Wrong policy on renewable energy

[kristopher]

As has been pointed out many times since being first noted by Amory Lovins in 1976, "hard path" energy policies "crowd out" renewables. This is an inevitable result of natural conflict in the design for distributing power from the two types of energy systems (centralized large scale thermal versus distributed renewables).

This letter to the editor appears in todays Guardian:

Wrong policy on renewable energy

We urge support for real feed-in tariffs for renewable energy and not nuclear power. British policymakers are poised yet again to ignore the dominant and most effective mechanism for promoting renewable energy across the world (feed-in tariffs) in favour of an auction system (Huhne promises 'seismic shift' to greener power, 17 December). This will replace the renewables obligation. The obligation is expensive, but allows good opportunities for onshore and offshore wind developers to set up schemes. The auction approach is tried and tested across the world (including the UK in the 1990s) and shown to consistently fail to deliver large capacities of renewable energy.

We need a German-style system which offers open-ended opportunities to developers to take up contracts to supply renewable energy at good, guaranteed rates for 20 years, with rates tailored for different renewable technologies. Instead, in its electricity markets reform proposals, the government is proposing a thinly disguised design for channelling money from electricity consumer receipts away from renewable energy, especially wind power, and towards nuclear power. The government proposals are inspired by e.on and EDF to benefit nuclear power, which will crowd out renewable energy. This flies in the face of all independent opinion polls which show that the public wants its electricity payments to be reserved for renewable energy, not nuclear power.

Dr David Toke Senior Lecturer in Energy Policy, Department of Political Science and International Studies, University of Birmingham

Emeritus professor David Elliott Professor of Technology, Faculty of Mathematics, Computing and Design, Open University

Professor Bryan Wynne, Professor of Science Studies, Lancaster University

Professor John Twidell, AMSET Centre Leicestershire

Professor Andrew Dobson, Professor of Politics, School of Politics, International Relations and the Environment, Keele University,

Professor Keith Barnham, Physics Department, Imperial College London

Dr Paul Dorfman, Warwick Business School University of Warwick

Colin Challen

Herbert Eppel

Dr Richard Cowell

Dr Peter Connor, University of Exeter

Dr Candida Spillard

Dr Ian Fairlie

Paul Brown

Antony Froggatt Senior Research Fellow, Chatham House

Dr Xavier Lemaire

http://www.guardian.co.uk/environment/2010/dec/27/wrong-policy-on-renewable-energy

[rucky]

1. We're not going to get anywhere until we address this.

K&R

[Nederland]

2. German-style feed-in tariffs are incredible expensive

For example, Germany ends up paying USD 0.65/kWh to increase its solar generation (http://www.wind-works.org/FeedLaws/IEAFeed-inTariffsMoreEffective.html). There is simply no way you are going to put a dent in GHG emmisions if you have to pay that much money. The authors are therefore mistaken to suggest that the German model is one we should emulate.

[kristopher]

3. That is only your perspective as a free market purist

To "free market" purists like yourself any subsidy is "expensive" but that is your perspective based on an ideological perspectiv, not a comment on the ability of the policy tool under discussion to deliver results.

The fact is that subsidies are used for both valid and invalid social purposes.
Valid subsidies are those that are used to encourage socially desirable technologies or practices that are not achievable within the context of established markets under the control of entrenched and powerful interests. Invalid subsidies are those that are simply a pretext for transferring wealth from the public coffers to entrenched and powerful interests controlling the political processes.

In the case of energy, we can see wonderful examples of invalid subsidies in the treatment of fossil fuels, nuclear energy and ethanol. No matter how much we spend on these technologies, the nature of the technologies is such that there are no benefits beyond the immediate product generated by the subsidies. When we give public money to fossil fuels, nuclear and ethanol we might receive a short term reduction in energy costs, but remove the subsidies and the price rises right back to where it would otherwise be.

Renewable energy industries, on the other hand, respond to public assistance just as we would hope - with *permanently* declining costs that return savings to the public far, far, far in excess of the initial amount of the subsidies that enable those industries to become established players in a market dominated by socially harmful technologies.

So I say again, to "free market" purists like yourself any subsidy is "expensive" but that is your conclusion based on an ideological perspective, not a comment on the ability of the policy tool under discussion to deliver results.

[joshcryer]

5. Government pays to build these fucking things, and rates go up.

But the citizens don't own them, the wind industry people do.

It's a scam.

[Nederland]

6. I am not a free market purist

...so I have no idea what your rant is all about.

I simply believe that a responsible government would not fund things that a simple cost benefit analysis shows to be idiotic.

[kristopher]

9. Then your conclusion regarding the FITs should be different than it is.

There are two facets to an economic discussion. The goal has to be set (normative economics) and then the best path to that goal needs to be established (positive economics).

Your conclusion regarding FITs is only possible when you START from the normative values of a free market purist.

[Nederland]

11. Define "free market purist"

Just so I know how to respond. I think we define the term differently.

[DCKit]

4. Additionally, what do coal, nnew-que-lur and NG generation actually cost...

once all the gubmint subsidies are figured in?

Not to mention the cost of the MIC, which seems to exist ONLY to protect energy interests - and not mainly ours.

[Nederland]

7. Not sure I get your point

Yes, existing government subsidies for lots of things are idiotic. That does not mean we should replace them with subsidies that are equally idiotic.

[DCKit]

8. If we subsidized wind, solar and water energy sources to the same degree...

there would be an actual payback.

[Nederland]

10. How do you know that?

Europe has subsidized renewables to a huge extent and for the most part all they have accomplished is higher prices for electricity. Sure, they've seen an increase in a few percentage points in their generation mix, but not enough to really make much of a difference...

[kristopher]

12. Still proceeding from the free market purist perspective, I see.

There are no benefits unless you actually look for them...

[DCKit]

13. Thank you, but you know exactly what's going on here, as do I.

Reminds me of someone I used to know here, but I can't remember the Nname.

[kristopher]

14. :)

I suspect the Church of Uranus has more than one acolyte...