“That brings us right back around to all the bad news about renewable energy. It all comes down to policy and political will.”
The Renewable Energy Internet News is all abuzz over the bad news about renewable energy and energy storage. Among the concerns bubbling to the surface in the last week or so are:
(1) Renewables might not be doing such a great job of replacing fossil fuel capacity after all,
(2) Energy storage is fomenting yet another carbon emissions problem instead of solving one, and
(3) Renewables are making electricity rates go up, not down.
Ouch! Nevertheless, the fact is that renewable energy and energy storage are both here to stay. So, what are we going to do about it?
First, Admit You Have A Problem
The issue of fossil fuel replacement was tackled by a newly published study titled “Have fossil fuels been substituted by renewables? An empirical assessment for 10 European countries.”
To Read the Abstract and/or Purchase the Report:
Have fossil fuels been substituted by renewables? An empirical assessment for 10 European countries
The study looks at this problem: energy managers among the 10 nations in the study are coping with the intermittent nature of wind and solar by installing more fossil fuel capacity.
That’s more natural gas capacity, to be specific. The case for natural gas integration with renewables is pretty straightforward if your only goal is to ensure reliability when there’s a lot of wind and solar on the grid. In contrast to coal, natural gas power plants can hang out on standby mode when not needed, and rev up quickly when needed.
On the plus side, the study notes that an increase in natural gas capacity doesn’t necessarily correlate to an increase in fossils burned. Remember, you can build all the capacity you want, but in an integrated grid that new gas power plant is competing with wind, solar, hydropower and other renewables.
The problem will become more apparent as the global economy transitions to full electrification. Unless other measures are taken, that means natural gas capacity will also continue increasing. Eventually, the long-term result could be an increase in fossils burned for electricity.
As if on cue, last week the US company DTE Energy won approval to build a new $1 billion natural gas power plant that was vehemently opposed by clean power stakeholders. Here’s the rundown from Midwest Energy News reporter Andy Balaskovitz:
The Michigan Public Service Commission said DTE’s near-term forecasts showed a “significant near-term need for power” as it retires coal generation. The company retired 510 MW of coal over the past two years, and plans another 1,970 MW by 2023.
…Groups also say the decision puts Michigan on a risky trend of overbuilding natural gas plants over clean energy alternatives.
Of course, the sparkling green power generation sector of the future doesn’t necessarily need to rely on building more natural gas capacity. Another pathway identified by the authors is the use of bioenergy instead of natural gas to smooth out supply spikes in wind and solar, so there’s that.
The authors also note that shaving peak demand would help. In that regard, DTE’s long-term outlook underscores the importance of demand-side solutions:
The MPSC noted that demand-side alternatives and renewables “could potentially displace — not just defer” a second gas plant DTE has forecasted to meet its needs in 2029.
Then there are energy storage solutions, like pumped hydro for example. The energy storage solution opens up a whole ‘nother can of worms, though…
Second, Admit That Energy Storage Has A Problem
For the bad news about energy storage we turn to Vox reporter David Roberts’s latest article, “Batteries have a dirty secret.”
Roberts reports that “emissions are higher today than they would have been if no storage had ever been deployed in the US.”
Roberts takes an especially close look at a study of emissions related to bulk energy storage in the US from researchers with the Rochester Institute of Technology and Carnegie Mellon University, titled “Bulk Energy Storage Increases United States Electricity System Emissions.”
The study digs into the conventional practice of storing cheap energy (typically at night) and releasing it during peak consumption hours. The economic benefit is obvious — buy low, sell high — but according to the study, the result is an increase in carbon emissions as well as other pollutants. Here’s the rundown:
Although economically valuable, storage is not fundamentally a “green” technology, leading to reductions in emissions…We find that net system CO2 emissions resulting from storage operation are nontrivial when compared to the emissions from electricity generation, ranging from 104 to 407 kg/MWh of delivered energy depending on location, storage operation mode, and assumptions regarding carbon intensity…
Roberts emphasizes, though, that energy storage itself is not the problem. It’s just being used in ways that prioritize costs and profits, not carbon emissions.
The main takeaway from the article is that a stronger renewable energy policy will counterbalance storage related emissions and eventually cut into carbon emissions overall.
