In today’s polarized climate, it is not uncommon to hear opposition to anything labeled climate-friendly or green. But confronting inaccurate and unfair arguments requires constant effort, and the trend toward complacency is dangerous. According to Jigar Shah of the Carbon War Room at the American Renewable Energy Day (AREDAY) conference in Aspen last week, if one doesn’t confront inaccuracies, “you’re not doing your job” and you are part of the problem. The tone of Shah’s message is comparable to the public’s frustration over political inaction.
Hunter Lovins, of Natural Capitalism Solutions, offered similar sentiment. Although we might not have a president who cares enough, “we don’t have a lot of things. We just have us.” There is no need to wait for political agreement in order to take action. Lovins’ work in energy efficiency has found that corporations around the world are already making money by going green. Reducing waste saves energy and resources, hence there’s no need to wait for government leadership.
The good news is that the cost of renewable energy is now competitive. In fact, in some states it costs more to open and run a coal power plant than solar. The main costs for a power plant are construction, maintenance and price of the commodity, which in this case, is coal. Once operational, a solar power plant requires minimal maintenance and sunlight is free. Shah highlighted North Carolina as an example, where solar is now cheaper than coal. And wind versus coal provides an even greater mismatch.
As one might think, it is not subsidies that are providing the difference, Shah explained. In contrast, fossil industry proponents claim that the percentage of subsidies compared to price is higher for renewables than for natural gas. This is accurate because start-up costs are higher for renewables; however, the reasoning is specious, he argued. The key is that the riskiest portion of the natural gas investment, exploration, is subsidized by the government, so if natural gas exploration fails, investors lose virtually none of their investment. On the other hand, investors might make a 25% return if the exploration succeeds. Without a guaranteed subsidy, investors might lose their investment should natural gas exploration fail. Shah pointed out that faced with such a risk, a 25% return might not be sufficient to lure investors; they might seek higher returns elsewhere.*
“Coal is no longer the cheap option,” Hunter Lovins reiterated. “When the General [Wesley Clark] says solar and wind are not ready, call bull—-!” Unfortunately, when the General made this statement earlier in the conference, no one objected. A more concerted effort is needed if we are going to do our job!
* Return estimates taken from the AREDAY conference