Subsidies

NukeLifeline

The push to save U.S. nuclear plants for the sake of fighting climate change is threatening support for the bread and butter of clean power: wind and solar.

New York and Illinois have already approved as much as $10 billion in subsidies to keep struggling reactors open for the next decade as part of a plan to limit fossil fuel consumption. Lawmakers in Ohio, Connecticut and New Jersey are debatingwhether to do the same.

The reactors, which are being squeezed by low natural gas prices, offer a singular advantage in the fight against global warming because they produce round-the-clock electricity without emitting greenhouse gases. Yet renewable energy operators including NRG Energy Inc. and Invenergy LLC say keeping nuclear plants open will leave grids awash with excess power, leaving little demand for new wind and solar farms.

“It’s the wrong policy — and whether it proliferates or not is going to be a really big factor,” Invenergy Chief Operating Officer Jim Murphy said during a panel discussion at the Bloomberg New Energy Finance conference in New York Monday.

[…]

Bloomberg

“Renewable energy operators say keeping nuclear plants open will leave grids awash with excess power, leaving little demand for new wind and solar farms.”

 

Keeping the “grids awash with excess power” is the only way to handle bellwether events without having to rely on brownouts and blackouts.  Solar and wind can neither provide base-load nor flexible response to bellwether events.  Increasing reliance on these resources make it imperative that we keep the “grids awash with excess power.”

Getting back to the Bloomberg article, there appears to be a lot of whining about subsidies for nuclear power… With the renewables crowd doing all of the whining:

[…]

Nuclear’s economic woes comes as wind and solar are starting to show they’re cheap enough to compete with traditional generators, after years of help from subsidies. The push to aid reactors began last year after Exelon Corp. successfully argued in New York and Illinois that since nuclear does not contribute to global warming, its plants should receive a premium to help level the playing field with wind and solar.

“The fossil generators sell electricity with air pollution,” Joseph Dominguez, an Exelon executive vice president, said in an interview. “We sell electricity without air pollution — and that’s a different product.”

There are key differences between wind and solar subsidies and those for nuclear, according to clean-energy developers. Renewable energy credits have spurred an emerging industry, whereas nuclear subsidies are to preserve aging plants. And while wind and solar developers compete against each other for subsidies, those for nuclear benefit a single technology.

Market Rules

“The renewables industry has been playing by competitive market rules that have helped to produce good prices,” Amy Francetic, an Invenergy senior vice president, said in an interview. “This is picking and winners and losers in a way that’s troubling.”

[…]

Nuclear power absolutely is the leader of the pack at reducing so-called “greenhouse” gas emissions:

252491_5_

Figure 1. Nuclear and gas kick @$$, wind breaks even and solar is a loser. http://www.realclearenergy.org/charticles/2014/08/01/solar_and_wind_more_expensive_than_realized_107939.html

 

“The renewables industry has been playing by competitive market rules that have helped to produce good prices,” Amy Francetic, an Invenergy senior vice president, said in an interview. “This is picking and winners and losers in a way that’s troubling.”

Really?  Ms. Francetic, *government* always picks “winners and losers in a way that’s troubling.”

As far as the renewables industry “playing by competitive market rules that have helped to produce good prices”…

wpid-data-laughs-o.gif

Figure 2. Ms. Francetic, Data is laughing at you.

The most recent U.S. Energy Information Administration report on energy subsidies reveals the following:

 

Solar and wind power are insignificant sources of energy.

Energy Subsidies1

Figure 3a. U.S. Energy production by source 2010 & 2013 (trillion Btu), U.S. Energy Information Administration.

mtoe

Figure 3b. U.S. primary energy production 1981-2015 (million tonnes of oil equivalent), BP 2016 Statistical Review of World Energy.

 

Solar and wind power receive massive Federal subsidies.

Energy 2

Figure 4. Federal subsidies by energy source 2010 and 2013 (million 2013 US dollars), U.S. Energy Information Administration.

 

The solar and wind subsidies are truly massive in $/Btu.

Energy Subsidies3

Figure 5. Subsidies per unit of energy by source ($/mmBtu), U.S. Energy Information Administration.

 

The true folly of solar power is most apparent in subsidies per kilowatt-hour of electricity generation.  At 23¢/kWh, the solar subsidies in 2013 were nearly twice the average U.S. residential retail electricity rate.

Energy Subsidies4

Figure 6. Subsidies per kilowatt-hour of electricity generation, U.S. Energy Information Administration.

 

Solar and wind subsidies are weighted toward direct expenditures of tax dollars.

Energy Subsidies5

Figure 7. Subsidies by type for wind, solar, nuclear, coal and natural gas & petroleum liquids, U.S. Energy Information Administration.  Table ES2.

 

Federal solar and wind subsidies were 3-4 times that of nuclear power in 2013.  Only 2% of the nuclear power subsidies consisted of direct expenditures, compared to 72% and 56% for solar and wind power respectively… And the renewables industry has the gall to complain about New York and Illinois kicking in $500 and $235 million per year in extra subsidies to keep nuclear power plants running in their States.  Really?

Most of the Federal subsidies for oil & gas (96%), coal (71%) and nuclear power (67%) consist of tax breaks.  The subsidies for oil & gas aren’t really even subsidies.  These are standard tax deductions and depreciation of assets.

Solar power simply can’t work without massive subsidies.  While the economics of wind power are improving, renewables are still extremely expensive relative to existing coal and nuclear power plants.

 

 

 

f12-comparative-lcoes-and-system-costs-hi-res

LCOE

http://www.world-nuclear.org/our-association/publications/online-reports/nuclear-power-economics-and-project-structuring.aspx

http://www.world-nuclear.org/getmedia/84082691-786c-414f-8178-a26be866d8da/REPORT_Economics_Report_2017.pdf.aspx

LCOE22

https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf

CO2 InfrastructureGavinDistribution

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