I want to confidently understand the relationship between the cost of renewable energy (Levelized Cost of Energy or LCOE) production and lower electricity prices, and I know there are many factors to consider. So I used Gemini’s “Deep research” mode, and queried about LCOE for both renewables and fossil fuels and queried  Gemini to factor into the future of electricity costs such necessary things as transformers, grid and transmission build out, and electricity demand flexibility (think smart meters and other digital power management options), and all within the context of  growing demand for electricity. I wanted a sense, too, of a timeline for electricity costs lowering and I wanted to know what the electricity price consequences are on electricity prices of that stinking One Big Beautiful Bill Act, and finally, I wanted to make sure I understood how electricity prices are set.

Why did I want this analysis? Well, because I’m writing The Steep Climes Quartet series and one of the areas of focus for us Americans (and, I suppose, given the central location of the Berkshires across the four books, us Berkshirites) is the effect of climate change on our household costs. Higher electricity costs, the analysis confirmed, will likely remain upwardly-aimed through at least 2035, and 2035 is the timeframe for Over Brooklyn Hills, the third book, and the one currently being written.

There is sort of a Pollyannaish view by some of my renewable energy fellow fanboys that transitioning our current fossil fuel-heavy energy system to all-renewable will lower our utility bills, and while such optimists are right, the timeline is too often suggested to be right around the corner, if only we get the transition going quickly and invest in our electrical grid and electricity management infrastructure chop-chop. Yes, then inexpensive energy is right around the corner, but only if a decade means “right around the corner.” We can do it, but as the recent indecent OBBBA getting signed into law passage suggests, various roadblocks and challenges in policy can be a problem, and I’m sure enough too that the profit motive within our current of greed and our historic reluctance to pay sufficient attention to infrastructure investment will likely further slow things down, if by “slowing down” I mean keep electricity prices up.

Another element in Over Brooklyn Hills is what’s happening in the courts with climate change and fossil fuel corporations, where, finally, progress in prosecuting (or suing, in civil class-actions) the bastards not only for lying about climate change and their businesses’ role in foisting a worsening climate upon us all, but specifically, the direct meddling in elections to gain further nefarious advantage in building out new gas plants and pushing their harmful products that much further into our collective future. Of course, there’s more in this book, and the largest theme is climate migration, but this is shown, and often amusingly, by the Berkshires getting overrun by young hipsters and the like up from the city escaping the brutal heat wave and their lack of air-conditioning, whether from living in old apartments without air conditioning or from an inability to pay the ever growing prices for electricity to run their air conditioners. Oh, and our southern border is now militarized because of new waves of climate migrants from drought-stricken Central and South American countries, and the cartels are part of the problem. A climate terrorist group called No One is Safe (NOS), introduced in Dear Josephine, is another part of several problems. Also, climate migrants crossing the Mediterranean are creating problems, and Italy is having trouble with right wing nationalist paramilitary, and, and, well, buy the book when its out at the end of this year.

But back to the issue of electricity bills. If you’re angry about how long it may take for the full promise of renewables to occur, I’m with you, but that doesn’t excuse us from reality and the reality is we face enormously complex issues as we aim for paradise. Yes, renewable energy lowers costs of electricity generation, but there are other costs involved, including the costs in building out the grid to better handle intermittency, mainly from new long-distance connections to help effectively balance renewable energy resources (e.g., sending electricity from regional renewable power generation that is over-producing to meet the power demands in places where renewable energy is under-producing. There are other related additional costs such as battery storage build out, but we also need to develop and implement digital power demand management (e.g., “smart meters,” “virtual power plants”), which would improve supply/demand balance and power capacity efficiencies.  Of course a large portion of the costs of expanded grid capacity and intelligence is electricity generation independent, where, for instance, new gas plants require much of the same grid expansion and interconnection costs.

Today, even with OBBBA’s thumb on the scale, renewable energy generation is the lowest cost of all electricity generation, but the unique grid demands of renewables reduces the renewables generation cost advantage. Nonetheless, much of the grid expansion and interconnection costs are also required with any new fossil fuel-based electricity generation capacity, and the LCOE for fossil fuels is higher. The smart grid management required for renewable energy is also applicable to any and all new fossil fuel-based electricity generation capacity, too, because the gains of smart management means  both power demand and power balancing efficiencies that will be needed regardless of power generation type, so that we can meet growing power demands. You can blame AI for the demand growth (although there are many other contributing power growth factors), but you can’t escape the need for power management efficiencies by just building out a bunch of new gas plants or solar farms, not if you want to avoid power delivery instability over the next few years.

And as pointed out above, OBBBA has increased costs of renewable energy electrical generation by removing IRA support for credits and infrastructure funds related to solar and wind, even while providing new incentives that support fossil fuel electricity generation. But here’s one unavoidable reality: the ongoing operational costs, in the form of the never ending need to purchase and consume natural gas, doesn’t apply to renewable energy, and that alone always makes fossil fuels electricity generation inherently more expensive over time. The externalities of fossil fuel electricity generation (pollution and health, and greenhouse gas and climate change) are other aspects of the real higher costs of fossil fuel electricity generation, and ones that are being experienced more directly, more frequently, and more consequentially as we move through time.

The report I generated—and reviewed for accuracy and logic of arguments—clearly shows that increased electricity demand that is met by building new fossil fuel electricity generation is likely to further increase electricity costs through 2035 by as much as 20% under OBBBA. Furthermore, while both renewable energy and fossil fuel energy share many of the long-term grid buildout and transmission management delays (e.g., transformer backlogs), renewable energy generation is significantly faster to build out, which could more quickly address the anticipated electricity demand growth and help maintain grid reliability and electricity supply. According to some analyses, there’s 1600 giga-watts of renewable energy generation in some phase—planning to already built—waiting to get connected, so there are solutions for meeting our growing power demand. 

Without building new gas plants, if you didn’t get that point.

The substantial capital investments in grid modernization and transmission are mostly paid through customer rate increases that allow the utilities to recover capital investment costs, so even when the grid infrastructure expansion and intelligent management is accomplished, the cost burden will persist for a long time. Nonetheless, meeting new electricity demands with renewables and replacing existing fossil fuel electricity generation will reduce, relatively, the size of increase in utility customers’ bills, but either way—renewables or new fossil fuel power plants—the U.S. is likely facing a significant and sustained period of elevated electricity costs, perhaps starting to moderate by 2035, at the earliest, if renewable energy generation prevails.

Higher energy prices, among other higher costs, making everyone more nervous. Sounds like a fun read, right?