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The Biggest Problem With Renewables

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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Nevada Renewable Energy – Good or Bad?

Say what you will, the energy matrix driving the U.S. economy is in flux, if for no other reason than the increasing volumes of natural gas and oil produced by U.S. hydraulic fracturing efforts are beginning to have a significant impact on the U.S. economy.

While the issue of “fracking” excites legions of both proponents and detractors, the common ground that both share is a commitment to lessen America’s dependency on foreign energy exports.

That said, the energy produced by fracking is a continuation of U.S. dependency on traditional fossils fuels.

Another element, still largely marginalized in the mix, is renewable energy, and a most interesting story is now playing out in Nevada, where two recent reports present diametrically opposed image of the importance of renewable energy in the state’s future.

For the upside, view the Applied Analysis “The Economic Impact of (Nevada’s) Renewable Portfolio Standard,” written for the Las Vegas-based Clean Energy Project last month.

Cutting to the chase, the report concluded that a shift to renewable energy would positively impact the state’s employment and economic output.

Related article: Verizon Prepares for $100m Renewable Energy Investment

The salient part of the report’s executive summary concluded, “Net Positive Economic Impact. Although positive and negative impacts are attributable to a proposed increase to Nevada’s RPS, the net overall economic impacts of the cases reviewed herein are positive. Positive impacts are reflected in higher rates of employment, wage and salary payments and economic output. One-Time Construction Impacts Significant. Net new facility construction is estimated to range from $3.0 billion to $6.4 billion depending on the RPS scenario analyzed. Including indirect impacts, the implications of this level of investment translate into between $5.2 billion and $11.0 billion in increased economic activity throughout the state of Nevada. It also translates into between 37,300 and 78,400 person-years of employment (i.e., one person employed for one year). These employees would earn between $2.1 billion and $4.4 billion in wages and salaries throughout the study period.”

Bottom line?

“The state could see an additional 45,256 jobs and $8 billion in economic impact through 2040 if changes are made to parts of the RPS, combined with its expansion to 35 percent. Established in 1997, the Nevada’s RPS mandates that the state receive 25 percent of the energy it uses from renewable sources by 2025.”

Not so fast, according to a report by the non-profit Nevada Policy Research Institute, which claims that, far from the RPS standard benefiting the state economy, it will instead cost Nevadans nearly $2.3 billion the next over 12 years.

The “RPS: A Recipe for Economic Decline” report, which was conducted by the Boston-based Beacon Hill Institute and authored by David G. Tuerck, Paul Bachman and Michael Head, predicts a projected 6 percent increase in Nevada electricity prices by 2025 as a result of RPS policies, which it says will reduce disposable income and lower employment.

Related article: Energy Storage: The Final Barrier to Wind and Solar’s Success

The report noted, “Our major findings show: the current RPS law will raise the cost of
electricity by $174 million for the state’s electricity consumers in 2025, within a range of $45 million and $310 million. Nevada’s electricity prices will rise by 6 percent by 2025, due to the current RPS law, within a range of 1.6 percent and 10.8 percent.”

Obviously, both interpretations cannot be correct.

We shall leave the final word to Paul Thomsen, business and policy development director of Northern Nevada-based geothermal developer Ormat Technologies, Inc., as quoted in The Reno Gazette-Journal. While hardly the most objective of sources, Thomsen nevertheless pointed out that scaling back the state’s renewable programs is wasting a key Nevada resource, particularly when it comes to geothermal and solar, citing a power purchase agreement being finalized with the Los Angeles Department of Water and Power for California to receive 14 megawatts of geothermal-based power generated by his company in Nevada, adding, “Nevada is one of the few states in the country that can actually replace its coal capacity with its geothermal capacity alone. Once we start selling power to another state and become an energy exporter in the region, then we reap all the benefits from the jobs, infrastructure, taxes and income that comes with that.”

Let the games begin!

By. John C.K. Daly of Oilprice.com




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Leave a comment
  • SA Kiteman on May 08 2013 said:
    Geo-thermal energy is Thorium decay power with a really, REALLY bad heat exchanger. Might as well just use Thorium fission directly with a Liquid Fluoride Thorium Recycler.

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