Renewable Energy’s Reversal of Fortune
“They told us the wind turbines were going to be good for the city; that our electric rates would go down. But that hasn’t happened. They keep putting up more and more of them and they are getting closer to the neighborhoods where you hear the noise all night while you are trying to sleep. Plus,” Monica told me last week during my Palm Springs vacation, “they look horrible; like a junk yard. It totally ruins our mountain views!”
I met Monica in a store where she works. When she found out that I write on energy issues, she told me her story. Her electric bills run as high as $7-800 a month in the summer for a 1600-square-foot home. “I work for the electric company,” she said. “Everything I have goes to pay my bill.” With her bills so high, Monica got behind. She’s been on a payment plan for three years and doesn’t see any hope of ever getting caught up. Instead of using air conditioning, she uses the swamp cooler whenever possible—but with temperatures above 100 most of the summer, the AC is essential. She’s cut back use of the pool pump. “The pool’s not crystal clear,” she told me, “but my bill is a little less
No one could have predicted the reversal of fortunes the renewable energy industry is facing
Nearly a decade ago, in the mid-2000s, states were busy passing legislation that mandated the use of renewable energy—generally called a Renewable Portfolio Standard (RPS). Today, more than half the states have renewable requirements that range from modest to aggressive with California’s being the most stringent at 33% by 2020
Legislators eagerly embraced the renewable mandates based on three specific myths:
· Climate change is a manmade crisis caused by the use of hydrocarbons,
· Hydrocarbons are finite and are about to run out and, therefore, are expensive. And
· Renewable energy, specifically the wind and the sun, is unlimited and free.
Since then, each of the key selling points has been wiped out.
Environmentalists have been crying “wolf” for so long that the public has become immune to their scare tactics—the disasters predicted at the first Earth Day haven’t happened and despite increasing CO2, the climate hasn’t warmed for 17 years.
The combination of new technology and new applications of old technology have unleashed a new abundance of natural gas and oil—dropping the prices and displacing the market for renewables. Last month, Atlantic Magazine’s cover announced “we will never run out of oil.”
Increasing utility bills have convinced people that, even though wind and sunshine are free, converting them to electricity is not—as Monica found out. Europe, the global leader in renewable energy, is backing away from the policies that are making energy more expensive and Europe less competitive.
Combined with the hard-hitting economic collapse and ongoing sagas of taxpayer-funded green energy failures, the public’s appetite for renewable energy has waned—producing headlines, such as “Cheap natural gas prompts states to sour on renewables” and “U.S. states turn against renewable energy as gas plunges.” Compared to last year, investment in renewable energy has dropped: 54% in the US and 25% in Europe—with the sharpest decline, 96%, in Spain. But, as long as the mandates exist, so does the rationale for subsidies, grants, and tax credits.
No wonder the 2013 legislative season was filled with renewable mandate policy action—including calls for repeals, reforms, and expansions. Wind Power Monthly reports: “there have been at least 35 bills to weaken renewable portfolio standards proposed in 16 of the 29 states that have them on the books.”
Six states introduced bills for a full repeal of the mandates: Texas, Minnesota, West Virginia, Wisconsin, North Carolina, and Kansas. While none passed, Kansas and North Carolina had bills with strong support.
Eleven states—Montana, Ohio, Virginia, Connecticut, Maryland, Maine, Missouri, Oregon, Pennsylvania, Vermont, and Washington—had bills aimed at reforming the mandates—several of which would have qualified hydroelectricity as “renewable energy.” Montana passed a bill to include the expansion of existing hydroelectricity as a part of eligible renewable resources. Virginia repealed incentives for electric utilities to pursue renewable energy investments. Vermont passed a zoning bill that would make it more difficult to site a wind farm.
Ten states—Arkansas, Colorado, Maryland, Michigan, Minnesota, Nevada, Oklahoma, Pennsylvania, Texas, and West Virginia—had bills to expand the current mandates. Two have passed: Minnesota and Colorado. The Colorado bill increases the mandate for rural electric cooperatives. The Minnesota bill establishes a 1.5% solar energy mandate, to be met by 2020 for investor-owned utilities. Electricity co-ops and municipal utilities are exempt. Nevada’s legislative session ends on June 3. A bill, SB123, which would force the use of more renewable electricity, is still being debated. The Las Vegas Review Journal’s Editorial Board called SB123 “a tax hike on everyone” and says it “is a feel-good political initiative, not an economic one.”
While this flurry of activity doesn’t declare a definitive winner or loser, renewable energy advocates are clearly unhappy about fighting a battle they thought they’d already won. Addressing the situation they find themselves in, Wind Power Monthly, offers the following insight from Jeff Deyette, assistant energy research director at the Union of Concerned Scientists: “These opponents have yet to make much progress in their efforts, but they have forced renewable energy advocates to expend valuable resources defending their positions. If you measure success by outright repeal of these standards, they may be successful with one or two. I don't think they are going to get much more than that. But if you measure success in a different way, in that they are slowing our ability to do what we should be doing, which is going out and expanding these policies and creating larger markets for renewable energy, then I think they have been successful.”
Roger Freeman, a Denver-based environmental attorney, who believes that the RPS needs to be protected, acknowledges: “the national trend is in the opposite direction.” Lyndon Rive, SolarCity CEO, says: “We expect in the next year or two that state-based incentives will disappear.”
Arizona’s Corporation Commission, which regulates utilities in the state, has “pulled back on incentives for rooftop solar installations,” as Tucson Electric Power Co. and Arizona Public Service Co. “have reached incremental goals for such installations under the state’s renewable-energy standard.”
Without the “marching orders” from the statehouses to the electric utilities, Rhone Resch, head of the Solar Energy Industries Association, says: “Without some carrot or stick, there’s little reason to pick [renewables] up.”
With the “national trend” heading away from state-supported renewable energy mandates, some hope that Congress will set a national renewable standard. But, Karin Wadsack, director of a Northern Arizona University-based project to monitor these legislative battles, concedes: “I wouldn’t see it happening in our current set of national priorities.”
Monica thought the wind turbines would be good, that they’d lower her utility bills. Instead, she’s scared to open her bill. Advertisements featuring a glistening white wind turbine in a green field don’t match the reality that residents of Palm Springs—and other locales—are living with. “They look horrible; like a junkyard.”
As the reality of policies that promote renewable energy sets in, fewer people want it. You can be sure that the 2014 legislative sessions will be filled with additional attempts to repeal or reform existing Renewable Portfolio Standards that could bring about renewable energy’s reversal of fortune—and add to yours, as cost-effective coal-fueled power allows you to pay less, and your tax dollars won’t be going to green energy schemes that line the pockets of political cronies.
[First Published by Townhall.com]