Sunday, July 15, 2012

It's time to repeal Ohio's alternative energy mandate

I read an interesting article, "Obama Wants You to Use Less, Spend More," written by Marita Noon, Executive Director of Energy Makes America Great.

In one section, she talks about the prices for various types of energy. She writes:

That got me thinking, if a few cents, between $.07-.11, can make a $10 billion impact on a state’s economy, what difference will the higher costs of renewable energy do to these struggling cities?

Taylor referenced a study done by Tufts University economics professor Gilbert E. Metcalf, which provides the levelized costs of the various sources of electricity—meaning with the subsidies, preferences, and differential tax treatment removed. The “Federal Tax Policy Towards Energy” study was done in 2006 and reported on in 2007, so the numbers quoted here would not be the most recent, but they do provide real numbers for comparison. Metcalf found that coal was the least-cost method of electricity generation. Natural gas was next, the second least-cost, but was still 48% more than coal. Nuclear is 57% more than coal; wind, 75%; solar thermal, 570%; and solar photovoltaic, 887% more than coal. Of course, the price of natural gas is greatly reduced due to its newfound abundance and, yes, the costs of wind and solar have come down—but they’d have to come way down even to be close to competitive to coal or natural gas.

Here’s another way to look at the numbers. The US Energy Information Administration (EIA) produced a report that shows the same basic ideas from a different angle. The 2010 report attempted to project out what future energy costs would be. Like the Metcalf study, the EIA report offers levelized numbers. They assume that natural gas costs will remain low and even give some benefits to the prices of renewable energy. In their projections, natural gas is the least-cost, with coal being 50% more. Nuclear is 81% more expensive than natural gas; onshore wind, 131% more; offshore wind, 470%; solar thermal, 394%; and solar photovoltaic, 234%.

No matter which way you look at the numbers, coal and natural gas are the least-cost ways to generate electricity, with wind and solar, the most expensive.

Ohio has a law, passed in 2008, requiring that at least 25% of all electricity sold in the state by 2025 come from alternative energy. Half of the mandated 25% must come from renewable sources like solar, wind, hydro power, geothermal or biomass. The other half can be met by instituting energy-efficiency programs, clean coal technology or using fuel cells. But the kicker is the requirement to use solar and wind as we really don't have the capacity for hydro power nor the facilities for geothermal or biomass (at least - not yet).

Municipalities and governmental entities are purchasers of electricity just as you and I are. Most of the alternative energy sources in the Toledo area are from solar photovoltaic. If we use the lowest number from the above data, we're paying 234% more for the solar-generated energy than we would if we used natural gas and 56% more than we would if we used coal.

This means that we are paying significantly more for our energy than we need to (absent a government order). This also means that our limited tax dollars are being spent to pay for increased energy costs, rather than for other, necessary government services like roads, police and fire.

I can only wonder how much that additional cost equates to for the city of Toledo and whether or not, considering the number of buildings, they'd have the money for their desired recreation levy they just voted to put on the ballot.

We already know that eliminating the biodiesel fuel requirement for the Ohio Department of Transportation would save taxpayers millions of dollars.

Toledo - and all cities in the state - should immediately express support for S.B. 216, which would repeal the 25% mandate, and insist that the bill be passed.

It's about time all politicians stopped worrying about catering to the environmental lobby and started worrying about catering to the taxpayers.


LennyOhio said...

Yes, the Navy is also going to bio-fuels, Which cost something like 23.00 dollars to the gallon! We couldn't afford to take the ships out of the harbor.

Maggie said...

I saw that! What a complete waste of taxpayer dollars - and I don't buy the whole 'if it saves just one life' argument.

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