2016: US States with MORE wind tend to pay LESS for their electricity


It's been said by some (notably former Minister Bill Boyd but several other coal proponents as well) that regions which generate more of their electricity with wind turbines have to pay more for their electricity. Actually the opposite is true.

To demonstrate why one must compare wind energy usage with average electricity prices. Canadian data is hard to come by and, since US information is not, we'll use that. The US Energy Information Administration publishes information on both average prices and  wind energy usage, by state. A correlation analysis of 2016 data is shown in the following chart. Hawaii and Alaska are excluded since, as the two non-contiguous states, both have significantly higher electricity prices than all others. Wind penetration is shown on the horizontal (X) axis and electricity price on the vertical (Y) axis.  


Source: US Energy Information Administration. Electric Power Monthly - February 2017 for FY 2016. 


A subjective analysis indicates that regions with higher wind energy usage tend to pay less for their electricity. This observation is, in fact, supported by a linear regression. However the correlation coefficient (0.04) of that regression is too low to be statistically significant.

One can nonetheless draw two conclusions;

1) Regions with MORE wind energy tend to have LOWER electricity prices

2) There is no objective statistical data from the U.S. which would support the claim that increased use of wind leads to higher electricity prices. 



The second chart shows much the same thing but in a more complicated fashion - we've nonetheless included it so as to provide state-specific information.


Source:  US Energy Information Administration. Electric Power Monthly - February 2016 for FY 2015. 


The vertical blue bars, which refer to the left axis, represent the percentage of in-state electricity generation which is from wind turbines. The red triangles (right axis) represent the average electricity price paid: a full-year, weighted average of Residential, Commercial and Industrial rates.

The data is self-explanatory but it is nonetheless of note that of the top-20 wind energy states 16 or 80%, paid less than the US average for their electricity.

In other words: detractors are on shaky ground when they claim that hi-wind US states have to pay more for their electricity. They don't!