Regulators Give Green Light To Solar, Wind

IRA FLATOW, host:

You're listening to SCIENCE FRIDAY from NPR. I'm Ira Flatow.

Solar and wind energy projects are sprouting up all over the country. Perhaps you have one opening up near you. But in many cases, they immediately run into roadblocks - could be desert tortoises who live right where the developers want to put their solar energy farm, or people who don't want to see or hear wind turbines, or the military, which sees them as a threat to their testing in radar and national defense, or perhaps the money just simply runs out on the project.

But now, at least, some of that stop and go may be over because a few weeks ago, a huge wind project, the Alta Wind Energy Center, finally started construction out there in the Mohave Desert in California.

The location has some of the best winds out there in California, and when the project is complete, it'll be the biggest not just in California, not just the U.S. but the biggest project in the world.

And it's not just wind. A whole bunch of solar projects are in the pipeline just waiting on the paperwork.

This week, California state regulators gave the green light to one of them, and that's a 250-megawatt solar-thermal plant also out in the Mohave. Federal regulators are close to approving 100 say that again, 1,000, that's 1,000-megawatt solar-thermal project near Blythe, California.

So we've been watching the continuing maturation of solar and wind energy technology over the years. It's always, it's always, when we talk about it, something that's going to be in the future, when we talk about energy projects. So it's five, 10, 30 years down the line.

But could solar and wind finally be at the point where they can add a significant share of clean energy to our electric grid, as they have been doing over in Europe and Scandinavia, for example?

Denmark fuels about 20 percent of its electricity consumption with wind power. In the U.S. now, it is only two and a half percent, and for such a huge country like ours, why can't we do more?

And what about the stimulus money, all those dollars? Has that money helped spur along these clean energy developments? What do you think? Give us a call. Our number is 1-800-989-8255. Would you like to have a solar or wind project near you? Would you support it? Where do you think you might want to house it? How would you work with it?

Give us a call, 1-800-989-8255. You can also tweet us @scifri, @-S-C-I-F-R-I, or go to our website at sciencefriday.com, and you can leave a comment there right on the topic page.

Let me introduce my guests. Severin Borenstein is a professor at the Haas School of Business at the University of California in Berkeley. He's also co-director of The Energy Institute at Haas. He joins us from a studio on the campus there. Welcome back to SCIENCE FRIDAY, Dr. Borenstein.

Dr. SEVERIN BORENSTEIN (Professor, Haas School of Business; Co-Director, The Energy Institute at Haas; Director, UC Energy Institute, University of California): Thanks a lot.

FLATOW: Ryan Wiser is a staff scientist at Lawrence Berkeley National Laboratory in Berkeley, California. He joins us by phone. Welcome to SCIENCE FRIDAY, Dr. Wiser.

Dr. RYAN WISER (Staff Scientist, Lawrence Berkeley National Laboratory): Thanks, Ira. Thanks for having me on the program.

FLATOW: You're welcome. Professor Borenstein, how far how come we're seeing these things now going through, where we had trouble before?

Dr. BORENSTEIN: Well, it's a combination of technological progress. Some of these technologies are getting more cost-effective. The stimulus package, which has definitely helped push forward some of these projects, particularly with the deadlines that are coming up that you have to break ground this calendar year in order to receive the stimulus funding. And an increased recognition of the need to move away from fossil fuels.

Of course, that increased recognition took a major setback a few weeks ago, when the climate change bill in Congress died, but I think there still is some momentum towards moving away from using coal and natural gas as our primary fuels to produce electricity.

FLATOW: Ryan Wiser, tell us about this new wind, this huge wind project in the Mohave. How significant is it?

Dr. WISER: Oh, it's very significant. This is a potential project of 3,000 megawatts in scale. To put that in context, the state of California, today, in aggregate, has 2,700 megawatts of wind power capacity online. So we're talking about the possibility of more than doubling that capacity with a single project.

