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Will renewables become cost-competitive anytime soon?

The Siren Song of Wind and Solar Energy

Despite advocates’ claims to the contrary, wind and solar continue to be the most expensive sources of electricity. The New York Times recently reported that “wind power is currently more than 50 percent more expensive than power generated from a traditional coal plant.” [1] Energy Secretary Stephen Chu told the New York Times that solar technology would have to get five times better to be competitive in today’s energy market.[2] In spite of these reports and admissions, the public relations campaign for wind and solar powered electricity marches on.

For decades, representatives and advocates of wind and solar have claimed that their technology was near a competitive tipping point—but just needed a bit more subsidies, set-asides, and government aid to succeed. But even after 30 years of massive subsidies, wind and solar continue to be more expensive and contribute only a small amount of electricity. In 2008, wind produced 1.3% of the electrical generation in America and solar produced a meager 0.02%.[3]

The quotations below highlight the errant predictions of near-term viability (with the predictions bolded for emphasis). These are just some of the examples of over 30 years of claims that wind and solar will soon be cost competitive.

Overly Optimistic Wind/Solar Claims

In 1983, Booz, Allen & Hamilton did a study for the Solar Energy Industries Association, American Wind Energy Association, and Renewable Energy Institute. It stated: “The private sector can be expected to develop improved solar and wind technologies which will begin to become competitive and self-supporting on a national level by the end of the decade [i.e. by 1990] if assisted by tax credits and augmented by federally sponsored R&D.”[4]

In 1986, Amory Lovins of the Rocky Mountain Institute lamented the untimely scale-back of tax breaks for renewable energy, since the competitive viability of wind and solar technologies was “one to three years away.”[5]

In 1990, two energy analysts at the Worldwatch Institute predicted an almost complete displacement of fossil fuels in the electric generation market within a couple decades [i.e. 2010]:

Within a few decades, a geographically diverse country such as the United States might get 30 percent of its electricity from sunshine, 20 percent from hydropower, 20 percent from wind power, 10 percent from biomass, 10 percent from geothermal energy, and 10 percent from natural-gas-fired cogeneration.[6]

Overly Optimistic Wind Power Claims

In 1986, a representative of the American Wind Energy Association testified:

The U.S. wind industry has … demonstrated reliability and performance levels that make them very competitive. It has come to the point that the California Energy Commission has predicted windpower will be that State’s lowest cost source of energy in the 1990s, beating out even large-scale hydro.

We are not quite there. We have hopes.[7]

Christopher Flavin of the Worldwatch Institute has been predicting competitive viability since the 1980s. In 1984 he wrote:

Tax credits have been essential to the economic viability of wind farms so far, but will not be needed within a few years.[8]

In 1985, he wrote:

Although wind farms still depend on tax credits, they are likely to be economical without this support within a few years.[9]

In 1986, he wrote:

Early evidence indicates that wind power will soon take its place as a decentralized power source that is economical in many areas…. Utility-sponsored studies show that the better windfarms can produce power at a cost of about 7¢ per kilowatt-hour, which is competitive with conventional power sources in the United States.[10]

Overly Optimistic Solar Power Claims

In 1976, solar advocate Barry Commoner stated:

Mixed solar/conventional installations could become the most economical alternative in most parts of the United States within the next few years.[11]

In 1987 the head of the Solar Energy Industries Association stated:

I think frankly, the—the consensus as far as I can see is after the year 2000, somewhere between 10 and 20 percent of our energy could come from solar technologies, quite easily.[12]

In 1988, Cynthia Shea of the Worldwatch Institute wrote:

In future decades, [photovoltaic technologies] may become standard equipment on new buildings, using the sunlight streaming through windows to generate electricity.[13]

Conclusion

Wind and solar should not be thought of as “infant industries” but as government-dependent industries that penalize consumers and/or taxpayers. “Buyer beware” should also apply to the purveyors of political energy. Self-interested consumer decisions in the energy marketplace should be respected—and false promises about inferior energies exposed—for good public policy outcomes.


[1] Matthew Wald, “Cost Works Against Alternative and Renewable Energy Sources in Time of Recession,” New York Times, March 29, 2009 (available at http://www.nytimes.com/2009/03/29/business/energy-environment/29renew.html).

[2] John Broder and Matthew Wald, “Big Science Role Is Seen in Global Warming Cure,” New York Times, February 11, 2009 (available at http://www.nytimes.com/2009/02/12/us/politics/12chu.html).

[3] Energy Information Administration, Net Generation by Energy Source: Total (All Sectors), Mar. 24, 2009, http://www.eia.doe.gov/cneaf/electricity/epm/table1_1.html; Energy Information Administration, Net Generation by Other Renewables: Total (All Sectors), Mar. 24, 2009, http://www.eia.doe.gov/cneaf/electricity/epm/table1_1_a.html.

