• Renewable energy mandates are costly
    March 25,2013
     

    Recently the New Hampshire Senate Committee on Energy and Natural Resources amended Senate bill 99, placing a moratorium on new wind electricity generation projects for one year. That’s a nice start, but it doesn’t go quite far enough. What’s needed is a repeal of the New Hampshire renewable portfolio standard mandate. Why? Because ratepayers are being forced to buy extremely expensive electricity when cheaper alternatives are available.

    The renewable portfolio standard requires electricity providers to purchase a percentage of their electricity supply from four separate classes of politically preferable renewable energy — either directly or in the form of renewable energy credits. If electricity providers aren’t able to meet renewable portfolio standard obligations, they are required to make alternative compliance payments. In 2012 these payments were $31.39 per megawatt-hour for Class III (biomass) and Class IV (existing small hydro); $64.02 per megawatt-hour for Class I (mostly wind and biomass) and $168.13 for Class II (solar). These payments are made in addition to what electricity providers have to pay for the energy they use to provide us with electricity. Who do you think pays for these additional expenses? The ratepayers.

    Based on data provided by the New Hampshire Public Utilities Commission, New Hampshire electricity providers paid a total of $47 million in renewable energy credit and alternative compliance payments from 2008 to 2010 and an additional $19 million in alternative compliance payments in 2011.

    The United States Energy Information Association estimates that the 2018 levelized costs of natural gas will be $67 per megawatt-hour. The same report estimates onshore/offshore wind will be $86 and $221 per megawatt-hour; biomass; $111; and photovoltaic/thermal solar, $144.30 and $261.50. This data doesn’t account for the reduced capacity value of wind and solar, which cannot be dispatched upon demand, making them less reliable and less valuable sources of electricity. These numbers will come into play as the renewable portfolio standard requirements increase from 12 percent in 2013 to 25 percent in 2025.

    New Hampshire ratepayers consumed nearly 11 million megawatt-hours in 2012. If supply is shifted just 10 percent from natural gas to onshore wind (which is the cheapest renewable alternative) it will cost New Hampshire ratepayers an additional $21 million in electricity charges; biomass would increase rates by $48 million and solar up to $213 million. It’s clear that renewable portfolio standard policies are detrimental to electricity rates.

    But what about the environment? This is certainly the case where good intentions have driven half-baked policy. Renewable portfolio standard rules have a negligible impact on global carbon dioxide emissions, especially when China, India and other developing nations are using fossil fuels at steadily increasing rates.

    More importantly, solar and wind aren’t exempt from negatively impacting the environment. The manufacturing of solar panels produces millions of pounds of hazardous waste containing lead and cadmium, a known carcinogen. The waste is then transported via truck or rail to dumps that are hundreds and often thousands of miles away — not exactly the greenest way to produce green energy.

    Windmills currently sit on over 9,000 square miles of our landscape — roughly the size of New Hampshire — and over 14,000 abandoned windmills are littered throughout the country. The environmental benefits touted by proponents are mostly outweighed by the more serious impacts they don’t want to discuss.

    What do ratepayers get for the billions in subsidies, loan guarantees, carve-outs, mandates, millions of pounds of toxic waste, obstructed views and dead birds? Not much. The combined electricity provided by all the wind and solar power in New England over the course of an entire year is generated by our traditional sources of electricity in less than five days.

    Despite meager contributions to the county’s electricity grid by “clean” generators like solar and wind, air quality has improved dramatically. According to the EPA, between 1980 and 2011, gross domestic product increased 128 percent, vehicle miles traveled increased 94 percent, energy consumption increased 26 percent, and U.S. population grew 37 percent. During the same time period, total emissions of the six principal air pollutants dropped 63 percent.

    In a nutshell, ratepayers receive no real benefits from renewable portfolio standards while paying a lot more for their electricity. Meanwhile, our legislators and their bureaucrats continue to obfuscate the costs to ratepayers through RPS mandates. The citizens of New England should stand up and fight these attempts to pull the wool over the ratepayers’ eyes in the name of green energy and faux environmental protection. It is time to repeal renewable portfolio standards and free ratepayers from the whims of the political class.



    Marc Brown is the executive director of the New England Ratepayers Association, a nonprofit dedicated to protecting ratepayers.

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