Despite Cheap Gas, 2016 Will Be a Big Year for Renewables
January 5, 2016
I continue to ask the burning question, Will Gas Break Wind, Will Wind Pass Gas?
Despite low gas prices, and in some cases, because of them, renewables are roaring ahead. Still work to do, though.
Wind and solar power appear set for a record-breaking year in 2016 as a clean-energy construction boom gains momentum in spite of a global glut of cheap fossil fuels.
Installations of wind turbines and solar panels soared in 2015 as utility companies went on a worldwide building binge, taking advantage of falling prices for clean technology as well as an improving regulatory and investment climate. Both industries have seen stock prices jump since Congress approved an extension of tax credits for renewables as part of last month’s $1.14 trillion budget deal.
Orders for 2016 solar and wind installations are up sharply, from the United States to China to the developing economies of Africa and Latin America, all in defiance of stubbornly low prices for coal and natural gas, the industry’s chief competitors.
“We’re seeing very good momentum across the board globally,” Anders Runevad, chief executive of Vestas Wind Systems, the world’s biggest producer of wind turbines, said in an interview. “We’re seeing growth in every region.”
Vestas, based in Denmark, is one of three major turbine makers whose stock price doubled in 2015 amid a surge of new orders from North America, Europe, Africa and Asia.
Runevad, the Vestas CEO, said the recent drop in prices for traditional fuels has prompted some of his customers to increase their spending on wind farms, especially in countries that are heavy importers of petroleum.
“Some countries are having a budget surplus now because of low oil prices, and they’re using that money to invest in new infrastructure,” he said. “For importing countries, it’s a net positive. Because of the uncertainty with gas prices, we haven’t seen any of our wind customers say, ‘Let’s build a gas-fired plant instead.’ ”
Runevad, who recently signed major deals to sell turbines to China and India, is confident that developing economies will ultimately choose renewables over cheap coal. India and China suffer from high levels of air pollution — mostly because of their heavy use of coal — which contributes to thousands of premature deaths annually.
A surcharge paid by Michigan utility customers for electricity generated by wind and solar energy is disappearing.
With the new year, DTE Energy Customers will no longer pay a 43-cent monthly fee for renewable energy. The state’s largest utility, Consumers Energy, dropped the fee last year.
“That’s reflecting the falling cost of renewable energy, and customers are benefitting from that,” says Judy Palnau with the Michigan Public Service Commission, the state’s utility-regulating agency. She says utilities initially charged as much as $3 per meter under a 2008 state law that encouraged utilities to use more renewable resources to generate electricity.
“Wind turbines, the ones that are being used today, are a lot more efficient than the ones even from 2008.”