Debate 4: Can Alternative Forms of Energy Make a Difference?
Myth: Some of the new technologies, such as solar and wind, will never make a dent in our energy mix
Reality: It will take time, yes, but the signs are already clear they are having an impact
First, you have to ask yourself if change happens in the energy markets. The answer is yes. The United States has undergone several key transformations of our energy mix. First our energy mix was dominated by wood, then coal, then oil, and now natural gas is gaining share. Given the size of the energy markets, these transitions can take decades. Wood went from about 90% share in 1850 to less than 50% by 1885 and then continued declining. Coal went from close to 80% share in 1910 about 30% by 1950. They can and do happen, but they take time.
But how do we know if a change will ever happen, or if we are waiting for a fantasy that will never come to fruition? This is a better question as just because change can happen it does not mean that it will happen towards cleaner forms of energy. One simple way is to look at the percentage of new capacity coming from these sources, as that will likely be a leading indicator of what generation will look like in future years. Solar and wind have been very large shares of new capacity being added. For example in the month of September 2012, wind and solar were 100% of new capacity added according to the FERC. You can also see the share in generation increasing as well, with non-hydro renewables going from 3.1% of generation in 2008 to a forecasted 6.0% in 2013 per the Energy Information Administration. I believe that these are clear signs that a transformation is underway and given the falling costs for sources such as solar, believe that this trend will continue.
If this trend continues, what might this look like in several years? Germany has installed the most solar of any country in the world so it is an interesting case study. While the debate on solar in Germany could be a long one, what I find interesting is that recent data on Germany’s power curve shows that solar generation is clipping the peak of power during the day in a very meaningful way, nearly flattening it at times which is truly remarkable. As most power demand occurs during the middle of the day, this is a costly period of time for utilities to ensure power and often an expensive one for customers. It is also when the sun happens to shine the most which is good for solar generation. Seeing a power curve flattened, especially by distributed generation that does not have to be owned by the utilities, will have huge implications for many participants in the energy markets for years to come.
The commentary above highlights that these are complex issues. I do not assert these issues are simple, but rather that a good debate must focus on reality and not the myths that are often promulgated. Focusing our debates on facts and coherent logic will give us the best chance at making the right decisions on the topic of energy and ensure the best impact on our economy, environment and security.
Lead image: Myth blocks via Shutterstock