Heritage Foundation Center for Data Analysis (CDA)

Published on May 5, 2010

Read More: http://www.heritage.org/Research/Reports/2010/05/A-Renewable-Electricity-Standard-What-It-Will-Really-Cost-Americans

America’s Energy

• 50% of America’s electricity is generated from coal
• 20% of America’s electricity is generated from natural gas and 20% from nuclear energy
• 6% of America’s electricity is generated from hydroelectric energy
• Only 3% total of America’s electricity is generated from wind, solar, and biomass together
• 29 states have some sort of RES in place

The CDA found that a federal RES would…

• Raise electricity prices by 36% for households and 60% for industry
• Cut GDP by $5.2 trillion between 2010 and 2035
• Cut national income for a family of four by $2,400 per year
• Reduce employment by more than 1,000,000 jobs nationwide
• And add more than $10,000 to a family of four’s share of the national debt by 2035
• Also, using wind and solar to provide 100% of electricity could double or triple household bills

Note: RES starts at 3 percent for 2012 and rises by 1.5 percent per year. This profile mandates a minimum of 15 percent renewable electricity by 2020, a minimum of 22.5 percent by 2025, and a minimum of 37.5 percent by 2035.

Average Electricity Bill for a Family of Four by Source:

Cons of Wind

• Though wind is “free,” it is very expensive to harness the power
• The cost of purchasing, installing, and operating the wind turbines is high
• It is difficult to determine when the wind will blow, so it is not reliable
• Wind is most commonly found on mountain ridges or sparsely populated plains, so there is the added expense of building transmission lines to get the power to people; transmission can cost as much as $15 per megawatt hour
• Wind power is easily ramped up for increased demand, but this is due to natural-gas-fired turbines that are expensive to operate compared to a baseload source like coal, nuclear, or natural gas combined-cycle power plants
• Wind cannot be turned on and off to match changes in demand, and there is no feasible energy storage option for most wind farms
• Wind, like solar energy, is not a dispatchable power source; that is, it cannot be turned on at will. As a result, increasing dependence on wind adds variability and uncertainty to the power grid that must be offset by quick-ramping power sources like natural gas turbines to maintain a relatively constant flow of electricity
• Gas turbines are not a renewable energy source, so swapping a megawatt hour of wind power for a megawatt hour of coal power also requires swapping power from natural gas turbines for additional coal. Since coal power is cheaper than power generated by natural gas turbines, the difference must be added to the cost differential between wind and coal
• After making these adjustments for transmission costs and additional gas-turbine generation, the cost of an additional megawatt of onshore wind power is $177 per hour. This is 126 percent above the cost of a megawatt of coal power per hour. Since onshore wind is the least expensive of the renewable electricity sources (ruling out conventional hydro and nuclear power), any plan that uses the more expensive renewable sources—such as offshore wind ($218 per megawatt hour); thermal solar power ($284 per megawatt hour); or photovoltaic solar power ($423 per megawatt hour)— would have even greater costs

Pros of Coal, Nuclear, and Gas Combined-Cycle Power Plants in Comparison to Wind

• They have high dependability
• Their output can be matched to sizeable, expected changes in demand when given sufficient lead time; wind energy plants do not have this ability by themselves, so direct comparisons of wind costs per kilowatt hour to coal or gas costs are misleading
• There is greater latitude for location choices for fossil and nuclear-fueled power plants than wind turbines

EIA Levelized Costs Per Megawatt Hour:

Note: Even though the $149.30 for the cheapest renewable power is already well above the cost of conventional power sources, it does not include any adjustment for reliability or additional transmission costs.