The problem with the “portfolio approach” in American energy policy

Abstract

One predominant theme in American energy and electricity policy is the idea of a “portfolio approach,” or that society must embrace an assortment of different energy technologies simultaneously. This article argues that such a strategy, in practice, is (a) biased, since fossil fuel and nuclear technologies have been heavily favored; (b) opaque, obscuring the different full social costs of energy systems; (c) inequitable, promoting technologies that contribute to climate change; and (d) unsophisticated, ignoring important qualitative differences among technologies. The article estimates the full social costs of electricity generation, concluding that the five cheapest forms of electricity generation are all renewable resources; that intermittency is not a reason to reject renewable energy technologies; that nuclear power has significant technical and environmental problems, especially from a greenhouse gas emissions and climate change perspective; and that “clean coal” and carbon capture and sequestration technologies face significant challenges to deployment.