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We can't afford subsidies for renewable energy

I received plenty of comment to my latest column (Forget Peak Oil. Think Peak Renewables, Troy Media, June 4) and one vein suggested that subsidies for energy are commonplace and, while they remain, they should apply to renewable energy just as they do to coal and oil and gas. If they did, the comments suggested, then the idea of peak renewable energy falls flat.

To deal with this response we need to understand something about costs and subsidy. Let us look at costs first:

The U.S. Energy Information Administration (EIA) calculated the costs in dollars per megawatt/hour of different energy sources as follows: Conventional coal power: $100.40; Natural gas: $83.10; Nuclear: $119.00; Onshore wind power: $149.30; Offshore wind power: $191.10; Thermal solar power: $256.60, Photo-voltaic solar power: $396.10.

According to the EIA, the availability, i.e. the ability to produce electricity on demand is 85 per cent for coal, 87 per cent for natural gas, 90 per cent for nuclear, but only 34 per cent to 39 per cent for wind and 21 per cent to 31 per cent for solar. For CSP Solar to produce electricity the other 74 per cent of the time requires costly thermal storage or an auxiliary fossil fuel boiler (usually a natural gas boiler that operates at about half the efficiency of a modern combine cycle natural gas turbine).

Availability is important, since capacity to produce (e.g. a wind turbines capacity) is not the same as actual production from that energy source. The above estimates of availability (production) are optimistic.

What is clear so far is that renewable energy is less reliable and more expensive than abundant energy from gas or coal. It is also more expensive than nuclear.

This is why governments, in part for environmental reasons but also so as to support a “green economy agenda”, subsidize renewable energy. Now let us look at energy subsidies:

According to an EIA study based on 2008 data, the U.S. subsidizes solar power to the tune of $24.34 per megawatt hour, $23.37 per year for wind, but only 44 cents for coal, 25 cents for natural gas and $1.59 for nuclear power. If renewable energy was as prevalent as fossil fuels, we couldn’t afford the subsidies.

The argument that renewable energy is efficient is lost. The argument that renewable energy is subsidized in just the same way as other energy sources is lost – look at the scale of the difference in subsidy. The argument that remains is the impact on CO2.

Yet as we have grown our renewable energy sector in the U.S., Canada and Europe, CO2 emissions have risen.

The political willingness to support renewable energy may be peaking as politicians realize that renewable energy systems are not the answer they were looking for.

Stephen Murgatroyd is a consultant in innovative business and education practices with a PhD in psychology.