Oops! Renewable Energy Costs Oregon Billions

In 2007, Oregon legislators decided they would force Oregonians to purchase renewable energy whether or not they wanted it or could afford it. Legislators proclaimed this would help the Oregon economy and make our energy system more affordable and reliable. They were wrong.

 

Last year, one in 30 Oregonians had their electricity cut off due to inability to pay, and enrollment in the low-income energy assistance program has increased significantly. On January 1, 2011, electricity rates increased significantly for Oregon households: Pacific Power rates increased by 14.5% and PGE rates by 4.2%. PGE also added a “Renewable Resource Adjustment” to ratepayers’ bills in January 2010. Currently, this rate is set at 0.22 cents per kWh, or approximately $2.13 extra per month, for an average household. Rate increases such as these will be the norm over the next fifteen years as utilities work to comply with restrictive energy policies on the state and the federal levels.

 

But legislators proclaimed that the 2007 renewable energy mandate would help “accelerate the transition to a more reliable and more affordable energy system.” What went wrong?

 

Unfortunately, renewable energy costs more than traditional energy sources and is often less reliable. Although generating energy from wind turbines and solar panels is essentially free, the costs of construction, maintenance and integrating inconsistent energy into the grid are prohibitively expensive. Thus, adding more renewable energy will increase costs and cause substantial economic hardships for Oregonians and Oregon businesses.

 

A Cascade Policy Institute report, The Economic Impact of Oregon’s Renewable Portfolio Standard, exposes the cost of renewable mandates on the Oregon economy. Over the period of 2015-2025, the average Oregonian household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641 and the average industrial business an extra $80,115. Over the same period, the mandate will cost Oregonians an additional $6.811 billion over conventional power, within a range of $4.009 billion and $9.310 billion.

 

Higher costs will lead to loss of jobs as well. By 2025 the Oregon economy will lose an average of 17,530 jobs, within a range of 10,025 jobs under the low-cost scenario and 24,630 jobs under the high-cost scenario.

 

Legislators may be able to justify higher electricity costs if environmental benefits, in terms of reduced emissions, outweigh the costs. However, it is unclear that the use of renewable energy resources, especially wind and solar, actually reduces emissions. Due to their intermittency, wind and solar require significant backup power sources that are cycled up and down to accommodate the variability in the production of wind and solar power. As a result, a recent study found that wind power actually increases pollution and greenhouse gas emissions.

 

Also, businesses and industries with high electricity usage likely will move their production, and emissions, out of Oregon to locations with lower electricity prices. Therefore, increasing renewable energy in the state will not reduce global emissions, but rather send jobs and capital investment outside the state.

 

In the end, renewable energy can and should expand according to voluntary purchases that reflect true demand. Government should not be mandating that citizens purchase a product they may not value or cannot afford.

 

It is time to face the truth. Legislators thought that by forcing Oregonians to purchase renewable energy they could make electricity more affordable and reliable. They were wrong. As a first step, legislators should repeal the renewable energy mandate and other restrictive energy policies before electricity costs spiral out of control. In addition, future energy policies need to be subject to a rigorous analysis of economic costs and environmental benefits.

Should We Be Worried, Very Worried?

By Gordon J. Fulks, Ph.D.

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From near record-high to near record-low temperatures last November in the Pacific Northwest, from relatively warm ocean conditions and “dead zones” to relatively cold ocean conditions and fabulous salmon runs off our Pacific Coast, from an unusually cold winter to an unusually hot summer in Russia, from near record-low Arctic sea ice to near record-high Antarctic sea ice, our climate displays wide variability. But an army of psychologists, journalists and even scientists make sure that the warm swings they deem alarming get the greatest attention. These propagandists know that the selling of Global Warming is all about perception, not reality.

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Cascade Report: Think Twice Why Wind Power Mandates Are Wrong for the Northwest

Todd Wynn

Cascade Report: Think Twice Why Wind Power Mandates Are Wrong for the Northwest

by Todd Wynn and Eric Lowe

New report by Todd Wynn and Eric Lowe highlights the problem with the legislature picking winners and losers in the energy market.

