Renewable Energy: Not Cheap, Not “Green” – Part 7 – Footnotes

August 27, 1997
by Robert L. Bradley Jr.


[6]. This subsidy appears to be the case with California’s $540 million renewable fund. See the later subsection, Deregulate: Do Not Re-regulate.

[7]. Combined-cycle technology, developed in the 1960s from jet engine research, captures waste heat created from primary generation to produce additional electricity. It is the most efficient technology for electricity generation today. See Walter Vergara et al., Natural Gas: Its Role and Potential in Economic Development (Boulder, Colo.: Westview, 1990), pp. 55-57.

[8]. Wind does have operating costs after capital costs become sunk. In addition to costs of periodic maintenance and repair, landowner royalties of between 2 percent and 5 percent of revenue and property taxes are paid. Paul Gipe, Wind Energy Comes of Age (New York: John Wiley & Sons, 1995), p. 403.

[9]. California Energy Commission, Wind Project Performance: 1994 Summary (Sacramento: CEC, August 1995), p. 1. Cited hereafter as Wind Project Performance. Total operating capacity of 1,609 MW produced 3.2 GWh of power in 1994. Ibid., p. 25. An average capacity factor is a broader measure than dependable on-peak capacity because off-peak performance is measured as well.

[10]. Energy Information Administration, Annual Energy Review, 1995 (Washington: Government Printing Office, 1996), p. 261; Resource Data International, Energy Choices in a Competitive Era (Alexandria, Va.: Center for Energy and Economic Development, 1995), p. 6 (cited hereafter as CEED Study); Enron Corp., The Natural Gas Advantage: Strategies for Electric Utilities in the 1990s (Houston, Tex.: Enron Corp., 1992), p. 11.

[11]. Wind, for example, often peaks in the early evening, whereas the demand peak occurs in midafternoon. See Christopher Flavin and Nicholas Lenssen, Power Surge: Guide to the Coming Energy Revolution (New York: W.W. Norton, 1994), p. 125. See also Alfred Cavallo et al., “Wind Energy: Technology and Economics,” in Renewable Energy: Sources for Fuels and Electricity, ed. Thomas Johansson et al. (Washington: Island Press, 1993), p. 151.

[12]. San Diego Gas & Electric, “Response to CEERT’s Additional Testimony on Resource Case Analysis,” ER-92 Proceedings, California Energy Commission, August 28, 1992, p. 5.

[13]. California Energy Commission, 1994 Electricity Report, November 1995, pp. 94, 97.

[14]. Secretary of Energy Advisory Board, Energy R&D: Shaping Our Nation’s Future in a Competitive World: Final Report of the Task Force on Strategic Energy Research and Development (Washington: U.S. Department of Energy, June 1995), Annexes 2-4, p. 184. Hereafter cited as DOE Task Force Study. A DOE study similarly estimated that wind costs had fallen from 50 cents per kWh in 1980 to 5 to 7 cents by 1993. Julie Doherty, “U.S. Wind Energy Potential: The Effect of the Proximity of Wind Resources to Transmission Lines,” Energy Information Administration, Monthly Energy Review, February 1995, p. viii. See also Statement of George Pres-ton, Electric Power Research Institute, Hearing of U.S. Senate Committee on Energy and Natural Resources on the Department of Energy FY 1995 Budget, March 8, 1994, p. 3.

[15]. Conversation with Randall Swisher, executive director of the American Wind Energy Association, March 22, 1996.

[16]. Joseph Romm and Charles Curtis, “Mideast Oil Forever?” Atlantic Monthly, April 1996, p. 64.

[17]. Total oil and gas tax incentives at the wellhead are estimated to be around $1 billion for 1996. Office of Management and Budget, Analytical Perspectives, Budget of the United States (Washington: Government Printing Office, 1996), p. 62. With natural gas accounting for approximately 60 percent of total U.S. oil and gas production on a Btu basis, the tax allocation is $0.03 per Mcf of 1995 production, under 2 percent of the 1995 wellhead price of $1.59 per MMBtu. Energy Information Administration, Monthly Energy Review, March 1996, p. 125.

[18]. See Independent Petroleum Association of America, The Oil & Gas Producing Industry in Your State (Washington: IPAA, 1996), p. 103.

