The U.S. Energy Information Administration has released updated figures on the levelized cost of different energy sources. Here's the latest in our irregular Friday Factoids series, provided as usual without comment...
According to the U.S. Energy Information Administration, the statistics and forecasting agency of the U.S. Department of Energy, a substantial price gap remains between the levelized cost of new renewable electricity sources and conventional fossil fuel power plants, though that gap has narrowed since the EIA published its 2010 numbers last October. Their cost estimates are for new power generation equipment constructed in 2016 and reported in 2009 constant dollars (see graphic below).
Electricity from new onshore wind power, for example, is still a bit more expensive than electricity from new conventional coal-fired power plants, and 47% more expensive than electricity from a conventional natural gas-fired combined cycle power plant, according to EIA estimates. Wind power built offshore a whopping 150% more costly than onshore wind, says the EIA.
True, we must reduce low-priority discretionary spending, both defense and domestic; slow the projected growth of Medicare and Medicaid; and restore Social Security to fiscal soundness. But we also need to care for an aging population and invest in the skills, research and modern infrastructure that power economic growth.
Alice Rivlin, founding director of the Congressional Budget Office, former director of the White House Office of Management and Budget, former Federal Reserve Vice Chair, and member of the Presidential Debt Commission.
See also: "Losing the Future?" a Breakthrough Institute staff editorial, April 14, 2011
It's not too late for President Obama to return to the clear path to "winning the future" articulated in his State of the Union. But righting the nation's economic trajectory demands a concerted and consistent effort to help Americans understand and embrace the difference between spending and investment, and to recognize that a growing economy fueled by new innovations, new technologies, and new industries is an essential component of any strategy to tame the debt.
"The first step in winning the future is encouraging American innovation. ... We'll invest in biomedical research, information technology, and especially clean energy technology, an investment that will strengthen our security, protect our planet, and create countless new jobs for our people."
With those remarks at the heart of his State of the Union address - and a 2012 Budget proposal to back them up - President Obama drew a line in the sand and articulated a vision of American economic renewal fueled by key investments in the kind of public-private partnership that brought us the railroads and jet aviation, microchips and the Internet, countless biomedical breakthroughs and a portfolio of clean energy alternatives.
As we wrote in January, "Obama's [State of the Union address] was a rejection of proposals to cut federal spending across the board, as he finally made the case before the American people about why public support for innovation is critical for the country's long-term prosperity."
It was a plan to "win the future" and restore American prosperity that embraced the crucial distinction between government spending - consumptive, transitory, and sometimes even wasteful - and public investment - that small portion of our federal budget that catalyzes the enduring innovation, entrepreneurship, and economic growth that makes this nation strong. We hailed the speech as "Obama's breakthrough" moment.
But that was January...
Today, we're veering closer to a very different vision of America's budgetary future, one that seems to embrace the logic of "across-the-board" spending cuts proffered by Republicans, including decreasing budgets for major national research agencies and clean energy innovation programs.
Budget Deal Cuts Investment in Innovation
Late on April 8th, President Obama's negotiators gave his imprimatur to a compromise to fund the government through the remainder of the 2011 fiscal year that would see federal investments in energy innovation fall by nearly 11% (or $325 million) below 2010 levels while stripping over $1 billion from the budgets of the nation's major non-defense research agencies.
These cuts amount to a veritable funding cliff, when one considers the nearly simultaneous expiration of the temporary investments flowing to innovation agencies in 2009 and 2010 under the American Recovery and Reinvestment Act.
If this is the opening battle in the war to win America's future, it is a clear defeat.
A budget compromise to fund the government through the remainder of Fiscal Year 2011 would reduce federal energy innovation investments by 10 percent relative to 2010 funding levels. At the same time, the Continuing Resolution would make across the board cuts to each of the major non-defense research agencies.
The House Appropriations Committee released the text of the legislation this week after an agreement reached over the weekend between Congressional Republicans and Democrats and the President that avoided a looming government shutdown. While final passage of the bill must still be secured in the House and Senate, the negotiated compromise is expected to find passage shortly.
