A blackout occurred in the wake of Hurricane Sandy, as more than 8 million people in the northeast were left without power. Millions could remain without power for several more days. Hurricane Sandy was a natural disaster that people could prepare for but couldn’t avoid.
Blackouts and brownouts caused by misguided energy policies, however, could be avoided. Micromanagement of the energy sector with renewable energy mandates, prohibitions, overly burdensome regulation, and subsidies are taking a heavy toll on people and on the electricity grid used to distribute power.
Germany, one of the most aggressive renewable energy adopters, is demonstrating the dark and cold path down which a government-centric approach to electricity supply leads. This winter, Germany is short 500 megawatts in electricity compared to the previous year.
Why the shortage? A premature shutdown of nuclear reactors and a slower than expected and government-directed energy transition toward renewable sources. The German government immediately shut down eight nuclear reactors in response to the Fukushima accident and determined to end all nuclear power generation in Germany by 2022.
Germany also adopted an aggressive 35 percent target of renewable energy by 2022. In the U.S., California has similar ambitions for renewables, having set a target of 33 percent by 2020.
The results of Germany’s policies are an unstable electricity grid that threatens to leave Germans in the dark and cold this winter. European grid operator Tennet reports that, during the last year, the electricity grid would have collapsed multiple times had only one more significant power plant or transmission cable become impaired. The rate of unusual measures to stabilize the grid—such as turning power plants off or taking wind farms off the grid—tripled last year, rising to 998 interventions.
Meanwhile, Vattenfall, another grid operator, is preparing for brownouts, asking large energy consumers how much electricity they could go without in the event it becomes necessary to take some users off the grid in order to avoid even worse results.
This is happening because federal policies are inhibiting electricity markets from responding to consumer demand. Government intervention is distorting prices and investment prospects in the electricity sector. Renewable energy subsidies are rendering conventional sources unprofitable, and yet the renewable sources alone cannot assure grid stability without conventional sources being available to meet electricity demand during times when the wind does not blow or the sun does not shine.
California’s ISO, which operates the region’s power grid, referred to similar challenges in integrating the state’s 33 percent renewable portfolio standard:
Among these challenges is ensuring that the ISO has sufficient flexible capacity to address the added variability and unpredictability created by intermittent resources.
Blackouts and brownouts come with huge costs. Industrialized economies such as Germany and the U.S. depend on reliable electricity to function. Hospitals need power to keep patients alive, and people freeze in their homes when electricity is their only source of heating. Electricity is the lifeblood of the economy, and without it few transactions can take place. It is mind-boggling to think that governments would impose these large risks on people for lofty policy goals.
Unlike natural disasters such as Hurricane Sandy, which caused blackouts across the American northeast, blackouts and brownouts as a result of short-sighted energy policies are avoidable. As Sandy relief efforts are underway, policymakers should look across the pond and avoid energy policies that put Americans at undue risk of power outages.