Innovation Pipeline

As everyone outside of Sarah Palin knows by now, there’s a concerted effort to move to renewable sources of energy like wind and solar. The long-term proposition of less reliance on foreign oil and sources of energy that have less impact on the climate are making it all the more interesting.

Of course, one part of the new electricity equation is embracing sources of juice that are economically viable versus oil. And governments are driving ambitious efforts to achieve greater use of renewables. The only problem is the price tag is going to be higher.

A recent study by a researcher at Delft University of Technology in the Netherlands has found that the overall price of alternative electricity could be expensive.

Researcher Hans Rödel recommends a mix of different generation technologies, coupled with CO2 capture and storage as well as recycling waste heat and using biomass. All of those combined are expected to make a more viable energy equation for electrical generation.

In the U.S., the average cost of electricity this summer was 10.33 cent per kWh, according to the EAI, electric power monthly. Solar is about 25 cents per kilowatt hour and wind is about 5 cents per kilowatt hour.

European governments have set ambitious goals for achieving CO2 reduction of 30 percent and boosting the sustainable energy sources to 20 percent by 2020.

At the end of 2007, more than 600,000 residential and business customers were participating in utility green power programs, which are offered by about 25 percent of utilities nationwide. Customer participation rates in these programs averaged about 2 percent, with the top programs averaging from 5 percent to 20 percent, according to the National Renewables Laboratory.

In the U.S., the small number of programs that offer green electricity generation programs, one of the important values is a fixed-price, rate stability benefit reflecting the fixed costs of the renewable energy sources used to supply the program. According to an NREL report titled Renewable Energy Price-Stability Benefits in Utility Green Power Programs, these programs offer this benefit as a way to protect participants from the portion of rate increases that stem from fuel costs. That helps these programs maintain a kind of hedge, or insurance policy, against fossil fuel price increases.

The higher price is one of those unavoidable trade-offs, according to Rödel’s research. The bottom line is scenarios that involve a low environmental burden lead to high costs and vice versa. Let’s make sure someone tells the electric car proponents about the higher cost of electricity here in California. By Lee Bruno