Sorry for my increasingly rare presence here of late - I've become overly busy at work (so much for my 4 day week, which didn't last long), and my personal life has had a few complications to manage as well.

Given that solar thermal power is pretty much my favourite form of renewable energy and the one I consider to make the greatest contribution to our energy needs in the long term, I can't let the weekend's announcement by PM Rudd about a plan to build a 1 GW power plant go past unnoticed.

Reuters reports the new solar power plant is part of efforts to achieve the new 20% mandatory renewable energy target - Australia to build world's largest solar energy plant: PM. More at Bloomberg.

Australia plans to build the world's largest solar power station with an output of 1000 megawatts in a A$1.4 billion (US$1.05 billion) investment, Prime Minister Kevin Rudd said on Sunday. The plant would have three times the generating capacity of the current biggest solar-powered electricity plant, which is in California, Rudd said during a tour of a power station.

Tender details will be announced later in the year, and successful bidders will be named in the first half of 2010. Rudd said the project was aimed at exploiting the country's ample sunshine, which he called "Australia's biggest natural resource." It was also aimed at helping the country become a leader in renewable, clean energy, he said. ...

Californian utility PG&E caused a stir in the media recently with an announcement that they are seeking approval from state regulators for a power purchase agreement with Solaren Corp. to deliver 200 MW of power by 2016 for a 15 year period.

A new study has been issued by the Manhattan Institute, called TAXING ENERGY IN THE UNITED STATES: Which Fuels Does the Tax Code Favor? The study was written by Gilbert Metcalf of Tufts University. I also participated in a conference call with Metcalf regarding the report. A couple of Metcalf's findings:

• The tax code is not at all generous with respect to investments in the electric grid. The effective tax rate on these investments is very close to the unadjusted statutory tax rate of about 39%. If investment is to be encouraged in the electric grid, Dr. Metcalf believes that this tax rate must be lowered.

• The current tax code, especially since enactment of the Energy Policy Act of 2005, strongly encourages investment in nuclear, wind, and solar power, which enjoy tax subsidies ranging from nearly 100 percent, for nuclear, to more than 200 percent, for solar. In other words, tax subsidies for these forms of energy generation are sufficiently generous that investors may use them to offset tax liabilities for capital gains and income derived from non-energy investments. The telephone discussion indicated that these provisions are not currently working as intended for wind and solar, because of lack of "tax appetite".

One of my most enduring memories of Washington D.C. occurred while attending a meeting on Geothermal Energy Development, back in the days before the Iron Curtain fell. In the evening after dinner, I took a colleague from Eastern Europe, on his first American visit, for a walk down the Mall. We walked, almost alone, on a still, bitterly cold, dark evening with fresh snow on the ground, and stars peppering the sky above us to see the sights, including the Lincoln Memorial. We stood staring, like backwoods tourists, through the windows of the Air and Space Museum.

We came back to the hotel for alcoholic refueling, thinking that the energy problems of the time would guarantee unending research funding into new forms of energy, and that our future was assured. That was about thirty years ago, and we were, of course, wrong, at least in terms of the funding and sustained interest in unconventional energy sources. Now we are walking back over some of the same ground. Again, fluctuations in oil prices have removed the immediate perception of the need for alternate supply, and have also weakened the credibility of those of us who try to suggest how to deal with the problem.

Prophecy, particularly when it deals with the near term future runs the risk of being corrected by the actual turnout of events. The ups and downs of energy demand, and available supply–-particularly when tied to the economic fortunes of nations, can make logical projection under one condition, but become apparently hopelessly in error when that condition doesn’t happen. Thus, at the moment, with the declining price, and apparent glut of oil, the public no longer feels that there is a crisis; the credibility of those forecasting a crisis is damaged, and can only be reconstructed over a longer period of time and changing circumstance.

Author's note: I have added a comment to the bottom of the post.