According to the Northwest Power and Conservation Council, this is the electricity source makeup of the Pacific Northwest:
- 51% Hydroelectricity
- 20% Coal
- 21% Natural Gas
- 3.2% Nuclear
- 1% Wind
First of all, in an advanced and allegedly environmentally aware section of the country such as ours claims or pretends or feigns to be, you should by asking why we derive 20% of our energy from burning coal and get almost none from the winds coming down from Alaska and off the coast?
If environmental costs were included in the cost of production, “the electricity generated from coal fired plants would be 50-100% more expensive than it is today”, according to the the Wind Energy Association of America.
Recently, increased energy demand has been met by constructing coal and natural gas-fired plants. Why? Hydroelectricity in the Northwest is limited because there are few rivers left untouched by dams and political support for the construction of new dams is weak. Awareness of the rivers’ role in the forested ecosystem is taught in public schools, and many people are aware of the effects on natural salmon reproduction in particular.
The current price of electricity generated by coal in Washington 5.8 cents per kWh. The Department of Energy estimates that 2.095 pounds of CO2 are emitted per kWh. Take the market price for CO2, $32.50 per ton, or 3.2 cents per pound, and multiply it by the amount of CO2 generated by one kWh and then add it to the current price of carbon, and you get an estimation of the true cost per kWh of coal generate electricity.
5.8+(3.2*2.095)=12.57, so $12.57 per kWh of coal-fired energy.
This is far more expensive than any wind-generated energy plant’s costs, and the fact that substitutes like wind or solar are currently not competing at these true market prices is an example of market failure.
It is at this point that my blog becomes more inquisitive than matter-of-fact.
The problem as I see it is, even though both Presidential candidate are proposing carbon cap-and-trade systems, this will not ensure that the most environmentally sustainable energy sources will be the market’s alternatives. (The next best choice in the Northwest would be hydroelectric, which is undesirable too.) But since this is a “market-based solution” the methodology is not to tell energy corporations what to produce and what not to. The methodology aims to put into place the correct cost structure and let the market find alternatives given the new parameters.
So – if there is going to be a carbon cap-and-trade system, it had better not create environmental loopholes so that energy corporations do not take over our rivers and streams. A mechanism to calculate the costs per kWh of hydroelectric energy could be capped and traded as well.
The other option, which actually makes more sense in terms of being “market-based”, is to have every firm simply pay the full price of energy production per kWh to a third party. This way there would be no capping, and that certainly has its appeal to anti-paternalists. The problem with this is it would create a legal structure that would continually sue and appeal regarding the costs each plant had incurred by making energy. It would be difficult to say exactly how much each plant destroys per kWh produced without incurring more and more costs simply to monitor that output and destruction. It would also not encourage managements to design new ways of making each kWh of energy less harmful to the environment.
And there’s also the grid system to factor into any decision about energy “policy”, which was originally designed to be less wasteful, but has resulted in freerider problems and the creation of Enrons. Nothing seems right, nothing seems fair. I am at a loss for solutions 😦