The Biggest Misconceptions People Have About Renewable Energy

September 26, 2013 by  
Filed under Green Energy News


While energy sources like wind and solar receive a lot of attention from the media and politicians, there is still a lot of confusion out there on renewable energy.

So we asked The Experts: What is the single-biggest misconception people have about renewable energy in the U.S.? And why do you think they have this misconception?

This discussion relates to a recent Journal Report on
myths about renewable energy
and formed the basis of a discussion on The Experts blog on Sept. 23.


Most People Don’t Understand the True Price of Renewable Power

Some have premised opposition to a shift toward renewables on the costs associated with such a movement. This assumption, however, may be based on faulty data that do not consider the rapid decline in renewable energy prices over the past decade.

Long-term contracts for wind energy are being signed by utilities in several states in the range of 3 cents per kwh over 20 years. According to data from the U.S. Energy Information Administration, this puts the cost of wind at roughly 50% below coal and 25% below natural gas—resources that are generally considered some of the least expensive forms of energy. Because wind has historically composed the bulk of new renewable generation to fulfill the 30 mandatory and seven voluntary state Renewable Portfolio Standards (RPS), compliance with these policies is saving consumers a great deal of money.

Consistent with free-market assumptions, the growth of the solar market and increased competition within the sector has reduced cost by 70% over the past 10 years. In fact, solar power is already at cost parity or below utility cost in a handful of states. Much of the public understanding of solar—as with wind—is rooted in information that is more than 10 years old.

People have misconceptions about the cost of renewable energy largely because the public conversation about these resources has been in the form of TV campaign ads and campaign debates, where the truth is, at best, elusive. When wind sells for 3 cents per kwh it will never be a front-page story. But when a state passes an RPS, it is on the front page, top of the fold, with the detractors making unfounded claims that this will make energy unaffordable for America’s middle class.

Bill Ritter served as Colorado’s 41st governor. He is currently the director of the Center for the New Energy Economy at Colorado State University.


Sorry, but Renewable Energy Doesn’t Always Work

CHRISTINE WHITMAN: The biggest misconception is that renewable energy sources are always working. Solar power only works when the sun is shining and wind-generated power only works when the wind is blowing; it’s not a constant energy source.

Christine Todd Whitman was governor of New Jersey from 1994 to 2001 and administrator of the Environmental Protection Agency from 2001 to 2003. She is currently president of Whitman Strategy Group, a consulting firm that specializes in helping companies find solutions to environmental challenges.


Stop Subsidizing Solar Power!

TODD MYERS: Two years ago, NY Times columnist Paul Krugman put it simply: “That’s right: Solar power is now cost-effective.” He was wrong then and is wrong today. Solar energy is not close to being cost effective for consumers or for the environment.

The National Renewable Energy Laboratory recently concluded that in the sunny Western U.S., solar “could” be competitive in 12 years. The Energy Information Administration (EIA) agrees. In its cost projection for 2018, solar is 67% more expensive than wind and twice as expensive as natural gas. At the Pacific Northwest Regional Economic Conference this year, one utility energy planner reported that solar costs about 80 cents per kilowatt hour (kwh) compared with the national average of about 10 cents per kwh.

Solar energy is one of the worst ways to reduce carbon emissions. McKinsey and Company’s analysis found that nuclear, wind and even coal with carbon capture are more effective. Bloomberg New Energy Finance found the same result, ranking solar panels 28th out of 33 carbon-reduction options.

Then why is solar popular? Huge taxpayer subsidies hide the actual cost. Other renewables receive a subsidy of about one cent per kwh, solar energy receives about 96 cents per kwh. We pay solar’s cost in the form of taxes instead of as electric rates.

A new study co-authored by William Nordhaus, a man Mr. Krugman calls a “mentor,” noted how ineffective subsides are, saying “very little if any GHG reductions are achieved at substantial cost.”

Finally, as a recent study reveals, people desire solar panels because they convey “green” status. Solar panels increase home prices “in communities with more registered Prius” owners. Although solar panels yield tiny environmental benefits, some pay the price to look “green.”

This misconception is not harmless. Billions are spent propping up wasteful solar energy instead of projects that effectively reduce carbon emissions.

Todd Myers (@WAPolicyGreen) is environmental director at the Washington Policy Center in Seattle and author of “Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment.” He also serves on the Washington State Salmon Recovery Council.



Why Most ‘Renewable’ Energy Sources Aren’t Really Renewable

ROBERT RAPIER: I believe the single-biggest misconception is the extent to which most of our “renewable” energy technologies aren’t really renewable. After all, what do we actually mean by the phrase “renewable energy?” In a nutshell, we generally mean energy that is produced within the annual solar budget of the planet, that doesn’t increase pollution and that doesn’t deplete natural resources.

