Wyoming could profit from bad energy policies

Posted 9/30/21

In its latest long-term plan, Pacificorp, a major utility producing and transmitting power across the Western United States, plans to retire 14 of its 22 active coal plants by 2030. The utility, …

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Wyoming could profit from bad energy policies


In its latest long-term plan, Pacificorp, a major utility producing and transmitting power across the Western United States, plans to retire 14 of its 22 active coal plants by 2030. The utility, which operates as Rocky Mountain Power in Wyoming, plans to be carbon free by 2050. 

Some of the lost energy production from the closed plants will be replaced by proposed advanced nuclear reactors, but the bulk of it will come from unreliable wind and solar energy, as well as battery storage charged up with those renewables. The nation’s march toward renewable energy sources continues unabated, and Pacificorp is responding to that demand. 

Newspapers are full of headlines about how cheap wind and solar have become, and proponents are all over Twitter to tell you how much money we can save if we get rid of expensive fossil fuels.

European countries have had much more ambitious goals for renewable energy than the U.S. for some time, and Germany is considered the go-to model for the world. One would expect that Europeans would be paying a fraction of what U.S. energy consumers pay. In fact, quite the opposite is happening. 

Since January, prices for electricity in Germany have doubled over the country’s 10-year average. Germany isn’t alone in its energy poverty. As a result of government-imposed fees on natural gas production and renewable energy subsidies, Spain’s electricity prices have surged to record highs. Even though Sweden faced no energy shortage, the country fired up an oil-powered energy plant last week to help lower economy-crushing energy prices. 

Why aren’t we seeing any decrease in energy prices as the globe builds more solar and wind farms, especially in nations with massive investments in renewable energy? When the sun shines in a cloudless sky and the wind blows solidly, wind and solar are incredibly cheap, but these conditions for optimal renewable energy production are met for small fractions of the day, which may or may not follow energy demand. 

No government mandate will ever suspend the laws of physics, and dealing with the unreliable nature of the wind and sun is enormously expensive. These costs will inevitably be passed onto consumers and taxpayers.  

Much of the shift in energy demand here in the U.S. is a result of government policy, but these policies enjoy lots of support, especially in the large markets of Washington and California. Driven by concerns about global warming, people will give an enthusiastic yes to renewable energy policies. 

Their attitudes, however, quickly change when you ask them to open their wallets to pay for it. In 2019, The Associated Press-NORC Center for Public Affairs Research surveyed people on how large of a fee on their electric bill they’d be willing to pay to combat climate change. For $1 a month, 57% of respondents were happy to join the fight against climate change. For $10 per month, support is cut in half. By the time the price gets to $100 per month, only 16% are still committed to the fight.

The inevitability of rising energy costs is just one problem that will quickly sour America’s appetite for renewable energy. The other issue is a destabilized grid. In the summer of 2020, when California saw high temperatures and little wind, the blackouts rolled. 

Texans went without heat this past winter when temperatures dropped and wind farms couldn’t meet demand. Renewable energy proponents pointed out that natural gas plants were unable to meet the demand, too, so they blamed fossil fuels. It’s true that surging gas demand exceeded supply, but what’s not mentioned is that the enormous investments in wind and solar energy deprive investments in reliable energy, as Pacificorp’s long-term plan illustrates. 

There are plenty of places — such as Wyoming, North Dakota and South Dakota — that seem to have no problem keeping the heat on when temperatures plunge, as they do every single winter.

But the more we have to rely on weather-dependent energy sources, the more we can expect not to have energy when we need it and pay a lot for the energy we’re getting. 

For now, support for green energy remains high and politicians who push for renewable energy win elections. When the economic realities of renewable energy start showing up on people’s electric bills — and when they sit through cold snaps with no heat or roast in heat waves without air conditioning — public support will quickly wane. 

Besides supporting development of advanced nuclear reactors, some Wyoming legislators have pushed bills to make it harder for utilities to close coal and natural gas plants. We should keep some reliable energy plants operational, because Wyoming could capitalize on the consequences of a short-sighted energy policy. When residents of California and Washington are sweating on a windless day, they’ll pay handsomely for an abundant supply of reliable and affordable energy from coal and nuclear, and we’ll have plenty to sell.

Coal production will almost certainly never return to its heyday, and it would be unwise to bet the state’s economy on such a future resurgence. Likewise, innovation in energy storage technology could address wind and solar intermittency problems, which would render fossil fuels obsolete. Currently, the technology is far from that point, but no one can predict future innovations. So, keeping some reliable energy handy won’t address Wyoming’s budgetary challenges. 

But it would be wise for Wyoming to plan for a day when economical realities take the wind out of renewable energy support. Continuing to develop advanced nuclear and keeping some coal-fired energy capacity ready for a day when energy-starved states need it could be profitable.