Bring On the Electricity Cost Crisis!


Francis Menton

In a post earlier this week, I celebrated the adoption by New York State of its Scoping Plan that tells us how we are going to accomplish the great transition to 70% “renewable” electricity by 2030 and zero-emissions electricity by 2040. The summary is: “just build a lot of offshore wind turbines and batteries.” Unfortunately, nobody seems to have done the basic arithmetic to see whether the prospective facilities will suffice to supply enough electricity to meet demand at all times. But then, this Scoping Plan is the product of the Important People, and why do the Important People need to trouble themselves with such minutiae? After all, they have a planet to save.

What that prior post did not consider was the likely cost to New York consumers of trying to buy electricity in a future at times when the wind is calm, the sun is dark, and fossil fuels have been suppressed. How high might the cost go when everybody has to bid at the same time for the small amounts of hydro or nuclear that may remain?

It turns out that three members of the Climate Action Council (propounders of the Scoping Plan) dissented from issuance of the Plan. One of those, a guy named Gavin Donohue, is at least partially alert to the consumer cost issue. His statement dissenting from the Scoping Plan can be found here. Among other things, he had this to say on the cost issue:

It is irresponsible to put out a plan to achieve the CLCPA’s goals while at the same time preventing New Yorkers from understanding the impact on their energy bills and the economy. We are in a period when electricity bills are expected to increase by 30-40% and the Plan’s lack of mentioning on how it will impact ratepayers is disappointing and a missed opportunity. The Plan lacks an independent, transparent, unbiased, comprehensive consumer cost impact analysis and quantification of the expense that will ultimately be borne by New York’s residents through increased fees, taxes, and energy bills. For the past two years, I have asked for this cost analysis.

Lack of consideration of potential consumer cost impacts is “disappointing” and a “missed opportunity.” That’s certainly a polite way of putting it. More accurate would be completely incompetent and irresponsible.

Not that it is necessarily straightforward to figure out what these future costs might be. The fundamental problem is that this future fantasy almost-all-renewable system requires some kind of full backup, which may only be called on occasionally, but when called on the need will be desperate and the price could get bid up to unimaginable heights.

How high might those heights be? While it’s impossible to put any definitive limit on it, we can get a very good idea of how the process plays out by looking at what’s going on in Europe right now. In its righteous battle to drive down carbon emissions, Europe has closed most of its coal plants, banned fracking for oil and gas, and otherwise suppressed almost all fossil fuel infrastructure except some pipelines from Russia. Trading Economics gives the most recent price for wholesale natural gas on the European market as 82.97 EUR/MWH. By the way, that’s down from prices over 100 EUR/MWH, and as high as 350 EUR/MWH (briefly) over the last six months. The most recent U.S. price is $5.12 per MMBTU. I come up with a factor of about 3.4 to convert from MMBTU to MWH, and the dollar and euro at close to par, so the comparison is about $17/MWH for the U.S. to $83/MWH for Europe. Europe’s fossil fuel suppression has resulted in a price about 5 times as high as the U.S. price.

And thus there is a consumer energy cost crisis currently raging in Europe — something that you read almost nothing about over here. The solution that the Europeans have come up with is to provide massive subsidies to enable consumers (and also businesses) to pay for their energy bills. A Brussels-based think tank called Brueghel has come out with a chart of the subsidies that the various European countries have agreed to pay (updated to November 29):

Germany, the European champion of the energy transition, is spending over 7% of GDP on these subsidies, and that’s just so far.

So, New York, when the same process plays out for you, are you going to spend the same 7% or so of GDP to shield the consumers from the real prices, or are you going to let the electricity and heat bills go up by a factor of three — or five?

Read the full article here.

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Ben Vorlich
December 26, 2022 11:17 pm

The UK ruling class still think that generating electricity using the weather will save us.

Reply to  Ben Vorlich
December 27, 2022 12:43 am

E-scooters banned from some of the British rail lines
“The train operator said that from Tuesday 27 December the devices will be prohibited because of the risk posed by the lithium-ion batteries that are normally in e-scooters. It said these batteries can produce “a vapour of toxic gases and lead to a fire or a risk of explosion” if they become damaged or overheated.”,are%20normally%20in%20e%2Dscooters.

