From MANHATTAN CONTRARIAN
Francis Menton
I have many posts about the rising consumer electricity costs experienced by residents in those areas that are furthest down the road to all-renewable power. These are places like Germany, England, and California, where consumer electricity prices are three times the US average. But is the difference a result of the race to convert to wind and solar electricity, or does it come from “bad luck,” or something else? Although the price of electricity in many of these places has increased, proponents of wind and solar power continue to claim that these sources of energy are cheaper than hydrocarbon alternatives. Do they have a point?
The latest back and forth has played out in the editorial pages of the Wall Street Journal. On August 20, Republican Vice Presidential candidate JD Vance had an op-ed online with the headline “Harris Wages War on US Energy.” He argued:
“Net-zero projects have disrupted investment in the coal, natural gas, and nuclear plants that Americans rely on for reliable and affordable ‘baseload’ electricity.”
On August 28, the Journal published a responsive letter to the editor from a man named Mark Z. Jacobson. Jacobson is a professor at Stanford University, and may be a supporter of the transition to electricity generation from all renewable sources, the so-called “WWS” (wind, water, solar), with some energy storage thrown in the back- up. Jacobson broke into the scene back in 2011 with a paper in an Elsevier publication called Science Direct, and followed up with a major opus in PNAS in 2015 titled “Low-cost solutions to grid reliability problems with 100% penetration of intermittent wind, water, and solar for all purpose. For example, we have this piece in the Guardian from January 2023, key quote: “Influential academics say that only renewables can prevent the climate crisis. . . . Wind, hydro and solar can provide abundant and cheap power, he said, ending the carbon emissions that are causing the climate crisis. And if I haven’t mentioned it yet, Jacobson is the driving force behind the New York Climate Leadership and Community Protection Act, through his acolyte Robert Howarth of Cornell.
So let’s consider Jacobson’s August 28 WSJ letter. Here’s the gist:
South Dakota, Montana, Iowa, Kansas, Oklahoma, Wyoming, and North Dakota missed the point (expensive renewable power). They, with the exception of Montana, are mainly powered by wind and are among the 12 states with the highest percentage of electricity demand produced by clean and renewable sources. How do the 12 most renewable countries rank in terms of electricity prices? Ten of them are among the 19 countries with the lowest electricity prices. Seven are among the 10 countries with the lowest prices. South Dakota, with renewable energy supplying 95% of demand, has the ninth lowest electricity prices. North Dakota (52% renewable) has the lowest. More renewables mean lower prices.
Is there anything? Well, let’s look at some countries, one by one.
Jacobson cited South Dakota as example number one. They say it’s renewable “Supply () 95% of demand,” yet the country has “the ninth lowest electricity price.” Does the publicly available data back it up?
The answer is that the public data available for South Dakota is quite inconsistent and contradictory, but however it looks at them they do not come close to backing up Jacobson’s claim. This is a South Dakota page from the Department of Energy’s Energy Information Administration, with an update date of August 15, 2024. The data is:
By 2023, wind will provide 55% of South Dakota’s total electricity generation. Wind surpassed the country’s previous main source of electricity, hydroelectric power, for the first time in 2021. Hydroelectricity accounted for 21% of the country’s generation in 2023. . . . Renewable resources will generate 77% of total electricity in the state of South Dakota by 2023, almost entirely from wind and hydroelectric power.
So according to that, “renewables” are available 77% of the SD generation, not the 95% claimed by Jacobson; and of the 77%, 21% came from hydro from dams on the Missouri River. Sorry if you don’t have the Missouri River running through your state to emulate. Wind generated only 55%. Yes, it’s better than El Hierro in years, but it’s a long way from zero-emission generation.
And now let’s look at the very different 2023 data from the South Dakota Public Utilities Commission. The data is for electricity “used” in South Dakota, rather than electricity “generated” in South Dakota, which may not explain the gigantic discrepancy. Here is the PUC pie chart:
Coal is suddenly the largest source, at 36.13%, making it more than wind, solar, and hydro combined (32.35%). Maybe all the other wind generation will be given to neighboring countries when the excess generation when SD can’t use it. I have no way of finding out.
Now, where does our friend Jacobson come in with the statistics that South Dakota provides “95% of demand (electricity) from renewable energy”? I don’t know. Most likely, they rely on the principle that leftists and climate activists do not fact-check.
