With the selling of Mr. Obama's economic agenda now reported in full gear,
it is an opportune moment to take another look at what he has told us he would
do and, more importantly, what he hasn't told us about the economic cost of his
energy plans.
The answer to the former question is straight forward. In his address to
Congress, he pledged to double the production of renewable energy in the next
three years, lay down thousands of miles of new transmission lines and introduce
a "market-based cap on carbon pollution" to promote clean energy, fight global
warming and "put Americans to work making homes and buildings more efficient."
Perhaps the best place to start seeking answers as to how costly and realistic
this agenda is likely to turn out is to look at the record of the three
countries Mr. Obama specifically mentioned as leading the United States in the
renewable energy revolution: China, Japan and Germany.
China, he said, "has launched the largest effort in history to make its economy
energy efficient." True enough, but it has nothing to do with renewable energy
and it is not clear that it's working either.
Energy efficiency to the Chinese means more efficient coal-burning equipment,
co-generation, coal-liquefaction and other improvements of their primarily
coal-based energy industry.
Despite marginal improvements in this area, China is now the largest
carbon-dioxide emitter in the world and can, at best, slow down but not stop
carbon emissions growth for the foreseeable future.
As far as renewable energy proper is concerned, its share of total energy
production is not only miniscule, but has actually declined the past two years,
according to Beijing's State Electricity Council.
There is, however, one clean energy sector in which China is making a lot of
progress and has even more ambitious plans for the future, but it is one Mr.
Obama scrupulously avoids mentioning - nuclear power.
What about Japan? It does produce a lot of solar panels for export and
subsidizes roof-top solar installation, but its solar energy production target
for 2010 is a negligible 3%. Instead, Tokyo plans to boost the share of nuclear
power to 41% from the current 30% in just the next five years.
This leaves Germany as a model for our green future. At first glance, it is a
renewable energy success story and, to no one's surprise, it has become the
poster child of the green fantasy universe.
In just a few years, the country has become the world's power-house of green
energy, currently generating nearly 15% of its electricity from wind-power and
solar energy, which already exceeds the EU target of 12.5% renewable share for
2010.
A heart-warming story, it seems, until one starts asking questions as to how a
country that has neither much sun, nor wind got there, how much it cost and
where it is going from here.
The reality, of course, is that it doesn't matter how much sun or wind there is
as long as the government provides huge subsidies at the expense of the
tax-payer and that of the economy's future prospects.
In Germany, through a scheme innocuously called "feed-in tariff," this has meant
guaranteeing solar producers, for instance, a price seven times higher than the
wholesale rate for 20 long years. No wonder every entrepreneur-for-the-dole
promptly lined up to feed at the public trough and created an artificial
industry overnight.
Yet, with Germany's electricity bill going up by 38% in just one year (2007 over
2006), this is hardly a sustainable proposition. If that's not enough, several
years of operational experience has proven what experts have known or feared for
a long time; namely, that renewable energy is not only very expensive but also
highly inefficient and unreliable.
Solar panels, for example, seldom convert more than 25% of sun energy into
electricity, while wind-power's "load factor," i.e. electricity produced per
installed capacity, seldom exceeds 20% in Germany. The intermittent nature of
both of these sources further makes them completely unsuitable for baseload grid
consideration, which means that they have to be backed up by conventional
energy, which, of course, defeats the purpose of green energy as an alternative.
Nor does the German and European experience with cap-and-trade provide any
reason to be optimistic about the prospects of Mr. Obama's plan to raise $646
billion through a similar scheme.
Four years after its introduction, the EU carbon-trading scheme has failed to
create a functioning emissions permit market, generate revenues or lower carbon
dioxide emissions as promised, even as it led to large electricity rate
increases and windfall profits for some of the worst polluters on the continent
.
The bottom line is that for the foreseeable future renewable energy will remain
a pie-in -the-sky, green fantasy, not feasible economically without huge public
subsidies.
Engaging in such economically irrational policies may have been understandable
on the part of Western political elites seeking to appease their hysterical
environmental lobbies, especially when the stakes were small, energy prices were
skyrocketing and economic prosperity seemed assured.
