July 27th 2019


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COVER STORY Fixing Australia: Can we trust the Morrison Government?

ENERGY Yallourn early closure more than a mere challenge, Mr Premier

CANBERRA OBSERVED Can Labor learn a lesson or is it unredeemable?

NATIONAL AFFAIRS High power prices lead to more deaths of elderly

GENDER POLITICS Catholic Ed's document strong on doctrine, weak on protocols

ENERGY Renewables do push up power price: Chicago economists

OBITUARY The eminence of Dr Joe Santamaria

HISTORY OF SCIENCE Faith and reason and Father Stanley Jaki, Part 6: Medieval Christendom sparks a revolution

ENVIRONMENT As many Pacific islands are rising as are sinking

ASIAN AFFAIRS Uyghurs lose in ethnic power play

POETRY AND HISTORY The epic of the White Horse

HUMOUR On patrol with Father Bruce

MUSIC Joao Gilberto: Carrier of melodies

CINEMA Crawl: Toothful entertainment

BOOK REVIEW America's postwar boom and its end

BOOK REVIEW The story of the drafting of a great document

BOOK REVIEW The facts behind an undying distortion

LETTERS

POETRY

FOREIGN AFFAIRS Boris Johnson and the EU: Crash through or just crash

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ENERGY
Renewables do push up power price: Chicago economists


by Peter Westmore

News Weekly, July 27, 2019

A study by economists from the University of Chicago has confirmed that solar panels and wind turbines are making electricity much more expensive.

Price spikes.

 

The study confirms the link between renewables and rising power prices, contradicting the claim of the green-energy lobby that renewables are cheaper than fossil fuels, and that energy prices will fall as the proportion of renewables increases.

The study is entitled, “Do Renewable Portfolio Standards Deliver?” Renewable portfolio standards (RPS) is the American bureaucratic phrase that means mandatory renewable energy targets.

They have been introduced in 29 of America’s 50 states, and are a form of carbon tax on fossil fuels, such as coal (used mainly in power stations), gas and fuel oil.

The RPS mechanism places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources.

Certified renewable energy generators earn certificates for every unit of electricity they produce and sell these along with their electricity to supply companies.

The renewable certificates are therefore a subsidy paid by fossil fuel users to renewable energy providers, pushing up the price of electricity generated from fossil fuels.

To enforce compliance, the electricity companies must pass the certificates to a government regulator, like the Renewable Energy Target scheme in Australia.

Comparison

The study was done by Michael Greenstone, Richard McDowell, and Ishan Nath. They compared states with and without an RPS. They used what they described as “the most comprehensive state-level dataset ever compiled”, which covered the period 1990 to 2015.

They found that renewable portfolio standards (RPS) “significantly increase average retail electricity prices, with prices increasing by 11 per cent (1.3¢per kWh) seven years after the policy’s passage into law and 17 per cent (2¢ per kWh) 12 years afterwards.”

This is despite the fact that renewables comprise only a tiny fraction of the amount of power generated. Despite heavy investment in renewables in the years prior to 2015, solar and wind power combined comprise only about 5 per cent of all power generated in the United States.

The cost to consumers has been staggeringly high: “All in all, seven years after passage, consumers in the 29 states had paid $US125.2 billion more for electricity than they would have in the absence of the policy,” they write.

Some states in the U.S. have set targets of 40 or 50 per cent renewables by 2030, as is proposed in some states of Australia. This will massively increase the cost of electricity.

The authors also point out a number of other costs that renewables place on the energy network, separate from the direct subsidies for renewable energy.

They point out that “solar plants have a capacity factor (that is, average power generated divided by its peak potential supply over the course of a year) of about 25 per cent and wind plants are not much higher, at 34 per cent, according to the EIA (Energy Information Agency).

“This means that a comparison bet­ween these intermittent sources and ‘base-load’ technologies that ‘always’ operate (for example, natural gas combined cycle plants have capacity factors of 85 per cent) is very misleading with res­pect to total system costs, because they do not account for the additional costs necessary to supply electricity when they are not operating.”

Solar and wind require that natural gas plants, hydroelectric dams, batteries or some other form of reliable power be ready at a moment’s notice to start churning out electricity when the wind stops blowing and the sun stops shining.

Additionally, solar installations and wind farms “are frequently located away from population centres, all of which raises transmission costs above those of fossil-fuel plants”.

They cited evidence that showed that transmission costs from renewables are 15 per cent higher than for base-load power stations.

Third, a study by Edison Electric Institute in 2011 showed that two-thirds of new transmission costs were associated with the use of renewables, either directly or in the form of back-up transmission lines like those that supply electric power between Australian states.

And finally, there is a cost associated with the under-utilisation of fossil-fuel plants, which have to be turned off because of the priority given to renewable energy.

The higher cost of electricity reflects “the costs that renewables impose on the generation system”, the economists note, “including those associated with their intermittency, higher transmission costs, and any stranded asset costs assigned to ratepayers.”

The economists found that “the cost per metric tonne of carbon dioxide abated exceeds $US115 ($A164) in all specifications and ranges up to $US530, making it at least several times larger than conventional estimates of the social cost of carbon.”

While the green lobby claims that this is a price that must be borne to avert “climate change”, there is no evidence that renewable energy has made any significant impact in reducing carbon-dioxide emissions.




























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