It is a phased project, though. It's not all going to come online immediately. However, half of that project is already under contract with one of the state's major electric utilities, did break ground last month. The first phase of the project has both financing secured, as well as wind turbines ordered.

So the project, at least in its initial phases, is very much on track. And again, if developed, it will be the largest wind project in the world, at least temporarily, before some project beats it, and will more than double California's wind power capacity.

FLATOW: Now, you've got to have, you have to have good enough wind for a project like this. Are there other places in California that are still available to develop?

Dr. WISER: Oh, sure. We have a number of wind passes that were developed in the 1970s and 1980s. This particular wind project, in the Tehachapi area, sits in one of the areas with the greatest remaining potential in California. But there are many areas, as well.

I would note that many of those areas will require new transmission lines to get that power out of those windy areas and towards the state's load centers, but there's certainly a lot of potential for wind that remains in California.

FLATOW: Dr. Borenstein, there was an AP story last week saying that since 2008, more than 20 coal-fired power plants have been built or are being constructed, the largest expansion of the coal industry in two decades, and using the old coal technology.

Are we moving backwards here? Instead of cleaner plants, we're just building the older, dirtier plants?

Dr. BORENSTEIN: Well, these were definitely not a movement towards more recognition of our climate problems. These plants are the old, pulverized-coal plants, which not only burn coal and produce greenhouse gases, but cannot really be retrofitted very easily to take advantage of carbon sequestration, if that technology actually is found to be workable. That is where the CO2 that comes out of these plants could be put underground, in underground caverns, and stored there permanently.

Unfortunately, the plants that are being built really aren't a technology that can easily adapt to that option. So these are plants that are being built today, will exist for 40 to 60 years, and are planned to burn coal and produce CO2 while they're producing.

FLATOW: It seems like in the last few years, and we've been talking about it on this program, we've spoken a lot about these large-scale solar-powered, these solar-thermal plants that use heat from the sun rather than the typical, flat solar panels we all see as photovoltaic.

But I'm now hearing that photovoltaic is becoming competitive, cost-wise. Is that correct?

Dr. BORENSTEIN: It has come way down in cost. The panels, in particular, the actual production have dropped by more than 50 percent in the last few years. And that has made large-scale solar farms much more economic, and in fact potentially competitive with the solar-thermal technologies. The costs are getting very close.

They're very different technologies, though, and they have different pros and cons to them. The solar panels, of course, need light but not too much heat. Heat is actually the enemy of a solar PV panel.

The solar-thermal panels or the solar-thermal plants need heat, and so they love the desert. And they also have some advantages in that if the sun goes away through cloud cover for a moment, they have, they tend to be able to keep up production for longer. The PV panels, if you run into cloud cover, will almost instantly drop most of their production.

FLATOW: So there's room for both of them out in the desert there.

Dr. BORENSTEIN: There is. Both of them are still quite expensive, just to keep this in context. Even right now, both of them still if you don't count any of the environmental consequences cost about three times as much as a coal-fired power plant.

Dr. WISER: Yeah, if I can jump in here.

FLATOW: Sure.

Dr. WISER: The truth is that in California, the state's three major investor-owned utilities have 16,000 megawatts of new, renewable projects under contract.

Now, these are not projects that are all online, of course, yet. Many of them are still in the development stage. The vast majority of them are.

Of those 16,000 megawatts, 7,000 are wind, 5,000 are solar-thermal, and 3,000 are solar photovoltaic, the flat panels that you referred to earlier.

And so there is just absolutely no doubt, in the state of California, that large-scale solar-thermal project and, now, large-scale solar-photovoltaic projects are competing with wind on economics alone.

Still somewhat more costly than other conventional energy sources in some cases. However, I would note that the California Public Utilities Commission has determined that of those 16,000 megawatts, about 50 percent of those projects have prices that are lower than what the California Energy Regulator calculates as the cost of a new, combined-cycle, natural gas generation unit in the state.

So we're getting about half of our new renewables contracts and capacity coming in at prices that are competitive with fossil energy resources in the state today.

