Clean Energy Tipping Point

Investment in and development of clean energy seems to be undergoing a transition, and this is reflected in a number of items that came across my desk this morning. Without attempting any serious analysis, here’s a brief summary.

Clean Energy investments have fallen over the last couple of years, leading some to assert that the transition to non fossil sources of energy is in trouble. But there is an excellent argument that the exact opposite is true. What has really happened is that the cost of implementing new clean energy projects has dropped dramatically, so the cost of investment has dropped dramatically. Therefore, the absolute cost of investment can drop while the effective level of investment … in terms of units of energy … goes up.

From an article in World Resources Institute’s blog, by Letha Tawney, Bharath Jairaj and Xuege (Cathy) Lu:

The recent fall in clean tech investments is partly driven by the fact that renewable energy has become much cheaper in the past few years. You can buy more energy output for less cash than you could have two or four years ago. At the 2014 Future of Energy Summit earlier this month, Michael Liebreich, founder of Bloomberg New Energy Finance (BNEF), said that roughly 80 percent of the reduced investment in clean energy over the last two years is due to these price reductions. Solar module prices, for example, have declined by about 80 percent since 2008. Increased competition among wind energy suppliers has also reduced prices. Research from the International Renewable Energy Agency (IRENA) finds that wind energy prices could drop from 10-30 percent further in the medium to long-term.

Meanwhile, from Scientific American’s ClimateWire, we learn that Solar Power Grows 200 Percent in Only 4 Years.

Driven by an explosion in photovoltaics, the U.S. solar sector has emerged “from a relatively small contributor to the nation’s total electric capacity into a one of comparative significance,” the Energy Information Administration reported this week in its latest Electricity Monthly Update.

Since 2010, EIA said, U.S. solar capacity increased 418 percent from 2,326 megawatts, accounting for 0.2 percent of total U.S. electric generation, to today’s 12,057 MW, or 1.13 percent of U.S. generation.

Over half of this capacity increase has occured in home and businesses involved in utility net metering programs whereby excess production is sold to the utility at reasonable rates. A good deal of this has occurred in California (38% of the US total).

It would make sense for Libertarian-leaning individuals, such as those who make up the Tea Party, to be on board with this sort of thing because it fits with their philosophy so well. One wonders, then, why the right wing is so opposed to even recognizing the importance of climate change, let alone doing something about it. But it turns out that the logic of home grown energy has not been entirely lost on that sector of society. According to an item in Slate by Josh Voorhees,

Last week…klahoma lawmakers quietly voted to reverse a nearly four-decade-old law that had barred utility companies from charging customers who install solar panels on their homes more than those who don’t. The bill… would have effectively cleared the way for utilities in the Sooner State to force homeowners who install solar panels to pay for both the electricity they buy from the grid and for a portion of the electricity they sell back to it.

The vote marked a rare victory for power companies in their quest to stymie the growth of the rooftop solar industry. It also represented a sharp departure from the wave of well-publicized, big-dollar federal and state efforts currently aimed at making solar energy cost competitive with more traditional energy sources like coal and natural gas…

Then, on Tuesday, to the surprise of pretty much everyone involved, Oklahoma’s Republican governor, Mary Fallin, issued an executive order largely undercutting the provision, dealing an unexpected defeat to major utilities and their deep-pocketed backers—a group that includes the Koch brothers and the American Legislative Exchange Council, a powerful national membership group for conservative state lawmakers.

So, there you go.

Comments

  1. #1 Matt
    Australia
    April 25, 2014

    In my particular state of Australia, we at one point had “feed-in tariffs” (the rate you get on electricity sold back into the grid) of about 60c/kWh due to some generous subsidies. Thankfully that rate was locked in for those who got it, so they still get paid that much.

    Now, with a conservative state government, it’s around 8c/kWh, artificially low. Given we pay about 25c for peak and 16c for off-peak, I do wonder what ever happened to to their “market” mantra…

  2. #3 Ambrotos42
    April 28, 2014

    I do hope the trends above continue, but also want to add something to it on the side of carbon fuel sources. Even if we only used up about half of the worlds carbon fossil fuels we still have to face the fact that the sources we used up until this point were the ones that were the easiest to get to. That’s why were beginning to resort to less efficient or more complex methods such as fracking. This results in the rise of carbon fuel prices. Hopefully the two sides of the coin will help even the odds a lot faster than we expect.

  3. #4 climatehawk1
    April 28, 2014
  4. […] 2014/04/25: GLaden: Clean Energy Tipping Point […]

  5. #6 climatehawk1
    May 2, 2014

    Agreed. Here is another nice initiative: Madrid installing parking meters that will charge more for more-polluting autos: http://www.theguardian.com/world/2014/apr/30/madrid-smart-parking-metres-polluting-cars