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Let customers choose their energy provider, not government

by Greg R. Lawson Jul 28, 2016

When renewable energy is fully ready for primetime, it should not be artificially kept off the electrical grid just to prop up older technology. However, neither should it be forced on the grid to displace more reliable, cost-effective technology.

The problems with government intervention in support of favored energy resources are becoming obvious in Europe, as documented recently by the The New York Times:

Germany, Europe’s champion for renewable energy, seems to be having second thoughts about its ambitious push to ramp up its use of renewable fuels for power generation.

Hoping to slow the burst of new renewable energy on its grid, the country eliminated an open-ended subsidy for solar and wind power and put a ceiling on additional renewable capacity.

Germany may also drop a timetable to end coal-fired generation, which still accounts for over 40 percent of its electricity, according to a report leaked from the country’s environment ministry. Instead, the government will pay billions to keep coal generators in reserve, to provide emergency power at times when the wind doesn’t blow or the sun doesn’t shine.

Renewables have hit a snag beyond Germany, too. Renewable sources are producing temporary power gluts from Australia to California, driving out other energy sources that are still necessary to maintain a stable supply of power.

Ohio has a similar renewable energy standard. In light of such reports from Europe and even the United States, Ohio’s mandate deserves serious scrutiny. For more on this issue check out our own Joe Nichols’ report and my testimony to Ohio’s Energy Mandates Study Committee last year.

Of course, renewable energy does have a future in Ohio’s energy mix. If and when storage becomes cost effective, renewables may even fully displace fossil fuels and nuclear power. But that day is not today.

The two main sources of renewable energy, wind and solar, are intermittent. That is, they don’t always produce electricity. Further, excess energy produced at non-peak demand can’t be stored cost effectively for use at a time when demand is most needed. In turn, the storage of renewables displaces resources that provide more stable energy, such as coal, natural gas, and nuclear. 

This means consumers take it on the chin twice: the first time with the cost of subsidies to renewables and the second for subsidizing other sources to stay online.

Ohio’s electrical grid should be reserved first and foremost for energy resources that provide the most reliable, cost-effective service to consumers. If that’s coal today and wind tomorrow, fine. But our free economic environment should decide—not government.