Energy Policies Promoting Renewables Increases Electricity Prices Rapidly

by Dan McKay

Apr 27

This graph completely debunks the notion that renewables suppress the wholesale costs of electricity in the New England Market.

In this graph, Carbon Dioxide costs to fossil fuel generation plants are monetized to dollars per megawatt hour. CO2 costs are applied by the Regional Greenhouse Gas Initiative and the costs to generators are passed to electricity customers. It is a portion of the supply costs on monthly bills.

The four continuous lines represented from the lower to the upper line are natural gas, No. 6 oil, No. 2 oil and coal, respectively.

ISO-NE figures the additional cost from RGGI on natural gas prices was $6.15 per MWHR in 2022 when per ton costs of C02 applied by RGGI was $9.56 per ton for the 1st quarter and rising to $13.48 per ton for the 4th quarter.

The RGGI price for the 1st quarter of 2024 is $16.00 per ton. 

The bar graph at the very bottom depicts the proportion of overall production costs attributable to RGGI. (Between 5% to 20%)

Obviously, the rapid rise in RGGI costs and the need for reliable production from natural gas plants is a factor brought about by the increase in intermittent solar and wind generators. Renewables do not suppress electricity prices; they cause increases in prices.

  • Dan McKay

    The cost of emissions is still relatively low compared to fuel costs (less than 10%), but has
    grown in recent years and is increasingly impactful on energy prices. In 2022, the average
    estimated costs of the RGGI program increased 41% for most fossil fuel-fired generators year over-year: natural gas ($4.36/MWh to $6.15/MWh), coal ($9.85/MWh to $13.89/MWh), No. 6 oil ($8.73/MWh to $11.69/MWh), and No. 2 oil ($9/MWh to $12.70/MWh).39 Since natural gas generators set price for most of load (~80% in 2022), one would expect that the impact on energy prices will be most closely related to their CO2 cost.

    Apr 27

  • Long Islander

    If the total price of electricity based on Maine's mix of generation sources without wind and solar, including transmission costs and the cost of government subsidies which elevate our taxes was set at 100, what would that number become with today's wind and solar added to the mix? What other costs?

    Higher electricity cost is of course only one cost. How about the monetary cost to someone whose property value has plummeted due to nearby overwhelming turbine noise and blight? What about the cost to their well being? How about the lost tourism costs in the immediate areas of wind turbines?

    Apr 27