Renewable Energy CAN Work!

Copied from Climate Progress, by Stephen Lacey:

Throughout my years covering clean energy, I’ve found that people involved in the field generally fall into two camps. The first camp – typically made up of investors, engineers and developers in the business of renewable energy – argues that clean energy can scale to high penetrations with current technologies. The second camp – made up of a diverse group of doubters, spin artists, cautious supporters and high-minded futurists – believes that we can only bring renewables to scale with dramatic breakthroughs in technology.


Of course, the latter group’s view is not completely wrong: We certainly need continued technological progress in order to bring down the cost of manufacturing, increase efficiencies and make installation easier. However, their arguments often lead to the perception that renewables are not ready today – which is completely false (see Pro-geoengineering Bill Gates disses efficiency, “cute” solar, deployment).

Saying that clean energy can’t scale without significant breakthroughs is like saying we shouldn’t bother with the internet because all we have is desktop computers and DSL, rather than powerful mobile devices and a 4G network. The fact is we are in the middle of an important period of technological progress today, and saying that we need to wait for something “game-changing” to take action is wrong and downright dangerous.

Critics often complain that we’ve thrown hundreds of billions of dollars behind renewable energy deployment, with little to show for it. But when looking at the rate of growth for existing “conventional” clean energy technologies like silicon-based PV, solar hot water, biomass combined heat and power and industrial wind turbines, the truth is that these sectors are making incredible progress.

Take solar PV: still a very small piece of the energy mix, but now hitting an incredible boom period as it reaches the back end of a decades-long commercialization process that most energy technologies must go through.

In 2000, the total global market for solar photovoltaics was around 170 MW. Last year, the market had grown to more than 17 GW (130% growth over 2009), with analysts projecting the PV market to reach 20 GW in 2011. In California, SunPower, a leading manufacturer/developer, is constructing a 250-MW solar PV plant – one project representing 80 MW more than the entire global installed capacity a decade earlier. In the last 3 1/2 years, the price of PV modules has dropped more than 50%, allowing solar developers in California to sign contracts for utility-scale projects (1-5 MW) for less than the projected price of electricity from a 500-MW combined cycle natural gas plant in California. (Note: This so-called Market Price Referent assumes a carbon price. Also, these contracts do not mean all the plants will get built, just that they have bid below a certain price threshold.)

What’s been driving this? The most promising steps haven’t been in creating “revolutionary” solar plastics and spray-on inks – they’ve been in steady, incremental improvements to cell and module manufacturing, racking systems, power electronics and enhanced business efficiencies through web-based software. Due to these improvements, the dramatic expansion of solar manufacturing and the shift toward large commercial and utility-scale installations, the average installed price of a PV system in the U.S. fell by almost 20% in 2010 to $5.13 a watt.

Solar expert Jigar Shah – who founded SunEdison, one of the largest solar integrators in the U.S., and who is now CEO of the climate-change solutions organization Carbon War Room – says that by 2012, the price of a 1-MW conventional silicon-based solar system will fall as low as $2.60 a watt installed. At around $2 a watt installed, solar PV could competitively supply 30% of the world’s electricity, says Shah. He believes the focus on breakthrough solar technologies, while important, should not overshadow the rapid price and cost reductions in the solar PV space.

“By the end of this decade, 100% of our incremental electricity needs globally will come from low-carbon sources,” he says. “Major breakthroughs are also coming given our heavy R&D investments but they will take over 15 years to come to market given the conservative nature of infrastructure investors.”

This is an important fact to note: It takes decades to scale any energy technology. Nothing in this sector happens overnight. We’re talking about turning over the most complicated, expensive set of infrastructure ever created; energy suppliers, investment banks and developers need to get comfortable with a particular technology in order to commercially deploy it. (For a look at why new energy technologies have such a hard time scaling quickly, listen to this audio story I put together on the “Valley of Death” problem in the financial sector.) The idea that we’re going to get some big breakthrough that will revolutionize the energy sector in a short period of time ignores the reality of how the energy transitions have historically unfolded.

