Making the United States the Renewable Energy Capital of the World
Whether you’re a skeptic of climate change and its implications, a climate-change denier, or a die-hard hippy with a flower in your hair, everyone agrees that cleaner air and a minimized human impact on the climate are positive changes that ought to be made.
While there is little the United States can do to impact the dubious practices of third world nations around the world, it can deliver its own hemisphere a clean, renewable, and business-friendly replacement for fossil fuel use.
The goal of this article is to project the capital and operations costs of replacing over 2,650 terawatt-hours of fossil fuel energy production with cheaper, safer, and cleaner nuclear and solar alternatives.
In 2018, the United States consumed 4,178 terawatt hours of electricity. According to the Energy Information Administration, 36.5% of our electric demand was met by either nuclear or renewable sources of energy. It is projected that in 2019, 35% of electricity will be consumed by the residential sector.
Arizona, California, Nevada, and New Mexico are home to the nation’s most valuable energy resource: solar radiation. The great southwest is home to over 200 million acres of solar rich land, garnering from 6-9 kWh of solar irradiance for every square meter. Arizona alone has the solar resources to power the entire continent.
North America will consume nearly 5,000 terrawatt hours of electricity in 2020, with more than four-fifths being consumed by the United States. The southwest states would require between 1.2 and 1.5 million acres of photovoltaic paneling.
The capital cost of utility-scale PV fell by a third in 2016, and saw significant price declines on from 2017 to the early part of 2019, with no signs of stopping. It’s safe to say the early 21st century will see an energy revolution rivaling the latter half of the 19th century when industrial juggernauts like Standard Oil brought the price of oil down by three-quarters.
The above chart shows a very steep drop in the cost of generating electricity through solar photovoltaic. I read similar numbers from the Department of Energy and Energy Information Administration, with the price per kW for solar PV projected to fall by 20% from 2018 to 2020, although thus far solar has seen larger price cuts than have been projected each year.
Unfortunately, the earth spins and the United States faces away from the sun for several hours each day. Suffice to say, it is inconceivable that the United States could store power for several hours of nighttime energy consumption each day. Solar alone cannot power the entire country, and there is simply not enough wind, geothermal, or hydroelectric energy potential available to cover the energy deficit.
This is where we run into nuclear energy. Most Americans are skeptical of nuclear energy thanks to the terrifying consequences of plant meltdowns, which were seen most famously after the 1986 Chernobyl Nuclear Disaster. Thousands were evacuated from neighboring Pripyat, and the ghost town is relatively devoid of any human population to this day.
What most people do not know, is that only an estimated three and a half dozen people died due to cancer and radiation exposure. Chernobyl Nuclear Power Plant saw safety upgrades, and continues to supply power to the Ukrainian electric grid today. Despite supplying nearly one-fifth of the US demand for electricity, nuclear has the lowest mortality rate (deaths/PWh) of any energy source. Even American hydroelectricity had a rate 50 times higher than American nuclear energy. Coal energy production, by comparison, has a mortality rate roughly 100,000 times higher than nuclear energy.
Another misconception is that nuclear energy is not clean, which could not be further from the truth. Nuclear energy emits no carbon or other pollutants, and spent nuclear fuel can be safely disposed of in old mines or newly-built underground depositories. If we get really desperate, I’m sure we could literally shoot the spent fuel into space, although I would concede there are major safety issues with that proposal.
We will need roughly one-third of our 2,650 TWh energy problem taken care of by nuclear energy. To start out, for solar, there are just under 4,000 sunlight hours each year in the southwestern states, we will need about twice as many panels than if we had sunlight 24/7. We will require 2,150 TWh of electricity from solar. This means we need a daytime capacity of 565 GW. With utility-scale PV pricing in at around $1/watt, we have a price of around $565 billion on solar, although in the near future, this figure could drop substantially.
Nuclear is a fair bit more expensive capital-wise. A 2016 report from the EIA estimated a capital cost for utility-scale nuclear power at $5,945/kW. This is between six to seven times higher than utility-scale PV, and about twice as high as residential PV. Producing 500 TWh will require a nameplate capacity of around 57 GW. Thanks to nuclear station’s ability to run 24/7, we won’t be needing twice as much capacity.
This brings us to about $340 billion. Together with solar, we will require roughly $905 billion. When factoring in administration, planning, R&D, and unexpected cost overruns, we may need as much as $1 trillion. This is a one time investment that amounts to a little under 5% of GDP.
Nuclear energy happens to have the lowest O&M cost of any source of energy, according to the EIA. Solar on the other hand, sits a little above average. We could see a decline in electricity prices, although this depends on whether or not we choose to fund the new plants with taxes or utility sales revenue.
The rate at which this investment pays itself off it wholly dependent on how much operations and maintenance costs are reduced, and how quickly they decline in the future. I would expect that, at a minimum, this investment would be fully payed for within 15 years, potentially paying off in less than 10 years.
Now I’ve made the case for green energy from a fiscal and economic standpoint. I am personally skeptical of the impact or severity of climate change, but I would appreciate economic growth and cleaner air. It’s generally better that we humans don’t fiddle too much with the environment, otherwise it may change in unexpected ways which inconvenience us and disrupt our economy.
I believe this plan is feasible, and I look forward to seeing how the private sector improves these technologies. If you’ve taken the time to read this far, I would like to thank you for your open-mindedness and patience.
Cade is a student and Arizona native who has broad interests in law, defense, investing, among other things.