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View Diary: The war over fossil fuels subsidies (41 comments)

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  •  To be fair re fossil fuels (2+ / 0-)
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    DWG, noladerf

    What's the subsidy number per MW equivalent?  It's probably less than that for renewables.  The number that looks really stupid in that graphic is the Corn Ethanol one, lots of $ per MW equivalent (the highest?) and extremely little net enviroinmental help.

    I totally concur that any fossil fuel subsidies are stupid, just want to understand the numbers in proportion.

    •  yeah, you right (1+ / 0-)
      Recommended by:
      DWG

      Another question: what percentage of those subsidies and tax breaks are for coal vs. oil&gas?

      BTW: why do we subsidize coal rather than relatively clean, relatively low-carbon, and now plentiful natural gas?

      •  The breakdown (0+ / 0-)

        About 80% of the tax breaks go for oil and gas (~45 billion of 55). Specific incentives tend to be about slanted 2:1 for oil/gas vs coal.

        Coal is subsidized because 45% of current generation capacity comes from coal and some states (WV, WY, KY) are heavily dependent on coal mining.

        Be radical in your compassion.

        by DWG on Fri Feb 18, 2011 at 03:56:57 PM PST

        [ Parent ]

    •  Yes, MW costs for renewables (2+ / 0-)
      Recommended by:
      Hopeful Skeptic, Travertine

      are higher at the moment, but that is the point of incentives - create economies of scale to improve commercial viability.

       Here  is a discussion of that point:

      Critics argue that renewable energy technologies cannot compete on price with fossil fuels without public subsidies. It’s true to date that renewables’ return per dollar of federal assistance remains higher than for fossil fuels. According to the U.S. Energy Information Administration (EIA), federal subsidies for conventional coal generated electricity production in 2007 equaled $0.44/MWh (megawatt-hour). The equivalent figure for wind was $23.37 and for solar, $24.34 per MWh.

      Commercial scale federal subsidies for renewables are less than twenty years old, dating to production tax credits enacted under the Energy Policy Act of 1992 to bolster national energy security in the aftermath of the first Gulf War. Furthermore, production tax credits for renewable energy have been subject to on again, off again congressional approval. This contrasts with fossil fuel subsidies, recipients of largely continuous and predictable subsidies since 1917.

      Nor are the costs of subsidies for renewables out of line with other emerging and evolving clean energy technologies. For example, federal subsidies for refined coal technology that removes moisture and certain pollutants from sub-bituminous and lignite in 2007 equaled $29.81/MWh. If refined coal and FutureGen are any indication, yet untested clean-coal carbon sequestration will require vast federal expenditures on a scale probably surpassing what has been directed to wind and solar.

      Renewables do not export environmental externalities such as drinking water contamination stemming from coal mining in West Virginia and other states, as recently reported in the New York Times. There is no need for a liability cap with wind and solar of the sort needed to fuel investment in commercial nuclear generation.

      The reality is that federal subsidies for renewables have played an important role in generating economies of scale and investment capital for improved technology that have driven down the cost of photovoltaic solar energy by 50 percent to about $3 per watt in the past decade and dropped the cost of wind generated electricity to as low as 4 cents/kWh per in some areas today.  These costs will only decline further as the market for renewables grows and technology improves.

      And there are also hidden subsidies in the form of infrastructure being built and maintained specifically for fossil fuels. A trunk rail line for example is being built in MT to support the Otter Creek mine. The Keystone pipelines are built to move tar sands oil from Canada. Coal states spend a great deal on roads, inspections, mine reclamation, and so on that come out of the taxpayers pocket but are not counted to generations costs.

      Be radical in your compassion.

      by DWG on Fri Feb 18, 2011 at 03:50:28 PM PST

      [ Parent ]

      •  Excellent summary, thanks (1+ / 0-)
        Recommended by:
        DWG

        Using a basic electric (retail) rate of $0.10 / kWH or $100 / MWH, the $23-24 per MWH subsidy suggests that solar and wind are about 25% subsidized.

        What's interesting here is how declining costs for clean energy sources could soon get them to a tipping point.

        Capital cost of solar panels, end of 2007: $3.7 per KW
        Capital cost of solar panels, end of 2010: $1.8 per KW
        Percentage of 2010 cost to 2007 cost: 48.65%
         Solar capital costs

        Now that's just the costs of the panels themselves, does not include installation and O&M, but it's a pretty amazing decline in 3 years.  A great illustration of how, if you can create the initial conditions for mass production of a new technology, smart people can then drive the costs down by getting better and better at it.

        •  That is very much the point (0+ / 0-)

          Improving the economies of scale will make renewables cost competitive and spur even larger scale. And the beauty is that they will not have to be propped up to sustain it.

          What we are seeing now is rising cost factors for oil and coal, which is spurring calls for subsidies to all continued. That builds in huge hidden costs to consumer that soften the impact on demand because the costs are less apparent at the pump or in the electric bill.

          Thanks again for stopping by.

          Be radical in your compassion.

          by DWG on Sat Feb 19, 2011 at 01:18:49 AM PST

          [ Parent ]

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