Clean Power us eia annual energy outlook 2014

Published on July 17th, 2014 | by Tina Casey


24% Renewable Energy Over 27 Years — Is That All?!?

July 17th, 2014 by  

The US Energy Information Agency is out with its new futurecast, the Annual Energy Outlook 2014. It’s packed with so many goodies that we hardly know where to begin, so let’s just start with that figure of 24%. It refers to the percentage of added capacity that EIA predicts will be accounted for by wind, solar, and other renewable energy from 2013 to 2040. Does that seem high to you? Low? And who gets that other 76%?

us eia annual energy outlook 2014

Wind turbines by Martin Abegglen.

Annual Energy Outlook 2014: Gas, Gas, And More Gas

To start with that last question, the Annual Energy Outlook 2014 lays out a reference case in which natural gas will account for the lion’s share of new capacity over the next 30 years. That comes to 73% from 2013 to 2040, with the remainder consisting of 1% coal plants (only those already under construction) and 3% nuclear.

EIA is on firm footing if the past is any indication. As EIA tells it, during the first five years of the Bush/Cheney Administration, natural gas accounted for “almost all” new capacity.

The driving force behind natural gas in those years was deregulation of the energy markets, which touched off a rush to build new power plants as independent producers edged into the market.

That would be from 2000 to 2005.

Now, here’s where it gets interesting. In 2005, Congress passed a comprehensive energy bill that included the now-famous “Cheney Loophole.” The loophole exempted oil and gas fracking from federal water resource protections, leaving a patchwork of state laws to fill in the gaps.

In some states, the absence of regulations touched off a fracking boom to match the power plant rush. Despite the frantic pace of drilling, though, EIA found that renewable energy still accounted for 42% of new capacity additions from 2006 up through 2012.

As for the Annual Energy Outlook 2014 prediction of a steep dropoff in renewables moving forward, EIA’s reference case is based on one scenario, in which the federal production tax credit for wind power is allowed to expire. Wind accounted for the vast majority of added renewable capacity from 2006 to 2012, so EIA predicts that loss of the tax credit will cripple the ability of the wind industry to add new capacity.

Noose Tightens Around Natural Gas

Okay, so EIA is the experts, but we’re wondering if they left a couple of things out of the equation when it comes to the competition between natural gas and renewables for a share of the new capacity market from 2015 on out.

First, although the Obama Administration has been crippled in terms of direct fracking regulation, EPA has started to seize enforcement opportunities relating to fracking as a general construction activity.

Second, in response to mounting evidence of significant health impacts, safety hazards (think: earthquakes), and negative effects on local property values, the anti-fracking movement is gaining steam on the local level. In New York, scores of communities have signed on to an anti-fracking strategy that was just upheld by the state’s highest court, and Pennsylvania communities also recently won an important legal victory relating to the use of local zoning laws.

Third, as US demand for fossil fuel flatlines, producers are putting pressure on the Obama Administration to enable more exports, which will exert more upward pressure on domestic prices over the long run.


Fourth, in the context of upward pressure on natural gas prices, consider that the cost of wind power, and the cost of solar power, have been on a sharp decline as new technology breaks into the market. We’re thinking that tax credit or no, wind and solar will beat fossil fuels moving forward, especially after the first offshore wind projects come online and the market for distributed solar heats up.

Fifth, add brand management to the bottom line and you’ve got a clear edge for wind and solar, as major US businesses (like Google and these 12 behemoths) and local governments rush to identify themselves with clean energy.

Ummm…we have a few more factors in mind but you get the idea. We’re thinking that at least some of today’s existing gas fired power plants will be replaced by renewables in the foreseeable future, especially taking into consideration the growth of the distributed renewable energy market. If you have any more to add to the pile, leave us a note in the comment thread.

As a reference case, EIA’s scenario builds on the past, but the future is going to look a whole lot different.

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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

  • Lou

    Quiet electric power reduces battle field signature for military tactical systems. That is a huge driving force. The logistics tail associated with moving fossil fuel is very cumbersome. Renewable energy is a huge advantage.

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  • Poechewe

    Three points: First, the EIA is good at collecting data but it’s not necessarily good at predicting the future. Don’t forget how badly it misgauged the potential of oil shale in California.

    Second, during the George W. Bush years, there was an effort to slip in political appointees in a number of agencies where normally merit would have defined who got lower level management jobs. It’s likely some leftovers are still around.

    Third, the EIA’s ability to predict seems to be two to three years behind the curve. It hasn’t been plugging in the dramatic improvements of the last two years.

    • Bob_Wallace

      “It hasn’t been plugging in the dramatic improvements of the last two years.”

      That’s so strange. They’ve been badly off for a while. One would think they would self correct.

      • Calamity_Jean

        “One would think they would self correct.”

        Yeah, I’d think they would get tired of embarrassing themselves.

  • EIA is sadly all we got when it comes to free-ish readily available energy data. I brought this up before, wind and solar groups really need to walk over to EIA’s office and enter renewables install and performance data for them. As far as predictions go, EIA has been heavily influenced by fossil fuel for so long – it may be bred in the bone. There’s probably a revolving door between EIA, energy consulting, fossil fuel and commodity traders that’s greased with grease from petroleum refineries. And of course the second EIA posts anything positive about renewables, the entire right side of congress (and Mary Landrieu of LA) will go into apoplectic shock. And cry big government takeover.

    • Jim Young

      I thought the EIA was a great independent source of information, with really useful data for the average layman. I recall the greater distance it had from outside influences in its early days (see and the easier to digest data in the late 90s and very early part of this century. It has seemingly become more complex, a little harder to understand, and may lag a bit on the issues you mentioned. I still consider it one of the least biased and most reliable sources (though some media seem to cherry pick and distort the data for their own advantage). I save all the reports from when I first found them in the 90s, and do go back to check them when there seems to be too much slanted reporting on them.

      It may not be as valuable or easy to interpret as we would like but it still seems the best we can get.

      • Bob_Wallace

        I view their historical data as solid. That’s based on never seeing any criticism of their accuracy.

        If their historical data was off I would think one or more segments of the energy industry would be screaming about how they were misrepresented.
        Their projections are simply off the wall. At one point it was said that they are predicting based on only the past which has meant that they were predicting very high solar prices as the cost of solar panels was rapidly dropping.

        If that’s what they are doing then they should just stick a ruler on the historical record and draw straight lines going forward. And hang a sign on their pages “We’re smokin’ crack”.

        To predict that the price of wind and solar will be significantly higher five years from now than current prices is off the wall.

        • vensonata

          Now ya got me thinkin’ Bob. Wind or Solar? Both equal or other? I think wind up to now has been more effective, just because a good site can produce most of the time and doesn’t care if its night or day. But, but, but, solar at current prices and therefore ‘effectiveness’ has just arrived. The thing about Pv is its amateur friendly. A wind tower is Corporate friendly. A 6 MW tower needs General Electric. A 5 kwh array needs me and my buddy, and a weekend. More or less, its Ikea furniture…there are those “ikea moments” but it is people power. Of course there are big scale solar too, but that’s perfect for semi-skilled jobs. So, beats me, but that is why I would say solar is going to dominate.

