*This column was co-authored by John Elick
Welcome to 2017, the year the environmental left decided to publicly take issue with ideologically driven energy source preference mandates. A Wyoming bill intended to mandate a source preference for traditional sources like coal in utility scale electricity generation has environmentalists in a veritable tizzy.
“Wyoming Bill Would Outlaw Wind and Solar,” sensationally claims EcoWatch, a self-styled environmental news site that leans left. Senate File 71 does indeed penalize utility scale wind and solar. The bill punishes these energy sources by charging utilities a fine for their usage at a rate that makes utility scale wind and solar uncompetitive in today’s Wyoming electricity market. The bill does not, however, go so far as to outlaw wind and solar.
The bill also does not penalize small scale renewable generation, like roof top solar. Further, Senate File 71 only applies to electricity sold to Wyoming consumers. Two thirds of electricity generated in Wyoming is exported. The legislation will not prevent utilities from selling solar or wind electricity generated in Wyoming even in theunlikely event it becomes law.
What the bill does is illuminate the political conversation around energy source preference mandates. Senate File 71 highlights problems associated with governments choosing energy winners and losers. When one strips away the veneer of renewables and instead, preferences fossil, penalizing utilities for using specific energy sources appear nakedly ludicrous.
Many states mandate utilities generate a certain percentage of electricity from renewable energy sources. These laws are intended to improve environmental quality by supporting zero or low air emissions energy. The laws are also often specific to wind and solar and rarely include other zero carbon and zero air emissions energy sources like nuclear, hydropower, or clean coal. If it is silly to preference coal or even clean coal to the detriment of solar and wind, is it not also silly to preference wind and solar to the detriment of other emissions free sources?
Senate File 71 demonstrates the stifling nature of legislating preferred energy sources, from both a technology and jobs basis. If investors know new fuel sources or energy technologies are disadvantaged by laws that function as actual or functional barriers to market entry, they will be less inclined to innovate. After all, why would one invest in developing a product for which one must pass new legislation to even hope to have the opportunity to bring it to market?
Free market values do not comport with governments choosing market winners and losers. In energy this is true whether that source is coal, solar, wind, nuclear, natural gas, hydro or a yet undiscovered source. Rather, policy should allow all energy sources to compete as freely as possible to serve consumer energy needs. Competition and capitalism will encourage the continued energy innovation that produces the affordable, abundant and environmental stewardship friendly energyAmericans desire. And compete wind and solar can: for two years running, Lazard finds when one controls for subsidies, utility scale wind and solar electricity are at times cost-competitive with natural gas and coal.
America’s need for new energy technologies and all of the above energy sector jobsare both critical. In that light, ideology driven source preference mandates that function as barriers to market entry make less and less sense – apparently, now, even to the environmental left, as their response to Wyoming’s Senate File 71 shows.