NYT’s Matt Wald blows the “Alternative and Renewable Energy” story, quotes only industry sources, ignores efficiency and huge cost of inaction

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"NYT’s Matt Wald blows the “Alternative and Renewable Energy” story, quotes only industry sources, ignores efficiency and huge cost of inaction"

[If readers have other good sources and citations for electricity costs, please put them in the comments.]

I have known the New York Times energy reporter, Matt Wald, for 15 years, and generally think he is pretty good. But he has published perhaps the most flawed, inaccurate, and indefensible article in his career.

Wald’s piece could also be a poster child for award-winning journalist Eric Pooley’s searing critique of the media’s coverage of climate economics (see How the press bungles its coverage of climate economics — “The media’s decision to play the stenographer role helped opponents of climate action stifle progress”).

And, amazingly, as we will see, a report by one of Wald’s two industry sources completely disagrees with the report by the other industry group Wald cites! In fact, new Concentrated solar thermal power Solar Baseload is already competitive with new gas-fired generation and likely to have better economics in 2015.

The first flaw is that Wald completely ignores the lowest cost electricity strategy — energy efficiency — even though the article’s headline is “Cost Works Against Alternative and Renewable Energy Sources in Time of Recession,” and a major point of the piece is that “Curbing carbon dioxide emissions — a central part of tackling climate change — will almost certainly raise electricity prices, experts say.”

Wald never tells the reader that until the economic collapse, traditional sources of power have been rising much faster in cost than alternatives (see “Power plants costs double since 2000 — Efficiency anyone?“). He also never mentions that efficiency, which costs two cents to four cents a kilowatt hour (not counting ancillary benefits, including no need for new transmission), is the only new source of power that is both pollution free and far cheaper than current electricity rates (see “Efficiency, Part 3: The only cheap power left“).

The media simply needs to start talking more about electricity bills, which encompassses, efficient use of energy, than electricity rates.

Second, just as Pooley specifically warns against, Wald only cites industry sources for cost — and, surprise, surprise, they have absurd and indefensible numbers. Indeed, the clearest evidence article of bias is the utterly insupportable cost estimate for nuclear power Wald cites from a Black & Veatch study, “a new nuclear reactor, 10.8 cents.

Matt, say it ain’t so. Let’s be clear here. That number is beyond unsupportable. There is not a utility or nuclear power plant provider in the country who would guarantee 10.8 cents/kwh in a Public Utility Commission (PUC) hearing. You would have trouble finding one that would guarantee twice that rate in year one of operation.

Let’s remember that “Turkey’s only bidder for first nuclear plant offers a price of 21 cents per kilowatt-hour.” Moody’s — a far less biased source than Wald cites — puts new nuclear at over 15 c/kwh (see here). Earlier this year, Time wrote “new nuclear energy is on track to cost 15¢ to 20¢ per kilowatt-hour,” and I published a detailed cost study this year that put it at 25 to 30 c/kwh (see “Exclusive analysis, Part 1: The staggering cost of new nuclear power“).

After Progress Energy tripled its cost estimate for its new twin 1,100 MW nukes to $17 billion last year, it warned state regulators its estimate for its planned nuclear facility is “nonbinding” and “subject to change over time” (see my May 2008 report, “The Self-Limiting Future of Nuclear Power“).

I recently debated Anndria Gaerity, Director for nuclear development at PSEG Power, and as anybody who was there can attest, she did not dispute my cost numbers nor the fact that no utility in the country would guarantee lower costs in a PUC rate hearing.

You can safely ignore all of Matt Wald’s numbers in the piece.

Third, Wald ignores numerous other credible sources that give very different cost estimates — including a study by one of Wald’s own sources! He cites Black and Veach that “A modern coal plant of conventional design, without technology to capture carbon dioxide before it reaches the air, produces at about 7.8 cents a kilowatt-hour.”

Well, again, I doubt you could find a coal utility to guarantee that price at a PUC hearing. Moody’s says it would cost more than 11 cents/kwh — and that assumes no cost for emitting CO2, another flaw in the article I will come back to.

