The true cost of renewables: An analytic response to the coal industry`s attack on renewable energy

Abstract

In April 1995, the Center for Energy and Economic Development (CEED), an umbrella organization of pro-coal interests, released a report entitled Energy Choices in a Competitive Era: The Role of Renewable and Traditional Energy Resources in America`s Electric Generation Mix. The report purports to show that a very modest growth in the use of renewable energy in the U.S. power sector would entail unaffordable costs for the nation`s electricity ratepayers. The National Renewable Energy Laboratory (NREL) was commissioned by the U.S. Department of Energy (DOE) to review the assumptions contained in the report, which was prepared for CEED by Resource Data International, Inc. (RDI). The NREL analysis finds that the conclusions of the CEED/RDI study are based on faulty data and assumptions regarding the comparative economics of coal and renewable energy development. After correcting these errors, NREL finds that a modest growth path of renewable resource development would essentially cost the nation little more than projected electricity market costs for coal-fired generation, even before considering the environmental benefits that would accompany this development.