[19]. “Wind-driven electricity generating facilities must be located at specific sites to maximize the amount of wind energy captured and electricity generated. However, many good wind energy sites are on ridges or mountain passes, where siting and permitting difficulties, land restrictions, aesthetic objections, the potential for bird kills, and harsh weather conditions often constrain development.” Doherty, “U.S. Wind Energy Potential,” p. x.

[20]. CEED Study, p. 14. This generic estimate is applicable for a high-voltage (230 kV) line from a wind farm in California, and with substation expenses it would be more. Conversation with Don Kondoleon, supervisor, Transmission System Evaluation Unit, California Energy Commission, February 13, 1996. A lower estimate of $286,000 per mile, based on a study using information from before 1993, is made inJ. P. Doherty, “Wind,” in Energy Information Administration, Renewable Energy Annual, 1995, p. 88.

[21]. The 0.5 cent estimate was offered as typical by Randall Swisher and is an actual cost for the 35 MW West Texas wind project of the Lower Colorado River Authority. Conversation with Tom Foreman, manager of Marketing and Energy Services, Lower Colorado River Authority, October 4, 1995.

[22]. “Wind resources cannot yet be predicted with precision for a specific 24 hours in advance.” Comments submitted by the American Wind Energy Association to the Federal Energy Regulatory Commission, quoted in “Various Parties Protest California IOU’s ISO and Power Exchange Proposals Filed in Response to CPUC Restructuring Order,” Foster Electric Report, June 26, 1996, p. 5.

[23]. This differential prevails, for example, at the California-Oregon border pricing point, the most active trading point for spot electricity in the country.

[24]. Doherty, “U.S. Wind Energy Potential,” pp. ix-x.

[25]. The material requirements for wind turbines could be 40 to 50 times greater than for gas power plants per unit of output, creating significant incremental electricity consumption and the emissions associated therewith. This rough estimate is made by comparing the materials of the 1,875 MW Teesside gas project in the United Kingdom (circa 1993) with those of the recently announced 112.5 MW Zond project in Iowa. Upstream gas facilities (wellhead, pipeline) would reduce but not negate that differential. For a discussion of this problem with solar facilities, see the later subsection, Solar: The Smaller, the Better.

[26]. For an estimate of the social cost of renewable subsidies, see the later subsection, “Greening” Electricity Prices.

[27]. Artificially low estimates for wind power can also result from substituting a real for a nominal price (where future prices are discounted to the present) and hidden benefits such as utility financing or free land use.

[28]. San Diego Gas & Electric, “Comments on Proposed Policies Governing Restructuring Electric Service Industry and Reforming Regulation,” Submitted to the California Public Utilities Commission, June 8, 1994, p. 35.

[29]. Conversation with Marino Monardi, supervising resource planner, Sacramento Municipal Utility District, January 30, 1996.

[30]. Northwest Energy System, “Toward a Competitive Electric Power Industry for the 21st Century,” Portland, Ore., December 12, 1996, p. 20. The new-capacity gas cost was 2.93 cents per kWh for 3,356 MW; the new-capacity wind cost was 4.1 cents per kWh for 117 MW and 4.94 cents per kWh for the next 116 MW. Conversation with Jeff King, Northwest Power Planning Council, March 6, 1997.

[31]. Gipe, pp. 238-39.

[32]. Federal Energy Regulatory Commission, “Promoting Wholesale Competition through Open Access Nondiscriminatory Transmission Services by Public Utilities, Recovery of Stranded Costs by Public Utilities and Transmitting Utilities: Proposed Rulemaking and Supplemental Notice of Proposed Rulemaking,” 60 Federal Register (April 7, 1995): 17669-70. Another recent estimate–between $0.028 and $0.045 per kWh–is made by Henry Lee and Negeen Darani, “Electric Restructuring and the Environment,” Harvard University, Environment and Natural Resources Program Study 95-13, December 1995, p. 65.

[33]. Conversation with Monardi.

[34]. The “backwardation” curve is a result of knowledge of such forthcoming market changes as major pipeline capacity additions in Canada, where surplus gas is selling at a significant discount to U.S. lower-48 gas, expected in late 1998. See U.S. Department of Energy, Natural Gas Imports and Exports, Second Quarter Report, 1996, pp. iii-v.

[35]. For example, 10-year fixed-priced gas in December 1996, when the front month was selling at $4.575 per MMBtu, was $2.635 per MMBtu. Ten-year, fixed-price gas in January 1997, when the front month price fell nearly 50 percent, was $2.555 per MMBtu, only a $0.08 per MMBtu difference. Translated into electric rates, this 3 percent increase in gas prices equates to less than one mill per kWh.

