Democratic presidential candidates are lining up behind energy policies a new study found would significantly make everyday life more expensive.
Mandating even a small increase in renewable energy use “leads to substantial increases in electricity prices that mirror the program’s increasing stringency over time,” according to a new study by University of Chicago economists.
The study comes as 14 of 18 Democrats running for president in 2020 come out in support of a national renewable energy mandate or the Green New Deal, which calls for “net-zero” greenhouse gas emissions within 10 years. The Green New Deal, however, is a much more expansive policy that involves all sectors of the economy and expanding the welfare state.
When polled by The New York Times, most 2020 Democrats backed renewable energy mandate as part of plans to fight man-made global warming.
“I am an original cosponsor of the Green New Deal resolution, which commits the United States to meet 100 percent of our power demand through clean, renewable and zero-emission energy sources,” Democratic Massachusetts Sen. Elizabeth Warren responded to The Times.
Democratic presidential candidates Bernie Sanders of Vermont, Cory Booker of New Jersey, Amy Klobuchar of Minnesota, Kamala Harris of California and Kirsten Gillibrand of New York also cosponsored the Green New Deal, which was introduced in February by Democratic New York Rep. Alexandria Ocasio-Cortez and Democratic Massachusetts Senator Ed Markey.
Booker told The Times he supported a national renewable energy mandate without mentioning the Green New Deal. Klobuchar, however, got more specific and favored a renewable energy mandate of 25 percent by 2025.
“Twenty-two states throughout the country have already demonstrated the value of establishing renewable electricity standards,” she told The Times.
So far, 29 states and the District of Columbia mandate certain amounts of electricity come from renewable sources, primarily solar and wind. Many states are looking to increase those mandates, an expensive prospect for consumers.
Gillibrand, Harris and former Colorado Democratic Gov. John Hickenlooper also support a national renewable energy mandate. Washington Democratic Gov. Jay Inslee seemed to be more broad, touting a “clean” energy mandate that could be seen to also more than renewables.
Washington state lawmakers passed a “clean” energy mandate Monday, which Inslee will sign. That bill bans coal-fired power and leaves the door open for nuclear plants and natural gas with carbon capture systems. California signed similar legislation into law last year.
Washington already gets most of its electricity from hydroelectric dams. But even small mandated increases in renewables come with a relatively high price tag, the University of Chicago study, co-authored by former Obama economic adviser Michael Greenstone, found.
“The estimates indicate that in the 7th year after passage average retail electricity prices are 1.3 cents per kWh or 11% higher, totaling about $30 billion in the RPS states,” the study found. “And, 12 years later they are 2.0 cents, or 17%, higher,” the study found.
For starters, the study noted that the intermittency of renewables means they have to be paired with back-up, either batteries or another power source. Many wind and solar farms are paired with natural gas “peaker” plants that rapidly ramp up and down power output.
The study authors also noted that wind and solar farms “are often geographically dispersed, and are frequently located away from population centers, all of which raises transmission costs above those of fossil fuel plants.”
A third factor the study considered was the fact that state renewable energy mandates prematurely displace existing generation, mostly coal plants, which further add to utility bills.
Hundreds of coal-fired generators have been, or are scheduled to, closed down from regulations and economic factors. The costs to decommission plants or switch them to burn natural gas “are borne by some combination of distribution companies, generators, and ratepayers,” the study found.
“Thus, the early retirement or decreased utilization of such plants can cause retail electricity rates to rise even while near zero marginal cost renewables are pushing down prices in the wholesale market,” reads the study.
“When the CO2 emissions estimates are combined with the estimated impact on average retail electricity prices, the cost per metric ton of CO2 abated exceeds $130 in all specifications and can range up to $460, making it at least several times larger than conventional estimates of the social cost of carbon,” the study found.
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