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Biden’s Energy Speech – What is it Really?

Eakinomics: Biden’s Energy Speech – What is it Really?

For the second week in a row, the Biden campaign orchestrated the rollout of a new part of the candidate’s policy platform with stories in the Wall Street JournalWashington Post, and New York Times, this time for his energy policy. The stories were all keyed to an address by Biden, so I listened to the speech in its entirety. I was especially struck by the assertion that “These aren’t pie in the sky dreams. These are actionable policies.”

Let’s think about that.

The New York Times described that plan thusly: “Joseph R. Biden Jr. announced on Tuesday a new plan to spend $2 trillion over four years to significantly escalate the use of clean energy in the transportation, electricity and building sectors, part of a suite of sweeping proposals designed to create economic opportunities and build infrastructure while also tackling climate change. In a speech in Wilmington, Del., Mr. Biden was building on his plans, released last week, for reviving the economy in the wake of the coronavirus crisis, with a new focus on enhancing the nation’s infrastructure and emphasizing the importance of putting the United States on a path to significantly cut fossil fuel emissions.” Further, The Wall Street Journal (and others) said that the proposal “would attempt to eliminate carbon emissions from the power grid by 2035.” There are two flavors of this goal in the literature: renewables only, and a net-zero emissions grid (i.e. renewables plus nuclear energy and carbon-capture technology).

First of all, let’s be very clear that this set of proposals is not a policy to recover from the ravages of the COVID-19 recession. The time scales are all wrong and, more important, changing the energy portfolio of the nation is a costly endeavor that requires reallocating labor, capital, and innovation. Those reallocation costs – especially getting people to new jobs – will slow the recovery. It was pie-in-the-sky thinking when it was embedded in the Obama Administration American Recovery and Reinvestment Act. It still is.

Second, it is not a move to a 100 percent renewables electricity grid by 2035. The plan is advertised as spending $2 trillion, which is not even close to enough money. The United States would need enough renewable electricity capacity and storage capacity to produce about 1,100 gigawatts of capacity. Solar power can only produce power during daylight hours, and wind power is most efficient at night, so there has to be redundancy. And to implement the redundancy there has to be storage capacity that does not yet exist. Still, using the Energy Information Administration’s capital costs from the 2018 Annual Energy Outlook puts the capacity cost at $5.7 trillion. That leaves out the new storage costs. It omits the operating costs. And it skips over the money needed for the transmission lines to get the power where it is needed. 100 percent…

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2020-07-15 11:18:13

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