FLATOW: 1-800-989-8255. Let's go to the phones. Let's go to Brad(ph) in Vancouver. Hi, Brad. Are you there?

BRAD (Caller): Yes, I am.

FLATOW: Go ahead.

BRAD: My position is that wind energy isn't near as green as people think it is. It takes there are nine parts to a wind turbine. Each part, from a port to the job site, takes a diesel truck to get there, plus two pilot cars. And it's $3 million to put one of those in the ground, plus it takes 300 cubic yards of cement to stabilize them. And each one of those, it takes a diesel truck to get it there. And if you look at the cost for each turbine, and it has to be replaced after 25 years, the wind energy is the most expensive way to generate electricity that there is. The cheapest is hydroelectricity.

FLATOW: Mm-hmm. Let me get a comment. Severin, Ryan, any comment on that?

Dr. WISER: Well, on the energy use part, it's certainly a good question, and one that often comes up. The truth though is that there have been now tens and tens, perhaps even hundreds of studies, on this very question. And virtually every one of those studies comes to the same basic conclusion, which is that after about six months of operation that wind turbine has made up all of the energy that was used to produce it and install it. So certainly on the net energy output question, there's just is no question here.

FLATOW: Uh-huh.

Dr. WISER: Wind does provide a lot of energy to the system.

FLATOW: What about the other states in the Southwest that get lots of sunshine? You know, like Nevada, Utah, places like that? Are we seeing the migration of solar energy to those places too? Or are they holding back, waiting to see what happens to California?

Dr. BORENSTEIN: We're definitely not seeing the level of commitment we have in California, in the other Southwestern states. Some of that, of course, is politics, and some of it is commitment that they've already made to coal. A lot of these states have access to a lot of cheap coal and have made big investments in that.

So, well, these are, as Ryan said, in some cases can be cost competitive for the state, that's largely because of very large federal subsidies to these renewable energy sources. And I think there's still quite a bit of uncertainty about how long the subsidies will last and how effectively they will offset the higher costs of renewable energy.

Dr. WISER: Yeah, I would add to that, that a number of the Southwestern states certainly are not being quite as aggressive as California. That's partly because we have a much larger state with a much larger electricity load. But in virtually every one of the Southwestern states, there are obligations on these state's utilities to deliver renewable energy in the same way as there are obligations in the state of California for our utilities to deliver renewable energy.

And increasingly in Nevada, in Arizona, in New Mexico - the utilities are turning to solar. And so there certainly are a large number of very sizable solar projects that are on the drawing boards in each of those states as well.

FLATOW: Talking about wind and solar power in California this hour on SCIENCE FRIDAY from NPR. I'm Ira Flatow talking with Severin Borenstein and Ryan Wiser. Our number: 1-800-989-8255. You could also tweet us @scifri, @-S-C-I-F-R-I.

Germany, Spain, Portugal, they've all beefed up their clean energy production. Is this something that we could emulate in this country, or do they have special situations that make it very difficult for us to follow them?

Dr. BORENSTEIN: Well, actually, I think that Germany, Spain and Portugal stories get presented in two different lights. And after reading quite a bit on it, I think the more negative light is probably the more accurate one. They have thrown huge subsidies at these technologies at a much earlier stage, in some cases, of the technology maturation. It's been extremely expensive. It started to drive up rates. And as these economies took a hit in 2008 and 2009, they moved away from these policies. As a result the new building of renewable energy there has been really very much curtailed.

Now, one of the goals of building - of committing to renewable energy was the hope that as a result they would become the major producers of the technologies. And although there was some indication they're moving in that direction, as these technologies have become more mature and something that can be done in pretty standardized factories, we're seeing China, of course, move into that business and take over an increasing share.

So in the European countries that have made these big commitments to renewable energy, I think there's now quite a bit of pushback on it, even from some people who are big supporters. And as far as an economic development program, I think it's largely been a disappointment.

Dr. WISER: You know, I also think that to a certain extent we do have a different set of policies that are being used to support renewables here in the U.S., and so we're not going to emulate the European powers in the same way from a policy perspective. But I do think that those European successes do provide something we can emulate in terms of ambition.

