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Congress Threatens U.S. with Renewable Portfolio Standards

September 24, 2010

A few weeks ago, I outlined the three largest threats that could spring from this Congress because of CO2 emissions.

One of these threats was that Congress would enact Renewable Portfolio Standards (RPS). (Cap and trade was the greatest threat, while allowing the EPA to regulate CO2 under the Clean Air Act was the third.)

With cap and trade seemingly sidelined, RPS has emerged as an active threat with Senators Bingaman (D-NM) and Udall (D-NM) introducing legislation to establish an RPS of 15% by 2021. Under the bill, utilities would have to generate at least 11% of their electricity from renewables, such as wind and solar, while using energy efficiency improvements to achieve the remaining 4%.

This is another effort to force the United States to generate electricity using the most expensive methods for generating electricity, rather than the least costly methods.

RPS will result in higher costs for homeowners and for industry. Higher costs for industry make industry less competitive and contributes to job losses.

The reason for RPS is to cut CO2 emissions, but cutting CO2 is becoming increasingly pointless.

Wind, solar and other renewables, such as hydrokinetics, are anywhere from two to six times more costly than generating electricity from coal, natural gas or from nuclear power plants.

Apparently, Senators Bingaman and Udall will try to push this RPS legislation through Congress this year when most Americas are concerned about jobs, yet this legislation will help to kill jobs.

Investment in wind energy has fallen dramatically this year because it’s uneconomical and because people are beginning to understand the negative consequences of wind turbines, such as noise and the killing of birds. Even the 2.1 cent per kilo-watt-hour subsidy isn’t sufficient to get developers to invest in wind projects.

RPS is intended to support wind developers by forcing utilities to use wind and solar.

It’s worthwhile keeping in mind the relative costs of building generating plants, as shown here, after adjusting for capacity factor, from most expensive to least expensive.

TABLE
Alternative Capacity Factor Construction Costs
Solar, PV 16% – 25% $24,000 to $37,000/ KW
Solar, concentrating 22% – 30% $12,000 to $16,000 / KW
Wind, off-shore 39% $6,200 to $12,800 / KW
Wind, land based 30% $6,600 / KW
Integrated Gasification Combined Cycle 80% Note $6,300/ KW
     
Nuclear 90% $4.500/ KW
Ultra-supercritical coal 80% $3,100 / KW
Natural Gas Combined Cycle 80% $1,500 /KW
Note: Too few IGCC plants have been built to know the capacity factor, but it’s likely to be similar to coal – or possibly worse.
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