Reply to  vuk
December 27, 2022 3:00 am

They have already been banned on the London Underground due to the fire risk. These have to be the most stupid invention ever which the morons who run our transport think will reduce car use when the evidence shows it makes no difference.

Tom Abbott
Reply to  gezza1298
December 27, 2022 5:17 am

Yes, the promoters of electric vehicles have not thought all this through completely.

They are flying blind and a crash is in the offing.

Bill Powers
Reply to  Tom Abbott
December 27, 2022 7:18 am

They are enriching the Faceless Cultural Elite Ruling Class and by extension their toadies: Politicians, Top level Bureaucrats, and the University Administrations and Tenured Propagand…ahh Professors. By transferring middle class future payments (aka Government Debt) into the aforementioned ruling class offshore bank accounts.

Bryan A
Reply to  Tom Abbott
December 27, 2022 7:40 am

More than ebikes and scooters have these explosive devices

Reply to  vuk
December 27, 2022 5:59 am

To be fair – as one who operated an electric scooter (for business purposes) for several years – the risk of batteries catching fire while in operation is very low. I say this from direct first-hand experience using scooters to the max of their capability, in all sorts of weather. If the ones I used didn’t catch fire after shorting out from rain, failing due to brush rotor wear, being banged about on pavement due to potholes, etc etc – I don’t see risks as being super high.
The risk lies when they are being charged. That’s an entirely different story – charging is when the batteries get super hot.
I would also note that the issue with the electric scooters most people are familiar with: the cheap junk rented out by the hour – is that they’re really not good for anything except 1 person transport.
You can’t carry a lot with them – say a couple grocery bags. You can’t carry more than a couple 12-packs of beer or soda. You can’t carry even 1 kid or even a modest kitchen appliance like a blender. And the cheap junk doesn’t have much range – they’re just for the lazy youngster who is unwilling to walk 10 blocks but many of whom are running on a treadmill every other day.

George Daddis
Reply to  c1ue
December 27, 2022 8:17 am

The risk from nuclear power plants is also very low but that does not prevent half the world’s population from being fearful of them.

Reply to  George Daddis
December 27, 2022 7:44 pm

Just shows how easily some people can be conditioned to a reflexive fear response.

Reply to  Ben Vorlich
December 27, 2022 2:16 am

“Gas and electricity firms ‘are hoarding nearly £2BILLION of customers’ cash’: Energy suppliers accused of hiking direct debits even when bill-payers are thousands of pounds in credit” – Daily Mail etc

Reply to  strativarius
December 27, 2022 3:05 am

Yes, my given gas supplier EDF tried that back in September. They were given 10 working days to provide the evidence for their increase so I could compare it with my accurate records or I would cancel my Direct Debit and require them to produce a bill for payment. They caved in. A totally useless company who only provide a bill every SIX months.

Reply to  strativarius
December 27, 2022 2:58 pm

Anyone who gave the energy companies permission to dip into the their bank account, at will, to get a slightly lower tarriff deserves everything that happens to them. Cancel your direct debit today, set up a standing order for what you expect to pay, and let them bill you for the difference. Stop whining.

Reply to  Ben Vorlich
December 27, 2022 6:03 am

Nope. The UK ruling class and others worldwide know that their scams will not save anyone. It is just a means to an end. The end being the total squashing of anyone not considered an “elite”. Its a club and most of us aren’t in it, as George Carlin once said.

Reply to  Ben Vorlich
December 30, 2022 5:58 pm

Macron wants to develop wind, notably offshore.

On avait dit aux habitants qu’ils ne les verraient pas, ce n’est pas tout à fait le cas.

People were told that the turbines at Saint-Nazaire wouldn’t see the wind turbines, but they find out these are very visible:

On nous avait annoncé qu’on ne verrait à l’horizon que des allumettes, ce sont vraiment de grandes allumettes”, réagit un habitant.

“We were told we would only see matches in the horizon. These are really big matches.”

December 27, 2022 1:12 am

Same philosophy as in movie “Field of Dreams” about a sports ground built with no planning in the middle of nowhere. “Build it and they will come.”
There is so much drive for this NY plan that someone must be making big bucks.
Makings of a new movie “Yield of Dreams.”. Geoff S

The Real Engineer
December 27, 2022 1:31 am

The situation in Europe is actually WORSE than described above. The subsidy does not keep prices as they were before the “transition” it just keeps them to 2 to 3 times the old price! The politicians are silent on how the electricity system will work in future, they simply keep up the mantra “Net Zero”, whatever that means, probably no electricity, transport, manufacturing or anything much else. They are of course totally brainless and will be the first against the wall once reality happens.

