It’s telling that the insurance industry won’t touch nuclear projects unless governments cap their liability. In Canada, the cap is now $650 million on disasters that can cost many billions of dollars to battle, excluding long-term economic impacts. Taxpayers, of course, cover the rest. Without such caps, the industry argues the cost of insurance would simply be too high.
Viewing all Articles Page 166 of 294
Public officials are looking for ways to reduce opposition to wind farms and the United Kingdom is piloting a “community wind fund” program for all new wind projects. Under the program, each wind project must pay in £1000 per megawatt (~$1600 per MW), per year, for 25 years into a community fund where the project is located. The funds would help maintain public support for wind power, but also (conveniently for the conservative government) replace reduced government funding for basic services:
“With all the current talk of libraries, community centres and sports halls being closed because of government cuts , here’s a great way for local communities to replace that funding. Local wind projects will from now on not just bring the benefits of local green electricity, but also the funding of vital social projects that government cuts would otherwise shut down.”
The impact for the community is significant. Compared to the typical land leases (often $5,000 per turbine for the host landowner), the community fund payments would increase local revenue by over 60 percent, with the additional funds spread to the entire community rather than just the lucky turbine hosts.
The impact on turbine owner net revenue is small but not negligible, reducing the net present value of the project by about 3 percent.
Using community funds to overcome local opposition may be worth the revenue reduction for the wind project owner, but the U.K. government strategy of using wind parks to offset (some) budget cuts represents a strategy that is unlikely to work well in the United States.
What’s really at issue in the fight over the CFPB is not how the agency is structured or how much power it will have, but whose interests it serves. Continue reading
The plumes of smoke rising from Japan’s Fukushima Daiichi nuclear reactor create a visceral reaction. But the crisis should not persuade Americans to abandon nuclear power.
Instead, Americans should abandon nuclear power for its prohibitive and un-competitive costs.
The wildly escalting costs of nuclear plants under construction in the U.S. are a perfect example. A pair of proposed nuclear power plants in Florida have “overnight” costs of $3,800 per kilowatt, but since nuclear power plants actually take eight years to construct, the total estimated project costs are closer to $6,800 per kilowatt (kW) of capacity. This figure is reinforced by an estimate for Progress Energy’s two new units ($6,300 per kW $8,800 per kW), and Georgia Power’s new plants ($4,000 per kW $6,335 per kW), both still incomplete.
As Mark Cooper notes in his thorough analysis of the so-called nuclear renaissance, this is nothing new. Most nuclear projects haven’t come in on budget, or even close.
But let’s be generous for a moment and assume the U.S. utilities can hold to their current cost estimates. What do those costs mean to consumers? At $6,500 per kW, the expected cost of nuclear electricity is over 15 cents per kWh ($150 per MWh).
At that price, investment bank Lazard estimates that only two technologies are more expensive than nuclear (crystalline silicon solar PV and natural gas peaking plants). But solar PV has significant near-term cost reduction potential and “gas peaking” only refers to the way we use natural gas, not its inherent cost (see Gas Combined Cycle). In the time it would take to build a nuclear plant (6-8 years, optimistically), every commercial energy technology could produce electricity for less.
Subsidies can change the picture – the picture most Americans have of nuclear, that is. The Union of Concerned Scientists recently reported that nuclear subsidies total nearly 7 cents per kWh, twice what a typical wind power plant receives and similar to the federal incentives offered for solar power. It’s time to let the market pick our winners, not outrageous government subsidies for nuclear power.
Beyond its (escalating) costs and huge subsidies, nuclear power also reinforces a centralized grid paradigm where the financial winners are utilities who pass through cost increases onto the backs of ratepayers (sometimes before the plant begins operations). Did we mention that Florida Progress will require $3 billion in transmission upgrades to accommodate its new nuclear plants? Compare that to distributed renewable energy sources that can often interconnect to the grid with a minimum of infrastructure upgrades.
The crisis in Japan is terrible, but we shouldn’t eschew nuclear power for its ability to cause immensely disproportionate harm during natural disasters. Instead, we should abandon this costly boondoggle for more cost-effective and renewable energy sources.
