When The Government Gets Involved, The Incentive For Innovation Goes Down

Yesterday The American Thinker posted an article about the Crescent Dunes thermal solar plant in central Nevada. The thermal solar plant has failed.

The article reports:

Crescent Dunes was a serious project designed to attack the great weakness of solar electricity.  Sunshine is strongest in the middle of the day, but demand for electricity peaks at the end of the day and in the early evening.  This is especially true during the Las Vegas summer, when air-conditioners are running full blast as temperatures soar well past 100 degrees in the late afternoon.

A method of storing plentiful midday solar electricity so it can be utilized in the evening was needed.  Otherwise, solar would hit a ceiling at far less than 50%.  One method is to use batteries.  That is wildly expensive and quite dangerous as the flammable batteries store vast quantities of energy.  That’s not stopping the Gemini project, scheduled for a site north of Las Vegas.  The Gemini solar project will have a $500-million battery system that stores as much energy as 5 million sticks of dynamite (1,400 megawatt-hours).  There have been dozens of fires at similar installations around the world.

The Crescent Dunes project stores energy in the form of molten salts.  During the day, sunshine is concentrated by motorized mirrors aiming beams of sunlight at a central tower, where the liquid salts are heated to a high temperature.  The hot salts are stored in a large tank.  When power is need in the early evening, heat is taken from the tank to make steam and drive a turbine-generator to make electricity.  Crescent Dunes was plagued by leaks in the salt tank, forcing it to close for months at a time.  By contract, the electricity was sold to NV Energy for $135 per megawatt-hour, or about six times as much as it would cost to generate the same amount of electricity in existing natural gas plants.

Crescent Dunes is eligible for the usual government subsidies amounting to around 75% of the construction cost.  It was granted a $700-million government loan guarantee on the ground that it was pioneering, experimental technology, which it was and is.  That problems emerged is not surprising.  That happens to pioneers.  But the not unexpected failures at Crescent Dunes besmirch the propaganda that solar energy is the wave of the future.  Thus, it is necessary to kill Crescent Dunes for the spurious reason that it is obsolete technology.  Like all utility solar, it is useless, but it was an honest attempt to fix the severe problem that solar doesn’t work well late in the day, and not at all after the sun sets.

If green energy were allowed to emerge on its own in a free market, we might have actually solved some of the problems associated with it by now. However, when you introduce government subsidies into the free market, you lessen the drive to innovate. Useful inventions make money for their inventors. That provides incentive to create new ways of dealing with problems. When the government gets involved, those incentives are gone (at taxpayers’ expense).