          • Jim Young

            I’d like a flexible mix, taking advantage of the strength of each. That may vary in which ratios work best in different areas. I think there are a few improvement that could be made in wind, like putting vertical shaft ones in a cage at the corner of buildings or other concentrating structure to gain some efficiency they’d lose in other installations. A can imagine a safety cage being worth some loss in efficiency if enough can be gained by concentrating the wind.

            If you want an easy test of this yourself, just try out different locations around buildings to see how much more can be gained at the corners. They already have designs that do this horizontally on roof edges. Though that seems potentially more efficient, I think it would be a little harder for a DIY project.

          • Bob_Wallace

            It will likely be a big mix, varying from location to location.

            The SW heavy on solar, the NE heavy on hydro and offshore wind. Idaho and Paraguay very heavily hydro, and Iceland using hydro and geothermal.

            (Paraguay already produces 10x as much electricity with hydro than it consumes.)

            Wind is now (apparently) about 4c/kWh onshore in the US and solar is roughly 8c but dropping fast. If solar ends up cheaper than wind we’re talking something like 2c vs 3c. That leaves no room for 2c + storage to beat out 3c. (Or 3c/4c if 2c/3c makes some uncomfortable.)

            I suspect wind will have an edge based on total hours of availability. We know that linking multiple wind farms can yield usable power 85% of the time. Solar’s edge will be its high covariation with demand.

            Solar may have another edge up with its possible lifetime.
            We know panels can last 40 years and we know of no reason why they would stop working. At 0.3% loss per year a 100 year old array would still be kicking out 70% of new. Once paid off solar drops below 1c/kWh. Wind drops to about 1c/kWh but turbine life might only be 40 years.

            Very cheap storage might push new geothermal, tidal and hydro off the table.

            So many mays, mights and maybes….

          • Calamity_Jean

            “We know that linking multiple wind farms can yield usable power 85% of the time.” That 85% figure is for linking just two wind farms only 300 miles apart. More wind farms or longer distances between them give a higher percentage.

            Some storage may be needed to cover the predawn and sunset-to-bedtime peaks daily. Or they could be covered by (existing) gas turbines running on biogas, as well as geothermal, tidal or hydro. The next few years are going to be interesting.

        • Jim Young

          I suspect you are right when it comes to their future predictions. I remember a brochure put out by Shell in 2007 ( I got it at the Eco Marathon event in California), and some discussions with their lower tier people (and one rep who spent a lot of time discussing their plans as well as gathering as much information as possible from participants on what they wanted to see done). They had planned on more hydrogen use then, but had seemingly robust plans for whichever of three major scenarios would become predominant. While they favored hydrogen, they also described deep drilling, horizontal and “snake” drilling (I presume to get to awkward pockets or folded seams). If I recall correctly, they described the tight resource fracking as taking from 32 to 64 times the number of wells to keep extraction rates acceptable (40 now seems the average). They also described lowering costs by putting rigs on skids as one of the ways avoid as much disassembly and reassembly as possible. Which of the techniques (much dependent on actual scenarios) they used would depend on what they could get for the resources compared to what it took to get them out. (look out if oil goes over $105 bbl, for much more potentially environmental damaging techniques to explode the depth, breadth, and cost of extraction.

          I suspect the Chinese finding it wiser to go with more than the 60 new nuclear reactors, combined with much more aggressive solar and other forms of greener energy, make it difficult to guess how many will continue to trying to use coal, oil, or cleaner burning, but increasingly hard and dirty extraction of natural gas. I suspect one big LPG accident would destroy that market, too.

          The problem is they have so much invested in grabbing leases, drilling holes, and buying political, media, and denier scientists allies, that it makes it very hard for us to do the most environmentally (and economically) rational actions we should.

          I favor smaller, easy to use and update as technology gets even cheaper Solar PV. I’d prefer smarter modular grids that can operate by themselves in emergencies, but also integrated into larger grids with a good mix of modular base power (compared to super sized plants that can’t adjust output as needed). I’m afraid privatizing so much of them will make it that much harder to change the model they make so much profit from, though.

          • Bob_Wallace

            We’re clearly moving toward grids that can isolate problems and use redundant loops to keep most customers supplied while the problem is fixed. That will happen regardless of what we use for supply. When a falling branch or wandering car takes down the line the smart grid will be able to turn off power on each side of the break and then supply everyone else normally.

            We also may see neighborhood storage which would allow the grid to stay up for a few hours even if a large supplier went down. Certainly long enough for deep backup generation to come on line.

    • eveee

      There is IEA, but they are no better. Talk about confusing acronyms.

  • Ross

    I’d love to see a graph of EIA predictions versus reality going back 36 years.

    • Vensonata

      You would see oil at $40 a barrel today…so much for that. That octopus that the Germans had picking soccer match wins could do much better.

      • Jan Veselý

        That octopus is unfortunately dead.

        • Calamity_Jean

          “That octopus is unfortunately dead.”

          So is the EIA’s credibility regarding renewable electricity.

        • A Real Libertarian

          That octopus is unfortunately dead.

          Still could do better.

    • Kevin McKinney

      Yes. The next time the EIA is right about renewables will also be the first time…

      And bizarrely, the annual outlook graph doesn’t at first glance seem very compatible with this one, from their “Short Term Outlook,” also just released:

    • eveee

      How about going back 14 years. There are lots of charts for oil and gas complaining about EIA forecasts being too rosy. Here are renewables completely panned. EIA way off for successive years. I smell a rat.

      Its like they don’t know what an exponential is. Then there is the one where they project no increases in renewables for decades despite their decades long doubling in less than 5 years.

      Overall, EIA is worthless at forecasts. In fact they look terribly biased.

      • Bob_Wallace

        That set of graphs are from the IEA, not EIA?

        And they show a learning curve on the part of the agency. Each year they crank their predictions higher as if they are paying attention.

        • eveee

          You are right. The graphs are IEA. Seems to be a problem with them also. The second link is to an article on bad EIA forecasts. Shows their forecast for PV to stop growing in 2016 and not start growing again for 12 years.

          • Bob_Wallace

            They explain that as based on solar subsidies stopping and claiming that solar won’t be built without subsidies.

            Of course that means that they have no idea how inexpensive solar has become and how much it should continue to fall.

            In fact, there is strong argument in part of the renewable energy community that removal of subsidies would result in prices falling faster. The existing companies would put a lot more effort into reducing soft costs.
            I’ll be very surprised if wind and solar subsidies continue until 2020. (Of course fossil fuels will still likely get theirs.)

    • tibi stibi

      yes that would be a great article. the thing with the EIA is they take the past to predict the future.

      doing this the future will always be the same as the past. we know it is not 😉

      • eveee

        tibi-actually, if they did look at the past to predict the future it would be great. They don’t even do that. They appear to make no notice of solar and wind exponential growth patterns and theorize that there will be no PV for a decade? If they looked at the past they would extend solar and wind out with a similar exponential plot. You can see my post above where IEA fails by extending linearly.

    • eveee

      There are lots of references to complaints about their predictions. I don’t know if they go back 36 years. Some of them come from the oil and gas industry.

  • JamesWimberley

    A clue to the EIA’s thinking, if you can call it that, is their “no sunset” scenario, in which wind and solar ITCs are extended and the US gets 265 GW of renewable capacity additions, against a mere 83 GW in the reference case. In other words, they believe in their bones that wind and solar are and will remain completely dependent on federal incentives. There are no learning curves in their world, no death spirals. Nuclear plants all get their lives extended to 60 years, and renewables grow by 1.9% a year. Which is what would happen if they were running the show. But they don’t.

