...The wind and solar industries received $5.9 billion and $5.3 billion, respectively, in federal subsidies in 2013. These substantial sums are far greater than the estimated cost of NOPR (between $1 billion and $4 billion per year) and allow renewable energy producers to profit while selling their electricity far below market rates, which they do to seize market share. This practice is similar to product dumping, when foreign companies sell their products below the cost of producing them to gain a greater share of a global market. Wind power producers receive a federal subsidy of $24 per megawatt hour (MWh) of power produced, regardless of whether this power is needed to satisfy the current demand for electricity. As a result, wind producers are incentivized to sell their power to the grid even when prices are negative (up to -$23 per MWh). In these circumstances, coal-fired generators must choose between paying customers to take the additional power generated or scaling back generation. Either way, subsidized renewable generators profit at the expense of coal and nuclear plants, which have high fixed costs but can generate low-cost electricity when they produce a steady, constant output of electricity...California has aggressively incorporated ever-increasing amounts of intermittent wind and solar power into its electric grid to satisfy its renewable energy mandate, which requires the state to generate 50% of its electricity from renewables by 2030. However, one important problem is electricity demand has been essentially flat in recent years, which means the addition of more renewables in the market depresses wholesale power prices even further. As a result, California's independent systems operator, CAISO, has been forced to issue payments to numerous natural-gas-fired power plants to ensure reliability as the state attempts keep the lights on while using more renewables. Either way, ratepayers will subsidize generating sources needed for system reliability...more
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