Question

Wind and solar energy are “clean” ways to generate electricity, although we tend to forget about pollution created in the production and disposal of equipment and we may overestimate their value due to grid - related requirements . Discuss both factors and how we might structure policies that would lead to efficient investment decisions.. (An answer would discuss the intermittency of these power sources and the need for (ii) more expensive transmission systems ; (iii)) need for more back - up , either batteries or traditional power plant ; (iiii)) pollution that is related to production and disposal of batteries and solar cells production . These costs could be offset by demand - side policies and by electricity prices that reflect full social costs..))

5.. Carbon dioxide emissions per KWH for coal - generated power is about 2.5 lbs , for gas about 1.0 lb.. and for solar and wind,, 0.. The carbon dioxide emissions from a gallon of gasoline is 20 lbs.. Suppose an electric car goes 45 miles for 10 KWH.. When will this car be cleaner – in terms of greenhouse gas emissions – than a standard gasoline - burning car,, and when won ’ t it?? (AAn answer would include:: ( i)) comparison of emissions,, which depends on the fuel efficiency of the gasoline car – if it goes 45 mpg,, then the car would emit 20 lbs,, which compares well to electricity generated by wind,, solar,, and gas,, and not as good as electricity from coal.. If the gasoline car gets 20 m gp,, the calculation changes,, and if it gets 90 mpg the comparison changes again.. The second part of the answer would then discuss the electricity system,, whether you charge the car during times of day that renewable power is available , and policies to encourage people to tailor demand to supply .))

Suppose the energy gap is real. (Energy saving technology exists where the real savings in energy costs exceeds the increase in purchase price over the inefficient alternative, yet people don’t buy it.) Give 3 reasons why the gap is consistent with economic reasoning (behavioral economics arguments accepted). Explain why the gap might appear to exist but actually be illusory (that is, real benefits do not exceed the additional cost to the purchaser).

Answer 1

Although solar and wind energy are cleaner and renewable sources of energy which are available as lower cost options. But the production and disposal of equipment cost the firms heavy price.If we see the installation and manufacturing cost of wind mills and solar panel,it is a heavy cost to the company. Moreover, we cannot rely on these sources when the solar energy and wind energy are not available which is not available 24*7.

Due to insufficient and expensive infrastructure and the pollution caused in producing and installing the equipment,the real benefits do not exceed the additional cost to the purchaser.

Below mentioned points can be given to illustrate that real benefits do not exceed the additional cost to the purchaser :

Being non-conventional sources, solar and wind energy have not got wider acceptance.

Solar and wind energy are not available 24*7, so we need to rely on alternative sources.

The production and installation cost of solar and wind energy is very high.

The required infrastrucrure is not available for the production of energy through the non-conventional sources like solar and wind energy.