Michael Hoexter’s Posts

• The (renewable) electron economy, part 15

  Passing the buck or paying the piper 0

  Posted 1 year, 1 month ago

  We have just gone through a period in the U.S. when very little new public infrastructure was built (with the exception of wired and wireless telecommunications infrastructure). Led by a generation and a half of politicians and economic theorists -- as well as our own inclinations -- Americans have become used to believing that a cheaper, more convenient option is always within reach through reliance on increasingly globalized markets. Our national specialization has become consumption, holding up the export economies of countries with lower labor costs by consuming ever more cheap goods, taking on increasing levels of debt in the… Read More

• The (renewable) electron economy, part 14

  Renewable energy promotion policies: transparent 32

  Posted 1 year, 1 month ago

  The previously discussed finance mechanisms tend to hide the costs of building renewable generators by concealing the actual cost per unit of electricity and costs for the ratepayers or taxpayers as a whole. In an era when so much is hanging on energy policy, it makes more sense to consider policies that do not pull punches when it comes to costs and benefits.

  Renewable Energy Payments

  A more transparent approach to spurring the market for renewable energy technologies are Renewable Energy Payments, a.k.a. feed-in tariffs. REPs name and guarantee a feasible price for renewable power from supported… Read More

• The (renewable) electron economy, part 13

  Renewable energy promotion policies: non-transparent or hidden 12

  Posted 1 year, 1 month ago

  Tax credit policies

  One of the ways the gap between market price and feasible price of renewable energy plants has been bridged is through tax benefits to investors. Just as the oil and gas industries have enjoyed various tax benefits to encourage investment in drilling, exploration, and production facilities, in the last couple decades investors in renewable generators have enjoyed either production or investment tax credits that contribute about 3 cents to the value of a kilowatt hour of renewably generated electricity for the producer. While these subsidies are set to expire at the end of 2008, most plans for… Read More

• The (renewable) electron economy, part 12

  How do we build (energy) infrastructure? 2

  Posted 1 year, 1 month ago

  The enthusiasm for unregulated markets in the last 30 years of American public policy has obscured how large pieces of infrastructure get built. Unregulated markets, to work according to their ideal, require economic actors to be able to create competing offers which are judged by consumers or buyers according to the total value they represent. Infrastructure, by its nature, involves building structures so massive that competition is considered economically inefficient, if not socially undesirable (two roads or bridges that "compete" with each other would be an eyesore and end up being much more expensive for society).

  Power plants, inclusive of… Read More

• The (renewable) electron economy, part 11

  So how much do renewables cost anyway? 30

  Posted 1 year, 1 month ago

  One of the attractions of renewable energy is that for most renewable generators (except biomass power plants) the cost of the fuel is free. However, even more so than with a conventional power plant, much of the expense of a renewable generator is concentrated at the beginning of the power plant's life. The cost of electricity is the sum of the initial, fixed capital costs for building a generator, variable costs of maintenance and fuel, any profit or return on investment, and finance costs divided by the usable energy produced over the lifetime of the generator.

  Currently, renewable generators range… Read More

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Michael Hoexter’s Recent Comments

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  Sweden and US have different renewable resources

  Jonas,
  For some reason I disagree with almost every comment you make here, in this case because you seem to treat renewable energy as independent from both its own supply and demand for energy.  

  Sweden is more sparsely populated than the US, and happens to have, relative to its rather small population and power demand a HUGE hydropower resource, especially if you include with that cross border energy trade with Norway's even bigger hydro resource.  Hydropower happens to be the most mature renewable technology out there and one of the most grid-friendly with adequate reservoir space.  

  Re: biomass.  Sweden also has historically had no water shortages so all of its territory is productive of biomass while in the US, large portions of the West are water constrained, so biomass is not as uniformly available.

  Finally Sweden has a recent and not so recent history of public investment in infrastructure that far exceeds that of the US.  

  The US, on the other hand, has relative to energy demand here, a much smaller hydropower resource and furthermore there is much controversy here about tapping into those remaining un-dammed rivers with adequate head to generate power.  We, on the other hand, have relative to Sweden, a spectacular solar resource that with solar thermal power plants with storage could supply a vast majority of the baseload power we need.  At current prices this would cost somewhere around $.15/kWh, which is more expensive than coal and existing hydro but we can afford it.  This price will go down with economies of scale and is by no stretch of the imagination "super-expensive".  

