Yesterday, President Barack Obama gave a speech in which he outlined his plan to "win the future" in energy production. The headline goal was to cut U.S. imports of oil by one third—he acknowledged that this is an (unkept) promise that nearly every president has made in the past 40 years. But more on that at another time. Instead, let's just a take a quick look at the president's glowing remarks on renewable energy:
I've visited gleaming new solar arrays that are among the largest in the world. I've tested an electric vehicle fresh off the assembly line. I mean, I didn't really test it—I was able to drive like five feet before Secret Service said to stop. (Laughter.) I've toured factories that used to be shuttered, where they're now building advanced wind blades that are as long as 747s, and they're building the towers that support them. And I've seen the scientists that are searching for the next big breakthrough in energy. None of this would have happened without government support.
Solar: Yes indeed, the president apparently loves to visit solar arrays. For example, he visited the Florida Power and Light's DeSoto Next Generation Solar Energy Center back in October, 2009. At the time, I looked at the costs of electricity produced by that facility in comparison to the costs of operating conventional power plants:
FPL spent $150 million building the 25-megawatt facility which will, reportedly, supply enough electricity for 3,000 homes.
Now let's do a rough calculation of the costs of DeSoto Solar versus conventional power sources. According to the Electric Power Research Insitute, a modern 1,000 megawatt coal plant without carbon capture technology would cost about $2.8 billion to build. Adding carbon capture would boost the cost to as much as $4.7 billion.
The 25 megawatt DeSoto facility cost $150 million. Scaling it up to 1,000 megawatts would cost $6 billion. But coal power plants operate 90 percent of the time snd solar only 30 percent, so in order to get the equivalent amount of electricity out of solar plant would mean tripling the capital cost for a total of about $18 billion. In other words, building a solar power plant costs between 4- and 6-times more than conventional, or even carbon capture, power. Even worse, a scaled up DeSoto-style plant costs 18-times more than a natural gas plant.
It is true that the costs of producing solar cells is declining, but even the Obama administration's own Blueprint for a Secure Energy Future [download here] finds that the cost per kilowatt-hour of solar power will not reach parity with conventional power until 2030. And keep in mind that the cost of producing conventional energy continues to drop, especially the costs of producing electricity using cheap and abundant natural gas.
President Obama also cited European countries' records in installing solar power. He, however, failed to mention that Germany, Spain, and France are all throttling way back on their solar subsidies because they cost taxpayers and ratepayers too much.
Electric cars: The president reiterated his goal of subsidizing a million plug-in hybrid electric vehicles onto America's roads by 2015. That would represent about one-third of one percent of all vehicles in the U.S. In any case, last fall I visited the Ener1 lithium-ion battery factory just outside of Indianapolis to get some idea of how much progress battery technology is making. I talked with Richard Stanley, Ener1's chief operating officer and here's some of what I reported:
In January, the Department of Energy awarded a $118.5 million matching grant to Ener1 to build a gigantic battery factory near Indianapolis. In addition, Ener1 was awarded a state incentive package of $21.3 million and a Hancock County package valued at $48.6 million. Ener1 has also applied for a $300 million low interest loan from the Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program to build out additional manufacturing capacity….
Cost is still a challenge for the technology," notes Stanley. He adds, "Many people don't realize that battery manufacturing doesn't progress like Moore's law in electronics." In 1965, microchip pioneer Gordon Moore predicted [PDF] that the number of transistors on a microchip would double every year. Figuring out how to jigger the chemistry of batteries so that they can store ever more electricity turns out to be a whole lot harder than cramming more transistors onto a silicon chip.
Car batteries now cost somewhere around $1,000 per kilowatt hour. Stanley thinks the price could fall to $500 per kilowatt hour in two years. The U.S. Advanced Battery Consortium has set the goal getting the costs down to $300 per kilowatt hour to become cost competitive with standard internal combustion engine automobiles. To get some idea of the cost that batteries add to an automobile, keep in mind that the capacity of a THINK car's [Ener1's chief automobile customer] batteries totals about 24 kilowatt hours.
A recent study by the Boston Consulting Group argues that without a technological breakthrough in battery chemistries, it is unlikely that battery costs will fall to $300 per kilowatt hour by 2020. Nevertheless, the report projects that 26 percent of the new cars sold in 2020 (1.5 million will be fully electric, 1.5 million will be range extenders, and 11 million will be a mix of hybrids) will have electric or hybrid power trains. In 2020, the market for electric-car batteries will reach $25 billion. So what about President Obama's goal of putting 1 million plug-in hybrids on America's roads by 2015? Stanley thinks that that goal is a bit "aggressive."
Wind power: I also visited a wind farm in Montana last fall. When the wind blows, the Judith Gap wind farm delivers electricity to the local distribution company for the remarkably cheap price of 2 cents per kilowatt-hour. But the wind doesn't always blow so additional infrastructure needs to be built to smooth out the fluctuations. Here's some of what i reported …
… according to the U.S. Department of Energy's Energy Information Administration (EIA), if one includes all the capital, operating, and fuel costs, electricity from wind still costs about 50 percent more than conventional coal and 100 percent more than natural gas. Proponents point out that the costs of turbines are coming down, but the costs for the considerable infrastructure needed to manage wind are still daunting.…
NorthWestern Energy is proposing to build a new 200 megawatt natural gas power plant in Mill Creek, Montana, at a cost of $206 million, "primarily to provide balancing services [PDF] for wind farms." An even more ambitious green proposal for balancing wind energy production oscillations is the $3 billion Wind Spirit Project by Grasslands Renewable Energy which would string a series of high voltage power lines across the state as a way to shift wind energy from regions where the wind is blowing to becalmed districts. Right now the wind power produced in Montana stays in Montana. Such a system of transmission lines would also make it possible for future Montana wind farms to export power to out-of-state big cities.
Grasslands Renewable Energy is proposing to build a 350 megawatt closed-loop pumped storage hydro project near Gordon Butte in central Montana. The idea is that water would be pumped to an uphill reservoir when wind electricity is cheap (mostly at night) and then allowed to flow downhill to another reservoir through turbines to produce electricity when the wind falters or demand peaks. Pumped storage functions as a kind of giant battery. Grasslands has not offered separate cost figures for the Gordon Butte project, but a recent report by the market research firm, Richard K. Miller & Associates, notes that typically pumped storage projects cost about $1,800 per kilowatt to build [PDF]. That would mean that the 350 megawatt Gordon Butte facility could cost about $630 million to build. In contrast, one might double the size of the Mill Creek natural gas power plant and just run it all the time.
President Obama is certainly right when he said, "None of this would have happened without government support."
I recount all of the previous presidential promises of "energy independence" here.