Nuclear, Silver Bullet or Money Pit

When discussing the "energy crisis," one of main issues is electricity, including its generation and distribution. In the US, electricity is mainly generated by burning fossil fuels, however, nuclear power generates about 20% of nations electricity, with hydroelectric, and to a much smaller degree wind and solar rounding out the list (numbers, source EPA).

When considering what is the most efficient as well as "best" for the environment, nuclear seems to be a pretty good option. Its day to day generation of electricity doesn't produce any green house gases or other pollutants to global warming adherents fear. Were that not enough, the French produce 80% of their electricity through nuclear power. So why not more here in the US? Cheap? No. 100% Free. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com

In the July 7, 2008 print edition of "Business Week," there is an article titled, "Nuclear's Tangled Economics," (which is the source of all quotations in this post). It highlights presidential candidate John McCain's desire to have 100 new nuclear power plants. The article also highlights that current estimates put the cost at new plants at about $7 billion dollars. While that number is expected to grow as the cost of materials to build the plants grow, the question is whether it makes sense for power companies to build them.

One the first issues any such project is going to contend with is the cost of regulation. Fortunately, the US has standards for building new plants, as well as more efficient regulation. However, some power companies have decided to drop their projects. Most notably, MidAmerican Energy Holdings, "... a gas and electric utility owned by Warren Buffet's Berkshire Hathaway, shelved its own nuke plan earlier this year, saying it no longer made economic sense." Protect your Medical Identity with TrustedID. $1,000,000 Warranty & Great Customer Service

While Berkshire Hathaway shareholders should be grateful for the careful financial management of the company, they may also consider that NRG Energy, Dominion Resources, Duke Energy, and "...six other companies have already leaped to file applications to construct and operate new plants largely because of incentives Congress has put in place." The incentives are not just tax credits, but also $18.5 billion in loan guarantees. Considering the status of the credit markets, the loan guarantees can make all of the difference. eFax Annual Subscription

While nuclear energy is clearly one the best, proven, and clean technologies for electricity generation, it isn't without commercial risk. Each power company is going to have to review the risks, their capital positions, and the economic climate to determine is building a new, nuclear power plant is right for the share holders.

Is Solar just Blowing Sunshine?

When initially deciding the four topics to start off my blog, I included solar because of its popularity. Solar energy is a very broad topic and this post is not intended to cover all possible aspects and applications of solar. Instead, I will focus on photovalic applications and not other more sophisticated uses, as many are still in the research phase.

In simple terms, photovalic modules are used to collect solar energy which is then transformed into electricity. This electricity can either be AC or DC. In some instances, such as calculators, garden lighting, and other applications with very low electrical requirements.

However, when compared with traditionally generated electric power, solar is not economically efficient. The US Department of Energy states:

"The cost of larger PV systems (greater than 1 kW) is measured in "levelized" costs per kWh—the costs are spread out over the system lifetime and divided by kWh output. The levelized cost is now around 30 cents/kWh." http://www1.eere.energy.gov/solar/pv_quick_facts.html

As of January, 2008 the US average cost per kWh was 10.2 cents, well below the solar cost of 30 cents/kWh. Again, this figure comes from the US Department of Energy, http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html



So, why is solar so popular? In many respects, it is the new, shiny toy. Also, there is the allure of "free" electricity. However, as the old adage states, "If its too good to be true, then it probably is." One has to recall that to convert one form of energy to another, there is loss. When one burns coal, heat is the main output, true also for any fuel that burns. What makes coal and fossil fuels in general, more efficient is that their combustion creates very high amounts of heat per unit. This heat is generally used to create steam, which then turns turbines (dynamos) to create electricity.

Solar has potential, but at today's cost points, it is only economically efficient in certain applications. Personally, I am renovating my home and looked into solar roofing shingles, as well as other PV collectors. In both cases, their cost well exceeded the benefits. However, a solar-powered attic fan may be just the thing.