The Achilles Heel of Renewable Energy — The Cost

Critics of the British Government’s energy and emissions plan point to its goal of turning the most expensive and least consistent fuel sources — wind and solar — into base load electricity sources for the country. The result, according to the critics, is that power costs will climb sharply and reliability will be at risk. In their view, the British Government is turning electricity economics on its head to the detriment of consumers.
In the U.S. the Obama administration’s energy and carbon emissions policy seems to be based on similar feel-good concepts. The Administration is favoring wind, solar and biomass over nuclear, natural gas and clean-coal. By approving regulatory and/or government mandates for using renewables, the mix of fuel sources will change as well as the trajectory of future electric power prices. The possible economic problems from these mandates are only now becoming more visible. We clearly will hear much more about this issue in the coming months and years.

An article on the green power movement in China published in The New York Times highlighted the cost issue in that country. The author reported on the issue of solar power projects being proposed and built in China and the cost of the power they will produce. The Chinese government in recent years punished three of its largest power companies by restricting them from building more coal-fired power plants because they had failed to comply with environmental regulations at existing coal-fired plants. To meet their growing power needs, the companies agreed to pay $0.59 per kilowatt hour for electricity to be generated from new solar facilities.

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