Renewables: Are They Really Cheaper?

I have had many posts on the soaring consumer electricity costs suffered by the residents of those jurisdictions that have proceeded furthest down the road to all-renewable power. These are places like Germany, the UK, and California, where consumer electricity prices are double to triple the U.S. average. But is that difference the result of their race to convert to wind and solar electricity generation, or does it stem instead from “bad luck,” or something else? Even as electricity prices in many of these places soar, advocates of wind and solar generation continue to claim that those resources are cheaper than the hydrocarbon alternatives. Do they have a point?

The latest back-and-forth has played out on the editorial pages of the Wall Street Journal. On August 20, Republican candidate for Vice President J.D. Vance had an op-ed with the online headline “Harris Wages War on U.S. Energy.” He argued:

“The net-zero project is already stifling investment in the coal, natural gas, and nuclear plants that Americans rely on for reliable, affordable ‘base load’ electricity.”

On August 28, the Journal ran a responsive letter to the editor from a guy named Mark Z. Jacobson. Jacobson is a professor at Stanford University, and is perhaps the most prominent advocate of transition to electricity generation from entirely renewable sources, what he calls “WWS” (wind, water, solar), with some sort of energy storage thrown in as back-up. Jacobson broke onto the scene back in 2011 with a paper in an Elsevier publication called Science Direct, and followed that up with a major opus in PNAS in 2015 titled “Low-cost solution to the grid reliability problem with 100% penetration of intermittent wind, water, and solar for all purposes.” The subsequent accumulation of evidence has not at all slowed Jacobson down. For example we have this piece in the Guardian from January 2023, key quote: “The influential academic says renewables alone can halt climate crisis. . . . Wind, water and solar can provide plentiful and cheap power, he argues, ending the carbon emissions driving the climate crisis.” And if I haven’t yet mentioned it, Jacobson is the driving force behind New York’s Climate Leadership and Community Protection Act, via his acolyte Robert Howarth of Cornell.

South Dakota, Montana, Iowa, Kansas, Oklahoma, Wyoming, and North Dakota missed that problem [of expensive renewable power]. They are, aside from Montana, powered primarily by wind and are among the 12 states with the highest percentage of their electricity demand produced by clean, renewable sources. How do the 12 highly renewable states rank in terms of electricity prices? Ten of them are among the 19 states with the lowest electricity prices. Seven are among the 10 states with the lowest prices. South Dakota, with renewables supplying 95% of demand, has the ninth-lowest electricity price. North Dakota (52% renewables) has the lowest. More renewables mean lower prices.

Jacobson lists South Dakota as his number one example. He says that renewables “supply[] 95% of demand,” yet the state has the “ninth-lowest electricity price.” Do publicly-available data back that up?

The answer is that publicly-available data for South Dakota are quite inconsistent and contradictory, but however you look at it they don’t come close to backing up Jacobson’s claim. Here is a page on South Dakota from the Department of Energy’s Energy Information Administration, with an update date of August 15, 2024. The data:

In 2023, wind provided 55% of South Dakota's total electricity net generation. Wind surpassed the state's previous leading electricity source, hydroelectric power, for the first time in 2021. Hydropower accounted for 21% of the state's generation in 2023. . . . Renewable resources generated 77% of South Dakota's total in-state electricity in 2023, almost all of it from wind and hydroelectric power.

So according to that, “renewables” provided 77% of SD’s 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 a Missouri River running through your state to replicate that. Wind generated just 55%. Yes, that is better than El Hierro does in most years, but a long, long way from zero-emissions generation.

And now let’s take a look at the very different 2023 data from the South Dakota Public Utilities Commission. These data are for electricity “consumed” in South Dakota, rather than electricity “generated” in South Dakota, which may or may not explain the gigantic discrepancy. Here is the PUC’s pie graph:

Suddenly coal is by far the largest source, at 36.13%, which puts it at more than the “renewables” wind, solar, and hydro combined (32.35%). Maybe all the rest of that wind generation gets given away to neighboring states at times of excess generation when SD can’t use it. I have no way of figuring that out.

Now, where did our friend Jacobson come up with the statistic that South Dakota supplies “95% of [electricity] demand] from renewables”? I have no idea. Most likely he is relying on the principle that leftists and climate activists don’t get fact-checked.

