The Green New Deal could make electricity 28 times more expensive

The Green New Deal could make electricity 28 times more expensive

David Wojick

Below I show how the Green New Deal can cause the average household electricity bill to go up a crushing $52,500. The reason is simple. Wind and solar require a lot of battery backup and we use a tremendous amount of electricity so the cost of all these batteries is many trillions of dollars.

Here is the basic derivation. It is kept simple and the numbers are all rounded off so they can be remembered. (The U.S. Energy Department should have done a detailed analysis long ago.)

— The electricity storage capacity required to replace today’s fossil fueled electricity generation nationwide with intermittent wind and solar is 250,000 MWh.

— Assume grid scale battery facilities cost $300,000 per MWh of storage capacity. (Today’s cost is higher.)

— Thus the capital cost of this storage is 75 trillion dollars.

— Spreading this cost over 20 years gives an annual cost of 3.75 trillion dollars.

— U.S. household electricity usage is 1.5 trillion KWh per year.

— Thus the household cost is $2.50 per KWh.

— Average household usage is 10,500 KWh/yr.

— Thus the annual household cost of this storage capacity is $26,250.

— Today’s average annual electric bill is $1,800.

— Thus the electricity cost increase is over 14 times as much.

In short everyone’s electricity bill will be 14 times greater than today if wind and solar replace today’s fossil fuel powered generation under the Green New Deal.

This will be true of industrial and commercial consumers as well which will drive up the cost of virtually all goods and services. This impact is truly inflationary.

But this does include the electrification of transportation and gas heat which are also part of the Green New Deal. Electrification is often estimated to roughly double the amount of electricity generated.

— Given electrification the cost of electricity might jump a whopping 28 times today’s cost. The Green New Deal causes the average household electricity bill to go up a crushing $52,500.

Of course the economy would likely collapse before this happened but this simple analysis is the necessary starting point for thinking about the incredible cost impact of the Green New Deal.

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