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No More Berning of Fossil Fuels

I am currently sitting in my yard enjoying the post El Nino 75 degree weather, while typing away on my locally made (…well invented at least) MacBook which was charged from the highly subsidized solar panels on my roof. I am still reeling from the large number of Oscar worthy performances during the recent presidential debates. For the energy sector a lot is at stake with this next election.

Of the GOP front runners, only Marco Rubio has an energy or climate plan on his website. A few choice nuggets are doing away with “Obama’s carbon mandates” (whatever that means), approving Keystone XL immediately, rewriting the offshore drilling plan and creating a National Regulatory Budget to Limit the Power of Unelected Regulators. There is no plan to address climate change, because that’s not a problem in the Rubio world. I can hear my great grandchildren crying into their organic pillows across the space time continuum. I don’t even want to speculate about Trump’s energy plan. Well, maybe he will put gold plated windmills made in U.S.A. on his wall to Mexico.

On the other side of the aisle, the two front runners have spelled out their energy and climate plans pretty well on their respective sites. Hillary Clinton’s plans are an aggressive acceleration of the agenda set during the Obama administration, and it focuses (perhaps wisely) on executive actions that are feasible without new acts of Congress. The two main goals listed are:

  • The United States will have more than 500,000,000 solar panels installed by the end of 2020.
  • The United States will produce enough renewable energy to power every home in America by 2026.

Goal one is ambitious and smartly stated in units that the voter can visualize (what is a MW anyway?). This is equivalent to putting solar panels on 25 million homes or a seven-fold increase of current levels. I assume that a significant share of these panels will not be on residential roofs but in PV plants, but this is not spelled out.

Goal two is broader than goal one, since it pulls in the other sources of renewable energy (wind, hydro, etc.). Promising to power “every home” implies covering residential consumption, which accounts for about a third of energy consumption. This would require a doubling of renewable energy sources over a decade. I’m mildly skeptical (professional hazard), but intrigued. The “how we get there” section lists a 60 billion dollar “Clean Energy Challenge.” The plan involves cutting red tape to get panels onto roofs faster, transmission infrastructure investments, a Solar X-Prize and …..drum roll…. tax incentives. I don’t want to be Debbie Downer here, but achieving this goal in four years is going to take net metering on steroids across large swaths of the country and tax credits that are significantly higher than the 30% you get now. If you spent all 60 billion dollars on subsidies (which I don’t believe is the plan) this would amount to roughly $3000 per new solar household. While that sounds like a lot, it is not. For a $21k install, you already currently get $7k in federal tax credits.

While there is no explicit mention of market based mechanisms to fight climate change, Hillary’s plan pushes for a continuation of the Clean Power Plan as proposed, which has some market mechanisms built in. Further, a carbon tax or national cap and trade is beyond the power of the executive and lacking a tidal change in Congress, is simply politically not feasible. There is also talk of more energy efficiency, reforming leasing of public lands, ending subsidies for oil and gas and cutting methane emissions.

Bernie Sanders’ agenda is significantly more aggressive. The stated goals make this liberal heart sing. Accelerating a just transition away from fossil fuels, investment in clean energy, revolutionizing the electric and transportation infrastructure, and taking a leadership position in the international fight against climate change. How to get there? Bernie plans to charge a revenue neutral carbon tax, repeal fossil fuel subsidies and invest massively in energy efficiency and clean energy. A candidate arguing for a REVENUE NEUTRAL CARBON TAX? Sign me up! And then I read on.

“Create a Clean-Energy Workforce of 10 million good-paying jobs by creating a 100% clean energy system. Transitioning toward a completely nuclear-free clean energy system for electricity, heating, and transportation is not only possible and affordable it will create millions of good jobs, clean up our air and water, and decrease our dependence on foreign oil.”

