Dethroning Old King Coal

blog by epcm world contributor  Nikki Fotheringham

Renewable energy is not only cleaner, but cheaper too

In the power generation industry, fossil fuels have traditionally been used to meet the spikes in power demand over and above the base load. Increased sabre rattling from the environmental sector and revelations about the true costs of fossil fuels has most governments considering the switch to renewables. This move is often put off due to the costs of installing new infrastructure. However, fossil fuel use harbours many hidden costs that, when taken into account, make renewables a logical option. But just how much would it cost to make the switch?

The true cost of fossil fuels

The fossil fuel industry has enjoyed unprecedented perks that through government subsidies and tax breaks. Their security needs are seen to by the military and when disasters do occur, they turn to the government to help pay for the cleanup. In his new tome to renewables, Greedy Bastards, author Dylan Rattigan calls it an "unholy alliance with government based not just on the money that they contribute to political campaigns and spend on lobbying but on their ability to hypnotize us with false prices.” A recent Environmental Law Institute study claimed that fossil fuel industries receive subsidies to the tune of $10 - $40 billion a year. Between 2002 and 2008, $72 billion found its way into their coffers.

Handouts are only a small fraction of the fossil fuel costs borne by the unwitting tax payers. A National Research Council investigation estimates that healthcare costs which result directly from air pollution, caused by the burning of coal, cost the tax payer $120 billion a year. A Harvard study on the medical effects of using coal was even more alarming. Said head researcher, Dr. Paul Epstein; “Between the land disturbance, the mountaintop removal, the processing ... and the combustion, we estimate that this is costing the American public somewhere between a third to half a trillion dollars in health costs and deaths." When the American Economics Review took all of the costs of coal into account, they discovered that electricity generated by coal actually cost more than it was worth.

The road to renewables

In Ontario we currently have about 2,000MW of installed renewables and about 3,500MW of coal. For renewables to overtake coal as the energy source of choice, massive investment in green energy projects would have to be made.

Replacing fossil fuel power with wind power would require about 1,750 new wind turbines rated at 2MW. If each turbine costs around $3.5 million, the necessary investment would exceed $6 billion, less transmission and distribution installations.  This may seem high, for a source of energy that is inconsistent. However, when you look at the true cost of fossil fuels, renewables begin to look like a far more attractive option.

The cost of coal power production in Ontario costs around $46/MWh, and with a total annual production in the province of 4.077 TWh at a cost of $187 million a year. Add to that $3 billion in healthcare related fees due to air pollution. If coal were to be replaced entirely by wind power, those same 4.077 TWh’s of coal generated energy would cost around $550 million (@ $135/MWh). Although this is more than the $187 million that we currently pay for coal, we would be saving $3 billion a year in healthcare costs. Perhaps it’s time to invest in green, if for nothing else than to save some green.