What’s missing from the climate/energy debate in Congress and the U.S. Senate is any discussion of cost. It’s amazing that these worshippers of the “free” market have neither debated the merits of the Waxman-Markey bill (HR 2454) or the Senate energy bill based on the relative costs of their preferred technologies, nor in the context of least cost – to ratepayers and the economy as a whole, that is.
The concept of least cost in terms of our electric energy mix is extremely important if we’re going to make utility bills affordable, create needed jobs, improve public health and effectively address global warming.
Even for those who question global warming, least-cost analysis would bring people to the same conclusion with respect to the energy mix.
To illustrate the point, compare the construction costs of the following technologies based on 2007 data from “Business Risks and Costs of Nuclear Power” by Craig Severance.
Keep in mind that these costs do not include the public health costs associated with coal and nuclear power.
•Nuclear power: 17 cents to 22 cents per kilowatt hour
•Coal with 90 percent carbon capture and sequestration: 18 cents to 24 cents per kWh
•Natural gas combined cycle: 6 cents to 12 cents per kWh
•Wind: 4 cents to 7 cents per kWh
If one adds operating and maintenance, fuel and decommissioning costs to nuclear, the total cost ranges from 25 cents to 30 cents per kWh. We have also seen more fluctuations in coal prices in recent years. For instance, Duke customers in Indiana paid $190 million more in 2008 than in 2007 for fuel, i.e. coal. Annual national estimates for capturing and storing carbon have been calculated to reach more than $1 trillion.
Solar photovoltaic electric generation is projected to be 6 cents per kWh by 2012, down from 2010 projections of 8 cents to 12 cents per kWh.
Of course, the cheapest energy resource we have is end-use energy efficiency coming in at less than 1 cent to 4 cents per kWh.
Indeed, as one analyst, Amory Lovins, points out, “(W)ind, cogeneration (at industrial facilities) and end-use energy efficiency provide electrical services more cheaply than central thermal power, whether nuclear or fossil-fuelled.”
There are three points:
1. The status quo (nuclear and coal plants) will be more expensive to sustain and expand than phase out.
2. It is the status quo (nuclear and coal plants) that is threatening the economy, not the alternatives (renewables and efficiency), which are powerful economic development engines with extensive pubic health benefits.
3. The price points between the cheaper alternatives and expensive conventional base load plants will continue to widen.
The problem is, however, that both energy bills now being discussed before the U.S. House and Senate are designed to maintain the status quo, and neither party is thinking outside the box.
