Whistling in the Wind? toward a Realistic Pursuit of Renewable Energy
Darmstadter, Joel, Brookings Review
To its adherents, renewable energy is all but ideal. Its virtues are twofold. First, unlike conventional energy sources, renewables exist ill such abundance as to eliminate scarcity as a factor in long-term energy concerns and planning. Second, renewables have an environmental integrity that fossil energy resources, with their emissions of greenhouse gases and other pollutants, cannot claim. As often happens, however, when the pursuit of laudable goals achieves virtually iconic status, the facts are more complicated.
Even the term "renewables" turns out to be more ambiguous than it seems. Extracting energy from geothermal basins, for example, is routinely viewed as a renewable energy strategy. But Such basins are, strictly speaking, exhaustible: a given site may lose useful heat after years of extraction. And uranium ores are viewed as depletable in a geologic sense and typically excluded from the renewables category. But uranium ores could accommodate nuclear power generation as far into the future as one might be inclined to consider. The constraints are not geologic, but political, economic, and technological.
When it comes to renewable energy; realism is in order. Can renewables contribute to the nation's longer-run energy requirements? Yes, they can--although in terms of their cost and market potential, they still have a long way to go. What is the status of renewables today, and how might they reasonably be expected to evolve in the years to come?
The Case of Electric Power
Probably the most promising application of renewable sources lies in generating electric power. The four systems most commonly put into the renewables rubric are variants of solar energy (thermal or photovoltaic applications), biomass-derived fuels, geothermal resources, and windpower. Sometimes the list expands to include energy derived from municipal wastes. (In several European countries, the harnessing of tidal energy is being explored as a more visionary objective.)
Conspicuously missing from the preferred list of renewables capable off generating electricity are conventional hydroelectric dams, though in principle, they too can generate power in perpetuity. The exclusion of hydropower from most discussions of renewable energy may be understandable, because even existing dams. much less newly planned ones, are widely seen as inimical to a whole range of social imperatives--integrity of ecological systems, preservation of cherished historic or cultural values, commercial and recreational fishing, and other leisure-time activities.
Table 1 puts renewables into a national electricity perspective. Nonhydroelectric renewable resources account for just a bit more than 2 percent of total generation today. The Department of Energy projects that their share will reach somewhere between about 3 percent and a little more than 5 percent by 2020. Some observers, citing developments in the past several years, view those forecasts as much too timid.
Judging Renewables' Economic Performance
The critics' argument has considerable merit. A 1999 study conducted at Resources for the Future found that although both advocates and more agnostic analysts had expected the costs of renewables-based electricity generation to during the 1980s and 1990s, the declines were greater than expected--in some cases, markedly so. A quarter century ago, the cost of windpower generation, then estimated at around 60 cents per kilowatt hour, was not expected to fall much below 8-10 cents per kilowatt hour by the end of the century. But current bids for new windpower facilities appear to be in the range of 3-5 cents per kilowatt hour, depending on location. (Throughout, references are to constant-dollar costs, expressed in 1999 prices.) The cost of solar applications remains substantially higher.
Given the sharp decrease in costs, why has the market share of renewables remained so low? …