The Energy Singularity: Big Utilities Pivoting Hard to Renewables

June 7, 2019

Very important interview above.

Dave Harwood directs Renewable Energy for DTE, a very large, rust belt utility, that until very recently was up to 70 percent coal reliant.
Now, along with just about every other similar utility, the company is pivoting, and pivoting hard – toward renewables and efficiency, and while they are now talking more openly about climate change as a driver – the real enabling factor here is that energy technology has reached some kind of singularity.

In 2017, the company announced it would be cutting carbon emissions by 80 percent by 2050. I applauded at the time, but I noted that with the acceleration in technological change, those plans would almost certainly be revised, and soon.
So here we are 2 years later, and the company is bumping their carbon reduction goal from 2050 to 2040 – and leaving the door open to further acceleration. Now they’re in spitting distance of making change in the time frame that is needed.

Corporate self interest is most definitely a primary incentive here.
The changes are happening so fast, that any company that persists in the old paradigm could very well cease to exist in relatively short order.

USAToday:

The energy landscape changes so fast, even experts have trouble keeping up. Prices for renewable power are plummeting,technologies for storage are becoming more cost-effective and what’s competitive today isn’t what was competitive five years ago –shifts that will only increase in the coming years. 

Coal is more expensive than other major electricity generation systems. U.S. utilities no longer build coal-fired power plants because newer, more efficient natural gas and renewable power plants produce cheaper electricity.

That’s partly because of clean air requirements, partly because the coal infrastructure is getting older but mostly because “the price of producing power at natural gas plants and with wind and solar has declined so dramatically,” said David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis, an energy research firm based in Cleveland. 

Coal’s share of the U.S. electricity mix fell from 48% in 2008 to 27% in 2018 and is projected to be 22% in 2020, according to the U.S. Energy Information Administration, the statistical agency of the U.S. Department of Energy.

“We’re retiring a coal plant every month. Coal will all be gone by 2030,” said Bruce Nilles, a managing director at the Rocky Mountain Institute, a think tank in Colorado that focuses on energy and resource efficiency.

Prices per megawatt hour from electricity for coal-fired power plants range from a low of $60 to a high of $143, according to Lazard, a financial advisory firm that publishes annual estimates of the total cost of producing electricity. This is the levelized cost, which includes the cost to build, operate, fuel and maintain a power plant.

Wind is significantly cheaper: Unsubsidized, levelized prices per megawatt hour of electricity from wind range from $29 to $56, according to Lazard’s most recent figures. In contrast, a decade ago, wind costs topped out at $70 per megawatt hour, according to the U.S. Department of Energy’s most recent report on the wind technologies market. The energy landscape changes so fast, even experts have trouble keeping up. Prices for renewable power are plummeting,technologies for storage are becoming more cost-effective and what’s competitive today isn’t what was competitive five years ago –shifts that will only increase in the coming years. 

Here, a resource planner for Consumer’s Energy, DTE’s larger competitor in Michigan, discusses how their economic modeling is driving a switch to renewable energy – showing that when presented with the current economic landscape, sophisticated models “love” renewables.

Indianapolis Star:

The embers of the coal industry have been slowly fading in recent years, despite efforts by the Trump administration to reignite the flames. 

But an announcement this week from a northern Indiana utility — in the heart of a state that ranks in the top 10 for both coal production and consumption — suggests the end may be nearer than some expect.  

After having already announced plans to speed up the retirement of its coal power plants, the Northern Indiana Public Service Company said this week that it will switch to renewable energy to make its electricity instead. 

Why? Because it’s cheaper. A lot cheaper, they said, to the tune of more than $4 billion over a few decades. Still, those long-term savings might come with a short-term price. The utility is asking for a raise in its rates to upgrade infrastructure. 

“It’s no surprise that the quicker you retire coal, that would equate to cost savings for customers, so we knew that,” NIPSCO President Violet Sistovaris told IndyStar. “But the pace of evolution with the market and technology was really picking up and that led us to say that maybe it no longer makes sense to rely on past assumptions.”

“We asked ourselves,” she continued, “is there something we can do differently?”

What surprised Sistovaris, however, was the answer to that question. Renewable energy sources like solar and wind are more cost effective and more efficient than both coal and natural gas. 

Thinking about the future, NIPSCO originally called for the construction of a natural gas plant as part of its 2016 planning process. That plan, however, faced fierce criticism from environmental and advocacy groups as well as customers, which led the utility to look elsewhere. 

