Policies to support renewable energy adoption have been in place worldwide for more than a decade and as the installed capacity of renewable energy has grown, technology has also improved dramatically. Now, the cost of renewable energy has been brought down to the point where it is now competitive with traditional forms of generation in some markets. In a panel discussion on Wednesday during POWER-GEN International, renewable energy stakeholders discussed whether technology or policy was actually driving grid integration and growth of renewable energy.
The panel consisted of Ken Pennock, director, Grid Solutions at AWS Truepower; Karin Corfee, managing director with Navigant’s energy practice; Andrew Cotter, product and program manager, Renewable Research at NRECA; Paul Denholm, NREL principal energy analyst; and Alison Williams, clean energy manager with EEI. Nancy Mohn, who recently retired from GE, moderated the panel.
To set the scene, Corfee outlined the three main drivers that Navigant studies when looking at adoption of renewable energy technology — policy and regulation, market demand and technology and innovation. For market demand, she pointed to the many major corporations that are purchasing renewable energy. In 2015, more renewable energy PPAs were signed by corporations than utilities. In the technology and innovation bucket are emerging trends such as digitization, networking and data analytics, something Navigant refers to as “the energy cloud.”
“We estimate that the energy cloud’s evolution could represent $1 trillion to $1.5 trillion in new value from investments,” Corfee said.
EEI’s Williams said she believes that policy is what has been driving renewable adoption, pointing to charts that show how the pending expiration of the U.S. federal tax credits for wind over the years always led to a spike in deployment. The tax credit was extended for five years in late 2015 and includes a step down to 2020.
“This cycling we see up and down is directly related to the policies we see from Washington,” she said.
Cotter said utility co-ops own 80 percent of the transmission lines but serve only 10 percent of the population.
As a result, he said co-ops have “a very different approach to basically everything in the energy industry.”
For co-op ratepayers, policies like net energy metering could become particularly problematic if there was wider adoption of rooftop solar PV in their regions.
Cotter believes that policy has been the major driver for renewable energy up until now but he thinks that we might be at a tipping point at which technology will begin to have a greater impact on adoption. For example, if a utility enacts a minimum charge or a fixed rate of $70 for example, at some point when technology costs come down enough, a ratepayer may decide to install solar PV and a battery and stop paying the utility all together.
NREL’s Denholm focused on the economics of renewable energy. He said renewable energy prices have come down to the point where we are seeing wind PPA at $20 per megawatt-hour. “But that is subsidized so now it’s $40,” he said, adding that even a $40 per megawatt-hour, wind is competitive with other generation forms. Overall Denholm said that he believes that both technology and policy are drivers for renewable energy growth.
Mohn said it’s important to remember that the U.S. market is impacted significantly by state and local policies and “the devil is in the details at the local markets.”