The Big Green Discount

The Big Green Discount

Texas is known for cheap and plentiful energy resources, but theyre usually of the dirty, fossil fuelbased variety. That reputation is changing. Texans can now buy renewable energy packages that are as cheap as or cheaper than the coal- or natural gasbased alternatives.

Texas is not an anomaly. A study released Friday by the venture capitalist firm DBL Investors shows that states boasting robust green energy programs have the nations cheapest electricity. The trend lines suggest its only going to get better for their consumers. In 2001, electricity cost more in the 10 top renewable energy states than it did in the 10 states with the lowest proportion of green energy production. By 2013, the situation had turned upside down: States with the most green energy now offer cheap electricity, while the dirty power states are the most expensive.

You could probably figure out whether youre in a top 10 or bottom 10 renewable energy state by tracking your utilities payments over the past few years. Just in case you dont archive your electricity bills, the 10 states with cheap green energy are Maine, Iowa, South Dakota, California, Idaho, Kansas, Minnesota, North Dakota, and Oklahoma, plus Washington, D.C. (Hawaii also has a high proportion of renewable energy, but it was excluded because its remoteness dictates energy prices more than any other factor.) The 10 laggard states in the DBL study were Florida, Connecticut, Delaware, South Carolina, West Virginia, Rhode Island, Ohio, Missouri, Tennessee, and Kentucky.

What happened? Technology. The sun and the wind are free. (It sounds like something from a Joni Mitchell song, but its true.) The price of renewables is therefore based almost entirely on the cost and efficiency of the hardware that captures the energy. Thats a good thing, because, over the past few decades, engineers have demonstrated an incredible knack for making technology smarter, faster, and cheaper. (See, for instance, Moores Law.) The cost of fossil fuelbased electricity, in contrast, depends overwhelmingly on commodity prices. Theres only so much that engineers, economists, and logistics experts can do to manage the swings in coal and natural gas prices.

This is a big advantage for renewables. The cost of wind power has dropped 58 percent in the past five years. Take a look below at what has happened to the cost of solar cells and modules over the past decade. Its not a precipitous drop, but there is an obvious downward trend.

This isnt just a feel-good study about the success of renewables; its a direct challenge to the dishonest lobbying of fossil fuel interests. The American Legislative Exchange Councilthe secretive coalition of corporative executives who want to write their own state lawsis currently trying to dismantle renewable portfolio standards, the rules that require utilities to generate a proportion of their energy from green sources. This Koch Industriesfunded think tank claims that green energy mandates replace the free market with bureaucratic government oversight, driving up costs.

I wanted to start this paragraph with The Koch machine has never been so wrong, but thats not accurate. Koch mouthpieces are wrong about so many other things, often spectacularly so. But this is a fairly clear lie. The DBL study is correlationalit doesnt prove that green energy caused prices to drop; it merely shows that green energy states tend to have lower prices. Nevertheless, the accumulating data makes it very difficult to substantiate the claim that renewable portfolio standards increase electricity costs. Including a high proportion of renewable energy in a utilitys mix of sources does not increase prices.

The Koch machine wont stop saying so, of course. They tend not to worry about things like studies and research. But you should.

Source: on Earth

Smart Grid Bulletin March 2019

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