Exposing the Real Costs of “Green” Energy

Today Center of the American Experiment released a groundbreaking paper that addresses a relatively mild “green” proposal: legislation that would raise the renewable energy standard in Minnesota from 25% to 50%. Two of my staffers have been working on the paper for months, drawing on publicly available (but rarely consulted) sources to understand what would be necessary to achieve that 50% goal, what it would cost, how it would impact the state’s economy, and what effect it would have on global temperatures.

The paper is titled “Doubling Down on Failure: How a 50 Percent by 2030 Renewable Energy Standard Would Cost Minnesota $80.2 Billion.” With appendices, it runs to 75 pages. I am not aware of a similarly comprehensive analysis that has been done of any “green” proposal at either the state or the federal level. The paper is fully transparent: all assumptions, data and calculations are clearly set forth. The appendices are largely spread sheets. If anyone disagrees with the report’s conclusions, it should be easy to identify where and why those disagreements arise. You can read the paper here.

These are some of the headline conclusions, from the executive summary:

* Building and maintaining “green” wind and solar facilities, along with transmission lines and necessary natural gas complementary plants (to provide electricity when the wind isn’t blowing, i.e. 60% of the time), would cost $80.2 billion through 2050. For a state like Minnesota, that number is out of the question.

* Every household in Minnesota would pay an average of $1,200 per year, in 2016 dollars, through higher electricity rates and otherwise.

* Electricity prices would rise by 40.2%.

* Electricity-intensive industries like mining, agriculture, manufacturing and health care would be hurt the most. Once again, urban greenies are hammering rural, and physically productive, America. [That last is my commentary, not found in the executive summary.]

* Higher electricity prices are a dead loss that will reduce spending in other areas as household budgets are squeezed. Therefore, according to economist John Phelan, using the generally accepted IMPLAN software, achieving the 50% renewable goal would cost Minnesota 21,000 permanent jobs, and reduce the state’s GDP by $3.1 billion annually. It is one small step on the road to Venezuela.

* The big winners are the regulated utilities, whose profits would increase under the “green” scenario by $30 billion. This is why utilities lobby enthusiastically to be subjected to “green” mandates, and assure their customers that wind and solar energy are saving the planet.

Greenies will tell us, of course, that $80.2 billion, a declining economy and tens of thousands of jobs lost are a small price to pay to save the planet. But in fact, the reduction in CO2 emissions would be infinitesimal. Using the Obama administration’s highly questionable assumptions, achieving the 50% renewable target would reduce the Earth’s average temperature by 0.0006 degree Centigrade by 2100–an amount that is far too small to detect with even the most sophisticated equipment.

Liberals don’t actually believe that global warming caused by human CO2 emissions is an “existential threat” to mankind, as they like to say. If they really believed it, they would be campaigning to invade China and India, or to bomb their hundreds (if not thousands) of coal-fired power plants from the air. But I think that we can all agree that reducing global temperatures by 0.0006 of one degree isn’t saving anything.

Our paper addresses nuclear power at length. If we were serious about cutting CO2 emissions, we would replace coal, natural gas, wind and solar installations with nuclear power plants. That would save many billions of dollars, compared with the “renewable” mandate that excludes both nuclear and hydroelectric power from its scope. Our paper quantifies these savings.

Nuclear power is reliable, unlike wind and solar, so it requires no natural gas backup. It is relatively cheap, and would be cheaper still if archaic regulations were rationalized to preserve safety while reducing needless expense. Currently, it is illegal in Minnesota to build a nuclear power plant. If anyone seriously thinks CO2 is a problem, that needs to change.

I should note that long after we began work on this paper, the liberals moved the goal posts. Minnesota’s ultra-liberal governor has now come out in favor of 100% “renewable” power. If renewable means solar and wind, you can’t get to 100%. The wind doesn’t blow 60% of the time, and solar is even worse in a Northern climate. The entire concept is impossible, no matter how many billions you spend. Governor Walz’s proposal is unclear, it may include some nuclear–perhaps existing, but not new, nuclear. We will analyze that plan if it ever becomes more specific.

On the other hand, 100% CO2-free electricity production is achievable, but only if you go to 100% nuclear power. Again, if the greenies were serious, that is what they would advocate. But they know global warming hysteria is a joke, intended only to generate billions of dollars in cash flow to them and their allies. They are utterly dishonest, and no one should take seriously anything they say.

Much more could be said about the American Experiment paper, and I will return to it in the months to come. For now, let me just add that the “Doubling Down” in the paper’s title refers to the first paper that we did on “green” energy, co-authored by Peter Nelson and our own Steve Hayward, which you can read here. That paper was seminal, not to say prophetic. Its title is “Energy Policy in Minnesota: The High Cost of Failure.”

The high cost of failure has only gotten higher as Leftists have upped the energy ante and their allies–utilities and others–have reaped immense rewards.

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