For what it’s worth, here’s the EIA’s chart of “average electricity prices for utility customers” for June 2024 (latest month available). The states aren’t ranked in price order, but if I’m counting correctly, South Dakota has the 16th lowest residential electricity rate among the states, and the 22nd lowest rate for “all sectors” combined. Not bad, but also nowhere near the “top nine” that Jacobson claims.
Do we try other countries? Next on Jacobson’s list is Montana. Jacobson admits that Montana is not “mainly by the wind,” but then he said that “among the 12 countries with the highest percentage of electricity demand produced by clean and renewable sources. Take a closer look, and once again it turns out that the secret of Montana is the dam on the Missouri River. The EIA (leaders cheering for “renewables” without telling us what they’re talking about) says this:
By 2023, Montana will rank among the top 10 states with the largest share of electricity generated from renewable energy, about 50%. Coal-fired power plants will provide the largest share of Montana’s electricity generation by 2023, accounting for 45% of the state’s generation.
But how much is 50% of “renewables” is hydropower from the Missouri River dam, how much is wind, and how much is something else? The best source I could find is this report from the Montana legislature with a publication date of 2023, but the data only goes to 2021. The chart on page 24 through 2021 shows about 40% of power generation from coal, another 40% from hydro, and about 10% from the wind There is an unspecified “other” category.
Again, for what it’s worth, in the EIA’s June 2024 chart, Montana’s electricity rates appear to be the 12th lowest among the states for residential, and the 11th lowest for “all sectors.”
So Jacobson’s first two examples don’t even come close to supporting his case. Looking at the other states cited, I think the one that most supports the case is Iowa. So let’s find out there.
Iowa, for better or worse, has gone further than any other state in building wind turbines to supply electricity. According to the EIA here, wind turbines will generate 62% of Iowa’s electricity by 2022, which is the highest percentage of any state. From the other EIA page here, Iowans are purchasing 54,203,955 MWh of electricity in 2022, which would produce an average of 6188 MW (divided by 8760). The Iowa Utilities Commission here reveals the resources Iowa has to meet these demands: 12,543 MW of wind capacity, 5543 coal, 4148 natural gas, 5253 petroleum, and more. What this tells us is that Iowa has plenty of generation resources to meet demand before it starts building wind turbines. It has more than twice the overbuild of wind turbines alone as against average demand, and has more than four times the overbuild if you count them all. Clearly, Iowa has a lot of idle generation resources. And, whatever the average rate may be, it may be cheaper to stop supporting capital that is usually inactive.
So where does Iowa rank nationally? According to the same EIA chart, it is the 22nd lowest for housing rates, and the 10th lowest for “all sectors.”
Two comments:
(1) In 2x overbuild wind turbine capacity and 62% of generation from wind, Iowa has pushed up against the limit of what can get by just building more wind turbines. Until now, it has barely dipped a toe into the world of energy storage. Going forward, it will quickly be discovered that more wind turbines can only increase the percentage of electricity from the wind, and that buying batteries is uneconomical and not a viable solution.
(2) The price of electricity from wind is highly distorted due to the many tax benefits and subsidies available to wind turbine developers. Just for starters, there is a federal investment tax credit (30% of the capital value of the investment in wind turbines) and a federal production tax credit (2.75 cents per kWh of electricity produced). Then there is a complete exemption from property taxes for five years from the state of Iowa. There are various federally guaranteed loan programs that provide subsidized interest rates. There are various handouts from the Department of Agriculture and the Rural Electrification Administration.
Now, how much do all these subsidies and handouts cost in consumer electricity rates? It’s all completely opaque. There is no way for the citizens to know about it. The subsidy could easily be as little as 5 cents per kWh, and could be as high as 10 or even 15 cents per kWh. Increase the value of subsidies, and Iowa will not be in the lower ranks for electricity prices, but also to the top.
So when Jacobson suggests building wind turbines to lower electricity prices, he doesn’t really say that they are economically cheaper; They simply say that there are enough subsidies to make up for consumer prices appear cheaper. They use gkam accounting.
Either way, we’ll see if Iowa and its wind power enthusiasts can keep moving toward a 100% zero-emissions future. I will be the first to congratulate them if they can pull it off. But let’s face it – they can’t. And when they start adding storage, prices are set to go through the roof.
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