Economy’s Ticking Time Bomb
Twenty-nine states, plus the District of Columbia have enacted Renewable Portfolio Standards (RPS) mandating that electricity from renewable sources make up a significant share of the electricity sold in each of these states.
The mandates vary from 10% by 2015 to 33% by 2025. Roughly, the average is 20% by 2020. While some states include renewable sources such as wave power, the common requirement on which the mandates are based are the generation of electricity from wind and solar.
Today, few people see any effect in their electricity rates due to these RPS mandates, because the amounts required are still small – one or two percent.
Obviously the percentages will increase, and as they do, electricity rates will rise.
For 219 million Americans, the cost of electricity will increase: This represents 71% of the population.
Until recently, coal was the least expensive means for generating electricity. With fracking, natural gas is now the least expensive.
This year the national average for the cost of electricity (all customer classes) is 9.8 cents per kilowatt hour (cents/kWh). Prices range from 6.2 cents/kWh (Wyoming) to 25.1 cents/kWh (Hawaii which has few resources other than imported oil) or 17.4 cents/kWh (Connecticut).
Some local prices in California are even higher.
While it’s difficult to forecast how far electric rates will rise because of RPS mandates, the following can provide some guidance. Electricity from:
- On-shore wind is over twice as expensive as natural gas.
- Off-shore wind is nearly five times as expensive as natural gas.
- PV solar is over twice as expensive as natural gas.
- Concentrating solar is nearly four times as expensive as natural gas.
Each of these also require the added cost of running gas turbines 24/7, ready to step in when the wind stops blowing or the sun stops shining. And they can hardly be called clean, since the back-up gas turbines running 24/7 emit CO2 and other emissions.
Because wind and solar tend to be located in remote areas, dedicated transmission lines will have to be built to transport the electricity from where it is generated to where it is used at a cost of billions and billions of dollars.
And wind has environmental impacts such as killing birds and bats.
A conservative estimate is that RPS mandates, when fully implemented, will cost consumers in these states (in today’s dollars) over $55 billion annually.
While building windmills and solar plants may create some jobs in the short term, the loss of $55 billion annually in discretionary spending by households will kill many more jobs every year. People will have less money to spend on food, clothes, travel and recreation. And many of these families are not rich, so spending $500 per year more on electricity will hurt.
Spain is a good example of how wind energy kills jobs.
This added cost will creep up on us over the next five to ten years. It won’t be visible as are gasoline prices posted on local gas stations and shown ad infinitum on the TV news. It’s hidden in the bill from the electric utility, and no one stands on the street corner shouting, “Your electricity costs more!”
The outrageous truth is that there is no need to force the adoption of wind and solar on Americans, which is the sole purpose of RPS mandates. There are no benefits to using the highest cost methods for generating electricity.
In fact, higher costs hurt families, businesses and industry.
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