A Step Forward in the American Renewable Energy Revolution
May 19, 2016
A couple of decades ago, the notion that renewable energy could possibly replace fossil fuels was considered irrational, as many argued it would hinder the American electric grid reliability. Recently, however, many nations around the world have proven these critics wrong, as growing renewable energies are effectively and reliably sustaining these countries’ economic growth.
Germany poses as an unparalleled example of how renewable energy can keep up with a robust and growing economy. As the fourth largest economy in the world, Germany is able to reach 90% of their overall total electricity demand using mostly renewable power from solar, wind, hydropower, and biomass energy sources.
The United States has made similar strides towards renewable integration, however, continued policy support for renewables is needed to reach Germany’s level. According to the Federal Energy Regulatory Commission’s (FERC) latest monthly “Energy Infrastructure Update”, the US grid added more than 70 times as much renewable energy capacity as natural gas capacity. More specifically, between January to March, 18 megawatts of new natural gas generating capacity were added, whereas 1,291 MW of new renewables. These figures clearly indicate the strong potential for a nationwide transition towards more energy-efficient renewable sources.
According to a Wall Street Journal article, the cost of renewable energy has rapidly declined over the past decade. Lazard, an international financial advisory and asset management firm conducted a study calculating and comparing “costs of financing, building, operating, and maintaining a power plan.” The study indicated that the average cost of onshore wind has fallen from $135 per megawatt-hour in 2009 to $59 in 2014. Similarly, the average cost of Solar photovoltaic technology has dropped from $359 per megawatt-hour in 2009 to $79 in 2014. Although renewable sources have become increasingly cost-competitive, they are inherently intermittent sources due to their dependency on the weather and sun cycle. As a result, utilities have found it necessary to “back up renewable energy generation with natural gas-fired generators.”
Studies have shown, however, that in the future utilities may not need to do so. Continued percentage increases of renewables may occur at an even lower cost over the next 15 years using already commercially available technology. The National Oceanic and Atmospheric Administration (NOAA) indicated that an energy transformation is possible following a “transition to a reliable, low-carbon, electrical generation and transition system.”
At the recent Paris climate summit, the United States pledged to cut its greenhouse gas emissions from all sectors up to 28 percent below the 2005 levels by 2025. If renewable energy costs are expected to be lowered in the future, this may significantly help accelerate and achieve such a goal. Therefore, it is important that a push towards expanding renewable energy generation and improving transmission infrastructure technology be made.