Renewable energy sources offer a way to supplement, or replace, much of our current reliance on traditional thermal generating technologies. But these sources also differ in several important ways from conventional energy sources. For example, wind, solar, and tidal power provide only intermittent, not continuous, generation of electricity. We cannot simply turn on the wind, the Sun, or the tides to meet a surge in power demand nor can we turn off those energy sources when demand is low. Because of this inherent uncertainty, it is often suggested that renewable energy sources are most useful as an adjunct to, rather than a replacement for, conventional thermal power generation.
Another difference is that wind, solar, and tidal generating facilities must be sited or built in places where they can best take advantage of natural conditions rather than at the convenience of the consumer. Sometimes optimal sites are far from human habitation. This means that transmission lines may be longer than for most conventional generating facilities. And when lines are longer, there is more risk of voltage loss in transmission, rather like trying to send water through a very long and leaky garden hose. Older wind systems in particular have been plagued with problems of long transmission lines, inefficient or unreliable generating equipment, and variable voltage. If unresolved, these problems have the potential to create serious problems for the consumer. Imagine how your computer—and the work you have saved on its hard disk—could be affected by wildly fluctuating electrical current or unexpected power failure.
A recent study of Hawaii Electric Light Company (HELCO), which uses some older wind-energy generating equipment, showed that modest wind power output changes, and/or unscheduled changes in consumer demand, would have caused the system to lose its ability to regulate current within acceptable limits. New generating and voltage-control devices have greatly reduced the problems inherent in intermittent energy sources and will allow HELCO to expand its consumer base while maintaining its reliance on wind energy. The future of renewable energy sources will depend partly on the ability of utilities to forecast and control intermittent sources, to store energy at peak generating periods and retrieve it when it is needed, and to maintain a consistent high-quality flow of electricity to consumers—with or without the aid of conventional generating systems.
Case Study: Full-Cost Pricing of Energy Options
Some analysts believe that renewable energy technologies cannot yet compete with conventional power generation, mostly because of high capital costs of wind, solar, or tidal power relative to fossil fuel or nuclear generating technologies. But this viewpoint centers on the single measurement of monetary cost and neglects many other factors that may be important in judging which technology is "best" for society.
Many environmental analysts are now proposing a move to "full-cost pricing" for utilities such as electricity and fuels. Full-cost pricing attempts to incorporate all the costs of providing the product or service, not just a portion of those costs. For example, the price of a kilowatt of electricity could be based on the costs of building a generating station, operating and maintenance costs (including fuel and personnel), distribution and use of the fuel or electricity, maintenance of distribution systems, decommissioning, and long-term care of decommissioned facilities. In the truest sense, however, full-cost pricing should include the environmental and human health costs of extracting and using fuels; acquiring (mining, milling, refining, etc.) raw materials for infrastructure; production and distribution; opportunities for reuse or recycle; and the ultimate disposal of by-products and wastes. The challenge, of course, is where to draw the line in "costs." Should full-cost pricing include secondary costs, such as the fuels required to manufacture bricks and cement for the power plant itself? Few standardized methodologies exist, so one person may construct a price very differently from another.
Typically, full-cost pricing attempts to incorporate two kinds of hidden costs: those that are borne by governments (such as subsidies and development costs) and envrionmental costs. For example, if the government gave grants to solar energy utilities to develop new generating facilities, those costs would be hidden from the consumer and would not normally be part of a utility pricing exercise. Environmental costs for power generation and heating can include those related to the food-production effects of global warming (caused in part by CO2 emissions from fossil fuel combustion, loss of fisheries through acid rain, and similar impacts. Environmental impacts can also include the long-term degradation of air, water, and habitat caused by the disposal of nuclear wastes, by-products of fossil fuel use (for example, fine ash), and the costs of long-term stewardship of waste disposal facilities. Human health costs include lost time and productivity, shortened working lives, and delayed cognitive development in children—factors related to poor air quality, occupational health problems, and similar issues.
There are several ways to incorporate these hidden costs into utility pricing. One is to impose taxes on pollution, for instance on emissions of carbon dioxide. Utility operators are then forced to pay those costs directly, and are justified in passing them on to the consumer. Several countries, including Denmark (a leader in wind energy use), now use a carbon tax, and the idea is under consideration by the European Union and some states in the United States. In addition to passing on to consumers the true cost of fuel use, this approach has an added advantage in that revenues generated from a carbon tax can be directed to specific environmental remediation projects. Cost reductions afforded by green technologies can also be recognized through pricing. For example, the United States currently offered a one-and-half cent "production tax credit" to wind power, and Washington State waives sales tax for manufacturers of renewable energy technologies.
Full-cost pricing of energy and utilities has many advantages, not the least of which is to reveal to the consumer the true societal implications of an energy choice. Consumers can then make educated choices about which energy sources are most acceptable to them. As markets for energy become more competitive, governments may choose to move toward the selection of new generating technologies based on all long-term economic, environmental, and human health costs, not just short-term, immediate costs.
To learn more about solar energy, visit the American Solar Energy Society information page. Next read about some of the things we can expect in the future at solar technology, a page maintained by the Solar Energy Technologies Center of the U.S. Department of Energy. A useful set of links and capsule descriptions of various renewable energy technologies is available at Renewable Energy. Select Comparative Assessment to read a comparative assessment of nuclear versus other fuel sources. Click on Profiles in Renewable Energy to access a site with links to many case studies of successful renewable energy installations. To learn more about current wind turbine technologies, an illustrated article can be found by clicking on Wind Turbine.