AUSTIN— Today, the Texas Public Policy Foundation, published the paper Intermittent Generation Comes to Texas: The High Cost of Renewable Energy.

“Low average power prices rooted in the subsidized growth of renewable energy are at variance with rationales for competitive markets,” said the paper’s author Robert Michael, Ph.D. “Texas ought to address the economic inefficiency of renewables in order to give consumers and producers correct market signals about today’s resource scarcities and tomorrow’s necessary invest­ments.”

The power industry is in a fundamental transition, its ultimate shape to be determined by technology, markets, and regulation. Mix intermittent generation with politics and federal, state, and local renewable subsidies, and you are unlikely to arrive at an economically rational outcome.

“Renewable energy subsidies transfer wealth from consumers and traditional generators to renewable generators and misallocate resources,” said Bill Peacock, vice president of research at the Texas Public Policy Foundation. “This is why the Public Utility Commission recently increased electricity prices by up to $2.5 billion a year. This situation will only get worse until the Legislature and PUC end the subsidies and require renewable generators to pay for the costs they impose on Texans.”

Key Points:

  • Intermittent renewable power, primarily wind and solar, is a major disruptive influence on operations and investments, and some of its costs are not being borne by those responsible for causing them.
  • The benefits of power produced without fuel are seemingly persuasive, but a growing body of research shows that wind power’s advocates in Texas have at best overstated their case.
  • If windy areas are remote from consumers, as in Texas, reaching a wind generator may require dedicated radial transmission that cannot be used to deliver power from alternative sources; its isolation from most of the energy grid also means that it contributes little to reliability.
  • Ratemaking practices for transmission that pass costs through to consumers take important intermittency risks away from wind generators and throw them on to non-wind producers and captive ratepayers.

For the full paper, please visit: