Tom Shepstone
Natural Gas NOW

…

… 

The expansion of renewable subsidies in the form of renewable portfolio standards is a guarantee of high electricity prices, but also more natural gas use.

A Today In Energy post a couple of days ago carried the headline “Updated renewable portfolio standards will lead to more renewable electricity generation.” It might have added “but at what price?” but, of course, it’s the government speaking, so that didn’t happen. When I first read the article, I was annoyed at that lack of perspective, but the EIA is valuable precisely because it only offers the facts. It also made me think a bit about the price. Then a reader came along and pointed out a couple of things that really point out the absurdity of some of these policies and why we need to ask a fundamental question.

That question is this. If renewable subsidies (and note that I used the singular “renewable” and not the plural “renewables”) are bringing down the price of renewable energy as so often claimed, why is it necessary to continue them forever? Shouldn’t they be sunsetted rather than be forever renewable themselves? When do we get to the point renewables truly pay for themselves without smoke and mirrors?

It reminds me of an old story from the neighborhood where I grew up about Archie McCollum, a curmudgeon if there ever was one. Approached by a salesman who wanted to sell him a new firewood saw “that would pay for itself” in a year, Archie’s reply was “well, when it’s finished paying for itself, send it over, as I’d like one, by golly.” I have a friend a lot like that and he always adds perspective like that to every conversation. We need more of it, frankly.

The Today In Energy post is summarized by its title and by this chart pointing out how four states and the District of Columbia are reaching for the stars with their renewable renewable portfolio standards:

The chart is self-explanatory. It’s a window into the world of green political correctness and no consequences. It’s a lot like what happened as politicians in various states mandated all kinds of ludicrous health insurance coverage in their jurisdictions. It was a free political ride to mandate every health insurance company cover in-grown toenails or whatever other obscure health problem a few had, but the cost was on all consumers to make the pols look good, even if they took good care of their feet. The same pols in the same states have pushed renewable portfolio standards and renewing them at ever higher numbers to claim credit for being green, but here is the result in the same four states and DC, using EIA data from here:

Data from EIA. Average for other states calculated. National average (including the five states) was $10.58

That’s the price of renewable portfolio standards imposed by ever eager to demagogue politicians who need to be halted with sunset rules on these indirect as well as direct subsidies. Or, do they?

Our above mentioned reader also pointed me toward this article about the TVA, which is being cautious about renewables but is looking to the future possibility of employing them as renewables advocates keep insisting the price is constantly dropping. The TVA is a little like Archie McCollum but perhaps a bit less curmudgeonly. They’re studying it, in other words, and these are the alternative scenarios they’re studying:

Take a close look. Also, remember these are potential incremental additions to capacity and pat special to the Valley Load Growth scenario under the “Promote Renewables” scheme; it shows renewables cannot be done without more use of natural gas, for the same reasons articulated over and over again here at NaturalGasNOW. Renewables demand baseload generation via dispatchable energy sources when the sun doesn’t shine.

That is to say states can renew renewable portfolio standards all they want and at ever higher indirect subsidies but the result will only be higher electricity prices and more natural gas use. That means the smart way to go is to gradually sunset these market distorting programs and let natural gas be the base it needs to be with renewables that are forced to compete in the real world as the supplement. Who knows; if renewables weren’t enabled to act like spoiled children and had to compete they might well become the base, but not the way it’s being done now.

Hat Tip: M.D.