The high cost of our failing wind policies

Back to All News

The high cost of our failing wind policies

December 14, 2017

Like many states, Minnesota is on the bandwagon for renewable energy, especially wind power. Despite all of the hype about falling wind power costs, Minnesota's energy policy is starting to exert upward pressure on electricity prices, and it is notably failing at its chief objectives.

America's fixation on renewable energy dates to the energy crisis of the 1970s, when it was thought that oil and natural gas were quickly running out and that we needed brand-new energy sources. Today, we are told that we need to develop renewable energy because oil, gas and coal are not running out, but they threaten to choke the planet with global warming gases. In other words, while our energy outlook has shifted from shortages to abundance, the policy prescription remains unchanged.

Minnesota has met its political mandate of supplying 15 percent of electricity from renewable sources, but the effects of this target are disappointing and worrisome for the future.

First, Minnesota's notable electricity cost advantage has disappeared. For most of the last 25 years, Minnesota's electricity prices were about 20 percent below the national average. But over the last five years — when renewable capacity was expanded at a fast pace — Minnesota's cost advantage has rapidly disappeared, and in March for the very first time Minnesota's electricity prices rose above the national average.

This has happened at a time when electricity use has been flat, so the price pressure has not come from increased demand. If Minnesota's historic price advantage had stayed within its historic range, Minnesota consumers would have saved $4 billion.

Second, the real embarrassment is that renewable energy is not achieving significant reductions in carbon dioxide emissions. Between 2005 and 2014, Minnesota's CO2 emissions fell 6.6 percent (and much of this reduction was achieved by greater use of natural gas, not wind), while the nation as a whole reduced CO2 emissions by 9.3 percent. In fact, over the last two years, greenhouse gas emissions from electricity in Minnesota have risen, even as more wind power was installed. This is not unusual. Recently the New York Times reported that although Germany has spent $200 billion subsidizing renewable energy over the last 20 years, its greenhouse gas emissions are the same as a decade ago, and they have also started rising again over the last two years. Oh, and German electricity rates have doubled during that time, despite the heavy subsidies.

SOURCE:  Star Tribune

Related Information