fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

Why the Minnesota “Conservative” Energy Forum’s “Cleaner and Cheaper” Slogan is a Fraudulent Talking Point

Yesterday, I wrote about how the Minnesota “Conservative” Energy Forum received nearly 86 percent its funding from the liberal Energy Foundation in 2017, the most recent year for which data are available. While this should raise big red flags for Minnesota conservatives, the policies that MNCEF advocates for are ultimately far more important than where they get their funding.

Unfortunately, MNCEF uses this money to try and convince conservative Minnesotans that renewable energy sources like wind and solar are “cleaner and cheaper” than traditional energy sources like coal, natural gas, and nuclear power, even though wind and solar are far more expensive than traditional power sources, and they are likely dirtier, too.

This article is the second in a series, and it will explain how wind and solar cost much more than traditional electricity sources in Minnesota.

Wind and Solar Aren’t Cheaper

Wind and solar special interest groups often claim that wind and solar are the lowest-cost forms of electricity on the grid, but these claims are incorrect, at best. At their worst, they are intentionally deceitful.

Quoting the Subsidized Cost of Wind and Solar

One way that renewable energy special interest groups claim wind and solar are the lowest cost resources on the grid is to quote the subsidized cost of these energy sources, but as all conservatives know, subsidizing something doesn’t reduce the cost to produce it, it simply changes how, or who, pays for it.

Subsidies for wind and solar subsidies may reduce the impact these weather-dependent energy resources may have on your electric bill, but they also increase the amount you are forced to pay in taxes. It doesn’t matter which pocket gets picked to pay for wind and solar, at the end of the day, what is most important is the fact that you end up with less of your own money.

Unsubsidized Wind and Solar Are Not Cheaper than Minnesota’s Existing Coal, Natural Gas, or Nuclear Power Plants

Research from Bloomberg New Energy Finance (BNEF), which was purchased with a grant from the McKnight Foundation (you can’t make this up), shows that the unsubsidized cost of wind and solar in Minnesota were $38 per megawatt hour (MWh) and about $60/MWh, respectively in 2018. At these prices, wind and solar cost more than Minnesota’s existing coal, natural gas, and nuclear power plants.

The graph below shows the cost of generating electricity at different facilities in Minnesota was using real-world data from the Federal Energy Regulatory Commission (FERC), and BNEF’s estimates for the cost of wind and solar in our state.

As you can see, the unsubsidized cost of wind is higher than the electricity generated at the Sherburne County (Sherco) coal facility, and the Boswell coal facility. In contrast, BNEF’s estimate for unsubsidized wind was about $3/MWh less than the cost of running the Allen S. King coal plant. Natural gas and nuclear were also less costly to operate than wind in Minnesota. Unsubsidized solar was nearly double the cost of these other energy resources.

However, the raw numbers here don’t even get anywhere close to telling the whole story.

Wind and solar are entirely dependent upon the weather to generate electricity, whereas coal, natural gas, and nuclear plants operate around the clock, 365 days per year. Unlike wind, these traditional energy resources can operate when the temperatures dip below -22 degrees Fahrenheit (arguably when you need reliable energy the most), and unlike solar, it is not “simply too expensive” to clear snow off of these power plants to ensure they operate when it snows.

The Hidden Costs of Wind and Solar

In the real world, the unreliability of wind and solar add huge hidden costs to incorporating them onto the electric grid.

One of these hidden costs is a “load balancing” cost or reliability costs. Wind and solar only generate electricity when the weather cooperates, and because there is no way to store electricity affordably or for long periods of time, Minnesotans need other types of power plants, like coal, nuclear, or natural gas, to make sure that the power stays on at our homes, businesses, and hospitals when wind and solar don’t show up to work.

Having to pay for the wind and solar on the grid, in addition to the reliable “backup” power plants on the grid is incredibly expensive because Minnesotans don’t pay for either wind or natural gas based on what is currently available, they pay for both, at significant cost.

Another hidden cost for wind and solar is the transmission infrastructure needed to connect distant wind and solar facilities to the Twin Cities. In fact, wind and solar also billions of dollars in transmission lines, but none of these enormous costs are ever reflected in the cost estimates wind and solar advocates use to peddle the myth that wind and solar are the lowest-cost sources of electricity, so we at Center of the American Experiment, Mitch Rolling, specifically, calculated it for them.

