There’s no putting the green energy genie back in the bottle
To understand the future of electricity, take a drive along Germany’s autobahns, where thousands of wind turbines spin above fields of solar arrays.
During a three-week road trip across Germany, Austria and Italy, every time I topped a hill I saw dozens of wind turbines generating electricity. When my wife and I drove through towns, almost every new building and home had solar panels.
This proliferation of clean energy technology in Europe is the product of generous government subsidies, and there is no doubt that renewable energy sources are painfully disrupting wholesale electricity markets. But the ubiquitousness of wind and solar installations demonstrate the rest of the world’s commitment to clean energy.
Between now and 2040, businesses and governments are expected to invest $7.2 trillion in renewable energy plants, according to Bloomberg New Energy Finance, an independent research firm. That will lead to an 87 percent drop in European coal usage,
researchers concluded.
Now, Bloomberg New Energy readily admits that past predictions have been wrong, but that’s because researchers have consistently underestimated the adoption rate of renewable energy.
“The greening of the world’s electricity system is unstoppable, thanks to rapidly falling costs for solar and wind power,” said Seb Henbest, lead author of the Bloomberg group’s 2017 outlook.
The cost of solar power is expected to drop by 66 percent, onshore wind by 47 percent, and offshore wind by 71 percent, Bloomberg New Energy predicts. A third of the world’s energy will come from renewable sources in less than 25 years. China plans to spend the most on renewable energy, representing 48 percent of the world’s investment. India comes in second with 11 percent.
Demand from consumers and businesses will drive U.S. investment in renewable energy, despite President Donald Trump’s pro-coal policies. Almost two-thirds of U.S. energy customers said climate change is a major concern and buying clean energy is a top priority now that prices are competitive with fossil fuels, according to consulting and research firm Deloitte.
“The demand for clean energy has passed the point of no return,” said Marlene Motyka, renewable energy leader and principal at Deloitte Transactions and Business Analytics. “Green energy no longer solely means environmental concerns. ‘Green energy’ also means the dollars that can be saved by investing in wind, solar and other clean energy sources.”
Bloomberg New Energy predicts that existing nuclear and natural gas power plants will meet the remaining demand for electricity. Investors are expected to put $804 billion into new gas-powered plants worldwide by 2040 to replace aging coal-fired plants. Gasfired power production is expected to rise 22 percent.
“Gas plants will increasingly act as one of the flexible technologies needed to help meet peaks and provide system stability in an age of rising renewable generation,” the Bloomberg report said. “In the Americas, however, where gas is plentiful and cheap, it plays a more central role.”
And what about coal usage in the U.S.? I’ve spoken to executives at several power companies, and no one thinks another coal-fired power plant will be built in the U.S., where coal usage is expected to drop 45 percent by 2040.
Using natural gas as a transition fuel until sufficient renewable generation is available makes sense. But I fear the U.S. may rely too much on this crutch and fall behind the global leaders, such as Germany, in developing new renewable energy technology.
Trump’s 2018 budget proposal cuts funding for clean energy research by 70 percent, slashing it from $2.1 billion to only $640 million.
“The administration’s proposed cuts to cleanenergy innovation programs represent not just a repudiation of scientific consensus and bad environmental policy, but also an enormous lost opportunity for job creation and economic growth,” the Information Technology and Innovation Foundation said. “If the United States fails to accelerate its progress toward cheaper, cleaner energy, then it will lose its leadership position in the burgeoning global clean-energy market.”
About 15 percent of Germany’s electricity in 2015 came from renewable energy, and the government’s goal is to have 45 percent of electricity generated by clean sources by 2040. The United States only broke the 10 percent mark for the first time in March, a low-demand month.
Texas has a proud history of innovation in energy, particularly when it comes to wind. The rest of the world is surpassing us when it comes to developing the energy sources of the future, and that’s a competition we need to be winning.