Wind And Solar Cheaper Than Coal – Or so says Michigan

Since we are in a Utility state of mind this week, the PSC of Michigan just released this report according to the folks at AWEA.

Mich. Public Service Commission: Renewable energy cheaper than coal

Posted: 2012-03-02 Tom Gray

We often run “Fact check” articles on this blog when fossil-fuel-funded “experts” exaggerate the cost of electricity generated with wind power (for a particularly bald-faced recent example, see Fact check: American Enterprise Institute epic FAIL on study of wind costs, Feb. 29), but perhaps this one should be titled “Reality check.”

Reality: the Michigan Public Service Commission (PSC) recently issued a report that finds that electricity generated from renewable energy sources, at an average cost of $91 per megawatt-hour (9.1 cents/kilowatt-hour), is almost one-third cheaper than the cost of electricity from a new coal-fired power plant ($133 per MWh, or 13.3 cents/kWh).

Further, the report notes, “The actual cost of renewable energy contracts submitted to the Commission to date shows a downward pricing trend.  This was the case as of the filing of this report in February of 2011 and continues to be the case, as the two most recent contracts approved by the Commission for new wind capacity have levelized costs of $61-$64 per MWh.  This is significantly lower than the levelized costs of the first wind contracts submitted in 2009.” (emphasis added)

The report is one in a series required annually from the Commission to the state legislature, reporting on the impact of the state’s Renewable Energy Standard (RES), which requires utilities to obtain 10 percent of the electricity they provide from renewable energy sources by 2015.

Other highlights from the report:

– While utilities are allowed to charge customers extra for renewable energy, customers are also seeing savings due to wind.  Said the Commission, “While … surcharges have an impact on electric rates, there are also economic benefits attributable to an increase in renewable energy generation sources and improved energy efficiency. As noted in previous sections, the cost of energy generated by renewable sources continues to decline and is cheaper than new coal-fired generation.


Go there and read. More tomorrow.


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