Steve Cicala reports that in the early days of electricity, it was difficult to transmit electricity long distances. So it made sense to build power plants close to population centers and transport fuel over these great distances via rail or barge. Over time it got cheaper to transmit electricity, but the regulatory framework has been slow to catch up and largely continues to treat power generation as a local issue. The impact of this historical approach is evident when looking at where coal comes from today, and where it is eventually burned. Twenty-five counties in just a handful of states produce two-thirds of our coal and then ship it to power plants all throughout the country. The farther away a plant is from a mine, the greater the coal, and with it, electricity costs.
So as uneconomical as it might be to grow oranges in Maine, it costs nearly five times more to buy coal there than in Wyoming, the coal equivalent of the citrus belt where electricity prices are 25% below the national average. Customers in the coal-producing state of West Virginia also get their electricity 25% cheaper than most Americans. What does this have to do with renewables? Much like coal, wind and solar resources are distributed unevenly throughout the country (but not nuclear). Unlike coal, one can not put the wind or sun on a railcar. Without a transmission network to import electricity from renewables-rich regions, states must do the equivalent of growing their own oranges. Unfortunately, this is exactly what states are doing when they adopt in-state generation-based renewable portfolio standards.
These policies encourage otherwise-surreal investments like solar energy in Massachusetts. And, they are costing ratepayers more. Local utility interests are at the heart of these types of standards, and have stood in the way of efficient energy production for some time now. For example, in the early 1990s, Illinois passed a law requiring power plants to burn locally-sourced coal...
Original URL: https://www.forbes.com/sites/ucenergy/2016/05/12/how-going-local-is-hamstringing-the-clean-energy-transition/#7adbe631afad
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