Open Letter Number Two to Mariel Nanasi, Executive Director of New Energy Economy (NEE), Santa Fe, NM, by Peter Burrows, 2/28/19
Dear Ms. Nanasi,
I received an email today from NEE which contained the following statement:
“NOW is the time for a new model of energy production and procurement. We can have locally produced solar, wind and storage, and efficiency at lower cost than gas produced energy 300 miles away.”
I would like to know if there is any place in the world where “locally produced wind, solar and storage” is cheaper than electricity produced by gas-fired turbines. Outside of a few research stations in the Antarctic, there is no such place. Neither is there any place where wind, solar and storage are cheaper than coal-fired or nuclear generated electricity.
I believe you have relied on misleading government statistics when you assert that renewable energy is more cost effective than the use of fossil fuels or nuclear energy.
The Department of Energy, on their Energy Information Administration (EIA) website, analyzes something they call The Levelized Cost of Electricity, LCOE, for different forms of electricity under a myriad of different assumptions. If you read the text carefully, you will find that they caution against comparing LCOEs between different forms of energy as that can be “misleading,” yet in table after table, comparing such LCOEs is precisely what the EIA does.
Whether deliberate or not, the EIA virtually ignores the costs of intermittency that are inherent in wind and solar power. Ignoring these costs means that LCOE comparisons with fossil or nuclear energy are meaningless. It’s not a matter of comparing apples to oranges. It’s more like comparing apples to basketballs.
Perhaps the worst thing about the LCOE numbers is that they give economic legitimacy to renewable energy when in fact renewable energy is virtually worthless. It is only produced because of government mandates and subsidies.
Just ask yourself, if renewables are in fact the cheapest form of electricity, why are coal-fired generating plants still being built? In India, for example, hundreds of new coal-powered generating plants are under construction, many of which will burn coal from one of 80 new coal mines opened since 2009.
India’s coal production in the six months April to November, 2018, was 434 million metric tons, an increase of 39 million tons over the previous year. Annualized at 78 million tons, India’s incremental annual production is over six times all the coal produced in New Mexico last year (~12.6 million metric tons.) Sub-Saharan Africa is also forecast to be greatly increasing the use of coal-generated electricity in coming years.
Ms. Nanasi, you are trying to avert a global climate catastrophe by shutting down New Mexico’s use of fossil fuels, yet much of the rest of the world is pursuing policies that totally overwhelm anything we can do here in New Mexico. Furthermore, your policies will be hugely expensive, something relatively poor New Mexico doesn’t need.
Wouldn’t we be better off heeding the advice of Bill Gates, who in 2015 said that the cost of 100 percent renewable electricity would be “beyond astronomical,” and simply eliminate new Mexico’s Renewable Portfolio Standard entirely? I’m with Bill on this one. For an update on his views, please see:
Ms. Nanasi, if the Department of Energy’s LCOE numbers are not the basis for your contention that solar and wind are cheaper than fossil and nuclear, please tell me what is the basis for your belief.
Sincerely, Peter Burrows – email@example.com