The economic value of renewable energy
A recent editorial (“Green subsidies,” July 24) arguing against federal incentives for renewable energy is based on myths and misunderstandings about wind and solar power. The fact is that renewable energy works alongside nuclear power in lowering our nation’s carbon footprint while keeping the lights on and costs low for consumers.
In reality, the low price of natural gas is the primary contributor to nuclear’s woes. Cheap fossil fuels have a 500-times larger impact than wind or solar on setting the prices received by nuclear plants, according to the nation’s largest electricity market monitor. As New York Times columnist Eduardo Porter notes, but the editorial omitted, “The economics of nuclear energy are mostly to blame. It just cannot compete with cheap natural gas.”
Recent analysis from the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory confirms that each megawatt-hour of zero-emission wind energy, the amount produced by a typical turbine in a little over an hour, provides $75 in benefits for human health and the environment by reducing air pollution. This benefit alone is more than three times the cost of the $23/MWh federal production tax credit.
That study also found that wind provides an additional benefit to consumers by reducing the price of electricity and fossil fuels, resulting in consumer savings of between $13/MWh and $49/MWh. That’s not including renewable energy’s additional economic value from reducing water consumption.
In any case, nearly the entire value of the wind tax credit is passed through directly to American consumers in the form of lower prices for the long-term power purchase agreements utilities sign with wind projects.