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Capitol Comment

    Capitol Comment 295 - Renewable Energy: The Great Hope or the Great Hype?

    06/07/2001

    With the release of its national energy policy, the Bush administration kicked off its drive for a new approach to meeting America’s energy needs. The report was instantly derided — before it was even released, in fact — by environmental fundraising groups, members of the media, and leaders of the opposition on Capitol Hill.

    Though there have been many different attacks on the plan, one of the main criticisms is that it fails to rely on so-called “renewable” sources of energy to meet increasing demands for electricity. Actually, the plan does call for greater use of renewables and devotes an entire chapter to the subject.1 More important than the new subsidies and tax credits thrown at renewables, however, is the question of whether or not this type of energy is reliable, efficient, and cost-effective.

    Lofty Promises. The most widespread renewable energy source is hydroelectric power. However, hydro is increasingly in disfavor with environmental extremists, who are seeking to tear down dams throughout the country. The more politically correct renewable energy sources include geothermal, wind, waste, and solar. Environmental fundraising groups claim that these types of renewables can provide the vast majority of America’s electricity. For example, the Sierra Club writes, “Renewable energy will allow the US [sic] to increase our electricity supply cleanly. With today’s technology, wind energy alone could economically provide 20 percent of America’s electricity. Solar energy is so abundant that the sunlight the Earth receives in 30 minutes is equivalent to all the power used by humankind in one year.”2

    One would think that if wind and solar power were so abundant and economical, we would be reading about the tens of millions of Americans powering up their flat screen TVs and CD players with windmills and solar panels. More importantly, there would be no need for cash handouts in the form of subsidies and tax credits to entice consumers to use these power sources. Of course, that is not the case.

     

    Back to Reality. At present, non-hydro renewables are more of a hobby than a practical source of electricity. The majority of America’s electricity supply, 52 percent, comes from coal. Another 20 percent is generated by nuclear power. Sixteen percent more comes from natural gas, with hydroelectric contributing 7 percent, and petroleum 3 percent. All non-hydro renewables — not just wind and solar — provide a mere 2 percent of the electricity Americans use every day.3

     

    Over the next 20 years, this mix is unlikely to change substantially. The U.S. Energy Information Agency (EIA) forecasts that in 2020, coal will provide 44 percent of our electricity, nuclear 11 percent, natural gas 36 percent, hydroelectric 6 percent, and non-hydro renewables only 3 percent.4 Even under scenarios that assume rapid improvements in renewable technologies with correspondingly lower costs to consumers, this only rises to 4.6 percent.5 In something of an understatement, EIA warns, “Projections of large increases in renewable energy use should be viewed with caution.”6

    Why Not Renewables? The simple fact is that, for the foreseeable future, renewables like solar and wind power are not technologically advanced enough to generate more than a fraction of America’s electricity supply. Regarding solar power, EIA concludes, “[T]he technology is still in the early stages of development, with relatively high costs and uncertain performance, and inadequate solar conditions east of the Mississippi River limit its potential market.”7 In other words, solar power cannot keep the lights on for nearly 170 million people in 26 states.8

    EIA also highlights the current shortcomings of wind power, “[W]ind resources are often far from electricity customers, and if the wind is not blowing the resources may not be available during peak daily or seasonal loads… The technology is fairly new and untested on a large scale, and it faces environmental objections, primarily for visual intrusion.”9

    Aside from reliability problems, wind and solar power have the potential to wreak havoc with the electrical grid. According to EIA, “In addition, unpredictable variations in output from intermittent generators like wind and solar affect other generators and the overall stability of large interconnected networks, leading to higher costs.”10 It is worth pointing out that while President Bush’s energy plan has been attacked for allegedly downplaying the role of renewables, all of these criticisms of wind and solar power were made by the Clinton-Gore administration.

    A Continuing Search. None of this is to suggest that we should give up on renewables. The search for reliable, efficient, and cost-effective renewable electricity is an important one, and must continue. For now, however, despite the claims of environmental fundraising groups, they are not a realistic option for meeting America’s energy needs.

    1 “National Energy Policy,” Report of the National Energy Policy Development Group, May 2001.
    2 The Sierra Club, “Energy Factsheet,” Sierra Club Web site, May 23, 2001.
    3 U.S. Energy Information Agency, “Electric Power Monthly,” March 2001.
    4 U.S. Energy Information Agency, “Annual Energy Outlook 2001,” December 2001.
    5 Ibid.
    6 U.S. Energy Information Agency, “Analysis of Strategies for Reducing Multiple Emissions from Power Plants,” December 2000.
    7 Ibid.
    8 U.S. Census Bureau, census 2000 information.
    9 U.S. Energy Information Agency, “Analysis of Strategies for Reducing Multiple Emissions from Power Plants,” December 2000.
    10 Ibid.

     

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    Citizens for a Sound Economy Foundation

    Capitol Comment 295:
    Renewable Energy: The Great Hope, or the Great Hype?
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