The renewable energy and energy efficiency industries will grow over
the coming years “strictly on the basis of cost,” rather than simply as a
result of supportive policies, according to a new report from the
Advanced Energy Economy Institute.
The report argues that, while renewable energy and energy efficiency
are certainly cost-effective mechanisms for compliance with EPA’s Clean
Power Plan (CPP), and will see growth owing to that, they would continue
to grow anyway even in its absence. As the report from the Advanced Energy Economy Institute puts it:
“Official projections of renewable energy deployment and the impact of
energy efficiency on electric demand growth do not capture market
realities, discounting the growth potential of these resources and the
role they can play in state compliance plans for the CPP.”
“Costs are dropping fast for wind and solar power, and energy
efficiency is almost always the lowest cost way to meet new electricity
needs,” noted Malcolm Woolf, Senior Vice President for Policy and
Government Affairs for Advanced Energy Economy, a national business
association. “There is every reason to believe that renewable energy and
efficiency will play growing roles in electricity markets based on
price alone. They can also help states reach their Clean Power Plan
emission targets at low cost.”
As noted by the report (which can be found here),
Energy Information Administration growth rate projections have been
shown to be inaccurate year after year — which obviously means that its
projections for dates further in the future (2020, 2030, etc) are
unlikely to be accurate.
As a recent press release put it: “For example, the installed
generating capacity of solar power is likely to double between 2014 and
2016, based on market analyses that take into account actual projects
in the pipeline. Yet in the AEO 2015 forecast, solar capacity does not
double from its current level until 2026.”
The Advanced Energy Economy Institute adds: “The effect of these
misperceptions can be seen in some responses to the CPP, which
identified renewable energy and energy efficiency as two key sources of
emission reduction in the electric power sector. Comments submitted to
EPA by several states questioned their ability to develop sufficient
renewable energy or to achieve energy efficiency gains on a
cost-effective basis beyond what they were getting already. In modeling
the impacts of the CPP, the North American Electric Reliability
Corporation projected no incremental increase in energy efficiency and
little additional investment in renewable energy in response to the CPP,
treating a large-scale build-out of new natural gas generating capacity
as the only way states could meet CPP targets.”
The report makes mention of the fact that, according to the financial advisory and asset management firm Lazard, the levelized cost of electricity from utility-scale wind energy and solar energy has fallen by large margins (58% and 78%, respectively) since 2009.
“There is every reason to believe that (renewable energy) and (energy
efficiency) will continue to play an increasing role in our changing
electric power system strictly on the basis of the economic value they
provide. In addition, as states consider ways to comply with EPA’s Clean
Power Plan between now and 2030, RE and EE measures will be competitive
with other options and available to provide substantial emission
reduction opportunities.”
Image Credit: Advanced Energy Economy Institute
http://cleantechnica.com/2015/06/27/report-renewable-energy-energy-efficiency-grow-based-cost-competitiveness-alone/