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Electricity Prices Are Soaring in Leading Wind Energy States

United States electricity prices are rising rapidly, up 18.1 percent over the last two years. Renewable-energy advocates claim that wind and solar installations produce cheaper electricity than traditional power plants, but power prices are rising as more wind and solar is added to the grid. In fact, electricity prices are soaring in leading wind-energy states.

Over a 12-year period, from 2008 to 2020, U.S. average electricity prices rose only 8 percent, according to the U.S. Energy Information Administration. This was much lower than the inflation rate of 20 percent over the same period. But power prices rose 5 percent from 2020 to 2021 and an additional 12.5 percent last year. Most of this rise was due to rising U.S. inflation, but the share of electricity generated from wind also rose, from 8.4 percent in 2020 to 10.2 percent in 2022.

Headlines announce that electricity generated from renewables is lower cost. Scientific American stated in 2017, “Wind Energy is One of the Cheapest Sources of Electricity, and It’s Getting Cheaper.” In October 2020, Bloomberg announced that “Wind and Solar Are the Cheapest Power Source in Most Places.”

It is true that the cost of building U.S. wind and solar generating facilities has come down. Wind construction costs are down about 20 percent since 2013, and solar construction costs have fallen more than 50 percent, both approaching the costs for natural gas power plants. But construction costs are only part of the cost of electricity generation.

Electricity prices in states with the highest penetration of wind systems are rising faster than the national average. U.S. average electricity prices rose 27 percent from 2008 to 2022. But in eight of the top 12 wind states, power prices rose between 33 and 73 percent over the 14-year period. Prices rose in Iowa (36%), Kansas (54%), Illinois (33%), Colorado (37%), California (73%), Minnesota (53%), Nebraska (37%) and Washington (35%), which are the number 2, 4, 5, 6, 8, 10, 11 and 12 leading states in terms of electricity generated from wind, respectively. Price increases were lower than average in Texas, Oklahoma, North Dakota and New Mexico, the other four leading wind states. The data shows that deployments of wind systems produce higher electricity prices.

In Europe, the nations with the most wind and solar capacity deployed, including Austria, Belgium, Denmark, Germany, Ireland, Spain and Sweden, experience the highest residential electricity prices. Residents of Bulgaria, Hungary, Poland and Romania, where few renewables are deployed, pay half as much per kilowatt-hour as the leading renewable countries. Denmark and Germany have deployed over 1,600 watts per person of wind and solar, the highest density in Europe. Electricity prices for Denmark (29 eurocents per kilowatt-hour) and Germany (32 eurocents/kW-hr) are the highest in Europe, and two-and-a-half times the prices in the U.S., where renewable penetration remains lower. In Europe, like the United States, wind (and solar) deployments raise electricity prices.

Wind systems increase electricity prices in three ways. First, wind intermittency raises power prices. Wind system electricity output can vary between full-rated output to near zero within a period of only a few hours. Wind systems typically produce between 25 percent and 40 percent of rated output. In 2020, U.S. power plant utilization levels were nuclear (92.5%), natural gas (56.6%), hydroelectric (41.5%), coal (40.2%), wind (35.4%) and solar photovoltaic (24.9%).

The intermittency of wind and solar means that, if always-on electricity is to be supplied, reliable coal, natural gas and nuclear generators must be maintained as wind and solar systems are added to the power grid. Power system operators know that up to 90 percent of the capacity of traditional generators must remain operational to prevent system blackouts. Therefore, addition of renewables boosts both the capacity and the number of needed systems, raising the cost of electricity.

Second, backup coal and natural gas systems must be run at lower utilization rates as operators push for higher percentages of renewable output. The low utilization levels for coal and natural gas systems in 2020 mentioned above are because these systems are scaled back in favor of wind and solar output. Backup systems are not able to operate profitably at low utilization levels, raising system costs and electricity prices.

Third, wind (and solar) systems require more and longer transmission power lines than traditional power plants. Coal, gas and nuclear plants are located near population centers and tend to be large-capacity plants. These plants can be connected to the grid with relatively short, high-capacity transmission lines. Wind systems tend to be located in remote areas, such as on ridge lines, often far from cities. Wind and solar are spread out over wide areas and require 100 times the land of traditional plants. Longer transmission systems over wide areas need to be deployed for wind and solar, raising system costs and electricity prices.

As more wind systems are added to the power grid, residents should prepare for soaring electricity prices.

