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How CO2 Distorts the Energy Equation

April 8, 2014

There is no question that electricity from PV Solar and Concentrating Solar costs more than from natural gas or coal, yet radical environmentalists have devised a way to say the opposite.

Again, we live in an Orwellian world, where words mean the opposite of what they have traditionally meant.

In Minnesota, they have determined that PV Solar costs less than electricity from natural gas or coal-fired power plants.

How did they achieve this legerdemain?

In the middle ages people proposed Alchemy as a means for turning ordinary metals into gold. We now have the modern Orwellian version as established by the EPA and adopted in Minnesota.

Add the Social Cost of Carbon to the cost of electricity generated by natural gas and coal to establish that PV Solar is less costly.

The Emerald Tablet, a key text of Western Alchemy, in a 17th-century edition, from Wikipedia

The Emerald Tablet, a key text of Western Alchemy, in a 17th-century edition, from Wikipedia

Minnesota selected $37 per ton for the social cost of carbon, as currently established by the EPA, though the social cost of carbon ranges between $12 per ton and $116 per ton in 2015, rising to $28 per ton and $235 per ton in 2050.

These costs were established under President Obama’s Executive Order 12866, by the Interagency Working Group on Social Cost of Carbon1.

These estimated social costs of carbon are largely based on computer models that have been discredited because they can’t replicate actual temperatures. But the working group assumed that the threats from climate change, based on these computer programs, should be the basis for establishing the social cost of carbon.

Minnesota has established a “value of solar” formula that has been affirmed by the state’s Public Utility Commission.

So a price has been set on carbon, and used to make decisions that affect the public.

The cost of PV Solar is still higher than the cost of generating electricity from natural gas or coal-fired power plants, but by a stroke of the pen, PV Solar has been deemed less costly.

We should look at what’s happening in Germany to see how this line of thinking is destroying Germany’s electric utility companies. In 2012 only 22% of Germany’s electricity came from renewables, and their energy revolution, Energiewende, calls for 80% by 2050, yet the system is already crumbling under the rules that work against fossil fuels.

Minnesota is falling into the same trap by placing a price on carbon.


  1. Technical Support Document: Revised November 2013:


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9 Comments leave one →
  1. April 8, 2014 11:40 am


    We need to debate green vs. brown power COSTS intelligently. And there is only one truth. Thank you for illuminating that truth.

    Check out this page on my site:

    There I explore the term “avoided cost” used in statutes requiring utilities to buy solar-generated power from guys like me. I point out that “cost” has become a political, rather than a mere accounting, term. And, I acknowledge that greenies push “cost” numbers blindly, thus polluting rational debate.

    Blog posts like yours, then, are very useful.

    I believe that it’s fair to get together and vote on what we want. But we need facts to do that rationally. Behind most all of your free-market-based posts about “true” energy costs there lurks the inescapable trade-off: lower cost = more pollution. Compared to our childhood days, you and I now pay more to operate our cars (the extra pollution controls on them; lead-free gas) and in return we get less air pollution. If we let $.04/KWH coal power run free, $.08/KWH green power (what I’m being paid for my solar-PV power) gets killed off.

    But of course, I don’t strip mine and spew polluting air when generating my power, coal does.

    Would we not be willing to pay more for our power in exchange for less air and water (and earth-disrupting) pollution? I would, just as I pay more for my car for seat belts (twice they’ve saved my life when I’ve been hit by drunk drivers, by the way).

    But how much? I should be able to have a say in that, and we should all vote through our representatives. That’s democracy. And accurate information (what you thankfully provide) is democracy’s oxygen.

    So I agree with your underlying premise here: Greenies pushing renewables should compare apples to apples, and not “phonified” costs. They should, as your properly point out, compare actual energy harvesting/processing costs between brown (coal, nukes, oil, gas) power and green (solar, wind, hydro).

    THEN we should all decide how much extra cost (and its precise dollar value) we want to ascribe to a particular brown power process and make political (policy) choices accordingly. Coal and other brown-power plants crap in the fish tank in which we all must swim. If I can charge you to dump your yard waste in my backyard (because you’re too lazy to properly dispose of it), don’t I get to charge others for polluting the air that I breathe? Can we not all do that on a mass level (when society votes in leaders who pass laws/regs reflecting their choices?).

    But yes, how much? And yes, let’s keep that “add-on” number separate so that true cost numbers are not obscured, thus inhibiting rational debate and decision-making on mass-scale energy policy.

