Economics of alternative energy improve
Many household budgets are feeling the impact of high gasoline prices. Imagine if you ran a power plant.
Two reports released on Tuesday make the case that alternative forms of energy--everything from plug-in hybrid cars to solar power plants--are becoming more cost-competitive with fossil fuels.
Clean-energy research firm Clean Edge, in a report done with nonprofit Co-op America, said that the United States could get 10 percent of its electricity from solar energy by 2025 under the right circumstances.
Meanwhile, financial analysts at AllianceBernstein said that hybrid vehicles already offer a lower cost of ownership than gas-only cars, a situation that could dramatically increase market share in coming years.
The rising costs of oil, natural gas, and coal are having a profound impact on utilities and automakers. But that's only one factor making alternative sources of electricity or transportation more attractive.
The capital outlay needed to build power generation facilities is on the rise, too, because of higher commodity prices. Construction costs of gas, coal, and nuclear power plants have increased about 75 percent since 2004, according to Bernstein Research, citing Department of Energy and company reports.
In addition, regulations to limit carbon dioxide emissions--expected to take hold in the next few years--significantly alter the cost of delivering electricity from fossil fuels, particularly coal.
"The economics of traditional fuels are changing," said Richard Keiser, global technology strategist at Bernstein Research. "The perceived environmental costs of these (fossil) fuels is no longer zero."
As a result, wind and geothermal power are now cost-competitive with operating fossil fuel-powered plants. Keiser predicted that wind growth will be in the double digits for at least the next decade.
The push to reduce greenhouse gas emissions is expected to play out in the transportation sector as well.
Keiser said that with gas at $3.18 a gallon or higher, the total cost of ownership for a hybrid car is lower than a conventional one. He assumed 15,000 miles driven per year, a six-year life, a $5,000 price difference, and mileage of 25 miles per gallon versus 45 for the hybrid.
"Consumers don't know this...and automakers haven't given them a lineup (of cars) to make this choice easy," he said. But if gas prices persist and biofuel options remain limited, market share for hybrids could rise "dramatically" from 2 percent of new cars today.
Closing the price gap
Bernstein's Keiser said that solar electricity still remains more expensive than fossil fuels. However, Clean Edge analysts said that the gap is closing, predicting that solar will be the same cost as traditional forms of power generation--or at "grid parity"--in 2015.
In its report, it provided a plan for how U.S. utilities, prompted by regulators and policy makers, could lead a transition to 10 percent solar power in the U.S. in 2025.
That's a big jump from less than 1 percent today, but authors Ron Pernick and Clint Wilder said they see utilities considering solar far more seriously today than any other time.
In the past few months, there have been a number of deals signed to build concentrated solar power plants in the Southwest and more are expected in coming months, Pernick said.
"Among the utilities we talked to, they said 'Yeah, this (target) would be difficult but it's achievable.' That's an important shift," said Pernick.
The projected drop in price for solar panels using silicon or thin film solar cells.
(Credit: Clean Edge, 2008)Solar energy provides a hedge against rising fuel prices and solar energy's peak output is the middle of the day, which is a more costly time to provide electricity, they noted.
On the retail level, Clean Edge predicts that more homeowners and businesses will install solar photovoltaic (PV) panels. Of the total 10 percent forecast, solar PV represents 8 percent.
The report forecasts a regular decline in the installed cost of solar panels, so that solar is at price parity with traditional electricity generation in places with high electricity rates in 2015 and in most other places in the U.S. by 2025.
Despite the bright outlook of this report and similar targets, the solar industry right now is troubled by policy uncertainty that can slow, rather than speed, adoption of solar energy.
An investment tax credit for renewable energy projects is set to expire at the end of this year and several attempts to extend it have been derailed.
Pernick said that if the tax credit is not extended this year, he expects it to be extended next year for five years. Solar demand will also be driven by state-level mandates, called renewable portfolio standards, for utilities to use renewable energy sources.
Martin LaMonica is a senior writer for CNET's Green Tech blog. He started at CNET News in 2002, covering IT and Web development. Before that, he was executive editor at IT publication InfoWorld. E-mail Martin.
