Re: Fuel costs and the competition with Coal & Natural Gas...
What you're describing is exactly the reason (from my perspective) that incentives for solar, wind, etc. exist... The up-front costs of R&D for new technologies, particularly those with long payback periods and uncertain progress milestones, are not well-provided for in a marketplace that isn't pressured by high costs of existing solutions. Without pre-emptive investment in alternatives, we'd just burn coal until we literally ran out, and there are significant economic and environmental consequences of proceeding in that fashion.
Beyond the basic subsidy concern, the cost of coal, natural gas, etc. is all-in. What we have to measure is not just the cost of replacing fuel in existing plants. What we have to measure is the lifetime cost of installing new capacity. We're turning on new power plants worldwide at a truly astonishing pace. I would like as few of those to be legacy technologies as possible. The trend towards new installations being solar comes from the latest Bloomberg energy forecast. [1]
The "we can't just do solar - what about nighttime" argument (and the same for wind, on a still day) is an acknowledged limitation that is being circumvented by battery storage, decentralized grids, and other infrastructure investments (witness the SolarCity/Tesla model where everyone has a battery pack on their home, much like you keep a propane tank on your off-grid homestead, as one example). It will never be the case that the shadow from a cloud interrupts your triple-bypass surgery, just as generators would currently take over in a brown-out on the current grid.
Re: dynamic market vs. stodgy old companies... My view is that people/companies respond to incentives at different rates and sensitivities. You can have a market swinging towards electric cars (GM is happy to sell you a Volt, Nissan the Leaf) and still have a company like Chrysler/Fiat dragging its feet. Regulatory pressures, be they a gas tax (I'm not a fan - too regressive), an electric car mandate, tax and commuting incentives for drivers of efficient cars, etc. are designed to serve as mobilizers for even those companies that are too mis-managed to follow the over-arching trend of the markets. This is how we get things to move faster in our favor, particularly when there are significant downsides to staying the course re: air pollution, environmental degradation, climate change, etc. Whether the price of gas rises due to taxes or swings of the oil industry, I'm indifferent - the price hike has the same effect on incentives. The only benefit to a gas tax (which, again, I'd rather avoid since it hurts the poor), is that when the price of oil goes down occasionally, the price of gas stays at the same high level. It reduces uncertainty in the market and allows everyone to uniformly plan for an economy that must absorb those high costs.
Re: Fuel costs and the competition with Coal & Natural Gas...
What you're describing is exactly the reason (from my perspective) that incentives for solar, wind, etc. exist... The up-front costs of R&D for new technologies, particularly those with long payback periods and uncertain progress milestones, are not well-provided for in a marketplace that isn't pressured by high costs of existing solutions. Without pre-emptive investment in alternatives, we'd just burn coal until we literally ran out, and there are significant economic and environmental consequences of proceeding in that fashion.
Beyond the basic subsidy concern, the cost of coal, natural gas, etc. is all-in. What we have to measure is not just the cost of replacing fuel in existing plants. What we have to measure is the lifetime cost of installing new capacity. We're turning on new power plants worldwide at a truly astonishing pace. I would like as few of those to be legacy technologies as possible. The trend towards new installations being solar comes from the latest Bloomberg energy forecast. [1]
The "we can't just do solar - what about nighttime" argument (and the same for wind, on a still day) is an acknowledged limitation that is being circumvented by battery storage, decentralized grids, and other infrastructure investments (witness the SolarCity/Tesla model where everyone has a battery pack on their home, much like you keep a propane tank on your off-grid homestead, as one example). It will never be the case that the shadow from a cloud interrupts your triple-bypass surgery, just as generators would currently take over in a brown-out on the current grid.
Re: dynamic market vs. stodgy old companies... My view is that people/companies respond to incentives at different rates and sensitivities. You can have a market swinging towards electric cars (GM is happy to sell you a Volt, Nissan the Leaf) and still have a company like Chrysler/Fiat dragging its feet. Regulatory pressures, be they a gas tax (I'm not a fan - too regressive), an electric car mandate, tax and commuting incentives for drivers of efficient cars, etc. are designed to serve as mobilizers for even those companies that are too mis-managed to follow the over-arching trend of the markets. This is how we get things to move faster in our favor, particularly when there are significant downsides to staying the course re: air pollution, environmental degradation, climate change, etc. Whether the price of gas rises due to taxes or swings of the oil industry, I'm indifferent - the price hike has the same effect on incentives. The only benefit to a gas tax (which, again, I'd rather avoid since it hurts the poor), is that when the price of oil goes down occasionally, the price of gas stays at the same high level. It reduces uncertainty in the market and allows everyone to uniformly plan for an economy that must absorb those high costs.
[1] http://www.bloomberg.com/news/articles/2015-06-23/the-way-hu...