I have previously questioned the environmental and economic sense of President Donald Trump pushing the United States into greater coal consumption with the rest of the world developing alternative energy sources. We seem to be pushing a buggy-whip economy as the world and markets pass us by. My greatest concern is the hostility shown by the Trump Administration to new energy sources. A touchstone of the industry is Levelized Cost of Energy Analysis (LCOE) which was used by investment bank Lazard to evaluate the current costs and prospects of different energy investments. It found (as we have previously discussed) that alternative energy costs are plunging and solar energy is now half the cost of coal.
New solar panels are now more durable and function well without direct sunlight, including cloudy days, to produce energy. Lazard found that the cost of producing one megawatt-hour of solar-produced electricity in North America is currently $50, compared to $102 for coal-origination. That is down from 2009 when it would have cost $359 to produce that level of power with utility-scale solar arrays. Wind-power is even cheaper at $45 per megawatt-hour today.
The use of fossil fuels also create huge environmental and health costs. Even if the costs were even, those externalized costs should push our country (as with our allies) toward a huge investment in alternative fuels. This issue is not subsidies (which I generally oppose) but ending the preferential treatment given fossil fuels, including varied forms of government support.
Yet, coal has huge benefits to Congress with the energy lobby and West Virginia still remains a key state for the reelection plans of President Trump. In fights over climate change and environmental legislation, fossil fuel companies and allied transportation and utility companies outspent both environmental groups and the renewable energy industry by a 10 to 1 on lobbying, according to a new study released this week.
The current position of the Administration would not be as alarming if it did not combine the priority given coal with a hostility toward alternative energy sources. The United States needs to be positioned to compete in this global market in the development and deployment of this new technology. Our retrogression on alternative fuels will stand as one of the most self-defeating and illogical policies of the modern era. It could well spell huge costs in our labor and technology markets as well as our environment.