    So I join you in demanding fair and accurate costing/pricing, and we must learn from any mistakes made in Germany and elsewhere. Only then can we intelligently decide to, just as we did with cars and trucks, add an environmental cost layer. Only then can we arrive at a fair rate for renewable power. And that rate includes contributing, in the case of grid-tied power generators like me, to grid maintenance costs. But in figuring that specific cost, renewables ought to be credited with what expenses are spared (e.g., the cost of building more coal plants and the spared pollution costs associated with them).

    Yes, it’s difficult to arrive at a fair and accurate cost number because there’s no free market in grids; most are monopoly owned. And many don’t trust utility and grid operators because they believe they’re tied in too deep with coal and other brown power interests, the Koch brothers, or some other boogie-man. And I sure don’t trust politicians and bureaucrats to properly tinker with the market-pricing process.

    It’s very frustrating. All the more reason to applaud your efforts to sort this out.

    — James

    • April 8, 2014 2:07 pm

      Thanks for your outstanding comments. The link to the information on avoided costs is also very useful.
      I might take exception to piling onto coal the peripheral costs of pollution emissions, such as Nox, but definitely take exception to adding social costs of CO2. The link in my article demonstrates the very bad thinking that has gone into social costs for CO2.
      Every method of generating electricity has some ancillary costs. What is the value of a bald eagle killed by a wind turbine, for example?
      I will argue, that when evaluating the big picture, and not a limited number of PV solar installations, that:
      • Wind and solar cannot supply our need for electricity, beyond a few percent.
      • Wind and solar, without adding social costs, are more expensive than electricity generated by natural gas and coal.
      • Fossil fuels are essential for providing the electricity this country needs.
      • Without nuclear, which seems to be where this country is headed, there will be a need for new coal-fired power plants.
      Over the next few weeks I will make these last two points clearer.
      You comments should be read by all, since there can be some very honest disagreements over avoided costs, which gets to the heart of net metering.
      My overriding view is, as outlined above, that fossil fuels are essential for providing the electricity we need to sustain a strong and vigorous economy, and a high standard of living … and that ultra-supercritical coal-fired power plants will be needed for base load generation to replace nuclear power plants.
      Thanks again for your comments.

    • April 8, 2014 3:28 pm

      James, Thank you for articulating your thoughts without muddying the discussion with the ad hominem attacks I have come to expect from people who are presenting a different point of view. I commend you! Minnesota has developed a bizarre partner relationship with Germany so our energy policy is patterned after their’s. Our leaders willfully ignore the realities of the problems that country is creating for it’s people.

      The debate about renewables is not complete without considering the sprawl represented by industrial wind, which is not just across the land but is also “up”. This fractures already fragmented habitat for all avian species, and since loss of habitat is the leading cause of species extinction, this bears serious consideration. A conservationist in New Zealand who has worked with the fishing industry to remedy impacts to seabirds like the albatross from long-line fishing compared turbine arrays to land-based long-lines. The USDA findings of a 47% loss of raptor abundance where we site turbines; a USFWS finding of a 56% loss of nesting marsh ducks; and an IA DNR agent’s finding of a 43% loss of “other” avian abundance in turbine fields should be cause for alarm. Bats, another species already under assault from White Nose Syndrome are also being wiped out. The current remedy is attaining a Permit so the developer and investors do not face legal or financial consequences. This does absolutely nothing to mitigate the danger to the ecosystem that relies upon the interaction of “life” to maintain balance.

      Using the term sustainability to promote industrial wind when viewing it from the myopic view of “carbon” is wildly incorrect. We rely upon ecological balance for sustainability. The numbers coming in from actual, verifiable science tell us that this is not possible with a wind/solar scenario. It does us no good to reduce carbon emissions if we have destroyed ecological balance in the process.

      I’d like to see more well-rounded discussions on this topic, which I think absolutely must include factual, not perception based, analysis of the impacts of our current path.

      • April 8, 2014 3:51 pm

        Thanks for your comments enlarging on the ecological damage from wind turbines.

  2. April 9, 2014 12:30 am


    I find I’m in agreement with you. Euro-liberals took too wild a swing and now I fear they’ve wrecked healthy economic undercarriage in places like Germany. “Any solar’s good solar” is the wrong way to go. Prudent solar is. Ditto for wind.

    And yes, I agree that renewables as we presently know them won’t make a serious dent in meeting demand anytime soon, so we’re stuck with brown power (sure, nukes I guess, maybe even the next-gen nukes Bill Gates says he’s investing in).

