- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Today's Calamity: Don't Forget About Renewable Energy Mandates

Posted By Nicolas Loris On September 1, 2009 @ 3:55 pm In Energy | Comments Disabled

Cap and Trade Calamities [1]

It’s easy to forget that the Waxman-Markey cap-and-trade bill is not just about cap and trade. There are a number of other problematic provisions buried in the 1,427 pages of legislation. Cap and trade should receive the most attention because it’s the most economically devastating [2]part of the bill, but Waxman-Markey also includes a renewable electricity standard [3]that mandates 6 percent of the nation’s electricity come from renewable sources, chiefly wind energy but also others like biomass and solar, by 2012. The mandate increases each year until it reaches 25 percent by 2025. It’s a provision that’s had a difficult time moving through Congress in previous bills.

Wind and solar power are promising ideas. They are renewable and clean, and parts of the U.S. are very rich in solar and wind resources. But right now it costs far too much [3]money to generate energy from these sources. Established energy sources like nuclear, coal, oil, and natural gas are far more efficient. If any renewable energy source is economically competitive (free of government subsidies that create government dependence), it will have its place in the market, but it’s not up to the government to pick winners and losers among energy sources. Doing so could crowd out energy sources we haven’t even discovered yet.

Government subsidies for renewable energy are only necessary because renewables are too expensive to compete in the market otherwise. In effect, the government is forcing costlier energy options on electricity consumers. Since renewables are lavished with substantial tax breaks, a national mandate will mean higher taxes and higher electric bills for Americans.

This isn’t just a game of estimates; we can learn from example. Britain’s renewable energy plan [4] will cost 11 to 17 times more than the economic benefits it will bring. In Spain [3], electricity bills are 10 times higher because of renewable mandates.

Right here at home, Austin, Texas, electricity providers gave consumers a choice to purchase renewable energy. The problem is people aren’t buying it [5]because it’s too expensive and now utility companies are spreading the costs to all the consumers. Moreover, in West Texas, wind suppliers are actually paying people [6]to take their energy.

Renewable energy and other innovative ideas to create energy have potential, but their fate should be decided by the market—not Members of Congress.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/09/01/todays-calamity-dont-forget-about-renewable-energy-mandates/

URLs in this post:

[1] Image: http://www.foundry.org/tag/cap-and-trade-calamities/

[2] economically devastating : http://www.heritage.org/Research/EnergyandEnvironment/cda0904.cfm

[3] a renewable electricity standard : http://www.heritage.org/research/energyandenvironment/wm2436.cfm#_ftn3

[4] Britain’s renewable energy plan: http://www.foundry.org/2009/08/11/british-green-energy-plan-to-cost-17-times-as-much-as-benefits/

[5] people aren’t buying it : http://www.foundry.org/2009/07/14/outside-the-beltway-austin-electricity-consumers-paying-more-for-renewable-energy/

[6] are actually paying people : http://foundry.heritage.org/2008/11/25/wind-suppliers-are-paying-people-to-take-their-energy/

Copyright © 2011 The Heritage Foundation. All rights reserved.