Go green or save green?

June 25, 2007 11:08 AM

Should I switch to green power, wind power, or whatever is cheapest?

So BGE has just hiked its generation rates to 11.4 cents per kilowatt. Through the magic of deregulation, I have several options if I switch my service provider:

1. 100% Wind Power at 13.9 cents/kW - the most expensive choice, but probably the most environmentally responsible. 1 year term, $75 early termination fee.

2. 100% Green (mix of solar, wind, biofuels, incinerating municipal waste) at 12.9 cents/kW. 1 year term, $75 early termination fee

3. Flat rate at new provider at 10.6 cents/kW - no information on the power source, since I'm in Maryland I assume it's some mix of coal and nuclear. No term.

Factoring in all the fees and tranmission costs, it looks like going with flat rate will save about $5 a month, the "green" option will cost an additional $5 and the wind will cost an additional $10 over my current bill.

So my questions are, what are the arguments for and against paying slightly more for green power? Or should I just go with the very cheapest? I'm aware that wind is probably the best choice in terms of emissions, but I'm wondering if I'm missing something. Is there an argument to be made for the loss in efficiency by paying a higher price for the same product?

posted by electroboy to Home & Garden (24 answers total)

It could certainly be debated whether your midrange option is actually green: biofuels and waste incineration are controversial methods of generating energy. Even wind power is not without its detractors.

Setting aside the "is it really green" question, the other argument would be whether the money would be well spent. Will your paying a premium really promote and encourage the use of wind power? There is evidence that allowing a profit motivation does promote the development of renewable energy. Another thing to investigate is whether your utility earmarks a percentage of the premium towards developing more renewable energy capacity, as some do. You can set this against the question of whether you could apply that money to an environmental cause in a manner that would provide greater benefit - but of course, that's the sort of comparison that is almost impossible to make a convincing case for one side or the other.

Bottom line, if environmental issues arising from power generation are ten bucks a month worth of a concern to you, and you believe in wind power as a technology capable of mitigating conventional power generation's effects, then you should pay the premium, as an apparent and profitable demand for wind energy is likely to increase its development. I don't really get what you mean by a "loss in efficiency by paying a higher price for the same product." Loss in the efficiency of what?
posted by nanojath at 11:36 AM on June 25, 2007

The more people switch over to wind (and to an extent, the other green options), the more wind farms they will build. In the long run this should help drive down prices, since once the initial investment is made, the wind is practically free.
posted by rikschell at 11:37 AM on June 25, 2007

If you buy wind power, you are paying very close to the full cost of the energy you consume.

If you buy cheap power, you are paying some of the price of the power you consume, and forcing the rest of the cost onto others (including your descendants) who unlike you, did not gain your use of and benefit from that energy.

Morally, I don't think it is right to force others to subsidise our lifestyles in this way.

It seems a bit like racking up credit card debt to live beyond your means, except that when you die, the bill isn't written off, but passed on to others to pay.
posted by -harlequin- at 11:40 AM on June 25, 2007

Paying more for wind power now might also make you more aware of how much it's costing you to use power, so you could actually end up using less power - making it cheaper in the long run, perhaps?
posted by mdonley at 12:00 PM on June 25, 2007

Incinerating municipal waste is not green.
posted by look busy at 12:00 PM on June 25, 2007

Isn't this all just a bunch of feel good crapola? You do realize that the electricity coming into your house comes from the closest source, and that company gets paid by whomever you choose be it wind or bicycle power.

IMHO The easiest thing to do to be Green vis a vis electricity is change as many lightbulbs to flourescent as possible, and convince others to do so.
posted by Gungho at 12:25 PM on June 25, 2007

Response by poster: Loss in the efficiency of what?

You can argue that the market is less efficient when you pay a higher price for the same product. The environmental effects are an externality, which you generally don't pay for. The money spent on the wind power premium can't be spent on something else. I suppose that only matters if it's spent on reducing pollution though.

