What's taxpayer cost for renewable energy deal?
I'm biased to love the O'Malley administration's proposal to buy nearly a fourth of all the megawatts used by state agencies and universities from nearby wind- and solar-power producers. It's a bold move to stimulate the development of renewable energy in the region and burnish the state's high-tech cred by supporting next-generation generation, so to speak.
Buried in the news of this announcement is Constellation Energy's idea to build a 17-megawatt solar farm in Emmittsburg to sell juice to the state as part of the deal. That would be the 32nd biggest photovoltaic array in the world and the 3rd-biggest in the United States, according to today's rankings, although surely many other projects are being built that will compete for the top spots.
But the state has to come clean on what this will cost taxpayers. Maryland energy czar Malcolm Woolf wouldn't disclose it to The Sun's Tim Wheeler. "Terms of the deals remain confidential until the contracts are signed early next year," Wheeler paraphrased Woolf as saying. "Generally speaking, the prices agreed to are slightly higher than electricity costs today, he said..."
Sorry, that's far from acceptable. Revealing the terms after Maryland is legally obligated to honor them is not the way open government should work in a transaction of this size. Over the 20-year term of the deal the cost will be in the $1 billion neighborhood. The price of solar- and wind-generated electricity is typically a lot more than "slightly higher" than today's prices for coal and nuclear juice. As a public entity the state isn't eligible for renewable-energy tax breaks available to corporations and individuals. The deals may be worth doing even if the price is a lot more than slightly higher. But taxpayers need to see the numbers.







Comments
10-day forecast for Emmittsburg predicts 6 of the next 10 days will be cloudy. Astronomical records suggest there will be less than 10 hours of daylight until late January.
Does the governor understand a solar plant requires sunlight?
Posted by: Dan | December 9, 2009 8:24 AM
You're so right and thanks for bringing up almost never mentioned topic of money.
“Renewable energy” is very expensive. Last month the Chinese government proposed construction of the largest photovoltaic project in the world – 2 gigawatts at an estimated cost of 5 to 7 billion dollars.
DOE figures show US electric generating base in 2006 was a bit over 4 million gigawatts. Use the lower Chinese estimate of 2.5 billion dollars per gigawatt. Cost to equal US capacity would be 2.5 billion dollars per gigawatt times 4 million gigawatts; this equals 10,000 trillion dollars. In round terms this is the US GDP for more than 600 years. For the foreseeable future photovoltaic power will be hugely more expensive than conventional.
Posted by: Tom Powell | December 9, 2009 9:03 AM
Are wind and solar supposed to make me feel all "warm and fuzzy" about the way the State is going to spend my money? Well sports fans it does not. I simply do not trust the State to act in my best interest when it comes to how they purchase energy for their buildings. It seems that they are willing to spend for more expensive wind and solar just to be able to say they have done something for the environment while the taxpayer foots the bills.
Posted by: reader | December 9, 2009 9:42 AM
Jay - how did you generate that $1B cost number. It seems quite high for a project of this size, would be curious to understand the data behind it.
Anon -- Wheeler's story says it'll be 23 percent of today's $165m annual bill. X 20 years = $760 million. And the price will probably be a lot higher than that. JH
Posted by: Anon | December 9, 2009 10:35 AM
Gee, and Dr Brown managed to accomplish so much (and in such a small package!) with just 1.21 Gigawatts
http://www.youtube.com/watch?v=bnqtXOi1iaY
Posted by: MrRational | December 9, 2009 11:48 AM
Even when you have a signed contract it still must be approved by the Board of Public Works. I can't imagine that the General Assembly is not going to take a good look at a contract of this size. So, this is a long way from a done deal!
Hey Luther: Good point on BPW approval. A contract this size will certainly go there. But the numbers ought to be released now so we can talk about them. JH
Posted by: luthersomd | December 9, 2009 1:46 PM
Jay, you should know that you cant negotiate a contract thru the media. As much as you'd love to publish that juicy information so you can get more hits, its just not practical to negotiate costs in a public forum because the process would get bogged down with everyone's point of view and nothing would get done. No contract, public or private, is ever negotiated publicly.
Posted by: Mr. Energy | December 9, 2009 2:36 PM
There are so many factors about the state's announcement. Why did they release it prematurely? What are the real costs of this action? Why don't they come clean about the federal and state subsidies of both industries and the additional costs to the taxpayers for the much more expensive, unreliable wind and solar energy?
Posted by: ajax | December 9, 2009 2:50 PM
I would love to see what the state can negotiate for the offshore wind deal. In Rhode Island, National Grid (the major utility) has been trying to negotiate a power purchase agreement with Deepwater Wind; currently, they're trying to solidify a rate of 20-25 cents per kWh (down from a rate of 30 cents per kWh that Deepwater was demanding a couple of months ago). I would expect Bluewater's rate to be similar. Compare to the 10-12 cents per kWh Maryland probably pays now.
Of course, the Bluewater contract would only make up a small portion of the state's load, so the impact of the potentially high wind price would be offset by the "normal' prices the state pays for its other electricity supply. The same principle applies to the other renewable purchases.
Posted by: mdenergygal | December 9, 2009 3:30 PM
How much is it going to cost the state to build levies up and down our miles upon miles of coastline, when global warming causes a 2+ foot rise in sea levels, before the end of this century? People are so concerned about the cost to them of taking care of our environment. Where is the concern for our children and our children's children? Those of you in the media who write about environmental issues, need to stop providing fodder for global warming deniers, and the so called fiscal conservatives who support them. The evidence is overwhelming, the scientific community is unanimous (contrary to popular belief, and the picture painted by the media), and the cost of acting now is much lower than if we keep kicking the can down the road. In many ways spending the money now, may actually help our economy. One way or the other though, inaction is no longer an option. We either address this now, or an awful lot of people in Florida, and quite a few here in Maryland as well, had better start buying boats.
