Judge finds solar power more cost-effective than natural gas

One of the big questions for the twenty-first century is what our biggest source of energy will be. Many are betting on natural gas, because it's cheap and plentiful. Unfortunately it emits dangerous carbon into the environment. The sustainable alternative is solar, but that was deemed too expensive — until now.

A recent court decision in Minnesota, a midwestern US state, may lay the groundwork for many US states seeking to invest in cost-effective energy infrastructures for the next century. Over at Huffington Post, Lewis Milford describes why administrative law judge for the Minnesota Public Utilities Commission, Eric Lipman, decided that it would be better for his state to invest in solar energy rather than natural gas. It's worth reading the judge's reasoning in full:

First, he said that future electricity demand is uncertain, at least in the next five years. In that, he echoes what we are seeing around the utility industry. Power demand is flat or declining. There are many reasons for the fall, but they suggest trouble for the electricity sector. Will electric utilities be able to survive as power demand drops? And most important, what kind of power plants will they invest in, to replace the smaller amounts of power they need - big ones or smaller, distributed ones?

Second, he turned to the current and future carbon regulations that might apply to new fossil plants, including those using natural gas. Minnesota's existing law says fossil plants should not be built unless all renewable power is exploited first. The state's law also says the utility can obtain credits for solar purchases from new solar plants. He then examined how future carbon regulations could add to the price of power from a natural gas plant that would last for fifty years, as compared to a solar plant that has zero fuel costs.

Third, he asked whether it was better to install smaller solar projects to avoid new transmission and distributed lines to serve electric customers. Those avoided lines would save the state over $33 million as compared to a new natural gas plant that would not avoid those costs.

And then last, he asked the most important question, one that might foretell the future of energy policy in the competition of gas and renewable power. And that question was about scale - with the uncertain future of electric load, with the potential for added carbon costs and the real carbon emissions from natural gas, with the costs of new power lines for large plants, would it make more sense to approve funding for a large, central power plant powered by fossil fuel, or to make incremental, scalable investments in solar?

This is how the judge put it when endorsing the solar proposals:

"[T]hese proposals offer competitively-priced energy generation; at firm prices; the fewest new environmental impacts; and significant protections against the imposition of project cancellation costs....[I]t bears mentioning that this procurement represents an important turning point in Minnesota's energy resource planning process. Since 1991, Minnesota has had a statutory preference in favor of renewable energy sources. Yet, that preference is overridden when the nonrenewable source has a lower total cost. Notwithstanding the statutory preference, it seemed that nonrenewable energy sources always won the head-to-head cost comparisons. Not anymore. Geronimo entered this bidding process as the sole renewable technology and beat competing offerors on total life-cycle costs."

This is an interesting argument, and was enough to persuade a public utilities judge in one of the wealthiest states in the US. If the ruling is held up on appeal, we'll have a chance to see what it looks like when a state invests fully in a solar-powered future.

Read more at Huffington Post