(Archive Article) Green Power's High Cost Scuttles Projects

The following was gleaned from a New York Times article with the above title published on or about November 8, 2010.

Electricity generated from wind or sun still generally costs more — and sometimes a lot more — than the power squeezed from coal or natural gas. 

Prices for fossil fuels have dropped in part because the recession has reduced demand. 

In the case of natural gas, newer drilling techniques have opened the possibility of vast new supplies for years to come.

The gap in price can pit regulators, who see their job as protecting consumers from unreasonable rates, against renewable energy developers and utility companies, many of which are willing to pay higher prices now to ensure a broader energy portfolio in the future.

In April, for example, the state public utilities commission in Rhode Island rejected a power-purchase deal for an offshore wind project that would have cost 24.4 cents a kilowatt-hour. The utility now pays about 9.5 cents a kilowatt hour for electricity from fossil fuels.

The state legislature responded by passing a bill allowing the regulators to consider factors other than price. The commission then approved an agreement to buy electricity from a smaller wind farm, although that decision is being challenged in the courts.

Companies that make solar cells and wind machines argue that a national energy policy is needed to guarantee them a market that will allow their industry to develop.

The United States has relied on a combination of state renewable energy mandates and federal tax credits to encourage greater reliance on energy from renewable sources. Legislation that would have set a price on carbon-dioxide emissions and included a standard for increasing the share of clean energy in the nation’s electricity portfolio failed in Congress this year.