Arizona's First Political Blog
E-mail Anonymous Mike at zonitics4-at-yahoo.com
By Anonymous Mike, pseudonymously.
Monday, February 25, 2008
Sunshine of My Love
Over a late afternoon coffee and whiskey, a good friend of mine reviewed his criticisms of the Solana solar deal that I linked to last week:
1) As solar thermal energy (the type of solar technology used at Solana) has much lower operational costs than traditional power plants, the trick to making the project work from an investment perspective is to manage the cost of money in the construction of the plant itself. His point is that while the APS contract is valuable, in order to show a guaranteed cash flow to both secure and pay off loans, the critical part to making the project work is the federal tax credit that would pay 30% of the construction costs.
2) While we discussed the high cost of electricity of Solana, he noted the kicker; APS fully expects government regulation through cap and trade of carbon that would make Solana electricity price competitive.
He then added (and I'm paraphrasing as the 3rd Maker's mark was taking hold), "Government money to make plant construction profitable, government regulations to make the the produced electricity cost competitive.... does this make solar power a special interest?"
His final point was the best one. He notes that each proposed energy alternative to taking oil out of the ground has a down side. Biomass is not an efficient source of energy and takes up cropland that could otherwise be used for food production. Wind farms take up space, deface the landscape, and chop up birds. Solar energy is expensive and takes up tons of space. Nuclear energy is over-regulated, has a waste disposal problem, and everyone is scared stiff of the stuff after 30 years of scare mongering. Coal produces gobs of carbon and sulfur; the good stuff that doesn't is largely locked up under Grand Staircase-Escalante National Monument. Tar sands and oil shale involves large scale strip mining. Do I need need to mention hydro?
Each proposed technology has a definite downside in terms of environmental impact. Given the neat intersection of government regulation and subsidy, the ability of environmentalists to tie up various projects across the country through litigation and special interest politics, and the current hysteria of environmentalist alarmism my companion wonders if any technology would be seen as "acceptable."
He notes that the progress of human civilization is directly tied to the use of stored energy and that the acquisition and use of that energy has always had an environmental impact. What politician, he wonders, will be an adult and stand up for cheap and available energy?