Revisiting Renewable Energy's Reliability and Affordability
September 13, 2023 - Merrill Matthews
The Electric Reliability Council of Texas (ERCOT) came close to implementing rolling blackouts in the early days of September. And while early September was very hot, it was very hot for nearly all of July and August, and yet the grid seemed to perform better then. So what changed?
Texas has the highest wind capacity of any state. When the wind is blowing, that source can serve the state well. But the wind doesn't always blow, especially when the state is blanketed by a high-pressure area, referred to as a heat dome.
Normally, when the heat dome quashes the wind, it also limits cloud formation, and solar panels are able to pick up some of the slack. However, the days are getting shorter as we approach the autumn equinox, which reduces the number of hours the solar panels push energy to the grid. And so ERCOT faced some real challenges in the late afternoon and early evening hours of the first 10 days of September, when both wind and solar were coming up short.
Maybe one answer is more offshore wind farms, where wind is more consistent. That was the hope, but the Wall Street Journal now reports, "Offshore wind farms should be one of the best solutions to the climate crisis but are turning out to be a lousy business."
Offshore wind farms are taking longer to install and costing much more than estimated. And higher interest rates are adding to those costs. "Average costs to build an offshore wind farm have shot up 36% since 2019, compared with 5% for land-based ones, in part because of pricier debt," the WSJ reports.
Plus, "Transmission bottlenecks to get power from offshore wind farms to land are now a major obstacle to delivering projects on time." It seems that even as the government hands out billions of taxpayer dollars in subsidies to encourage offshore wind projects, various government-imposed regulations and restrictions get in the way. Who knew?
Since electricity consumers--i.e., ratepayers--rebel at excessively high electricity prices, the government will have to come to the rescue. "While the industry needs to get better at understanding the hidden costs of innovation," the Journal reports, "governments will have to pay more if they want offshore wind power to help reduce carbon emissions."
And there you have it--governments will have to pay more. Even though the Biden administration has already spent more than ever.
We are constantly told that the cost or renewable energy is going down. But those claims often ignore large, government-provided tax breaks and subsidies. When those hidden costs are included, the affordability of renewable energy is less clear.