Over-Stating Our Ability to Adopt Renewables

All those confident in our ability to ramp up things like wind and solar quickly should take a long look at T. Boone Pickens decision to virtually abandon billions of investment in wind.

One of the ways I think our potential to increase renewables is over-stated is that the government has begun lumping hydro power into wind, as in these charts.  They show "renewables" as about 9% of electricity production.   Increasing this to, say, 20% seems daunting but doable - after all, we are just doubling it.

But in fact, almost all of the 9% is hydro power, and that is not going to increase (in fact environmental presure is actually to destroy several hyrdo facilities to allow the rivers to run free).  This means that to get total renewables to 20%, other renewables like wind and solar will have to increase from about 1% to 12%, or a twelve fold increase.  This is much more daunting, especially since a raft of subsidies and incentives and programs have gotten us to just 1%.

Postscript: Owning a home in Phoenix with a big flat roof, there is no one in the world rooting for solar to be economic more than I am.  I have run the numbers recently, and taking advantage of all government subsidies, the investment has about an 8-10 year payback.  It's just not there yet.  Further, I worry that the current silicon/germanium IC technologies are dated and dead end.  I fear that buying solar now is like buying the last IBM mainframe before PCs came out.  I have a ton of confidence in the innovativeness of man, and believe that a real solar breakthrough will occur in the next 10 years.  Wind, on the other hand, is never going to work.  It is the ethanol of electricity production.


  1. Evil Red Scandi:

    There's a lot of tinfoil hat speculation regarding Pickens' actual motives for building the wind farm - that it was actually about the ability to construct a water pipeline underneath the power lines that would have to be run to his windmills. With government involvement, he'd be able to use eminent domain and other means to get it built.

    In any case, his investment made no sense on its own - he needed government involvement of some sort to make it work (hence his lobbying people's support). Screw him.

  2. DrTorch:

    One of the big problems when people talk about "solar" is they mean photovoltaics. Solar thermal is actually reported to be cost competitive w/ fossil fuels.

    There are many projects that have been started in this area, including AZ. My concern is not knowing the outcomes of these, and wondering if there are unanticipated costs causing delays or failures. Nevertheless, solar thermal is inherently more competitive than photovoltaics.

    Curiously, it's use has been blocked in some places...by Sen Feinstein. So much for the committment towards sustainable energy.

    I agree that wind will never make it for large scale production. However, like your hopes of putting photovoltaic panels on your roof one day, I can't help but wonder if some place like suburban Chicago could use small scale windmills for each home.

  3. Anon:

    "I have a ton of confidence in the innovativeness of man, and believe that a real solar breakthrough will occur in the next 10 years."

    Coyote, you might want do a quick back-of-the-envelope on total solar energy per square meter.

    IIRC, it's something like 6 kw-hr/day on average per square meter. It is going to take a lot of space to get terawatts.

  4. re: Evil Red:

    No, his business model was to increase the subsidies/tax breaks and mandates to use wind power to the point that he could turn a profit.

    Not really tin-foil hat stuff, just recycling the ethanol business model. (pun intended).

  5. Anon:

    Evil Red Sandi,

    His business plan was to get Congress to enact enough subsidies, tax breaks, and mandates so that he could turn a profit.

    Nothing tin-hat, just *recycling* the ethanol business plan.

  6. David, Chandler, AZ:

    IBM mainframes are still alive and doing very well by the way. They just renamed them servers to placate the masses.

  7. Another David:

    I agree with the first David - there is no "last mainframe" - they are alive and processing more data every moment than you can imagine. If anything, we may see a mainframe resurgence since they pack a lot more computing horsepower and a lot less electrical power consumption into each cubic foot than do PC servers.

  8. morganovich:

    it's very easy to get to 20% renewable energy.

    simply alter the definition of "renewable energy" until what we are already doing qualifies.


  9. craigkl:

    My comment is on the Postscript saying that solar panels are "not there yet" because the payback period is 8-10 years, even with all the subsidies.

    As any Finance textbook will tell you, payback is a poor measure of the attractiveness of an investment. One reason is that it fails to take risk (or risk mediation) into account. For instance, if you had to choose between two projects of the same size, and Project 1 had a payback of 5 years but was extremely risky, while Project 2 was very low-risk but had a payback of 7 years, payback would tell you to take Project 1, which would probably be the wrong choice.

