As has been documented here, the federal energy program from which the Solyndra investment was made has been a success. The program's losses, including Solyndra, have been much lower than what was expected and the amount for which Congress appropriated to cover the expected loss rate. In addition, most of the investments made--Tesla being one example--have been highly successful.
Add to those successes an innovative 22 megawatt geothermal plant that is now on line in Idaho. The plant was a $130 million project that received a $97 million federal loan guarantee.
http://www.idahostatesman.com/2013/10/15/2815862/loan-program-boosts-us-geothermal.html.
The federal guarantee reduced interest rates on the project to 2.6% and was a major factor in the plant being built and now generating power. The plant's innovative technology increases efficiency by 15% and allows geothermal production in areas with a lower temperature resource.
This exactly is an example of the public-private partnerships needed to commercialize energy innovation that benefits our environment and economy.
The article is not clear at all on how good an investment this is, and what the return on climate CO2 reductions would be.
ReplyDeleteAre geothermal plants 100% efficient? If so, this 22MW plant should be able to produce about 193 million kilowatt-hours of electricity each year. So, if that plant cost $130 million, and only operated for a single year, it would be able to produce at a rate of 67 cents per kw-hr. Ignoring discounting, a 10-year life implies 6.7 cents per kw-hr, certainly cheaper than most sources. My guess is that the expected life of the plant is longer.
Which leads to the question of why this sort of a program needs any loan guarantee in the first place? Second, on what grounds is Tesla successful? Electric cars are over 100 years old, so it's hard to justify public investment on the grounds that this is some sort of a new technology. The cars themselves are still expensive, and the all-in environmental costs of producing, operating and recycling of those cars is not at all clearly better than reasonably efficient internal combustion engine cars? Does the mere existence of Tesla and its sales to wealthy customers imply it is a success?
Finally, how did the entire "fossil" fuel energy and automotive industry get built out when it started? It is a sector with enormous network externalities and coordination difficulties and has a stock value today in the trillions. Was public-private partnership required to do that? What has changed?
This plant will probably operate for 40 years or more. It also has first of its kind technology that expands where geothermal can be done and its efficiency when it is done.
DeleteThe stock market certainly values Tesla as a success. Plus Tesla paid back its government loans with interest years ahead of schedule and is employing directly and indirectly probably as many people in direct, core gas drilling jobs in PA. That adds up to a success to me.
Gas utilities, electricity utilities, roads/bridges all involve public-private partnerships essential to auto industry and fossil fuels.