There is a growing push in the United States for an energy transition from fossil fuels to renewable energy. The federal government is leading the effort with regulations and subsidies to reduce fossil fuel use, while many states, including those in New England and the Pacific Northwest, are also involved.
However, two recent studies highlight that this transition could result in significant costs for consumers.
In The Staggering Costs of New England’s Green Energy Policies, the authors examine state policies driving the energy transition in the region. They found that if the states’ “Decarbonization Plans are realized, New England will go from generating about 6% of its electricity from renewable energy (solar, wind and batteries) in 2023 to generating 71% in 2050.”
The study concluded that this shift would cost New England ratepayers $815 billion through 2050, excluding the impact of federal subsidies.
Bill Peacock, policy director of the Energy Alliance, said the push for the energy transition is based on overhyped concerns about fossil fuels.
“By 2029, renewable energy subsidies will have totaled more than $300 billion,” said Peacock. “Renewables are just the latest, and most successful, fad in the more than 50 year effort by the environmental left to eliminate fossil fuels.”
According to the U.S. Energy Information Administration, the push for renewables and the electrification of energy use has been accompanied by higher electricity prices.
In 2015, the average retail price of residential electricity in the U.S. was just over 12 cents per kilowatt-hour. Today, it exceeds 16 cents. Meanwhile, prices for other major energy sources, such as gasoline and heating oil, have declined.
A second study, The Crippling Costs of Electrification and Net-Zero Energy Policies in the Pacific Northwest, examines the impact of net-zero emission policies. The study found that these policies will drive increased demand for electricity as cars, light trucks, and home heating are electrified.
Meeting this new demand with renewable energy would result in higher costs for residents of Washington and Oregon.
“We estimate the additional costs for the renewables scenario will total about $550 billion in 2024 dollars,” the study found.
“The effects on your monthly electric bill are going to [be] devastating,” said economist and report author Jonathan Lesser. “The average person is going to see their electric bill balloon 450% by 2050. Small business owners won’t escape, they’ll see their bills go from an average of $600 a month today to almost $4,000 in the next 25 years.”
The cost of renewables also impacts Texas, which leads the nation in generating electricity from wind and solar.
Peacock, who has studied the state's electric grid, said that even though Texas does not have the electrification policies many other states have, renewables have contributed to rising prices.
“Renewables have greatly increased reliability problems on the Texas grid,” Peacock said. “The costs of renewable subsidies and addressing reliability concerns added $20 billion to Texas wholesale electricity prices last year, making Texas second in the nation, just behind California.”