Worse, Wald cites another industry study for costs in 2015:

The Electric Power Research Institute, a nonprofit consortium financed by investor- and publicly-owned utilities, predicted in November that even for plants coming on line in 2015, wind energy would cost nearly one-third more than coal and about 14 percent more than natural gas. The cost of solar thermal electricity, made by using the sun’s heat to boil water and spin a turbine, would be nearly three times that of coal and more than twice that of natural gas. (It would be almost double the cost of wind energy, too.)


According to a 2008 Sandia National Laboratory presentation, concentrated solar thermal electric power (CSP) costs are projected to drop to 8 to 10 cents per kilowatt hour when capacity exceeds 3,000 MW. The world will probably have double that capacity by 2013. A 2006 report by the Western Governors Association makes the same point, “that, with a deployment of 4 GW, total nominal cost of CSP electricity would fall below 10¢/kWh.” And that deployment will likely occur before 2015. Indeed, the report noted the industry could “produce over 13 GW by 2015 if the market could absorb that much.”

Or consider work done for the California Public Utility Commission (CPUC) on how to comply with the AB32 law (California’s Global Warming Solutions Act), online here. They put California solar thermal at 12.7 to 13.6 cents/kWh (including six hours of storage capacity).

And one comprehensive collection of different CSP cost estimates (here), notes that in Energy Technology Perspectives (2008), “the International Energy Agency says that CSP plants under construction are expected to generate electricity at between 12.5 and 22.5 US cents/kWh.”

Finally if you really want to see how one-sided and unsupportable Wald’s analysis is, read the 2006 report “Economic, Energy, and Environmental Benefits of Concentrating Solar Power in California,” for the National Renewable Energy Laboratory,” by … wait for it … Black & Veatch:

A comparison of the levelized cost of energy (LCOE) revealed that the LCOE of $148 per MWh [14.8 c/kwh] for the first CSP plants installed in 2009 is competitive with the simple cycle combustion turbine at an LCOE of $168 per MWh, assuming that the temporary 30 percent Investment Tax Credit is extended.

The ITC was extended 8 years in the bailout bill. But it gets better, since this analysis was really aimed at 2015 costs:

CSP plants installed in 2015 are projected to exhibit a delivered LCOE of $115/MWh, compared with $168/MWh for the simple cycle combustion turbine and $104/MWh for combined cycle plants. At a natural gas price of about $8 per MMBtu, the LCOE of CSP and the combined cycle plants at 40 percent capacity factor are equal.

And that is without a carbon price.

So I’m afraid Wald needs much better sources.

[Note: I’m not saying that apples to apples electricity cost comparisons are easy, especially projections six years from now. Only that Wald picked one’s that are one-sided and indefensible.]

Fourth, we are long past the time that a serious reporter can write an article about the cost of carbon carbon dioxide emissions and never bother once to mention any of the costs of not doing so.

Seriously, traditional media, if your cost-of-combating-climate-change articles repeat industry cost estimates, ignore obvious cost mitigation strategies that those writing climate bills have embraced, and never mention the cost of inaction — you are acting like industry flacks.

I guess it is time to repeat the key conclusions from Pooley’s “analysis of news articles published in national and regional newspapers, wire services, and newsmagazines between December 2007 and June 2008″ for Harvard’s prestigious Joan Shorenstein Center on the Press, Politics and Public Policy (see here):

  1. The press misrepresented the economic debate over cap and trade. It failed to recognize the emerging consensus … that cap and trade would have a marginal effect on economic growth and gave doomsday forecasts coequal status with nonpartisan ones…. The press allowed opponents of climate action to replicate the false debate over climate science in the realm of climate economics.
  2. The press failed to perform the basic service of making climate policy and its economic impact understandable to the reader and allowed opponents of climate action to set the terms of the cost debate. The argument centered on the short-term costs of taking action–i.e., higher electricity and gasoline prices–and sometimes assumed that doing nothing about climate change carried no cost.

Sound familiar.

The end of Wald’s piece is unintentionally ironic:

No one likes higher bills. But the pain might not be shared equally: despite modest rate breaks for low-income customers, poor people spend a higher portion of their income on electricity than the rich.