Communities in California have been trying to become more energy self-reliant for nearly 10 years, but not a single one has managed to establish a "community choice aggregation" (CCA) network despite a state law requiring incumbent utilities to "cooperate fully." Only four states have CCA laws on the books – Ohio, Rhode Island, Massachusetts, and California. Most have only a single CCA; California has none. There’s a reason. Incumbent electric utilities aren’t big fans of CCAs. Read the full story over on our Energy Self Reliant States web site
Communities in California have been trying to become more energy self-reliant for nearly 10 years, but not a single one has managed to establish a “community choice aggregation” network despite a state law requiring incumbent utilities to “cooperate fully.”
Community choice aggregation (CCA) offers an option for cities, counties, and collaborations to opt out of the traditional role of energy consumers. Instead, they can become the local retail utility, buying electricity in bulk and selecting their power providers on behalf of their citizens in order to find lower prices or cleaner energy (or even reduce energy demand). Only four states have CCA laws on the books – Ohio, Rhode Island, Massachusetts, and California. Most have only a single CCA; California has none. There’s a reason.
Incumbent electric utilities aren’t big fans of CCAs.
In California, the CCA law passed in 2002 but utilities like Pacific Gas & Electric (PG&E) have stymied the development of local CCAs, even sponsoring a ballot measure – Proposition 16 – to require towns to get a two-thirds super majority to create a CCA. The measure was narrowly defeated (with a 52% vote) despite $46 million spent by PG&E to steamroll local choice. The ballot measure was only the latest in a series of attempts by PG&E to quash community choice, dating back to the utility’s bankruptcy and $8 billion bailout in 2001-02.
Advocates are continuing the fight with new legislation to clarify what was meant in the original law when utilities were ordered to “cooperate fully” with communities seeking to establish a CCA.
The CCA difference can be significant. Ohio’s largest CCA offers customers prices averaging 5% lower than the incumbent utility. And CleanPowerSF, the CCA certified (but not yet operational) for the City of San Francisco intends to get 51% of its power from renewable sources by 2017.
You can read more about Community Choice Aggregation in our 2009 policy brief.
Methodical as ever, a European research group has published a study of “benefit-sharing mechanisms” to help renewable energy project developers gain local acceptance of their projects.
Communities have three types of objections to renewable energy projects – environmental, NIMBY, and opportunism. The study examines eight ways that developers can share benefits with the local community in order to address their objections to renewable energy projects.
In a sentence: people want to avoid environmental and personal harm and share in the economic benefits of their local renewable energy resources and developers will increase their chances of success by addressing local desires.
U.S. developers should take note that opposition to wind farms may not seem so perverse when seen in the context of trying to use a community’s “free” renewable resource.
Toby Couture is one of the pre-eminent experts on cost-effectiveness of renewable energy policies and his comparative analysis of auctions (such as California recently adopted for distributed generation) and CLEAN Contracts (a.k.a. feed-in tariffs) is a must-read. Read the full story over at our Energy Self Reliant States web site. Continue reading
In January, we released a report – Maximizing Jobs From Clean Energy: Ontario’s ‘Buy Local’ Policy – highlighting the impressive job forecast (43,000 jobs) from Ontario’s CLEAN Contract (a.k.a. feed-in tariff) program. News from the province suggests that the program is overcoming hurdles and continuing to grow.
Forecasts for 2011 indicate that Ontario could become North America’s largest solar market, installing 455 MW, more than twice what California installed in 2009. This is nearly a 3-fold increase over 2010 installations.
Additionally, supply concerns have faded. ClearSky Advisors notes that, “Though there has been concern that development would be limited by supply shortages, it is now most likely that there will be sufficient supply to meet demand from 2011 to 2015.”
Hurdles remain for Ontario. They are still subject to a World Trade Organization complaint over their ‘buy local’ policy (discussed in detail in our report) and if liberals lose the fall elections, it could spell significant cutbacks in the province’s clean energy program.
One recent report suggests that there are new “big fees” for project development, as well, but these fees exempt small-scale projects and a back-of-the-envelope calculation suggests that the fees will comprise less than 2 percent of projects costs.
Overall, it appears Ontario’s robust clean energy program is still on track to develop thousands of megawatts of clean energy and thousands of jobs.
We just fixed a technical problem with the site that had prevented your comments from being displayed. We had no idea until today that it was a problem and sincerely apologize, and very much appreciate your thoughtful comments (now on display!).