    The future will be much more dynamic, a bloodbath for the bad guys, a triumph for the good ones. As a corrective, look at GTM’ s chart of the PPA strike prices (link) for utility solar in the USA. (H/t Mike Munsell). In 2014 they are all around 5c per kwh, say 6.5c with the tax break. Last year they were dispersed around 6c; two years ago 8-9c. Some utilities are signing PPAs though they have already met their state renewables requirements, on the basis of price and the expected impact of Obama’s coal regulation. Project the trend a few years, and utility solar does not need incentives to win against all comers.

    The EIA focuses with blinkers on new centralised grid generating capacity, treating distributed generation as a minor driver of reductions in demand. So they miss the bus on both commercial and residential solar. The limit to grid substitution from home-grown solar is not a few percent annually, but 100% and grid defection. Why should utility solar’s cost reductions not extend to commercial, with somewhat higher costs offset by the behind-the-meter benefits of self-consumption? Residential solar can also flourish without federal tax credits. Their removal would be a blow to the leasing companies, but consumers can and will just shift to the growing offer of zero-down bank loans and PACE.

    • Bob_Wallace

      “Some utilities are signing PPAs though they have already met their state renewables requirements”

      Wind PPAs at (apparently) 2.1c/kWh are now cheaper than NG generation. Solar PPAs at 5c, non-inflating which makes them an effective 4c over the life of the contract, are as cheap or cheaper than NG and are fixed prices where gas prices will likely rise over the next 20 years.

      Long term fixed price PPAs are smart. They remove a lot of cost variability.

    • Bob_Wallace

      James’ link to PPA prices isn’t clear (text color work order submitted) so let me paste the graph here so folks can see what has been happening with the contract cost of solar….

    • patb2009

      well clearly a drive to self consumption will become a big deal

  • Bob_Wallace

    “24%… the percentage of added capacity that EIA predicts will be accounted for by wind, solar, and other renewable energy from 2013 to 2040”

    I guess the EIA figures we’ll get that 24% of renewables in first and then go back to installing traditional generation?

    First quarter of 2014 92.1% of our new capacity was renewables.

    In May renewables dropped all the way down to 88%.

    “Since January 1, 2012, renewable energy sources have accounted for nearly half (47.83 percent) of all new installed U.S. electrical generating capacity….”

    I sure love me them EIA predictions. We’re they stock I’d sell them short and make a fortune. (There must be a Cheney mole running that office.)

    • patb2009

      EIA underweights renewable energy

  • Vensonata

    My silicon crystal ball says solar pv 70 % of all power. Other renewables the rest. Why? Because sunshine is everywhere, totally predictable, reliable, and pv is simple, reliable and safe. It will also happen before 2040. It’s people friendly. Storage, you say? Harvard, MIT, flow batteries 1 cent per kwh. You read that right (by 2020). If I am wrong blame my crystal ball.

    • Bob_Wallace

      I doubt 70%. The wind blows more hours of the day and it will cheaper to use wind -direct rather than stored solar.

      My guess is 30% to perhaps as high as 50% for solar. Besides wind there’s also hydro, geothermal, tidal and biofuels that will grab a share.

      • Calamity_Jean

        Scientific American published an article a few years ago that suggested the mix would be 45 to 50% wind, 40 to 45% solar, and the rest “other”. I dunno how they arrived at those proportions.

        • Bob_Wallace

          Same way I make mine. Guess.

          I’d guess “other” will be higher than 15% (all the room they leave between 45% wind + 40% solar).

          Hydro currently supplies 16% of the world’s electricity. Biogas and biomass are likely to provide a meaningful percent because gas is dispatchable and mass can be stored cheaply for long periods (deep backup). And nuclear will hang in for a while, it’s now a bit over 10% worldwide and many of the reactors will last a few decades.

          • Calamity_Jean

            Nuclear may be gone before the reactors wear out, many aren’t making a profit any more. I’d be surprised it biogas and biomass together come to more than 5%, but that small contribution will be important (high profit) because of the dispatchability & storability considerations. Hydro will hold at around 15% because most of the good dam sites are already filled with dams.

            Wind & solar around 40% each? We’ll find out, I suppose.

            There’s that PJM study that said it could all be done with wind and solar, mostly wind. That’s with the technology of 2012-2013, if solar prices keep falling it will get a bigger share.

          • Bob_Wallace

            Roughly 3/4rds of our nuclear plants have low operating costs. A dozen or two may fall by the wayside in the next few years.

            The DOE identified a significant number of existing dams which could be converted to hydro and we’ve got some pretty decent run-of-the-river potential. I don’t know if hydro will get a bigger share, but it will.

            Worldwide, hydro is growing.

          • Calamity_Jean

            Even with low operating costs some nukes can’t make money. In the developed world, some nuclear plants that are currently under construction may get finished, but I’ll be surprised if any more are started.

            Regardless of the exact percentages, we know that all-renewable can be done. Different areas will have different proportions; very little hydro in the flat US midwest, close to no wind in the southeastern US “wind desert”, solar negligible in Alaska etc. (My disregard of hydro probably stems from the fact that I live in Illinois.)

          • Bob_Wallace

            Run of the river hydro turbines are being installed in the upper Mississippi locks.

            You’ve got hydro in your neighborhood.

          • Calamity_Jean

            Hey, cool! Thanks for the information.

          • Calamity_Jean

            You might find this interesting if you haven’t seen it before: Their suggested mixes don’t include any biogas/biomass.

      • jxxx mxxx

        So when lib sympathizer/.001 percenter Warren Buffet says “wind doesn’t work, I only buy it for the tax credits”, is he wrong?

        • PCalith

          Yup. Wind produces energy and reduces price variability and swings on fossil fuel grids, but is a margin based business, unlike a number of other ‘bubble’ businesses. Wind works, it’s just not wildly profitable.

        • Bob_Wallace

          I suspect Warren is saying that wind doesn’t work well as an investment compared to other places where profits are higher. You should know that when he says “for the tax credits”. That’s investment talk. Not utility company talk.

          Clearly wind works. It’s lowering the cost of electricity in Texas.

          I consider lower electricity prices as a sign of working. Don’t you?

          • jxxx mxxx

            I scan this article and threads and see a lot of unjustified optimism on renewables. If it doesn’t make money, I don’t know how you get the the investors; if you don’t get the investors, I don’t know how you get the critical mass to unseat fossil fuels. Yes, wind works… in the same way anti-matter works but anti-matter will never be a big player in energy.

            I recommend to climate hawks that they embrace a consumption-tax-combo of $1/gal carbon tax plus a 20% VAT than replaces the consumption-incenting, investment killing income tax. The renewables/foffile fuel ratio will then take care of itself. Failing that, renewables (pvs, testla batteries, wind) are a waste of time for the next couple of decades

          • Bob_Wallace

            Perhaps you’d be better served by doing some reading as opposed to scanning.
            You’d discover so much….

          • jxxx mxxx

            Ok – I read it… Stiil see a lot of unjustified optimism on renewables.