After putting a call out for proposals, the utility received more than 90 potential projects from 30 different providers. Instead of natural gas, the analysis called for adding roughly 1,150 megawatts of solar and storage, 160 megawatts of wind as well as lowering demand through energy efficiency, education and incentives.

“I like to say that we love natural gas, we are a natural gas and an electric provider, but right now after our analysis, the economics don’t work,” Sistovaris said. “I will say that the projects submitted from those 30 providers gave us some new things to think about.” 

Excel Energy:

Denver, Colorado (Dec. 4, 2018)—Xcel Energy, a national leader in renewable energy, rolled out a clean energy vision today in Denver that will deliver 100 percent carbon-free electricity to customers by 2050. As part of this vision, the company also announced plans to reduce carbon emissions 80 percent by 2030, from 2005 levels in the eight states it serves. The new goals are the most ambitious announced to date within the electric power industry. 

“This is an extraordinary time to work in the energy industry, as we’re providing customers more low-cost clean energy than we could have imagined a decade ago” said Ben Fowke, chairman, president and CEO, Xcel Energy. “We’re accelerating our carbon reduction goals because we’re encouraged by advances in technology, motivated by customers who are asking for it and committed to working with partners to make it happen.”

”When I launched my campaign back in 2017 we had a bold agenda for our state to get to 100 percent renewable by 2040,” said Colorado Governor-Elect Jared Polis. “Xcel Energy’s exciting announcement today, along with the strong climate goals communities like Pueblo, Summit County, Ft. Collins, Denver and others across the state have embraced, shows we are leading the way forward right here in Colorado — by committing to a renewable and clean energy future.”

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16 Responses to “The Energy Singularity: Big Utilities Pivoting Hard to Renewables”

  1. Don Osborn Says:

    It is a great sign that the majority of utilities are putting the sun to work. HOWEVER, yes the utilities “love” solar, that is utility owned or utility controlled solar. Not so much distributed generation PV (customer owned, “rooftop” solar). Yet over a third of all solar being put in is in the form of “rooftop” solar which provides the solar owner with real savings and provides substantial benefits to all ratepayers. The urgent need is to provide Net energy metering rates that account for the full range of benefits if distributed, customer owned solar.

    • greenman3610 Says:

      agree – not all states and utilities are on the same page here – yet.
      The overwhelming logic of solar + battery revolution is going to erode resistance to good net metering policies – eventually, utilities that resist small solar will see their best customers start to self generate and possibly create a
      death spiral for them.
      So my approach is to applaud when they move in the right direction and continue to educate.

  2. redskylite Says:

    In Michigan farmers can build commercial solar panels on land preserved for agriculture.

    “Solar energy provides farmers, agribusinesses and farm communities with a steady source of tax revenue while preserving farmland for future generations,” said MABA President Jim Byrum.

    Michigan League of Conservation Voters Executive Director Lisa Wozniak said the new rules will remove barriers for solar development in rural communities.

    “”At a time when big utility companies like DTE and Consumers Energy are laying out their long-term energy plans, this order will remove barriers to solar energy and provide opportunities to aggressively follow through on their own clean energy goals,” Wozniak said.

    https://www.mlive.com/public-interest/2019/06/michigan-farmers-can-build-commercial-solar-panels-on-land-preserved-for-agriculture.html

  3. redskylite Says:

    Michael Bloomberg Promises $500 Million to Help End Coal. . .

    “If you move those 10 states decisively toward 100 percent renewable electricity, that actually means that every major public utility in the United States would have to go clean,”

  4. redskylite Says:

    It’s good to see DTE have a goal and they are improving the timeline. if a new federal government took the climate scientist’s and U.N reports seriously, and declared an emergency, that timeline would reduce even more.
    A lot resting on next years election.

    Meanwhile in California, who still run 1 small coal burning station, but otherwise have an interesting mix.

    “California has too much solar power. That might be good for ratepayers

    California set two renewable energy records last week: the most solar power ever flowing on the state’s main electric grid, and the most solar power ever taken offline because it wasn’t needed.

