In the waning hours of the tax bill debate last December, the Obama Administration and GOP leaders released the terms for continuing the Bush-era tax cuts. The framework negotiated between the parties initially omitted any reference to extending the renewable energy programs introduced in 2009 under the American Recovery and Reinvestment Act of 2009 (ARRA), which were scheduled to sunset at the end of 2010.

The renewable industry responded ferociously. A media blitz hit overnight, and wind and solar lobbyists huddled with lawmakers on Capitol Hill. Repeated warnings about job loss and the immediate harm to green energy businesses worked. Lawmakers relented and sanctioned a 1-year extension. The windfall? A check from the U.S. Treasury for 30 percent of a project’s qualifying cost.

With the fuss now behind us, we decided to examine one of the more popular renewable subsidy programs to be extended, the Section 1603 cash grants.…

[This interview of Robert L. Bradley Jr. by Stephen Hicks (website here) is part of a series: Part I (Libertarianism and Energy); Part II (Expanding Energy Horizons); and Part III (Enron as a Political Company).]

Kaizen: You mentioned that Enron was also involved in lots of alternative energy sources—wind power, solar power, “green” energy, and that it was one of the first at the political table. Did Enron think that with the right kind of farsighted investment the new energies could be profitable?

Or was this again part of a political strategy: Alternative energy was a political favorite, certainly during the Clinton Administration years, when Al Gore was vice president? So Enron is getting a seat at the table; and whether alternative energy actually succeeds or not, it’s a good business strategy at least in the short term.…

Parts I and II dealt with most of the issues in a recent paper by Chuck Kleekamp and showed the weaknesses of his analysis. This post addresses in detail the question of the costs of electricity generation for nuclear and wind.

Kleekamp says, “If you think wind power is expensive, wait till you have to pay for electricity from a new nuclear plant.” This suggests that nuclear plant electricity is more expensive than that of wind. This is remarkably incorrect. The costs of each according to the EIA along with my adjustments, are shown in Tables 2 and 3 below, which clearly demonstrates the high costs of wind compared to nuclear. As will be seen, the EIA costs are just starting points.

These costs are shown on separate tables for wind and nuclear because they are not really comparable.…

Part I of this series critiquing an article by Chuck Kleekamp dealt with the more general issues of examples used, one of the major references and electricity markets. There is a lot found to question his analysis. This post focuses on capacity considerations and other miscellaneous issues raised by Kleekamp. Finally, Part III addresses his remarkably inappropriate warning, “If you think wind power is expensive, wait till you have to pay for electricity from a new nuclear plant.”

Availability of Other Generation Capacity

Kleekamp cites the extensive unused capacity in the total electricity system that he claims is available to balance wind. He is incorrect in this notion. This capacity provision is normal, and it is there for a purpose. One of the reasons is the need for reserves as described in Part I and represents about 20% of total capacity.…