Incinerating municipal waste is not green.

That paper isn't particularly convincing. It may not be the optimal solution, but the question should be is it preferable to using landfills? I don't think "everything should be composted" is realistic or cost effective. Not to mention they define incinerator as "anything that can burn waste", as if electricity is being generated by the tire fire out behind the junkyard.


I guess what my problem is that I would hate to spend the additional money and not realize any benefit. I don't want to give money to feel better, I want my money to actually make a difference. From what I understand, the variability of wind power doesn't make it a scalable technology, so I'm not convinced that promotion of wind power is the preferred alternative.
posted by electroboy at 12:35 PM on June 25, 2007

look busy: that's a criticism of older technology. It does not do justice to more advanced high-temperature approaches.
posted by bonehead at 12:37 PM on June 25, 2007

Gungho, the arrangements for the provision of green power markets are defined by state laws that regulate how power is sourced, how "renewable power" is priced, and how additional revenue from green power markets is disbursed (i.e. a certain percentage of revenue must be applied to increasing capacity of renewable power etc.) Here is some info on specific state agreements on green power markets by way of example. So no, it isn't "all just a bunch of feel good crapola." You can argue about the efficacy, but there is a market-based strategy with the purpose of increasing the use of renewable power sources behind these programs.
posted by nanojath at 12:38 PM on June 25, 2007

electroboy, thanks for the clarification - I admit I don't think my economics are strong enough to judge whether the issue of market efficiency is a strong one or not, but I see where you are coming from. Here is EPA's page on benefits of green power markets - also see my prior link directed to Gungho, maybe you can find some info on your specific state's set-up there if it is a state-defined market. EPA's site has some external links to explore. I doubt you'll get a definitive answer, but at the very least there is some solid theory and evidence that these markets do provide a benefit.
posted by nanojath at 12:45 PM on June 25, 2007

what are the arguments for and against paying slightly more for green power?

For: it's greener.

Against: it might be even more greener to buy the regular electricity and give $10/month to the Nature Conservancy or similar.
posted by ROU_Xenophobe at 12:52 PM on June 25, 2007

Is there an argument to be made for the loss in efficiency by paying a higher price for the same product?

It's not the same product. The bundles of goods are different. Look at your past power bill and figure out what the difference is.

The other thing to look for is whether the wind rate is locked in. If you can lock in that 13.9 cent rate now, you'll probably be better off when greenhouse gases get regulated. This is more important if you're a business, but if you're looking for the economic rationale, it might work for you.
posted by claxton6 at 1:13 PM on June 25, 2007

Here's how one provider explains the market in my state. Among other things: Buying renewable energy does not mean that electricity is coming directly from wind farms or other clean energy sources to your home — it is impossible to specifically direct an electron that travels through the electric grid.

Their main point seems to be that using green/clean energy stimulates demand for the same, and the develpment of green/clean energy sources.

FWIW, I was paying over 15 cents / kWh until recently using the former monopoly electric provider here. I changed to some other company's "clean" plan at 13.6 cents / kWh. I'm happy. Even though it wasn't the lowest cost option available, for me it saves money and satisfies my greener desires.
posted by Robert Angelo at 1:13 PM on June 25, 2007

Response by poster: It's not the same product. The bundles of goods are different. Look at your past power bill and figure out what the difference is.

It's exactly the same. You pay a premium for the manner in which it's generated, but the actual product is indistinguishable from conventional power.
posted by electroboy at 1:35 PM on June 25, 2007

Couple choices from my end. I do green policy and design, and I work with people who are mostly self-sufficient.

Solar generally has a 25 year payback period and a 30 year life expectancy. We're on the brink of big things in solar generation, but we're just not there yet.

Wind...just ain't gonna cut it.

Water turbines are AWESOME if you've got the flow. Chances are, you don't.

Best solutions (from my point of view)
Remodel/rebuild/build using passive solar as your heating option. Use solar water heating for your hot water AND your radiant floors.