            –Noose Tightens Around Natural Gas

            –the anti-fracking movement is gaining steam

            –US demand for fossil fuel flatlines,

            –cost of wind power, solar power, on sharp decline

            –you’ve got a clear edge for wind and solar

            –we have a few more factors in mind but you get the idea

          • dgaetano

            “Failing that, renewables (pvs, testla batteries, wind) are a waste of time for the next couple of decades”

            The burden of proof for this statement is on you. Wind and solar provided 15% of California’s energy mix yesterday, up about three fold in the last three years.

            (and pretty much every climate hawk supports a carbon tax, that’s a non-issue, it’s getting it to happen that’s an issue)

          • jxxx mxxx

            The proof is in the price. Wind and pv are still not cheaper than ff… even if they were, you would need to couple them with expensive batteries (that don’t yet exist) b/c they don’t run all the time

            “5% of California’s energy mix yesterday”… really? your telling me that pv and wind attained 15% of the market place w/o price/tax/legal/political coercion?? Seriously???

            “every climate hawk supports a carbon tax, that’s a non-issue, it’s getting it to happen that’s an issue”: I told you how to get it; replace the income tax with a carbon tax and VAT consumption tax – conservatives and libertarians will join you. Otherwise you’ll never get it… and if you ever get it you wont keep it (see Australia)

          • JamesWimberley

            Why can’t you believe official data? Once you have built a solar of wind farm – with or without subsidy – it produces electricity at near zero marginal cost. Rational grid managers select generators as the load varies according to the merit order of marginal cost. The feed-in priority of wind and solar isn’t coercion, it’s market logic.

          • jxxx mxxx

            I know digital cameras were cheaper (and better) b/c kodak went bankrupt b/c everyone bought digitial. I look around the Southeast where I live – I see NO conspicious solar.

            But if u want official data – here it is from wkpedia: UK, Spain and Germany have spent the last 5 years chasing solar and wind; here is there 2013 $/kwh:
            UK: 20cents
            germany: 36c
            Spain: 23c
            and coming in lowest cost, good ole USA: 13c and for reference, coal is 6cents/kwh

            How do you explain them paying almost 2x than USA when as you say solar “produces electricity at near zero marginal cost”?

          • Zer0Sum

            Don’t use wikipedia as your official reference.

            Germany is way ahead of the curve and effectively subsidised the worlds PV so they bear some additional costs. This summer they have been producing more electricity than they can use during peak solar periods. Still not enough to cover 24 hr requirements but enough that the traditional energy suppliers are in decline year on year.

            The Germans, like the Chinese have realised that there is no need to waste effort on propping up the fossil fuel industries when renewables are much more efficient investments.

            The Chinese also realised some time ago that they cannot maintain the status quo because they will literally gas us all to death.

            The elite in Amerika and Australia will keep being stoopid because they have too much vested interest in the status quo. Not because they have any rational or logical reasons. They just can’t handle getting out of their comfort zones. Something to do with being geriatrics with a sense of entitlement. It’s a hard psychological nut to crack.

          • jxxx mxxx

            Sorry, didn’t realize Wikipedia was a right-wing propaganda rag?

            Why don’t you log in and edit the data if it is wrong?

          • eveee

            No. Its just seriously out of date on some issues that move very quickly. Europe is different, but Citigroups take on wind vs FF is that wind is the hands down winner against all but gas, and even then its competitive in the windy Midwest.
            Next time, instead of going to Wikipedia, go to Greentechmedia. They will point you to Citigroup as a reference. These are finance professionals.
            WInd is 5c without subsidies. Nuclear, 11c and rising.

          • Bob_Wallace

            Wind is probably 4c without subsidies.

            Average PPA prices in 2013 are reported (unconfirmed) as 2.1c/kWh. Adding back in about 1.5c/kWh for subsidies over a 20 year PPA makes the price something like 3.6c. And those are delivered prices which include owner profits and other costs not included in LCOE calculations.

          • Bob_Wallace

            Germany has very high electricity taxes. Their cost of generating electricity is quite reasonable. Their wholesale priced of electricity has been dropping quite rapidly.

            A lot of what holds US average prices down is the low cost of running paid off coal or nuclear plants. But our plants are aging and will have to be replaced over the next few years.

            Be thankful that the price of wind and solar have dropped so low. That will keep our electricity prices from going through the roof.

            BTW, the average lifespan of a US coal or nuclear plant is about 40 years. Take a look at how old our fleet has become.

          • Hans

            It seems the Wikipedia data are outdated. The following datacome directly from the German Federal Grid Agency:

            German Feed in Tarif for PV in 2013:
            between 10 €ct and 18 €ct (13 $ct to 24$ct ), dependent on month of installation and system size.

            German Feed in Tarif for PV for July 2014:
            between 9€ct and 13€ct (12$ct to 18$ct), dependent on installation size.


            Don’t forget: Germany has the same solar radiance resource as Alaska.

            If you take external costs into account coal does not look so good anymore.

          • jxxx mxxx

            Why did they use the term “Vergütungssätze” and not “kosten” or “preise”???

            Actually sorry – it’s in your post: Your showing me “tariffs” which are, by definition, contrived prices not fully loaded costs.

            Can you send me fully loaded costs?

          • Hans

            In the current EEG you get a guaranteed price for a kWh fed into the grid, the Feed in Tarif (fit). To stimulate investment the tariffs are slightly higher than the costs for the system owner.

            The FiTs are regularly decreased (for new systems) as to reflect cost decreases.

            For a direct answer: no I do not have data on the “fully loaded costs” but they will be lower than the FiT.

          • jxxx mxxx

            So Hans, the question remains: In free-market America, if solar is as gunstig as you and everybody else here says, why aren’t pv panels popping up everywhere?

            BTW: Fully loaded costs would include the cost of providing backup power, nighttime power and cloudy-day power and batteries

            And can we at least agree that wind is nowhere near the cost of FFs?

          • Bob_Wallace

            I’d say PV panels are popping up very nicely in the US. Look at the graph below at how our percentage of power from solar is growing.

            Can we agree that wind is nowhere the cost of fossil fuels?


            New wind is about 4c/kWh without subsidies. New coal is over 10c/kWh plus external costs which drive it well over 15c/kWh.

            Paid off wind is 1c/kWh and paid off coal is more than twice as much.

            No contest. Wind is much cheaper than coal, nowhere near the cost.

          • jxxx mxxx

            Your grid confirms what I thought – you do realize those are decimals on the left? Seriously? .21% is something to brag about? Granted you have to start somewhere but this looks more like a niche than a game-changing commodity.

            I do wish pvs luck; if the price is right, I’ll buy it

          • Bob_Wallace

            My “grid” does not confirm what you thought. It puts lie to your assumption.

            Solar is taking off in the US. That’s an enormous growth rate.

          • eveee

            You don’t have to worry about price. You can buy it as a contract with the solar provider or a lease. No down. The provider does and assessment to make sure you don’t have trees blocking and have enough south facing area. Also helps if the roof has a pitch. Then they look at your electric use history and see if it all makes sense. If it does, one the PPA option means you buy their output. You pay a much smaller bill to your utility and one to the solar provider. The two bills are smaller than your original. Thats all there is to it.

          • Hans

            So jxx mxxx:
            First of all there is no real free market for electricity in the U.S. You have vertically integrated semi-regulated monopolies, that have a big interest in sabotaging new entries to the market.

            You use a cheap rhetorical trick: you say back-up power in four different ways in the hope it will look you have more than one argument.