For what it’s worth, here is EIA’s chart of “average price of electricity to utility customers” for June 2024 (most recent month available). The states are not ranked in price order, but if I’m counting correctly South Dakota has the 16th lowest residential electricity rates among the states, and the 22nd lowest rates for “all sectors” combined. Not bad, but also not close to the “ninth lowest” that Jacobson claims.

Shall we try another state? Next in Jacobson’s list is Montana. Jacobson concedes that Montana is not “powered primarily by wind,” but then he says it is “among the 12 states with the highest percentage of their electricity demand produced by clean, renewable sources.” Take a closer look, and once again it turns out that Montana’s secret is dams on the Missouri River. The EIA (cheerleaders for “renewables” without telling you which one they are talking about) has this to say:

In 2023, Montana ranked among the top 10 states with the largest share of electricity generated from renewables, about 50%. Coal-fired power plants provided the largest share of Montana's electricity generation in 2023, accounting for 45% of in-state generation.

But how much of that 50% from “renewables” is hydropower from the Missouri River dams, how much is wind, and how much is something else? The best source for that that I can find is this Report from the Montana legislature with an issue date of 2023, but data going only through 2021. A chart on page 24 going to 2021 shows about 40% of electricity generation from coal, another 40% from hydro, and about 10% from wind. There is a substantial unspecified “other” category.

Again, for what it’s worth, on EIA’s June 2024 chart, Montana’s electricity rates appear to be 12th lowest among the states for residential, and 11th lowest for “all sectors.”

So Jacobson’s first two examples don’t come close to supporting his case. Looking at the other states he cites, I think the one that best supports his case is Iowa. So let’s look there.

Iowa, for better or worse, has gone farther than any other state in building wind turbines to supply its electricity. According to the EIA here, wind turbines generated 62% of Iowa’s electricity in 2022, which was the highest percentage of any state. From another EIA page here, Iowans purchased 54,203,955 MWh of electricity in 2022, which would make for average demand of 6188 MW (dividing by 8760). The Iowa Utilities Commission here tells us the generating resources that Iowa has deployed to meet this demand: 12,543 MW of wind capacity, 5543 of coal, 4148 of natural gas, 5253 of petroleum, and small amounts of others. What this tells us is that Iowa had plenty of generation resources to meet demand before it started building any wind turbines. It has more than a two-times overbuild of wind turbines alone as against average demand, and it has more than a four times overbuild if you count everything. Clearly, Iowa has a lot of generation resources sitting idle most of the time. And, whatever its average rates may be, they could be a lot lower if they stopped supporting large amounts of mostly-idle capital.

So where do Iowa’s rates rank nationally? According to that same EIA chart, they are 22nd lowest for residential rates, and 10th lowest for “all sectors.”

(1) At a 2x overbuild of wind turbine capacity and 62% of generation from wind, Iowa has pushed up against the limit of what it can get by just building more wind turbines. As of now, it has barely dipped its toe into the world of energy storage. Going forward, it will quickly find that more wind turbines can only marginally increase the percent of its electricity from wind, and buying batteries is completely uneconomic and not a viable solution.

(2) The prices of electricity from wind are wildly distorted by the myriad of tax benefits and subsidies available to wind turbine developers. Just for starters, there is the federal investment tax credit (30% of the capital value of the investment in wind turbines) and the federal production tax credit (2.75 cents per kWh of electricity produced). Then there is the complete exemption from property taxes for five years from the state of Iowa. There are multiple federal guaranteed loan programs providing subsidized interest rates. There are handouts of every sort from the likes of the Agriculture Department and the Rural Electrification Administration.

Now, how much are all these subsidies and handouts worth in consumer electricity rates? It’s all completely opaque. There’s no way for an informed citizen to figure it out. The subsidies are easily worth 5 cents per kWh, and probably more like 10 or even 15 cents per kWh. Add in the value of the subsidies, and Iowa would not be in the lower ranks for electricity prices, but rather well toward the top.

So when Jacobson recommends building wind turbines to lower electricity prices, he’s not really saying that they are economically cheaper; he’s just saying that sufficient subsidies are available to make the consumer prices appear cheaper. He’s using gkam accounting.