The 2011 budget resolution would cut $325 million in federal energy innovation spending and over $1 billion from major non-defense research agencies over 2010 levels (see Figures 1 and 2 below). Cuts to agency operating budgets will be even more severe when combined with the expiration of temporary American Recovery and Reinvestment Act funds that have been flowing to energy innovation and non-defense research programs during 2009 and 2010.
While ultimately keeping budgets at a higher level than those proposed by HR 1, the House GOP's 2011 budget proposal released in February, the negotiated Continuing Resolution would cut the budgets of most of the major non-defense research agencies by at least 1 percent of FY2010 levels, and, in the case of the National Institutes of Standards and Technology (NIST), by as much as 13 percent.
The final budget figures for key innovation agencies reflect the overall direction proposed by Republicans - including some degree of cuts to all major innovation agencies - and a repudiation of the increased investments in key research activities planned by President Obama. Energy innovation programs are funded in the CR at levels 14% below President Obama's FY2011 budget request and 30% below President Obama's 2012 budget requests, while funding for the major non-defense research agencies are 5% (and more than $3.3 billion) below levels proposed by the Administration for FY12.
Carbon dioxide emissions in Germany may increase by 4 percent annually in response to a moratorium on seven of the country's oldest nuclear power plants, as power generation is shifted from nuclear power, a zero carbon source, to the other carbon-intensive energy sources that currently make up the country's energy supply.
The German government announced today that it will shut down seven of the country's seventeen nuclear power plants for an indefinite period, a decision taken in response to widespread protests and a German public increasingly fearful of nuclear power after a nuclear emergency in Japan. The decision places a moratorium on a law that would extend the lifespan of these plants, and is uncharacteristic of Angela Merkel, whose government previously overturned its predecessor's decision to phase nuclear out of Germany's energy supply.
The seven plants, each built before 1980, represent 30% of Germany's nuclear electricity generation and 24% of its gross installed nuclear capacity. Shutting down these plants, or even just placing an indefinite hold on their operation, would be a major loss of zero-emissions generation capacity for Germany. The country currently relies on nuclear power from its seventeen nuclear power plants for about a quarter of its electricity supply.
The long-term closure of these plants would therefore seriously challenge Germany's carbon emissions efforts, as they try to meet the goal of 40% reduction below 1990 carbon emissions rates by 2020.
On Tuesday, House Budget Committee Chairman Paul Ryan released his fiscal year 2012 budget proposal, a plan that would strip federal funding for energy innovation. If enacted, the budget would seriously threaten the country's clean energy competitiveness and damage innovation, the engine of economic growth.
A long-term Republican budget plan released this week by Representative Paul Ryan of Wisconsin calls for drastic cuts in federal spending on energy research and development and for the outright elimination of subsidies and tax breaks for wind, solar power and other alternative energy technologies.
Under the Republican plan, overall discretionary funding for energy programs would fall to about $1 billion per year. President Obama's 2012 budget, meanwhile, would provide about $8 billion to support clean energy research and deployment.
Mr. Ryan's proposal calls specifically for "eliminating welfare for energy companies." The proposal does not include details on which subsidies would be curtailed, but its references to "uncompetitive" energy sources clearly point to wind and solar power, which typically generate electricity at a premium to fossil fuels like coal.
Clean energy advocates criticized the Ryan proposal, calling it a short-sighted plan that would cede dominance in the fast-growing clean-tech market to countries like China and Germany.
"The Ryan budget has handouts for big oil and a slammed door for the emerging technologies of the future," said Daniel J. Weiss, a senior fellow and director of climate strategy for the Center for American Progress, a liberal research organization. "It's bad for American competitiveness, innovation and job growth."
See this four-part series for an analysis of the budget battle and its implications for federal investments in energy innovation:
Post updated to include a geothermal power replacement scenario, adjust costs for coal-fired power plants, correct a land area figure, and outline major assumptions utilized in calculations.
