The Costs of Net-Zero Electricity

A s part of the Biden administration’s effort to reduce the carbon dioxide emissions of the United States to zero by the year 2050, the Environmental Protection Agency is preparing regulations that would forbid power plants from emitting CO₂.

According to the New York Times, “President Biden’s administration is poised to announce limits on greenhouse gas emissions from power plants that could compel them to capture the pollution from their smokestacks, technology now used by fewer than 20 of the nation’s 3,400 coal and gas-fired plants, according to three people who were briefed on the rule.”

The reason why less than 1 percent of U.S. power plants employ carbon-capture technology is that it is expensive. The cost of this conversion would be covered by the American public. Readers may be interested in knowing what their bill is going to be, so let’s do the math.

Under the wittily named Inflation Reduction Act, $135 in tax credits will be provided to utility companies for every ton of CO₂ they capture. The U.S. averages 0.855 pounds of CO₂ for every kilowatt hour of electricity it produces. This equates to 2,339 kWh/ton. At $135/ton, this works out to 5.8 cents/kWh.

The average retail price of U.S. electricity is 11.1 cents/kWh. So the Biden regulations would increase the overall cost of electricity in the United States by at least 50 percent, with that portion of the bill being sent to the taxpayers.

In 2022 the U.S. produced a total of 4,243 billion kWh of electricity. Assuming no growth in U.S. electric production, the total tax bill would amount to $246 billion per year.

But wait, there’s more. The $246 billion per year is just the taxpayer subsidy. That won’t be enough to cover the cost of implementing carbon-capture technology. If it were, utility companies would be rushing to take the IRA subsidy and implement carbon capture technology now, without any new EPA regulations forcing them to do so. In fact, the costs would be much greater, and these would have to be covered by increasing utility rates.

To give you an idea of how much higher these rates might be, it should be noted that, as an alternative to carbon-capture technology, the administration is offering utilities the alternative of switching from burning coal or natural gas to burning “green hydrogen” as their fuel, thereby making the carbon-capture technology unnecessary. “Green hydrogen” is hydrogen produced by using electricity generated by solar or wind power to electrolyze water. Solar and wind are the most expensive sources of electricity, but for the sake of argument, let’s assume they can produce electricity at the average rate, 11.1 cents/kWh. The best electrolyzers (which themselves are quite expensive, with prices of about $2000/kW — about the same as an entire gas-fired power plant) have efficiencies of about 85 percent. The hydrogen they produce can then be burned in a gas-fired power plant at about 35 percent efficiency to produce electricity. If you put these numbers together, they more than triple the cost of the power produced.

Between the tax subsidy and rate increases, the Biden initiative could multiply the cost of American electricity as much as fourfold. This would represent a massive, highly regressive tax not only of the American public, but also upon U.S. industry, accelerating the deindustrialization of America, costing millions of jobs, and critically weakening our defense-industrial base.

There is no way to decarbonize America, let alone global civilization, because modern society is based on fossil fuels. As I show in my book The Case for Nukes, despite all the shouting about reducing carbon emissions for the past 30 years, total global carbon use doubled between 1990 and 2020, just as it did between 1960 and 1990, 1930 and 1960, and 1900 and 1930. This happened because all the necessities of life are produced and transported using lots of energy, and people don’t want to be poor. If it were actually implemented as designed, the Biden administration would serve to impoverish America, but the rest of the world, whose average income is one-fifth the U.S. average, won’t follow suit. They can’t, because increasing income for them is a life-and-death question. Crushing the U.S. economy with carbon taxes will slow global progress, however, because America, with 4 percent of the world’s population, produces 50 percent of the world’s inventions. But keeping others poor by destroying ourselves should not be our goal.

Policies designed to make energy unaffordable are unethical and impractical. The world needs a lot more energy and a lot more inventions. A reasonable goal for humanity for the 21st century would be to raise the world average income to current American levels. That will require multiplying global energy generation fivefold.

Climate activists only serve to discredit themselves when they scream “the world is burning up,” when it plainly isn’t. So carbon emissions are not a crisis now. But while global temperatures have only increased by 1 degree Celsius since 1870 — the equivalent of a New Yorker moving to central New Jersey — atmospheric CO₂ levels have risen 50 percent, from 280 ppm to 420 ppm. If we were to quintuple global-energy use while relying on fossil fuels, the acceleration of this trend could seriously impact atmospheric and ocean chemistry.

There is a viable way to deal with this, and that is the widespread adoption of nuclear power –which can make unlimited amounts of reliable carbon-free energy available. Democratic administrations from FDR though LBJ had a leading role in creating and expanding nuclear energy. But since the 1970s, the Democratic Party policy has been to try to kill it through hyperregulation and obstruction on every front. In the ’50s and ’60s, they supported nuclear power because it reduces air pollution. But in the ’70s, the Left was taken over by Malthusians, who wanted to use issues of air pollution, and later climate warming, as clubs for stopping economic growth. They therefore targeted the nuclear industry for destruction. They hated nuclear energy because it solved a problem they needed to have.

Biden has been in public office for the entire five-decades-long span of the Democratic Party’s anti-nuclear crusade. In the early 1970s, the U.S. nuclear industry was getting orders for two new nuclear-power plants every month. If that trend had not been aborted by the Democratic Party’s nuclear-policy reversal, the U.S. electric grid would have been decarbonized decades ago, just as that of France was. His administration now says that carbon emissions are an “existential crisis,” that is one threatening the existence of the human race. Is that sufficient motivation to get him to admit he was wrong?