A report released in September 2016 by Ken Girardin and Annette Brocks of the Empire Center, titled Green Overload: New York State’s Ratepayer-Zapping Renewable Energy Mandate, says New York State’s newly-approved Clean Energy Standard (CES) will cost state ratepayers roughly $3.4 billion over the next five years. This amounts to a “massive unlegislated tax increase, imposed through utility charges,” according to the authors.
The goal of CES, which goes into effect in 2017, is to have 50 percent of New York State’s electricity provided by renewable energy sources by 2030. Renewable energy mandates like CES – often referred to as “renewable power mandates” or “renewable portfolio standards” – force expensive, heavily subsidized electricity on ratepayers and taxpayers while providing few if any net environmental benefits, which is exactly what the Empire Center says will be the results of the new mandate.
To get New York to the 50 percent renewables mark within the next 13 years would require a massive investment in wind and solar energy sources. Wind energy sources would need to triple, requiring roughly 2,090 additional turbines to be brought online. The amount of land required to accomplish this is estimated between 196 square miles and 922 square miles. To demonstrate how much land these turbines would cover, only 23 of New York’s 62 counties are larger than 922 square miles.
An additional 152 expensive turbines would also have to be built offshore—either in the Atlantic Ocean or Lake Ontario. The country’s first offshore wind farm, which is currently scheduled to be built off of Rhode Island’s Block Island, will cost $300 million for the construction of just five turbines. These turbines will provide power for 17,000 homes, meaning the wind farm will cost roughly $17,600 per home powered.
Wind power alone, however, wouldn’t be enough. Solar capacity in New York State would also have to grow by 19,900 percent beyond existing capacity. This would require an additional 38 square miles of solar farms, which is twice the size of Manhattan Island.
The final part of the CES plan is to subsidize New York’s unprofitable nuclear power plants to keep them open and online. These plants are required under the CES plan to back up the large increase in renewable energy, because the land-based turbines and solar panels are only intermittently operational. The New York Independent System Operator, a non-profit agency that auctions New York State’s energy supply, estimates the turbines and solar panels will only be operational 14 percent and 45 percent of the time, respectively. The Empire Center argues the extra costs associated with keeping added generating capacity from conventional energy were not added in to CES’ calculations.
The wind and solar power forced on consumers by renewable power mandates like CES is extremely expensive. A 2014 study by the Brookings Institution found wind power is twice as expensive as the conventional power it replaces. The same study found solar power is three times as expensive as conventional power. These higher costs impose real burdens on electricity consumers: Retail electricity prices in states with renewable power mandates are rising twice as fast as the national average.
Additionally, the environmental impact will be minimal. “When fully implemented, the Clean Energy Standard is expected to reduce carbon dioxide emissions in 2030 by 23.6 million metric tons,” write Girardin and Brocks. “[This] amount, while seemingly impressive, equates to less than 0.3 percent of CO2 emissions in China alone as of 2014.
“New York residents and businesses are already paying some of the highest electricity prices in the nation,” the authors also concluded. “The Clean Energy Standard is likely to drive prices much higher while producing little, if any, progress towards the goal of reducing carbon dioxide emissions.”
Repealing renewable power mandates will lower electricity prices, thereby raising living standards, stimulating long-term economic growth, and creating a substantial increase in net jobs. Living standards increase because lower-cost electricity frees up money for consumers to purchase additional goods and services, which improve people’s lives. Economic growth and net job numbers increase because the newly available money spent on goods and services creates additional jobs throughout the economy.
The following documents provide more information on renewable energy mandates.
Green Overload: New York State’s Ratepayer-Zapping Renewable Energy Mandate
This report by Kenneth Girardin and Annette Brocks of the Empire Center examines New York State’s Clean Energy Standard (CES) and determines the renewable energy mandate will cost New York ratepayers more than $3.4 billion over the next five years.
Evaluating the Costs and Benefits of Renewable Portfolio Standards
This paper by Timothy J. Considine, a distinguished professor of energy economics at the School of Energy Resources and the Department of Economics and Finance at the University of Wyoming, examines the renewable portfolio standards (RPS) of 12 different states and concludes while RPS investments stimulate economic activity, the negative economic impacts associated with higher electricity prices offset the claimed economic advantages of these RPS investments.
Ten Principles of Energy Policy
In this Legislative Principles booklet, Heartland Institute President Joseph Bast identifies the ten most important energy issues facing the nation and outlines the energy policy actions that will lead to the highest, most efficient production at the lowest cost to consumers.
Ten State Solutions to Emerging Issues
This Heartland Institute booklet explores solutions to the top public policy issues facing the states in 2016 and beyond in the areas of budget and taxes, education, energy and environment, health care, and constitutional reform. The solutions identified are proven reform ideas that have garnered significant support among the states and with legislators.
Research & Commentary: Higher State Support for Green Energy Increases Energy Costs for Consumers
Heartland Institute Policy Analyst Tim Benson discusses an analysis by the Daily Caller News Foundation (DCNF), which found, “States which offered rebates, buy-back programs, tax exemptions and direct cash subsidies to green energy were 64 percent more likely to have higher than average electric bills. For every additional pro-green energy policy in a state, the average price of electricity rose by about .01 cents per kilowatt-hour.”
The Status of Renewable Electricity Mandates in the States
The Institute for Energy Research finds states with renewable electricity mandates have on average 40 percent higher electricity rates than those without such mandates.
What Happens to an Economy When Forced to Use Renewable Energy?
The Manhattan Institute conducted an economic analysis of the effects renewable portfolio standards (RPS) had on the average price of electricity in states with mandates compared to those without mandates. The study found residential and commercial electricity rates were significantly higher in states with RPS mandates than in states without them.
Study of the Effects on Employment of Public Aid to Renewable Energy Sources
Researchers at King Juan Carlos University in Spain found each “green job” created in Spain cost about $750,000. Electricity rates would have to be increased by 31 percent to account for the additional cost of renewables.
Study: Consumers Unwilling to Pay More for Renewable Energy
Relatively few consumers are willing to pay extra for renewable energy offered under voluntary “green” pricing programs, according to a report from the Institute for Energy Research.
Why is Renewable Energy So Expensive?
This brief but useful essay in a January 2014 blog post for The Economist states countries with the most renewable power generation also have the highest electricity prices, and government efforts to alleviate this problem have been unsuccessful.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the website of Environment & Climate News at https://heartland.org/publications-resources/newsletters/environment-climate-news, The Heartland Institute’s website, http://heartland.org, and PolicyBot, Heartland’s free online research database, at www.heartland.org/policybot.
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