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The Cost of Doing Green

December 3, 2012

It’s been a while since I noted a good post from Kevin Williamson.  This is likely because he hasn’t posted much, rather than the fact that his quality’s gone down… I don’t think I’ve read a bad post from him, so there.  Anyway, here’s his latest on Green Energy, and I want to focus on one area.  Mr. Williamson makes a point that sometimes renewable energy is an excellent place to focus, within limits:

Wind energy is not always a boondoggle. As I have reported, Valero has installed at its refinery in the Texas panhandle a massive wind farm that, when operating at capacity, generates enough electricity to power the entire complex. The Texas panhandle has lots of wind, lots of real estate, and not very many people. Wind makes sense for some large industrial users. Similarly, a great deal of the equipment used to run Marcellus Shale gas wells runs off of solar power, again for very good economic reasons. Purpose-specific commercial uses are in fact one of the most productive applications for wind and solar power. A good indicator that a project makes sense is that a firm is willing to invest its own money in the project; conversely, an excellent indicator that a project makes no economic sense is that the local utility is scrambling desperately for a way to stay in the wind-energy racket without having to assume the associated costs and risks.

I happen to work for one of the largest purchasers of renewable energy in the world.  In part, my company does it to show environmental responsibility, but it’s also a way to ensure that we’re driving a build-out of renewable resources that will gradually go down in cost.  You have to suck up the costs of any initial investment somehow, and doing it intelligently is a great way to straddle both sides of the equation.  For instance, much (not all, but much) of our building power runs on solar where we have large sites.  This enables us to keep the building running in a state of emergency, which is good for our employees and good for company productivity.

What I’ve never gotten is a blind adherence to any particular energy when it doesn’t make sense.  Coal power in the Northwest is a losing proposition, since hydro and (perhaps emerging) geo-thermal have the option to be much more cost-efficient.  That focuses coal use where it’s going to make the most difference until something else makes sense.  But complaining that we can’t do anything but what a particular person prefers has always made me scratch my head.

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