In other words, it varies greatly depending on where and how you get your electricity. States that use coal or hydro, in general, are the cheapest. You can see a graphic on the distribution here (on right): http://www.eia.doe.gov/fuelelectric.html
We project that the cost for crystalline silicon PV systems will drop from an average of $7 peak watt (19-32 cents kWh) today to approximately $3.00 (8-14 cents kWh) a decade from now. Thin-film PV systems and low-price, bulk-purchased crystalline
PV systems are projected to drop from around $5.50 per peak watt today (15-25 cents kWh) to $3.00 peak watt in 2015 (8-14 cents kWh) and less than $1.50 peak watt (4-7 cents kWh) in 2025. In our utility-scale concentrating solar power (CSP) calculations we show an average price of $3.50 per watt (around 18 cents per kWh) in 2007 declining
to around $1 peak watt (approximately 5 cents per kWh) in 2025.
Now, where on Earth are the "Real-Time Software Tools" to do the "Economic Analyses"!!!
Nonsense. And who is expected to burden this immense expense then? Of course, the taxpayers (through the "state-level mandates" mentioned in the article) !
IMHO wind and solar have don't have a snowball's chance in hell to make it cost competitive. Surely this is my personal opinion. However if this was really cost effective, then the private investment will move in and make it happen. But let the free market decide the fate of these alternatives (with no unfair incentives which ultimately is paid by the taxpayers).
Hmmmm! " CGX Best Estimate for 4 Prospects Offshore Guyana: 2.7 Billion Barrels"
http://www.rigzone.com/NEWS/article.asp?a_id=54829
http://www.energycurrent.com/index.php?id=2&storyid=7913
"Small Canadian Oil Exploration Company Major Prospects"
http://www.taipaninvestor.com/2007/12/10/small-canadian-oil-exploration-company-major-prospects/
Now, for the security of the South American "OIL" Basin/Region!
On a related note, we still can not store AC power. For those that don't know, utility companies use AC power because DC power won't travel very far.
Another note, we still can not mandate the wind blowing or sun shining. So, we have to have a backup plan to provide power. This mandates another power generation plant being built. We can't use existing coal or nuke plants as backups because one can't adjust the output of either very quickly. (Days for a coal plant, weeks for a nuke plant.) Enter natural gas, and the increase of the price of natural gas. This has been occurring since solar and wind generation has come online.
The increase in gasoline prices have occurred because of the mandated (legislated, judicially tolerated, and sometimes executive complicit ) shortage of our supply. We have enough oil to drill. We choose to import. We choose not to build refineries. We choose not to build nuke plants. We choose to rely on foreign entities for our energy. We also choose to believe in fanciful pipe dreams such as the wind always blowing how and when we want it and the sun always shining how and when we want it. Even on those hot summer nights when the wind doesn't blow. I propose that we choose to be energy independent. I propose that we let our energy technologies mature before we mandate human progress halt and revert. I propose that we don't intentionally starve 3rd world nations of power or food. We have the infrastructure in place today. To those that drank the koolaid, we knew this was going to happen and it will only get worse. What was your plan? Sit back and watch human suffering? I don't think we're going to let that happen.
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by suyts
June 18, 2008 3:31 PM PDT
- to willdryden, I don't believe that was the context of the article in its entirety. While fuel costs for construction of a traditional power generation plant is a consideration, it is also a consideration for alternative power generation plants. Furthering the increase of costs for all power generation. I believe the point to the article was that costs for traditional fuels and alternative fuels have less of a gap. What I was trying to point out was that this is only true because we have chosen to increase the costs of our traditional fuels. While anybody who cares to look into such things know that there is no infrastructure in place to support these alternative quests and will take decades before they can be fully implemented. We have a choice with what to do in the meantime. We can, through inaction, create hardship and suffering not just here in the States but worldwide or we can collectively state that we don't wish to sit idle while this nation, its people, and the people of the world are harmed by our inane policies of forcing traditional fuel prices to a point where they are no longer viable. Just think of the possibilities. Without undue restrictions, we could drill and mine fuel that could eliminate the need for imports. This would free up fuels for other parts of the world and drive down the costs. First start with oil and refineries. Then we could construct more nuke and coal plants at a lower cost. (Without restrictions, coal generated electricity would cost less than 2 cents a kwh to generate, today.) With the decrease in cost of transport and energy and with the increase in the subsequent demand for steel, we could then probably fire up some of the steel mills we used to have in this nation. Wow, then employment would rise. Food would be plentiful and cheaper!!!! It seems some are hell bent to ensure that the later alternative won't happen.
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