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Oh Snap: New England Energy Markets Undermined By Renewables Subsidies. Will Minnesota Learn From the Looming Disaster?

We’re rapidly reaching a dangerous tipping point where the cost of  renewable energy subsidies and state-level renewable energy mandates will explode.

While renewable energy advocates talk about declining costs for wind and solar power, they don’t talk about the fact that subsidizing and mandating these resources has led them to take away so much market share from natural gas, nuclear power, and coal-fired power plants that they are not able to sell enough electricity, thus make enough revenue, to cover their expenses.

This would be good for consumers if wind and solar were able to reliably generate electricity 24/7, 365 days  per year, but they simply can’t. As a result we rely upon, and more importantly pay for“on-demand” sources of natural gas, coal, and nuclear power to be available when the wind isn’t blowing or the sun isn’t shining. These payments are generally made in the form of “reliability contracts.”

Utility Dive provides an excellent example:

“Mystic Generating Station. Mystic, the second largest power plant in New England, was unable to recover its costs for operations despite being a highly efficient resource in a critical load pocket. Mystic’s owner was ultimately forced into a position where retirement was the only financially prudent choice it saw. ISO New England followed by taking the unprecedented step of offering a cost-of-service contract to retain Mystic for fuel security.”

New England and California are already seeing this scenario play out. These areas are making direct payments to natural gas plants to remain open and provide on-demand electricity service for families and businesses. Renewable energy advocates hate this, and often claim these “reliability-must-run” payments are subsidies to the plants, especially as it pertains to the Trump Administration’s plan to compensate coal and nuclear power plants.

There is no question that renewable energy infrastructure and reliability payments increase the cost of electricity for consumers, but for renewable energy advocates to claim these payments are somehow unfair when they receive subsidies and guaranteed market share is  unbelievably hypocritical. The only reason anyone builds these sources is due to government mandates and subsidies.

As is always the case, subsidies beget more subsidies.

Minnesota’s electricity prices are skyrocketing because we are paying twice for our electricity. Once for incredibly expensive wind turbines (which can cost more than $4 million per turbine) and again for the on-demand electricity sources.

High electricity prices hurt low-income families, seniors, and they are devastating for industries like farming, mining, and manufacturing because it greatly increases the cost of doing business. If we want to grow living-wage jobs for all Minnesotans, we must stop the madness and stop mandating expensive renewable energy.

 

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