[36]. Energy Information Administration, Natural Gas Monthly, March 1996, p. 11. These statistics have been restated in 1995 dollars using the Consumer Price Index. Higher wellhead prices that began in late 1995 and are continuing in early 1997 are expected to be reversed with new deliverability from the lower 48 states and Canada, explaining the aforementioned backwardation curve.

[37]. Wolfgang Gajewski, “Using Gas for Power Generation,” in The Petroleum Economist and Gas World International: Fundamentals of the Natural Gas Industry (London: Petroleum Economist, October 1995), p. 110. Coal plants have also been improved, with a one-half decline in coal input prices and a one-third fall in installed capacity costs in the last 10 to 15 years. CEED Study, pp. 3-9 to 3-10.

[38]. Energy Information Administration, Annual Energy Outlook, 1996 (Washington: U.S. Department of Energy, January 1996), p. 32.

[39]. Joseph Schuler, “Generation: Big or Small?” Public Utilities Fortnightly, September 15, 1996, p. 30.

[40]. Surplus capacity means that all electricity-related air emissions associated with building the wind farm are incremental and must be subtracted from later air-emission displacement.

[41]. “California grew to dominate worldwide wind development during the early 1980’s because the state has some of the most energetic winds in North America, and where these occur, low-cost land was abundant; at the time California had the most favorable purchase power rates and the most cooperative utilities in the nation; it had an abundance of wealth; it had a favorable investment climate; and California offered lucrative incentives to match those of the federal government.” Gipe, p. 30.

[42]. “Our marginal generation cost for oil in the 1970s and early ’80s was six cents per kWh. Today it is two cents per kWh using natural gas.” Vikram Budhraja, “Generation as a Business–Fact, Fumbles, Fictions and the Future,” Electricity Journal, July 1995, p. 37.

[43]. See Southern California Edison Company, Application for Off-System Power Sales Incentive Mechanism, Application 93-08-006, August 2, 1993, p. 2.

[44]. “[The California Energy Commission’s 1994 Electricity Report] demonstrated that there is a sufficient reserve margin within the PG&E service territory [northern California] through 2003.” Letter from PG&E to the California Energy Commission, Re: Docket 95-ER-96, January 9, 1996. “Edison agrees with conclusions reached by the CEC in ER 94 that no new resource additions are needed in the Edison system until 2005.” Southern California Edison, “Testimony on Submittal of Supply-Side Data,” CEC Docket no. 95-ER-96, May 15, 1996, p. 2.

[45]. Institute for Energy Research, “Comments to the California Energy Commission in the Matter of Preparation of the 1994 Energy Efficiency Report and 1994 Electricity Report,” April 4, 1995, p. 13.

[46]. See later subsection, The Increasing Environmentalism of Natural Gas.

[47]. American Wind Energy Association, “Is a Residential Wind System for You?” May 1995, p. 1. The up-front costs of a home wind system range from $6,000 to $22,000, with an estimated payout from displaced utility electricity of between 6 and 15 years.

[48]. Ibid.

[49]. Energy Information Administration, Electric Power Monthly, March 1997, p. 76.

[50]. Wind Project Performance, p. 1.

[51]. Public Law 95-617, 92 Stat. 3117 (1978).

[52]. CEED Study, pp. 1-7.

[53]. Ibid., pp. 2-3.

[54]. Ibid. See also Gipe, pp. 33-34.

[55]. CEED Study, p. 2-3. See also later subsection, Deregulate, Do Not Reregulate.

[56]. Sharon Pollard, secretary, Office of Energy and Natural Resources, Testimony, Solar Development Initiative Act of 1987 and the Renewable Energy and Energy Conservation Competitiveness Act of 1987: Hearing before the Subcommittee on Energy Research and Development of the Senate Committee on Energy and Natural Resources, 100th Cong., 1st sess. (Washington: Government Printing Office, 1987), p. 88. For a history of federal subsidies to renewables, which began on a large scale with the Energy Tax Act of 1978, see Robert L. Bradley Jr., “The Rise and Coming Fall of Political Electricity,” unpublished manuscript, January 1996, pp. 90-99.

[57]. Michael Lotker, “Solar Generation Flowers, Fades,” Forum for Applied Research and Public Policy, Summer 1992, pp. 90-91.