            The need for back-up for renewables is overrated. Every power plant needs back-up, yet not every power plant has its own back-up, they share. No different for renewables. Most older studies come to the conclusion that at least 20% of variable renewable can be fed into the grid without the need for extra back-up. A recent study by the IEA (not really known for there optimism about renewables) comes to the conclusion that 45% of variable renewables can be fed into the grid with limited extra costs.

            If you talk about hidden costs you should also take into consideration the environmental and health costs of fossil fuels. This will probably not bother you because these will end up being paid by poor people, people in other countries and future generations. But there are people who do care. An I think that is the point. If you are aware that there are very negative consequences to going on with business as usual you are willing to work on alternatives. If you don’t want to know this because it interferes with your believes that free-markets have no negative side effects, or you have a financial interest in the vested interests of the fossil fuel industry, you will keep on saying it is impossible, even after the last coal power plant has been closed.

          • jxxx mxxx

            “no real free market for electricity in the U.S…semi-regulated monopolies…sabotaging new entries to the market.” Sounds like you’re talking a need for “deregulation” – a new concept for libs; an old one for Reagan Republicans

            “Every power plant needs back-up… hmmm Nat gas and coal can run 24/7 and on cloudy days; any backup is a contingency and minimal- solar is dead during those periods; it needs a contingency backup and a daily/routine complement – (a far greater resource commitment/cost). In any event, regardless of energy mode, fully loaded costs includes ALL operating/contingency costs – your EEG link did not contain fully loaded costs; my wiki link did.

            “you should also take into consideration the environmental and health costs of fossil fuels” – you’re talking externalities; perfectly legit and even applicable, except that the green movement has forfeited the right to invoke externalities because it refuses to admit that the welfare state is a textbook example of enternailities. Take on the welfare state externalities with the same vehemence as FF externailities and I’m with you.

            You’re talking to the guy who advocates a $1/gal equiv carbon tax plus a 20% VAT/consumption tax – the full impact of which is far more environmentally beneficial than anything advocated by the circle-jerk going on here – All I ask is that you repeal/replace the income tax

          • Bob_Wallace

            And replace the income tax with a property/possession/investment based tax? One that includes foreign assets?

            Or do you dream of the day when the law of the land is based on who has the most fire power?

          • jxxx mxxx

            First, I dream of that red-head in Game of Thrones…

            Second, not sure where you are going Bob but you can’t replace the income tax with a property/possession/investment based tax – that IS the income tax

            fire power? What the frack is that?? Please be more articulate

          • Bob_Wallace

            “property/possession/investment based tax – that IS the income tax”


            Since when is a house or sofa income?

          • Hans

            You did not post a wikipedia link. You only put up some numbers which you said were from wikipedia.

            For the rest you are actually saying: “my handwaving arguments are more valuable than hundreds of serious scientific studies”

            Let me explain why your intuitive idea of back-up is wrong:

            Baseload powerplants “trip” more often than you think. If that happens a 1000 MW goes of offline in seconds. The variations of variable renewables are much smoother and much easier to deal with. The reason for this is that these are geographical spread, as a result short therm fluctuations are averaged out. Combining wind and PV makes it even better.

            Of course you cannot get a 100% of variable renewables without back-up or storage, but like I said before most older studies come to the conclusion that 20% of annual power from variable renewables is possible without extra back-up. However, these studies are based on the assumption that you leave everything as it is and renewables are just an add-on. The new IEA study comes to the conclusion that if you organise the grid-managment as to maximise the contribution of variable renewables you can get up to 45% of variable renewables with minimal extra cost.

            Just because I am aware of the limitations of free-market, does not mean I am a communist. I am convinced that a proper price on pollution and an unbundling utilities* will bring renewables forward faster than any FiT, investment subsidy or any other bandage solution that is used right now. In this case the externalities for the grid will become internalities: predictable power will get a higher price than unpredictable power, power produced during high demand will get a higher price than during low demand.

            The problem is that politicians have been to cowardly, or are to close to the fossil fuel industry, to put a proper price on carbon and other pollutions. So now we are stuck with the bandage solutions mentioned before.

            You see we are actually not so far apart. The only difference is that your gut feeling says renewables won’t make it in a free market+carbon tax, whereas I think they will.

            The welfare state is another issue, and does not belong here.

            *with power production an retail left to the free-market and the natural monopolies transmission and distribution in the hands of (semi-)government.

          • jxxx mxxx

            Lets get some book keeping out of the way first:

            >> I am a communist… Where did I use that term

            >> politicians have been to cowardly This is left and right by the way, and probably everybody on this site… as I said the most beneficial method for fighting AGW is a $1/g cc and a 20% VAT that replaces/repeal the FIT. How many who share your world view (and on this site) are brave enough to support that… isn’t it ironic that the right-winger in this thread is proposing the most sweeping, most effective action for fighting AGW

            >>welfare state..does not belong here. Neither do “externailities”… u can’t invoke externalities in AGW and not in other spheres – it’s all or nothing

            >>we are actually not so far apart. Actually we agree 100%. I think they WILL make it in a free market AND carbon tax but they won’t make it in a free market alone which BTW was my original complaint. That’s why I want to help your team with a CT; all I ask is that you repeal/replace the FIT/PRT/CIT which btw accelerates carbon emission growth by converting investment into consumption in addition to sending jobs and investment to over-polluted china. Help me help you.

            Climate hawks will have to part ways with “bleeding heart” libs if they are going to save the planet… I will be here when the finally realize that

          • Hans

            The communist remark was a bit tongue in cheek, as you were clearly surprised that I was in favour of a free-market solution.

            In general what you are actually saying is that we agree on a carbon tax, and a but nevertheless we cannot get to an agreement because progressives do not buy into your libertarian/conservative agenda on social issues.

            If you would for a moment would put off your prejudice glasses, you would see that many progressives are in favour of a carbon tax, and wouldn’t mind breaking up monopolistic vertically integrated utilities. The real problem is of course is that conservatives/libertarians are too much dug in in their science denying position for them ever to agree on any climate action.

            Climate caring conservatives have to part ways with their fossil fuel industry puppet masters and their useful idiots of the teaparty if they are going to save the economy and the future of their children. I will be happy to be there when this happens.

          • jxxx mxxx

            Again – I see nothing but agreement… “Climate caring conservatives have to part ways with their fossil fuel industry puppet masters and their useful idiots”

            I have done that…Again please state a plan MORE eco-friendly than mine! You can’t…

            Now, have you parted ways with your fellow takers and soak the rich redistributionists and their useful idiots in Hollywood and the democratic party? Clearly you have not.

            You and your compatriots tell us the planet is on fire and this is the moral issue of our time… Time is running out etc. etc etc…. We have to do something NOW!.. well as long as it doesn’t buzz-kill to your hyper-pity for the poor.

            BTW: I maintain that the poor will have more jobs and better incomes (and a cooler planet) from a well functioning rationalized economy that has a simple consumption-based tax system that doesn’t encourage companies to send work to China.

            Why is it that the poor can’t pay a 20% VAT in the US. They pay MORE in socialist Europe

            Look at Australia… Look at CA where they are already griping. Taxes are the easiest thing in the world to demagogue. You will never get a robust carbon tax without conservatives and you will never get conservatives if you add a carbon tax on top of the pile of taxes we already pay. You are in affect hoisted on your own petards… you are screwed before you even start.