And the truth is, the U.S. has a better solar resource certainly than any of the countries that you just mentioned. Germany, the world's solar energy leader, has a solar resource that is somewhere equivalent to approximately Alaska. So given the solar resource that we have here in the U.S., and given the extraordinary wind resource that we have here in the U.S., as well, certainly the ambitions of some of those European countries can be followed.

FLATOW: With all the production that's upcoming with solar and wind, you mentioned China in the formula. Is China going to be making all the parts? Or have we lost this alternative energy race, already, to China?

Dr. BORENSTEIN: Well, I don't think we have lost the technology race at all, most of the technology...

FLATOW: Well, I'm talking about the jobs the jobs.

Dr. BORENSTEIN: But, you know, in a free-trade economy, when those technologies mature, they're going to go where they can be produced most cost-effectively. And right now, China is making some real commitments and probably subsidizing them implicitly through their tax treatment, but so are we. But they - there is a real attraction to producing in less developed countries where the cost of labor is lower.

Now some of these technologies, of course, need a lot more than labor. And as they do, I suspect we will continue to have some advantage in the more developed countries with more sophisticated workforces.

FLATOW: Mm-hmm.

Dr. WISER: Yeah, you know, we have already 85,000 jobs in the U.S. associated with the wind sector. We have about 25,000 jobs associated with the solar energy sector. So we certainly are gaining some employment here in the U.S. as a result of, not just the manufacturing, but also the installation and servicing of these areas' projects. Another thing to recognize is that the technologies differ. I - we...

FLATOW: Let me let you hold that - Ryan, please hang on to that, because I have to take a break. And we'll come back and let you finish that thought in full instead of rushing through it. Yeah, we're going to take a break. We'll come back and talk lots more about solar and wind power. Stay with us. I'm Ira Flatow.

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FLATOW: This is SCIENCE FRIDAY, from NPR.

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FLATOW: You're listening to SCIENCE FRIDAY, from NPR. I'm Ira Flatow. We're talking about solar and wind with my guests Severin Borenstein, professor in the Haas School of Business at UC Berkeley. Ryan Wiser, staff scientist at Lawrence Berkeley National Laboratory in Berkeley, California.

Our number: 1-800-989-8255. Ryan, you were trying to make a thought when I rudely interrupted you.

Dr. WISER: Yeah, sure. Well, it sounds absolutely right, manufacturing is going to go where it's more cost-effective to go. But one also needs to recognize that some of this equipment is sizable equipment. Transporting a wind turbine from somewhere in China to a project in Glenrock, Wyoming, is going to cost a tidy sum. And as result of some of those factors, we've seen a pretty significant growth in the share of domestic manufacturing of wind in the U.S. just over the last couple of years. Three, four years ago, about 20 percent of the wind turbine equipment used in U.S. wind projects was sourced domestically, was manufactured...

FLATOW: Hmm.

Dr. WISER: ...in a facility here in the U.S. Today, that percentage is 60 percent. And so, sure, it may be cheaper to manufacture in China and some other countries, but once you factor in some of the transportation constraints, there still is going to be room for some manufacturing...

FLATOW: Hmm.

Dr. WISER: ...here in the U.S. as well.

FLATOW: General Electric is the biggest American producer of the turbines?

Dr. WISER: Absolutely.

FLATOW: Yeah.

Dr. WISER: They represent roughly 40 percent of the U.S. market for wind turbines.

FLATOW: 1-800-989-8255. Let's see if we can go to San Antonio, Texas. Hi, Richard(ph). Welcome to SCIENCE FRIDAY.

RICHARD (Caller): Hey, Ira. How are you doing? I love your show. You're so awesome, dude. I just wanted to comment on - over here in San Antonio, we have tons of wind turbines going over there to the east side of the town, east side of San Antonio, just trailers and trailers. There's usually about six trailer loads and two cars, front and back.

