Discussions of the cost of wind and solar vis a vis gas or other fossil fuels are going to morph from "they're only cheaper because they're subsidized" to attempts to impose infrastructure costs on them because they "get a free ride" using the distribution system.

Of course, if installed on a roof top (solar) or in a back yard (wind) there is no "free ride" -- the distribution point is only a few feet away in either case. The only juice going to the grid is excess which relieves the utility of capital costs associated with add'l generation costs.

And, alternative energy need not fear charges of "subsidies." Every sector of the energy industry in America has been (and most continue to be) subsidized, directly in the form of tax breaks, or indirectly in the form of exemption from regulatory costs. All fossil fuels obtained their current market share while bearing zero costs associated with CO2 emissions.

For decades and currently, under the Internal Revenue Code, 70% of the cost of drilling an oil and/or gas well can be deducted the first year as "intangible drilling costs," and since Bush/Cheney both oil and gas have been exempted from the Clean Air Act and the Clean Water Act.

Coal is exempted from the external health costs of coal mining and coal-fired electric generation which include the dubious achievement of making West Virginia #1 in the country for deaths per 100K from particulate matter emitted from coal-fired elec plants; PA, KY, VA, TN, IN rank 2 thru 5. Step back from the map one foot and you see the footprint of AEP, the largest purchaser of coal on the North American land mass.

The automobile industry is subsidized by the construction of an interstate highway system on which its cars run; the airline industry flies from one airport to another, all of which were constructed by municipal or state funds (not the airline industry); and the railroad industry in the 19th century got every other square mile as an incentive to cross the continent -- making it collectively among the richest and largest landowners in the US.

Solar and wind have been subsidized and should be indefinitely. Their external costs are minimal, their through put costs are near zero, and they remove any and all incentive to intervene in the Middle East.

DO NOT APOLOGIZE FOR ALTERNATIVE ENERGY SUBSIDIES. If somebody argues we cant afford more, then end the 70% write off of intangible drilling costs, and tax CO2 on a tonnage basis.

And when the debate shifts to "gotta pay your fair share of the installed infrastructure" point out that the rate payers have already repaid the capital cost many times over, and solar/wind relieves the utilities of current and future capital costs for add'l generation.,

On Mon, Aug 18, 2014 at 9:32 PM, James Kotcon <jkotcon@wvu.edu> wrote:

The 2013 Wind Technologies Market Report from US-DOE shows that newly-installed wind-generated electricity is, as a national average, already cheaper than electricity from coal, and, if the PTC is included, is currently cheaper than gas-fired electricity. Since the PTC expired last year, wind may have to compete with gas without subsidies, but as costs continue to fall for wind, and are likely to rise for gas, wind is likely to compete well even without subsidies in the near future (5-10 years). Cost for wind are lowest in Interior Midwest states. Wind resources in most of the Mid-Atlantic states are of lower quality and are unlikely to be competitive with gas in the near term. A future cost for fossil carbon emissions will accelerate the market for wind as it is likely to further increase the costs for gas.

Bottom line, no one is investing in coal, and investments in new gas infrastructure are increasingly risky as long-term investments. The Longview plant looked like a really good deal in 2003, but was not operational until 2011, and filed for bankruptcy in 2013. A new gas plant proposed today is unlikely to be operational in less than 3-5 years, by which time it may be unable to compete with wind in time to pay off its investment.

See the full report, especially Figure 49, at:

http://emp.lbl.gov/sites/all/files/2013_Wind_Technologies_Market_Report_Final3.pdf

Jim Kotcon

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