          • Bob_Wallace

            Design a consumption tax that doesn’t burden the poorest and let the rich dodge paying a fair share and we can talk.

            Tell us how we get to the income stream of someone making millions per year off investments and using that money to purchase more investments. You going to treat investments as “consumption”?

          • jxxx mxxx

            Bob – there’s nothing to talk about; Conservatives hold all the cards here… Australia just repealed it CT; Canada has abandoned Kyoto so no CT tax there. I just read the US has the most AGW skeptics so no CT here for the next couple of decades. And even if you get a CT, it will be a nickel & dime affair not a robust CT that effectively fights AGW.

            If a VAT burdens the poor why does every socialist euro country have a 18%+ VAT?

            Why would I treat investments as consumption, they are investments. btw: The income tax cap gains tax converts investment into vile, polluting consumption but that doesn’t bother you apparently.

            What is investment anyway: funding a way to “do more with less” you know like wind turbines or gotomeeting or the Tesla. Why would you tax something so beneficial to the environment? Because you’re obsessed with “the rich” even if your envy allows your planet to go up in smoke.

            Why would a VAT let the rich “dodge”, don’t they buy first class tickets to Europe and huge Mcmansions that they fill with lots of pretty things, all of which will be taxed at 20%

          • Bob_Wallace

            What? You want to abolish the income tax and replace it with a consumption tax but can’t tell us what a fair consumption tax would look like?

          • jxxx mxxx

            I already told you: $1/gal carbon equiv + 20% VAT… I’m willing to go higher on the carbon tax if you like.

          • Bob_Wallace

            That’s not much of an answer.

            Since people making modest to low incomes spend just about everything they earn they would pay a large percentage with a VAT.

            Rich people, making tens of thousands, hundreds of thousands, millions per year would pay a very small percentage of their income with a VAT.

            You are proposing a ‘screw the poor’ regressive tax scheme.

            And we’re way off topic for this site. Let’s get back to renewable energy. And not bother with discussing carbon taxes at the federal level. Ain’t going to happen as long as we have such an anti-tax, anti-government collection of jerks in office.

          • jxxx mxxx

            …low incomes would pay a large percentage with a VAT; and the planet would be saved!

            Rich people would pay a very small percentage of their income with a VAT; and the planet would be saved!

            You are proposing a ‘screw the poor’ regressive tax scheme; and the planet would be saved!

            …and the planet would be saved!

            …and the planet would be saved!

            …and the planet would be saved!

          • Hans

            First of all I am European and not part of your silly American culture war thing. In my country we have more than two parties, which allows for a bit more nuance. From a European point of view the democratic party is moderately conservative, and I can see no hyper-pity for the poor in your country.

            As I said before: a carbon tax has been on the wish list for progressives worldwide for a long time, and they would happily exchange all energy subsidies (including things like free insurance for the nuclear industry) for a carbon tax that reflects the external costs of climate change.

            The coupling a complete change the of tax system in to a carbon tax is artificial and seems to make sense only in your head.

            The economic textbook solution for dealing with the carbon taxes is to use the money to compensate victims of climate change and to use it to pay for infrastructural projects that mitigate climate change, for example building higher dykes, and moving coastal cities inland. A problem is that the people suffering from climate change will for a large part live abroad and in the future, and it would be very hard to determine damages on an individual level so the distribution of the money in this way would open a can of worms.

            A more simple solution is a budget neutral carbon tax: income taxes are reduced with the same amount of what comes in from the carbon tax. In this case you can haggle about how the income tax reduction is distributed, but some political compromise is always feasible, if both parties want a carbon tax.

            But like me and Bob said before: This whole discussion is not very relevant right now, because the republicans are dug deep into science denial and also a large portion of the democratic party is eating out of the hand of corporate interest groups.

            Your BTW remark comes down to trickle-down-economics, which has not worked the last 30 years.

            Finally, my own btw remark: the way you speak about the poor and the people who care for them tells a lot about you and the way conservatives think.

          • eveee

            I wish we would use technical terms to avoid confusion. Backup is not specific. Reserves are required for reliability. They are there for unplanned outages among other things. Now there is really no such thing as a reserve generator. Its just how much generation you have sitting there waiting to be used. It generally does need to have fast ramping or it does not do much good. Peaking plants slew output quickly. They can be reserves, and they can and are used to meet the daily demand variation. Baseload is slow ramping thermal plants like coal and nuclear, that are best left running, because it takes a long time to turn them back on if they go off, and it is difficult and expensive to change their output a lot. On a typical peak day in late July, the peak demand can reach twice the demand at 4AM. Then peakers, mostly gas, have to be available to provide as much power as the base load does at 4AM. The single greatest misunderstanding and fallacy of those unfamiliar with the power system is the fact that the load determine the amount of peaking necessary. There are always lots of reserves necessary for the peak demand is summer that sit idle most of the year. So the capability to respond to changes is built into the system. Thats why the first 30% of wind integration essentially has little or no impact on the system and very little or no excess reserves are needed. Its not until greater than 30%, that it even starts to e felt and even then, its nowhere near the need for 100% reserves.

          • eveee

            OMG. Ever heard of the million solar roofs campaign in California. You obviously don’t live here. Every day you get fliers and salesmen. And a good number of the roofs in every block are adorned with them. The Solar City salesman is at every Home Depot. Its impossible to avoid. Wind nowhere near the cost of FF? Come out of your cave. Wind competes with the lowest of all FF, gas. It simply trounces coal. Oil was non competitive long ago. Nuclear is much more expensive. Its down to wind and solar, soon to be by themselves.



          • eveee

            There seems to be an awareness problem here. Thats two times you have made assertions based on a lack of awareness. This is not entirely your fault. Renewables are growing so quickly, its hard for people to be aware. Case in point, I thought wind farms were pretty rare, just a few spots in California, maybe Texas. Not so. You cannot miss them if you drive I 80 across the country. From Utah to Illinois, the dot the landscape in the distance. Solar is showing up rapidly in about a dozen states. California is booming with solar. Every Home Depot has a SolarCity salesman. You get door to door solar sales constantly that have to be turned away and fliers in the mail. Every block has several. Its shocking. Only last year prices were higher.


          • Zer0Sum

            Almost all fossil fuels are now energy negative. But renewables are increasing in profitability on a daily basis.

            And please don’t use Phony Tony and his gang of Cronies as an example of the norm. They have lost all credibility and he has now obtained the mantle of the Joker King from Dubuwah. They will be thrashed when the Double Dissolution kicks in.

          • Bob_Wallace

            Apples:apples, please.

            New wind is cheaper than new coal. New solar is cheaper than new coal.
            Paid off wind is cheaper than paid off coal. Paid off solar is cheaper than paid off coal.

          • eveee

            If? If it doesn’t make money? Tell that to Warren Buffett. I believe some think he knows how to make money.


          • jxxx mxxx

            You DID read the article right???

            “Berkshire Hathaway Energy CEO Greg Abel has said that the company is going to ‘keep moving’ in the renewable energy field, using TAX CREDITS to offset profit at other businesses”

            … like fish in a barrel.

          • eveee

            Yes. Solar has a tax credit for a few years. Wind has none today. Unless he is gambling that the PTC will come back, he is investing in wind on raw profit.