  So, I am mystified by your bad-mouthing solar, especially CSP/solar thermal.  Perhaps out of ignorance?On Alliance for Climate Protection ramps up calls for renewable-energy plan posted 12 months ago 17 Responses

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  Sean, you presuppose knowing the endpoint

  I'm not going to take on the big ethical/ political/economic issues of profit vs. non-profit/public good.  

  Sean,
  Way back when at the beginning of this string of comments you were suggesting that renewables were not NECESSARILY a cost effective means of reducing CO2 emissions, therefore a feed in tariff system is not necessarily the quickest route to carbon emission reductions.  

  Most commentators agree that the quickest and most cost effective route to reducing carbon emissions short of rapid economic contraction is aggressive energy efficiency.  I would add that an aggressive program of feed in tariffs (more aggressive than existing systems which do not effect power costs much), that includes some of the more expensive energy sources, if it contributes substantially to energy costs will spur energy efficiency investment.  The higher power costs get, the more investment you will see in energy efficiency both incentivized and without incentives.

  Also, in your comment, you overlook that the more advanced tariff systems are meant to reduce the tariff amount in successive generations of plants and spur the renewable industry to become more efficient.  This is occuring now in Germany with some protest from the PV industry but will favor those panel manufacturers that have lower costs.

  So, while someone of your orientation would favor a carbon tax or cap and trade system, I believe those systems are not, alone, capable of getting us to a mostly renewable or carbon-emissions free energy system.  At some point, people will be choosing a technology or set of technologies for a number of different reasons that are not based purely on the calculus you or others have proposed as being the most important.  

  Right now, as I have outlined earlier in this series, we are faced with "choosing horses" with regard to how we generate electricity or supply energy.  That choice involves a number of factors that are based on assumptions and not a single dollars/tons CO2 avoided figure.   Infrastructure investment takes such a long time to actually arrive at that figure that it must be based on surmises about future price trajectories, forecasts about the availability of primary energy and also notions of the public good.  This is why engineering firms consult with utilities and with regulators to make sure that contracts to build these massive pieces of equipment are priced within reason.On Renewable energy promotion policies: transparent posted 1 year, 1 month ago 32 Responses

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  Good work Gar

  Gar,
  Much appreciate the explanation and support for a renewable supergrid.  

  DrX,
  The smartness of the grid will not make up entirely for variations and shortfalls in the primary energy that may occur locally or regionally.  A smarter grid is going to be a necessity but I believe you put too much faith in the smart-grid as a kind of "holy water" where we are talking about a basic First Law problem of not being able to create energy out of nothing. Removing coal and natural gas from use by the grid is going to use a big hole in that primary energy.  Linking supply and demand, which the transmission grid as described by Gar will do, will enable us to fill in that gap, and/or use the scalable energy storage capacity of thermal energy from CSP.

  As EGS comes online over the next few decades, we may be able to pare down the density of grid interconnections we will need, as EGS may allow local renewable baseload power generation almost anywhere.On A purely local approach would double or triple costs posted 1 year, 1 month ago 23 Responses

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  Being committed half-way is more dangerous

  The US has not fully committed to rail transit, so in most areas, freight and passenger rail share the same tracks.  If we were able to segregate freight and passenger traffic, this type of accident would be far less likely.

  Barring the expense of building a dedicated passenger rail system, improved signaling would go a long way to preventing this type of accident. On L.A. train collision dismays new riders posted 1 year, 1 month ago 12 Responses

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  If you insist on cheap, not much happens

  Sean,
  Your approach to this is a recipe for nothing significant happening in this area.  The full piece of which this is a serialization is a argument for investing more and paying more for energy to build a clean energy infrastructure.  I don't want to repeat the whole argument here but in a nutshell, the market-biases that you find here in the US and in Britain, which insist that demand will dictate to supply what a good should cost, don't work in the area of energy, and in particular, the new clean energy infrastructure that we need.  

  The reason, especially in the are of renewable energy, is that one needs a lot of "stuff", raw materials to capture the relatively diffuse renewable energy flow.  Also electric generators are supposed to last 20 to 50 years, so have to have a build quality that costs money.  We will achieve SOME efficiencies with lowered finance costs and economies of scale as well as technical innovation but with not nearly the speed that we as consumers have become used in the area of other "miniaturizable" technologies like electronics and biotechnology.  

  Those countries that follow your philosophy, Sean, like the US and Britain, lag in the area of building new infrastructure and in particular in the area of renewable energy.  

  I've written a critique of Google's RE<C in which I suggest that they (and you) are "making the perfect the enemy of the good".On Renewable energy promotion policies: transparent posted 1 year, 1 month ago 32 Responses