The success of AWEA’s recent report showing the consumer benefits of wind power has ruffled the feathers of the fossil-funded Heartland Institute and one of its more notorious wind energy myth-makers, James Taylor.
Earlier this month, AWEA authored a report summarizing the large body of evidence confirming that wind energy keeps electricity prices low. The report included the following information, none of which Mr. Taylor was able to dispute:
- DOE data for the 2005-2010 time period shows the same benefit of wind energy keeping electricity prices low, with rates increasing less than half as fast in the states with the most wind energy as in other states. That benefit was widespread across the states with the most wind, with 8 of the top 10 wind states seeing electricity prices increasing far slower than the national average, while the other two were in line with the national average.
- Citations to 15 studies by state governments, grid operators, academics, and others confirming that wind energy keeps prices low.
- Regulatory filings and quotes from utilities and state utility regulators confirming wind energy is saving American consumers money. Such as the Southern Company and Alabama Power stating the “price of energy from the wind facility is expected to be lower than the cost the company would incur to produce that energy from its own resource…with the resulting energy savings flowing directly to the Company’s customers.”
- DOE data on wind energy contract pricing that shows how rapidly wind energy costs are falling – specifically how the cost of wind energy has declined 43 percent over the last four years.
Instead, Taylor latched onto a single correlational datapoint in the report, Department of Energy data illustrating that the states that obtain more than 7 percent of their electricity from wind have seen their electricity prices decrease over the last 5 years, while other states have seen theirs rise. As usual, Taylor’s attacks don’t hold up to scrutiny.
The methodology used for the report is sound. The weighted average across a large number of states in the sample and outside of the sample isolates the impact of wind energy on prices. Weighting the results based on state electricity demand is essential for correctly performing this type of analysis. A failure to do so would give equal weight to electricity price changes in South Dakota and Texas, even though the latter uses 22 times more electricity.
Texas’s emergence as the U.S. wind leader is the real reason why its electricity prices are decreasing. Taylor’s claim that electricity market deregulation is the primary cause of the decline in Texas’s electricity prices cannot be correct for one simple reason. Deregulation was implemented 12 years ago in 2002, while the DOE data we analyzed covers the last five years, which is the period during which Texas tripled its use of wind energy.
The fact is American wind power is a good deal. With the right smart policies in place at the federal and state levels we can keep this American success story going.
by David Ward