Why the shift to alternate energies continues, despite shale boom

Oil prices are rising as uncertainty grows over the fate of major producers like Russia and Iraq. Everything from transportation to manufacturing to a petroleum-intensive agricultural system is a puppet flailing on the strings of this volatile commodity.

Meanwhile, increased production of alternative power is finally making prices more competitive, particularly for solar energy, as former Vice President Al Gore recently pointed out in Rolling Stone. Costs have declined dramatically — 20 per cent a year since 2010. This is not yet reflected in energy prices, however, largely because of the major tax breaks still extended to the dirty technology of the past.

Yet this shift to alternative energies is inexorable. The recent boom in natural gas from shale, which has glutted the market with cheap fuel, has delayed it. But as oil costs rise, the transition to alternative energy is again poised to accelerate.

Roughly 49 per cent of new US electrical-generating capacity in 2012 came from renewables. Battery storage and other aspects of solar technology are also now cheaper and far more efficient.

Solar still accounts for a small percentage of US energy use. The United States currently produces 10 gigawatts of solar a year, powering about 2.4 million homes. But in the past five years, solar-power consumption has increased at a compound annual growth rate of 63.2 per cent.

“Solar can easily maintain its current fast growth rate through the year 2020,” energy analyst Gregory MacDonald predicted. “Assuming this is the case, and also projecting strong annual growth in overall global power consumption at 3.4 per cent per year, solar will be making a meaningful contribution to total global power supply by 2020.”

Excess solar electricity generated by individuals is now being sold back to power companies in 44 states through a system called “net metering.” Instead of electricity being produced solely in a central power plant and then distributed to customers, renewables like wind and solar allow for a decentralized system in which energy is produced wherever the sun is shining and winds are blowing, and then sent into the grid for distribution where it is needed.

Are we to believe that a country that created the Internet and launched the Human Genome Project can’t figure out how to incorporate solar and wind power into the power grid?

This democratization of the power system is not exactly welcomed by the utilities. It is also under attack by some free-market advocates, including the American Legislative Exchange Council, which is funded by Charles and David Koch, whose fortune is built on fossil fuels. In their view, it seems, the free market must not include open competition from solar and wind power. These groups have fought against subsidies for renewable energy companies. In some states, they are even pushing for higher taxes on homeowners who install rooftop solar panels.

Arizona, which has the highest per-capita solar potential of any state, charges its citizens $5 a month for the privilege of producing their own clean energy. The state public utility commission is considering adding a monthly charge for sending power to the grid.

Critics of renewables contend that citizen power generation is a nuisance. The US electrical system, they insist, won’t be able to cope with the addition of intermittent individual power sources like wind and solar.

There are legitimate concerns about how to effectively integrate alternative energy sources into the grid while maintaining the stability of the system. But are we to believe that a country that created the Internet and launched the Human Genome Project can’t figure out how to incorporate solar and wind power into the power grid?

Germany has already done so. Italy, Belgium, the Czech Republic and other European nations are all well on their way.

However difficult and expensive it may be at the outset to green the US power system, it won’t take long before our initial investment begins to pay off in lower electric bills — which are no longer a hostage to global oil prices — and a cleaner environment. A 25 per cent renewable energy standard by 2025, according to a study by the Union of Concerned Scientists, would result in 7.6 per cent lower electricity prices by 2030.

The same analysis found that switching to 25 per cent renewables would create more than three times as many jobs as producing an equivalent amount of electricity from fossil fuels, an additional 202,000 new jobs within 10 years.

Economically depressed areas in the Midwest are already reaping the benefits of renewables. Not only are payments by turbine owners allowing thousands of farmers on the high plains to stay on their land, but the wind power revolution has also “reinvigorated old-line manufacturing,” according to the Midwest Governors Energy Coalition.

Ohio, for example, has more than 600 firms in the wind energy-supply chain, as well as machine shops, foundries and gear makers. In Iowa, where wind power produces one-quarter of the state’s power, MidAmerican Energy has not increased its electricity rates in 18 years.

Critics regularly return to the matter of price. It costs far less to burn fossil fuels, they say, than to tap into free power from the sun and the wind. That argument is flawed, however. It does cost more to build wind farms and install solar arrays. But once these plants are set up and running, they have lower operation and maintenance costs than conventional poweron a yearly basis. No more regular fuel bills and only minimal expenses for upkeep of solar, for example, which  has no movable parts that wear out and need to be replaced.

The price argument is also fallacious because we have never paid the real price for the power we use, which includes the cost to the environment and human health of the carbon pollution that fossil-fuel mining and burning generates.

And it is only going to get worse. Global warming is going to have one hell of a sticker-price when temperatures rise more than 2 degrees centigrade (3.6 degrees Fahrenheit above pre-industrial levels), as the latest Intergovernmental Panel on Climate Change  report predicts will happen by mid-century if we continue on our current trajectory.

Even aside from these “hidden costs,” however, the federal government is subsidizing the fossil fuel industry to the tune of a half-trillion dollars a year in tax breaks, according to the International Monetary Fund. This makes the United States the world’s largest benefactor of fossil-fuel industry.  Renewable energy also gets government support. But worldwide, fossil fuel subsidies were at least six times larger.

This makes little sense. We should be supporting technologies that help us to put the brake on destructive climate change, rather than feeding the unsustainable fossil-fuel habit that is driving it.

Richard Schiffman is the author of two biographies and a journalist specializing in the environment whose work has appeared in the New York Times, The Washington Post, National Public Radio and elsewhere. This post originally appeared in Reuters’ The Great Debate.

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