With all the noise surrounding the energy transition, sometimes it’s hard to grasp what’s truly happening, or not happening at all. Is the shift to renewable power and the infrastructure to support it moving smoothly? Or is it proving far more challenging and costly than advocates want to admit?
What’s happening in California, New York and with the effort to rapidly transform and expand the nation’s grid paints a remarkably clear picture of ambition coming apart at the seams. While the U.S. Environmental Protection Agency (EPA) has forced through a suite of rules to close the nation’s coal fleet by 2032 and make it impossible to build new baseload coal and natural gas generating capacity, replacement capacity and the enabling infrastructure – much less the capacity needed to meet soaring new demand – is not materializing. The grid is increasingly short of power while costs are soaring.
Consider the high-voltage transmission buildout required to modernize the grid. According to the National Renewable Energy Laboratory, the U.S. needs to build as much as 10,000 miles a year of high-voltage transmission to enable a renewable-dominant grid. Last year, we brought just 55 miles of high-voltage transmission lines into service.
Instead of ramping up high-voltage transmission construction, we’re building less than we ever have. High-voltage additions have in fact collapsed over a decade. In the 2010s, about 1,700 miles were added each year on average. Additions then fell to 925 miles on average from 2015 to 2019 and then 350 miles a year from 2020 to 2023.
Spending on transmission has grown – now at $23 billion per year – but it’s not going to high-voltage interstate projects. It’s now focused on low-voltage in-territory projects that, while important, aren’t the power highways needed to bring low-cost renewable power to demand centers and help manage intermittency. Costs keep rising and there’s less and less to show for it.
Consumer-Crushing Costs in California
In California, power prices, already some of the most expensive in the country, have exploded over the past decade. For a state that has trumpeted its effort to lead the energy transition, California has trailblazed a path no one can – or will want to – follow.
According to reporting in The Wall Street Journal, power prices for many Californians have jumped 82% in the past 10 years as utilities pass along costs to move to solar power, integrate batteries and bury transmission lines to fortify the grid from wildfires. For many Californians, the extraordinary cost of electricity is now untenable.
Working-class Californians are now paying 65% more for their monthly electricity bills than they’re paying for rent. Small businesses have to keep their thermostats at 85 degrees to stay afloat and retirees are now sending half of their social security checks straight to utilities each month just to manage power bills for mobile homes.
The Journal found that California households owed $2.1 billion in unpaid utility bills at the end of 2023, more than four times the amount in 2019. And more than a quarter of Californians have missed utilities bills in the last year, with around 215,000 Californians having their power shut off for nonpayment in 2023. California’s energy unaffordability is an unmistakable crisis. Is this really the energy leadership we want to replicate?
New York Models an Impossible Future
In 2019, New York took the bold and terribly unwise step of following in California’s footsteps and mandating a 100% zero-emission electricity system by 2040. It was an extraordinarily ambitious goal in 2019. Now, with electricity demand soaring, it’s looking all but impossible.
In recent analysis, the state’s grid operator projected power demand to jump as much 90% over the next 20 years. Meeting that demand will require more than tripling existing generating capacity from 37 gigawatts (GW) today to as much as 130 GW by 2040. If that isn’t hard enough, the grid operator also said the state will need between 20 and 40 GW of dispatchable emissions-free resources to replace 25 GW of fossil-fuel generation. Those resources could include long-duration batteries, small modular nuclear reactors, hydrogen-powered generators and fuel cells. Currently, none of those things exist in commercial operation anywhere.
If California and New York are supposed to be leading the nation in the energy transition, an impossible-to-achieve and crushingly expensive future appears to be on the horizon.
An affordable and reliable supply of power is the very backbone of our economy. Without it, we short circuit our economic potential, saddle consumers with impossible costs and drive away jobs while leaving Americans without any electricity at all when they need it most. Concern that the energy transition isn’t moving in an orderly and responsible fashion is increasingly reinforced by inarguable data. We’re mandating the impossible with completely predictable results. It’s far past time for an immediate energy policy course correction.
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