Electricity prices soar across US
The price of electricity for residential consumers is surging across the US, and particularly along the East Coast, offering both opportunities and challenges for the renewables sector.
The average cost of residential electricity during the first half of 2014 hit $0.123/kWh across the US, with the 3.2% increase on 2013 representing the fastest year-on-year growth in half a decade, according to the US Energy Information Administration.
The situation is even more extreme along the densely populated East Coast, with prices rising 11.8% year-on-year in New England states, and 6.7% in Mid-Atlantic states.
Day-ahead wholesale power prices in the New England area averaged $93/MWh during the first half of the year – up 45% on last year, the EIA says.
The increases reflect a number factors, including a growing reliance on natural gas for electricity production, continued shutdowns of many coal-fired plants, and extreme winter conditions seen across much of the US this past winter.
Rising power prices present a double-edged sword for renewables. For some sectors, like rooftop PV, higher electricity prices make for a more compelling argument with potential customers.
It is also easier and more cost effective to integrate wind and solar on a large scale with gas-fired generation, than with base load coal or nuclear.
Yet rising prices also present public-relations challenges for renewables, including the nascent US offshore wind sector, as industry advocates are forced to make their case amid growing public concern and media attention about energy costs.