By: TANJA SREBOTNJAK, Director of the Hixon Center
The new Administration’s emerging environmental and climate change policy agenda is much discussed these days, to the serious concern and fear of many. Therefore, I would like to use this article to give you a brief update on the state of renewable power in the U.S., because it is both an area of immense importance for combating climate change and associated environmental challenges, as well as a reason for some optimism.
First, renewable power continues its downward path along the cost curve and is now cost-competitive with most types of fossil fuel generation. Using the widely applied Levelized Cost of Electricity (LCOE) metric, the Energy Information Administration (EIA) finds that in 2015, new natural gas-fired power plants had an LCOE of $57.2 – $110.8 per MWh generated. Coal fired plants with carbon capture and storage (CCS; as now required by law) averaged $139.5 per MWh, and advanced nuclear power cost $102.8 per MWh. In contrast, geothermal energy cost $41.9, onshore wind $56.9, solar PV $66.3 and hydro $67.8 per MWh, respectively.
Second, for the third year in a row, newly installed renewable capacity has outpaced growth in fossil fuel power. The EIA estimates that 24 GW of new power were added to the grid in 2016, 63% of which were from renewable sources like solar, wind, hydro, biomass, and geothermal.
In the residential sector, the trend is equally encouraging: installed capacity has nearly tripled since 2014. Overall, small-scale installations (<1MW) have grown from just below 6 GW in 2014 to more than 12 GW in 2016.
Third, although federal programs such as the Production Tax Credit (PCT) are helping renewables, a lot of clean energy policy is devised and implemented at local and state levels. Thus, even if the Trump Administration were to follow through with its plans to scrap the Clean Power Plan, abandon national commitment to the Paris Climate Agreement, and take a hostile stance towards low-carbon, renewable power, there is still a lot that states, counties and cities can do to continue decarbonizing the energy sector.
Providing a supportive regulatory and policy environment for renewables adoption is obviously helpful for reducing our dependence on fossil fuels, but there are many states that are seeing their renewables portfolios grow rapidly without substantial government handouts or interventions. Texas, for example, produces the most wind power (~18 GW in 2015) of any state – far exceeding the state’s own modest requirement of 5.88 GW by the end of 2015. Other conservative states such as Alaska, South Dakota and Idaho also produce sizable fractions of their electricity from renewable sources (29%, 75.3% and 74.6%, respectively).
At the city and county levels, we don’t have to look far for examples of clean energy leadership: San Francisco has a 100% renewable energy goal and just passed an ordinance requiring all new buildings to install solar PV systems, building on a prior ordinance that required 15% of rooftop area be solar-ready.
Finally, businesses and governments are partnering across the country to build the infrastructure for a 21st century clean energy transition. There are now nearly 41,000 electric vehicle charging stations in the U.S. compared with 168,000 conventional gas stations. Building energy efficiency and smart home monitoring technology makes sense for the financial bottom line and reduces greenhouse gas emissions. The U.S. Green Building Council, for example, continues to grow its project base and has certified 27,699 commercial projects and 112,000 residential units since the inception of its LEED program.
Thus, although the transition could surely go faster, many experts are concluding that, while there might be some rough seas ahead for renewables, the sector is here to stay and will continue to expand. This might be something to remember when negative news on the environment saps our energy.