WHAT CAN HAPPEN IN SUN AND WIND

Report Examines Potential Of Wind And Solar Electricity; New Policies Needed to Spur Significant Growth in Wind, Solar in U.S.
June 23, 2009 (Pew Center on Global Climate Change)

SUMMARY
Wind and Solar Electricity: Challenges and Opportunities, a new report from the Pew Center on Global Climate Change authored by Dr. Paul Komor of the University of Colorado at Boulder, examines the urgent need for the New Energies (especially wind and solar power) and the obstacles that must be overcome to transition to them. The report breaks little new ground and is quite conservative in its calculations, yet cannot avoid reporting that the New Energies can be and likely will be crucial to a hopeful future.

The starting place: Electricity production generates a third of U.S. greenhouse gas emissions (GhGs). In the absence of measures reducing U.S. GhGs, climate change impacts could be severe, even crippling or disasterous, and certainly will be very costly.

New Energies, excluding hydroelectric power, provide only 2% of U.S. electricity and have the potential to provide much more electricity and reverse the impending impacts of climate change.

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There are 3 major barriers to the New Energies becoming a greater part of the U.S. electricity generation mix: the higher costs of solar and wind generated electricity, insufficient transmission to deliver the electricity from the remote areas where it tends to be most plentiful to the population centers where it is most in demand, and the management of intermittency in the wind and solar energy potentials for electricity output.

Policies can drive changes that will bring these barriers down. In the absence of such policies, New Energy could be as little as 8% of U.S. power generation in 2030.

A national Renewable Electricity Standard (RES) requiring regulated utilities to obtain 20% of their electricity from New Energy sources by 2030 would drive development by necessitating increased manufacturing capacity and deployment. No new technology would be necessary. It would likely force spending on new transmission and result in technology advancements like new storage strategies.

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Pew predicts that the costs of meeting a national RES obligation would add 4-to-6% to the price of wind energy-generated electricity. The necessary transmission to meet a national RES obligation would add 20% to the price of wind energy-generated electricity. These costs would boost the price of wind energy-generated electricity higher than the cost of natural gas-generated electricity, though it would remain less expensive than the cost of electricity generated by a new nuclear plant or a new coal plant equipped with a (hypothetical) carbon capture and sequestration (CCS) capability.

Any legislation establishing a cost for the GhGs generated by burning fossil fuels, which now is paid by the public (in the form of things like health care costs and climate change mitigations), would make even natural gas-generated electricity more expensive than wind energy-generated electricity.

Solar energy-generated electricity will remain more expensive longer. Solar power plant (SPP) technology will likely achieve a large enough volume to bring costs down to a competitive level before PV solar will do so.

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COMMENTARY
Wind energy is at present cost competitive with natural gas, especially when Congress provides reasonable subsidies (like the production tax credit) and when the fluctuating price of natural gas rises (as it is expected to over the coming decades of high energy demand).

Solar energy-generated electricity, both from photovoltaic (PV) and solar power plant (SPP) sources is more expensive. Subsidies like the investment tax credit will help bring it down. Improvements in the technologies will help further. Significant market penetration will come when economies of scale are achieved and costs approach parity with the costs of fossil fuel electricity generation sources.

Among the most important technology breakthroughs needed for solar energy are improvements in PV cell production methods that facilitate high-volume, low-cost PV manufacturing.

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The extraordinary abundance and omnipresence of the sun’s light and heat mean that when solar energy achieves price parity it will revolutionize electricity.

The abundance of wind and the great potential for economy-wide Energy Efficiency implementations means there will not, in the short term, be adequate emphasis on solar energy to drive innovation and create the economies of scale that would drive the cost of solar energy-generated electricity down to competitive levels soon.

The places where wind is most abundant and most readily harvested are (mostly) far from population centers where demand is expected to grow. For wind to make a larger contribution to U.S. power generation, new transmission infrastructure will be essential.

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New transmission costs $2-to-$4 million per mile. Regulatory obstacles and Not-In-My-BackYard (NIMBY) objections make new transmission very difficult to site. There are, however, potential solutions. Innovative financing that include new opportunities to entrepreneurs, electricity consumers and landowners could easily resolve the cost obstacle. Breakthroughs in storage could reduce the need for transmission. Streamlined regulation, especially in the areas of state and federal planning and siting guidelines, could speed infrastructure development.

The intermittency of wind and solar require grid operators to learn how to integrate and manage energy sources without compromising system reliability by using a 3-part strategy: (1) Flexibility in power plants, with ready source-switching capacity and contractual arrangements for varying energy sources and electricity supplies; (2) Flexibility to manage demand, with demand response capability; and (3) Electricity storage and the ability to integrate stored electricity.

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QUOTES
- Eileen Claussen, President, Pew Center on Global Climate Change. “Wind and solar power are two of our most promising renewable energy technologies, but without a price on carbon – they will face significant barriers to widespread market penetration…Acting now to regulate carbon through a cap-and-trade system and changing the way we plan and manage our electricity grid can help to make these cleaner energy sources a more significant part of the climate solution.”
- From the Pew report’s conclusion: “Renewables currently play a small but growing role in the U.S. electricity system. However, legislation now under consideration, such as a national renewable portfolio standard…and GHG cap-and-trade program, could lead to a significantly larger role for renewable electricity. Wind and solar could play a larger role, as wind and solar resources are plentiful and wind and solar technologies are commercially available…”

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- From the Pew report’s conclusion: “There appears to be no fundament technical, resource, or manufacturing barrier to achieving roughly 20 percent wind by 2030. While uncertain, the available evidence suggests the costs for doing so are not enormous…Solar, in contrast, has quite high first costs, and adding variability and new transmission costs makes solar not economically competitive at current prices. Significant cost reductions in solar, however, could bring costs down to where solar could play a role in meeting future electricity needs.”