December 27, 2022 1:44 am

Just bought more coal and logs. I don’t intend to freeze for Selwyn Scumbag or the stupid elites.

And now…. The Nantucket Carbon ride

“Whales could be important allies in the fight against climate change, scientists have discovered.”

Yes they are not only Carbon based, they’re big too

Rick C
Reply to  strativarius
December 27, 2022 9:27 am

Yup, whales – “a renewable energy source”. I’m thinking of starting a whale oil lamp manufacturing business.

David Wojick
December 27, 2022 1:55 am

Given the impossibility of the “planned” transition, the interesting question is how this impossibility will manifest itself? Price spikes versus blackouts? A hard choice but certain.

Reply to  David Wojick
December 27, 2022 5:28 am

David asks: “…the interesting question is how this impossibility will manifest itself? Price spikes versus blackouts?”

The answer is BOTH! Plus, we can add personal energy austerity actions leading to lost comfort at a higher price plateau. What a wonderful accomplishment.

But at least the world will be saved from …???

Last edited 3 months ago by corev
David Wojick
Reply to  corev
December 27, 2022 8:28 am

I am sure the backlash will help wipe out alarmism so I am thinking about the specifics.

Reply to  David Wojick
December 27, 2022 1:24 pm

I am sure the backlash will help wipe out alarmism so I am thinking about the specifics.

What a dreamer!

Reply to  corev
December 27, 2022 7:48 pm

I have never understood how people living in the coldest parts of the Earth could be so mind numbingly scared that it might become a couple of degrees less cold.

Elliot W
Reply to  David Wojick
December 27, 2022 12:05 pm

I’m thinking both blackouts AND high prices would be most effective because people aren’t getting upset enough at either one or the other. But imagine how irate people would become to be without electricity 50% of the time, plus pay 5 or 10 times their current bill for that intermittent service.

Reply to  Elliot W
December 27, 2022 1:25 pm

People may be very upset but what can they actually do about it? In most cases, at least, nothing.

Reply to  David Wojick
December 27, 2022 2:05 pm

I think the rate that we saw at the peak here in Texas, $500/MWh might get their attention.

Reply to  Mason
December 27, 2022 7:49 pm

At one stage, on the East cost of Australia, it went over $1,200 per MWh.

Reply to  David Wojick
December 27, 2022 3:02 pm

No spike; inexorable increases. Plus blackouts on high-demand circuits (thanks to smart metering). No choice.

But yes, certain.

December 27, 2022 2:18 am

And in the UK, us poor saps are paying a Green Levy to subsidise windmills while at the same time the government are dishing out billions of pounds of taxpayer’s money to reduce the cost of electricity to the consumer! Ditching the green levy would show just how expensive wind energy is, but would also reduce household bills.
However, this will never happen as without subsidies the wind industry would collapse, and that would be a humiliation for our politicians. So the consumer continues to pay a premium to subsidise wind, while the government gives us back the money we’ve paid in taxes to reduce our energy bills. A farcical state of affairs.

Reply to  Jackdaw
December 27, 2022 3:13 am

It is worse than that. The UK has a system where all generators are paid at the rate of the most expensive generation, which currently is gas, regardless of their costs. So windmills, nuclear, coal, US tree burners are all getting a bonus payout.

Leo Smith
Reply to  gezza1298
December 27, 2022 3:40 am

The odd thing ius that the price of gas is now back to where it was a year ago but no prices have reduced have they?

Jim Gorman
Reply to  Jackdaw
December 27, 2022 3:43 am

It is exactly what bureaucrats dream for. A problem where they become the middle man for taking your money, raking some off the top, and then giving you back some of what they originally collected. Can you imagine a better gig?

Reply to  Jackdaw
December 27, 2022 1:27 pm

Isn’t it more like they give you the money your children and grandchildren WILL pay in taxes?

Reply to  AndyHce
December 27, 2022 3:05 pm

It’s not “like” that. It is that.

