The recent op-ed from Life:Powered’s Mike Nasi in the Albuquerque Journal calling attention to the insurmountable cost and reliability problems with New Mexico’s renewable energy mandate is making waves.
U.S. Senator Martin Heinrich (D-NM) this weekend published a rebuttal attempting to rebut Mr. Nasi claiming “disinformation” while offering no supporting data or sourcing for his claims. We welcome debate and discussion — they are the cornerstones of our democratic republic — but the senator’s piece is riddled with factual errors and omissions.
At Life:Powered, we’re committed to the truth, not to partisan agendas. Here’s how Sen. Heinrich’s rebuttal stacks up against the actual facts.
CLAIM: “The truth is that market forces and technological innovation have already reshaped the way we produce electricity. Wind, solar and energy storage projects are outcompeting fossil fuels.”
If it were true that solar and wind energy are powerful and efficient enough to challenge fossil fuels, why does the state need to establish mandates, distort its energy markets, and make massive subsidy payments to make this energy transition happen?
The cost to produce wind and solar infrastructure is coming down. But slowly decreasing installation costs does not mean it is anywhere close to being able to power an entire electric grid.
New Mexico currently gets 23% of its electricity from wind and solar, but as it increases the amount of that intermittent generation, the cost to ensure reliability will rise exponentially. Germany, for example, has to subsidize coal plants to provide backup generation when the wind doesn’t blow and the sun doesn’t shine. Even the largest, most advanced solar and battery storage project in the world under construction in Florida will barely make a dent, supplying only enough energy to power 329,000 homes for just 2 hours. Energy storage technology is a long way from enabling a 100% wind and solar grid, even in the rare states like New Mexico that have enough unused land to produce excess wind and solar that could supplement daily and seasonal variations.
CLAIM: Speaking of Germany: “In Germany – the other place Nasi falsely claims is suffering because of a transition to clean energy – citizens are demanding their country take even bolder action to decarbonize their economy by moving away from expensive coal power plants and investing more – not less – in the clean energy infrastructure of the future.”
This supposed demand for renewable energy is occurring in the midst of a 46% rise in electricity prices since 2007, as Nasi noted in the Journal op-ed. The Energiewende has already cost Germany hundreds of billions in additional infrastructure investment according to various studies.
After all this, German CO2 emissions only declined 6% from 2005-2016. Worse yet, 8% of Germany’s electricity, or one-fifth of its “renewable” generation, comes from biomass. Germany is importing wood scraps from the U.S. to feed its biomass plants. Burning wood isn’t a way to significantly reduce CO2 emissions, and, in fact, increases the release of genuinely dangerous pollutants into the air. Germany’s average urban concentration of fine particulate matter, the toxins that are truly harmful to human health in high concentrations, was 57% higher than the United States in 2016, despite the fact that the U.S. uses far more fossil fuels per capita than Germany does.
Charging German citizens hundreds of billions of dollars with little to no environmental benefit would sound like suffering to most people. The country is making a concerted choice to ignore the best interests of its people and swallow higher electricity prices to push for 100% renewable despite almost no results.
CLAIM: “Residents of Georgetown, Texas – which has moved to 100 percent renewable power by purchasing its power from the growing wind industry – are seeing massive savings in their electric bills.”
Georgetown’s leaders predicted that their plan to go 100% renewable would save them money, but those predictions were wrong. From 2016 to 2018, Georgetown Utility System’s purchased power costs rose 30% from $40.3 million to $52.5 million, even as consumption only increased 8%. The average retail electric price in Texas has risen only 4% since that time.
A recent Austin American-Statesman report found that the average electric bill in Georgetown was $132 per month in 2018, 51% higher than in nearby San Marcos, a city with a similar population makeup and its own municipal utility. The city was $23 million over budget on energy in 2016 and 2017. That’s money that can’t be spent on public safety or fixing potholes. Georgetown is now looking for ways to renegotiate and even get out of its solar contract.
As of February 1, Georgetown customers were saddled with an average increase of $12.82 per month to help the city recover the cost of purchasing energy, and that’s surely not the last price increase. It may not seem like much to some, but $150 per year adds up to a week’s worth of groceries for a family of four, three to four tanks of gas, or the freedom to treat your household to dinner out once or twice. For the many retirees on fixed incomes in Georgetown, shelling out an extra $150 is a tough pill to swallow. And it is certainly not reaping customers “massive savings” as the senator claims.
CLAIM: “The same story is true here in New Mexico where Facebook chose to invest billions of dollars in its Los Lunas data center precisely because our state can provide economical, renewable electric power.”
VERDICT: HALF TRUE
What is left out is any mention of the cheap land and massive subsidies Facebook received to come to New Mexico. And Facebook is only required to create 30 jobs to receive the government handout.
The company has the option to buy up to a $30 billion in industrial revenue bonds over 30 years, exempting them from millions in gross receipts taxes on equipment for the data center. The city of Los Lunas also received $10 million in Local Economic Development Act funds from the state for water and wastewater improvements necessary for the project.
The think tank Good Jobs First conducted a study in 2016 of 11 “megadeals” for data centers and found that the average cost of the subsidies for these megadeals was $1.95 million per job created. A good deal for Facebook, but not so good for New Mexico taxpayers.
THE BOTTOM LINE: Pants On Fire
We know that environmentalists mean well. After all, who doesn’t want to preserve the rich and diverse beauty of the planet we call home? But ignorance of the facts and, worse, resorting to actual falsehoods is no way to make policies that will impact ratepayers and taxpayers for generations to come.
The affordability of electricity is serious business. New Mexicans deserve the truth.
Competitive energy markets have proven to be the best means for providing the abundant, reliable, and affordable energy resources that are the key to both human flourishing and environmental protection. Instead of mandates that will destroy New Mexico’s energy market by forcing an “energy transition” before renewable technology is ready, the Land of Enchantment should instead foster a competitive energy market that allows all energy resources to compete on a level playing field. A well-functioning energy market, not government intervention, is the key to unlocking the clean, low-cost energy resources that will power New Mexico’s future.
Brent Bennett is Life:Powered’s Policy Analyst. He holds a Ph.D. in Materials Science and Engineering from The University of Texas.