Buy a diesel generator and a bunch of go-cart batteries if you want to go off-grid. Rig the generator to kick on during the daytime, what you want is called NET METERING, lots of states have it, lots don't. Basically, it makes it easy to sell back to the grid w/o having to do any crazy synching. Burn the genny all day on biodiesel from waste VO OR old motor oil. (We can debate the green-ness of this later or out of this context, if anyone wants, the field is fascinating.) Spin the meter backwards all day, and/or keep your batteries charged. The thing is that you WANT to be spinning the meter backwards during the daytime, since it's peak hours, and best prices. You want to USE at night, since it's cheapest.

Alternatively, there are companies springing up all over the place who will lock in your energy rates TODAY for 20 years, by installing solar panels @ your house and charging you todays going rate for 20 years. Excellent option if you believe that prices will only go up. (In my area they're actually DOWN from 10 years ago.)

From my perspective, it ALMOST always makes more sense to build NEW and GREEN and sell what you have to someone who doesn't care about energy cost. This is what I will start in the next 12-24 months---building my own house from scratch.
posted by TomMelee at 3:42 PM on June 25, 2007 [1 favorite]

IIRC, one of the flaws cited of 'The Market'(caps intentional) and economics in general is that it deals poorly with intangibles like 'Quality of living', except in after-the-fact rationalizations.(Who knew you could charge 30% more for a MP3 player that wasn't confusing to operate? What units are 'Confusion' measured in, anyways?)

Or, to look at it another way, isn't saying 'We could do it (safer, greener, less wastefully, etc...), but we won't make as much profit that way.' how we got into this mess in the first place?
posted by Orb2069 at 4:23 PM on June 25, 2007

Isn't this all just a bunch of feel good crapola? You do realize that the electricity coming into your house comes from the closest source, and that company gets paid by whomever you choose be it wind or bicycle power.

That's not quite accurate. You're correct that signing up for green energy doesn't mean I can say "every electron coming into my house is from Wind power". However, the electric company does have to put as much wind power into the grid as it's green subscribers take out. Thus, if lots of people sign up for green power, it forces the company to build more wind farms, etc, and stimulates growth in the renewable energy sector.
posted by chrisamiller at 4:48 PM on June 25, 2007

Is there an argument to be made for the loss in efficiency by paying a higher price for the same product?

Yes, and the argument, cogently put forward in The Market System by Charles Linblom is that in fact the real problem is that hidden costs--such as the long term environmental effects of burning coal, for example--are rarely captured in the price of that product. "Efficiency" is an interesting way of looking at the economy but don't confuse it with "energy efficient."

If you go with the cheaper version, the greenest thing to do would be to replace everything in your house that isn't already energy efficient (i.e. lightbulbs, etc) to more healthy variants. You can also start doing things like getting up earlier and taking advantage of natural vs. artifical light, that sort of thing. if you really want to be crazy about it, apparently there's a water heater out there that's 95% efficient (which is way above most) but it costs loads.
posted by Deathalicious at 6:35 PM on June 25, 2007

You are buying a political statement. Since any possible solution to environmental problems will come first from political processes, that isn't an entirely bad thing.

On the other hand, it isn't comparable to appropriate lifestyle choices; going car free, cutting the square footage of your living space, changing your diet, eliminating air travel (and then there is career choice).
posted by Chuckles at 6:53 PM on June 25, 2007

come first second from.. Lifestyle is first!
posted by Chuckles at 6:55 PM on June 25, 2007

From what I understand, the variability of wind power doesn't make it a scalable technology

This seems to be wrong. Denmark has a full 20% of its power coming from wind farms Right This Minute, and are expanding that to 50% over the next 17 years. Their grid hasn't suddenly fallen over - and they are already using wind to the same extent that California is using coal.

