Posted by Jonathan Adler:
Rewewable Energy Shortfalls:
http://volokh.com/archives/archive_2009_07_05-2009_07_11.shtml#1246718225
The WSJ [1]reports that the hard push for renewable power in
California could produce near-term power shortages, particularly in
the even the California economy rebounds any time soon.
California's utilities are barreling ahead to try to meet a state
mandate to garner 33% of their power from renewable sources by
2020, and some officials are concerned the effort might push up
electricity prices and crimp supplies.
The state auditor warned this week that the electricity sector
poses a "high risk" to the state economy. A staff report from the
state energy commission also warns that California could find
itself uncomfortably tight on power by 2011 if problems continue to
pile up.
Utilities complain that the ambitious renewable-energy mandates,
combined with tougher environmental regulations on conventional
plants, are compromising their ability to deliver adequate power. .
. .
The stresses being felt in California could be a harbinger of
problems to come in other states. The federal Waxman-Markey
climate-change bill, passed by the House of Representatives on June
26, would require states to obtain about 15% of their electricity
from renewable sources by 2020. Currently, about 4% of U.S.
electricity comes from renewables, excluding hydropower.
California's 33% renewable-energy target is so ambitious that it is
likely to miss the goal by five years or more, energy officials now
concur.
State energy agencies recently concluded it could cost $114 billion
or more to meet the 33% mandate, more than double what it might
have cost to achieve an earlier 20% requirement. Consumers will
bear those costs, one way or another.
Agencies also identified problems with constructing sufficient
transmission capacity to move renewable-based energy to cities.
One particular problem is that some popular forms of renewable power,
such as solar and wind, are insufficiently reliable to provide base
load power because they can be intermittent. They are also not yet
cost-competitive with traditional power sources, which is why they are
both subsidized and mandated.
If the goal is to encourage cost-effective renewable energy, without
bankrupting consumers or creating supply problems, a revenue-neutral
carbon tax would make more sense than the current mix of regulations
and subsidies. It would create space for renewables as they become
more cost-effective and encourage conservation without creating
additional distortions in energy markets or prejudging what percentage
of what sort of power source is the "right" amount. It would also be
less prone to rent-seeking than massive bureaucratic regimes (a la
[2]Waxman Markey).
References
1. http://online.wsj.com/article/SB124658578833590355.html
2.
http://article.nationalreview.com/print/?q=YTc1MmVhMGYxY2UzNzAwMTJlODBjZjg2NDJjNmM2MWE=
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