          • jxxx mxxx

            From wikipedia: “The PTC provides a 2.2 cent per kilowatt-hour benefit for the FIRST TEN years of a renewable energy facility’s operation”

            It’s not paid upfront, it’s paid out per kwh of production. Any wind turbine that broke ground before 1/1/14 gets it.

            So buffet can buy wind turbines for the next 9 years and still collect the credit

          • Bob_Wallace

            That’s not how buys wind for tax purposes. You buy a new wind farm and use the ITC to offset profits from another income stream. It’s all about getting your tax benefits early so that you can put that money to work over time.

            If you opt for the PTC then you’re just covering the profits from the electricity produced over the ten year period.

          • eveee

            Wikipedia is not always up to date. Read the news. You are badly out of circulation.


          • jxxx mxxx

            ThinkProgress ain’t news – its advocacy. Why not just send me to MSNBC?

            Anyway, I saw nothing that article that contradicts anything I have said. Can you point it out to me?

          • Bob_Wallace

            I found it for you –

            “An $85 billion tax package that included reviving a key subsidy to the wind energy industry was struck down by the Senate on Thursday, after Majority Leader Harry Reid refused to let Republicans offer an amendment to kill the wind subsidy altogether.”

            It was cleverly disguised as the first paragraph.

          • eveee

            This is the DOE website.

            “Note: This credit expired at the end of 2013. Projects that were not under construction prior to January 1, 2014 are ineligible for this credit. See below for more information about determining when construction has commenced on a project.”


          • jxxx mxxx

            Eveee – If u read the entire thread u will see that I already noted this. It doesn’t changemy point – Buffet can continue to buy wind turbines for the next 4 to 7 years and still get an adequate return on investment despite the fact that, as an usubsidized business, wind turbines make lousyinvestments

          • eveee

            Un frigging believable. You dragged the whole thread that long to prove what? That you don’t know that the wind PTC is expired? You can’t claim you knew it and ask the question repeatedly. Then you say wind is bad business, and dismiss that Warren Buffett has invested in it without the PTC. Something must have changed his mind, because he did invest in it without a PTC. Now you say that, and by now you admit, I hope not forget, that

            “Buffet can continue to buy wind turbines for the next 4 to 7 years and still get an adequate return on investment despite the fact that, as an usubsidized business, wind turbines make lousy investments”

            They make an adequate return on investment….

            but make lousy investments…

            I will let the reader decide. For me, simple. Doubletalk.

          • A Real Libertarian


            Berkshire Hathaway Energy CEO Greg Abel has said that the company is going to ‘keep moving’ in the renewable energy field, using tax credits to offset profit at other businesses and allow further investment in the RE sector.

          • eveee

            You have wind and solar mixed up. The statement is about both. Solar has an ITC for a few more years. Wind has no subsidy as of today and starting in January of this year. Yer barking up the wrong tree. Take some lozenges for that throat thing.

          • A Real Libertarian

            You have who I’m talking to mixed up.

            I’m correcting jxxx’s quote mine.

          • eveee

            Sorry man. I get confused. My bad.

          • A Real Libertarian

            No problem.

          • jxxx mxxx

            You folks keep sending me quotes from buffet as if to prove I’m somehow wrong or misstated what he said. So here is the EXACT quote: “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They DON’T MAKE SENSE WITHOUT the tax credit.”

            How is that in anyway unclear? Why is this even a debate? How can that in any way be construed as an endorsement of wind as a viable/profitable energy source?

          • A Real Libertarian

            How is that in anyway unclear? Why is this even a debate? How can that in any way be construed as an endorsement of wind as a viable/profitable energy source?

            Simple, wind gets subsidies, wind’s competitors get subsidies, don’t see why people whine about wind getting a slice of the pie while ignoring the nukes and fossils gulping down the lemon meringue to ensure there’s no tomorrow.

            And if you’re going to say “I don’t ignore them”, then why do you only say you disapprove of those subsidies when people call you out on your hypocrisy?

            And on a related matter: Why would u as a “real libertarian” support tax credits for wind?

            Because I’m tired of vulgar libertarians droning on, and on, and on, and on about how subsidies are always wrong and economy killing and blah-de-blah-de-blah, but the billions in free government money that goes to their guys is totally Not-Subsidies you guys, no sirree Bob!, scout’s honor.

          • Bob_Wallace

            No all caps shouting please.

            Wind PPAs are now 2.1c/kWh. (That’s an unconfirmed number but from a reliable source.)

            2.1c without the PTC would mean 4c/kWh electricity. There’s no other way to bring new generation to the grid. And wind farms will be profitable.

            Now, wind farms may not be the highest paying investments. It may be that some subsidies are needed to make them attractive investments and bring in the money needed to get them built.

            Things in the investment world are more complex than what one can get from a single statement.

            Now, let me quote you from above…

            ” If it doesn’t make money, I don’t know how you get the the investors; if you don’t get the investors, I don’t know how you get the critical mass to unseat fossil fuels.”

            Let’s rewrite it.

            If it doesn’t make enough money, I don’t know how you get the the investors; if you don’t get the investors, I don’t know how you get the critical mass to unseat fossil fuels.

            That is why we need to keep subsidizing renewables. We need to insure that there is adequate profit to drive investment. We need investment to build “critical mass”, to build the industry in order to bring costs even lower.

          • jxxx mxxx

            I can’t cap but you can bold….you are a liberal.

            Anyway, I still don’t know what I said that was a) wrong or b) controversial. You are agreeing with my original comment – wind needs subsidies because it doesn’t work without them. Not “work” in terms of the technology (yes – the whirly-gig turns and energy comes out the rear-end); works in terms of an investment.

            Do we at least agree on Buffet’s exact (and damning) words above?

            The science is settled: when u subsidized, you are admitting it isn’t sustainable (as an enterprise) and that people won’t pay break-even value for your product – thus the subsidy.

            Anyway the subsidy is dead so it is a mute point and wind is a lost cause unless you work with right-wingers to get a carbon tax that repeals/replaces the income tax (which is my ultimate point)

          • Bob_Wallace

            I’m really liberal. You can use italics, underline and strike through as well. ;o)

            Buffet’s words are there for all to see. But there is disagreement on meaning.

            Remembering back to Econ 101, there is a distinction between “profit” and “extraordinary profit”. Simple profit is the amount of profit needed to keep existing businesses operating. But to attract new players it takes extraordinary profit. Investment money doesn’t seek out opportunities where there’s only enough profit for survival.

            Now, remember that Buffet was likely talking about wind when the unsubsidized cost of new wind was around 5.5c/kWh, in 2012. (PPAs were running 4c. Add in a bit more than half of the 2.3c/kWh subsidy as it applies only to the first 10 years and PPAs run 20 to 25 years.)

            It seems that new wind PPAs dropped to 2.1c/kWh in 2013. That 1.9 cent drop more than replaces the 2.3 cent for 10 year subsidy. It could be that wind farms are now profitable enough, without subsidies, to attract investors. There is value to up front money such as the ITC (investment tax credit) provides that isn’t replaced by the cost drop, but it would take a CPA some time to work that out.

            I don’t know how the ITC works now but some years back I looked at wind farm investments. With a $10k investment one got back almost $10k in tax credits (not deductions). My tax rate was very high at the time and the credit would have paid for a very large part of the investment. Getting the tax credit up front can be very powerful.

