The problem with the ‘‘portfolio approach’’ in American energy policy

[kristopher]

The problem with the ‘‘portfolio approach’’ in American energy policy
Benjamin K. Sovacool
Published online: 15 July 2008 Ó Springer Science+Business Media, LLC. 2008

Abstract

One predominant theme in American energy and electricity policy is the idea of a ‘‘portfolio approach,’’ or that society must embrace an assortment of different energy technologies simultaneously. This article argues that such a strategy, in practice, is (a) biased, since fossil fuel and nuclear technologies have been heavily favored; (b) opaque, obscuring the different full social costs of energy systems; (c) inequitable, promoting technologies that contribute to climate change; and (d) unsophisticated, ignoring important qualitative differences among technologies. The article estimates the full social costs of electricity generation, concluding that the five cheapest forms of electricity generation are all renewable resources; that intermittency is not a reason to reject renewable energy technologies; that nuclear power has significant technical and environmental problems, especially from a greenhouse gas emissions and climate change perspective; and that ‘‘clean coal’’ and carbon capture and sequestration technologies face significant challenges to deployment.

To repeat:

One predominant theme in American energy and electricity policy is the idea of a ‘‘portfolio approach,’’ or that society must embrace an assortment of different energy technologies simultaneously.

This article argues that such a strategy, in practice, is
(a) biased, since fossil fuel and nuclear technologies have been heavily favored;
(b) opaque, obscuring the different full social costs of energy systems;
(c) inequitable, promoting technologies that contribute to climate change; and
(d) unsophisticated, ignoring important qualitative differences among technologies.

The article estimates the full social costs of electricity generation, concluding that the five cheapest forms of electricity generation are all renewable resources; that intermittency is not a reason to reject renewable energy technologies; that nuclear power has significant technical and environmental problems, especially from a greenhouse gas emissions and climate change perspective; and that ‘‘clean coal’’ and carbon capture and sequestration technologies face significant challenges to deployment.


Download full paper here: http://www.lkyspp.nus.edu.sg/docs/fac/benjamin-sovacool/Published%20Papers/Sovacool-Problem%20With%20Portfolio.pdf

[msongs]

1. in short, energy coprorations want to keep dominance despite obsolete technology, using welfare

subsidies provided by taxpayers to make up losses. AKA privatize profits, socialize costs and losses.

[XemaSab]

2. And how, exactly, would you change this?

Developing wind, solar, tidal, hydropower, and geothermal technologies simultaneously is also a portfolio approach.

No one technology, not coal, not nukes, not natural gas, not anything renewable, will get us where we need to be.

[kristopher]

3. It would do you good to read the paper, it is very clear.

The first three paragraphs of the paper make clear that the term "portfolio approach" refers to a very specific policy approach (elsewhere called the "all of the above" approach). Sovacool takes care to differentiate between that and "the principle of diversification".

Contrary to your claim a grid built around renewable energy sources is not a grid built on "one technology". It is, rather, a collection of technologies that share some common characteristics - the principle one being sustainability. Additionally it is an energy system that is economically conceptualized primarily around technologies that have zero fuel costs.

You really should read the paper. Link to download is in the OP.

All that glitters is not gold, and in the age we live in not every energy technology deserves to be promoted. In the last issue of Policy Sciences, one of Felder and Haut’s (2008) most fundamental themes, crosscutting many points in their article, is the idea of a ‘‘portfolio approach’’ in electricity policy. This notion, that society must embrace all sorts of different energy technologies simultaneously, has four interconnected assumptions:
• A diversified portfolio of electricity technologies is needed to respond to different sets of challenges and problems, some of them unknown;
• All energy technologies, including those on the demand- and supply-side, from energy efficiency and renewables to fossil fueled generators and nuclear power plants, deserve support;
• Energy research and development (R&D) should push breakthroughs on all technological fronts;
• Nuclear and coal have an important future role to play in American and global electricity policy.

Part of this thinking makes sense, as it relies on the principle of diversification to meet uncertain and future risks and deal with unexpected changes in policy and technology. In practice, however, this article will argue that the ‘‘portfolio approach’’ is (a) biased, as such a ‘‘portfolio’’ has penalized renewables and energy efficiency and heavily favored fossil fuel and nuclear technologies; (b) opaque, obscuring the different full social costs of electricity technologies; (c) inequitable, promoting technologies that contribute to climate change; and (d) unsophisticated, ignoring important qualitative differences among technologies.

In responding to Felder and Haut, I have chosen to focus almost exclusively on these points. Given the limits of space, I felt I could either have covered many of the criticisms raised in their article quickly or explored a few of their points in greater depth. In choosing the latter, much of their critique will be answered indirectly, but I apologize if readers feel points raised by Felder and Haut remain unaddressed. I also use the term ‘‘energy policy’’ in the title intentionally rather than ‘‘electricity policy’’ because the type of ‘‘portfolio’’ thinking described above permeates all aspects of energy policy, from work in the buildings and transportation sector to discussions about electric utilities and oil refining. I do thank Felder and Haut (2008) for engaging the ideas presented in my initial article (Sovacool 2007), and I am appreciative to the editors for giving me a chance to respond.

[XemaSab]

4. Nowhere in my post did I say that it was one technology

We can work on developing wind and work on developing solar, but they're not the same at all, and if we work on both at the same time that's a portfolio approach of sorts.

[kristopher]

5. No, it isn't "the portfolio approach of sorts"

It isn't "the portfolio approach" at all.

READING IS FUNdamental
Download full paper here: http://www.lkyspp.nus.edu.sg/docs/fac/benjamin-sovacool/Published%20Papers/Sovacool-Problem%20With%20Portfolio.pdf