This is Part Two of a multiple‐part response to the recent court order issued in the case Held v. Montana. Part One is available here.
As an energy economist, I think the most unfortunate part of the Order in Held v. Montana is that it repeats well‐known errors in energy system modeling made popular by Stanford Professor Mark Jacobson, who provided testimony in the case. Professor Jacobson has been making bizarre claims for years, and his work has been rejected as unrealistic, even by academics who share his desire to reduce carbon dioxide (CO2) emissions.
For example, in the Proceedings of the National Academy of Sciences (PNAS), a group of 21 academics publicly criticized the methodology and assumptions in Professor Jacobson’s work on a hypothetical 100 percent “wind, water, and solar” energy system (WWS). The authors found that Jacobson’s work “used invalid modeling tools, contained modeling errors, and made implausible and inadequately supported assumptions.” Authors warned: “Policymakers should treat with caution any visions of a rapid, reliable, and low‐cost transition to entire energy systems that relies almost exclusively on wind, solar, and hydroelectric power.” (Note: Professor Jacobson initially sued the academics for challenging his work, but later dropped the suit.)
The counterpoint to Jacobson’s work by the PNAS authors is interesting context but doesn’t address the specific claims in the Order. And although a full rebuttal of Jacobson’s work is beyond the scope of this piece, let’s spot‐check a few of the Order’s assertions—based on Jacobson’s testimony—to see if they stand up to scrutiny. (I also encourage readers to jump to paragraph 269 in the Order and read for yourself Professor Jacobson’s contributions to the case, which the judge deemed “informative and credible.”)
Paragraph 271 reads: “Non‐fossil fuel‐based energy systems across all sectors, including electricity, transportation, heating/cooling, and industry, are currently economically feasible and technically available to employ in Montana. Experts have already prepared a roadmap for the transition… to a 100% renewable portfolio by 2050, which, in addition to direct climate benefits, will create jobs, reduce air pollution, and save lives and costs associated with air pollution” (emphasis added).
Using the kinetic energy of the wind to generate electricity has been technically available in the U.S. since at least 1888 when Charles Brush powered his home near Cleveland using a dynamo connected to a windmill and backed up by batteries in his basement. So I take no issue with the assertion of technical availability, especially if we’re only discussing one state (although a national or global shift to WWS would raise important questions about the availability of critical minerals at sufficient quantities and reasonable prices). However, the concept of a 100 percent WWS system being economically feasible needs a closer look.
Paragraph 276 offers the patently false assertion that: “Wind, water, and solar are the cheapest and most efficient form of energy. Cost per unit of energy in a 100% WWS system in Montana would be about 15% lower than a business‐as‐usual case by 2050, even including increased costs for energy storage.”
Policymakers should not be tricked into thinking a WWS future would be inexpensive. We have real‐world examples of states and nations that have tried to make the transition Professor Jacobson imagines—specifically California and Germany, who have both made an expensive mess of their attempts to decarbonize. For one thing, they have yet to fully decarbonize after many years of effort, as Professor Jacobson claims is feasible. For another, the accumulated costs are staggering: an estimated $580 billion in Germany by 2025. Regarding California’s transition, proponents say decarbonization would take “about $76 billion per year on average between 2021 – 2030.” Specifics aside, it is incorrect and irresponsible to claim a WWS future would be cheap. On a national level, estimates of green energy spending included in the Inflation Reduction Act reach as high as $2.7 trillion. This doesn’t mean that such a transition couldn’t conceivably pass a cost‐benefit test, but the costs are much higher than Jacobson claims.
Paragraph 276 continues: “New wind and solar are the lowest cost forms of new electric power in the United States, on the order of about half the cost of natural gas and even cheaper compared to coal.”
This is a reference to the Levelized Cost of Energy (LCOE). The National Renewable Energy Laboratory explains that LCOE is “an economic assessment of the cost of the energy‐generating system including all the costs over its lifetime: initial investment, operations and maintenance, cost of fuel, cost of capital.” LCOE should not be used to compare intermittent energy sources to on‐demand sources. The U.S. Energy Information Administration states: “direct comparisons of cost between dispatchable and resource‐constrained technologies may not be meaningful in most contexts.”
However, perhaps the most‐cited LCOE research firm—Lazard—attempted to remedy the “dispatchable vs. non‐dispatchable” problem in its 2023 assessment. Slide 8 in Lazard’s 2023 report illustrates the cost of “firming” intermittent sources of energy.[1] Notably, under the Lazard methodology, the cost of firming increases as the share of intermittent energy goes up. For example, in California (which already has a high penetration of solar energy), the LCOE of firmed solar is $141 per megawatt-hour—compare that to the cost of running existing power plants like nuclear ($31), coal ($52), and combined cycle natural gas ($62). Even for new power plants, the LCOE for combined cycle natural gas ($39-$101) is competitive with the intermittent output of wind ($24-$75) and solar ($24-$96).
Paragraph 281 states: “Transitioning to WWS will keep Montana’s lights on while saving money, lives, and cleaning up the air and environment…” (emphasis added).
Regarding the power grid reliability impacts of a forced transition to intermittent resources, see pages 22–25 of my recent comments on the power plant regulations proposed this year by the Environmental Protection Agency. The short version is this: the reliability of the electric grid is a matter of public health and safety (over 200 people died during extended power outages in Texas during Winter Storm Uri), and efforts to protect people from the risks of climate change have so far ignored the health risks of an unreliable electricity supply.
Conclusion
Energy and environmental policy is too important to allow serious errors to go unchallenged. Policymakers and judges should carefully parse the facts to guarantee that energy and environmental policy is grounded in reality. Unfortunately, the court Order makes several errors on its way to concluding that Montana should turn away from fossil fuels and embrace a WWS energy system. I certainly want a “clean and healthful environment” for my own children. Where advocates and policymakers (and judges) may differ is on which facts are relevant to policymaking and the right policies to promote a clean and healthful future.
[1] Lazard provides the following explanation in a footnote: “Firming costs reflect the additional capacity needed to supplement the net capacity of the renewable resource (nameplate capacity * (1 – ELCC)) and the net cost of new entry (net ‘CONE’) of a new firm resource (capital and operating costs, less expected market revenues),” where ELCC stands for Effective Load Carrying Capability and is “an indicator of the reliability contribution of different resources to the electricity grid.”