            From a purely selfish standpoint we should keep subsidizing wind. Create extraordinary, extraordinary profits, attract a lot of investment, and build wind farms at a much faster rate. That upfront investment could save us tremendous amounts down the road if we slow climate change.

          • eveee

            This is the year. 2014. There is no PTC. Warren Buffett did invest more in wind this year. So the PTC is not necessary for Warren Buffett to invest in wind this year without a PTC.

          • eveee

            You are really sidestepping here. I proved there is no tax credit in 2014. Warren Buffett doubled down on wind this year. He either thinks its coming back or he thinks wind makes enough money without it. You claimed its all subsidy. You jumped the shark.

          • jxxx mxxx

            what do you not understand about buffets own words uttered on April 28, 2-0-1-4!: “we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They DON’T MAKE SENSE WITHOUT the tax credit.”

            Yes or no: if today Buffet buys a used wind turbine that broke ground on 12/31/13, does he get a tax credit?

          • Bob_Wallace
          • jxxx mxxx

            my apologies – it was a paste from a prior post…

            no answer the question (all lower case)… Yes or no: if today Buffet buys a used wind turbine that broke ground on 12/31/13, does he get a tax credit?

          • Bob_Wallace

            I don’t know.

            One would have to dive into the tax credit law and see if he would or not. My guess is that he would.

            I would suggest you separate “investment value” from “profitable”. While a group of investment opportunities may all be profitable, some investments simply return higher value than others.

            Investors such as Buffet may not purchase more wind farms for a while because they’re looking for up front tax benefits. They have a lot of profits from other activities which they would like to shelter and a modest return from profits would be augmented by tax credits.

            Other investors may purchase wind farms because they’re looking for guaranteed income streams. There aren’t a lot of businesses one can get into where your product is pre-sold and profits set for the next 20 to 25 years.

    • Doug Cutler

      Do you have a link for 1c kwh storage? Best projection I’ve seen is 3.5c kwh from Isentropic pumped heat but still unproven at scale.

      • Bob_Wallace

        I think he’s talking about Ambri’s liquid metal batteries. I’ve never seen a price estimate, just statements that they should be as “cheap as dirt” based on low cost materials and unlimited (?) cycle life.

        That came out of a MIT lab. There’s an interesting TED talk on their site.

      • 84093

        Where is data available on cost per kWh of storage capacity? This seems like the key metric in the storage race, followed closely by the issues of lifetime cycles and ‘battery fatigue’

        • Bob_Wallace

          Boy! That’s the question that needs to be answered.

          I can find bits and pieces here and there, but then most of it is more speculation rather than hard facts.

          We mere mortals don’t buy large scale storage so there’s no public market is my guess why prices aren’t more available. Companies tend to keep costs/prices as private as possible

        • Vensonata

          The government “sunshot” program aims at 4cents kwh by 2020. Being off grid with lead batteries I know the best life cycle price of storage is 15cents right now, so I was skeptical . Lithium by 2020 won’t be much better than lead acid since you need to be at $200 kwh to get to about 12 cents with lithium at 3000 cycles above 80% capacity. Then I read about harvards work with flow. They are talking …now get this…1/4cent a kwh storage! Well let’s quadruple that even, it still comes to 1cent/kwh. So storage is where all the viability of the the new green grid depends…maybe the fate of the world hangs on it.

          • Calamity_Jean

            “So storage is where all the viability of the the new green grid depends…maybe the fate of the world hangs on it.”

            Not really. Wind and solar generating capacity that is well-diversified geographically is surprisingly reliable. As long as generating capacity is significantly cheaper than storage capacity, it makes sense to just install extra turbines and panels, and plan on switching some off if there’s too much.

          • Vensonata

            Yes, you need lots of extra to reduce storage, but if solar dominates then you do need storage. Example: 4 days of overcast and snow in December nets about 10% or less of a sunny day…it would be absurd to overbuild by 10 fold for December as it would be 50 times too much in the summer. Although a nice problem to have…what to do with 10 times more power than the U.S. uses (not needs, uses). The D.O.E. is not planning storage for a hobby, if there were an easy alternative they would take it.

          • Calamity_Jean

            That’s why solar needs to be balanced with wind. Winter is windier and that fills in for less sunshine. Put in more transmission lines or beef up the existing ones and send power from where it’s temporarily in oversupply to where there’s a temporary shortage. Transmission is cheaper than storage.

          • Vensonata

            I’m all for it, in fact I believe that the whole issue of replacing carbon with clean alternatives is fairly easy, economical, and will happen much sooner than 2040. Wind is good, storage is good, pv is good. But best of all negawatts …50% easily kills coal completely all by itself.

    • Hans

      Regarding the predictability of wind vs sunshine: This depends very much on the climate. In arid climates sunshine can be predicted more accurately than wind speeds, but in cloudy climates it is the other way around.

      • Vensonata

        Monthly it is amazing the reliability of solar irradiance averages even in Seattle. They are not good but they are reliably not good.

        • Hans

          What kind of averages do you mean? Daily or monthly averages or no good for a grid operator.

  • PCalith

    BNEF has a much different view of gas than the EIA, and quite possibly a more accurate one. IIRC, the EIA sees gas prices stabilizing and continued increase in production, but there is more than likely a bust a-brewing in that arena. Drillers make so little money that they wind up on a funding treadmill, running to get nowhere, hoping they’ll eventually be profitable. I don’t know how much longer that can carry on.

    • Jim Young

      I think the only way they will stay profitable is by selling the investments to suckers like what was done on the dark side of Mortgage Backed Securities (not a bad idea by itself, but criminal when they could, and did, phony up the risk profiles). I believe they are too enabled the same with Rent Backed Securities since I see so little actual financial reform to prevent throwing all the junk ones into the pools like they did with MBS. (Poorly regulated, monitored, immunized from criminal prosecution, favored with ridiculously low capital gains taxes, bailed out when they fail, and supported by Quantitative Easing that topped a $Trillion a year for years, instead of helping people who actually EARN all their money and support real growth greater than the leaches “return on capital” greater than real growth.)

      To me, it is the next big bubble that can’t last much longer.

  • Ronald Brakels

    South Australia went from almost zero renewable energy to almost 40% of electricity from wind and solar in less time then that. And it resulted in lower wholesale electricity prices. And if somebody wants to make something out of the fact that South Australia is a state and not a country I’ll point out that we could take an axe to the electricity interconnectors with Victoria, end all electricity imports and exports, and have no disruption in our grid electricity. We are more than capable of fully meeting demand and nearly 40% of it would be met with wind and solar.

    • Calamity_Jean

      That’s an accomplishment you can be proud of!

      • Ronald Brakels

        All it took was a modest Renewable Energy Target and a lack of cheaply accessable coal. Very roughly the Renewable Energy Target would have acted in a manner similar to maybe a $40 a tonne carbon price. But also note that the cost of renewables are now much lower than they were eight or nine years ago.

  • Hans

    Are we talking about 24% of all energy or 24% of electric energy?

    Big difference!

    • JamesWimberley

      Electricity. Follow the link.

      • Hans

        Me thinks an article should be understandable without reading the linked material.

        In the current form the title is a bit misleading, and the article unclear.

        • Bob_Wallace


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