The Heritage Foundation opposes energy efficiency. And they recently lost their grip on reality, calling science “magic.” So it’s no surprise that they are trying to mislead the public about how a renewable electricity standard (RES) would impact electric bills. CAPAF’s Richard Caperton has the debunking.
In a piece posted to their website on May 5, “A Renewable Electricity Standard: What it Will Really Cost Americans”, several researchers from Heritage’s Center for Data Analysis claim that a renewable electricity standard would increase annual electric bills for consumers by $300, decrease GDP by $5.2 trillion, and cost over 1 million jobs. Fortunately for those of us who care about making sure that America’s energy future includes plenty of clean energy, these numbers are deeply flawed.
Analysis of how much a federal RES standard would affect consumers is extremely complicated, but government agencies have done the analysis. For example, the Energy Information Administration looked at the RES in the American Clean Energy and Security Act (ACES) and found that in 2030, electricity rates would be exactly the same with or without a RES (see the table on page viii for a summary).
How does Heritage get such different results than the non-partisan EIA? It’s simple: Heritage’s report isn’t based on real understandings of electricity markets or how proposed RES policies will work. Instead, they oversimplify and exaggerate and come up with unfounded results.
Here are a few examples of gross distortions from Heritage:
- Heritage assumes that 100% of the RES targets would be met by renewable energy. But, RES proposals in both ACES and the American Clean Energy Leadership Act (ACELA) call for some of the target to be met with energy efficiency. Data from Duke and Progress Energy indicates that the levelized cost of energy for energy efficiency can be as low as 3 cents per kwh. (I suspect that even this number is too high.) This is less than half the cost of conventional coal power and means that the RES can actually save consumers money.
- Heritage simply takes today’s EIA estimates of how much new electricity from various sources will cost and assumes it will stay constant. This is wrong. Renewable energy resources have become much less expensive in recent years (for instance, here’s some information on solar). Costs will continue to decrease as more renewables are deployed.
- Heritage doesn’t even truly model electricity cost differences under realistic scenarios. Instead, they appear to have modeled an absurd scenario comparing the cost of electricity from dirty coal to the cost of electricity from a diverse resource supply. Thankfully, most consumers get electricity from a portfolio of generating technologies, which provides for a more dependable, secure, and clean system. If Heritage wants to find out what a RES will cost consumers, they should compare electricity costs under an RES to electricity costs without an RES, not to electricity costs for a mythical consumer who gets all of his/her power from dirty coal.
Par for the course, Heritage also leaves out the biggest impact an RES would have on consumers: reducing greenhouse gas emissions. EIA’s analysis shows that the RES in ACES could reduce greenhouse gas emissions by 10% in 2030.
A strong RES is one tool that we need to drive investment in clean energy technologies, investment that will create American jobs and clean the environment. Heritage’s scare tactics shouldn’t stop anyone from embracing this clean energy future.