Good News for Planet. Bad News for Science Deniers. Renewables Breaking Out Everywhere…
September 24, 2013
Good news for the planet is, of course, Mr. Yuck for climate deniers.
Four key technologies in ascendance. Wind, for instance.
Michigan’s current Renewable Portfolio Standard (RPS) requires electric providers to ramp up their use of renewable energy in order to obtain 10% of their electricity sales from renewable resources in 2015. Those goals are expected to be met in nearly all cases, and the exception has announced plans to wind down service.
The RPS has resulted in approximately 1,400 MW of new renewable energy projects operating or currently under development in our state (94% of these new projects are wind energy projects and approximately half are non-utility owned). By the end of 2013, in total, Michigan consumers will have paid approximately $675 million in surcharges supporting this expansion.
Due to decreases in renewable energy costs, surcharge collections are expected to be significantly reduced or even eliminated for some electric providers beginning in 2014, because project costs are in some cases essentially equivalent to conventional generation under current conditions.
..and continuing to get cheaper, I might add — because the more fossil fuels you use, the more expensive they get, but with renewables, its just the opposite, the more you use, the cheaper they get.
Of course, wind has the advantage of being, well, free – in the sense that utilities and customers know that the base cost of the fuel will be the same 25 years, and 2500 years, from now, as it is today. For utilities, this makes signing a 20 year contract much easier.
A new annual wind energy evaluation for the entire US from Berkeley Labs shows that wind energy is cheaper than ever, and continuing to drop –
Falling wind turbine prices are pushing installed project costs lower. Wind turbine prices have fallen 20 to 35% from their highs back in 2008, and these declines are pushing project-level costs down. Based on a large sample of wind projects, average project costs in 2012 were down almost $200/kW from the reported average cost in 2011, and down almost $300/kW from the reported average cost in both 2009 and 2010. Among projects built in 2012, the windy Interior region of the country was the lowest-cost region, with average project costs of ~$1,760/kW.
Wind energy prices have been falling since 2009, and now rival previous lows.Lower wind turbine prices and installed project costs, along with improved capacity factors, are enabling aggressive wind power pricing. After topping out at nearly $70/MWh in 2009, the average levelized long-term price from wind power sales agreements signed in 2011/2012 – many of which were for projects built in 2012 – fell to around $40/MWh nationwide. This level approaches previous lows set back in the 2000-2005 period, which is notable given that wind projects have increasingly been sited in lower quality wind resource areas. Wind energy prices negotiated in 2011 and 2012 are generally lowest in the Interior region of the U.S., with prices averaging just above $30/MWh, and typically ranging from $20-40/MWh. Even with today’s very attractive wind energy prices, however, wind power sometimes struggles to compete with what are currently very low natural gas and wholesale power prices in many parts of the country.
1. Wind deployment
Since 1999, the average wind turbine has increased electrical output by 260 percent. So although turbine prices have risen in recent years, the cost of electricity from wind has fallen to around 5 cents per kilowatt-hour — a 90 percent drop since the 1980s. In 2012, wind was the single largest source of new electricity capacity in the U.S., beating even natural gas.
2. Solar photovoltaic (PV) deployment
As we recently pointed out, there is now a solar PV system installed in America every four minutes, up from every 80 minutes in 2006. According to GTM Research’s Solar Market Insight report, the national average price of an installed PV system declined by 26.6 percent in 2012. That drop has been helped by a strong reduction in module costs and pricing due to global oversupply. The DOE points out that the cost of a solar module in 2012 is 1 percent of what it cost 35 years ago.
Consequently, two-thirds of all distributed solar PV capacity in the U.S. has been deployed in the last 2 1/2 years, GTM Research Senior Analyst MJ Shiao recently showed.
3. LED Deployment
As lighting manufacturers ramp up production, the cost of producing an LED relative to the cost of raw materials has declined by 25 percent each year. This leads some experts to conclude that LEDs may represent 80 percent of all new lighting by 2020. According to the DOE, there were 400,000 LED lights deployed in the U.S. in 2009. With 20 million deployed today, that number has increased by a factor of 50. According to a recent survey from Sylvania, 35 percent of U.S. households now have at least one LED light.
4. Electric vehicle (EV) deployment
After multiple fits and starts, the electric vehicle market in the U.S. is finally starting to make some progress. In the first half of this year, sales of electric vehicles have already been more than double the total of all sales throughout the entirety of 2012. In California, Tesla is outselling high-end cars like Porsches, Lincolns, Land Rovers and Jaguars. And although battery makers have struggled to find customers and appropriate business models, the DOE reports that the cost of manufacturing an EV battery has dropped by 50 percent since 2008.