RENEWABLE ENERGY IS CHEAPER THAN FOSSIL FUELS. CALIFORNIA PROVES IT

Tom Solomon*

With New Mexico’s Energy Transition Act now leading the country’s shifts towards clean renewable energy, fossil fuel interests and their supporters seek to spread disinformation on the real benefits of renewables. They can’t stand that solar and wind energy is clean, non-polluting, abundant, and now, as the cheapest form of electricity (per Lazard), is out-competing fossil fuel energy on cost. Their latest effort is to point to high electricity costs in California and blame them on that state’s move towards renewable energy. But as we know, “correlation is not causation”. California’s high electricity prices are NOT due to a shift to renewables, but instead are due to their over-reaction to the Enron-caused energy crisis and the rolling blackouts of 2000-2001, caused by Enron’s criminal market manipulations. California’s response to those blackouts was to overbuild gas-fired power plants. And because energy demand has also dropped due to increasing energy efficiency, “Californians are paying billions for power they don't need”. This was the finding of a Feb 5, 2017 LA Times report by that title (1).

Whereas many states require an energy capacity cushion of 10% over demand, California regulators responded by requiring a capacity cushion of +15%, and their gas-powered building boom had them on a path towards overbuilding by 21%! Of course their costs were high!

Fortunately, California regulators recently came to their senses and in Nov 2018 cancelled three gas-fired power plants proposed by PG&E, instead directing them to build utility scale battery storage, saying it was cheaper (2).

The fact is that renewable energy requires no fuel, therefore no fuel costs and no pollution. And solar and wind provide peak power at different times of the day and of the year and therefore complement each other. Studies show that significant utility battery storage is not required until renewables reach about 50% of grid power, which for NM is in 2030 (3).

And with battery storage competitive already, and prices dropping 20% per year, per McKinsey(4), it will be available and inexpensive when we need it.

Renewable energy wins on climate, on health and on cost. Now let’s build it as fast as we can.

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(1) https://www.latimes.com/projects/la-fi-electricity-capacity/

(2) https://www.utilitydive.com/news/storage-will-replace-3-california-gas-plants-as-pge-nabs-approval-for-worl/541870/

(3) https://www.sciencedirect.com/science/article/pii/S1876610217346258

(4) https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/the-new-rules-of-competition-in-energy-storage

*Tom Solomon works with 350 New Mexico and can be reached at: 505-328-0619.

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