First off, Wald inappropriately switches from talking about prices to bills here. Because of the aggressive energy efficiency strategies that Obama and Congress are pursuing, bills can stay relatively flat even as rates go up. But Wald has omitted any discussion of efficiency, so he should not have used the world “bills” here.

Second, regressivity exists only if the country doesn’t take the actions Obama and Congress have promised. But they have significantly ramped up funding for low-income weatherization, and they plan to use revenues from a cap-and-trade to pay for a tax cut for middle- and lower-income people.

“There are great benefits to the use of alternative energy,” said Jonathan Mir, co-head of the North American power utilities group at the investment bank Lazard.

But if Congress neglects the social issue, Mr. Mir said, a change in policy could fall hardest on those without a safety net.

Again, why is Wald quoting some industry source when Congress has already begun acting on the social issue? If Wald is going to write these incredibly stovepiped articles, where he doesn’t talk about global warming impacts or do any political reporting, then his articles will be less than helpful, and filled with biased quotes. But I love the final line.

“If it is deployed in an uneconomic way,” he said, “it is quite regressive in nature.”

In nature, what is regressive is a species using up all of the planet’s nonrenewable resources (water, fisheries, arable land, and so on), destroying a livable climate, and generally accelerating the extinction of most species on the planet. That is about as uneconomic as you get (see “Is the global economy a Ponzi scheme?“)

See also the Jerome a Paris post on DailyKos, which especially focuses on windpower economics, “NYT repeats coal talking points, try to sabotage Obama’s green energy plans.”

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18 Responses to NYT’s Matt Wald blows the “Alternative and Renewable Energy” story, quotes only industry sources, ignores efficiency and huge cost of inaction

  1. James Newberry says:

    Mr. Wald, who I also feel has done admirable work in the past, has overstated the the cost from solar photovoltaic installations by about one hundred percent in his current article in Scientific American magazine.

  2. The 2006 Black & Veatch study you cited (http://www.nrel.gov/csp/pdfs/39291.pdf) goes on to point out that

    “In terms of economic return, for each 100 MW of installed capacity, the CSP plant was estimated to create about $628 million in impact to gross state output compared to an impact of about $64 million for the combined cycle plant and $47 million for the simple cycle plant.”

    *Over ten times the jobs and tax revenues when you build solar thermal plants instead of fossil-fired plants.* And competitive electricity prices for the first plants built in 2009 with ongoing cost reductions.

    As the solar thermal power industry moves to volume deployment, costs are projected to decrease.

    “With technology advancements, improvements to CSP construction efficiency, and with higher gas prices consistent with 2015 MPR projections, CSP becomes competitive with combined cycle power generation ($115 per MWh vs. $119 per MWh, even with the permanent 10 percent ITC). Most of the economic and employment advantages are still retained.”

    Note that the study was written before Senator Reid extended the 30% investment tax credit for 8 years, and President Obama made it a fully refundable credit for plants beginning construction before the end of 2010. As a result, solar thermal power will be cheaper than the study projects.

  3. robert funicello says:

    Freeman Dyson’s ill informed views were over sold and glorified in the NYT Magazine and Wald pens a very misleading think piece on energy costs all on the same week end. I suppose its just a coincidence.

  4. DB says:

    In the real world renewable projects are being cut back. For example, from the Times of London:

    Green energy plans in disarray as wind farm giant slashes investment
    http://business.timesonline.co.uk/ tol/ business/ industry_sectors/ natural_resources/ article5977714.ece

    Britain’s ambition to become a global leader in renewable energy suffered a major setback last night when the world’s biggest investor in wind power said that it was slashing its investment programme. The announcement comes less than two months after ministers backed a string of huge gas-fired power stations, prompting concern that the Government cannot fulfil its promise of a green energy revolution.

    Iberdrola Renewables’ decision to cut its investment in Britain by more than 40 per cent, or £300 million — enough to build a wind farm powering 200,000 homes — is the latest obstacle to Gordon Brown’s target of generating 35 per cent of the country’s electricity from renewable sources by 2020. Lifting it to that level from the current 5 per cent would cost an estimated £100 billion. But wind energy investments have collapsed as funding dries up in the credit crunch and the price of oil, gas and coal has fallen. Delays obtaining access to the national grid and planning permission have compounded the industry’s woes.

