The Economics of Green Energy

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Back in the old days of sustainable energy, circa 2000, the cost of switching to solar or wind was so expensive that only the well-intentioned considered it – and only the very wealthy could afford it.

How times have changed! Nowadays, utility-scale solar power and wind power are cost-competitive with utility-scale coal-fired and nuclear electrical power generation.

And obviously, solar and wind are much better for the environment.

That’s not to knock coal, which has provided reliable power for decades and still has a great future in Coal to Liquid fuels – that is, coal processed into extremely pure transportation fuels. Gasoline for your car, diesel for cars, trucks and ships and jet fuel are all created from coal using CTL technology.

South Africa’s SASOL have been using CTL technology since 1955 and 30% of all the transportation fuels in that country are made from domestically-sourced coal. No alterations to vehicles or aircraft are required to use fuels made from coal as CTL technology produces almost laboratory-quality fuels.

However, electrical power generation using raw coal releases billions of tons of CO2 and carbon monoxide, along with huge amounts of hydrogen sulfide, arsenic, lead, cyanide, sulfur dioxide, nitrous oxide and other toxins into the atmosphere every year – which easily cross state lines, national boundaries and even the oceans before settling in both populated areas and farmland.

One brand new coal-fired plant per week is completed and goes into service in China these days and this has been the case since late 2008.

In 2010 for example, China operated 620 coal-fired power plants which burned over 3 billion tons of coal per year. The CO2 emissions alone from coal-fired electrical generation in China surpassed 7.2 billion tons that year.

Which leads to higher health care costs in both the developing world and in the developed world. According to

“China faces a number of serious environmental issues caused by overpopulation and rapid industrial growth. Water pollution and a resulting shortage of drinking water is one such issue, as is air pollution caused by an over-reliance on coal as fuel. It has been estimated that 410,000 Chinese die as a result of pollution each year.”

In addition to being cost-competitive with coal, solar and wind are also cost-competitive with nuclear at the per-gigawatt price. In the case of solar and wind power there is no need for spent-fuel storage, as some types of nuclear fuel rods must be stored in terrorist-proof bunkers and be constantly-cooled 24 hours per day/365 days per year for up to 20,000 years – without any interruption lasting longer than 36 hours. The cost of just one failure here would be catastrophic.

Nuclear power has been statistically safe – with only one serious incident about every ten years on average. However, we have seen deaths caused by exposure to radioactive emissions from nuclear power plant accidents and indirect adverse health effects on population centres near nuclear disaster sites. Some particles remain radioactive at toxic levels for many decades.

Which leads to higher health care costs in many nations as the wind can carry radio-isotopes thousands of miles – just as it can carry toxic gasses and heavy metals produced from coal-fired power generation for thousands of miles.

For a recent example of the costs of nuclear accidents, the cost to clean up the Fukushima disaster had been estimated at between $15 – 45 billion dollars, but more recently a $50-100 billion dollar price-tag has appeared and full decommissioning may take until 2030 to complete. The Japanese government is covering all the costs of decommissioning the Fukushima nuclear site. Which means Japanese citizens will end up paying the final amount through taxation.

From the perspective of taxpayers everywhere, which bear the brunt of health care costs and disaster mitigation, the full cost of a given kind of fuel must include the costs of all adverse health effects, deaths, damages and lost productivity caused by each kind of fuel.

Which is why solar, wind and biomass are still the better deal by far – even at the same per-gigawatt price.

John Brian Shannon is a writer who lives on Canada’s west coast. Green energy, sustainability and economics, are his favorite blog topics. His articles appear in the Huffington Post, EnergyBoom, Arabian Gazette and other quality publications. John believes it is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers. Check out John’s personal blog at

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