Third, Why Are Electricity Rates Going Up?
That thing about costs and profits leads us to that third bit of bad news, in the form of an op-ed by energy and environment writer Michael Shellenberger that appears in the Forbes under the title, “If Solar And Wind Are So Cheap, Why Are They Making Electricity So Expensive?” [ Asked No One when interviewing/ questioning the previous U.S. Administration on its ‘sell-out’ policy on Fossil Fuel “Bad” vs. Renewable Energy “Good” mandate(s).
Shellenberger begins with the proposition that all the good news about low wind and solar prices may give the general public the idea that their electricity rates will necessarily go down.
For obvious reasons (labor, overhead, insurance, profit margins, transmission and other infrastructure costs aside power generation, etc.) that’s not gonna happen, but for now let’s just go with that.
Shellenberger notes that the cost of wind and solar fell precipitously between 2009 and 2017 (yes, they did — here’s a solar example from 2015 and a wind example from last year), but some areas with the most wind and solar deployment didn’t see their rates go down. In fact, they went up:
…Electricity prices increased by 51 percent in Germany during its expansion of solar and wind energy from 2006 to 2016; 24 percent in California during its solar energy build-out from 2011 to 2017; over 100 percent in Denmark since 1995 when it began deploying renewables (mostly wind) in earnest…
After other possibilities, Shellenberger zeroes in on wind and solar. He cites German economist Leon Hirth, who crystal balled the situation back in 2013:
…Both solar and wind produce too much energy when societies don’t need it, and not enough when they do. Solar and wind thus require that natural gas plants, hydro-electric dams, batteries or some other form of reliable power be ready at a moment’s notice…
Hirth also cites economist James Bushnell of the University of California:
The story of how California’s electric system got to its current state is a long and gory one, [but] the dominant policy driver in the electricity sector has unquestionably been a focus on developing renewable sources of electricity generation.
The picture is a bit more complicated when you look at the other 49 states, though. EnergySage, an online solar marketplace backed by the US Department of Energy, takes a deep dive into the issue of rising electricity costs and finds more nuance.
That point is illustrated by the situation in Montana and the Dakotas, which EnergySage includes in the rates-going-up group. The three states also have fairly healthy wind energy profiles.
A recent rate proposal by the Montana-Dakota Utilities Company takes wind into consideration, but the Bismark Tribune takes note of additional detail:
The need for increase is mainly to do with infrastructure, including investments at the Heskett Station in Mandan, the purchase of the Thunder Spirit wind farm, transmission and substation build out and a new billing system. Hanson said, from 2010 to 2017, MDU will have doubled its infrastructure investment — $412 million in new energy production, $126 million in transmission, $142 on substations for distribution and $36 million for other administrative expenses.
As far back as 2005, the Tribune took note that North Dakota’s aging fleet of power generation facilities was in sore need of an expensive makeover, so there’s that.
For another angle on the topic of costs, take a look at the Energy Department’s deep dive into the the economic value of wind power.
What’s So Bad About High Electricity Rates?
Anyways, according to one school of thought, high electricity rates are actually a good thing because they encourage conservation, and when ratepayers invest in conservation their monthly bill will go down, not up.
That’s nice for electricity consumers with the wherewithal to invest in weatherization and other conservation measures, and who can change their habits to use less energy, but for various reasons a lot of ratepayers don’t have those options.
One solution is ratepayer assistance, which predates the advent of wind and solar. Renewable energy or not, energy costs have always been a big issue in policy making (see Oil Crisis, 1973, OPEC). Various forms of assistance have long been available to ratepayers, including rate subsidies and weatherization help.
That brings us right back around to all the bad news about renewable energy. It all comes down to policy and political will.
The bottom line is that if renewable energy is going to help save the Earth, then development has to accelerate at a pace that will push fossil fuels out of the power generation and energy storage markets, conservation and demand side issues must be addressed, and social policy must continue to play a role in ratemaking and assistance programs.
There has been a subtle policy shift in the US, but the transition to solar, wind and storage is still bubbling away through local policy decisions, state-level initiatives, and recent changes in state policy.
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