Lindsay Morris, Associate Editor, Power Engineering
November 27, 2012 | 0 Comments
We also polled around the country and found that across party lines, 92 percent of likely voters support greater deployment of solar. We got that information into the hands of both of the campaigns, making sure they had the facts about how the public feels about renewable energy – so attacking clean energy is not a winning strategy. All in all, I think that the political attacks appeared worse in the beginning of the campaign. The industry spent a lot of time correcting the facts and getting the information out that the public strongly supports solar, which I think minimized solar’s role as a political issue in this campaign. Because at the end of the day, we’re not an issue; we’re a $93 billion global industry.
Gramlich (right): Rhone is right: We were all caught in the crosshairs. The presidential election was really driving a lot of the discussion around renewable energy, so there were political points being sought at our expense in many cases. The election’s over, so that objective is passed, and now we can all look forward. Generally, a lot of renewable energy policies retain strong bipartisan support, as they always have, particularly tax incentives, on which we all rely. Those have historically had strong support from both Republicans and Democrats. Republicans in particular have supported reducing the tax burden on private companies using private capital and hiring private sector workers, and consider those different from other programs where maybe government officials are picking specific companies or projects. So the main policies on which we rely survived the attacks of 2012, and I think are in good standing going forward.
Ivany (left): This onslaught of negative stories during the election campaign unfortunately dominated campaign coverage despite a record number of successful installations in the renewable sector. Solar jobs are up significantly from 2011, PV capacity nearly doubled in 2011, we have a surge of CSP (concentrating solar power), and wind capacity has experienced a significant increase in terms of new generating capacity since 2007. Those are the kind of successes that have to be touted by the industry. We as constructors have to tout our successes as well. At Ivanpah, we have over 2,000 workers building the largest solar thermal facility in the world. It’s about 70 percent complete. It’s going to be generating electricity in 2013. We’ve installed dozens of miles of piping, assembled and installed tens of thousands of heliostats and pylons. President Clinton visited the site this past summer and was amazed at the size and scale of the installation at Ivanpah. Then we’ve got other jobs, California Valley Solar Ranch and Catalina for NRG and EDF, that are putting megawatts on the grid this year. I think we’ve got to tout the successes of the industry instead of the isolated failures.
Gawell: I think we all recognize that there was a fairly concerted effort of disinformation funded by people who stand to lose when renewables win that really was not effective. When you look at the states in the presidential campaign where energy became an issue – Iowa, Colorado – those states were carried by the President. The elections do tell us there is, in a sense, an energy constituency out there. Now the “losers” in the clean energy battle are gearing up to fight us. ALEC (American Legislative Exchange Council) put out a notice about they’re reinvigorating to go after state renewable portfolio standards. That says to me we have to redouble our efforts to get a clear message about what is really happening in these industries to make sure we counter the kind of disinformation we’ve seen in this election.
Burkhart: Perhaps one of the lasting effects of the campaign in 2012 will be the federal government being involved less as a venture capitalist, less in direct funding, and more in terms of productive, lasting tax incentives that create a more level playing field.
PE: How have renewable energy developments faced the challenge of low natural gas prices over the last year? Do you foresee that low natural gas prices will be a continued threat?
Resch: Broadly speaking, when you look at the growth of our industry, low natural gas prices have had a limited impact on solar. The biggest impact that low natural gas prices have had is really on the coal industry. If you look back at January 2010, 47 percent of our electricity was generated by coal at that time; it’s now down to 39 percent – a significant drop in a short amount of time – I would argue primarily due to low natural gas prices. What we found is that solar and natural gas complement each other very nicely. Though we’re not a peaking generation technology like natural gas, it aids a utility to have peak generation using solar with natural gas either as a backup in the shoulder hours or in the evening. We found that many utilities are actually replacing some of their old, simple-cycle peaking units with new and improved peakers along with solar, which is an interesting complement overall. Today’s low natural gas prices are not going to last. If you talk to the producers of natural gas, this is not the boom; it’s the bust. They’re not making as much money as they would like or had planned on when they were drilling these wells, and the expansion of fracking has opened up a huge amount of natural gas to the industry.
When you look at the EIA (Energy Information Administration) forecast, you see natural gas prices doubling in the next couple of years. That gets us to a more sustainable price – in the $5 to $6 per mcf level. It’s sustainable not only for the producers but also for the industries that use natural gas, and I think that’s where the market is leading. At that level, this creates some challenges for renewables, but what we’ve seen in the last two years is the cost of installed solar has come down by over 50 percent. And we continue to make advances both in technology efficiency as well as construction costs. If we anticipate that natural gas prices will be in that $5 to $6 price range in the next couple of years, that sets a goal for solar – to lower our costs so we are cost-competitive with peaking units for natural gas. I think the other key piece of natural gas is, prices will be very different in 10 or 20 years. When you’re building new facilities for natural gas, no one’s going to give you a 20-year contract for $2.50 or $3/mcf. A long-term contract now is maybe 12 to 18 months, so the fluctuations of natural gas always exist. The benefit of renewables is you have no additional fuel costs over that lifecycle. You really need to look at the levelized cost of energy over a 20-year lifespan of all of these projects in order to understand the impacts of natural gas. Solar is on track to being cost-competitive with natural gas in the near future.