Let’s You and Him Fight

By Marlo Lewis

Cap-and-trade is dead because the public finally caught on that it is a stealth energy tax, a big reason being that it makes coal – the most economic electricity fuel in many markets – uncompetitive.

That’s exactly what a Clean Energy Standard (CES) would do. “Clean” essentially means “anything but coal.” Instead of pricing the carbon emissions from coal, as a cap-and-trade program does, a CES simply prohibits coal from competing with other energy sources for a specified portion of the nation’s electricity market.

Yes, I know, coal with carbon capture and storage qualifies as “clean,” but carbon capture is unlikely to be commercially viable any time soon. Thus, a CES would effectively ban some – perhaps most – investment in new coal capacity. Just like cap-and-tax, a CES would demoralize the coal industry and scare off potential investors.

I haven’t seen Sen. Graham’s specific proposal. From the descriptions, however, a CES is very much like the Renewable Fuel Standard (ethanol mandate) and the Bingaman-Brownback Renewable Electricity Standard (RES). In each case, politicians tell industry what to produce and how much. All such schemes bear an eerie resemblance to the production quota featured in Soviet five-year plans.

Sen. Graham is correct about one thing – a CES is more internally consistent than an RES. If your goal is to build a low- or zero-carbon energy system, then it makes no sense to leave nuclear energy out of the quota. Indeed, nuclear power probably has a lower carbon footprint than wind and solar have, because nuclear does not need to be backed up by coal- or gas-fired generation when the wind doesn’t blow and the Sun doesn’t shine.

Although Graham’s proposal would do much mischief if enacted, I am happy to see it drain political support from its more prominent cousin, the Bingaman-Brownback RES. My advice to both sides is, “Let’s you and him fight!”

See post here.

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Mandates are costly
By David Kreutzer, Research Fellow in Energy Economics and Climate Change, Heritage Foundation

A renewable energy standard (RES) is an expensive energy standard. Renewable sources that are economically viable would not need mandates to force consumers to buy them.

The Heritage Foundation’s Center for Data Analysis adjusted the Energy Information Administration’s projected energy costs for various sources in 2016 to account for the variability and remoteness of the major renewable energy sources – wind and solar. With these adjustments, swapping one megawatt-hour (MWh) of electricity from coal or natural gas combined-cycle generation to onshore wind drives the cost up from about $79 to $177. Offshore wind is worse at $218 per MWh. Worse again are solar thermal at $284 and solar photovoltaic at $423 per MWh.

Heritage analyzed a generic RES that starts at 3 percent of total power generation in 2012 and rises by 1.5 percent per year. Such an RES would destroy 1 million jobs by 2020, when the standard reaches 15 percent….

A renewable energy standard (RES) is an expensive energy standard. Renewable sources that are economically viable would not need mandates to force consumers to buy them.

The Heritage Foundation’s Center for Data Analysis adjusted the Energy Information Administration’s projected energy costs for various sources in 2016 to account for the variability and remoteness of the major renewable energy sources – wind and solar. With these adjustments, swapping one megawatt-hour (MWh) of electricity from coal or natural gas combined-cycle generation to onshore wind drives the cost up from about $79 to $177. Offshore wind is worse at $218 per MWh. Worse again are solar thermal at $284 and solar photovoltaic at $423 per MWh.

Heritage analyzed a generic RES that starts at 3 percent of total power generation in 2012 and rises by 1.5 percent per year. Such an RES would destroy 1 million jobs by 2020, when the standard reaches 15 percent. Average family income drops by $2,400 per year, and by 2035 these families’ share of national debt would grow by an additional $10,000.

Adding nuclear power to the options for renewables could moderate these impacts, but the mandates still aren’t good for the economy. Banging your head three times with a hammer is better than banging it four times, but it would be best to quit hitting yourself altogether.

Read post here.

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