[58]. “The rush to build wind turbines brought many poorly designed machines to market which failed miserably in the field. The reputation of the wind industry was further damaged by naive and sometimes dishonest operators who oversold their products. These problems left a legacy of public scorn and skepticism about wind power that has only recently begun to fade.” Michael Brower and Michael Tennis, “Catching a Steady Breeze: Putting Wind Power to Work on Electric Utility Systems,” Electricity Journal, March 1995, p. 33. See also Murray Silverman and Susan Worthman, “The Future of Renewable Energy Industries,” Electricity Journal, March 1995, pp. 15-16.

[59]. Cavallo et al., p. 150.

[60]. Michael Grubb and Niels Meyer, “Wind Energy: Resources, Systems, and Regional Strategies,” in Renewable Energy,p. 173.

[61]. Public Law 102-486, 102 Stat. 2776 at 3021-22 (1992).

[62]. Ibid.

[63]. Ibid. at 2969-70.

[64]. The Energy Policy Act of 1992 also made permanent a 10 percent energy investment tax credit for solar and geothermal, and, under separate IRS rules, wind investments received accelerated depreciation. Ibid. at 3024.

[65]. DOE Budget Study. See also Appendix, Table A.1.

[66]. The Energy Technologies Advancement Program has granted more than $20 million to various renewable energy programs alone. California Energy Markets, May 19, 1995, p. 3.

[67]. Paul Gipe estimates the total expenditure on wind energy development by world governments (in nominal dollars) at more than $2 billion, $1.4 billion of which was spent in the United States. Gipe, p. 73.

[68]. California Energy Commission, 1994 Electricity Report, p. 104.

[69]. ICF Kaiser Study, Prepared for Enron Corp., September 1995.

[70]. Angus Duncan, American Wind Energy Association, Statement, Renewable Energy Incentives: Hearing before the Subcommittee on Energy Conservation and Power of the House Committee on Energy and Commerce, 99th Cong., 2d sess. (Washington: Government Printing Office, 1985), pp. 189-90.

[71]. The chairman of the DOE-appointed task force was Daniel Yergin, president of the industry consulting firm, Cambridge Energy Research Associates; author of The Prize (1991) and of two books related to the eco-energy planning perspective; and coeditor of Energy Future (1979). The 32-member task force was dominated by a pro-renewable group of academics, industry executives, trade group heads, and environmental representatives; free-market, fuel-neutral representatives were absent.

[72]. DOE Task Force Study, Annex 1, p. 61.

[73]. Gipe, p. 93.

[74]. Ibid., pp. 71-72. He adds, “Centrally directed R&D’s most spectacular failure was in the ultimately unsuccessful attempt to build the giants of the wind turbine world: the multimegawatt machines” (p. 96).

[75]. Ibid., pp. 89-90.

[76]. This estimate is composed of 8 cents per kWh in direct and indirect ratepayer costs and 2 cents per kWh in DOE subsidies. The DOE “social cost” of wind is calculated in the later subsection, “Greening” Electricity Prices.

[77]. Representative of high-cost nuclear power, PG&E’s 2,160 MW Diablo Canyon nuclear units cost ratepayers between 11 and 12 cents per kWh in 1993-95. Pacific Gas and Electric Company, 1995 Annual Report, p. 39. The market value of those two units under competitive pricing is estimated by PG&E to be a negative $10 billion. Ibid., p. 15.

[78]. This was the variable cost of producing coal oil at the Parachute Creek, Colorado, plant before it closed in early 1992. Robert L. Bradley Jr., Energy Choices and Market Decision-Making (Houston: Institute for Energy Research, 1993), p. 17. Up-front capacity costs would make the estimate substantially higher.

[79]. The total cost of the Strategic Petroleum Reserve, primarily for crude oil acquisition, is around $22 billion. Restated in 1995 dollars, the total cost is more than $36 billion, which divided by total inventory of 591 million barrels is in excess of $60 per barrel. DOE Budget Study.

[80]. This range was taken from the contract prices of gas produced at the Great Plains coal gasification project, which began at $6.75 per MMBtu and more recently had a commodity charge of $3.70 per MMBtu. Foster Natural Gas Report, February 8, 1996, pp. 3-4. Operating costs alone were estimated to be around $3 per MMBtu in 1988. Paul Duke, “U.S. Finds Buyer for Big Synfuels Plant but Won’t Recoup Its Initial Investment,” Wall Street Journal, August 8, 1988, p. 36.

