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December 21, 2012

The Myth of Wind and Solar Energy: They Are Not Free

December 21, 2012
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The public is repeatedly told that wind and solar are “free” energy sources. Of course, this statement relates to costs once the plant is constructed and operating because, like hydropower, there is no ‘fuel cost’ with wind and solar power as there is with fossil fuel and nuclear generating technologies. But even that statement is a bit misleading, for intermittent technologies like wind and solar cannot be relied upon to produce power when needed, and must have other technologies to back them up. The cost of the back-up power, usually gas-fired or coal-fired generation, is not added to the cost of wind and solar power, so the public is less aware of the issues of using these intermittent technologies.

Currently, the existing fleet of fossil fuel generators is handling this problem. But as state Renewable Portfolio Standards (RPSs) increase over time, the problem will become more acute. Currently, 30 states and the District of Columbia have RPSs, which require the generation and/or sale of a specified amount of qualified renewable energy by certain set dates. These mandates were the major reason for the recent rapid escalation of solar and wind power, and, of course, other state and federal subsidies helped too. But, when the wind doesn’t blow and the sun doesn’t shine, coal and natural gas are used to provide the power that must be available on demand.

That sounds easy, but easy isn’t always the case. When the wind stops blowing or a cloud goes by a solar facility and it is during the afternoon when air conditioning demand is high, the back-up technologies must be up and spinning to provide electricity without disrupting the grid, i.e. to ensure there are no blackouts or other disruption of demand. Coal capacity, for example, was never planned to be used in this way. It is considered a base-load technology and was designed to run continuously. The greater the amount of wind and solar power on the electricity grid, the more severe the back-up problem becomes.

Let’s look at an example.

The Case of California

California currently gets 20 percent of its electricity from renewable sources, but not all of it is from wind and solar. Hydroelectric power and geothermal power make up a fair share. By 2020, 33 percent of the state’s electric generation is to be from qualified renewable generating sources—an amount that Governor Jerry Brown wants to up to 40 percent.

California maintains a reserve margin of 7 or 8 percent above projected daily demand, but by 2020, the California Independent System Operator, the company that runs the grid, estimates that the state will need to double its reserve capacity due to the 33 percent renewable mandate. And by 2017, the independent system operator is estimating that the state will be short by about 3,100 megawatts of flexible power that it can dedicate to meeting reserve needs. This is about the same amount of power as produced by three nuclear units. So far the State Public Utility Commission has been noncommittal in requiring this extra capacity, most likely due to its cost.

But the grid stability issues the independent system operator fears are real. For example, one afternoon in November, a huge number of wind turbines in California stood still because the air was too calm to turn their blades. That afternoon, just 33 megawatts of wind power statewide were generating electricity from a total wind capacity of 4,000 megawatts. That’s less than one percent of the state’s potential wind capacity.  With intermittent sources of electricity, the difference between “installed capacity” and capacity at a given moment when the power is needed can be extreme.

According to Jan Smutny-Jones, executive director of the Independent Energy Producers Association, California will need to make billions of dollars in investments to prevent electrical grid problems, which will increase costs for both residents and businesses. The renewable energy mandate coupled with the closure of coastal power plants has created “one big happy dysfunctional system.”[i]

What Mr. Smutny-Jones is alluding to is California’s closure of 19 gas-fired generating plants by 2020 because their cooling intake pipes suck in and kill fish even though the California Water Quality Control Board does not know the extent of the fish kill. One company, Virginia-based AES, conducted a study of its gas-fired plant in Huntington Beach and found that just four pounds of fish and other marine life per day were lost, which is about what one pelican eats.

Conclusion

Take California’s situation and magnify it by the other 29 states with an RPS and one can see that grid reliability issues will be rampant in the next 5 or so years. Add to this the new regulations from the Environmental Protection Agency that are expected to close 30 or more gigawatts of coal-fired power plants throughout the country in the next few years and we are beginning to see an untenable situation surfacing nationwide. The judgment of politicians is making our electricity grid unreliable and only billions of dollars in future expenditures will make it work—a cost that struggling consumers and businesses will need to pay.

Wind and solar power’s hidden costs will rear their ugly heads shortly and the consumer will pay higher electricity rates. Add to this what taxpayers are paying in subsidies for these technologies, which in fiscal year 2010 alone was over $6 billion[ii], and one is left to wonder where the free market has gone and what the destruction of reliable, affordable and abundant energy will mean for our nation’s future.  Hidden costs, unsustainable subsidies, decreased reliability and increased costs associated with artificial mandates and dictates may be setting the United States up for a “power cliff,” in much the same way that government policies have led to the “fiscal cliff” facing the nation right now.



[i] Los Angeles Times, Rise in renewable energy will require more use of fossil fuels, December 9, 2012, http://www.latimes.com/news/local/la-me-unreliable-power-20121210,0,6250142.story?page=1

[ii] Energy Information Administration, Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010, August 1, 2011, http://www.eia.gov/analysis/requests/subsidy/

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