Dan Watkiss Column in Nov/Dec 2011
Regarding Dan Watkiss’ column “Defining, Encouraging Winners is Good National Energy Policy” (Page 22, Nov/Dec 2011), I read the column and had the uncomfortable feeling that I was reading alternative energy industry propaganda rather than an unbiased evaluation of the government’s energy policy and lessons to be learned from the failure of recent solar energy companies. What came through loud and clear was a call for more federal money, not less, for research and development of accessible, sustainable and economical energy supplies.
Watkiss tells us that the bankruptcy failure of Solyndra occurred because the Chinese “invested some $30 billion in its silicon-based solar energy industry,” which “made Solyndra’s nonsilicon technology no longer competitive.” The problem is that their nonsilicon technology (thin film photovoltaics) was presented as competitive to get loan approval for a manufacturing facility.
This loan wasn’t research money to develop new technology, and thin film technology was widely known at the time to be more costly than silicon-based systems. But federal loan guarantees to finance a manufacturing facility was expected to attract capital investor money to build and deploy significant solar energy generating capacity. They were expected to make money, for how else were they to repay the taxpayer-guaranteed loan money? When the Solyndra project business plan was under consideration, DOE evaluators saw that it would not be competitive with existing solar technology, let alone with other sources of electrical generation.
And without a prospect of profits, they recommended against giving Solyndra loan guarantees to build the plant. Under a new DOE secretary and re-evaluation by the Obama administration, the loan guarantees were made anyway under questionable circumstances. When it was apparent even to Energy Secretary Steven Chu’s people that the company was failing, the loan was modified in such a way that the principals in the firm and key investors in Solyndra were able to convert their soon-to-be-worthless stock into real money, with the U.S. taxpayer left holding the bag.
Also, if the Chinese government wants to fund U.S. solar energy installations by subsidizing the solar panels we get from them, why not let them drain their economy of the funds? The Coalition of American Solar Manufacturing (CASM) trade complaint charging the Chinese with dumping has been countered with opposition from a newly formed Coalition for Affordable Solar Energy (CASE). Ultimately, market forces will prevail if regulatory government keeps out of the fray.
What about the cost viability of solar electricity generation? Mr. Watkiss tells us that “energy cost expert Ken Zweibel” established the “levelized cost of a solar photovoltaic (PV) system over its useful life with no incentives or subsidies” at 15 cents per kilowatt-hour, compared with other sources of electricity ranging from 6.4 for natural gas combined-cycle generators to 10 cents for advanced nuclear generation.
In this analysis, wind turbine electricity is supposedly cheaper than that from conventional coal! Zweibel is the director and founder of The George Washington University Solar Institute (established 2008) and attained that position after working nearly 30 years developing solar technology, primarily of the thin-film PV type Solyndra intended to build. Now he promotes solar power to government as a viable form of alternative energy. He is hardly an objective source of relative energy costs, so it is no surprise that assumptions about the solar system were cherry-picked to provide his lowball estimate of industry costs at 15 cents per kilowatt-hour estimate. Maybe, using Chinese PV panels?
We are also told that the Environmental Law Institute (ELI) found governmental subsidies to fossil fuels and nuclear power generation to dwarf the support for solar and other clean energy sources. The problem here is that the fossil fuel “subsidies” are for the most part just the standard IRS investment tax credits and foreign tax credits any company is entitled to claim. Conversely, the ELI says between 2002 and 2008, $29 billion of taxpayer dollars were spent on renewable energy tax credits (with more than half going to corn ethanol), which is in addition to those standard credits. True enough, $2.3 billion was spent on developing carbon capture and storage (CCS) systems, which would be a benefit to fossil fuel plants if they needed CCS systems in the first place. One way to make alternative energy sources look economically competitive is to increase the cost of conventional energy: fossil fuel and nuclear. If coal-, oil- and natural gas-fueled sources are forced to install carbon dioxide mitigation measures, their generation costs go up exponentially. Is it any wonder that anthropogenic global warming is taken as Gospel-truth by these proponents of alternative energy sources?
It’s often said that it doesn’t matter who wins a lawsuit because the lawyers get paid regardless. And as long as there are taxpayer-subsidized dollars to be had, Mr Watkiss and his firm will be there to represent the companies lining up to use them.
So it matters not whether a project is financially successful, so long as the taxpayer dollars are available on a regular basis. That’s the message I got out of this column.
Stanley J. Penkala
Air Science Consultants Inc.
I Think You Meant …
The article on Page 50 of the Nov/Dec issue stated that Browns Ferry came online in 1947. I think you meant 1974.
David G. Mitchell
From the Editor: You are correct, sir. Thanks for reading.