[81]. Killing endangered species, including golden eagles, prohibited under two federal acts, is a felony punishable by two years in jail and a fine of up to $250,000. Gipe,p. 344.

[82]. “The impacts of major oil and gas development in the Arctic environment are significant, chronic, cumulative, and difficult or impossible to mitigate and prevent. . . . [A U.S. Fish and Wildlife Service] report documented extensive loss of vegetation, and concluded that most bird species in the area have declined in population, as have bears, wolves and other predators.” Lisa Speer, Natural Resources Defense Council, Testimony, Arctic Coastal Plain Competitive Oil and Gas Leasing Act: Hearing before the Senate Committee on Energy and Natural Resources, 101st Cong., 1st sess. (Washington: Government Printing Office, 1989), pp. 116, 121.

[83]. Gipe, p. 450.

[84]. All the material quoted below is from Amy Linn, “Whirly Birds,” SF Weekly, March 29-April 4, 1995, pp. 11-12, 14.

[85]. Ibid., p. 15.

[86]. CEED Study, pp. 2-15.

[87]. This estimate is based on 7,000 estimated bird deaths at Altamont Pass alone through 1991. California Energy Markets, May 8, 1992, pp. 16-17.

[88]. Biosystems Analysis, Inc., Wind Turbine Effects on Avian Activity, Habitat Use, and Mortality in Altamont Pass and Solano County Wind Resource Areas: 1989-91 (Sacramento: California Energy Commission, 1992), p. xi; Elissa Wolfson, “Who Owns the Wind?” E Magazine, May-June 1993, p. 19.

[89]. The Valdez kill was estimated to be 200 out of a total bald eagle population of 40,000, a percentage of .5. Alexander Volokh, “Punitive Damages and Environmental Law,” Reason Foundation Policy Study no. 213, September 1996,p. 52.

[90]. Jan Beyea, “Birds, Windpower and Energy Futures,” Presented to Audubon’s Asilomar Conference, March 27, 1994,p. 1. Copy of speech in author’s files.

[91]. Jan Beyea, “Avian Issues in Wind Development,” Presented to the 1995 Annual Meeting of the American Wind Energy Association, March 1995, p. 2. Copy of speech in author’s files.

[92]. Ibid., p. 5.

[93]. “Never Again,” Windpower Monthly, February 1994, p. 4. This editorial in the organ of the wind-power community went on to say, “The situation should never have arisen and the industry ought to be kicking itself.”

[94]. Ibid., p. 14.

[95]. Ibid., p. 4. For a revealing look at the internal debate among the pro-wind community on whether to expose the Tarifa bird death problem, see Arthur O’Donnell, “Wind Turbines, Dead Birds and Bad News,” California Energy Markets, February 18, 1994, p. 5.

[96]. For a history of bird research at wind farms, see LGL Ltd., Proceedings of National Avian-Wind Power Planning Meeting (Washington: LGL, Ltd. 1995), pp. 33-52.

[97]. See Jonathan Weisman, “Two Dead Eagles Fuel Altamont Debate,” Tri-Valley Herald, September 12, 1995, p. A1; “CEC Awards Grant Money for Bird Research,” California Energy Markets, December 19, 1996, p. 2.

[98]. Quoted in Arthur O’Donnell, “Energy Commission Studies Bird Deaths at Wind Farms,” California Energy Markets, May 8, 1992, p. 16. For claimed progress with the problem, see Colleen Wilder, “Kenetech Reports Bird Progress,” California Energy Markets, June 2, 1995, p. 2.

[99]. Allen Myerson, “Enron Wins Pact to Supply Power from Wind Turbines,” New York Times, March 20, 1997, p. C2.

[100]. Ralph Cavanagh, “Opening Comments of the Natural Resources Defense Council and Comments on Balancing Public Policy Objectives in a Competitive Environment,” California Public Utilities Commission Hearings on Restructuring California’s Electric Services Industry and Reforming Regulation, June 7, 1994, p. 14.

[101]. Christopher Flavin, “The Bridge to Clean Energy,” World Watch, July-August 1992, p. 12. Flavin on the same page mentions that “no energy source is ecologically pure” but provides no follow-up analysis of the environmental problems of wind and solar, much less a possible monetary value.

