Oct. 17 (Bloomberg) -- Arguments for solar and wind power are so enticing (endless availability, no pollution and so on) that it’s easy to see why the idea of transitioning the world economy to alternative energy over the next 40 years keeps gaining favor.
Public discussion often makes it seem as if the only obstacles are efficiency and cost. Photovoltaic solar cells and offshore wind farms can provide power at about $160 a megawatt hour. That’s far costlier than coal-fired plants, which deliver power at about $70 a megawatt hour. That price gap keeps narrowing; it may close completely in a decade or two.
Recent events in Germany, though, highlight a less discussed, but equally crucial, challenge. As Bloomberg News reported recently, German energy prices have begun careening in the strangest ways. Sunny, gusty days generate so much alternative energy that utilities pay industrial customers to take it away. Cloudy, calm weather creates shortages that can send wholesale prices as high as $220 a megawatt hour.
It’s a problem inherent to solar and wind energy. Modern factories and homes want reliable power round the clock; the sun and wind don’t oblige. Without good ways of storing peak output for later release, alternative-energy plants become the most erratic parts of the power grid.
Zigzagging energy prices aren’t just a short-term annoyance. They distort budgets and spending priorities, forcing utilities to spend billions on conventional fossil-fuel plants that are used only part time to ensure steady power when wind and solar are in short supply.
An Elegant Solution
The most elegant solution would be to improve grid-level storage of solar and wind power, so yesterday’s sunshine can continue to yield power during today’s storms. Better storage could provide the steadier energy prices and more efficient power-plant networks that everyone craves.
Achieving next-generation storage will take years. False starts will abound. Partial breakthroughs will need to be freely shared. Such long-horizon projects are anathema to the private sector, but well-suited to government support, with the U.S., Germany, China and Japan leading the way.
Governments worldwide are still trying to figure out the best ways of encouraging alternative energy, and some check- writing to date has been more hasty than prudent. U.S. support for the failed Solyndra LLC solar-cell factory is one prominent example; China’s all-out push to subsidize cheaper production of silicon wafers may be another.
Taking fewer risks on the factory floor, and more in the research lab, would be the wisest use of government money. The U.S. Department of Energy took a step in the right direction last month when it issued a slew of $3 million or smaller grants to labs exploring projects as varied as molten batteries, nanomaterials, high-temperature salts and compressed vapor.
Judicious government backing for such ideas should persist, and even accelerate, worldwide. Alternative energy’s full potential goes well beyond the approaches that are being commercialized today. The sooner that major advances in areas such as storage can be found, the easier it will be to save billions by shrinking the need for backup plants.
--Editors: George Anders, Timothy Lavin
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