    Solar panels are a *very* low-risk investment. They just sit there on your roof and produce energy day after day, with a warranty of 25-30 years. But where do you think electricity rates will be in 25-30 years, particularly if Obama has his way and cap-and-trade legislation makes it much more expensive for utility companies to build new plants? If you purchase solar panels, you *also* purchase insurance against the (high) risk of being hit with higher electricity rates, because once you install your panels, you've paid your electricity bill, or at least most of it, for the next 25-30 years.

    The way to look at solar panels is as if they were an annuity: you give the company selling the annuity a lump sum, and in return they pay you back an incremental amount, plus some interest rate, for the next N years. We have solar panels, and I calculate (using the tables for present value of an annuity from that Finance book) that after the subsidies, the panels are in effect returning us principal plus about 7% on our initial investment for the next 30 years. It's hard to find conservative investments with that kind of return, and in addition, we have the "insurance" feature. Since every portfolio ought to have some conservative, low-risk, dependable-return investments, that's certainly good enough for me.

    I'll add just one other comment. Suppose that instead of that 1200-page Waxman-Markey bureaucratic nightmare, they had just decided to provide (say) $10 or $20 billion per year over the next ten or twenty years to subsidize (and perhaps help finance) solar panels. That would add a predictable amount of alternative energy to the nation's power grid every year. And then, if Warren's solar breakthrough came along in (say) seven years, we could terminate the program and still feel good that we didn't really waste a lot of money along the way. Too easy, I guess.

  10. steep:

    There is still room to expand hydropower production. There are many small irrigation and flood control reservoirs around that have now power generation systems installed. There are also pumped-storage reservoir projects that can be done to moderate peak load needs. I personally know that these people " http://www.symbioticsenergy.com/index.html " are trying to make money on it.

  11. steep:

    Sorry, spelling error

    "There are many small irrigation and flood control reservoirs around that have NO power generation systems installed."

  12. smurfy:

    Another challenge I see for residential photovoltaic, at least in the next few years, is the evisceration of home equity. It's scary, and arguably stupid to sink another 20k into a house that's 100k underwater. Plus HELOCs have been a major financing vehicle for home improvements over the last few years.

  13. smurfy:

    Perhaps I should add 'challenge to large scale roll-out'. What are we now, 20% underwater nationwide?

  14. Dr. T:

    Wind power is great, if you need to pump 20 gallons of water an hour to water your cattle. Wind to electricity is a bad joke.

    My family drove through western Texas last summer and saw hundreds of wind-powered electricity generators. Not one was turning. It was 90 degrees and winds were 5-10 mph. With those rare 10 mph 'gusts,' some blades might start to move, but then they would stop. The only saving grace was that these wind devices were no uglier than the rusty oil derricks.

  15. Ian Random:

    I just hope research like this pans out and in 50 years they'll regulate how much CO2 you can extract from the air.


  16. Bob Smith:

    IIRC, it’s something like 6 kw-hr/day on average per square meter. It is going to take a lot of space to get terawatts.

    That's the problem with all "renewable" energy sources: the energy density is way too low. It makes me wonder why a class of people who endlessly complain about "sprawl" and want to mandate densification want to promote low-density energy sources.

  17. Al Fin:

    Pickens is smart to dump his wind farm investment. Wind and solar are better suited for small scale projects for single homes, farms, ranches, etc.

    Keep in mind that all fossil fuels are solar energy, stored and concentrated over a long time scale. We will need all the fossil fuels we can get over the next few decades.

    Biomass, a less dense form of stored solar energy, can be huge within 20 years. Several approaches to increasing the energy density of biological energy are likely to succeed within 10 years, and take another 10 years to scale up.

    Bioenergy fits the local and regional planning scale, and that is where it should start. From there, it can be scaled to affect national and international energy markets.

  18. Peter:

    Wind can work on an individual basis in some areas of the country even without government subsidies. There is a company called prairie turbines(prairieturbines.com) that both sells affordable 5.5kw turbines as well as the instructions on how to build one yourself. I would very much like to put one up myself as the payback for me would be less than 5 years with no subsidy. However despite the abundance of wind and owning 3/4 of an acre, local zoning laws won't let me put up a windmill unless it is set back sufficiently that if it fell over it would still be ten feet from the property line. As the trees on my property are approximately 65' tall and my property is 150' wide that only leaves the dead center of my property to locate the windmill which is where my house is located. Even without the house the windmill would only be allowed to reach the tops of the trees at the upper tip of the blade which makes it useless. So just remember for everything that your federal government is forcing you to do or taxing you if you don't, there is a local community telling you you can't do that here.

  19. Brit-Mueller:

    Great idea, but will this work over the long run?