This is an idealized definition, and practically none of our existing renewable energy sources would strictly meet this definition. In some cases, it is not even clear that some renewable energy options would be viable sources of energy without the fossil fuel inputs on which they currently rely. In such cases, these options are not truly renewable due to their fossil fuel dependence, even though many of them are treated as renewable.

Wind turbines are made from steel, the production of which is heavily dependent on coal. They are anchored by concrete, the production of which is a major global source of carbon dioxide emissions. Wind turbines and solar panels are both produced with scarce rare earth elements. Crops for fuel production are typically grown with fertilizer made from natural gas, as well as pesticides and herbicides derived from petroleum.

Corn ethanol is produced using process steam normally derived from natural gas, and electricity mostly produced from natural gas or coal. Biodiesel is usually produced using an oil feedstock derived from crops, and methanol, which is normally made from natural gas. Many advanced biofuels depend on hydrogen for upgrading, and hydrogen is made almost exclusively from natural gas.

Energy production that consumes nonrenewable resources, depletes aquifers faster than they can be recharged, degrades the topsoil, or causes pollution to build up in the environment is frequently called renewable, but it isn’t sustainable.

Even with renewable energy, as with all energy sources, we have to make trade-offs. Generally those trade-offs are economic, and so we consume fossil fuels during the production of renewable energy. But a renewable energy source that depletes resources will ultimately pose the same sorts of issues as those arising from dependence on fossil fuels. In the end our “renewable” energy will need to be sustainable energy. Ultimately the important question must be, “Can the renewable energy source still be produced without a heavy reliance on fossil fuel inputs?”

Robert Rapier (@RRapier) is chief technology officer and executive vice president at Merica International, a forestry and renewable energy company. He serves as managing editor for Energy Trends Insider and is chief consultant for Energy Trends Group.


Why Are We Still Propping Up Fossil Fuels?

KATE GORDON: There are so many misconceptions out there about renewable energy that it’s hard to know where to start. But probably the biggest is this: that there is something inherent to renewable energy that makes it flimsy, unreliable, anemic and generally inferior to fossil fuels. It’s the notion that—barring some miraculous and unexpected technological breakthrough—renewable technologies like wind, solar, geothermal, hydropower and biomass will never be good enough to serve as the backbone of the American energy system.

The reality, as I’ve written on this site before, is far rosier. In the electricity sector, renewable technologies are already producing vast amounts of electricity at competitive prices. That’s why utility giant Xcel Energy just filed a proposal with the Colorado Public Utilities Commission to expand dramatically its use of solar and wind energy in that state—on the basis of cost alone. According to an Xcel spokeswoman, “Based on generation needs, the most reliable and most cost-effective resources happen to be solar and wind.” And their costs should keep falling, particularly in the solar industry, where
Swanson’s law
predicts that the cost of solar PV panels will fall 20% each time global panel manufacturing capacity doubles.

In the transportation sector, renewables are making a smaller dent—but then again, we’re seeing a strong shift from fuel-driven to electricity-driven vehicles, making solar and wind strong players in this sector as well. Hybrid and electric cars hit all-time sales records in August 2013, and GM just this week came out with news of a new EV to challenge the Tesla.

Let’s face facts: The major reason renewables aren’t scaling up faster is that the fossil-fuel industry has, for over a century, seen hundreds of billions of dollars in government subsidies, allowing the industry to reach economies of scale that have brought down costs. A 2011 report by DBL Investors calculated that by 2009 the American oil and gas industry had received a whopping $447 billion (in 2010 dollars) in cumulative historical subsidies. Compare that with the paltry $6 billion that wind, solar and geothermal combined received in cumulative subsidies by that same year.

Not that this shockingly unequal playing field is stopping the renewable energy industry. Companies like Xcel Energy see the future: Clean energy technologies are cost-competitive right now, today, even without a boost in subsidies. That’s the kind of American business success we can all celebrate.

Kate Gordon (@katenrg) is the vice president and director of the energy and climate program at Next Generation. She previously served as vice president for energy and environment at the Center for American Progress.


Both Sides Have It Wrong About Renewable Energy

The single-biggest misconception people have about renewable energy in the U.S. is that it’s an all-or-nothing proposition. The misconception exists because renewable energy, like most aspects of energy, is caricatured by ideologues on both sides.

Partisans on the left often talk of renewable energy as a panacea. If only the nation spent more money on renewable energy, they suggest, renewable energy could replace coal and oil. Partisans on the right often suggest renewable energy is a farce. They paint solar, wind and other renewable energy sources as profligate green dreams that do little but divert the nation’s focus on serious energy: fossil fuels and nuclear power.

Both extremes miss the reality, which is in the middle.

Renewable energy is making major progress: Its cost is falling, its reliability is increasing, and, both in the U.S. and around much of the world, it is growing fast. Perhaps the biggest sign of that growth is that, across the U.S. and globally, renewable energy is causing political and economic fights between established energy players and upstarts. The fights are erupting because the economic stakes are large.

