Americans have been exceptionally fortunate in recent decades to enjoy robust power generation to heat their homes, refrigerate their food, and deliver clean drinking water. Unlike many countries, the United States maintains affordable, non-stop, 24/7 electricity. It’s an impressive feat in a nation of 325 million that continues to add more than 2 million people annually.
As America increases its use of intermittent wind and solar power, it’s important to examine whether the nation can continue to meet its overall energy needs. Recently, Energy Secretary Rick Perry announced a review of the stability of the nation’s power grid – and just as the nation faces conflicting energy problems. Nuclear power, which generates about a fifth of America’s electricity, appears to be winding down, thanks to prohibitive construction costs. And while natural gas generates a third of the nation’s power, export controls are being lifted – which could lead to price increases as both domestic and overseas demand is rising.
Secretary Perry has his work cut out for him, since the task of securing America’s energy grid could stumble into a perfect storm of higher prices. And much-touted renewable power faces its own troubling drawbacks – since the wind doesn’t always blow, and the sun doesn’t always shine. If Washington bets the farm on natural gas and renewables, it’s unclear whether the nation will still be able to meet base load power needs while also maintaining affordable pricing.
These are important issues for the U.S. Department of Energy to consider. But news of Secretary Perry’s study has stirred up controversy nevertheless. The nation’s wind and solar groups have expressed concern over Perry’s intent to conduct a thorough review of the cost-benefit ratios involved in power grid reliability. And with taxpayer-funded subsidies for renewable projects under scrutiny, these groups very much want to justify their position.
Notably, coal still undergirds America’s overall power generation. And with the DOE looking to keep the lights on, coal may play a surprisingly strong role in the coming years.
Right now, coal provides roughly one-third of total U.S. power generation. And 13 states depend on coal for more than half of their overall power supply. Unfortunately, this workhorse effort appears under-appreciated. For example, less than 10 percent of voters in a recent study correctly assessed the scale of emissions reductions attained by coal-powered plants over the past 40 years.
Evidently though, any discussion of coal’s strengths, or the subsidies parceled out to wind and solar projects, disturbs the renewable energy industry. In a recent letter to Secretary Perry, these groups argued that they shouldn’t share the blame for coal’s woes which, they insist, merely stem from low natural gas prices.
But Obama Administration regulations posed real consequences. As Duke University’s Nicholas School has reported, recent government regulations threatened the viability of 56 percent of U.S. coal plants, while competition from much-touted low natural gas prices threatened only 9 percent. Conversely, mounting federal subsidies for renewable energy have shielded the wind and solar industry from competition at the expense of competing sources like coal.
According to the Institute for Energy Research, government policies have meant solar power being subsidized by over 345 times more than coal, and wind being subsidized over 52 times more. And this subsidization is costly. DOE data reveals that each energy sector requires vastly different labor inputs: one coal worker equals two natural gas workers, or 12 wind industry employees, or 79 solar workers. And while coal creates 7,800 jobs per Megawatt-hour, wind yields only 2,200, and solar 98. Without subsidies, wind and solar would fare poorly in the free market against coal and natural gas.
States need to protect their base load power, and Secretary Perry is taking a prudent approach in examining such considerations. The heavily subsidized growth of renewables is indeed impacting other power sources, leaving U.S. taxpayers paying more for a less diverse supply of energy. Thus, Perry is right to consider whether America is still on track to meet future power needs, and at a price that consumers can afford.
Terry Jarrett is an energy attorney and consultant who has served on both the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission.
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