[4] Renewable Energy Industry, Joint Hearing before the Subcommittees of the Committee on Energy and Commerce et al., House of Representatives, 98th Cong., 1st sess. (Washington, D.C.: Government Printing Office, 1983), p. 52.

[5] Lovins, in K. Wells, “As a National Goal, Renewable Energy Has An Uncertain Future.” Wall Street Journal, February 13, 1986, pp. 1, 19 at 19.

[6] Christopher Flavin and Nicholas Lenssen, Beyond the Petroleum Age: Designing a Solar Economy (Washington: Worldwatch Institute, 1990), p. 47.

[7] Statement of Michael L.S. Bergey, American Wind Energy Association in Renewable Energy Industries, Hearing before the Subcommittee on Energy Conservation and Power of the Committee on Energy and Commerce, House of Representatives, 99th Cong., 2nd sess. (Washington, D.C.: Government Printing Office, 1986), p. 129.

[8] Christopher Flavin, “Electricity’s Future: The Shift to Efficiency and Small-Scale Power,” Worldwatch Paper 61, Worldwatch Institute, November 1984, p. 35.

[9] Christopher Flavin and Cynthia Pollock, “Harnessing Renewable Energy,” in Worldwatch Institute, State of the World 1985 (New York: W. W. Norton, 1985), p. 197.

[10] Christopher Flavin, “Electricity for a Developing World: New Directions,” Worldwatch Paper 70, Worldwatch Institute, June 1986, p. 53.

[11] Barry Commoner, The Poverty of Power (New York: Alfred A. Knopf, 1976), p. 151.

[12] Scott Sklar, Solar Energy Industries Association. Quoted in Solar Power, Hearing before the Subcommittee on Energy and Power of the Committee on Energy and Commerce, House of Representatives, 100th Cong., 1st sess. (Washington, D.C.: Government Printing Office, 1987), p. 12.

[13] Cynthia Shea, “Renewable Energy: Today’s Contribution, Tomorrow’s Promise,” Worldwatch Paper 81, Worldwatch Institute, January 1988, p. 44.


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4 Responses to “Will renewables become cost-competitive anytime soon?”

  1. Barnaby Dawson on

    The article provides many quotes of past predictions. This form of argument suffers from the following two logical fallacies. Firstly, it is anecdotal. People are making predictions all the time. Exhibiting a handful of overly optimistic predictions, really doesn’t prove anything with regards to the predictions overall. Secondly, it is an ad hominem argument. Whilst such arguments are beloved by the media, they are logically vacuous. What people say about wind power, and solar power is irrelevant. What matters, are the figures, and the trends.

    To be convincing, this article needs to address the historic trend in cost per peek watt. I have read elsewhere that this value has been decreasing, at an average rate of 20% per year, for a couple of decades. Now if this trend is correct, is sustained for another decade, and is not in some way misleading, then the predictions that this article ridicules are in fact reasonable estimates.

    So the article needs to argue that this trend is misreported, will not continue or is misleading. As the article fails to do this, it does not address the reason behind the recent bold predictions made by advocates of solar power, and it is unlikely to convince anyone aquainted with the historic trend above.

    It also fails to consider the massive subsidies given to carbon intensive energy sources, in direct and indirect forms (coal tax breaks and oversees military expenditure for example). It is by no means clear, that carbon intensive energy gets less government help than solar and wind.

    Finally, any comparison of carbon intensive and low (or neutral) carbon energy sources, must consider the external costs associated with global warming. The scale of that externality is huge, and it is certain that, were this externality internalized, wind power would be cheaper than coal.

    Reply
  2. Barnaby Dawson on

    The article provides many quotes of past predictions. This form of argument suffers from the following two logical fallacies. Firstly, it is anecdotal. People are making predictions all the time. Exhibiting a handful of overly optimistic predictions, really doesn’t prove anything with regards to the predictions overall. Secondly, it is an ad hominem argument. Whilst such arguments are beloved by the media, they are logically vacuous. What people say about wind power, and solar power is irrelevant. What matters, are the figures, and the trends.

    To be convincing, this article needs to address the historic trend in cost per peek watt. I have read elsewhere that this value has been decreasing, at an average rate of 20% per year, for a couple of decades. Now if this trend is correct, is sustained for another decade, and is not in some way misleading, then the predictions that this article ridicules are in fact reasonable estimates.

