Yes our old friend has raised his head out of the alfalfa patch and has provided his green vision of the energy policy that our next president and congress should adopt. Is it realistic to think we can replace all of our electric power generation with renewable energy within a decade? The department of energy reported that the US used 4.065 billion megawatt hours of electricity in 2006. The peak installed capacity is approximately 906,155 megawatts. Dividing the 4.065 billion megawatt hours by 8760 hours in a year the average load is some 464,041 megawatts or some 48.2% of peak power.
The following are the fractions of the electricity generated in 2006 by the various sources of fuel: Coal 49.0%; Petroleum 1.6%; Nuclear 19.4%; Natural Gas 20.0%; Other Gases 0.7%; Hydroelectric 7.0%; and Other Renewable 2.4%. Hence 73% of all electric power generated in 2006 had associated carbon emissions as the fuel contained carbon. Coal and nuclear are baseload plants which means they run all the time. Replacing coal fired power generation station with renewable sources such as wind or solar cannot be done simply by replacing one megawatt of coal capacity with one megawatt of wind capacity, as the wind is intermittent and is at best available one quarter of the hours in every year. Therefore we will have to have massive energy storage capability to remove the=2 0baseload coal fired plants.
Assuming we can install wind turbines for a cost of $2,000,000 per megawatt, if one does all the tedious mathematics to replace the 73 % of the US generation capacity that is carbon based with wind power would cost. $1.32 trillion. However we would need twice as much wind generation facilities to replace baseload carbon fired plants and the cost of the wind generators will equal $2.64 trillion. To store the wind energy so it can be dispatched when it is needed will cost a similar amount, so we are talking about an investment of $5.28 trillion before we add in the cost of the transmission lines that are needed. Let’s assume the transmission system together with the controls needed for dispatching all this wind generated energy cost $0.72 trillion we have a cool $6 trillion needed to be spent over the next decade. This would be significantly higher if PV cells were used instead of wind turbines. Therefore using a mix of wind and PV as well as tidal, r un of the river, solar thermal, and geothermal we may need to invest $10 trillion for the carbon free electric generation replacement system.
We import a total of 12 million barrels a day of crude oil and refined petroleum that costs us $130 per barrel or approximately $570 billion per year. Assuming the world has a savings rate and banking system to allow the US to divert $10 trillion of investment into the alternate electric energy sector, this investment without interest or profit equals 17.5 years of oil imports at present rates and present prices. As I am neither a magician nor the chief economic advisor of the next president, I cannot forecast the price of oil or the level of imports over the next two decades. However, I do believe that the level of imports will drop and the price of oil is presently unaffordable and possibly unsustainable. This being said it will take 20 years or more to recoup the dollars we ship overseas for oil for the total replacement of carbon based electric power generation.
It is not completely infeasible that the system could be replaced, but it will simply place a major economic burden and will also substantially increase the cost of electricity to the consumer. My vote goes to the proposition to replace one quarter of the carbon fired power generation with renewables, as well as reducing our electricity consumption by a total of 10% in ten years time through demand side management and deployment of more efficient technologies. We certainly should spend a couple of trillion dollars over the next decade on alternative energy. This amount matches the total of the lowered home values and subprime mortgages losses we are experiencing and it is not going to divert all of global savings and investment to renewable energy but will leave some money for, social security, schools, hospitals, high-tech, biotech and of course old Al who makes millions on his speaking engagements that he flies to in his private jet.