But these days are now gone and probably for quite some time. Instead, under the
perfect storm of collapsing energy prices, the worst economic crisis in decades,
a severe credit crunch and mass unemployment, the green energy bubble has burst.
Around the world, Germany included, green subsidies are being slashed, renewable
projects canceled or postponed, private capital and credit institutions have
abandoned the sector and many of the once high-flying green companies are on the
brink of bankruptcy. Green energy, long touted as our promised salvation from
environmental doom now appears doomed itself.
This should be a cause for celebration for out of the ruins of this irrational
fantasy, a new powerful trend toward clean, inexpensive and reliable power is
gathering steam that may finally bring some economic rationality to energy
policy worldwide.
It has taken the form of a remarkable economic comeback cum political
rehabilitation of the much maligned nuclear power industry. Though Americans
will hear neither their president nor his devoted claque in the mislabeled
"mainstream" media discuss this, it is already a powerful reality that may yet
make the 21st century, the century of nuclear power.
What is most remarkable about the nuclear power revival is that it is a
worldwide phenomenon and that it includes Western countries that until recently
were staunch members of the anti-nuclear bandwagon.
Italy and Sweden, both of which had moratoriums on building nuclear reactors
dating back to the 1980s, have now reversed course and Germany will almost
certainly follow shortly. Italy now plans to get 25% of its future electricity
needs from eight new nuclear plants and has already contracted with a French
company for the construction of the first four. Great Britain envisages not
only refurbishing its eight ageing reactors, but also building ten new ones.
France, which never succumbed to the anti-nuclear frenzy and already derives 80%
of its electricity needs from 58 reactors, has become a world leader in nuclear
technology eclipsing the United States and is aggressively moving forward with
third generation reactors at home and abroad.
Further east, Ukraine, despite its Chernobyl legacy, plans 11 new reactors by
2030, while Russia, itself an exporter of nuclear technology, wants to double
its electricity output from nuclear power by 2020. Not to be left behind,
Poland, Finland, Lithuania, Bulgaria and Romania are either planning or already
building new nuclear plants.
In short, Europe, until recently a citadel of anti-nuclear fervor, is being
transformed into a gigantic nuclear power construction site.
Elsewhere, the nuclear power steamroller is making even more impressive inroads.
India and China, likely economic superpowers of the future alongside the United
States, have both opted out for nuclear energy in a decisive way.
India, which today produces a meager 4100 megawatts or 3% of its electricity
from nuclear, aims to boost that fifteen fold to 63,000 MWs with 40 new reactors
by 2032. It is already constructing five new plants and has just signed a
contract with the French company Areva for six more third generation reactors.
Not to be outdone, China with a nuclear generating capacity of 9000 MWs
currently, plans to increase that to 40,000 MWs by 2020 and 63,000 MWs ten years
later. Finally, Japan, which alongside France is a world leader in nuclear
technology, is fully committed to nuclear power and intends to double its share
of electricity production from the current 30% by mid-century.
So where does this leave the United States and Mr. Obama's energy agenda? It
leaves us in the unenviable position of being the only major economic power led
by a president dogmatically wedded to yesterday's make-believe universe of green
energy that has already been mugged by reality in the rest of the world.
Much like in Europe, renewable energy in America is in a dire predicament. By
the end of 2008, American solar and wind-power stocks had lost some four fifths
of their value -twice the loss rates of the general market - inflicting
catastrophic losses on investors who bought into the green mania.
Investment and credit have both dried up and despite the brave if deceptive
rhetoric of Mr. Obama, there isn't enough government money to make much
difference in the absence of private capital. In just one example of the parlous
state of renewable affairs, California, where sunlight is nearly as abundant as
lack of environmental common sense, produces but 0.2% of its electricity from
solar power after three decades of heavy subsidies.
Alas, worse may be in store. If Mr. Obama's dubious energy agenda is pushed
through, as seems likely, not only are Americans going to be saddled with a
crushing tax burden, courtesy of his bogus cap-and-trade scheme, but the
country's economic competitiveness could suffer a lasting if not irreparable
damage.