Normally, in order to get the electricity from those wind turbines, you have to subscribe with one of our local energy provider which is CPS. And the letters that - they gave out tons of letters to every subscriber of electricity over here in San Antonio. And the way they made it sound when they gave it out, they were, like, renewable energy but it's going to cost more. And it did cost a bit more.

And from my friends who own houses over here, they - they've decided, you know, cost - it just costs a lot more just to live these days, and they'd rather not do it. I myself, put a check on the box, and I said, yeah, go ahead.

FLATOW: Uh-huh.

RICHARD: But I've only seen - I usually spend about $150 to $200 a month on electricity. I saw about a $15 to $30 increase, which isn't too much for me, but - and, again, those costs can...

FLATOW: Yeah.

RICHARD: ...make people think twice about even using the electricity that comes from those wind turbines. And I think that's sort of disappointing.

FLATOW: All right, Richard. Thanks for calling. Yeah, they - I guess these days, if you want alternative energy, you're going to pay for it.

Dr. BORENSTEIN: Yeah, that's right. Alternative energy, at this point, is still raising the cost of electricity. That's because we really aren't recognizing the full cost of using...

FLATOW: Right.

Dr. BORENSTEIN: ...fossil fuels.

FLATOW: Right.

Dr. BORENSTEIN: And, well, it sounds cheap to burn coal and get cheap electricity as we have, increasingly, we're recognizing, not just the greenhouse gas impact, but also the local pollutants that are quite damaging as well.

FLATOW: Mm-hmm. If you take the whole - if you take the total footprint of different energy sources, then it would - it'd be fairer to do it that way than just (unintelligible) cost is.

Dr. BORENSTEIN: Absolutely. But that - but doing that will require us to recognize that energy is actually more expensive than we have historically been willing to accept, as a population. And until we do that, I think renewable energy is really working with one hand tied behind its back.

FLATOW: What about all these stimulus dollars and the president trying to get people to invest in these alternative energies? How has that worked out?

Dr. WISER: Yeah, you know, I think it's worked out quite well, actually. The truth is that several years ago, in the midst of the financial crisis, the renewable energy industries were also, to a certain extent, in crisis. Federal incentives for renewables, historically, have been delivered to the tax code, requiring people who invest in those projects to have a good amount of tax liability.

Well, a lot of the financial institutions that had that tax liability and were investing in wind and solar projects went bankrupt, no longer had profit, and therefore no longer had tax liability.

And so one of the most important programs created by the Recovery Act and the stimulus money, was the program administered - now administered by the U.S. Treasury, to basically transfer the tax credit into an upfront cash grant. So the incentive is roughly the same cost to the U.S. tax payer one way or the other, but it converts a tax incentive into a cash grant. And that's one of the key reasons that we've seen continued growth in some of the renewable sectors, even despite the significant financial crisis.

FLATOW: Severin?

Dr. BORENSTEIN: That is - I completely agree with Ryan. That is part of the stimulus package, and we'll have to see how we transition. Now, obviously, eventually, we would like to be able to get the incentives right without having this large array of programs, particularly the ones that expire every year or two. If you talk to people in the solar and wind development, one of the big barriers has been that when they start to invest in these projects, there is some sort of favorable tax treatment. But by the time they start bringing it to market, either that has expired or it's up for renewal and the real questions, and that is also a huge barrier to this sort of investment.

We've made some real progress in that area. Particularly...

FLATOW: Well, that would go along toward a whole energy policy, comprehensive energy policy, which we don't' have time to discuss right now. But it's something that we would need to talk about in the future, so I want to thank you gentlemen for taking time to be with us today.

Dr. BORENSTEIN: Thank you.

Mr. WEISER: Thanks, Ira.

FLATOW: You're welcome. Severin Borenstein is a professor in the Haas School of Business at the University of California, Berkeley. He's also co-director of the Energy Institute at Haas. Ryan Weiser is staff scientist at the Lawrence Berkeley Labs in Berkeley, California. Once again, thanks for joining us.

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