firms in the wind energy-supply chain, as well as machine shops, foundries and gear makers. In Iowa, where wind power produces one-quarter of the state’s power, MidAmerican Energy has not increased its electricity rates in 18 years.

Critics regularly return to the matter of price. It costs far less to burn fossil fuels, they say, than to tap into free power from the sun and the wind. That argument is flawed, however. It does cost more to build wind farms and install solar arrays. But once these plants are set up and running, they have lower operation and maintenance costs than conventional power on a yearly basis. No more regular fuel bills and only minimal expenses for upkeep of solar, for example, which  has no movable parts that wear out and need to be replaced.

The price argument is also fallacious because we have never paid the real price for the power we use, which includes the cost to the environment and human health of the carbon pollution that fossil-fuel mining and burning generates.

And it is only going to get worse. Global warming is going to have one hell of a sticker-price when temperatures rise more than 2 degrees centigrade (3.6 degrees Fahrenheit above pre-industrial levels), as the latest Intergovernmental Panel on Climate Change  report predicts will happen by mid-century if we continue on our current trajectory.

Even aside from these “hidden costs,” however, the federal government is subsidizing the fossil fuel industry to the tune of a half-trillion dollars a year in tax breaks, according to the International Monetary Fund. This makes the United States the world’s largest benefactor of fossil-fuel industry.  Renewable energy also gets government support. But worldwide, fossil fuel subsidies were at least six times larger.

This makes little sense. We should be supporting technologies that help us to put the brake on destructive climate change, rather than feeding the unsustainable fossil-fuel habit that is driving it.

 

PHOTO (TOP): Thousands of solar panels are pictured generating electricity used at Nellis Air Force Base in Las Vegas, Nevada, May 27, 2009. REUTERS/Jason Reed

PHOTO (INSERT 1): Wind turbines are seen in the distance beyond hills, blackened by the Silver Fire near Banning, California, August 8, 2013.  REUTERS/David McNew

PHOTO (INSERT 2): Solar panels are pictured in the Nevada Desert as President Barack Obama visited the Copper Mountain Solar Project in Boulder City, Nevada, March 21, 2012.  REUTERS/Jason Reed

PHOTO (INSERT 3): An old style windmill is pictured with newer and larger wind turbines in the background, at a wind farm near Milford, Utah, May 21, 2012. REUTERS/George Frey

7 comments

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It would help if the author made an honest comparison of the cost of subsidies for either traditional fossil fuels or renewables on a unit energy basis. As far as I can tell from the numbers cited by Congressman, all the much touted subsidies to oil and gas amount to about a dollar per barrel (apart from tax deductions common to all industries), whereas the existing subsidies and the similar benefits of renewable standards tend to be a much higher fraction of the unit energy cost. I am eager to see solar grow, but am disappointed at the biased, unbalanced rhetoric on both sides. A plague on both your houses.

Posted by Shale_Doctor | Report as abusive

“Is it too hard to go to the moon, eradicate smallpox or end apartheid? Is it too hard to build a computer that fits in your pocket? No? Then it’s not too hard to build a clean energy future, either.” http://clmtr.lt/c/IZt0fz0cMJ

Posted by alchemistfromri | Report as abusive

You write “It would help if the author made an honest comparison of the cost of subsidies for either traditional fossil fuels or renewables on a unit energy basis.

We the taxpayer have been subsidizing the fossil fuel industry for about one hundred years. It was done to help them get started just as solar and wind. So now, when the oil and gas co’s are reporting NET gains in the hundreds of billions/yr, why are we still subsidizing them? Those co. own Congress, that’s why.

Just three years of fossil fuel subsidies adds up to close to 1.5 TRILLION. Do you care to try to calculate what one hundred years would total out to be? 10 trillion 20 trillion? So lets talk about fairness, O.K. When we the taxpayer have finally subsidized solar and wind to the tune of tens of trillions then you can beef. I am very glad you are eager to see solar grow but you need to check your bias at the key board.

Posted by Masi | Report as abusive

“But are we to believe that a country that created the Internet and launched the Human Genome Project can’t figure out how to incorporate solar and wind power into the power grid?” Oh, this country could do it, I mean the people, but, we are not free to do it. We are regulated by old men with allegiances to wealthy political donors who also happen to want the mantainance of their money making empires to exist until humans no longer exists. They would wipe us out rather than give up their dirty businesses, and they probably will. Slaves to the fascists, that’s what we are. While the economic analysis would have us know that the path toward renewables is the best option for the greater good, we have leaders and priests who could care less about that. Pain, ignorance and fear are their tools of manipulation.

Posted by brotherkenny4 | Report as abusive

Please, please, please, anyone, tell me how to get one of the fossil fuel subsidies you keep talking about. After more than 30 years in the oil and gas businesses, I’ve yet to receive a penny from any government entity. On the other hand, approximately 19% of the selling price of my oil and gas go to the Federal Government as royalties, while another 40% of my revenue goes to the Federal and State Governments in the form of income taxes. I pay landowners for access, build my own roads and pipelines and facilities and receive fewer tax deductions than any other industry.

As regards US military protection to keep the oil flowing from the Middle East…who benefits from that protection? Saudi Arabia and other foreign exporters, not US domestic oil companies.

US subsidies for the fossil fuel industries are myths perpetuated by people who, when asked for details will never be able to give them because we get no such subsidies. Instead we are one of the most highly taxed industries in the US. Unlike the solar and wind energy industries, which are highly subsidized at tax payer expense.

Posted by just_the_facts | Report as abusive

Why is the shift working this time? Simple, global warming scare. Is it real? Who cares as long as it keeps working and we get closer and closer to alternate fuels that will alleviate the need for fossil fuels and the politics and power struggles that come with it. If you thought the second gulf war was bad, just wait a decade or two remaining dependent on fossil fuels. We’ll have WWIII for sure.

Posted by tmc | Report as abusive

@just_the_facts

You have to hire a lobbyist to pay off Congress to admit you into the elite oil and gas group. They didn’t just get in there by signing up. You have to pay politicians off to add your name to the tax payoff.

Posted by ProfDoc | Report as abusive