Georgia Senate Results Mean Boatloads of Bad Energy Policy
As of this writing, it appears that both Georgia Senate seats will go to Democrats, meaning the Senate will be a 50-50 tie. Future Vice President Kamala Harris (who was quick to sign on to the Green New Deal) will be the deciding vote in the event of a tie, which bodes extremely poorly for energy policy in our country for at least the next two years.
What to Expect
It isn’t likely that the Senate will approve anything quite as crazy as the Green New Deal (if Joe Manchin is a voice of sanity, but who knows), but the Biden administration wants to spend $2 trillion building thousands of wind turbines and solar panels, and they want the grid to be carbon-free by 2035.
The worst part about the situation is that none of the above policies need to be enacted for our energy system to become more expensive and less reliable because the system is already rigged in favor of wind and solar at the expense of reliable coal and nuclear plants, and to a lesser extent, natural gas plants.
However, we can still take a look at their proposals and their likely outcomes.
Your Green New Electric Bill Is Out of This World
Biden’s plan claims it will “achieve carbon-pollution free energy in electricity generation by 2035.” To accomplish this, “Biden will scale up best practices from state-level clean energy standards.”
California has among the most aggressive renewable energy mandates in the country. As a result, their electricity prices have increased 4.3 times faster than the national average since Governator Arnold Schwarzenegger (R) signed an executive order increasing the state’s renewable energy mandate to 33 percent by 2020. Since that time, Governors Jerry Brown and Gavin Newsom have only made these renewable energy mandates more expensive and unrealistic.
Rather than scaling up these mandates, this should be an example of what not to do.
Bankrupted by Batteries
As I wrote in July of 2020:
Another key focus of Biden’s plan is to invest in battery storage. But as we have discussed in the past, battery storage is an impossibly expensive fantasy. A slide created by Xcel Energy for the Midwestern Governors Association shows that electricity prices would exponentially increase the cost of electricity in the United States if the grid were to be powered by only wind turbines, solar panels, and battery storage.
If America were to try and use these three technologies to provide 100 percent of our electricity, the nation’s annual electric bill would grow from about $397 billion in 2019, to $6.6 trillion dollars every single year, an annual increase of $6.2 trillion.
This is the equivalent of every man, woman, and child in the country paying an additional $19,000 per year for their electricity, and it is important to remember that these are low end estimates, because they don’t account for the cost of transmission lines, distribution systems, or other costs that are associated with retail electricity rates.
Outlawing the Internal Combustion Engine?
Biden climate plans have called for subsidizing electric vehicles (EVs) and building 500,000 EV charging stations, but it is also possible that he will try to follow in the footsteps of California Governor Gavin Newsom and sign legislation banning the sale of gas-powered vehicles by 2035. This policy will harm low-income families who can’t afford to buy an expensive electric vehicle because it will make them more dependent upon public transit, which is less convenient than personal transportation, limiting their job opportunities.
While hurting the poor, Biden’s promotion of electric vehicles will primarily benefit white, wealthy liberals and raise the cost of driving for everyone else. According to EIA, 67 percent of EV owners make more than $100,000 per year and only 3 percent of those earning less than $25,000 own an EV.
This means EV subsidies are a wealth transfer from low-income families to the wealthy.
EV chargers are also costly, with the fastest chargers costing $50,000 per charger. Contrast this with replacing a gasoline pump, which costs $260 to $1,000 per unit. This means Biden wants to spend $25 billion on a project that likely won’t even replace the number of gasoline pumps we already have in existence today.
It looks like the American people will get a taste of the Green New Deal now that the Biden administration will have a supportive Senate. It is probably a great time to buy utility stocks because they will be building as many wind turbines and solar panels as they possibly can over the next few years. That’s not financial advice, though.