Good afternoon everyone,
A recent study suggests that setting mandates for the use of renewable energy is an expensive approach.
Delaware, like many states, has a goal of getting a quarter of its energy by 2025 from alternative sources.
The widely read Axios site highlighted a University of Chicago study that indicates electric costs for businesses and home are higher in states with the mandate.
The study indicates that cap and trade, which auctions off credits for power from polluting sources, is a cheaper way to go.
In the case of Delaware and a number of Eastern states, both cap and trade, and mandates are in place. In Delaware, Cap and trade money is also used to finance energy conservation and costs related to the installation of solar systems.
Both cap and trade and mandates are unpopular in some quarters and at one point were blamed for the closing of the state’s auto plants and our lone steel mill, due to high electricity costs.
The claims are shaky, given the region’s historically high electrical rates that were around before alternative sources entered the picture. Chrysler and GM had been looking for decades for ways to close plants away from the center of the country.
In the case of Evraz Steel, the Russian company overpaid for the Claymont mill, which was doomed the minute the market for its products tanked.=
At this point, it would be difficult to quickly change course. A sudden switch would be painful for a utility industry where planning and permitting for new transmission lines and other improvements can take a decade.
Meanwhile, we are seeing more activity from offshore wind power.
Delaware is out of the running (for now) on offshore wind. One controversial proposed wind farm near Ocean City, MD would be visible from the Fenwick Island area in Delaware. There is also a strong likelihood that power from one of the wind farms would be connected to the grid at an inland site on the Delaware coast.
The Maryland projects have drawn opposition from residents who want the wind turbines further off the coast. Others suggest the project is too expensive and could be re-engineered to be built at a lower cost.
Even the most vocal advocates of offshore wind say new projects have to “get it right” in terms of location, costs and connections with the grid.
Offshore wind would have one big benefit. Money for building and maintaining wind turbines would stay closer to home. Wind power in Delaware now comes from Pennsylvania with little or no economic benefit.
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