Phasing out Japan's nuclear fleet would increase carbon emissions by at least 414 million tons, a 10% increase over current carbon emissions, as the country shifts electricity generation to more carbon-intensive LNG and coal-fired power plants. Replacing projected nuclear power generation in 2030 with power from coal or LNG would add at least 25% and as much as 37% of current emissions to the country's future carbon output.
As Japan struggles to resolve the ongoing crisis at its Fukushima Daichi nuclear complex, the implications of the crisis on the future of nuclear power remain unclear. Japan, a country with few domestic energy resources, relies heavily on nuclear power production to meet its electricity demands. In 2009, nuclear power was responsible for 27% of domestic electricity generation.
Before the crisis at Fukushima, Japan aimed to roughly double its nuclear capacity by 2030 to provide 50% of its total electricity generation. This expansion of nuclear power was a key component of the nation's climate change mitigation efforts, which include a targeted 25% reduction in CO2 emissions relative to 1990 levels by the year 2020.
Phasing Out Current Nuclear Generation
If Japan were to phase out its nuclear power fleet, it would likely ramp up production from its natural gas-fired and coal power plants. The country is already dependent on natural gas and coal for the majority of its electricity generation, as roughly 26 percent of the country's electricity comes from natural gas, and another 28 percent from coal. The number of natural gas plants in the country increases yearly, and Japan remains the world's largest importer of both liquefied natural gas and coal.
Below, we've estimated the impact on overall current carbon emissions if Japan were to completely phase out production of electricity from its current fleet of nuclear reactors. Three scenarios project the effect of replacing lost generation either entirely by coal generation, entirely by generation from liquefied natural gas, or by an equal split of both.
If nuclear power were to be completely taken out of Japan's power supply, the country's carbon emissions would rise by at least 414 million tons over current emissions. Carbon emissions would increase by at least 10% and as much as 17% across the entire economy, while power-sector emissions would soar by 29% to 49%, depending on the mix of replacement power.
The final death toll from the earthquake and tsunami in Japan is expected be 20,000.
The natural disaster left 4.4 million homes without electricity in Japan and 1.5 million without water.
A dam in the province of Fukushima burst the night of the tsunami, washing away a reported 1,800 homes and leaving several people dead.
A bullet train on a coastal line was washed away by the tsunami, its 400 passengers are missing and presumed dead.
The Cosmo oil refinery, near the city of Ichihara, Chiba, experienced a massive blaze after the earthquake hit. The fire at its natural gas storage tanks took 10 days to fully put out.
The Chernobyl disaster, as of 2008, killed 64 people, according to the United Nations. UN officials say that the death toll could be as high as 4,000.
Breakthrough Institute President Michael Shellenberger debated the future of nuclear power today on KQED Radio'sForum, joining host Dave Iverson and the Sierra Club's David Hamilton to discuss the impacts and implications of the Fukushima nuclear crisis in Japan.
The Breakthrough Institute welcomes listeners of KQED and other readers interested in exploring the relative risks and benefits of nuclear power and the future of this low-carbon energy source.
Listen to the debate here:
Alternately, you can download the mp3 directly by clicking here.
In a new report, ITIF's Matt Hourihan and Rob Atkinson write that the conventional wisdom that carbon prices can spur breakthrough innovation is wrong. While carbon prices can help at the margin by pulling mature technologies into the market, it is investment in focused, strategic research and technology development that have led to some of the great innovations of our time.
Carbon prices won't drive the level of energy innovation required to mitigate climate change and fuel sustainable global development, according to a new report by the Information Technology and Innovation Foundation (ITIF).
One of the most influential pieces of conventional wisdom in the energy and climate debate is that a price on carbon is the key to unleashing the breakthrough innovation required to make clean energy technologies much cheaper. Venture capitalist John Doerr captures this view well, saying in 2009 that "no long-term signal means no serious innovation at scale."
But the new ITIF paper, co-authored by Research Analyst Matt Hourihan and ITIF President Rob Atkinson, finds that the idea that carbon prices can spur breakthrough innovation is built on flawed assumptions about the nature of technological change and wholly inconsistent with real-world evidence of the sources of breakthrough technology innovation.
