Both large scale wind and solar energy distorts the normal wholesale energy markets resulting in higher electricity prices. Known as the “California Duck Curve”, when these heavily subsidized  sources compete with each other they will bid into the market at zero cost and in the case of wind less than zero and still profit. During the day when the sun is out and the wind is blowing these sources are in peak production which suppresses market prices driving other generators such as nuclear and natural gas from the market. Unfortunately during this time of the day electricity demand is usually at its lowest level. Since the grid can’t handle too much power at once some of theses subsidized wind and solar sources are being paid to not produce.  Hard to believe! But it gets worse. Some states are subsidizing nuclear plants to account for their inability to compete with the increasing quantities of zero cost wind and solar generation.

A system of subsidies that causes economic distortions in electricity markets, necessitating further subsidies to overcome them, is true economic madness.  (Jonathon Lesser)

In the early evening electricity demand increases rapidly while at the same time solar and wind energy disappears resulting in a shortage of supply. At this point nuclear and gas power plants are required to step in to provide power during this peak demand period. In California since there is only one nuclear power plant left operating and many of the natural gas plants are no longer in service a situation is created where supply is limited. In some instances the grid operator has to purchase electricity at elevated prices from out of the area producers. When demand is high and supply is low the result is always higher prices.

One way wind energy companies are subsidized is through Power Purchase Agreements or PPA’s. These are prices the companies are guaranteed to be paid for the power they produce which the state either forces the utility companies to pay or the state pays with taxpayer funds. Documented  PPA’s in 2024 for offshore energy projects in New York and New England range from $160 /MWh to $190/MWh which is considerably higher than the established wholesale prices of $40/MWh for that particular area. California already has the highest retail consumer electricity prices in the country primarily due to the increase of large scale wind and solar energy producers added to the grid. The proposed Offshore Wind Energy facilities in California will be deep water, floating systems much further from land than projects built elsewhere and will cost considerably more.