Alternative Energy Production Leads to Unexpected Consequences

As wind and solar energy becomes more economical and states pass legislation requiring energy producing companies to have greater percentages of renewable energy as part of their portfolios, unexpected consequences are occurring.  In an article by Bloomberg LP on August 7, 2018, recent data shows that the amount of electricity being generated exceeds demand during certain hours of the day.

Both the number of subzero hours and the number of affected jurisdictions are being affected by this unforeseen development.  In some cases, it could lead to the temporary shutdown of some traditional coal and gas plants even though some of those facilities are not designed to shut down.  The longer-term trends could have significant impacts as more power companies join EAMs or regional power pools where the supply of electricity exceeds demands, and where multiple power companies are competing on the open market for a more limited market demand.