Ron Long
December 27, 2022 2:22 am

I wonder if the Christmas 2022 snowfall of four feet in Buffalo, New York, might be something of a wake-up call? If you are on the CAGW Loonie train-to-nowhere are you wondering what will happen if it gets really cold or really hot and it’s your turn for a rolling black-out? Or you need to sell one of your (carbon powered) cars to pay for the electric bill? And meanwhile China is laughing at us?

Barnes Moore
December 27, 2022 3:42 am

I think Texas – that is ERCOT – could also be used as an example of how not to run an electrical grid. While many simply blame the problems with ERCOT on deregulation – which plays a role – the problems are far more complex. One problem is, once again, over-reliance on unreliables, that is, wind-turbines. Plus the lack of reserve capacity, plus, in the case of 2021, a fair amount of capacity being off-line for routine scheduled maintenance since demand in the winter months is typically lower so it is a good time to do maintenance. ERCOT and other grids will continue to have increased reliability issues as they continue to replace reliable energy sources with unreliables. At some point, if this continues, and access to gas/oil/coal is restricted, there will be a major catastrophic grid failure, and if it happens in winter, which is most likely, a lot of people will die.

Tom Abbott
Reply to  Barnes Moore
December 27, 2022 5:28 am

“ERCOT and other grids will continue to have increased reliability issues as they continue to replace reliable energy sources with unreliables.”

That’s right. The politicians better wake up.

Reply to  Barnes Moore
December 27, 2022 1:29 pm

a lot of people will die.

Then, no more subsidy payment to pay for power for them.

paul courtney
Reply to  AndyHce
December 27, 2022 3:46 pm

Mr. Hce: “a lot of people will die.” I don’t know about subsidy payments, but they still get to vote, so long as it’s for dems.

More Soylent Green!
December 27, 2022 3:54 am

You say “crisis” I say “feature.” You say “failed policy” I say “works as designed.” Soaring energy costs are an ideal opportunity to increase power and control over our lives.

Last edited 3 months ago by More Soylent Green!
Ronald Stein
December 27, 2022 6:24 am

“The nameplate farce”:
There should be financial penalties for wind and solar power plants inability to deliver at least 90% of their permitted nameplate ratings on an ANNUAL basis, like their backup competitors of coal, natural gas, and nuclear power plants that provide continuous uninterruptable electricity.

Subsidies for wind and solar power plants are based on “nameplate ratings”, thus they should be penalized when they cannot deliver what they have been permitted for.

Practically every windmill or solar panel requires a backup from coal, natural gas, or nuclear, thus understanding electricity generation’s true cost is paramount to choosing and prioritizing our future electricity generating systems.

December 27, 2022 6:30 am

While the cost is an issue. of far greater consequence would seem to be that if they keep going the way they are there will not be enough gas, no matter how much you are willing to pay. Not even the stupidest politician would shut off power to residents, over industry during a bad cold snap.

I cross my fingers and hope.

But if Industry finds themselves with constant intermittent power and gas they will pretty quickly pull up roots and get out of Dodge.

Tom Halla
December 27, 2022 7:00 am

One of the problems with socialism it that administered “prices” destroy the ability to calculate real demand and supply information. Which makes central planning even more of an exercise in mathterbation. Numbers that refer to nothing meaningful.

December 27, 2022 8:45 am

Subsidies just pass the buck and governments try to make it sound like they are ‘giving’ you something. It’s no secret that electricity costs as a proportion of income hurt the lower income people more so when will the poorer people start to cry foul? Or are they already but no one is listening?

Reply to  mleskovarsocalrrcom
December 27, 2022 1:32 pm

no one is listening?

Have you not heard the word? Those scum are terrorists.

December 27, 2022 4:43 pm

Saving the planet came after the Malthusian idea of depopulating the planet to prevent resource exhaustion. The goals are the same however. Get rid of someone else. What we need are a large population of environmental Bodhisattvas, those who eliminate themselves so others can achieve utopia.

Last edited 2 months ago by doonman
December 30, 2022 5:51 pm

Everyone owns at least one device with a battery that is almost always too small, and needs frequent recharge and is something to think about (unlike the start battery of the regular gas car).
So I figured that “everything battery powered” was a dead in the water, as everyone with this so called “smartphone” would have figured out how difficult energy storage is.

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