Posted by: CharmCityLights | December 9, 2009 3:54 PM
I think this would be a more accurate post if instead of mentioning just the construction costs/operating costs the economic impact included the excess deaths of Marylanders who die from air pollution. Particulate matter produced from coal or other fossil fuels is associated with significant morbidity and mortality. You have to paint the whole picture and not just cherry pick certain costs and leave other costs out.
Posted by: karl newman | December 9, 2009 4:32 PM
CharmCity Lights, were you one of the people predicting the imminent ice age back in the 70s? Do you think you might want to narrow down your assertion that "the scientific community is unanimous" to something that at least makes sense? The scientific community includes lots of scientists who work in other unrelated areas to climatology, so I'm pretty sure your sweeping statement, although impressive, may be slightly overreaching. I'd be willing to bet there are more than a few scientists, including those who are knowledgeable about matters climatological, who take exception to the alarmist approach that's being wielded like a sledge hammer by guys like you. There's never a true consensus on any issue as monumental as "climate change" or "global warming" (that's right, it's not actually warming since 1998, so scratch global warming). There's always an opposing view, even in the face of the heavy-handed efforts of true believers to squelch it.
Posted by: MarkJ | December 9, 2009 6:22 PM
As Dan alluded to in the first response, in Maryland the 17.1 megawatt solar array will produce only about 2.2 megawatts over the course of a year; this number is a little uncertain because it is impossible to find valid data about how much sunshine there is in our state. Hancock is correct about relative price; according to the American Physical Society it costs 3.5 times more to displace a ton of carbon dioxide production with distributed solar arrays than with new nuclear plants.The only sure way to supply Maryland’s electrical needs without the production of carbon dioxide is nuclear power. It is demonstrably safe, its electricity is less expensive than that from the renewables, and there are methods for the transportation and storage of spent fuel that reduce risk to insignificant levels. Mr. Newman’s concerns about smog and air pollution don’t apply to nuclear power. Maryland needs a clean energy portfolio standard that includes nuclear power in the mix of global warming remedies.
Posted by: NDM | December 9, 2009 10:39 PM
So we build levies? Then we become NO. If the earth wants to encroach water on the coast(s) it will do that regardless of how we mere humans try to defend against it. Because then the gradual encroachment becomes a constant threat of a sudden deluge. That is the future you want for your grand kids and their kids? I do not understand people who think they can control the (overall or general) power of the earth. The earth is a engine that cannot be manipulated the way some people talk about. WE are not all powerful. Given time, this planet is! Think in those terms. What do we need to do to prepare for the future? Maybe move inland more would be a better idea the building levies. Face the facts, the only real approach to a changing environment caused by humans is to REDUCE the number of humans causing the issues. Other than that, I think the earth itself is way ahead of us. All I have seen so far, with the likes of AG and all of the others, is policies and procedures that pad their pockets with the almighty dollar. If you think they have any concern for the people and how these issues may affect mankind well, I feel very sorry for you. Whena person (such as AG) preaches one thing and does the opposite, then they are not to be believed.
Posted by: Mac | December 10, 2009 1:24 AM
What most people fail to look at is the huge amount of land necessary for the photovoltaic array. What can we do, build houses beneath them. You certainly cant farm that land.
Posted by: Skyhawkrg | December 10, 2009 2:09 AM
Adding insult to injury, Gov. O'Malley plans to sign a contract which would have MD Government agencies and U of MD system buy 20% of the electricity generated by the Synergics windplant - which the Public Service Commission only last month gave permission for construction of up to 20 huge wind turbines along the crest of Backbone Mtn in Garrett County. Sadly, this industrial wind energy facility was approved by the PSC despite the public knowledge that the project's construction and operation would harm the only known occurrence in MD of the state-endangered Mourning Warbler, which the wildlife experts working for the MD DNR officially testified before the PSC that Synergics' desired layout of this windplant would put at risk the continued existence of this endangered nesting bird.
By giving financial support to the Synergics windplant, the Governor and his Energy Secretary Malcolm Wolf, as well as the heads of the University of MD system, are further failing to comply with our State's Nongame and Endangered Species Act - which requires them to protect state-listed endangered species - i.e., "...by taking any action necessary to insure that actions authorized, funded, or carried out by them do not jeopardize the continued existence of the endangered species or threatened species...(fide §10-2A-06(c) of this Act)"
Posted by: Dan B | December 10, 2009 8:07 PM
It is worth sharing the results of a recent study by the Investigative Reporting Workshop of American University concerning the huge proportion of taxpayer dollars being doled out to foreign wind energy companies as part of federal stimulus plan - see: http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas . Over 84% of the billion dollars awarded by USDOE for "clean energy projects" has gone to wind energy developers who purchased the enormous and very expensive wind turbines from overseas manufacturers.
Also, Spain is 2nd to the US in terms of generating capacity of wind turbines, and a recent study completed by researchers at a leading University in that country dispells the incessantly repeated claim of wind industry boosters that this form of renewable energy development will spawn a vast number of new "green" jobs. The study found that renewable energy policies in Spain resulted in the loss of more than twice as many jobs elsewhere in the country's economy as were created within the "green energy" sector. Here is weblink to that study's report - http://www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf .
Posted by: Dan B | December 11, 2009 3:16 PM