Solar, Wind Power

Signposts to a Clean-Energy Future

Wind power is the largest emerging clean-energy source on the planet. It is starting to reach significant penetration in an increasing number of markets, representing approximately 20 percent of Denmark’s total electricity generation, 10 percent of Spain’s, and more than 7 percent of Germany’s. In the U.S., Iowa and Minnesota now get approximately 5 percent of their electricity from the wind, New Mexico around 4 percent and Oregon approximately 3.5 percent. Even more remarkable, wind represented 30 percent of new electricity generating capacity installed in the U.S. in 2007.

Solar power, which still lags significantly behind wind as a percent of total electricity generation and new installations, is attracting investors, governments, utilities and others for its potential to scale like earlier high-tech industries (think computer chips and cell phones). Germany, which dominates the world in solar deployment, now gets around six tenths of one percent of its electricity from the sun. In the U.S., the number is closer to just one tenth of one percent.

Against the backdrop of renewable portfolio standard (RPS) requirements, emerging carbon regulations and energy supply challenges, a range of stakeholders are now asking: What would it take for solar and wind to both contribute significantly to U.S. electricity generation? Two recently published reports (one written by Clean Edge), outline how these two emerging energy sectors combined could provide up to 30 percent of U.S. electricity generation sometime between 2025 and 2030. Both reports highlight steps that need to be taken to make such targets a reality.

On the wind front, a Department of Energy (DOE) report, entitled “20 Percent Wind Energy by 2030,” identifies requirements to achieve the goal of 20 percent wind by 2030, including reducing the cost of wind technologies, citing new transmission infrastructure, and enhancing domestic manufacturing capability.

The report presents an in-depth analysis of the potential for wind in the U.S. and outlines a potential scenario to boost wind electric generation from its current production of 16.8 gigawatts (GW) to 304 GW by 2030.

The analysis concludes that:

  • Annual installations need to increase more than threefold. Achieving 20 percent wind will require the number of annual turbine installations to increase from approximately 2000 in 2006 to almost 7000 in 2017.

  • Costs of integrating intermittent wind power into the grid are modest. 20 percent wind can be reliably integrated into the grid for less than 0.5 cents per kWh.

  • No material constraints currently exist. Although demand for copper, fiberglass and other raw materials will increase, achieving 20 percent wind is not limited by the availability of raw materials.

  • Transmission challenges need to be addressed. Issues related to siting and cost allocation of new transmission lines to access the Nation’s best wind resources will need to be resolved in order to achieve 20 percent wind.

Another study written by my firm, Clean Edge, along with green-economy nonprofit Co-op America, makes the case that solar power is emerging as a cost-effective hedge against fossil fuels and is likely to reach cost parity with retail-electricity rates in most regions of the U.S. in less than a decade. The Utility Solar Assessment (USA) Study) provides a comprehensive roadmap for utilities, solar companies, and regulators to reach 10 percent solar in the U.S. by 2025. Action items outlined in the report include: 

  • For utilities: Take advantage of the unique value of solar for peak generation and alleviating grid congestion; implement solar as part of the build-out of the smart grid; and adapt to new market realities with new business models.

  •  For solar companies: Bring installed solar systems costs to $3 per peak watt or less by 2018; streamline installations; and make solar a truly plug-and-play technology.
  • For regulators and policy makers: Pass a long-term extension of investment and production tax credits for solar and other renewables; establish open standards for solar interconnection; and give utilities the ability to “rate-base” solar.
According to our research, solar power is beginning to reach cost parity with conventional energy sources. As solar prices decline and the capital and fuel costs for coal, natural gas, and nuclear plants rise, the U.S. will reach a crossover point by around 2015. Just look at the numbers, installed solar PV prices are projected to decline from an average US $5.50-$7.00 peak watt (15-32 cents kWh) today to US $3.02-$3.82 peak watt (8-18 cents kWh) in 2015.

Solar power also offers a number of other advantages over conventional energy sources. Among them, the ability to deliver energy at or near the point of use, zero fuel costs, minimal maintenance requirements and zero carbon-based source emissions.

Both of these reports reflect an important new reality: Solar and wind are capable of providing an increasingly significant portion of the U.S.’s total electricity generation needs. Pair them with enhanced transmission lines, the smart grid and conservation and efficiency, and we could transform utility markets in the U.S. and abroad.

“To dramatically reduce greenhouse gas emissions and enhance our energy security, clean power generation at the gigawatt-scale will be necessary, and will require us to take a comprehensive approach…,” said Andy Karsner, DOE Assistant Secretary of Energy Efficiency and Renewable Energy for the U.S. Department of Energy.

We couldn’t agree more. The future of solar and wind lies in their massive build-out — and will require the active participation of utilities, regulators and companies. The two reports outlined in this column provide important pathways to make this vision a reality.

Ron Pernick is co-founder and managing director of Clean Edge, Inc., coauthor of The Clean Tech Revolution, and Sustainability Fellow at Portland State University’s School of Business.