    So the article needs to argue that this trend is misreported, will not continue or is misleading. As the article fails to do this, it does not address the reason behind the recent bold predictions made by advocates of solar power, and it is unlikely to convince anyone aquainted with the historic trend above.

    It also fails to consider the massive subsidies given to carbon intensive energy sources, in direct and indirect forms (coal tax breaks and oversees military expenditure for example). It is by no means clear, that carbon intensive energy gets less government help than solar and wind.

    Finally, any comparison of carbon intensive and low (or neutral) carbon energy sources, must consider the external costs associated with global warming. The scale of that externality is huge, and it is certain that, were this externality internalized, wind power would be cheaper than coal.

    Reply
  3. admin on

    1) The above quotations are from individuals and groups that support major government favor to help their technology become competitive on a major scale. My quotations show that “we are almost there” is a decades-old refrain.

    2) Renewables are not an infant industry but just the opposite, which adds substance to the above post. I posted on the long history of solar, for example with quotations (many from solar subsidy boosters) at http://masterresource.org/?p=5180. Check this out on wind: http://masterresource.org/?p=1274.

    By the way, WS Jevons refuted wind and other renewables as industrial energies in his 1865 book, The Coal Question (http://masterresource.org/?p=506).

    3) I put together the above quotations some years ago when I was providing Dallas Burtraw of Resources for the Future criticism of his co-authored 1999 paper, “Winner, Loser, or Innocent Victim: Has Renewable Energy Performed As Expected?,” (here http://www.repp.org/repp_pubs/articles/mcveigh/index_mcveigh.html“).

    The RFF authors argued that wind and solar costs had gone down and that thus government-favored renewables had met its political promises. I argued that the real issue and promise was to “be competitive,” and renewables were not and would not be. The RFF paper explains how conventional technologies were improving, not only subsidized renewables. And renewables predate the fossil fuel industry. (Remember that the market share of renewables for most of man’s history was 100%.)

    4) Politically favored renewables are subsidized much more than oil, gas, or coal per unit of energy produced. I believe EIA and others have documented this clearly.

    5) Beware of cost trends to conclude that they will automatically continue. I can quit my job and train at basketball and get an improvement curve going that if extrapolated would put me in a lot of basketball leagues in time. But I am 54, and let’s just say I am ‘intermittent.’

    6) Even if solar was cost competitive, solar loses because it is an inferior product compared to other forms of grid electricity. Would you buy an appliance that had a trick motor (don’t know when it is on or off) if it was cheaper than a reliable one? I doubt it.

    7) Global warming? I invite you to check your premises about market failure and compare government failure to market failure. It is adaptation time if you are a political realist. Just do the math.

    – Robert L. Bradley, Jr.

    Reply
  4. admin on

    1) The above quotations are from individuals and groups that support major government favor to help their technology become competitive on a major scale. My quotations show that “we are almost there” is a decades-old refrain.

    2) Renewables are not an infant industry but just the opposite, which adds substance to the above post. I posted on the long history of solar, for example with quotations (many from solar subsidy boosters) at http://masterresource.org/?p=5180. Check this out on wind: http://masterresource.org/?p=1274.

    By the way, WS Jevons refuted wind and other renewables as industrial energies in his 1865 book, The Coal Question (http://masterresource.org/?p=506).

    3) I put together the above quotations some years ago when I was providing Dallas Burtraw of Resources for the Future criticism of his co-authored 1999 paper, “Winner, Loser, or Innocent Victim: Has Renewable Energy Performed As Expected?,” (here http://www.repp.org/repp_pubs/articles/mcveigh/index_mcveigh.html“).

    The RFF authors argued that wind and solar costs had gone down and that thus government-favored renewables had met its political promises. I argued that the real issue and promise was to “be competitive,” and renewables were not and would not be. The RFF paper explains how conventional technologies were improving, not only subsidized renewables. And renewables predate the fossil fuel industry. (Remember that the market share of renewables for most of man’s history was 100%.)

    4) Politically favored renewables are subsidized much more than oil, gas, or coal per unit of energy produced. I believe EIA and others have documented this clearly.

    5) Beware of cost trends to conclude that they will automatically continue. I can quit my job and train at basketball and get an improvement curve going that if extrapolated would put me in a lot of basketball leagues in time. But I am 54, and let’s just say I am ‘intermittent.’

    6) Even if solar was cost competitive, solar loses because it is an inferior product compared to other forms of grid electricity. Would you buy an appliance that had a trick motor (don’t know when it is on or off) if it was cheaper than a reliable one? I doubt it.

    7) Global warming? I invite you to check your premises about market failure and compare government failure to market failure. It is adaptation time if you are a political realist. Just do the math.

    – Robert L. Bradley, Jr.

    Reply

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