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If Renewables Use Free Energy Why Does Electricity Cost More?

  • By Admin
  • March 13, 2023

Since passage of the IRA (Inflation Reduction Act), government officials have been telling us that renewables produce electricity much more cheaply than any other electricity providers. But if this is true, why is the cost of electricity increasing? In fact, year-over-year the average cost of electricity has increased by 12%.  Some areas have seen an even higher increase. 

Why? The answer is rather complicated but ultimately it has to do with the fact that renewables are not stand-alone.

When we flip the light switch, we expect the light to come on…24 hours a day, 7 days a week. But here is part of the problem because renewables can only supply electricity during a limited amount of time. To have electricity available to us 24/7 we need some other supply source to back up the renewables when they are not available. So which source do we prefer as the backup – coal, fuel oil, natural gas, nuclear, battery, etc.?  Any one of these can do the job but they all add to the cost. As we increase renewables, we must increase these backup sources to keep electricity available. Keeping these backup sources available requires manpower, maintenance, and fuel.  Therefore, the cost of electricity will continue to increase as we transition to zero net carbon.

Another reason for the increased cost is transmission and distribution.  Renewables are rarely located where existing power plants are located. Even if the transmission lines are located there, they need to be upgraded to carry the additional capacity.  And those renewables located away from existing power plants require NEW transmission lines, which will require land purchases or “right-of-way” purchases, not to mention the infrastructure needed to support the new transmission lines to our grid and distribute electricity to us. 

So yes, while the wind blowing, water flowing, and the sun shining is techically “free”, creating the systems that enable the “always available” electricity that we all demand from these renewable sources of energy is not.

Photo Credit: WatchWire

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