Mario Loyola
The Inflation Reduction Act is deeply unpopular among conservative Republicans. Yet a solid bloc of 21 GOP members of Congress recently called for keeping the its lavish tax credits for renewable energy. In a letter to the House Ways and Means Committee, they warned that disrupting the tax credits would “risk sparking an energy crisis in our country, resulting in drastically higher power bills for American families.”
There is just one problem with that claim. Our country is already facing an energy crisis and steadily rising power bills, precisely because of the Inflation Reduction Act’s renewable subsidies. Those subsidies, and the renewable tax credits in particular, are poisoning the economics of the reliable power sources we actually need, namely coal, natural gas and nuclear.
In its latest reliability assessment, the North American Electrical Reliability Corporation warns that America is facing a widening gap between electrical generation capacity and soaring demand.
Coal-fired plants, which provide reliable baseload power, are rapidly retiring. Approximately 15 percent of current U.S. coal-fired generation capacity is expected to retire by 2030. Meanwhile, electricity demand is expected to rise at least that much by then due to the revolution in AI and the push to electrify everything. This equates to a shortfall of about 400 gigawatts—about 30 percent of projected demand.
Trump Administration Puts Subsidized Green-Energy Companies on a Diet
In a properly functioning electricity market, investment in new baseload plants like natural gas and nuclear would be booming. Instead, investment in such plants has virtually disappeared. In 2024, new natural gas capacity barely offset nuclear retirements, while nearly 9 GW of coal plants retired.
Worse, reliable capacity is being replaced by renewable power that is mostly a dangerous mirage. The grid saw 13 GW of new solar additions, but solar plants are usually rated at around 24 percent of their nominal capacity and can’t be counted on to produce even that when needed. » Read More
https://www.heritage.org/energy/commentary/renewable-subsidies-are-poisoning-the-nations-electricity-grid