NEW ENERGY: ALL IT’S CRACKED UP TO BE

The recent energy bill allots $2 billion to New Energy R&D. That irritates some. Nevermind that the fossil fuels industries have maybe ten times as much in subsidies and tax breaks, nevermind that much of that $2 bil will underwrite oil and gas companies’ biofuels development projects, nevermind that much of it will also go to coal companies’ experiments with carbon capture and sequestration – some demand that New Energy justify its R&D funding to taxpayers.

Nevermind that the cost of solar energy- and wind energy-generated electricity is coming steadily down while the cost of oil-and-gas heating and coal-generated electricity is going up.

Here are the hard numbers: The Department of Energy (DOE) spent $3.1 billion on fossil fuels R&D and $1.4 billion for New Energy R&D from 2002 to 2007. In the same time period, there were $13.7 billion in tax breaks for fossil fuel-generated electricty and $2.8 billion in tax breaks for New Energy-generated electricity.

Ben Lieberman, senior energy/environment policy analyst, Heritage Foundation: "The more government help something needs, then the less I think it's probably all it's cracked up to be…"

So by Lieberman’s logic (and he is a distinguished scholar at a distinguished, if conservative, think tank) fossil fuel energy isn’t all it’s cracked up to be. As NewEnergyNews has always suspected. And New Energy is rapidly becoming all that it can be.

New Energy costs are coming down while the prices of oil and gas go up and utilities prepare to pay a carbon premium for coal-fired power. (click to enlarge)

Analysis: Renewable energy’s potential
Rosalie Westenskow, January 21, 2008 (UPI)

WHO
Gary Schmitz, spokesman, National Renewable Energy Laboratory (NREL) of DOE; Brian Lynch, spokesman, Schott Solar; Jan van Dokkum, president, fuel cell producer United Technologies Co.; Ben Lieberman, senior energy/environment policy analyst, Heritage Foundation

WHAT
The assessment begins by summarizing the New Energies to be considered as “wind, solar, geothermal, hydropower, fuel cells and biomass.” OK.

WHEN
- The assessment uses the Department of Energy (DOE)/Energy Information Administration (EIA) 2006 figure of 7% for NewEnergy”s shareof U.S. electricity generation.
- On January 14, Schott Solar announced a $100 million investment in an Albuquerque, NM, factory to produce equipment for solar power plants.

The markets continue to bet big on New Energy's future. (click to enlarge)

WHERE
- While the assessment allows that enough sun falls on just a part of the Arizona desert to supply all of U.S. electricity, it points out that to install so much solar infrasturcuture would coast a great deal and be more expensive at present rates for solar photovoltaic (20 to 25 cents/kilowatt-hour) than coal-fired energy (3 to 7 cents/ kilowatt-hour). Of course, it makes no allowances for what the cost of coal-fired electricity will be when a cap-and-trade system imposes on it the cost of the harm it does in emissions, environmental destruction and respiratory disease.
- 23 states and DC have Renewable Electricity Standards (RESs), policies that require the states’ utilities to obtain a specific percent of their electricity from renewable sources by a date certain.

WHY
- The wind energy industry, as a result of encouraging government policies, has brought its per kilowatt-hour down to levels competitive with all other energy sources.
- The Schott Albuquerque factory will employ 1500 people and cost $500 million.
- Opponents contend such investment and its attendant anticipated growth is only possible as a result of government incentives and state policies. New Energy proponents respond that fossil fuels have enormous subsidies and incentives and the federal government has withheld the most important policy, a national RES that would spark real New Energy development.
- Hydrogen fuel cells are used on the space shuttle, in buses and in prototype cars but producers are still trying to make them competitive in the marketplace. There are legitimate problems with fuel cells but the long term promise of completely emissions-free driving deserves research funding.

The cost of wind energy is virtually competitive now and will be even better when that inevitable national cap-and-trade system is instituted. (click to enlarge)

QUOTES
- Gary Schmitz, spokesman, National Renewable Energy Laboratory (NREL) of DOE: "In terms of potential, (renewable energy) is virtually limitless…Theoretically, if you took today's solar photovoltaic technology and employed it in a square of the Arizona desert, 100 miles on a side, you could provide the entire country with its electricity needs…(Implementation of) all of these technologies is growing at a rate of 20 percent to 30 percent per year…Even solar…has found a healthy market."
- Brian Lynch, spokesman, Schott Solar: "We are anticipating continued, steady growth, which has been 50 percent over the past several years…We see the United States as a sleeping giant for solar energy…With increased incentives from the federal government and growing state action, we think the market for solar will continue to grow…"
- Jan van Dokkum, president, fuel cell producer United Technologies Co.: "It takes a mandate to go large scale…If we can get volumes up, the price will come down … (because) if you look at the materials that make up a fuel cell compared to an internal combustion engine, it should be cheaper (to make a fuel cell)…the problems you face with fuel cells in getting them to the marketplace are tremendous… I should say if we had serious, sufficient funding, maybe five years…"
- Ben Lieberman, senior energy/environment policy analyst, Heritage Foundation: "The more government help something needs, then the less I think it's probably all it's cracked up to be…The real issue with fuel cells is that they're not as good as their proponents say they are…The problem with wind and solar is their reliability. The sun doesn't always shine; the wind doesn't always blow. "