Keith Johnson, writing recently in the Wall Street Journal, does a commendably even-handed job laying out “Six Myths About Renewable Energy.”
Citing the rapid progress renewables have made in recent years, he concludes that “Many of the debating points we hear today are based on outdated facts and assumptions that don’t hold up anymore.”
Of the six myths he covers, it is Myth #2 — “Renewables Can Replace All Fossil Fuels” — that is especially salient. While it is possible to have high levels of renewables, he notes it would be “a long, tough slog.”
This long slog is exactly what America’s Power Plan was designed to address.
Johnson cites difficulties in siting, finance, market design and transmission. America’s Power Plan tapped 150 energy experts to address these issues specifically, plus three more that Johnson doesn’t mention.
America’s Power Plan addresses the changes in the power sector being driven by game-changing new technologies, consumer demand for cleaner, more efficient energy, an aging and increasingly obsolete grid, and dramatic reductions in the cost of renewables.
“There’s no technical reason renewable energy can’t provide 80% of the power in the U.S. by midcentury. But there are a host of challenges that would have to be met first.”
Johnson starts by referring to the landmark study led by the National Renewable Energy Lab, Renewable Electricity Futures, which he accurately describes as finding that “technically, by 2050 the U.S. could get 80% of its electricity from renewable energy and keep the lights on every hour, every day, in every corner of the country.”
The REF study is different from other studies, in that it was the first to grapple with the when-and-where aspects of renewables.
Unlike conventional power sources — which can be built practically anywhere, with fuel delivered to them, and operated at any time, in any amount — renewables are dependent on location and time.
Yet energy models designed for conventional power plants — most notably the EIA’s National Energy Modeling System (NEMS) — ignore time and place. As a result NEMS can’t answer the most urgent and obvious question about high levels of renewables – can they keep the lights on?
The NREL study team, which included researchers from other national labs, universities, engineering firms, and industry think tanks, used sophisticated modeling to meet this issue head on. NREL’s Regional Energy Deployment System (ReEDS) accounts for the location of supply and demand, while ABB’s GridView model can handle the hourly system needs and the power flows from one region to another.
The results, in 28 different scenarios (which you can peruse here) were that currently available renewable generation technologies, “in combination with a more flexible electric system,” could provide penetration levels ranging from 30 to 90 percent. As Johnson notes in his article, “there’s no technical reason renewable energy can’t provide 80% of the power in the U.S. by midcentury.”
The Long Slog
The issues instead are more practical. Johnson asks how we can finance the “big upfront capital costs”? What happens in power markets when renewables drive “wholesale power prices close to zero at times”? “Where do we find “a place to put all those wind farms, solar arrays and hydroelectric facilities”? New transmission raises questions of “where the lines would go, who would pay for them, and which state and local governments would be in charge.”
These are exactly the questions America’s Power Plan was intended to address.
To deal with the need to finance this major investment in a cleaner power system, we commissioned thoughts on finance policy from Todd Foley of the American Council on Renewable Energy, Uday Varadarajan of the Climate Policy Initiative and Richard Caperton of the Center for American Progress. ACORE drew on their US Partnership for Renewable Energy Finance, a coalition of senior-level financiers. The paper lays out recommendations for removing barriers to investment and managing risk.
Michael Hogan of the Regulatory Assistance Project (RAP) wrote our paper on market design. The issues of market design go well beyond the occasional episodes of zero or even negative market prices, as Johnson mentions. Instead, the real issue is to (1) ensure that markets recognize the value of efficiency as a resource, (2) update system operations to unlock flexibility in the short term, and (3) update investment incentives to drive flexibility in the long term.
We paired Carl Zichella of the Natural Resources Defense Council (NRDC) with Johnathan Hladik, an attorney with the Center for Rural Affairs, to find better ways of siting energy facilities. NRDC has been deeply involved in siting issues on public lands in the West, working with BLM, states, and other stakeholders to use “smart from the start” practices. The Center for Rural Affairs has worked on transmission siting in the Midwest, seeking outcomes that avoid conflict between farmers, ranchers, county commissioners, and transmission developers.
A greatly expanded transmission grid raises questions of who pays, who benefits, and who is in charge. These issues and more were addressed by John Jimison and Bill White of Americans for a Clean Energy Grid. They concluded that the primary barriers to building new lines are bureaucratic. “Inefficient institutions and insufficient policies are the key factors preventing the United States from accessing its rich resources of clean energy, and spreading that wealth throughout the economy.”
Wait, There’s More
America’s Power Plan also covers three additional topics that Johnson didn’t mention.
As high-tech companies like IBM and Google apply information technologies to the electric sector, smart distributed energy resources are opening up all kinds of possibilities. James Newcomb and colleagues at the Rocky Mountain Institute describe the potential for customer-side technologies and the need to encourage innovation rather than stifle it.
Distributed generation is rapidly growing, as solar and other power technologies become competitive with retail power prices. Joe Wiedman of the Interstate Renewable Energy Council and Tom Beach of Crossborder Energy lay out the need for policies that remove barriers to distributed generation.
And perhaps the broadest question was tackled by Ron Lehr, former chair of the Colorado utility commission – what will these rapid changes do to the business model of utilities, and to the regulatory compact that has guided the utility business for the past 80 years? While some utilities are trying to protect their revenues from the forces of consumer demand and technological innovation, Lehr argues that “this is a losing battle, and runs counter to the public interest.”
Johnson raises the right questions. While it may not be the final word on the subject, America’s Power Plan is intended to be the start of a conversation that may go on for decades.
This is one of a series of articles on America’s Power Plan, a policy plan for dealing with rapid change in the power sector on the way to a clean energy future.