Energy writer Vaclav Smil sums up the historical context quite well in a piece from 2008:

It took oil about 50 years since the beginning of its commercial production during the 1860s to capture 10 percent of the global primary energy market, and then almost exactly 30 years to go from 10 percent to about 25 percent of the total. Analogical spans for natural gas are almost identical: approximately 50 years and 40 years…. Nuclear fission reached 10 percent of global electricity generation 27 years after the commissioning of the first nuclear power plant in 1956, and its share is now roughly the same as that of hydropower.

After three decades of on-gain/off-again support, renewables represent around 13 percent of our global primary energy consumption. In the power sector, renewables (including large hydro) represent around 25% of total electricity production. A report out this week from the UN IPCC on clean energy development suggests that by 2050, renewables could feasibly represent over 75% of primary energy. In fact, between 2008 and 2009, today’s suite of technologies made up almost half of all electricity generating capacity installed worldwide.

Indeed, a number of countries have proven that a wide range of renewable energy technologies can be deployed to produce 20%, 30% and, theoretically, 100% of electricity or heating needs.

Take Germany, which plans to get 35% of its electricity from wind, solar, biomass and hydropower by 2035 and 80% from those resources by 2050. Germany’s experience suggests it may even pass those targets: From 2000 to 2010, the country increased its share of renewable electricity from 5% to 17%. Government officials predict that Germany will get beyond the 35% target before 2035. And the cost to ratepayers? The equivalent of a few dollars a month.

A project in Germany has also theoretically proven that existing renewable energy technologies can provide 100% of the country’s electricity. The Regenerative Combined Power Plant, a software-enabled “virtual power plant” was built in 2008 to allow the grid operator to call upon different renewable resources depending on demand and available supply. The project blended three wind farms worth 12.6 MW, 20 solar PV plants totaling 5.5 MW, four biogas systems equaling 4 MW and a pumped storage system with 8.4 GWh of storage. The project coordinators modeled the project to represent 1/10,000 of Germany’s energy system – and have said that the virtual power plant proves Germany could meet its energy needs with no fossil fuels.

Utilities around the world are increasingly looking toward intelligent demand response capabilities – aggregating supply-side and demand-side resources with web-based tools to match intermittent generation with a diverse set of renewable energy assets – and scale clean energy without the need for significant amounts of storage.

Spain has made a similar effort to integrate renewables in the last decade: From 2000 to 2010, the country increased its electricity generation from wind and solar from 2% to 20%. When factoring in large hydropower, the country gets 35% of its electricity from renewables.

And in Upper Austria, a state which currently gets 45% of its heat from renewables, there is a goal to get 100% of its space heating from technologies like solar thermal and biomass by 2030. According to Wilson Rickerson, a renewable energy analyst from Meister Consultants, Upper Austria was able to double solar water heating installations from 5 million m2 (3,500 MW thermal) to 10 million m2 (7,000 MW thermal).

“Upper Austria is well on the way to its goal. Looking around the world, renewable heat is something that can be scaled quickly and in a distributed manner with the right policies in place,” says Rickerson.

Renewable energy advocate and wind expert Paul Gipe agrees, calling the debate around the readiness of the technology “one for the 70’s, not 2011. The challenge today is regulating rapid growth.”

While R&D is extraordinarily important to the continued progression of renewables, the key to the next decade isn’t in some new-fangled, groundbreaking technology in the lab – it’s putting the right policies and price signals in place to ensure that commercially proven technologies have the opportunity to continue their current growth in a sustainable way.

That’s what we hope to accomplish here at CP with our clean energy reporting. There are legitimate debates about how, where, why and if different technologies should be deployed. But one thing is for certain: We have the resources available right now to get large portions of our energy from renewables.

As we increase our coverage of the business, economics and politics around clean energy, we want to put to rest the notion that addressing our climate challenges with renewable energy technologies is not possible. It is happening today.