[102]. “To some who drive through the Alameda County, California, site, Altamont is a visual blight. Acre after acre of 100-foot-tall turbines in long curved rows line the softly rolling hills. . . . Altamont is where neighbors complain–loudly and with media coverage–that the noise from the turbines is unbearable.” Carlotta Collette, “Wind’s Eastern Front,” Northwest Energy News, July-August 1992, p. 14.

[103]. Quoted in Gipe, p. 258.

[104]. This has been called the “machines in the garden” problem. Ibid., p. 255.

[105]. “When heavy rains struck, runoff surged along roadcuts to cascade down steep slopes, gouging deep gullies into the mountainsides and leaving some wind turbines standing precariously on exposed foundations.” Ibid., p. 414. See also ibid., p. 317.

[106]. Ibid., p. 417.

[107]. “Such flashing lights are particularly annoying at night, as is the bright ‘security’ lighting common at wind plant substations in California.” Ibid., p. 320.

[108]. “California wind developers say wide roads speed construction by enabling two-way traffic of heavy vehicles to move at high speed. These roads met the need of the frantic year-end construction schedules typical of California’s tax-credit era.” Ibid., p. 411. See also ibid., pp. 322-23.

[109]. Ibid., p. 342.

[110]. Ibid., p. 444.

[111]. “Unfortunately, there are hundreds, if not thousands, of wind turbines in California that are less reliable, less well maintained, and less well sited. . . . Some simply do not work.” Ibid., p. 302.

[112]. Ibid., p. 324.

[113]. Paul Gipe, letter to Charles Imbrecht, chairman, California Energy Commission, Document File 96-RDD-1890, October 15, 1996.

[114]. Gipe, p. 454.

[115]. LGL Ltd., p. 5. The aforementioned West Texas wind-power project evoked this reaction from an official of the Guadalupe Mountains National Park: “I’ve got a lot of mixed feelings. I understand that wind power is supposed to be clean, yet I don’t look just at the visual intrusion. We’re tearing up a lot of country putting up those wind towers.” Quoted in Diane Jennings, “Wind Power Gets a Turn,” Dallas Morning News, September 24, 1995, p. 49A.

[116]. James Bruggers, “Stirring Ill Winds, San Ramon Valley Times, May 14, 1995, p. A1. Explains Paul Gipe, “There are many ways in which a wind turbine can ignite a wildfire. Electrical short circuits, an overheated bearing, downed electrical cables, welding splatter from technicians servicing the turbines, or even the catalytic converter on service vehicles can start a conflagration.” Gipe, p. 370.

[117]. Flavin and Lenssen, Power Surge, p. 294.

[118]. Gipe, p. 396.

[119]. CEED Study, pp. 2-12. A land-use estimate by EPRI is near the low end of this range. LGL Ltd., p. 11.

[120]. Christopher Flavin, “Power Shock: The Next Energy Revolution,” World Watch, January-February 1996, p. 15.

[121]. Grubb and Meyer, p. 173.

[122]. The “footprint” argument for ANWR drilling was made against the Sierra Club to no avail by the Bush administration’s Department of Energy. Stated the DOE, “Full development in the Arctic National Wildlife Refuge (ANWR) would directly impact only 13,000 acres, an extremely small portion (less than 1 percent) of the 1.5 million acre coastal plain where leasing would occur. The coastal plain, in turn, is a small portion of ANWR itself, which totals 19 million acres.” Letter from the Department of Energy to the Sierra Club, reprinted in Committee on Energy and Natural Resources, Legislative History of the Energy Policy Act of 1992, 6 vols. (Washington: Government Printing Office, November 1994), vol. 2, p. 1459.

[123]. Grubb and Meyer, p. 174.

[124]. American Wind Energy Association, The U.S. Wind Industry, February 1995, p. 4. The jobs argument is used to support subsidization of other favored renewable energies. Stated the Union of Concerned Scientists on California’s proposal to restructure California’s electric industry: “Investments within California for geothermal development have totaled about $5 billion, wind development about $3 billion, biomass-electric development about $2 billion, solar thermal-electric development about $1.5 billion, and solar domestic and pool heating about $1.5 billion, totaling somewhere around $13 billion, or more than a 2:1 ratio in favor of capital investment in California’s economy vs. ratepayer subsidies.” Union of Concerned Scientists, “Comments on the Commission’s Proposal Governing Electric Services Industry Restructuring,” June 18, 1994, p. 17.