    Shell and BP have shelved or pulled out of renewable energy projects, including a £3 billion project for 341 turbines in the Thames Estuary, and questions have been raised over the future of npower’s £2.2 billion Gwint y Mor farm off the Welsh coast.

  5. ecostew says:

    My take:

    Wind: ROI 4-8 cents/kWh & potentially 3-10
    Concentrated Solar: ROI 12-34 cents/kWh & potentially 4-20
    PV: ROI 11-160 cents/kWh & potentially 5-25
    Geothermal: ROI 2-10 cents/kWh & potentially 1-8
    Natural Gas: ROI 5.25-5.8 cents/kWh
    Nuclear: ROI 5.93-6.7 cents/kWh – new more costly
    Hydro: ROI 2-10 cents/kWh
    Coal: ROI 4.2-5.31 cents/kWh & potentially 4

    [JR: Uhh, this is meaningless crap that appears to be a cross between mixing apples and oranges and making stuff up.]

  6. We should remember that rationalization and denial are human coping strategies. Not all denial comes from Exxon cash. It is also natural way of dealing with an unpleasant future. One reason why a very simple PR nudge can be so effective.

    We all want to see the best news, the most positive outcome. Wald wants to write it, and NYT readers want to read it. It may not have been intentional, but it does not serve the best interests of the public to serve up too much of that.

    NYTimes editors have a lot of work to do to correct these errors.

  7. Andy says:

    The article is beyond absurd. Why is it that reporters don’t talk about what really drives up electricity bills? Not sexy enough? Might tick off an advertiser? Doesn’t play just right into the prevailing conventional wisdom? Maybe they just feel that there is nothing that can be done about it? I’d really like to know what goes through a reporter’s head when they are pitching a story like this to their editor.

    My bills are very high because our legislature has castrated our PUC. It’s pretty simple.

    Why is ok to allow my bill to increase 30% to allow an electricity generator to pay off debts incurred during construction of a way over cost nuclear power plant from which I receive no juice; but not ok to allow it to increase a single penny to save the world?

  8. “According to a 2008 Sandia National Laboratory presentation, concentrated solar thermal electric power (CSP) costs are projected to drop to 8 to 10 cents per kilowatt hour when capacity exceeds 3,000 MW. The world will probably have double that capacity by 2013.”

    It’s looking like California might have that much CSP by 2013, if my numbers for agreed on plants are correct. Brightsource alone just signed for 1.3 GW. And I believe 2 GW had already been agreed to, with various companies. I’m not sure how much of that has full govt. approval etc.
    Or how much the credit crunch is slowing this down.

  9. David B. Benson says:

    Busbar costs of electricity:


    Busbar (generation) cost in cents per kilowatt-hour in 2008 dollars:

    Biogas: 8.552
    Wind: 8.910
    Gas Combined Cycle: 9.382
    Geothermal: 10.182
    Hydroelectric: 10.527
    Coal Supercritical: 10.554
    Coal Integrated Gasification Combined Cycle (IGCC): 11.481
    Solar thermal: 12.653
    Nuclear: 15.316
    Biomass: 16.485
    Coal IGCC with Carbon Capture & Storage (IGCC with CCS): 17.317

    Study was commissioned by the State of California

  10. ecostew says:

    Actually Joe – It is the current info – if wrong, please put some numbers our there.

  11. ecostew says:

    And Joe,

    Line by line – you owe it!

  12. I don’t understand Joe’s furor against this article that only states the obvious evidence that the present low price of carbon fuel strongly hits the profitability of the renewable sector. It is less expensive to throw CO2 in the atmosphere than to CCS it.
    It is a new basic evidence that we must put a price on carbon if we really want to head our society toward a low carbon economy, the more independently with the variations of the oil market so far.

  13. NFJM says:

    Sad that he is either himself not able to understand the difference between a PRICE and a COST or misleading his readers by not explaining the difference.
    Off course the price of electricity per unit has to go up! That does however not mean that the cost per unit of energy service increases.

    MOST energy efficiency measures have a payback period lower than 4 or 5 years…. that is roughly 20% return on investment.

    Yes US citizen, your house especially your kitchen is full of attractive investment opportunities!

