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Published on May 1st, 2014 | by Zachary Shahan


Link Between Electricity Prices & Renewable Energy Completely Warped In Forbes Article

May 1st, 2014 by  

Christine Harbin Hanson, the Federal Affairs Manager for Americans for Prosperity, recently wrote an article published on Forbes that shows that she is either very ill-informed on this matter or is simply looking to deceive people. I can only hope it’s the former. Her article incorrectly argues that Renewable Portfolio Standards cost citizens a great deal and that “renewable energy sources like wind and solar… are significantly more expensive than their traditional energy alternatives.”

wind cost growth

All you have to do is head over to the Department of Energy’s electricity cost graph to see that onshore wind power has a minimum LCOE of 5¢/kWh and a median of 6¢/kWh. That’s the lowest median LCOE in the United States of any electricity source other than natural gas, which is at 5¢/kWh. However, that doesn’t take into account the cost of natural gas pollution, which harms our air, our water, and our climate. Surely, natural gas is actually considerably more expensive for society than wind power. As just another indication of that, a study for the Mid-Atlantic United States found that adding more wind power to the PJM electricity grid would save ratepayers nearly $7 billion per year within a decade. “The report found that doubling the wind generation already planned in the region would lower fuel costs and drive down prices by $1.74 per megawatt hour (MWh) in the largest wholesale competitive energy market in the world, PJM, which includes all or parts of 13 states and Washington, DC.”

solar cost growth

When it comes to solar, an important thing to note is that rooftop solar panels compete with retail electricity not wholesale electricity. When that is considered, solar is often cheaper than the norm. Furthermore, solar PV costs have fallen off a steep cliff in recent years. Recently, a Minnesota judge ruled that a solar power project should be chosen over several natural gas projects because it offered ratepayers a better deal (money-wise). Yep, a solar power project in a northern state offers cheaper electricity than several natural gas projects on a wholesale level. In Austin, a new solar power plant is coming in at under 5¢/kWh under a new 25-year power purchase agreement (PPA)!

But let’s get back to the main thing that Ms Hanson was attacking: Renewable Portfolio Standards (aka Renewable Energy Standards). A Tigercomm representative, who notified me of this horrible Forbes/Americans for Prosperity article, also passed along a useful resource on this specific matter. Ohio, one of the 37 states that have a Renewable Portfolio Standard, has seen repeated attempts to remove its Renewable Portfolio Standard (by the likes of Americans for Prosperity). In the midst of a recent attempt, an economist with the state’s utility regulator analyzed the results of the law and found that renewable energy was actually pushing down the cost of wholesale electricity. Yes, not only has renewable energy not been increasing electricity prices in Ohio, but it has been reducing them.

The Midwest Energy News story regarding that study also points out that similar findings have come out of studies in other states. “A study done earlier this year by the Illinois Power Agency found that the integration of renewable-sourced power in 2011 reduced the fuel cost component of the typical residential customer’s bill by between 0.1 percent and 1.2 percent,” for example.

This really shouldn’t come as a surprise at all to those who follow this industry. In Germany and Australia, which have much higher penetrations of renewable energy, wind and solar have been cutting the cost of wholesale electricity for years. (Another story on that here, and another here, and another here.) Actually, this is one key thing about renewables that threatens utilities (which earn more profits on higher electricity prices), and is very likely one key reason why Americans for Prosperity has been hired …  I mean, funded … to knock on Renewable Portfolio Standards and spread myths about them.

Graphs via New Energy Ethic 

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About the Author

Zach is tryin' to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

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