Should the power industry adapt its approach to capital markets in this environment? The answer, of course, is yes. Multiple frameworks are necessary to establish a power company’s or project’s...
Bridging the Carbon Gap: Fossil Fuel Use for the 21st Century
widely used high-tech renewable power source both in the United States and abroad. But wind energy carries with it the problems of intermittency and grid management, due to large variations in output. It is possible, however, to store wind power economically by compressing air into underground reservoirs, such as mined caverns, and then recovering it with expansion turbines driven by this compressed air, after heating it with some fuel during periods of low wind velocity. 17 Yet there does remain the question of what the source of this fuel would be in a fully sustainable and carbon emission-free system. It may have to be hydrogen produced with some of the wind power in high-pressure electrolyzers. 16
Also, wind power unfortunately faces strong opposition to the "environmental pollution" caused by wind turbines systems as high as 370 feet, especially in the offshore installations widely used in northern Europe.
In the United States and Europe, wind power is now nominally competitive with other power sources, in part as a result of government subsidies. In the United States, wind power has enjoyed a 1. 7 cent/kWh tax credit, and there are additional state subsidies. It is now a multibillion dollar per year global industry, with about 17,000 megawatts of global capacity as of year-end 2000, using turbines with outputs as high as two MW. 17 The cost of wind power in areas of high average wind velocity has dropped below four cents/kWh, and an eventual level of 3.5 cents/kWh is expected.
One of Europe's largest users of wind power-Denmark-is considering a phase-out of its various subsidies. That stems not only from dispatchability problems, but also because a study has shown that environmental benefits of using wind turbines instead of gas for power generation are far less than the subsidies to wind turbines. 18 Moreover, in high population density areas such as western Europe, where wind turbine farms generally can be located only offshore, the available wind power capacity falls short of total power needs.
In the United States, by contrast, some 95 percent of exploitable wind resources of moderate or better quality are located in the sparsely populated 12 states of the Great Plains, with a generation potential of three times current U.S. capacity. The problem, then, is how to turn this intermittent power source into "baseload" electricity that would justify the construction of costly high-voltage transmission lines to the load centers. 17 The least-cost solution appears to be the compressed air energy storage (CAES) technique noted above. For small, decentralized installations, the new high-pressure electrolytic hydrogen storage technology eventually may also become economically feasible. 16 Of interest is that China has huge, high-quality wind resources in Inner Mongolia, which represent a large fraction of the world's practically exploitable resources (about three times present global generation), but again remote from the major markets. 17
Solar Photovoltaics. One area of high-tech renewable power source development and commercialization in which the United States has taken the lead is photovoltaics. An early, cost-effective application of photovoltaic power would be in areas with moderate to high levels of annual