Category Archives: Wind

EIA Annual Outlook
 Misses The Mark
 On Threat To Utilities,
 Generation Revolution

Coal, Department of Energy, Distributed Generation, Forecasts, Solar, Utilities, Wind, , , ,

So many studies, so little time. Just in the past couple of weeks analyses from DOE’s Energy Information Administration, Bloomberg New Energy Finance, British Petroleum and the International Renewable Energy Agency have hit my inbox (thank goodness we have moved beyond the old hardcopy stage, just those reports alone would have contributed to the world’s ongoing deforestation problem), and having the time to study them all has been difficult. But muddling through them does provide some fascinating glimpses of where the energy industry is today, and where it might be headed in the years to come.

EIA’s 2016 Annual Energy Outlook, released in abbreviated form last month with its full rollout slated for early July, includes more sobering news for electric utility executives: Sales growth really is gone, and it isn’t coming back. In its analysis, EIA estimates that overall electricity sales will grow at an average rate of 0.7 percent from 2015-2040, essentially unchanged from the 0.6 percent growth rate posted from 2000-2015. But a closer look at the numbers shows even that relatively anemic growth estimate may be optimistic.

For example, EIA estimates that electric sales in the residential sector will rise by an average of just 0.3 percent a year from 2015-2040—well under even the paltry 1.1 percent annual growth recorded from 2000-2015. According to EIA, the slow growth can be attributed to rising energy efficiency, especially in the lighting sector, and the broad adoption of distributed photovoltaics (PV). But what is most intriguing about EIA’s estimate is that virtually all of the growth occurs in the out-years (see chart below): From 2015 through 2030 there is essentially zero growth in residential sales. Specifically, EIA puts 2015 sales in the sector at 1,402 billion kilowatt-hours (kwh)  and projects that sales in 2030 will rise to just 1,416 billion kwh—an increase, if you can call it that, of 0.1 percent annually. Rather than calling this growth it would be more appropriate to write it off as a rounding error. It also represents the continuation of a longer-term trend: Residential electric sales in 2007, just before the onset of the Great Recession, totaled 1,392 billion kwh. Measured from that starting point, sales are expected to climb just 24 billion kwh in 23 years, a miserly 0.07 percent annual increase.

Continue reading EIA Annual Outlook
 Misses The Mark
 On Threat To Utilities,
 Generation Revolution →

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Corporate Interest
 In Green Energy
 Requires New Thinking
 From Electric Utilities

Environment, Ratemaking, Solar, Utilities, Wind, , , ,

There was a news nugget in the American Wind Energy Association’s latest market report (released last week, the executive summary can be found here) that should be required reading for electric utility executives everywhere: Non-utility purchasers (that is, corporate and institutional customers) signed power purchase agreements (PPAs) for more than 1,300 megawatts of windpower in the fourth quarter of 2015—accounting for roughly 75 percent of the total.

Translation: Corporate America is going green and if you don’t give them what they want, they are going to get it on their own.

This transition has been under way for some time—Whole Foods, for example, said it planned to go all-in for windpower in 2006 and Walmart signed its first major windpower deal in 2008—but it wasn’t until 2013 that the change really began to take hold. Since then, it has been an entirely different story, almost an overnight transition from “meh” to “let’s do this.” According to data from RMI’s Business Renewables Center, corporate buyers signed power purchase agreements for more than three gigawatts of new wind and solar power in 2015, two and a half times the 1.2 GW of green power purchased in 2014. And this is just the beginning, says Hervé Touati, head of the BRC. “Despite this incredible success, less than 20 corporations have been active in this space since its inception. This is just a start….”

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 In Green Energy
 Requires New Thinking
 From Electric Utilities →

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Taking A Step Back
 Brings Energy Revolution
 Clearly Into Focus

Department of Energy, Distributed Generation, Environment, Forecasts, Solar, Uncategorized, Wind, ,

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.

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 Brings Energy Revolution
 Clearly Into Focus →

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Republican Leaders
 Badly Out Of Step
 With Party Regulars

Congress, Environment, Politics, Solar, Wind, ,

 Congressional Republican leaders and a number of GOP governors have marched virtually in lockstep for the past seven years in the opposite direction of President Obama’s environmental proposals, particularly regarding the development of emissions-free wind and solar power and initiatives to address climate change. It is now embarrassingly obvious that they are marching to a tune that only they can hear, and that virtually no one else, not even most of their own party, is following along.

