By Steven F. Hayward
Renewable Portfolio Standards (RPS) are all the rage in pro-green energy circles these days; they’ve become the chief fallback position since the collapse of cap and trade—a back door way to regulate carbon. Twenty-nine states and the District of Columbia (and Puerto Rico!) have adopted mandates calling for a certain portion of electricity to come from renewable sources (chiefly wind, solar, and biomass; some RPS standards do not count hydro power, since dams are environmentally incorrect). California has the most ambitious target, with a new law calling for 33 percent of its electricity to come from renewable sources by the year 2020. Most state RPS goals are around 20 percent. And proposals for a national RPS are a hardy perennial; New Mexico Senator Jeff Bingaman is out right now with another national RPS proposal (though he calls it a “Clean Energy Standard,” or CES). Senator Bingaman claims that “a properly designed CES would have almost zero impact on GDP growth, and little to no impact on national electricity rates for the first decade of the program.” Well maybe, but what about the second decade?
Naturally, RPS boosters all claim, and can point to forecasts, that RPS standards won’t significantly increase electricity prices to consumers, even though every study shows renewable electricity sources are significantly more expensive than conventional fossil fuel sources. But never let the belief in the possibility of free lunches get in the way of reality: think of it as renewable stupidity, which really is abundant and cheap.
The Manhattan Institute’s Robert Bryce is out with a new report, “The High Cost of Renewable Energy Mandates,” that sheds considerable light on the subject. The whole thing is worth reading, but I’m particularly struck by his Table 1, which shows that of the ten states with the cheapest electricity rates, only two (Oregon and Washington) have RPSs, while of the ten most expensive states, eight have RPSs. And Oregon and Washington deserve asterisks to go with their RPS asterisks: both of those northwestern states enjoy a high amount of cheap hydro power, built by the federal government about 80 years ago. Washington state also gets a lot of its power from cheap nuclear power, heavily subsidized by the federal government 50 years ago. In both cases, the capital cost of their current electricity infrastructure is pretty cheap.
These old, non-carbon sources of energy enable Oregon and Washington more easily to absorb RPS sources like wind power, though, as Forbes magazine explained a few months ago, when the dams have too much water to manage through the dams, they shut off wind power, which is rather telling about the limitations of renewable sources.
Source: Energy Information Administration.