Director of Regulatory and State Affairs Daniel Simmons will testify today before the Ohio Senate Public Utilities Committee. Simmons will discuss the common misperceptions of state Renewable Portfolio Standards (RPSs), focusing on Ohio’s Alternative Energy Standard. Highlights from his testimony include:
- Renewables such as wind and solar are intermittent energy sources and cannot be counted on to produce electricity when needed. According to the California grid operator, on Saturday, November 9, when wind was at its peak, it was producing at just 2.4 percent of its total capacity. Over the course of the whole day, wind energy produced just 0.8 percent of its capacity. Wind cannot be relied upon to keep the lights on.
- A recent study found the cost of wind power to be 15.1 cents per kilowatt hour if natural gas is used to back-up the wind energy or 19.2 cents per kilowatt hour if coal is used as the back-up fuel. These costs are 1.5 to 2 times the 9.6 cents per kilowatt hour estimate the EIA is using for generating electricity from wind in its models.
- Wind and solar are not new or infant technologies. People have used wind power to generate electricity for more than 125 years old. The first solar cells were made in 1883 and the first photovoltaic solar cells that were powerful enough to run everyday electrical equipment were created in 1954.
- According to the Joint Committee on Taxation, last year’s extension of the PTC would cost $12.1 billion. The American Wind Energy Association, the lobby for the wind industry, claims that 37,000 jobs would have been lost if the PTC was not extended. This means that each job “saved” cost the U.S. Treasury $327,000.
- Trying to create jobs through renewable subsidies has proved to be a failure. In Spain, for example, it is estimated that 2.2 jobs were lost as an opportunity cost of creating one expensive, subsidy- and set-aside-dependent job in the renewable sector.
- Currently, states that have renewable electricity mandates have residential electricity prices 23 percent higher than states without these mandates. As states increase their use of renewable sources, it is likely that the price of electricity in states with mandates will increase even more.
- Some claim that RPSs are necessary since we are running out of energy resources. In reality, the U.S. is energy rich with 486.1 billion short tons of coal and 2.744 quadrillion cubic feet of technically recoverable natural gas. We have enough coal resources to provide electricity for more than 480 years at current consumption rates and enough natural gas to provide electricity for at least another century at current usage rates.
- Despite years of subsidies for wind, solar, and other renewables, these technologies are still not competitive with coal, natural gas, and other affordable, reliable sources of electricity generation.
Mandating renewables will only increase the cost of electricity and create a further drag on an already struggling economy, further harming job prospects. Electricity supply needs to equal electricity demand or the electrical grid will fail. But intermittent sources like wind and solar cannot be counted on to produce electricity at the correct time to keep the lights on.
To read the full testimony, click here (PDF).
To read IER’s study “Assessing Wind Power Cost Estimates”, click here (PDF).