This sounds good. Real good. Much like free Krispy Kreme donuts that don’t make you fat good. Then there is a link where for each state you can see what this 100% clean energy system for your state will look like. I clicked on California. The future mix looks like this:

transWWS

This is 35% from Wind, ~55% from Solar and the remainder from a mix of sources. No nuclear, no gas, no coal. All clean. This plan will generate 315,982 forty-year jobs in construction, and 142,153 permanent operating jobs. Also, the private costs of this system are projected to be 9.7 cents per kwh, which is one cent lower than projected costs of the fossil energy. This plan will avoid 127.9 billion dollars in health damages. And the final conclusion is that because of customer-side solar and improving energy efficiency, total demand will go down by 44%. This is not fat free donuts. In my humble opinion achieving this goal is about as likely as me starting to work out today and looking like Ryan Gosling next week.

Why? California’s population is projected to grow by 28% by 2050. So in order to decrease demand by 44% over today, you will have to do that and add 11 million carbon free individuals. California is famous for its aggressive energy efficiency policies. They have contributed to keeping our per capita consumption relatively constant. But a decrease in demand of this magnitude is beyond what even the most optimistic energy efficiency advocates would consider reasonable.

I don’t even want to get started on these job creation figures. Severin has written about this. I realize that you have to promise jobs to get elected in some places, but these wildly exaggerated claims are simply not honest. And neither are the claims about the costs of renewables.

We need to craft an ambitious path forward towards this brave new energy system that will address climate change and local pollution externalities. Germany is trying the path of nuclear free renewables and it is turning out to be an expensive and not necessarily “coal reducing” one. Let’s study this case closely and learn from it. I realize that in order to get elected one has to make promises one can’t keep. But this economist dislikes it when as an adult he is promised Santa, when we know that Santa does not exist.

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Maximilian Auffhammer View All

Maximilian Auffhammer is the George Pardee Professor of International Sustainable Development at the University of California Berkeley. His fields of expertise are environmental and energy economics, with a specific focus on the impacts and regulation of climate change and air pollution.

60 thoughts on “No More Berning of Fossil Fuels Leave a comment

  1. Does anyone seriously believe that the Jacobson plan could ever be implemented? I doubt that Jacobson himself believes it. Hanson says it best >here<. Just have a look at the numbers in Chart 2. Over 1600 Cape Wind arrays (over 90 average per coastal state), 2400 Tehachapi-size wind farms (avg 50 per state), 27GW of wave power (nothing today), over 500 Ivanpah-sized concentrated solar plants, 2.3TW of solar PV (that’s 1200x current), and almost 500GW of solar thermal storage. >Some reality< needs sink in. And this so far only considers the energy collection that would be required!

    Beyond that is the many Terrawatts (TW) of electrical storage that would be needed to be able to dispatch the produced power when it’s needed. TW storage technology hasn’t yet been invented.and may never be. Pumped water storage is by far the most common form of electrical storage available today and expansion of that technology is limited by the available real estate that would be suitable. Battery storage is considered by some to be the obvious choice but turns out that Terrawatts of chemical energy requires large volumes of materials that are not available on this Earth. It’s a Catch-22 >dilemma< for sure.

    Ah but Jacobson says the wind always blows and the sun shines somewhere so we don’t really need that much storage. When weather patterns are analyzed, his assertions are >highly questionable<. Even if there was a case for some portion of that assertion were deliverable, it would only be possible with many more long-distance power transmission lines, some of which would stand idle when the wind dies in the area served by any particular transmission line. Well continent-wide transmission lines aren’t full value for the funding required if they are operated at partial capacity as would be the case when renewables fuel shows up intermittently in various locations. Even if somehow the costs of such additional infrastructure could be justified, there’s then the >complexities of power engineering< that Jacobson hasn’t considered.

    Sorry to be >bursting your bubble< Mark but unfortunately it’s not just a matter of plugging numbers into a spreadsheet model. Boots on the ground trumps paper. Sorry. I know, reality bites but there you have it. I can understand how politicians not familiar with the complexities of power production infrastructures might be misled but what’s Jacobson’s excuse? Could it be that he doesn’t know as much as he thinks he knows?

