Monday, November 21, 2011

Coal and Solar Energy Developments

While politicians in this country grandstand over the bankruptcy of Solyndra, a solar-energy company that received a loan guarantee from the Department of Energy, South Africa is the latest country to see the energy future and act, albeit belatedly, to move toward cleaner sources of energy.  

Eskom, the state-owned South African electric utility, plans to build solar plants at its coal stations.  In the U.S., solar energy is under attack because of the loss from the failure of Solyndra, which while significant at about $500 million, was only about 2.5% of the total loan guarantee program at the Department of Energy.  

Despite the political clout of the fossil fuel industry, renewable energy in the U.S. continues to grow and now exceeds nuclear power as a source of energy.  Coal, whose pollution externalities are not reflected in its price to consumers, must be phased out.  (Remember that there is no such thing as "clean coal," despite the massive advertising campaign of the coal producers.)  

Imagine what progress could be made if the government provided significant, ongoing support for renewable energy sources (as it has done for many years for the oil and coal sectors)?  Though the industrialized world will be reliant on oil for many years, the sooner we can move away from coal the better.  Recent scientific studies add to the incontrovertible evidence of the damage to human health from mercury pollution from burning coal.  

For investors, coal exports may sustain the industry for a while, but in this sector I certainly would not want to invest in the laggards in innovation and would (as I do in other sectors), favor the innovators rather than those who undermine scientific evidence in order to protect the status quo.

Steve Lehman

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