The graph below shows the cost of different generation technologies using the data from FERC referenced above for coal, nuclear, and natural gas. For wind and solar, the BNEF figures from above are used. For the property taxes, load balancing cost, and utility profits, we used the assumptions provided by Xcel Energy in their Integrated Resource Plan. Transmission expenses were assumed to be $12 billion, based on informal, preliminary cost estimates for the next big transmission build-out, CAPX2050.

Once things these hidden costs are taken into account, using wind to generate electricity is 2.5 times more expensive than the power generated at Sherco, and solar is 4.4 times more expensive.

This is why Minnesota’s electricity prices have increased 30 percent faster than the national average since 2005, when Xcel Energy was required to add significant amount of wind to its system. The price increases became even steeper after 2007 because that is when Minnesota politicians passed a renewable energy mandate requiring 25 percent of Minnesota’s electricity come from renewable sources (but not large hydro) by 2025.

The most important question ordinary people can ask wind and solar promoters is this: “If wind and solar are so cheap, why is Minnesota’s electricity so expensive?”

Liberal renewable energy groups prey on the fact that most ordinary people think the wind is free. While wind has no fuel costs, it still costs more than Minnesota’s existing coal, natural gas, or nuclear power plants because it is expensive to build wind turbines. Think of it this way, is your car free if you ride your bike to work?

On it’s face, you may think, “Yeah!” However, the fuel cost of the car avoided by biking, but the insurance, maintenance, registration fees, and loan payments don’t go away for the days you biked to work that day. The same principle applies to the electric grid. The electricity isn’t free because the wind was blowing today, because there are other bills to pay.

Conservatives should understand there is simply no such thing as a free lunch.

Conclusion

All of this information on the cost of energy in our state is publicly available to anyone who is intellectually curious about the cost of energy in Minnesota.

While it is unfortunate that liberal groups like Fresh Energy and the Minnesota Center for Environmental Advocacy peddle misleading information about the cost and reliability of wind and solar in Minnesota, it is understandable, because frankly, who has ever accused Congresswoman Alexandria Ocasio-Cortez of having a firm grasp of energy policy, or basic financial literacy?

A group that promotes itself as a conservative organization, like the Minnesota “Conservative” Energy Forum, however, should know better. Sadly, they repeat the same talking points as far-left liberal groups. This is why it is my sincere belief that MNCEF isn’t really a conservative organization at all. In reality, they are an astro-turf group funded by liberal environmentalists to intentionally mislead conservatives on energy issues.

Monday, I will discuss why it is debatable as to whether wind and solar are “cleaner” than coal, natural gas, or nuclear, at all.

 

Comments

Subscribe

Categories

Upcoming Events

  • Morning in Minnesota: St. Cloud

    Location: St. Cloud

    Sign up HERE! Courtyard by Marriott St. Cloud 404 West Saint Germain Street St. Cloud, MN, 56301 Please join Center of the American Experiment on Tuesday, July 21 for breakfast with Center policy fellow and education expert Catrin Wigfall as she explains K-12 education in the state and its persistent disparities despite decades of increased spending. Following her presentation, Catrin will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude   Catrin Wigfall is a Policy Fellow at Center of the American Experiment. She is also the director of EducatedTeachersMN and EmployeeFreedomMN. Catrin’s…

    Register Now
  • Kristi Noem: The Courage to Reject a Shutdown

    Location: Online

    Sign up HERE! Join us Wednesday, July 8th for an interview with South Dakota Governor Kristi Noem over Zoom. In response to COVID-19, Noem defied the norm of a statewide shutdown and let South Dakotans choose for themselves what safety precautions to take. Tune in to this live online event to hear how Governor Noem preserved her state’s economy while still keeping citizens safe. Wednesday, July 8th at Noon CT Sign up HERE!  

    Register Now
  • Morning in Minnesota: Marshall

    Location: Marshall Golf Club

      Sign up for this event HERE! Please join Center of the American Experiment on Thursday, July 16 at Marshall Golf Club for a breakfast with Center economist, John Phelan, as he discusses Minnesota’s economic future. Following his presentation, John will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude John Phelan is a graduate of Birkbeck College, University of London, where he earned a BSc in Economics, and of the London School of Economics where he earned an MSc. He worked in finance for ten years before becoming a professional economist. He…

    Register Now