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Key issues affecting acceptance and integration of renewable energy technologies in the US

Written by Alex Nicholsen, P.E., Nicholsen Engineering Services, Sunland, California.

I would like to point out that the green revolution and in particular, renewable and clean energy products such as solar power, wind turbines, geothermal and algae-based bio-fuels are not waiting for viable technology; it already exists in many forms. What they are waiting for is a massive sea change in our antiquated financial accounting systems.

We keep hearing that green technology has too long a "payback" or too low an internal rate of return and just can’t compete with non-renewable coal, oil and natural gas, etc, etc.

As an example of this problem, in my studies of various energy systems, there is a rule that seems to apply that makes it difficult for green energy systems to compete. The costs for building and operating a coal-fired power plant are typically 20 per cent initial building costs and 80 per cent costs for the 30-year service life of the plant. The costs of, say, a solar power plant are almost the opposite: 80 per cent is upfront installation costs and 20 per cent is needed to maintain the plant over its 30-year service life. With our current myopic accounting standards, this has caused a serious problem that, in my opinion, can easily be changed. 
 
Allow me to explain: We complain about $4+ a gallon gasoline, but how many people realize that we are actually, in my opinion, paying over $10-15 a gallon (if we add on all the currently ignored direct social, environmental and economic costs of oil).
 
These are called “externalities” by economists, who recognize the existence of these external costs of doing business. Other than that recognition, these costs are still not assigned to their correct source.
 
For example, if we look at our enormous military budget, (currently about $700 billion) and the 800+ military stations maintained around the world, kept in place to protect sea lanes for oil tankers and oil pipelines. Combined that with the social "costs" of young soldiers being trained, deployed and often killed, severely injured or made physically and/or mentally incapable for the rest of their lives and the enormous stress this imposes on their society, families and friends, both economically and emotionally. That is another direct cost of oil.
 
Also consider the enormous costs of the recent oil spill in the Gulf, to the ocean and beach environments, to people’s health and livelihood and the stress they are under with hurricane seasons coming and the likelihood that more oil and dispersant sludge will be thrown up on their shores -- that is another direct cost of oil.
 
We see a similar example with the unaccounted for "externalized costs" of coal. Apart from the carbon dioxide emissions from coal burning power plants, there is the fact that coal-burning power plants emit (ironically) more than 1,000 times the radioactivity of nuclear plants in the form of radioactive radon gas, which is emitted directly into the atmosphere.
 
This highly toxic gas was absorbed over millions of years into underground coal formations and is now being directly released into the air when the coal is burned. The inevitable negative health effects of that dangerous radioactive emission into the local atmosphere of a coal plant is simply dumped onto those people living downwind of the plant! According to some estimates, yearly deaths from health problems caused by coal plant emissions, just in the US, are conservatively estimated at about 60,000 people. That is a direct cost of coal!
 
Solar, wind, geothermal and algae technologies do not need these massive hidden support costs, they are based on a worldwide renewable source (sunlight) so cannot be stolen by any super-power and so are unlikely to be the source of protracted wars and intrigue between nations under the pretense of spreading democracy, as happens now for oil. The sun pays no attention to national boundaries and so we see that in most mid- and southern-latitude countries, a surprisingly small surface area of solar plants can deliver most of the electrical power a country needs, particularly in the US.
 
So taking all these factors into account, let's get our accounting practices into the 21st Century and apply all the direct costs of each energy resource as they are incurred by the entire world. Only then we can efficiently compare and make a correct decision on the various energy resource technologies.

Subscribe to Renewable Energy Focus magazine and the REF weekly e-newsletter to view this story in its entirety in the coming weeks.  

Posted 13/01/2014 by Reg Tucker

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