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Renewable Standards and Jobs

October 13, 2010

Laws in at least 32 states require that as much as 20% of the electricity supplied by utilities and other retail electric providers be generated from renewable sources. Congress is about to mandate a nationwide RES of 15%. Renewable Portfolio Standard (RPS) and Renewable Electricity Standard (RES) both require that a percentage of electricity sold to customers must be generated from renewable sources, such as wind and solar.

On September 21, 2010, US Senator Bingaman (D-NM) introduced a bill, S 3813, that would establish a Renewable Electricity Standard for the entire United States. Both Republicans and Democrats are sponsoring this bill.

RPS requirements are forcing the country to use expensive electricity rather than electricity that is less costly. Low cost electricity is better for our economy. High cost electricity harms families, farmers and industry.

People debate the cost per kWh of electricity generated from wind, solar, coal and natural gas, but there can be little debate over how much it costs to build each type of facility.

It is only common sense that, if a facility costs more to build than competing facilities, its output is also likely to cost more.

As we have shown earlier, these are the cost per KW to build different types of facilities. They take capacity factor into consideration.

Capacity factor measures the amount of electricity actually produced over the period of a year, compared with what could theoretically have been produced based on the nameplate rating of the unit. The costs in the Table for wind and solar do not include the cost of building dedicated transmission lines, or in the case of wind, the cost of gas turbines to provide back-up for when the wind stops blowing.

TABLE
Alternative Capacity Factor Construction Costs
Wind, land based 30% $6,600 / KW
Wind, off-shore 39% $6,200 to $12,800 / KW
Solar, PV 16% – 25% $24,000 to $37,000/ KW
Solar, concentrating 22% – 30% $12,000 to $16,000 / 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.

 

Fuel costs also affect the final cost of the electricity produced by each method.

Wind costs nothing, but the initial cost discrepancy is too large to allow wind to compete with natural gas or coal. The same is even more true for solar.

When natural gas prices are low, such as they are now, natural gas produces electricity more inexpensively than coal.

RPS forces utilities to build costly wind farms and solar installations, and unproven alternatives, such as the hydrokinetic river installation in Minnesota.

The reason that Renewable Portfolio Standards have become law is the fear of global warming caused by the burning of fossil fuels.

With cap and trade stymied in Congress, there has been a drive to establish Renewable Portfolio Standards in its place.

Establishing RPS at the national or state level distorts the market, drives up costs for industry and, inevitably, costs jobs.

© Power America, 2010. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Power America with appropriate and specific direction to the original content.

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