How it works: The wind varies locally, and the weather is different from one place to the next, so if instead of looking at the local windspeed, you average the windspeeds from ten, a hundred, (or a thousand!) locations scattered all around the the country, the net variance should be very low. The grid, and windfarms, span the country, so the local variance averages itself out of the equation.

In other words, the more you scale up wind power, the more reliable it becomes. You'll need some hydro to adjust the total load for peak user demand, but hey, that stuff is already installed :)
posted by -harlequin- at 11:00 PM on June 25, 2007

I've heard the same thing as -harlequin- about the scalability of wind technology, that it's more viable as the scale gets larger. That's why I'd buy the wind power. I'd feel like I was helping the technology get over the hump until the scales got tipped and it gained its own momentum.

incineration... is it preferable to using landfills?

electroboy, I'm confused about how you're calculating. From what I've read, eg, incinerating waste is definitely worse than putting it in a landfill if your measure is human health impacts. The way I see it, either the chlorine is contained in the plastic on the toaster, or it's burned and suddenly mobile. It's airborne and breathed in, or ash that lands on things and eventually ends up in our food system. Maybe I'm missing something.

look busy: that's a criticism of older technology.

But do you know the incineration technologies used by the suppliers that BGE authorizes? The article may very well apply to the method being used where electroboy lives. From the little I could find, it sounds like a lot of incinerators in that area have been around for a while.
posted by salvia at 1:53 AM on June 26, 2007

The key thing when considering these schemes is ensuring that when you pay for renewable energy, be it wind or other technologies, is that enough power is generated to meet your needs and that the system isn't set up to allow double counting of the environmental benefits.

Where green certificates are used then for your paying a premium to be worthwhle, the green certifiates should be retired against what you use. If they aren't then you're just paying in to subsidise the power company with no impact on carbon reduction. BGE appear to offer a wind product which has a significant mark-up, potentially they may retire their green certificates at this price, you could check them them.

The other option is schemes where the premium goes into development of new renewable energy schemes, this may well help to stimulate extra renewable capacity and it's certainly possible to make an argument that some of the environmental benefit accrues to you as a result of this payment, though it's unlikely to totally mitigate the carbon output from your energy use.

There's a guide to green power in Maryland here.

Deathalicious is right to suggest you should look into energy efficiency before you consider renewables, it tends to be the most cost effective way of saving energy.

Some other things have been said in the thread that aren't very accurate:

You can argue that the market is less efficient when you pay a higher price for the same product. The environmental effects are an externality, which you generally don't pay for. The money spent on the wind power premium can't be spent on something else. I suppose that only matters if it's spent on reducing pollution though.

The market is inefficient because of the externality. Not having to pay to use the resource of the atmosphere changes the market conditions radically.

Scalability of wind power: The evidence I've seen tends to suggest that wind can be added to national supply systems without additional systems costs until it contributes 10-20% of total electrical generation. (This is the cost of reinforcing the sytem, separate from the cost of buying and installing a wind turbine). This tends to vary by territory, etc. It would be technically feasible to scale up wind beyond 20% but it will tend to mean higher system costs. it is also possible that switching the way that systems are managed could reduce these costs. Denmark has around 25% wind power currently, but this has been manageable because Denmark is part of the Nordpool, an electricity trading and delivery mechanism that also includes Norway, Sweden and Finland. Nord pool allows Denmark to dump excess power from wind on to other systems as necessary. Denmark has also made significant efforts to introduce active management of its electrical networks as opposed to the more traditional passive management that remains the paradigm elesehwere - this may have helped to reduce some of the costs of reinforcing the grid system.
I've not seen any evidence that wind becomes more efficient as it is scaled up, I'd be interested to see some.
posted by biffa at 2:50 AM on June 26, 2007

Response by poster: If anyone cares, I went with the cheapest option for now and I'm going to work on reducing consumption by improving the insulation in the house. I may go with one of the green power options later on.
posted by electroboy at 10:06 AM on June 26, 2007