well said Gregor. I guess that is a point of this post - now is the time for the New Energy Deal. And given the constraints, we can't take baby steps. Obama, and all of us, have to be willing to take risks. I think he knows that, but the electorate doesn't understand how wide the structural problems are, and will probably cry at the first sign of pain...If one understands the Neurobiology of Dread, all we have to do to 'accept' short term pain, is make long term pain seem either higher or unavoidable (broadly speaking):

"Most people don't like waiting for an unpleasant outcome, and want to get it over with as soon as possible," explains Dr. Berns, an associate professor in the Department of Psychiatry and Behavioral Sciences at Emory University School of Medicine. "The only explanation for this is that the dread of having something hanging over your head is worse than the thing that you are dreading. It is a commonplace experience, but standard economic models of decision-making don't deal with this issue.

I have just calculated how much it would cost to produce 24 hour a day electricity in Texas using renewables.

I recently attempted to calculate how much 24 hour a day, 365 days a year renewable electricity would cost in texas. Dr. Ben Sovacool, a renewables advocate, recently offered the figure of $1700 per nameplate KW of wind generated electricity in discussions with me. That figure is probably low. I have reason to believe that the cost of a fully installed windmill in November 2008 is perhaps closer to $2500 per name plate KW, but the lower figure will serve to illustrate my point. If we assume that our project to replace Texas fossil fuel generating plants with renewables by 2030, as the Gore and Google plan would require, how much is it going to cost in Texas? Lets assume that we decide to go with a all renewables system, with wind base power. Assume that the same rate of inflation for electrical generating facilities that we have seen during the last 5 years. That would bring our wind facilities capital costs to $3400 per nameplate KW by the middle of the next decade, and lets assume the system is built then. A stanford study found that only 21% of wind nameplate capacity can be counted as base load electricity. In order to figure the cost of building base load electricity we have to divide the cost of a KW of of wind generating capacity by 21%. That gives a figure of something over $16,000 per KW. But hay, that is not the end of our cost, since the Electrical Reliability Council of Texas says that wind generated electricity cannot be relied on during summer days. So we are going to have to build some solar facilities in West Texas to provide day time solar back up to our wind facilities. Solar thermal facilities are now costing $4000 pre name plate KW in the Southwest. Assuming inflation the same inflation that will impact the cost of wind and nuclear facilities that cost will probably go up to $8000 per KW during the next decade. That gives us a cost of $24,000 per KW of semi-reliable wind and solar generated electricity. Semi-reliable because we know that there will be after dark hours of high electrical demand when our wind system will not be able to supply all the electrical Texas Air Conditioners demand on summer nights. So we have a system that is not 24 hours a day reliable. How much will it cost to give us some assurance that we can keep those Texas air conditioners running 24 hours a day? We could use sodium-sulfur batteries @ $350 per KWh capacity. 4 hours of battery back up brings out price to $25,400 for each 24 hour a day KW provided to Texas by a renewable system. Needless to say renewables advocates have not and will not perform this exercise.

In contrast, the $6000 to $8000 per kW for conventional nuclear power plants at during the next decade looks like a positive bargain, and the possibility that advanced technology reactors can be built at a lower price, perhaps a far lower price, should be intriguing to anyone who is interested in low cost electricity.

Gregor,

when Gail insightfully points out that an accelerated buildout of alt. energy might come under pressure to be accounted for on a cash, rather than on an accrual basis. . .

The result is that we need to ask the funders of both our debt, and our new investments, to give us time.

I would argue that ultimately, it is nature that is giving us a call on our profligate spending ways.

We are used to using accrual accounting, but nature uses only the equivalent of cash flow accounting. There is only so much oil pulled out of the ground each year, and part of it is used for producing the oil. We only have a certain amount left, and it is divided among particular uses. No matter how much we bargain, that is all there is. If we want to spend more oil on making wind turbines, we (the US, or someone somewhere else in the world) have to use less oil on something else.

I see long term debt as less and less of a solution. We know that with peak oil (and peak resources of all kinds and climate change), we will collectively have less and less resources to pay back the debt plus interest than we have now. The probability of default is very high. I see the big crisis that we will be facing now and in the years ahead is the end of long and medium term debt. Debt has allowed us to greatly ramp up demand over what it otherwise would be. We are now seeing the unwind of both debt and demand--hence the big drop in prices.