Speaking of Coal Power: The True Costs of Going Green

Three of the best-kept secrets in the U.S. today have nothing to do with national security in the traditional sense. They all involve costs: the cost of fulfilling campaign promises, a valid estimate of the cost of carbon control legislation (S. 2191) expected to reach the Senate floor in a few months, and the real cost of "going green." The first two secrets will be revealed in time as either a grand illusion or the typical political game of applying practical magic to our tax dollars. Meanwhile, many are beginning to understand the true costs of playing the green card.

Don’t get me wrong, I believe that any cost-effective renewable form of energy should be given preference by our society and governments. But using state renewable portfolio standards to force very expensive renewable-energy projects down ratepayers’ throats is both undesirable and has practical limits that few outside our industry understand. Witness the Texas blackout on February 26, when day-ahead forecasts predicted over 1,000 MW of wind power that never materialized. There are few cases where renewables can match the low cost or reliability of baseload coal-fired generation.

Jumping the Gun

Every company, regulator, and candidate for office seems to be showing a green face to the public these days. In my opinion, there is too much marketing hype surrounding all things green and not enough practical evaluation of renewable-energy technologies, their compatibility with existing grids, or clear explanations of the additional costs for electricity they will force us to pay. Just because we can now develop green plants (the power-generating kind) doesn’t mean we should, if their numbers don’t pan out.

Case in point: A recent press release by Ausra Inc., a developer of utility-scale solar thermal projects, pointed to a "peer-reviewed study" the company did claiming that over 90% of U.S. electricity demand could be met by solar thermal power with heat energy storage. I’m weary of companies’ blatant marketing hype about universal "green" solutions — that they happen to sell. In Ausra’s case, the claims of the study mentioned are patently absurd, and even a cursory review of them reveals nothing but questionable assumptions and poor analysis.

Poll Reveals Cost Sensitivity

What we really need to do is determine how much economic pain the U.S. public is willing to suffer to help the country make its power supply greener. A worldwide online survey recently conducted by Harris Interactive for The Financial Times found that 37% of American adults surveyed considered themselves "green." That was about the same share as in the UK (47%), but far less than in Germany (70%).

The rubber hit the road when the survey questions turned to cost. For example, 54% of British respondents said they would not pay more for electricity produced from renewable sources. Some 50% of German respondents took the same position, as did 40% of the Americans surveyed.

When the cost questions used actual numbers, the survey found even more reluctance to go green. Asked whether their household would be willing to pay $200 a month (the EU estimate) to help cut greenhouse gas emissions by subsidizing renewable energy plants, strong majorities across the EU and the U.S. just said "no."

"Until people are forced to do so, or the price for renewable energy comes down considerably, people will not make the ‘green’ choice," The Harris Poll said in commentary on the survey findings. "This is especially true as economies around the globe tighten. When it comes to [consumers choosing between] food or solar power, food will win… each time."

In brief, the poll’s findings reveal that consumers would like to make power greener, but they aren’t willing to pay much more to do so. How much more is the $64,000 question, and pocketbook issues have become an untouchable "third rail" in this U.S. election year, especially with the economy on the brink of recession. That’s why the political shell game of carbon controls will continue to focus on image and avoid any substantive discussion of the true costs of imposing them.

Nevertheless, given that carbon controls are a matter of when rather than if, much of this issue of COAL POWER looks at some of the ways in which future efforts to control CO 2 emissions may affect coal power generators.

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