Fact Check

Fact check: Attack by Locke Foundation's Sanders on N.C. RPS relies on flawed data

Fact check: Attack by Locke Foundation's Sanders on N.C. RPS relies on flawed data

A recent column in the Carolina Journal by Jon Sanders, Director of Regulatory Studies at the fossil fuel- and tobacco-funded John Locke Foundation, criticized North Carolina's Renewable Portfolio Standard (RPS) law. In doing so, Mr. Sanders ignored real-world data, instead citing analyses from a variety of questionable sources such as the fossil-funded Beacon Hill Institute and American Tradition Institute.

As noted by other third party reviews, Beacon Hill is notorious for inflating the cost of wind power. In fact, its analysis of the Kansas RPS claimed costs for wind energy that were shown to be two to eight times greater than actual wind energy costs as documented by signed contracts filed with regulators. Similarly, American Tradition Institute researchers have also previously been debunked for doubling the costs of wind power in their studies.

In targeting the North Carolina RPS, Mr. Sanders relies on incomplete data from the same Beacon Hill team that wrote the flawed Kansas analysis. In fact, its North Carolina analysis fails to actually calculate electricity cost increase or annual household cost increase as a result of the RPS. Without any data to back their assertions–not even the old and grossly inflated data they used in other states–both Mr. Sanders’s and Beacon Hill’s protests fall flat.

Perhaps the omission in their analysis occurred because in reality, adding renewable energy–specifically wind power–actually drives electric bills down. This is demonstrated by electricity rates increasing by twice as much in the 40 states with the least wind power between 2005 and 2010 as in the top 10 states for wind generation.

These savings occur because electricity generated from renewable energy sources, such as wind power, displaces electricity from the most expensive, least efficient power plant on the utility system–usually older fossil-fueled plants. Renewable energy standards also help consumers by protecting them from price spikes in fossil fuel markets, much like a fixed-rate mortgage protects homeowners from fluctuations in interest rates.

Steady pricing isn’t the only reason that wind power helps the economy, as renewable energy standards also spur economic development. Last year alone, $25 billion in private investment was channeled into the wind industry.

In fact, according to a February 2013 Research Triangle Institute study, “North Carolina’s clean energy and energy efficiency programs […] spurred $1.4 billion in project investment statewide between 2007 and 2012.” A strong RPS will continue to draw that investment to North Carolina.

Further, the cost of wind power has dropped by over 90% since 1980, helping to make it more attractive to utilities and spurring the wind industry’s growth. Nearly 70% of a wind turbine’s value is now produced in America, compared to 25% in 2005.

As a result, the American wind power manufacturing chain now encompasses over 550 facilities across 44 states, with at least 18 in North Carolina.  75,000 Americans are now employed by the wind industry, with at least 1,000 jobs in North Carolina resulting from wind industry development.

While economic development is certainly important, renewable standards also have significant environmental benefits. Wind power emits no air or water pollution, and creates no hazardous waste, making it one of the most benign forms of energy production available.

North Carolina has significant offshore wind resources that, if developed, will enable the state to meet its renewable energy goals. The economic and health benefits of added renewable energy are clear and the North Carolina state legislature should resist the misguided attacks on its RPS, which is working as intended.
 

Fact Check

Michael Goggin is Vice President at Grid Strategies LLC, a DC-area consulting firm working on grid and markets issues for clean energy clients including AWEA. He was previously head of Research at AWEA.

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