  2. Bernie’s energy ideas rely on the WWS plan which is not feasible because WWS lacks a transmission infrastructure. New 5000 MW power lines in the US covering vast distances will be a nightmare to route and get approval for them, and finance them, based on our actual recent experiences. There has never been a valid and detailed plan for transitioning off fossil fuels. Thanks for your article pointing out how all the presidential candidate’s energy plans are non solutions. …Transmission Adequacy Consulting

  3. In 1985, would we have said that 90% of U.S. adults would own cell phones? http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/
    Too often as we stand at the brink of a technological revolution, we can’t envision what might happen. In the early 1980s, despite rapidly falling component prices, no one really could see that PCs would be cost much less than $1,000 and we would carry then around instead of notepads for college courses. There’s no reason to believe that we are not standing in a similar position with DERs. Again costs are falling rapidly and the technology, including complementary ones, are evolving quickly. Instead, the analysis I see being presented relies on a continuation of the status quo. Analyses that incorporate potential dynamics, and work backwards, asking what technology costs would be needed to achieve these stated targets, would be much more useful.

  4. Max’s discussion provides a nice counterpoint to today’s rant by Paul Krugman. Has anyone calculated the excess burden costs of solar subsidies for California? Lee Endress did a prima facie analysis for Hawaii and estimated that Hawaii’s tax credit for distributed solar shrinks the economy by roughly $1500 per household every year compared to a socially efficient policy that recognizes the DOMESTIC (Gayer-Viscusi) costs of harmful emissions. That means the wage bill declines. So much for job creation. An additional problem w/ the infant industry argument, is that once you remove the subsidy, the baby dies (Spain).

    From the perspective of the U.S., we should also account for leakage from the Clean Power Plan, possibly greater than 100%.

    An efficient policy would also internalize the external costs of solar (e.g. Christina Nunez, National Geographic) and wind (1.4 million birds and bats allegedly killed very year in the U.S.).

    • And what about internalizing the same environmental consequence costs for natural gas, petroleum and coal? By the way, an FCC study found that only a tiny fraction of bird deaths are caused by wind turbines. More than 85% caused by hitting building and domestic cats.

      As for the full cost accounting, a longer-term analysis accounts for the savings in distribution investment and integration with other products and services.

      • My question is whether the COMPLETE social costs of fossil fuels were included? You cite bird kills for wind, but rarely the fossil fuel social costs include impacts at the production sites. Most often they include only emission related impacts.

        • Richard,
          Fair enough. I suspect the claim is that disposal of toxic water etc. in the case of solar panels and bird/bat costs for wind are higher than the non-emission costs of fossil fuels, but I can’t say that this has been definitively determined. A higher priority is presumably determining the domestic damages of burning fossil-fuels after accounting for leakage.
          Jim

  5. Sen. Sanders climate goals can be achieved, but he needs a completely different technology mix.

    Nuclear energy CAN be affordable, reliable, and emission free. Those capabilities have been well proven, but we need to be willing to learn lessons from countries like Sweden, South Korea, and China. There’s lots of headroom for improvement.

    In almost every way outside of its name, fission ticks Bernie’s boxes. Lots of good-paying jobs, less material consumption, empowered employees of all races, creeds, and genders, and ZERO CO2 and other air pollution emissions.

  6. The subsidies for residential solar are MUCH higher than the 30 percent tax credit. Thanks to net metering in California they exceed 170 percent of the unsubsidized installed cost! Other states, like New Jersey, come close to the California subsidies due to direct payments from the state and artificially driving up Renewable Energy Certificate (REC) prices.

    We can get the same benefits of residential solar at less than half the unsubsidized price from large-scale solar (e.g., 10MW or larger) PV facilities. Why are we wasting taxpayer and electricity consumers’ money subsidizing residential solar?

    • “Why are we wasting taxpayer and electricity consumers’ money subsidizing residential solar?” — fossil fuel vendors, and governments that levy special taxes on these fuels, plus specially high *rates* of royalty/severance tax, like it because it is highly visible, yet nonthreatening.

    • The tesla folks already get free electricity at most public and many private parking lots. So what if the rest get home electricity free too.
      I realize you were likely being sarcastic- but we now have a heavily tilted ‘socialism’ favoring one segment of the economy/ society – time to get a level field of benefits for all

      • We have lots of “socialism” favoring one part of the economy or the other. And the reasons are perfectly rational–our markets always have significant imperfections that require addressing if we want to have a harmonious society. The “unfettered market” is a myth. All markets need a communal guiding hand of some kind–that’s why we have governments.

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