Affirmative Action for the Green Industry? Part 3

Affirmative Action for the Green Industry? Part 3
Al Ritter

We have talked about federal subsidies for energy sources for use as fuel, ranging from ethanol to solar, and today we discuss the subsidies for energy sources used for electrical production. A lot of the same energy sources are funded as subsidies at different rates when they are used to produce electricity. Coal, natural gas, nuclear, hydro- electric, wind, and solar are the subjects today.

The environmental push today is for clean coal technologies, but the practical application of this type of cleaner burning is very limited despite the money being put in to this sector. Natural gas is yet another form of fossil fuel that also includes coal and oil. Hydro-electric is probably the most ignored and most economically efficient form of electric generation. Very few hydro-electric plants have been built in the last few decades due to the high price of property to create the reservoirs for the dam, and as a result this type of power generation has been largely ignored. Wind, and solar are the most popular recipient of the subsidies today, as is clean coal technologies.

Let’s get down to the nitty gritty of what our government sees as the future of electrical generation, and what they have chosen to promote. To do an accurate comparison we will compare each source by megawatt production. The highest subsidy on the list would be clean coal, now regular coal was subsidized at only .44 cents when used as fuel, electrical generation clean coal comes in at $29.81 per megawatt hour, second on our list is wind coming in at $24.34 per megawatt hour, third would be solar at $23.37 per megawatt hour, fourth would be nuclear at $1.59 per megawatt hour, fifth would be hydro-electric at .67 cents, and rounding out the subsidies is natural gas at a mere .25 cents per megawatt hour.

The wind and solar lobbies are currently complaining that they don't get their fair share of the subsidies. They also argue that subsidies per unit of energy are always higher at an early stage of development, before innovation makes large-scale production possible. But wind and solar have been on the subsidy take for years, and they still account for less than 1% of total net electricity generation.

Without major advances in technologies wind, solar and clean coal will languish in the realm of “also rans” for many more years, but our government will continue to fund undeveloped technologies with taxpayer money.