[125]. Percy Greaves, Mises Made Easier (Dobbs Ferry, N.Y.: Free Market Books, 1974), p. 37. For an explanation of “opportunity cost,” see, generally, Henry Hazlitt, Economics in One Lesson (1946; New York: Arlington House, 1979).

[126]. “European countries are maintaining or increasing government-sponsored funding and continue to dominate wind energy research, development, and demonstration, which totals about $140 million annually worldwide.” DOE Task Force Study, Annex 1, p. 61.

[127]. Christopher Flavin, “Wind Power Soars,” in Vital Signs, 1995, ed. Lester Brown, Nicholas Lenssen, and Hal Kane (New York: W.W. Norton, 1995), p. 54.

[128]. DOE Task Force Study, Annex 1, p. 61.

[129]. Ibid., Annexes 2-4, p. 183.

[130]. “After spending 15 years and investing millions of dollars, America’s alternative-energy industry is selling out to Japanese and European concerns–just as some experts believe alternative technologies may be about to pay off.” Bill Paul, “U.S. Falls Behind in Alternative Energy,” Wall Street Journal, August 15, 1989, p. A6.

[131]. Energy Daily, January 31, 1996, p. 4.

[132]. Total U.S. exports in 1994 were approximately $833 billion. U.S. Department of Commerce, Statistical Abstract of the United States, 1995 (Washington: U.S. Department of Commerce, 1995), p. 802. Solar exports are currently estimated to be $300 million per year. Julie Halpert, “Harnessing the Sun and Selling It Abroad,” New York Times, June 5, 1996, p. C1.

[133]. “AWEA’s growth reflects the fairly broad interest of American industry in a technology which a 1976 Department of Energy study estimated could supply nearly one-fifth of all U.S. electric power demand by the year 1995.” DOE’s Fiscal Year 1985 Budget: Hearings before the Subcommittee on Energy Conservation and Power and the Subcommittee on Fossil and Synthetic Fuels of the House Committee on Energy and Commerce, 98th Cong., 2d sess., (Washington: Government Printing Office, 1984), p. 810. More recently, an estimate was made that wind could supply 20 percent of world electricity demand “even when environmental, land use, and systems constraints are taken into account.” Grubb and Meyer,p. 157.

[134]. Wind Project Performance, p. 1.

[135]. Quoted in Bruggers, p. 1.

[136]. Wind Project Performance, p. 1. See also the later section, Has Natural Gas Made Renewable Energy Subsidies Obsolete?

[137]. The concern over retirements suggests that operating cost estimates of only 1 cent per kWh are too low. In addition to periodic maintenance and repair, landowner royalties of between 2 percent and 5 percent of revenue and property taxes are paid. Gipe, pp. 233, 403.

[138]. Cyril Penn, “Kenetech’s Altamont Pass Repower May Be Blown Away as Congress Threatens Renewable Tax Credit Wipe Out,” California Energy Markets, September 22, 1995, pp. 11-12; Charles McCoy, “Kenetech Chooses Saunders as CEO, Explores Options to Increase Its Value,” Wall Street Journal, December 13, 1995, p. B6.

[139]. Staff report, Wall Street Journal, May 30, 1996, p. B4.

[140]. Llana DeBare, “Twisting in the Wind,” Sacramento Bee, February 18, 1996, p. D1.; Arthur O’Donnell, “Heads Roll at Kenetech: Annual Report Delayed by Red Ink,” California Energy Markets, April 5, 1996, p. 2; Arthur O’Donnell, “Kenetech Still Bleeding,” California Energy Markets, May 17, 1996, p. 3.

[141]. The $45 million, 45 MW project, expanding a 5 MW project that became operational in 1994, was terminated because of “gearbox oil leakage and blade delamination.” Ted Rieger, “SMUD Cancels SEPCO Cogen Project and Kenetech Wind Expansion,” California Energy Markets, May 17, 1996, p. 12.

[142]. It is telling that “[environmental organizations’] hesitancy [to endorse natural gas] is reinforced by the beating some took when they mistakenly endorsed nuclear power in the 1960s.” Flavin, “The Bridge to Clean Energy,” p. 17.

[143]. Arthur O’Donnell, “Enron Acquires Zond, Forms Renewables Unit,” California Energy Markets, January 10, 1997, p. 13.

[144]. All statistics for renewable and nonrenewable generation and capacity are from the DOE’s Energy Information Administration and can be found in Appendix, Tables A.2 and A.3.

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