Yet renewable energy faces major barriers. In most places it remains more expensive than fossil-fueled power, a cost hurdle reinforced by America’s bounty of cheap natural gas. Moreover, the two energy sources that most people think of when they think of “renewable energy”—solar and wind power—are variable; when the sun isn’t shining or the wind isn’t blowing, they typically need fossil fuel to back them up. For all their feverish growth over the past few years, solar and wind power together still provide less than 2% of U.S. electricity.

The bottom line on renewable energy is this: It’s a small but growing piece of a massive energy pie.

Jeffrey Ball (@jeff_ball), formerly The Wall Street Journal’s environment editor and a longtime energy reporter at the paper, is scholar-in-residence at Stanford University’s Steyer-Taylor Center for Energy Policy and Finance, a joint initiative of Stanford’s law and business schools. He writes about energy and heads a project exploring the relationships among countries in the globalizing clean-energy industry.



Natural Gas Is Not Destroying Renewable Energy

IVAN MARTEN: Very simply, the biggest misconception about renewable energy in the U.S. today is that it is failing.

Many people believe that cheap natural gas is crowding out investment in renewable energy; that U.S. companies are largely destined for bankruptcy as Chinese players expand to dominate the market; and that the Department of Energy has lost an immense amount of money on its federal loan guarantee program.

In reality, however, the outlook is much brighter. The market for renewable energy in the U.S. continues to grow rapidly alongside natural gas as a quickly increasing source for power generation. Solar-power installations in 2013 are expected to be up 33% over last year and to reach their highest level ever. Consumption of wind-powered energy was 21% higher in the first six months of 2013 than during the same period of 2012.

While there has been a shakeout of weak U.S. renewable-energy companies, others are thriving. U.S. solar manufacturer SunPower gained market share versus Chinese competitors in 2012. Innovative services businesses, such as solar installers, also are enjoying dramatic growth: share prices of SolarCity, for example, have tripled since the company’s initial public offering in early 2013. Project developers such as NRG have built strong pipelines of activity. And new players are popping up frequently. More than $500 million in venture capital was invested in clean-technology companies, including those in renewable energy, during the summer of 2013. Nearly all are based in the U.S.

What about those federal loans? Despite a few high-profile failures—including the infamous Solyndra debacle—the DoE currently is on track to recover 98% of the loans it made since 2009 to help renewable-energy startups commercialize their technologies.

In summary, the U.S. remains a healthy, competitive, and growing renewable-energy market. This growth will continue, driven by the need to meet existing mandates and falling costs that will make the energy more competitive with fossil fuels in the future. The creative destruction brought by market forces will continue, and some existing companies will fail. But new, innovative business models will continue to emerge.

Renewable energy is here to stay as part of the U.S.’s total energy mix.

Iván Martén is a senior partner at Boston Consulting Group. He has been the global leader of BCG’s energy practice since 2008 and previously was the European leader of the practice.


People Under 40 Simply Don’t Understand the Energy Reality

There are two fundamental misconceptions about renewable energy: 1) It is robust, 2) Status quo resistance prevents displacement of traditional energy. This comes particularly from people younger than 40, who came of age in the post Rio ’92 era. They are worried about Earth’s climate, believing traditional fuels destroy the Earth.

Truly energy from all sources is the future given the demands for energy and the limits of our supply base. We must utilize traditional sources or succumb to a lower level of economic activity with limitations on lifestyles. But trying to explain this to renewable supporters invites disbelief. It becomes impossible for too many to reconcile that renewable energy is not the only answer. They ignore that renewable energy is intermittent, small scale, too costly and capital intensive to be commercial, and creates its own environmental degradation. And they’re intolerant to the suggestion that traditional energy could be used in cleaner ways.

But whose fault is it that so many people trust renewable solutions and disdain traditional energy sources? We collectively tolerate the misinformation perpetrated to the public and do nothing to change the pervasive lack of information about energy that permeates our society. Those with the most at stake, our leadership across government, industry, institutions and associations, are collectively to blame for the nation’s lack of understanding or an energy plan for the future.

So what do we do? We stay on the current path until costs and shortages cause an economic and social crisis. Or, we come to grips with the real problem. We’re not governing energy appropriately in this complex, dynamic and sophisticated century. We’re past the points of letting markets rule or populism prevail. We need more and different, not less and fragmented, governance. We can apply the lessons learned from the governance of our monetary system, managed by an independent regulatory authority, and apply them to our energy and environmental systems. The four basic subsystems: Supply, demand, infrastructure and environment of energy deserve an independent, autonomous governance structure to make sense of the future. Before it’s too late the nation’s leadership and its citizens need to agree a better decision-making way forward so energy remains affordable, available and ultimately sustainable.

John Hofmeister (@cfaenergy) is former president of Shell Oil Co. and founder and head of Citizens for Affordable Energy. He is also a member of the U.S. Energy Security Council.


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