As the federal government contemplated how to help people hurt by the pandemic and lockdown, the renewable energy industry was scrambling behind the scenes to use the COVID-19 rescue package to extend something called the Production Tax Credit—one of many government subsidies used to prop up wind and solar producers.
The renewables industry didn’t get its way on this particular COVID-19 bill, which passed without a PTC extension. But on the whole, the renewables industry has been mind-boggling successful at procuring handouts from Washington: over the last 40 years, federal subsidies for renewable energy have totaled more than $100 billion. To put that figure in perspective, it’s roughly eight times the size of the commonwealth’s annual budget.
And don’t believe the lie that fossil fuels receive even greater subsidies. For years, researchers have pointed out that, per unit of energy, wind and solar receive the most subsidies of any energy source. A new study from the Texas Public Policy Foundation, for example, found that wind subsidies are 26 times greater than coal, and solar subsidies are a breathtaking 113 times greater.
The math is even more lopsided for Kentuckians. We pay for those subsidies even though we get less than 1% of our electricity from wind and solar. The vast majority—more than 70%—comes from coal.
There’s a good reason we use so little wind and solar, despite the massive handouts they get: we don’t rely on wind and solar because wind and solar aren’t reliable.
Wind and solar are intermittent sources of energy: they only produce power when the sun shines or the wind blows. To guarantee 24x7 power, wind and solar need virtually 100% back up from reliable sources—almost always fossil fuels.
Wind and solar can’t replace reliable power sources. They can only pile new costs on top of them, including infrastructure costs for wind turbines, solar panels, and transmission lines—and inefficiency costs. In order to cope with the frequent fluctuations in wind and sunlight, reliable sources of power like fossil fuels have to be quickly ramped up and down. This wastes fuel the same way that driving in stop-and-go traffic wastes fuel. More waste, higher costs.
And so while coal-heavy Kentucky enjoys the lowest electricity costs east of the Mississippi, the places that use the least coal and the most wind and solar almost always have higher electricity costs. For example, the world leaders in wind and solar—Denmark and Germany—also have the highest electricity prices in the developed world, 3-4 times what the average US household pays.
Wind and solar subsidies mean that Kentuckians are paying for the privilege of helping other states use more expensive energy sources.
Worse, that expensive energy is making grids around the country less reliable. Because coal can be stored on site at a power plant and deployed on command, it’s the most secure fuel source in the world. That’s especially important during unusual weather events such as polar vortexes and bomb cyclones, which typically shut down wind and solar. By subsidizing renewables, we’re becoming more dependent on energy sources that won’t be there when we need them the most.
Wind and solar advocates assure us that renewables can be cheap and reliable without subsidies. The head of the American Wind Energy Association, for example, bragged that “growth in the wind industry is expected to remain strong” without tax credits. Let’s take them at their word. End all energy subsidies and mandates and empower consumers to decide the best energy sources to meet their needs.
If California wants expensive, unreliable energy, let them have it. But don’t expect Kentuckians to pay for it.
Tyler White is the President of the Kentucky Coal Association.