Blame government, not the market, for dwindling coal industry

Blame government, not the market, for dwindling coal industry


Renewable energy advocates free and competitive markets are to blame for coal-fired power plants being replaced by natural gas and wind generation. The problem is, there is no such thing as “free-market electricity generation,” because electricity markets are warped by a series of state and federal government policies.

These market-distorting policies include a host of regulations that require states to purchase a portion of their electricity from renewable sources (state renewable energy mandates) and federal policies that subsidize renewable energy sources and impose onerous regulations on coal-fired power plants, such as the Clean Power Plan.

The confluence of these policies has created carrots and sticks that have been used to manipulate wholesale electricity prices, to the detriment of coal and nuclear electricity generators.

Renewable energy mandates have decreed that more electricity generation capacity must be built, even though demand for electricity has been stagnant. Federal subsidies bankrolled much of the cost. As a result, the supply of electricity has outpaced demand for that electricity, causing wholesale prices to fall.

This is similar to the tactic called “product dumping,” which occurs when foreign companies sell their products in other countries for less than the cost of producing them to gain an unfair market share.

In the United States, product dumping in the electricity sector is enabled by a federal tax subsidy called the Renewable Electricity Production Tax Credit, which grants $23 per megawatt hour of energy produced to wind electricity generators. The payment is issued regardless of whether there is consumer demand for the electricity created.

This government policy is important, because it enables wind producers to sell their power for a profit no matter what the market demand is, a phenomenon that occurs most frequently in areas where renewables have been aggressively pursued and are dictated by state mandates.


It is this government-induced oversupply of electricity, coupled with low natural gas prices, that provides the real explanation for why wholesale electricity prices are currently suppressed. However, it is important not to be fooled into believing artificially low wholesale electricity prices are a windfall for consumers. As additional coal and nuclear plants retire, the oversupply of electricity will decline and push prices upward.

This has already started to happen in California, which has experienced higher retail electricity prices, despite higher incidences of negative wholesale prices, thanks to state policies that mandate renewables and the shuttering of coal-fired facilities. Residential customers in California now pay 39 percent more for their electricity than the national average.

Coal and nuclear plants are not retiring because they are inefficient and need subsidies to remain competitive; they are retiring because state and federal policies have placed a thumb on the scale, unfairly favoring renewables over traditional forms of energy.


Views: 37

Comment

You need to be a member of Citizens' Task Force on Wind Power - Maine to add comments!

Join Citizens' Task Force on Wind Power - Maine

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

Not yet a member?

Sign up today and lend your voice and presence to the steadily rising tide that will soon sweep the scourge of useless and wretched turbines from our beloved Maine countryside. For many of us, our little pieces of paradise have been hard won. Did the carpetbaggers think they could simply steal them from us?

We have the facts on our side. We have the truth on our side. All we need now is YOU.

“First they ignore you, then they laugh at you, then they fight you, then you win.”

 -- Mahatma Gandhi

"It's not whether you get knocked down: it's whether you get up."
Vince Lombardi 

Task Force membership is free. Please sign up today!

© 2019   Created by Webmaster.   Powered by

Badges  |  Report an Issue  |  Terms of Service