Renewable Energy Use Rising – 3/9/16

Renewable energy use is rising throughout the world thanks to falling costs and increasing support from businesses (big ones), politicians, and the public in general.

Barring major political changes, the US is set to move towards clean energy in 2016 as solar, natural gas, and wind make up most 2016 generation additions.

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Scheduled electric generating capacity additions favor the three energy types heavily with relatively little additional capacity planned for other sources like coal and hydro. In fact, wind power alone will soon overtake hydropower as the largest source of renewable energy in the US. By region: utility-scale solar additions will, as usual, be concentrated in California (3.9 GW out of 9.5 GW total) and other southern states like North Carolina (1.1 GW), Nevada (0.9 GW), Texas (0.7 GW), and Georgia (0.7 GW); natural gas additions will be spread out; and wind power will see the most gains in the Plains region between the Dakotas and Minnesota, south to Texas and eastern New Mexico.

At least in the case of the last few years, estimates of growth of non-hydropower renewable energy have been overly conservative. Recent reports by the Federal Energy Regulatory Commission (FERC) and U.S. Energy Information Administration (EIA) illustrate how the agencies failed to foresee the surge in renewable energy development. Earlier forecasts from the EIA’s “Short-term Energy Outlook” predicted non-hydropower renewable power generation to increase by 4.2% for 2015 versus the 7.3% actually seen. The EIA’s “Annual Energy Outlook 2012” that forecast that non-hydro renewables would not surpass hydropower until 2020 was broken sometime in 2014. Distributed sources of energy like rooftop solar, equal to about 45% of utility-scale solar capacity and generation,  are not accounted for in the reports.

Solar has seen the most significant gains in the last decade thanks to significant cost reductions, federal tax credits, modular design, innovative financing options, and suitability for off-grid purposes. Almost 100 million households worldwide may be powered by solar panels by 2020, according to Bloomberg New Energy Finance, and many of these households will be in areas of Africa and Asian where electrical grids struggle to match high growth rates. On-site PV solar systems are modular in design making upfront costs manageable and the lighting provided by their electricity is safer, more consistent, and cheaper than the kerosene and candles many populations resort to using. Fast growing countries like Kenya, Tanzania and Ethiopia are leading the way in Africa and India leads in Asia as far as off-grid solar.

Trends in Chinese energy use are especially important to consider given the sheer amount needed by the world’s most populous nation. The world’s largest coal consumer saw solar power generation capacity was up 74% last year compared with 2014 levels, while wind power generation capacity grew by 34%, all at the expense of coal consumption which dropped by 3.4%. Wind, solar, hydro, and nuclear power combined with natural gas now account for nearly 20% of China’s energy mix suggesting that its leadership’s claim that it will cut power sector carbon emissions by 60% by 2020 is not just a bunch of hot air.

India, another massive population in need of massive amounts of energy, has doubled a clean-energy tax on coal to fight environmental pollution suggesting a readiness to fight environmental pollution. The tax on coal, which fires more than 60% of the nation’s generation capacity, will be raised to 400 rupees a metric ton from 200 rupees. The tax increase and a promotion of nuclear energy use show the government is making moves to meet its Paris Climate Agreement goals.

Iran is another place of great potential for wind and solar. The Rouhani government wants to increase installed renewable energy capacity to 5 GW by 2020, equal to about 5% of annual power generation. Around 80% of Iran’s territory is well-suited for solar power, common in the Middle East and solar companies are eager to assess the new market now that sanctions against the country have been lifted.

In the U.K., the picture for renewable energy has taken a turn for the worse. The government dented investor confidence by making sudden policy changes and sending out mixed messages on carbon reduction. Decisions to cut subsidies for wind and solar power, end a program to install “green” measures in homes and scrap a competition for 1 billion pounds ($1.4 billion) of funding for carbon capture and storage. The government claims its priority is to keep consumer bills down. Unfortunately, the hit to investor confidence has left many unsure about the future policies of the government which turn suppresses investment.

Compared the U.K. government, Canada’s liberal government led by Prime Minister Justin Trudeau is providing a very reassuring environment for renewable energy investment. The First Ministers have already announced plans to focus on climate change mitigation and renewable energy promotion via four areas: clean technology; carbon pricing mechanisms; specific mitigation opportunities; and, adaptation and climate resilience.

Germany, after seeing large increases in renewable energy use due to government support, is seeing its utilities report large losses as they write down the value of coal and gas-fired power plants. This is due in part to solar and wind plants getting priority access to the German power grid. Recent plans by the German government to cut renewable-energy subsidies have been met with resistance.

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