Yesterday, I wrote about how the Minnesota “Conservative” Energy Forum received nearly 86 percent its funding from the liberal Energy Foundation in 2017, the most recent year for which data are available. While this should raise big red flags for Minnesota conservatives, the policies that MNCEF advocates for are ultimately far more important than where they get their funding.
Unfortunately, MNCEF uses their platform to try and convince conservative Minnesotans that renewable energy sources like wind and solar are “cleaner and cheaper” than traditional energy sources like coal, natural gas, and nuclear power, even though wind and solar are far more expensive than traditional power sources, and they are likely dirtier, too.
This article is the second in a series, and it will explain how wind and solar cost much more than traditional electricity sources in Minnesota.
Wind and Solar Aren’t Cheaper
Wind and solar special interest groups often claim that wind and solar are the lowest-cost forms of electricity on the grid, but these claims are incorrect, at best. At their worst, they are intentionally deceitful.
Quoting the Subsidized Cost of Wind and Solar
One way that renewable energy special interest groups claim wind and solar are the lowest cost resources on the grid is to quote the subsidized cost of these energy sources, but as all conservatives know, subsidizing something doesn’t reduce the cost to produce it, it simply changes how, or who, pays for it.
In this way, subsidies for wind and solar subsidies may reduce the impact these weather-dependent energy resources may have on your electric bill, but they also increase the amount you pay in taxes. It doesn’t matter which pocket you pay for wind and solar, at the end of the day, you end up with less of your own money.
Unsubsidized Wind and Solar Are Not Cheaper than Minnesota’s Existing Coal, Natural Gas, or Nuclear Power Plants
Research from Bloomberg New Energy Finance (BNEF), which was purchased with a grant from the McKnight Foundation (you can’t make this up), shows that the unsubsidized cost of wind and solar in Minnesota were $38 per megawatt hour (MWh) and solar costs about $60/MWh. At these prices, wind and solar cost more than Minnesota’s existing coal, natural gas, and nuclear power plants.
The graph below shows the cost of generating electricity at different facilities in Minnesota was using real-world data from the Federal Energy Regulatory Commission (FERC), and BNEF’s estimates for the cost of wind and solar in the state. As you can see, the unsubsidized cost of wind is higher than the electricity generated at the Sherburne County (Sherco) coal facility, and the Boswell coal facility. In contrast, BNEF’s estimate for unsubsidized wind was about $3/MWh less than the cost of running the Allen S. King coal plant.
Natural gas and nuclear were also less costly to operate than wind in Minnesota. Unsubsidized solar was nearly double the cost of these other energy resources.
The raw numbers here don’t even get anywhere close to telling the whole story. Unlike wind and solar, coal, natural gas, and nuclear plants, which can operate around the clock, 365 days per year. Unlike wind, they can operate when the temperatures dip below -22 degrees Fahrenheit (arguably when you need reliable energy the most), and unlike solar, it is not “simply too expensive” to operate them when it snows.
The Hidden Costs of Wind and Solar
In the real world, the unreliability of wind and solar adds huge “load balancing” costs to incorporating them onto the electric grid. This is because wind and solar require Minnesotans to pay for backup generation sources, like natural gas or coal, and wind and solar, to make sure the electricity at our homes, hospitals, and businesses doesn’t go out because wind and solar didn’t show up to work. Minnesotans don’t pay for either wind or natural gas based on what is currently available, they pay for both, at significant cost.
Wind and solar also require billions of dollars in transmission lines, but none of these enormous costs are ever reflected in the cost estimates wind and solar advocates use to peddle the myth that wind and solar are the lowest-cost sources of electricity, so we at Center of the American Experiment, Mitch Rolling, specifically, calculated it for them.
The graph below shows the cost of different generation technologies using the data from FERC referenced above for coal, nuclear, and natural gas, and for wind and solar, the exact cost estimates provided by Xcel Energy in their Integrated Resource Plan are used.
Once things like load balancing, transmission, additional property taxes for having more power plants on the grid, and higher corporate profits for Xcel are taken into account, using wind to generate electricity is 2.5 times more expensive than the power generated at Sherco, and solar is 4.4 times more expensive.
This is why Minnesota’s electricity prices have increased 30 percent faster than the national average since 2005, when Xcel Energy was required to add significant amount of wind to its system.
This begs the question, “If wind and solar are so cheap, why is Minnesota’s electricity so expensive?”
Liberal renewable energy groups prey on the fact that most ordinary people think the wind is free. While wind has no fuel costs, it still costs more than Minnesota’s existing coal, natural gas, or nuclear power plants because it is expensive to build wind turbines. Think of it this way, is your car free if you ride your bike to work?
On it’s face, you may think, “Yeah!” However, the fuel cost of the car avoided by biking, but the insurance, maintenance, registration fees, and loan payments don’t go away for the days you biked to work that day. The same principle applies to the electric grid. The electricity isn’t free because the wind was blowing today, because there is no such thing as a free lunch.
All of this cost information is publicly available to anyone who is intellectually curious about the cost of energy in Minnesota.
While it is unfortunate that liberal groups like Fresh Energy and the Minnesota Center for Environmental Advocacy peddle misleading information about the cost and reliability of wind and solar in Minnesota, it is understandable, because frankly, who has ever accused Congresswoman Alexandria Ocasio-Cortez of having a firm grasp of energy policy, or basic financial literacy?
A group that promotes itself as a conservative organization, like the Minnesota “Conservative” Energy Forum, should know better, but they repeat the same talking points as far-left liberal groups. This is why it is my sincere belief that MNCEF isn’t really a conservative organization at all, but are an astro-turf group funded by liberal environmentalists funders to intentionally mislead conservatives on energy issues.
Monday, I will discuss why it is debatable as to whether wind and solar are “cleaner” than coal, natural gas, or nuclear, at all.