23 Sep Energy Inflation: The Conundrum Ahead
Energy Inflation – It’s Just The Start
For a number of years, I have been warning that our electrical rates, and energy prices were going to rise due to the proliferation of renewables. I wish I were wrong but this week’s story in the Kansas Sentinel confirms what I have been saying for a long time.
Unfortunately, the massive infusion of “Green Energy” policies just passed in the inflation Reduction Act, from the Biden administration, is only going to exacerbate the problem. Kansas already has some of the highest retail rates in the region…but we should have the lowest. We generate more power than surrounding states.
Natural gas prices have doubled since last September. In January of 2020, just before winter Storm Uri caused disruption in the gas supply, the price was under $3.00 per unit. In September 2021, the price of natural gas was $5.30 per unit, now it’s $10.27! It has doubled in one year! This, of course, will cause an increase in your gas and electric bills.
There is a perfect storm of global energy inflation right now. It’s not because of any lack of supply of oil and gas. This inflationary cycle began with the war on fossil fuels and the insane policies that we have pursued in the name of curbing global warming.
Here is how it works.
Industrial wind and solar installations do not produce electricity all the time. When they don’t, they actually USE electricity…lots of it. Both sources are terribly inefficient. Both require huge amounts of land, minerals, resources, transmission lines, and backup generators to exist. The hidden cost of both wind and solar make them very expensive.
But, because the massive subsidies to wind and solar are so high, companies that own them can make a profit without producing much energy at all. As a result, it makes it profitable for companies who generate electricity to add wind and solar to their generation mix to obtain the subsidies which directly affect their bottom-line profits. Without the subsidies, there is no reason to invest in wind or solar. And, now, the Inflation Reduction Act just doubled the subsidies for both…which means there will be an even greater rush to invest in wind and solar.
The problem with both wind and solar is that they are not reliable sources of power. And, due to the subsidies, in Kansas, we have added over 4,000 turbines to the landscape. Currently, 43% of the generating capacity in the state is wind. That does not mean we get 43% of our energy from wind. It can vary from 0% to about 30% depending on the day and the amount of wind. The national average is 25% of installed wind capacity. So, for every 100 megawatts of installed capacity, you can only expect to get an average of 25 megawatts. It’s even worse for solar, which has a capacity factor from 0% to 20% at best.
With all of the renewables on line, we have to have additional natural gas back up generation on constant standby to pick up the slack. The more we rely on wind and solar, the more we have to rely on natural gas generators. As I mentioned above, the natural gas prices have doubled in the last year.
Wind and solar are so heavily subsidized, that when they do produce electricity, they can come on line at prices near or below $0. You…the taxpayer…are paying to have wind turbines and solar panels compete directly against our coal and nuclear plants. Those plants end up operating at a loss during times when wind and solar are producing electricity. That is happening more and more often due to the increasing number of “renewables”. Companies that own the base load plants (coal, gas, and nuclear) must keep the large generators running but are forced to reduce the amount of generation the plants produce in order to save money. This puts our power grid in even more jeopardy, especially at times when demand for electricity spikes, and wind and solar are not available.
We need the coal, nuclear and gas plants on line to keep our lights on 24/7. Why would we pay for an entirely parallel energy grid comprised of wind and solar when we had more than enough generation capacity before one turbine was ever installed? It’s all because of subsidies and nothing else. Paying for two energy grids only increases our costs.
Taxpayers pay for the wind and solar through a variety of subsidies. And, we pay for the under-utilization of the base load plants caused by our increasing reliance on unreliable sources of power…that can never replace the base load generators.
Ultimately, if the losses to the nuclear and coal plants are great enough, the owners must close them and that costs a lot of money…all of which gets passed along to you.
Obama’s war on coal started us down this path. Even though coal still generates nearly half of our electricity, coal plant operations are in jeopardy. Most of the retirements of electrical plants in the U.S. this year are coal fire plants. We have invested billions of dollars on cleaning up coal plant emission…but now we want to retire the plants? It makes no sense!
There are also retirements of nuclear plants scheduled and yet it is the least subsidized and cheapest, cleanest form of electrical generation!
We will be facing more energy generation shortages across the U.S thanks to the increased push to replace reliable forms of electrical energy with wind and solar.
To make the situation worse, we are seeing record exports of natural gas to Europe, who went full tilt into wind power years before the United States. Europeans are now even more reliant on natural gas than ever before, and much of their natural gas comes from Russia. In Europe the price of natural gas is 10 times higher than in the United States. They have retired even more coal and nuclear plants than we have…and they are in big trouble. They can’t afford their electrical bills and are facing a winter with severe power shortages. As a result, the demand for wood has increased…so a smoky atmosphere lies ahead for our European friends. They are also scrambling to reopen coal plants, but that is difficult and expensive to do.
It was clear what was happening in Europe years ago. Now it’s happening here.
But instead of turning around and reconsidering the path we are on…this nation is doubling down on the insanity. The hour is late and we don’t have much time.
If we don’t regain our energy independence, and stop the subsidies for renewables, our energy prospects for the future are bleak. We will see more blackouts, unaffordable electric and gas bills, and energy poverty on the scale we are seeing in Europe.
The regulatory restrictions on development of nuclear power adds $billions to the cost of building new nuclear plants. The EPA is set to implement even more stringent rules that will accelerate the retirement of coal plants. The radical “Green” leftists are pushing toward all electrical vehicles. That will require the doubling of an already challenged power grid just to meet the demand for new EVs planned over the next 8 years.
As the Chairman of the Senate Utilities Committee, these are the problems I am worrying about every day. That’s why I am writing this newsletter…so that you understand challenges.
This newsletter only scratches the surface…it’s more complicated than what I just described. But hopefully you can see that when I tell you we need to stop the proliferation of wind and solar in Kansas…there is a reason why I say it.
One of these days I will explain, in detail, the global climate change farce. But for now, just know that there is no reason to implement renewables to save the planet. In fact, they are far more damaging to the environment and our economy than you might realize. Building more of them will only enslave future generations to a far less prosperous life.
My advice…know who you are voting for…and what their stance is on renewable energy. Your livelihood depends on it now more than ever!