‘Low-Cost’ Green Energy Is Breathtakingly Expensive
How often do we hear proponents of renewable energy claiming that wind and solar power are the lowest-cost power sources on offer?
Hardly a day goes by without these ideological zealots offering one or another discredited argument that their favored sources are not only necessary to save the planet from some existential climate catastrophe but also lower-cost than conventional power sources.
These outlandish claims got a major boost when a freshman House of Representatives member unveiled her “Green New Deal,” which absurdly claimed that the world would end in 12 years unless the U.S. made a crash effort to radically transform its economy in the next ten years.
That transformation would entail, in addition to a lengthy list of inane ideas, complete elimination of beef and dairy cattle, elimination of air travel in favor of high-speed ground transport options, and complete conversion of all power generation to renewable sources like wind and solar power.
The contention, born out of economic illiteracy, is that this transformation was not only necessary for planetary survival but would be so affordable that we would struggle to know what to do with all the newfound prosperity.
We don’t need to wait around for decades to learn how this program would work in practice.
At least some of these wild claims are testable today by examining energy prices in places that have already deployed large measures of renewable energy.
Currently, 29 states have enacted laws called Renewable Portfolio Standards (RPS) requiring certain threshold levels of renewable energy to be used in the generation of electricity.
Thus, it’s a simple matter to compare the effect of high renewable energy penetration on system prices in those states that have integrated large amounts of renewable energy into their generation portfolios with those of adjacent places that have forgone this option.
Let’s examine in detail all-sector electricity rate activity in five states with high degrees of renewable penetration (i.e., states that have deployed renewable capacity to such a degree that their 2018 renewable generation output represents the highest percentages of total in-state generation output from all sources).
Kansas is the U.S. state with the highest degree of renewable energy penetration in 2018.
As the chart below shows, the state began deploying wind power at a furious pace beginning in 2008. (Note: Kansas first deployed wind power in 2001, but the state saw only token deployments until 2008.)
At the beginning of 2008, year-to-date all-sector rates were below 73% of the U.S. average. But by the end of 2018, Kansas rates were essentially equivalent to the national average.
As the state increased wind capacity by nearly a factor of six, its rates climbed more than 7.8 times faster than the average of the 45 states with the lowest degree of renewable energy penetration.
It wasn’t an accident.
A recent Kansas rate study of several utilities in the state makes clear that a large measure of blame for skyrocketing rates resides with inordinate amounts of fixed investment in power generation (i.e., wind farms) and transmission lines (i.e., the costly integration infrastructure required to connect far-flung wind power turbines to distant consuming regions).
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