Biden’s energy policies hurting US, Europe: Here’s the fix Read more
The new policy requires utilities to buy a share in “renewables” – but only at a relatively higher price than would be appropriate without government subsidies. It also provides a new subsidy of $16.3bn (£11.46bn) to renewable power generators over the medium term. It could raise power prices for US consumers by $100 per megawatt-hour, according to a study.
The price of renewable power is the same for everyone, even the utilities, since it’s based on the cost of developing the resource, not its cost to consumers, said the US Department of Energy, which publishes Renewables 2017.
As it stands, renewable power costs 4.7 cents a kilowatt-hour to generate from power plants and a whopping 40 cents a kilowatt-hour from wind turbines. The $16.3bn subsidy is worth just 0.14 cents a kilowatt-hour.
A new subsidy would add $6.75bn to the cost of renewable generation over the 20-year period until 2023.
At the same time, the subsidies would provide “considerable benefits” to the economics of renewable energy in the US, said Richard Hebb, the department’s acting assistant secretary for energy efficiency. “It allows new technology to flourish while allowing the grid to continue operating,” Hebb said.
The policy comes more than a year after President Barack Obama created a Climate Action Plan to cut emissions of greenhouse gases. The plan is largely to reduce carbon dioxide, the most dangerous of the greenhouse gases. The power plant industry, and utilities, have argued that renewable energy will undermine that goal.
The Obama administration is preparing a follow-on to the plan. In a speech on the plan the night before Trump was inaugurated, President Obama said the US must get “back to the climate that’s going to protect our world for future