By James Conca in Forbes. Dr. James Conca is an expert on energy, nuclear and dirty bombs, a planetary geologist, and a professional speaker. Excerpt:
"On a total dollar basis, wind has received the greatest amount of
federal subsidies. Solar is second. Wind and solar together get more
than all other energy sources combined.
However, based on production (subsidies per kWh of electricity
produced), solar energy, has gotten over ten times the subsidies of all
other forms of energy sources combined, including wind (see figure).
Source: University of Texas
Figure Caption: Subsidies for various energy sources normalized
to total energy produced by each source for the years 2010, 2013, 2016
and projected for 2019. Data Source: University of Texas
According to the Energy Information Administration (EIA) and the University of Texas,
from 2010 through 2013, federal renewable energy subsidies increased by
54%, from $8.6 billion to $13.2 billion, despite the fact that total
federal energy subsidies declined by 23%, from $38 billion to $29
billion.
Subsidies then decreased dramatically from 2013 to 2016, because:
• tax incentives expired for biofuels,
• the American Recovery and Reinvestment Act (ARRA) stimulus funds were used up,
• energy assistance funds decreased,
• there was a 15% decrease in fossil fuel subsidies from $4.0 billion to $3.4 billion, and
• a 12% decrease in nuclear subsidies from $1.9 billion to $1.7 billion.
But the subsidies for nuclear and fossil fuels are indirect subsidies
like decommissioning and insurance assistance, leasing of federal
lands, and other externalities, unlike the subsidies for renewables
which are directly for the production of electricity and directly affect
cost and pricing.
Within the renewables, electricity-related subsidies increased more
than 50% for wind and solar, whereas conservation, end-use, and biofuel
subsidies deceased more than 50%. This is unfortunate since conservation
and efficiency usually yield great results with little cost or
infrastructure requirements.
The Institute for Energy Research and the University of Texas calculated
the subsidies per unit of energy produced, or cents per kWh. This is a
more relevant number for comparing different energy sources as it
normalizes to the amount of energy produced (see figure above).
Between 2010 and 2016, subsidies for solar were between 10¢ and 88¢
per kWh and subsidies for wind were between 1.3¢ and 5.7¢ per kWh.
Subsidies for coal, natural gas and nuclear are all between 0.05¢ and
0.2¢ per kWh over all years.
Much of the subsidies in 2010 and 2013 resulted from ARRA stimulus
funding following the economic crash of 2008 and the end of ARRA is why
the 2016 and 2019 numbers are so much lower.
Solar also gets the most state-funded subsidies, some of which
greatly exceed the federal subsidies. In my own State of Washington,
where electricity prices are 8¢/kWh, the State pays me 54¢ for every kWh
generated by my rooftop solar array, whether I use it or not. This has
made my total electricity costs -7¢/kWh over the past two years, and
will for the foreseeable future.
Yes, that’s negative (-)7¢ per kWh. And this is on top of my 30%
installation federal tax credit which came to about $6,000 for my 4 kW
array.
There is no doubt that these subsidies incentivize renewables, but
what do they do to the cost of the electricity generated by them?
They actually increase the cost. However, this cost is transferred
from the ratepayer to the taxpayer, and so goes unnoticed by most
Americans.
Using the per-kWh subsidy numbers from EIA and UT in the figure
above, each kWh of solar produced in 2010 received 88¢, more than ten
times the actual cost of any other energy source. These subsidies have
to be added to the retail cost of that energy to determine total costs
since that’s what was actually spent to produce it.
So in 2010 and 2011, solar cost about 100¢ per kWh, and in 2013 and
2014, solar cost about 80¢ per kWh. Even after the ARRA funds were
depleted after 2013, the cost of solar is still double what is usually
given as its cost.
For comparison, nuclear energy cost between 4¢ and 5¢ per kWh to
produce over this time period. Remember, though, the cost to produce
energy is not the same as the price charged for it. Price is set by the
region and the market, and has add-ons for transmission, grid
maintenance and other non-production costs. Subsidies decrease the price
while increasing the cost.
Although wind received more total subsidies, wind received much less
subsidies per kWh produced than solar as it produced much more energy.
However, it is nonetheless significant for 2010 and 2013 and about 50
times that of nuclear and fossil fuels, allowing wholesale prices for
wind and solar to become negative, unfairly undercutting nuclear, hydro
and coal prices."
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