Estimates of renewable savings only include installation costs, not operating costs.

A recent study from Synapse Energy Economics (commissioned by the Sierra Club) claims that replacing the J.K. Spruce coal-fired power plant units owned by CPS Energy — San Antonio’s municipal utility — with wind and solar power “could benefit rate payers an average of $85 million each year from 2026-2040.” Unfortunately, the Sierra Club and the press coverage surrounding the report fail to acknowledge a critical gap in the assumptions underlying the flawed narrative that wind and solar are rapidly becoming cheaper than fossil fuels for electricity generation. When the report says that the levelized cost of wind is $17 per megawatt-hour and solar is $25 per MWh, it is only counting the cost to build the wind turbines and solar panels and hook them up to the grid. In reality, when we add wind and solar to our grid, we are paying for two systems: the renewable resources themselves, and the cost to firm them up — to provide backup power when the wind doesn’t blow and the sun doesn’t shine, and to cut production when there is too much wind or sun. Until recently, the costs of this “second system” have been hidden because wind and solar have comprised less than 20 percent of Texas’ electricity production and the state has had ample reserves. But these costs will rise dramatically as we add more wind and solar to the Texas grid. In other words, the more renewables we have, the less value they add because we are having to pay more for the second system behind them.

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