Reno Hayek Symposium

Tuesday evening’s discussion on renewable energy lead by Gene Humphrey was excellent. He distinguished “alternative energy” (Coal was an alternative to wood following the deforestation of the British Isles!) from “renewable energy” (Sustainable energy that meets the needs of the present generation without compromising resources for future generations.) It is good to note at the start that traditional transitional sources, oil, coal, gas and nuclear account for about 90% of our current energy. So all the remaining sources must have dramatic growth to replace or reduce dependence on those sources. Gene treated the naturally replenished resources, sunlight, wind, rain, tides and geothermal energy and then compared some of the traditional sources and their alternatives.

The amount of solar energy reaching the earth’s surface in one year is more that all the earth’s non-recoverable energy resources combined. It is both active (photovoltaic) and passive (thermal water heating) yet provides only 4/100ths of 1% of current world usage. Land use is the issue since a 550MW PV plant occupies 9.5 square miles, and a more efficient 354 MW Thermal plant takes 2.5 square miles. To replace current US electrical production from coal would take 1,600 to 4,000 square miles. So which states in the southwest will offer 4,000 square miles of land to supply the US appetite and what productive land uses will be impacted.

Distributed solar generation, the rooftop panels have dropped in price from $10.50 to $7.60 per installed watt.  (As a reference and as you would expect on grid base load power from new nuclear is $1.70-$1.90 per watt and from new coal $1.50-$2.50 per watt.) Yet government subsidy principally the investment tax credit has increased for commercial PV but is capped for residential PV. Likewise, powers to grid sales are limited for residential PV. Notwithstanding the perverse limitations individual rooftop solar PV investments in the southwest can generate a seven-year payback in some cases. The cost of the subsidy is not accounted for nor is the missed opportunity cost of the power to grid sales limitation.

Wind power supplies about 3/10 of 1% of our energy and is growing at the rate of 30% per year with a lot of the growth is due to tax incentives and efficient investment vehicles. There is dramatic growth potential estimated to be 5 times the current production. Power costs are 2-4 cents per KWH for large-scale units. As with solar, land use and the NIMBY factor come into play, as a 3 MW generator requires a quarter acre of land. In high wind areas, farmers and ranchers are forming associations to efficiently lease or license land to production companies expediting wind power growth. We briefly discussed the vertical generators as being more aesthetically acceptable for smaller applications. 

Hydro generates about 3% of global energy. It is long lived and low maintenance generating power at 2-4 cents per KWH day in day out. As we have recently seen in the Pacific Northwest, drought periods can affect the amount of electricity generated. Closely related is an insignificant amount of base power from wave and tidal action was briefly discussed. Geothermal, which accounts for 2/10 of 1% of our energy is primarily available at the edge of tectonic plates where high temperature resources are available. This has low power factors because of the relatively low temperatures.

Traditional sources were also compared: Nuclear, 6% of energy, growing rapidly is a major underused resource in the US but also subject to the “peak” limitations that Don discussed last month. There are thirty plants or expansions currently being planned. Government and public opposition make dramatic growth unlikely. Reprocessing is something that can be undertaken in the US on a greater scale. Yucca Mountain is something we in Nevada should exploit, not shun!

Tar sands and biofuels were also covered. Alberta’s tar sands are proven at 1.75 trillion bbls, 173 of which are economic today at $28/bbl cost. Biofuels, 2/10 of 1% of energy, have only a 25% energy yield. Their subsidy and trade barriers by government fiat are so uneconomic as to be unconscionable. We raise food prices for ourselves and for poor Mexicans and protect the likes of ADM and Cargill through the agency of the political shills in Congress and the Administration.

One intriguing aspect of our discussion was Gene suggestion of renewable combinations, i.e. using solar, wind or tidal to generate daytime power that pumps water to a reservoir, affecting “storage” for subsequent release and generation of hydroelectric power when needed. Or how about photochemical, using photovoltaic solar to drive electrolysis producing hydrogen! Or, in an area where Gene had patents, coal to gas, underground combustion in the right places!

Gene notes summarize with a current-future cost projection estimate of the various resources for comparison:

Gene thanks for a great discussion, everyone got involved.