Taking A Step Back
 Brings Energy Revolution
 Clearly Into Focus

It is easy to get lost in the day-to-day minutia of the revolution under way in the energy industry—announcements of technology improvements, installation milestones and price reductions of all kinds hit my inbox almost daily. But two recent reports, one highlighting where we’ve been and the second pointing to where we are going, are a useful grounding tool, pointing out that while I (and probably many others) often get lost looking at individual trees there is a whole forest out there.

The first report, an Energy Department publication dubbed Revolution…Now (which can be found here), walks through the startling changes in five clean energy technologies during the past five-plus years. While much of this information may be familiar, it is worth a quick review.

Starting with windpower, the report notes that as of the end of 2014, more than 65,000 megawatts of utility-scale wind generation had been installed across the U.S., producing 4.4 percent of the nation’s electricity. All told, there is some wind generation in 39 states, DOE said, and in nine states windpower accounts for more than 10 percent of in-state generation. And the numbers aren’t leveling off: The American Wind Energy Association reports that total installed generation through the 3rd quarter of 2015 has topped 69,000 MW, with an additional 13,250 MW of capacity under construction and 4,100 MW of capacity in the advanced planning stage.


Turning to solar, DOE separates the resource into two categories, utility scale and distributed, but the results have been equally dramatic for both. On the utility side of the coin, installed generation has shot up from essentially zero in 2009 to just under 10 gigawatts at the end of 2014. This surge, DOE said, was driven in large part by the dramatic decline in module and overall installation costs during the past five years: module costs fell 80 percent, to about $.71 per watt, while total installed costs dropped about 58 percent, from $5.50 per watt in 2008 to $2.34/watt in 2014. Here too, the latest information from the Solar Energy Industries Association projects continued strong growth in the years ahead. Already, SEIA noted in its 2nd quarter market report, total utility operating PV capacity has topped 11,000 MW—with an additional 11,412 MW under construction and 5,102 MW contracted (with a signed purchase power agreement) but not yet in the building phase.


The progress on the distributed side of the solar equation has been equally eye-opening. Since 2009, the average installed cost of distributed solar has dropped by half, falling from more than $8/watt to just over $4/watt in 2014. During the same period, installed distributed solar generating capacity has soared, rising from about 1,000 MW to just under 9,000 MW—with no end in sight. As of mid-2015, DOE said, some 800,000 distributed PV installations were in operation, with industry analysts projecting that as many as three million more units will be added in the next few years.

The fourth pillar of DOE’s revolution is LEDs, which have turned the lighting industry upside down during the past five years. From fewer than 400,000 installed units (of the traditional A-type bulb that screw into a light fixture) in 2009, the number of these bulbs installed across the U.S. has skyrocketed to an estimated 78 million as of year-end 2014—impressive growth in anyone’s books. It is easy to dismiss the individual impact of a single homeowner changing some (or even all) of the old-school incandescent bulbs in his/her home to LEDs, but when you add it up it makes a huge difference: DOE estimates that LED use could cut electricity use in the lighting sector by almost 50 percent by 2030—saving 3,000 trillion British thermal units annually.


Finally, DOE points to the strong growth that has occurred in the electric vehicle market. Sales there have grown from essentially zero in 2010 (the first battery EVs, not hybrids, were sold in December that year; the Electric Drive Transportation Association reports that 345 EVs were sold that first month) to just under 119,000 in 2014—accounting for 1.6 percent of the U.S. passenger car market during the year.

Just as impressive as how far the U.S. has come in the past five years is where the world is headed in the next 20-plus years, and for that we need to look at the International Energy Agency’s World Energy Outlook 2015 (information about purchasing the publication can be found here). The upshot of IEA’s analysis is simple: the renewable energy era is here.

By the early 2030s, IEA said, renewables will overtake coal as the largest generation resource worldwide and from now through 2040 3,600 gigawatts (yes, gigawatts with a G) of new renewable generation capacity are expected to be installed worldwide—more than all other generation resources combined.


Beyond the move toward renewable generation, IEA highlighted the importance of energy efficiency initiatives. In 2014 alone, the group said, “energy efficiency improvements helped restrain the growth in final energy demand…to just one-third of the level it otherwise would have been.”

In dollar terms, IEA expects energy sector investment to total an estimated $68 trillion through 2040, with 37 percent of that going toward oil and gas supply, 29 percent for the power generation sector and 32 percent for energy efficiency. Of the roughly $20 trillion IEA estimates will be invested in the power sector through 2040, 60 percent or almost $12 trillion will go toward new renewable generation. Adding that to the estimated $21.76 trillion that will be invested in energy efficiency means roughly 50 percent of total investment over the next 25 years will be going toward creating a new, less carbon-intense energy economy.

A whole forest indeed. Clearly, sometimes it pays to take a step back from the day-to-day and look at the long-term trends–then it is clear that a greener future is on the way.

–Dennis Wamsted


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