Thursday, October 12, 2017

Report: National energy mix forecast bright for renewables and gas, not for coal

Renewable energy makes an increasing part of our national energy mix, and a data and chart-laden report from Standard & Poor's Global says the trend is likely to continue. "Although Washington is sending mixed messages on renewables, states are likely to continue encouraging their use, especially as the price of renewable power decreases," says the report, which contains data for each state and serves as an excellent resource for any reporter writing about energy trends. Because of a pro-coal administration, renewable energy use may not expand as sharply in the near future, but it will still likely rise.

One reason is market forces. Many utilities are buying power from wind farms (or buying the wind farms outright) because it's cheaper. Solar is on the rise too: in 2016, 79 percent of added renewable energy capacity was for solar, though it makes up only 34 percent of the overall renewable energy mix. 

Another reason for the increasingly popularity of renewable energy is state laws. In 32 states, three territories, and the District of Columbia (but not the federal government) utilities are required to sell some electricity generated by renewable power. And federal tax credits have helped wind power-generated electricity to quadruple in the U.S. between 2001 and 2014.
What's on the horizon? Despite the Trump administration's ambivalence about renewable energy, "as long as the marginal cost of renewable generation remains negligible, federal efforts to revive languishing coal and nuclear assets may prove fruitless," the report says. But the report has a little good news for coal, whose main competitor is gas: "According to the U.S. Energy Information Administration (EIA) annual energy outlook (Jan. 5, 2017) a modest recovery of natural gas prices from 2016-2020 will create favorable economics for electricity generation from coal vis-√†-vis electricity generation from gas."
The make-up of the national energy mix. (S&P graphic; click on it to enlarge)
Gas will probably overtake coal permanently, but because of the administration's withdrawal of the Clean Power Plan, it'll likely happen by 2035 instead of 2030. "Similarly, renewable generation starts to converge with, but does not overtake, coal generation by 2040. This, of course is a consequence of the gradual retirement of coal assets, which we expect to occur as a result of shifting economics," the report says.

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