 




Green Energy: Greatest Wealth Transfer to the Rich in History

“Since 2000, the world has spent more than $5 trillion on green energy. More than 300,000 wind turbines have been erected, millions of solar arrays were installed, more than 25 million electric vehicles (EVs) have been sold, hundreds of thousands of acres of forest were cut down to produce biomass fuel, and about three percent of agricultural land is now used to produce biofuel for vehicles.”

We are in the midst of history’s greatest wealth transfer. Government subsidized wind systems, solar arrays, and electric vehicles overwhelmingly benefit the wealthy members of society and rich nations. The poor and middle class pay for green energy programs with higher taxes and higher electricity and energy costs. Developing nations suffer environmental damage to deliver mined materials needed for renewables in rich nations.

Since 2000, the world has spent more than $5 trillion on green energy. More than 300,000 wind turbines have been erected, millions of solar arrays were installed, more than 25 million electric vehicles (EVs) have been sold, hundreds of thousands of acres of forest were cut down to produce biomass fuel, and about three percent of agricultural land is now used to produce biofuel for vehicles. The world spends about $1 trillion per year on green energy. Government subsidies run about $200 billion annually, with more than $1 trillion in subsidies spent over the last 20 years.

World leaders obsess over the need for a renewable energy transition to save the planet from human-caused global warming. Governments deliver an endless river of cash to promote adoption of green energy. The Inflation Reduction Act of 2022 provided $370 billion in subsidies and loans for renewables and EVs. But renewable subsidies and mandates overwhelmingly favor the rich members of society at the expense of the poor.

Wind systems receive production tax credits, property tax exemptions, and sometimes receive payments even when not generating electricity. Landowners receive as much as $8,000 per turbine each year from leases for wind systems on their land. Lease income can be quite high for a landowner with many turbines. In England, ordinary taxpayers pay hundreds of millions of pounds per year in taxes that are funneled as subsidies to wind companies and wealthy land owners.

In the U.S., 39 states currently have net metering laws. Net metering provides a credit for electricity generated by rooftop solar systems that is fed back into the grid. Solar generators typically get credits at the retail electricity rate, about 14 cents per kilowatt-hour. This is a subsidized rate, which is more than double the roughly five cents per kilowatt-hour earned by power plants. Apartment residents and homeowners that cannot afford to install rooftop solar pay higher electricity bills to subsidize homes that receive net metering credits. Rooftop solar owners also receive federal and state tax incentives, another wealth transfer from ordinary citizens.

U.S. federal subsidies of up to $7,500 for each electric car purchased, along with additional state subsidies, directly benefit EV buyers. The average price of an EV in the U.S. last year was $66,000, which is out of reach for most drivers. A 2021 University of Chicago study found that California EV owners only drive 5,300 miles per year, less than half the mileage for a typical car. Most electric cars in the U.S. are second cars for the rich.

A mid-size electric car needs a battery that weighs about a 1,000 pounds to provide acceptable driving range. Because of battery weight, EVs tend to be about 50 percent heavier than gasoline cars, which causes increased road damage. But EVs don’t pay the road tax included in the price of every gallon of gasoline. EVs should pay higher road taxes than traditional cars, but today this cost is borne by everyday gasoline car drivers.

Renewable systems require huge amounts of special metals. Electric car batteries need cobalt, nickel, and lithium to achieve high energy density and performance. Magnets in wind turbines require rare earth metals, such as neodymium and dysprosium. Large quantities of copper are essential for EV engines, batteries, wind and solar arrays, and electricity transmission systems to connect to remote wind and solar sites. According to the International Energy Agency, an EV requires about six times the special metals of a gasoline or diesel car. A wind array requires more than ten times the metals of a natural gas power plant on a delivered-electricity basis. The majority of these metals are mined in developing countries.

Almost 70 percent of cobalt is mined in the Democratic Republic of the Congo. Indonesia produces more than 30 percent of the world’s nickel. Chile produces 28 percent of the copper. China produces 60 percent of the rare earth metals. These nations struggle with serious air and water pollution from mining operations. Workers in mines also suffer from poor working conditions and the use of forced labor and child labor practices. But apparently no cost is too great so that rich people in developed nations can drive a Tesla.

To top it off, the European Union recently approved a Carbon Border Adjustment Mechanism (CBAM). The CBAM will tax goods coming from poor nations which aren’t manufactured using low-carbon processes. CBAM revenues will be a great source of funds for Europe’s green energy programs that benefit the wealthy.

In January, California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington proposed a wealth tax on billionaires. It’s interesting to note that all seven of these states mandate and heavily subsidize wind and solar arrays and electric vehicles, which transfer wealth from poor and middle-class residents to those same billionaires.


This article was originally published at MasterResource.org