energy subsidies

Can a technology-first approach to climate change work?

The progression of time and accumulated evidence of global warming finds us still committed to forging solutions -- albeit, different ones.

Good climate policy is responsible fiscal policy

Here’s a fact you won’t hear much about in Politico or the Washington Post: good climate policy is responsible fiscal policy. Earlier this month, Susan Kraemer turned up what should have been a bigger story: while the comprehensive climate/energy bill introduced by Sens. John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) last year would reduce the […]

RPS, EERS and energy politics

I think this one’s got it! There is a belief that with the Democratic shift in Congress, we finally have the votes to get a national renewable portfolio system (RPS). I don’t buy it. As I pointed out here, a “pure” wind-and-solar-only RPS means a wealth transfer from Eastern to Western U.S., and no political […]

Myth: There is a “free market” in energy

To hear some people talk, you’d think the greatest danger of government intervention in the energy sector is that it will “distort the market.” Poor, tender market. In fact, energy markets would give Adam Smith the screaming willies. The world’s biggest oil companies are state-owned members of anti-competitive cabals. Half the electric utilities in the […]

First DOE loan guarantee goes to … a solar manufacturer

The Department of Energy announced on Friday that the first energy loan guarantee authorized by the 2005 (!) Energy Policy Act went to a plant that manufactures solar panels: Energy Secretary Steven Chu today offered a $535 million loan guarantee for Solyndra, Inc. to support the company’s construction of a commercial-scale manufacturing plant for its […]

Turkey's only bidder for first nuclear plant offers a price of 21 cents per kilowatt-hour

New nuclear power is going to be very expensive -- no matter where the plants are built. The most detailed and transparent recent cost study on the new generation of plants put the cost of power at 25 to 30 cents per kilowatt-hour -- triple current U.S. electricity rates (see "Exclusive analysis, Part 1: The staggering cost of new nuclear power").

Some have suggested that other countries will fare better -- in spite of Finland's nightmarish nuclear troubles (see "Satanic nukes? Finnish plant's cost overruns to $6.66 billion" and below). They should read the story in today's Today's Zaman, Turkey's largest English-language newspaper:

The only company bidding, the Russian-Turkish JSC Atomstroyexport-JSC Inter Rao Ues-Park Teknik joint venture, offered a price of 21.16 cents per kilowatt-hour (kWh). Current electricity prices in the country vary between 4 cents and 14 cents per kWh.

[Wholesale prices in Turkey are 7.9 cents per kWh.]

That gives new meaning to the word "turkey."

The company apparently offered a revised price "Immediately after the envelope was opened ... that better reflected current market prices" (i.e. the global recession and collapse in commodity prices). But another English language news source, Hurriyet Daily News, reports today:

A closer look at current U.S. CO2 pricing

Kevin Drum over at Mother Jones blogged on my recent Grist post, joining my mom in the list of people who publicly praise my math skills. Thanks!

Much more interestingly, he raises this question:

Are we wiling to charge [a price for CO2 emissions] openly, with the carbon charges going to the public, [or] inside a complex giveaway to a favored corporation?

(The question is in response to my estimate here that the recently passed Illinois Clean Coal Portfolio Standards Act represents an implicit $300-$500-per-ton payment in the name of CO2 reduction.)

It's a great question because the truth is that under current federal and state policy, we do pay people for their actions to reduce CO2. But we do so in a horribly inconsistent way, providing not only inconsistency between technologies and "favored corporations," but also wild disparities in price.

For instance, suppose you're getting $0.03 per kWh from your state renewable portfolio standard. Those kWh displace -- on average -- 1,300 lb per MWh of U.S. power, and you are therefore being paid $46 per ton of CO2 you reduce. CO2 reduction is not the only justification for RPS policies, but would we ever have an RPS if we didn't care about CO2? I doubt it.

The good news there is that people are, today, being paid in the U.S. for reducing CO2. But is there any rhyme or reason to their price? And is it at all consistent with what others are getting for the same environmental service?

More math below the fold.

No to phony clean coal credits, yes to refundable, renewable tax credits

The green stimulus is beginning to take shape with mostly good stuff in the stocking, except one big lump of coal.

The package is getting bigger -- no surprise. The Washington Post writes:

Congressional leaders and Obama advisers are looking at including as much as $25 billion of energy tax credits in the economic stimulus package in an effort to bolster renewable energy projects, fuel-efficient cars and biodiesel production, said sources familiar with the negotiations ...

The main elements under consideration include a two-year, $8.6 billion extension of the production tax credit [PTC] for renewable energy, an item that favors wind power projects. Obama advisers are considering a proposal from the wind and solar industry that would make those credits refundable or count them against past taxes because many financial firms that provided capital for those projects no longer have taxable income and can't use the credits.

I understand why only a two-year PTC extension is being floated from a narrow stimulus perspective, but seriously, people, it's time for a much longer extension to give the industry firmer ground. The solar investment tax credit got an eight-year extension last year! Is there any possibility that an Obama administration with a Democratic Congress won't eventually extend the PTC that long? So don't play games with the industry. The idea of making the credits refundable is an important one I will elaborate on in part 2.

The bill could also include tax credits for service stations that install high-ethanol-content fuel pumps, a $7,500 tax credit for plug-in vehicles, an extension of the biodiesel credit, and one for coal-fired power plants that capture more than half of their carbon emissions or that could be retrofitted to do so later. There could also be clean-energy credits for rural cooperatives.

Apparently someone missed the memo that plug-ins already have a $7,500 tax credit -- which in any case won't be doing much stimulating since there aren't any plug-ins to stimulate!

Memo to Dems: Please, please, please, do not give a tax credit to any coal-fired plants "that could be retrofitted" for capturing carbon. So-called "capture ready" coal plants are nothing but snake oil, just like clean coal itself.

Congress does not want to be in the business of trying to pass regulations to determine how many angels are dancing on the head of a pin whether it might be easier or harder for some new climate-destroying coal plant to some day integrate carbon capture. Either a new coal plant captures and permanently sequesters the vast majority (not just half) of its carbon emissions now, or it should not be permitted in the first place. Stop trying to fool the public into thinking we can risk building any more new coal plants with unrestricted greenhouse gas emissions. We cannot.

One of the most exciting stimulus proposals is aimed at boosting clean-energy financing during this credit crunch:

Responding to Heritage's staggeringly confused 'rebuttal'

Part 1 presented a new study by power plant cost expert Craig Severance that puts the generation costs for power from new nuclear plants at from 25 to 30 cents per kilowatt-hour -- triple current U.S. electricity rates!

Those ideologically promiscuous folks at the Heritage Foundation have replied with "New Study on Staggering Cost of Nuclear Energy, Staggeringly Pessimistic." Craig's point by point response follows a few of my comments.

Heritage is a leader of the conservative movement stagnation. They have written "the only thing a green 'New Deal' will do is lead us down a Green Road to Serfdom," comparing such a policy to "collectivism in the Soviet Union and Nazi Germany," and their Senior Policy Analyst in Energy Economics and Climate Change is quite confused about both of the subjects he analyzes.

The key paragraph in Heritage's new critique is: