The Cost of Alternate Energy Subsidies
The rising cost of alternative energy subsidies in the Unites States is well documented in legislation approved by the U.S. Congress. The nature of alternative energy and the research done to further it is not the problem. The physical and ethical problems presented by the approved budget for alternative energy subsidies reach too far into the public pocket to be called acceptable, and therein lay the core of the problem.
Legislation passed in the last year calls for solar and wind powered electricity to be at a competitive standard against coal and oil powered electricity by 2015. This is very noble, but not the answer. For wind and solar energy to be able to catch-up on almost 200 year of electrical development using oil and coal is financially irresponsible and so unethical to continue with such a goal. To prove this, the researcher will investigate the real life costs of making standard power electricity. From installation to delivery for final consumption, over the alternative forms of electricity and the surprising improper business ethics imposed by the solar and wind energy budgets that directly affect the private energy markets.
The U.S. energy markets have been under assault by rising prices for everyone from creator to consumer. In the end, the higher energy prices go, the lower the level of living falls across the country. There is something that can be done about the high costs of energy, an answer that some believe is right around the corner, in the form of wind farms, wind turbines, and solar panel energy. This technology for an alternative energy source, sadly, is not here and will not be here for, perhaps, decades to come, at best. There is another way of getting technological results at any rate, by increasing funding. An idea that has come to the minds of the United States Congress starting in the year 2006 and culminating in 2009 with the passed 2009 budget.
In the year 2009 the United Stated government passed the solar and wind energy budgets, in a report released by the department of Energy Efficiency and Renewable Energy (2009) www.eere.gov , it announced in the opening statement that one of the main objectives of the 2009 wind energy budget will to actively alter the private markets of wind energy to aid in pushing wind energy as a competitive replacement to standard coal or oil based electricity by 2014. The wind energy bill continues to directly the influence the private markets of wind energy by using, “…coordination with stake holders,” to be able to “…influence the barriers for wind energy,” EERE Budget in Brief ( 2009, page 49). To attempt this, the government approved a 2009 budget that imposes a $52.5 million budget, which is a $30 million dollar increase in research / subsidy spending from the former 2008 budget; doubling it, EERE Budget in Brief (2009, page 49).
According to the Department of EERE Budget in brief of 2009, the wind energy budget for the year was split into 2 main categories: Wind Technology Viability, which received $31 million in public aid, and Wind Technology Application, which received $21 million in publicly funded aid. The object, or goal, of the Technology Viability section, stated in the EERE’s Budget in Brief (2009, page 50), focused on improving wind turbines and the other finer workings of the modern windmills engine. The Technology Application mentioned in EERE’s Budget in Brief (2009, page 51), stated that the funds are meant to be used to research and develop the means to integrate wind farms and singular wind turbines, such as on top of high rise buildings, into the main U.S. power supply easier and more efficiently than current standards. The funds are meant to find ways to allow an everyday buyer of a wind turbine to be able to connect it the electrical grid with as little federal, state, or city assistance as possible.
The end goal of all this research and development in wind power viability and applications is to have the wind powered electricity make the drastic fall to only 3.6 cents per kilowatt, as reported in the EERE’S Budget in Brief (2009, page 50), with a gentle class 4 wind, which equals out to be 10-11 miles an hour. The EERE’s Budget in Brief (2009, page 50), continues on to call for the end cost of wind powered electricity to cost only 7 cents per kilowatt in a slightly stronger class 6 wind, neither of which is possible today. The cost of wind powered electricity is around the 11 cent mark per kilowatt and 3.5 cents per kilowatt at the average coal or diesel electric factory.
The wind energy legislation continues on in the EERE’s Budget in Brief (2009) to say, that the monies spent to achieve this end orders contracts to be filled for fixing the wind turbines. Controversially, the contracts that will be created for the research and development of any of these products will go up for bidding in a way that would land any business or individual investor in legal hot water. The government created and public held contracts will be put up for bidding to private and public companies. This will, by design, be pitting public and privately funded companies against one another for a public contract, pushing the ideals of ethical business practices by the U.S. government.
In the same Budget in Brief report by the EERE (2009, page 35), the U.S. governments department for renewable energy research, reported that the solar energy goals are even greater than the government’s plans for wind energy. The majority of the funds set approved for the research and development of solar energy creation and storage will be done in the form of research thermal energy storage called photovoltaic. The goal of all this spending is to, “develop cost-competitive, unsubsidized solar energy by the year 2015. The programs starting funds are $19 million.
The problem with these programs is that the U.S. government wants to beat 200 years of electrical advancement within 6 short years. When one compares the subsidies involved with traditional fossil fuels, oil and coal, an obvious difference is apparent. The list of subsidies and tax breaks for fossil fuels is nearly endless, the totals though are not. Direct funds from the government to fossil fuel companies is $16.3 billion and the tax break totals for fossil fuels equal out to be 53.9 billion, totaling out at a massive $70.2, according to the Environmental Law Institute’s report by A. Adeyeye & j. Barret, Estimating U.S. Government Subsidies to Energy Resources: 2002-2008 (2009).
The biggest factor when considering the massive amount of subsidies, tax cuts, and grants given to the oil and coal industry is the fact that without its exploration, drilling, transportation and refinement the world would come crashing down around every person alive and just not in the United States. Oil and Coal powered research, manufacturing, and distribution has been going on in a modern sense for the past 200 years, and never at the government’s wishes and never on the government dime. The end influence of the mass tax cuts for oil and coal industries is the high number of oil and coal factories in operation, the amount of product they refine and distribute and the income they provide for the masses employed by them in the United States and abroad, requiring more tax cuts to be distributed.
On the other side, alternative energy creation, installation, and distribution makes up far less than 10% of America’s energy production. In consequence, the wind and solar power manufacturers are employing an even smaller fraction of people. These two factors are what are holding alternative forms of energy, such as wind and solar, from getting the awesome amount of tax breaks, cuts, and subsidies that their more popular counterparts receive.
The only way to determine if the current spending has been effective is to look at the past. According to the US Energy Information Center, the average American spent 9.84 cents per kilowatt hour for their electrical service. When it comes to forms of power for electricity coal can’t be defeated. According to the US Information Agency on their monthly release of Electric Power Monthly, C. Cessar (December 17 2010), http://www.eia.doe.gov , states that coal produces 45.3% of our nation’s energy, nuclear is 19.2%, and petroleum makes only 1% of our nation’s total electrical output. Alternative energy already outpaces petroleum, creating 4.1% of the US power supply, but still nowhere near nuclear or even water power, that makes up only 6.4% our electrical supply. The throw it the wind spending that the 2009 budget called for is unsustainable and unrealistic, even with today’s technological capabilities.
The highest cost of the ideas of alternative energy is the installation price and hassle. For even the simplest of wind mill set ups require a professional electrician, city permits, city inspectors, and city paid electrician on top of it all. According to the aforementioned mentioned EERE, in a the Annual Report On US Wind Power Installation, Cost, and Performance Trends: 2007 (2008) by R. Wiser and M. Bolinger, states that the costs of a single wind mill installation, just installation, project can cost more than $2,500, the turbine and pole totals over $5,000, and the number of wind turbine manufacturers are so low that all orders need to be made 12 months in advance to be reliable on installation day.
The same report sponsored by the EERE by R.Wiser and M. Bolinger (May 2008), state the biggest installation problems are in Hawaii, the Great Lakes area, and New England. The next big expense with wind energy is operation and management of the wind turbines. The freezing temperatures of the Midwest and eastern coast of the United States have been marked as presenting exception problems, such as freezing turbines, damage on the mill wings due bird impacts, and the high cost of repairmen who are skilled in fixing such a machine.
The story is much the same with solar power. While the tax rebates are considerable, they hardly ever add-up to what the home owner expects. The real savings of the wind mill or solar panel comes after years of using the same panels, if they break the expenses start over again. To help this set in, imagine furnaces have no replacement parts, and if it breaks down or malfunctions the only way to repair it would be to completely replace it. The state of alternative energy technology has not reached the pinnacle it needs to be at for it to be considered as and used as a reliable form of replacement energy for mass consumption.
No matter what the inspirations and dedication of tax dollars, there’s little hope that the current heavy subsidies toward alternative forms of energy will make a dent in our current energy crisis. Even with the US government dedicating billions in public funds, it simply does not have the time needed to make the leaps in technology that are needed to impact the national electrical market by 2015, let alone 2014, as is the goal of the federal alternative energy budget as released by the U.S. Governments own Department of Energy Research and Renewable Energy report, Budget in Brief (2009, page 49).
References
Wiser, R. & Bolinger, M. (2008), U.S. Wind Installation, Costs, and Performance Trends: 2007. Retrieved from http://www1.eere.energy.gov/windandhydro/pdfs/43025.pdf Cassar, C. (2010), Electric Power Monthly. Retrieved from
http://www.eia.doe.gov/cneaf/electricity/epm_sum.html
Energy efficiency and Renewable Energy Dept.(2009, pg. 35&49), 2009 Budget-in-Brief. Retrieved from http://www1.eere.energy.gov/ba/pba/pdfs/FY09_budget_brief.pdf
Environmental Information Assoc. (2010), Ave. Retail Price of Electricity. Retrieved from http://www.eia.doe.gov/cneaf/electricity/epm/tables5_6_b.html
Environmental Lawsuit Institute (2009), Energy Subsidies Black, Not Green. Retrieved from http://www.eli.org/pdf/Energy_Subsidies_Black_Not_Green.pdf
Pendergrass, J.( 2009), U.S. Tax Breaks Subsidize Foreign Oil Production. Retrieved from http://www.eli.org/energy subsidies.html
