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Friday, October 24, 2014
Wind Power Drives Electricity Prices Up
By NCPA @ 12:21 AM :: 3985 Views :: Energy

Texas Comptroller Report Destroys Wind Industry Claims

by James M Taylor, Heartland Institute, October 21, 2014

A new report by the Texas Comptroller documents how wind power is raising electricity prices in Texas, throwing cold water on false assertions made by American Wind Energy Association (AWEA) lobbyists. Big Wind made its false assertions about Texas wind power after I pointed out in a Forbes.com article that electricity prices are soaring in the states most reliant on wind power.

As I documented at Forbes.com, in nine of the 10 states most reliant on wind power, electricity prices are rising at least five times faster than the national average. This huge disparity in electricity price trends directly contradicts assertions by the subsidy-dependent wind industry that wind power is reducing electricity costs and spurring job growth.

AWEA’s lobbyists frantically responded to my article, publishing an item on the AWEA blog claiming wind power is reducing electricity costs in Texas. AWEA claimed that if you ignore the top 10 wind power states and dig down deep enough – all the way to the 11th most wind-dependent state in the nation – declining electricity prices in Texas prove wind power lowers electricity prices.

Texas state officials who oversee the Lone Star State’s electricity market say the opposite.

On September 23, the Texas Comptroller published Texas Power Challenge: Getting the Most from Your Energy Dollars. The report documents falling electricity prices in Texas, while also emphasizing “Texas faces many challenges to remain affordable, competitive and reliable.” Chief among those challenges is dealing with costly and unreliable wind power. Fully one-third of the Texas Comptroller report addresses high prices and reliability shortcomings associated with wind power.

Among the wind power shortcomings documented in the Texas Comptroller’s report:

•    Wind power is more costly than conventional power and will continue to be so for decades to come.

•    Wind power is intermittent and unpredictable. This requires conventional power plants to back up wind power, ramping conventional power output up and down on short notice. This reduces the efficiency and raises the costs of conventional power.

•    One of Texas’s most pressing challenges is meeting peak demand during hot summer days. Wind power, however, delivers its least production on hot summer days.

•    Wind production peaks when electricity demand is at its lowest, during cooler weather.

•    Wind power is most productive along Texas’s coastal shores (where wind power’s environmental infringement is most troubling).

•    New transmission lines must be built to deliver wind power from remote wind farms. This imposes additional costs on electricity consumers, already costing Texas households an extra $70 to $100 per household per year. A Texas grid official advised the Texas Public Utility Commission further expansion of the grid to accommodate wind power will cost another $2 billion – which is an additional $200 per household per year.

•    Wind power unfairly benefits from preferential subsidies.

In short, Texas electricity prices have declined due to deregulation and price declines in other energy sources, such as natural gas. The high price of wind power has stunted that price decline, rather than contributed to it, yet wind power lobbyists ridiculously attempt to take credit for the system-wide price declines. Texas electricity officials explained it best, with the Texas Comptroller report observing regarding wind power: It is time to “end the tax credits and property tax limitations on new generation that helped grow the industry, but today give an unfair market advantage over more reliable power sources.”

AWEA sought to distract attention from soaring electricity prices in the 10 states most dependent on wind power. By highlighting the Texas electricity market, however, AWEA merely presented additional real-world evidence that wind power is unreliable, raises electricity costs, and destroys jobs.

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