Recently, some of the pervasive net zero happy talk in the media has been replaced with sober voices raising alarm that public utilities may not be able to deliver the electricity to meet demand over the next decade. They often cite unanticipated energy demand from datacenters running AI applications and residential EV chargers as the culprits. That may be the proximate cause, but it overlooks a much more deeply rooted problem with our public policy on energy.

Public Utilities were originally commissioned to ensure delivery of affordable, reliable, and universal electricity. Several decades ago, they included in their mission the goal of reducing carbon emissions. This shift has resulted in willful neglect of the nation’s fossil-fuel based power plant fleet. The fleet is being retired prematurely with only meager replacement, while “renewables” are being substituted. This phenomena stems from ill-conceived public policy involving renewable energy mandates.

Renewable energy mandates require energy providers to supply a minimum share of energy from low- or zero-carbon emission sources. Twenty-eight states, more than half of the country, have led the way in implementing renewable portfolio standards.  Some states, notably Texas and California, have doubled down on the percentage of renewables mandated, even with the memory of colossal grid failures, like during winter storm Uri, fresh in the minds of legislators. Public utilities have acquiesced to the will of state legislatures and the results foreshadow an impending disaster.

To understand why, it is best to envision renewables as having a parasitic relationship with fossil fuel generation. A parasite survives by leeching the nutrients from its host. If it grows too big it will starve its host, and both will die. This is the situation in which many states with a growing percentage of renewables find themselves.

Increasing wind and solar power capacity does not imply that fossil fuel power capacity can be decreased in any way.  The fossil fuel power capacity must be available at a moment’s notice to ramp up and compensate for vacillations in renewables output. Therefore, the cost of operating and maintaining fossil fuel generation is not less.  In fact, it is more expensive to operate as the operator must recoup capital, operating, and maintenance costs across a smaller window of power generation time as renewables generation substitutes for fossil fuel generation. Fuel cost is less but the capital and operating costs remain the same no matter if it runs 100% or 50% of the time. Therefore, unless the fossil fuel operator is subsidized, it has no incentive to invest in fossil fuel plants.

The current approach of retiring fossil fuel plants and not replacing them is suicidal. This would have been the case with or without the surge in demand from datacenters and E.V. chargers. If state legislatures proceed on the current course of mandating a greater percentage of generation from renewables, they must incentivize operators to maintain their current fleet of fossil fuel power plants and invest in new ones. It is ironic that a mandate for fossil fuel power plants must be added to the current list of subsidies and mandates for renewables. However, if this advice is not heeded, public utilities might not be able to ride out the current craze for renewables without hitting the wall.

Image: Free image, Pixabay license.