The Obama administration painted a pretty picture Friday of what the U.S. would look like if a clean energy “revolution” took hold. There’s just one big problem: the low cost of natural gas.
Clean energy technologies “are already making a big impact and are easily visible: wind towers dot the landscape, solar panels sprout on rooftops, LED [light bulbs] are on every hardware shelf, and the latest [electric car] models can be seen on many neighborhood streets,” the Energy Department said in a report released Friday called “Revolution Now,” showing how renewables are becoming cost competitive with fossil fuels.
But the fact is, many utilities and related companies have been investing in their natural gas hardware, with new gas-fired power plants and pipelines to supply them. The Energy Department’s revolution report says solar is becoming more cost competitive with natural gas and coal. But the resources are not quite there yet.
In addition, wind and solar are not being counted as baseload power facilities, in which power can be produced 24 hours a day, seven days a week, with minimal interruption. Electric storage devices, such as big batteries, are seen as the key to make renewables baseload resources. But the devices are expensive and are not widely deployed without mandates and subsidies.
Meanwhile, natural gas is out-competing most other fossil fuels such as coal, wind and even nuclear. The Energy Information Administration recently reported that natural gas, whose price is at record lows, has surpassed coal this year as the leading producer of electricity in the United States. Although renewable energy is on the rise, fossil fuels still dominate the U.S. as the primary source of energy.
The former head of the nation’s electric utility regulator, Jon Wellinghoff, told Bloomberg in an interview earlier this week that it is a mistake for utilities to be investing so heavily in natural gas and warned companies not to go down that route without making investments in renewable energy and electric storage devices.
“These utilities are taking a risk that these will be stranded assets that ultimately their shareholders will have to pay off,” Wellinghoff said. “We will see regulators being more critical of these asset decisions as prices of renewables continue to go down.”
Wellinghoff ushered in several landmark regulations when he was chairman of the Federal Energy Regulatory Commission during President Obama’s first term. Several of the regulations environmentalists have hailed for making it easier to integrate renewables onto the grid.
Wellinghoff had outraged power plant owners when he became chairman when he foresaw the end of large “central station” power plants and a move to small distributed power plants. He then pushed through a rule that would limit the need for power plants, called Order 745, which power plant firms fought tooth-and-nail. The Supreme Court is now weighing that order and will decide next year if it stays or goes.
The Energy Department report was released to help demonstrate the improvement of solar and wind in terms of price and availability and to push back against critics of clean energy.
“As the federal government and industry made long-term investments to support those technologies, some critics became impatient, claiming a clean energy future would ‘always be five years away’,” the agency says. “Today, the clean energy future has arrived.”
The agency said it released the report ahead of the president’s trip to Paris in two weeks, where he plans to sign onto a deal being negotiated to limit global emissions from fossil fuels. Many scientists say the emissions are causing the Earth’s climate to change, resulting in more extreme weather events, droughts and coastal flooding.