    There’s no contradiction: As California utilities buy more and more solar power as part of the state’s quest to confront climate change, supply and demand are increasingly out of sync. The state’s fleet of solar farms and rooftop panels frequently generate more electricity than Californians use during the middle of the day — a phenomenon that has sent lawmakers and some climate advocates scrambling to find ways to save the extra sunlight rather than let it go to waste.”
    https://www.latimes.com/business/la-fi-solar-batteries-renewable-energy-california-20190605-story.html

  5. dumboldguy Says:

    Hmmmm—-California sometimes has more solar-generated electricity than it can use but still has a coal-fired generating plant? And there are a still a lot of coal-fired plants around the country? Pardon me if I don’t quite see a “hard pivot” yet.

  6. jimbills Says:

    Washington Post: White House blocked State Department agency from warning about climate change
    https://www.cnn.com/2019/06/08/politics/state-department-climate-change-house/index.html

    https://www.washingtonpost.com/context/the-national-security-implications-of-climate-change/d5977183-15d9-45eb-a011-d4c701b02594/?utm_term=.6d60cfed455e

    “Climate change will have wide-ranging implications for US national security over the next 20 years through global perturbations, increased risk of political instability, heightened tensions between countries for resources, a growing number of climate-linked humanitarian crises, emergent geostrategic competitive domains and adverse effects on militaries,” the blocked testimony stated.

    It concluded: “Absent extensive mitigating factors or events, we see few plausible future scenarios where significant — possibly catastrophic — harm does not arise from the compounded effects of climate change.”

  7. jimbills Says:

    Rising methane: A new climate challenge
    https://science.sciencemag.org/content/364/6444/932

    ‘While the scientific community continues to debate the causes of the CH4 surge, the consequences are clear. The latest Intergovernmental Panel on Climate Change (IPCC) emission scenarios that limit warming to 1.5°C assume that the amount of CH4 in the atmosphere will decrease by 35% between 2010 and 2050 (13). Yet, between 2007 and 2014, the amount has risen by an average of 5.7 parts per billion (ppb) per year, and by an average of 9.7 ppb per year since 2014. If this rise continues unabated, cuts to carbon dioxide and other greenhouse gases will need to be even steeper to achieve the Paris goal.’

  8. indy222 Says:

    Global atmospheric CO2 is still accelerating, having transitioned from 2ppm per year to 3ppm per year in the past decade. I don’t see any pivoting here. I see continued economic growth with fossil fuels leading the way. I see China helping to install new coal power plants in Africa. I see China promising to lower the carbon intensity of their energy by 60% by 2030 and wild cheering….. without noticing that convolving this with their growth means that annual CO2 emissions from China continue to rise at their 21st century rate. So, I see some attempt to put a bit of torque on the steering wheel…. and not much more. yet.

  9. indy222 Says:

    Thanks for the recent methane link, Jimbills. It’s a good summarizing of the data and interpretations. About half way down the article is this…

    Coincident with the 2014 acceleration, Nisbet et al. find a source shift to the southern tropics, where wetlands are concentrated (2). They hypothesize that record high temperatures in 2014 and the following years spiked wetland CH4 production. Such a wetland climate feedback challenges the commonly held view that wetland area rather than temperature is the main control of wetland CH4 emissions (although some wetland CH4 models are more temperature driven) (10). If natural wetlands, or changes in atmospheric chemistry, indeed accelerated the CH4 rise, it may be a climate feedback that humans have little hope of slowing. Although studies have demonstrated the potential for substantial CH4-climate feedbacks, they were expected to occur gradually, not reaching the magnitude observed by Nisbet et al. for decades (12).

    So notice the temperature reference. I’m not sure the authors realize the work of Yvon-Durocher et al. 2014, https://www.nature.com/articles/nature13164 which show a much stronger temperature dependence of CH4 emissions from wetlands with respect to temperature than had been thought. A 44:1 leverage of methane emissions; 1% rise in temperature means 44% rise in methane emission rates. I’ve been highlighting this work in my own Presentations for the past few years. It may help resolve why methane is accelerating; about half due to the expanding livestock, and half from rising temperature’s effects on wetland methane emission. The first cause we could presumably do something about, if McDonalds and Burger King cared. The second cause, as the paper says – we can’t do much about. Not good.

    • toddinnorway Says:

      Burger King is rolling out the all-veg Impossible Burger as we speak. Initial customer responses are very positive. Less beef produduction and consumption has many benefits for health of the consumer, health of the land and reduced GHG emissions. So we should do it anyway, even if it does not fix all the methane emissions.

      We need a portfolio of solutions. No single solution will ever be enough. Think ‘silver buckshot’ instead of ‘silver bullet’.


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