By Ron Knecht and Geoffrey Lawrence
Nevada’s Controller and Assistant State Controller.
We often hear that electricity can be generated cheaply and with no environmental impact from the wind and sun.
Sounds good. But long ago, folks were also assured that nuclear power would be “too cheap to meter” and the only safe environmental choice.
The catches then were the same as now: First, the cost claim was based on biased estimates by the advocates for these sources, not on competitive market data.
Second, the viability of these technologies depends on government intervention. For nukes, taxpayers had to provide nuclear fuel enrichment services and government had to exempt plant owners from having to fully insure the risks. For wind and solar technologies, advocates say government must adopt extensive mandates to use these resources.
If these renewable power sources are so great, why does government have to force consumers and utilities to use or buy from them? The answer: In the real world they are usually quite costly ways to generate electricity.
The environmental left often claims that wind and solar power are cheap because they require no fuel to generate power. However, fuel is only a part of the cost of electricity generation at conventional power plants. Much of the costs lie with the plants themselves: sometimes billions of dollars to construct. Solar projects and wind turbines are typically even more costly per unit of energy produced.
In comparisons based on the energy output of plants, renewables are often very expensive. Although the costs have fallen over the years, the federal government estimates that new solar plants coming online in 2020 will still cost around 70 percent more per unit of electricity than natural-gas-fired units.
Another major problem is that solar and wind technologies can’t produce electricity on demand, as conventional plants can. They produce electricity only when the wind speed lies within certain ranges or the sun is shining.
Wind turbines produce much of their power at night and during the winter – when power demand and value are low. There’s no economic way to store this energy at utility scale, so they add little capacity to the electric grid and traditional power plants still must meet the main needs of homes and businesses.
Renewables advocates have studiously ignored these concerns and pushed government to require combinations of subsidies and mandates for wind and sun. In Nevada, the state’s Renewable Portfolio Standard requires NV Energy to procure at least 20 percent of its electricity from renewables this year and at least five percent from solar panels specifically. By 2025, those mandates increase to 25 percent and six percent, respectively.
The high costs are passed on to utility customers in their power bills. One study finds these mandates will raise the average Nevada yearly electric bill by $70 for households and $400 for businesses. This constitutes a tax on their electric energy use – with the proceeds going to wind and solar owners, not into the public till.
Some alternative energy sources such as hydropower don’t suffer these problems, but environmental groups don’t want to allow them to be used to satisfy the mandates. Such groups even successfully lobbied to get energy efficiency measures removed from Nevada’s mandates in 2013. So, NV Energy can no longer meet some of the requirement by offering incentives to purchase more efficient appliances or light bulbs, even though that is much more cost-effective than wind and solar plants.
One of us (Knecht) has testified often as an expert witness on power generation economics and for years was a left-leaning environmentalist and alternative energy advocate. That experience and public policy studies showed him that, while solar and wind power sound good in theory, mandates to purchase them do not serve the public interest.
There are clean, safe and reliable methods to produce electricity today, and nuclear power may well have matured after five decades to become one of them. However, the environmental religion seems to be dogmatically opposed to nukes and other renewables while regarding wind and solar power – which often have significant environmental impacts – as the singular source of grace.
That’s like insisting that Betamax is the best way to play movies at home and so we should all be forced to purchase a player and tapes.