Anyway, we’ll see if Iowa and its co-enthusiasts for wind power can keep marching forward to the 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 as they start adding storage, their prices are set to go through the roof.

Wind and Solar are cost ineffective!

There is insufficient ability to store the power they generate for times the sun doesn't shine and the wind doesn't blow.

Windmills have a 21 year payback period and a 20 year service life....if you're lucky.

We will never have the resources necessary to make the batteries to store the power.

Does anyone really doubt that green makes the electricity you use more expensive? It is at least a double system. For every Kw of green energy there has to be another of some kind of battery or conventional base load to back it up. Batteries only last a very short time so if they are used for backup there must still be full conventional redundant backup.

Heck yeah it is more expensive!!!

“We will never have the resources necessary to make the batteries to store the power.”

The batteries of a Tesla would be sufficient to power my house for days.

So, the states that have the most wind generate the most electricity from wind and they are about built out, no more locations.
Moving all that wind to where it isn’t requires more lines
I’d like to see the nameplate wind capacity compared to the actual wind generated power. I’m told it is about 35%. Anybody know?

Since a state would need (for many years into the future) a backup power system (i.e. the current fossil fuel electrical system), the price comparison needs to be between the price of natural gas and the wholesale solar farm price of electricity.

A household’s energy needs need to be met via a well-thought-out system involving all electrical devices of the household. This has not been done because such systems would eliminate the existing fossil fuel system and the need for the unionized local electric company.

The largest Tesla auto battery is in the Model S long range and is about 100 Kwh (https://en.wikipedia.org/wiki/Tesla_Model_S). My power consumption is a modest 1600 Kwh per month last month. I don't know what kind of house you live in but in a best case this Tesla car battery would last me less than two days. I still hardly think we will have battery resources necessary to store power for very long with current technology that seems to have hit a brick wall. Check your numbers, you mileage may vary.

The biggest problem with all these greenies is that it takes an unrealistic amount of time assembling a rational and credible argument against their half baked ideas. They get out first with their fairy tale bull shit and plant that unrealistic and untrue seed that has to be unwound from the jaded and misled but hopeful psyche of the masses.

“My power consumption is a modest 1600 Kwh per month”

That’s modest?? We use about 500kwh/month!

Where? In a a cave? Certainly not in Oklahoma or if it is in such a setting it is a swamp cooler or the thermostat is set very high. My place is built like an igloo cooler. We never see less than 900 to 1000 Kwh in the shoulder months so cooling takes very little. It takes that much just for lights, cooking, washing and drying clothes even with tankless propane hot water heating and all LED lighting.

Better check for a pulse to see if anyone in your house is moving.

No, not a cave, the California bay area. A place with probably the best weather in the world (unless you’re fond of snow, tornadoes, hailstorms 100% humidity...) but sadly it has the worst politics.

It never gets too hot or too cold, low humidity, even in the summer it’s cool at night, just leaving the windows opens makes you sleep under a blanket. We use gas for heating, and a fireplace insert and have a whole house fan that cools the house pretty good. We got rooftop solar this year, so we’re thinking of getting AC for the couple of weeks a year when it gets a bit warm... and use some of that solar power.

So the weather is great but the price of electricity is not - about 40c/kwh (and going up, probably double what you pay in Okie country, right?

There is nowhere on earth (which is where we live, BTW) where they have replaced even a single fossil fuel power plant with a renewable source where the cost of electricity has not GONE UP SIGNIFICANTLY.

Germany in particular is the poster girl for “green” energy and the best they have ever managed is “renewable” energy that’s 3x as costly per kWh as fossil fuel or hydroelectric or nuclear produced.

MUCH different conditions and solar. Not even in the same league. Right now 11 to 12 cents plus service fee of $35. With service fee up to 15 cents. Rural electric coop.

For the foreseeable future, cost is proportional to total carbon emissions. Spending 3 times more means Germany is generating about 3 times more CO2 than before. To find out where, just look at the accounts payable ledger.

Energy, light, and truth are on the side of everything good, cold, dark, and lies are on the side of everything evil. The capital intensive energy industry is a natural ally of the free market, and a permanent enemy of leftism. That is why leftists hate energy, and want to nationalize everything about it.

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