Such are the wages of our renewable delusions.
Alex Alexiev is an adjunct fellow at the
Hudson Institute in Washington DC.
DOE to Invest $18 Million in Small Business Clean Energy
Innovation Projects
My comments: Rather then making a nuclear
system to provide energy, Obama is going to start from the bottom and try the
nit picks that have been tried for the last 15 years to develop conservative
energy saving projects. What are new clean energy technologies? Anyone care to
state.
U.S. Energy
Secretary Steven Chu today announced more than $18 million in funding from the
American Recovery and Reinvestment Act to support small business innovation
research, development and deployment of clean energy technologies. In this first
phase of funding, 125 grants of up to $150,000 each will be awarded to 107 small
advanced technology firms across the U.S.
"Small
businesses are drivers of innovation and are crucial to the development of a
competitive clean energy U.S. economy," said Chu. "These investments will help
ensure small businesses are able to compete in the clean energy economy,
creating jobs and developing new technologies to help decrease carbon pollution
and increase energy efficiency.
The
companies were competitively selected from a pool of 950 applicants through a
special fast-track process with an emphasis on near-term commercialization and
job creation. Companies that demonstrate successful results with their new
technologies and show potential to meet market needs will be eligible for $60
million in a second round of grants in the summer of 2010.
Grants were
awarded in each of the following ten topic areas:
*
- Advanced Building Air Conditioning and Refrigeration, Thermal Load
Shifting, and Cool Roofs (15 projects, for up to $2,241,229 total). Projects in
this area will seek to improve efficiency of air conditioning and refrigeration
while reducing greenhouse gas emissions, reducing peak demand, and reducing
thermal loads on roofs.
* -
Water Usage in Electric Power Production (6 projects, for up to $878,144).
This effort will focus on decreasing the amount of water used in thermoelectric
power generation, improving water quality through the development of advanced
water treatment technologies, and developing innovative approaches to
desalination using Combined Heat and Power projects.
* - Power
Plant Cooling (1 project, $150,000). This project will focus on advanced
heat exchange technology for power plant cooling.
* - Advanced
Gas Turbines and Materials (11 projects, for up to $1,637,033). These projects
will research high temperature materials and component cooling techniques, high
performance materials for nuclear applications, materials that help save energy
and diminish carbon emissions, and novel designs for high-efficiency and
low-cost distributed power systems.
*
- Sensors, Controls, and Wireless Networks (12 projects, for up to
$1,787,061). Projects in this area will develop building applications to
minimize power use, sensors and controls for efficient industrial processes,
wireless networks and sensors for monitoring nuclear power systems, and power
line sensor systems for the Smart Grid.
* - Advanced
Water Power Technology Development (12 projects, for up to $1,747,259). Projects
will focus on advances in hydropower systems or subsystems, as well as new
approaches to wave and current energy technologies and ocean thermal energy
conversion systems.
* - Smart
Controllers for Smart Grid Applications (8 projects, for up to $1,166,871).
These projects will help develop smart controllers for household appliance to
enable Smart Grid services, technologies to support electric vehicles, and
support of distributed energy generation systems.
* -
Advanced Solar Technologies (12 projects, for up to $2,783,996). Projects
will focus on achieving significant cost and performance improvements over
current technologies, solar-powered systems that produce fuels, and Concentrated
Solar Power systems for distributed applications
. *
- Advanced Industrial
Technologies Development (25 projects, for up to $3,709,564). Projects in
this area will focus on improving efficiency and environmental performance in
the cement industry, low-cost manufacturing processes for innovative
nanomaterials, novel approaches to water heat recovery, and transformational
technologies to address high Global Warming Potential industrial gases.
* -
Advanced Manufacturing Processes (16 projects, for up to $2,222,110). These
projects will focus on mitigating heat losses, fouling and scaling in unit
operations, and improving heat and energy losses in energy intensive
manufacturing processes, including distillation and dewatering systems.
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