  14. Eli Pollak says:

    I emailed Matt Wald criticizing his article a little and sent him a link to Eric Pooley’s paper. My email was pretty contentless because I figured he would never see it, but he ended up responding. His response was very disjointed, and somewhat odd. I’m attaching it here:

    Mr. Pollak,
    Thanks for your e-mail.
    I’ve seen this Shorenstein Center article. It makes some good points but I see some shortcomings. It notes that no one expected Lieberman-Warner to pass, but misses a key point, not even Lieberman or Warner expected it to pass. It was a quick attempt to test the waters. It should be seen that way.
    I don’t know if Mr. Pooley is right that this is THE issue of our time. It’s a little like the movie review on January 2 that describes the best movie of the year. And I recognize the “balance as bias” argument. If you’re interested in that problem, you might look up Dr. David Michael’s recent book, “Doubt is their product.”
    But I do know that policy proposals made without regard to cost don’t do very well. I don’t know how far back you go in this field; remember EPACT 1992? By the year 2000 (so long in the future then that we always called it “the year 2000,” and not just 2000) ten percent of our cars were supposed to be able to run on something besides gasoline. Shifting economics doomed it; by the time we got to 2000, the fraction of cars that could run on an alternative fuel had actually declined.
    I don’t do most of our climate debate coverage; Andy Revkin does. But I keep a close eye on the energy side. At the moment I don’t see a consensus around the world for carbon limits; we might get carbon GOALS in this country, but actually meeting them is a different issue. States with renewable portfolio standards are already falling short.
    Matt Wald

  15. J4zonian says:

    Mr. Pollak,

    T’weren’t so much shifting economics as shifty auto companies that have so far shift-canned alternative fuels. Pretending to work toward effiency or other goals, all the while it is readily apparent that the efforts made cannot possibly attain the stated goals is hardly unique to the auto industry as a tactic but they certainly have perfected it. Their expenses, business plans and relative success all make clear they put more stock in lobbying, campaign contributions and out and out bribery and intimidation than in technological progress. They always have, as shown by the course of the development of seat belts, head rests, catalytic converters, and air bags. Energy is no different.

  16. russ says:

    Just for the record the electricity cost here in Turkey (as of the last bill a few days back) is 0.2493 kurus or at the present exchange rate 14/6 cents US.

    When comparing cost between solar, combined cycle natural gas fired turbines etc. it seems it would be best to remove the solar tax credits/benefits – they are a real cost.

    I think it should be made clear to everyone that the costs and benefits of wind and solar have nothing to do with residential production. In that case wind (residential style) will never be profitable and residential solar is probably in the same boat. Commercial production for either is attractive.

    Energy efficiency is the prime target – the easiest and most cost effective just as long as the government doesn’t do it for us.

    A CO2 penalty (say tax) for not just power but for every consumer item is the only way forward.

    I am totally against carbon cap & trade. I personally have seen how that works in Asia. A company I worked for there considered it similar to milking the neighbors cow. You can get anything certified by the government with little expense there.

    Matt Wald is very correct on the point about goals – just think about Pelosi and the carbon neutral house of reps program which she just dropped. Got good press and then decided it was too much trouble so she quietly dropped it.

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  18. Anti-Karvounos says:

    Wald has been systematic in minimizing the health savings from the averted pollution that will result in health savings. NOx and SO2 emissions are reduced but not set at zero and they still kill and get people sick. The US Army Corps of Engineers calculated that Cape Wind will save $54 million a year from reduced asthma, bronchitis and premature deaths. Of course as oil became expensive and more natural gas displace it the health saving will be less because natural gas is safer but not harmless and health savings may be reduced to 13 million a year. However as oil prices went down potential natural health savings went up again. This is .8 to 3.5 cents per KWH or well documented savings. It does not real costs that the consumers pays for losses to agriculture, forestry, and car and building finishes due to acid rain.

    Wald has reported uncritically the American Academy of Science report on wind energy that made pegged the reduced health savings on pollution controls that had been legislated but what not implemented BUT by a sleight of hand they did factor in the extra cost of the electricity if pollution control was implemented not to mention how many times in the past power plants failed to comply with pollution controls that had been legislated?