Renewables Versus Power Prices
Do regions that add wind and solar see their residential power prices go up or down?
There’s a chart making its way around the internet right now showing countries with a high share of renewables also having high power prices. Readers should be sure not to mix up correlation with causation.
The debate: Critics of renewables often argue that the rise of wind and solar energy is driving up electricity prices. The data tells a different story.
On average, states that have expanded their share of renewables the most over the past decade have seen below-average increases in electricity prices, and vice versa. Those states that have added the least wind and solar over the past decade have seen their power prices go up, despite gas prices falling by nearly 50%.
That being said, clean power policies don’t always help electricity prices. In parts of New England and New York, prices have risen despite limited wind and solar. Policy decisions like carbon pricing and the retirement of existing nuclear and gas-fired plants have likely played a part in rising electricity rates.
Ok… so what about the bad chart? The relationship is nicely explained in this article by Andrew Dressler, and it has to do with the complexity of power markets, natural gas prices and how expensive it is to build any type of project in the countries building more wind and solar.
Written by Aaron Foyer, Vice President of Research and Analytics at Orennia
✉️ As always, feel free to reach out to me at aaron.foyer@orennia.com