    But at the same time, I think we also agree that the energy commerce channels should remain free and open, so that if some innovation (or even an innovative process) comes along, then artificial barriers (example: the 10KW limit to my solar power system) should be removed and fair pricing should be the norm (an industry analyst opines that $.08KWH for my solar-pv-generated power is a fair price).

    Then, sure, stand back and let the winner emerge fairly and squarely.

    But again, since there is NO free market structure in the U.S. (again, MONOPOLIES own utilities and the national grid), and since brown power’s been dug into that UNFREE market scheme so long, we necessarily must make some political choices in re-arranging (for “fair-accessing”) the energy sector and structure into it some rational policies that assign at least some “cost” to the pollution brown power interest make us all absorb.

    Hence, SOME positive-ecological benefit/pricing credit, you seem to agree, should go to “good” renewables (right, wind chews up wildlife, and solar thermal burns birds, but my PV array hasn’t harmed anything).

    And yes, we should debate about whether CO2 “cost” is being exaggerated and decide that issue in the open.

    I’ve said this before. Price-manipulation via tax policy makes the most sense to me. I’d rather tax consumption and pollution sources than tax business and productive activity (hence, eliminate corporate and income taxes, but tax brown power to make up for lost revenue and thus make green more price-competitive).

    The Free Market at work: If solar PV panel prices fall (now being projected) to $.50/watt and it makes sense for Do It Yourselfers like me to erect solar $1/watt PV on, say, 100 million roofs and backyards — which WILL make a serious dent in electricity demand — then hey, let the games begin. Especially if, as my grid operator friend assures, smart-grid-tech evolves to handle all that variable power in an economically attractive way.

    More on how to get to $1/watt installed Solar PV here:

    • April 9, 2014 9:45 am

      Thanks again for your comments.
      The prediction of $1 / W seems overly optimistic, though anything is possible, but not necessarily probable..
      Both McKinsey and Morgan Stanley clean energy analysts predict that PV solar will get down to $2 / W, but that also seems overly optimistic.
      I’m drafting an article that should be published in the next week or two about the grid, and in it I quote from the SunShot report as follows:

      “The Government’s SunShot Report, Tracking the Sun VI, by Environmental Energy Technologies Division, Lawrence Berkeley National Laboratory, determined that, among projects installed in 2012, median installed prices were $5.3/W for systems ≤10 kW, $4.9/W for systems 10-100 kW, and $4.6/W for systems >100 kW, which were all move than $4,000 per KW.”

      Actual costs of installed systems in 2012 would seem to cast doubt on ever getting to $1 / W.

  3. April 9, 2014 12:40 am

    Mary, I hear you, but I’ll only march with you when you acknowledge the 1 Billion birds decimated each year by the ultimate invasive species: The American House Cat. It’s disingenuous to hyperfocus on specific animal losses in the tens of thousands level around renewables when 1 Billion are lost to cats which otherwise constitute a net ecological loss to the planet. (Sure, cat owners will now line up to shoot me — the messenger).

    You also know that wildlife gets routinely killed by ALL forms of progress. A Savannah, GA highway’s construction was stopped for two years when it encountered an eagle’s nest. How many more animals died from the increased (traffic generated) pollution that construction halt caused (for two years hundreds of thousands of cars sat in stop-and-go traffic attributed to the “eagle’s nest” delay)?

    How many birds and other animals die every time a new housing development is built?

    And so on. .

    Look, life’s full of trade-offs. Babies inside of fuel efficient little cars like mine die in vehicle crashes while those in big heavy gas guzzlers live. Yet, no one’s clamoring to use governmental power to force us all to drive guzzlers, right? We accept that (horrendous) result and results like it all the time. I guess I want to know how many brown-power (hence, animal killing) energy sources are displaced by the wind-power sources you’d otherwise want to shut down to protect the species you’ve identified. I want data, so that prudent (and hard) choices can be made.

    • April 9, 2014 10:22 am

      I’m afraid that some of your comments to Mary are irrelevant. We aren’t discussing the advantages and disadvantages of big or small cars.
      Airplanes also kill birds, but airplanes are a vital component of today’s society. The same is true with cars, big or small, and trucks.
      However, in the case of windmills they kill birds and bats, BUT are not a vital component of society. In fact, from my perspective, they aren’t needed at all.
      There is ample data that wind turbines kill birds and bats, so that’s not an issue.
      I’m not aware of any data saying that coal-fired power plants and NGCC power plants kill birds and bats. If you have that data please let me know.
      Whether cats are indispensable, I’ll leave for someone else to decide.


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