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Watch an Interview with Todd Wynn about the perils of forcing wind energy on the grid.

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Worried About Climate Change? Promote Free Markets!

Todd Wynn
Cascade Commentary

Worried About Climate Change? Promote Free Markets!

by Todd Wynn

Every day more and more Americans are growing skeptical of the climate change doomsday claims and plans to ration energy through cap-and-trade type proposals. Despite this, many environmentalists still claim that far-reaching government intervention is needed to achieve greater energy efficiency and lower greenhouse gas emissions to reduce the threat of global warming. Although there has been no statistically significant global warming since at least 1995, the same groups often claim economic growth and lack of comprehensive environmental regulations have created a society that wastes energy and pays no regard to greenhouse gas emissions. But what if less energy use and lower greenhouse gas emissions are a byproduct of limited government and economic freedom? What if environmentalists’ goals can be reached by freer markets and prosperity? Recent Cascade Policy Institute research shows that very phenomenon.

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NEW REPORT – Economic Freedom: A No Regrets Strategy for Reducing Global Energy Consumption

Todd Wynn
Economic Freedom: A No Regrets Strategy for Reducing Global Energy Consumption

A new report from Todd Wynn of Cascade Policy Institute

Summary:

This empirical study exposes a relationship between greenhouse gas intensity, energy intensity and economic freedom. The level of a country’s economic freedom is a statistically significant and negative determinant of both energy intensity and greenhouse gas intensity. Countries with higher levels of economic freedom not only have more energy efficient and less carbon intensive economies, but over time these countries continue to decrease the amount of energy used and the amount of carbon dioxide emitted per unit of production. The merits of free markets and economic prosperity should not be overlooked as a potential method for reducing carbon emissions.

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Todd talks about the report:

The Climate Swindle

Todd Wynn
Cascade Commentary

By Todd Wynn

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Are you worried about your carbon footprint hurting the earth? Don’t worry. Now climate doomsayers can sleep easy at night. For a fee a carbon offset provider will gladly funnel your money into earth friendly projects aimed to reduce greenhouse gases, such as planting trees in Ecuador or supporting a wind farm in Texas. But are carbon offset providers really delivering what they claim? Studies of international carbon offset schemes have revealed examples of widespread fraud and abuse. And now, investigations into two of the most prominent carbon offset providers in the U.S. have revealed that neither of them actually offers real reductions in greenhouse gas (GHG) emissions.

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The Climate Swindle

Todd Wynn
Summary: Carbon offsetting has spread quickly in the past few years, fueled by worries of human induced climate change. The newfound popularity of carbon offsets warrants a closer examination of their legitimacy. Studies of some carbon offset schemes have revealed examples of fraud and abuse. These examples caution against the use of offsets for regulatory compliance.

This report offers an in-depth look into one of the most prominent carbon offset marketers in the United States, the Bonneville Environmental Foundation (BEF). The audit casts serious doubt on whether carbon offsets will ever be a product that can be verifiable and additional. The problems that plague the carbon offset concept will most likely never be solved, meaning that the offset mechanism will always be questionable in delivering real verifiable reductions in greenhouse gases.

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Global Warming Conference Heats Up in May 2010

CHICAGO, IL USA – What a difference a year makes! Last year at this time, global warming “skeptics” were dismissed as being a fringe group of dissenters from “the overwhelming consensus” of scientific opinion. Now, their critics are admitting that the science is far from settled and that global warming is not the crisis it was once made out to be.

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Increased Costs Are Blowin’ in the Wind

Todd Wynn
Cascade Commentary

by Todd Wynn and Eric Lowe

Increased Costs Are Blowin’ in the Wind

Summary: Wind energy on the Pacific Northwest’s electricity grid has increased substantially. Often overlooked are the impacts of increasing wind generation on the reliability and affordability of electricity that very well might outweigh any of the promised environmental benefits.

Download the .pdf here, or click through the break to read the commentary.

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