A fascinating poll (which can be found here) released last month shows conclusively that the vast majority of Republicans nationwide (see chart below) support government action to spur the development of clean energy sources, policies that by definition would cut emissions and help address climate change concerns. Unfortunately, in the current congressional climate those very same views could get a Republican congressman run out of the GOP-controlled House of Representatives by the give no-quarter Freedom Caucus if its members weren’t otherwise preoccupied with shutting down the whole chamber. Specifically, the poll found that a whopping 72 percent of Republicans said they supported taking steps to spur the development of clean energy. Even among self-described conservative Republicans, 68 percent supported clean energy. In addition, the poll found that most Republicans, even the self-identified conservative Republicans, said the climate was changing and that human activity is at least partially responsible.

RepublicanPoll2

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 Badly Out Of Step
 With Party Regulars →

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Green Power Is The Key
 For Utilities To Keep
 Their Commercial Clients

Environment, Solar, Utilities, Wind,

For utility executives used to 40-year planning horizons, the past 10 years have been, shall we say, a difficult learning experience.

Ten years ago shale gas production was still at miniscule levels and natural gas prices were well above $6 per million British thermal units (mmBtu) and showing no signs of decline; today gas is the go-to fuel and price projections have essentially flat-lined well under $5 per mmBtu. Ten years ago nuclear was in the midst of a renaissance, with utilities considering plans to build upward of 28 new reactors; today just four new reactors are being built (by two utilities) and they are way over budget and long-delayed. Ten years ago renewables were a far-off hope, with EIA’s 2005 energy outlook pegging solar PV at 0.00 quads through the 2025 forecast horizon; today solar is shining, with 20 gigawatts of installed capacity to date and much more on the way, while wind accounts for more than 4 percent of the nation’s electric generation.

Another change in the past 10 years, harder to quantify but just as real, has been the complete shift in customer expectations. Previously, customers simply bought what their utilities offered—“We don’t have any of that clean power today, you’ll have to buy this brown stuff.” Today, customers are going out and finding the cleaner, greener power they want—a fact I see regularly in press release after press release touting company X’s decision to buy the output from a new solar or wind project or, even more telling, to develop the project themselves.

It has been hard to put numbers on this change, but a new report from DOE’s National Renewable Energy Laboratory (Renewable Electricity Use by the U.S. Information and Communication Technology (ICT) Industry, which can be found here) provides clear evidence of the shift within the information/telecommunications sector. Ten years ago, the companies in an EPA initiative called the Greenhouse Power Partnership purchased essentially zero renewable energy; today, those companies (the number participating has now climbed to 68) purchase 7.8 million megawatt-hours (mwh) of green power—amounting to almost 44 percent of their total electricity consumption in 2014.

ICTRenewableUse

Taking a broader slice of the ICT market, NREL tracked 113 companies that reported information either through EPA’s GPP or another program called the Carbon Disclosure Project Worldwide and estimated overall electricity use in the sector at more than 59 million mwh in 2014. Of this total, which is well over 1 percent of annual U.S. electric consumption, 8.3 million mwh—or about 14 percent—was renewable. According to NREL, the green electricity is sourced from a mix of power purchase agreements (PPAs), on-site generation, utility green power products and renewable energy certificates (RECs). In other words, in large part, the companies are going out and getting what they want, not waiting for their supplier to bring it to them.

This growth is almost certain to continue in the years ahead, NREL said, projecting that by 2020 the amount of renewable energy used by the 113 will more than double, climbing to at least 18.5 million mwh even under a low growth scenario. In a more aggressive estimate, NREL said renewable consumption by the 113 could shoot up to more than 37 million mwh.

And some of the firms have even grander plans. Amazon, Apple, Facebook and Google, for example, all have publicly announced corporate plans to purchase 100 percent of their electricity from green sources. That won’t happen overnight, but don’t be surprised if 10 years from now they have met that goal.

These commercial customers clearly are driving huge changes in the utility industry—it’s time, past time in fact, for the industry to respond and give them what they want or risk losing them as customers entirely.

–Dennis Wamsted

 

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