This story on Sunday suggests that utilities are pulling back from investments in renewable energy over concerns about the cost.
Invenergy…had a contract to sell [wind] power to a utility in Virginia, but state regulators rejected the deal, citing the recession and the lower prices of natural gas and other fossil fuels.
“The ratepayers of Virginia must be protected from costs for renewable energy that are unreasonably high,” the regulators said. Wind power would have increased the monthly bill of a typical residential customer by 0.2 percent.
Based on what price forecast? The following chart illustrates the complexity of relying on fossil fuel prices when making decisions about renewable energy. Note that wind and solar prices are relatively stable (i.e. zero).
The chart does a good job of showing the futility of predicting natural gas prices, but the timeline smooths out coal price changes, particularly by region. Here’s a closer look at coal prices since 2007, courtesy of the federal EIA:
Utilities that are making shortsighted decisions about renewables based on current fossil fuel price trajectories are going to get burned, and so are their ratepayers.
