Friday, December 12, 2014

Energy Efficiency & Renewables... Good signs for both.

In one recent edition of the New York Times, there were two very positive articles on energy efficiency and improving the cost/kwh of renewables.  The Monday, November 24, 2014, issue featured "Good News on Energy," by Ralph Cavanagh of theNatural Resources Defense Fund, and "Solar and Wind energy Start to Win on Price vs. Conventional Fuels," by Diane Cardwell,

From Cavanagh, peaked energy use occurred in the US in 2007 and has trended downward since with a small increase in 2013.  And, economic growth is increasing more rapidly than the growth in energy usage because technology is making energy sources more efficient.  The LED light bulb is a good example.  Improvements over the last 40 years have done more to meet US energy needs than the combined contributions of oil, coal, natural gas and nuclear power.

Electricity consumption has decreased since 2000 despite the introduction of new consumer electronics.  Moreover, oil consumption by homes, businesses and vehicles is down 12% since the peak in 2005.  June, 2013, began a 12-month period in which the combined usage of renewables exceeded hydroelectric power.  More than 12% of our energy supplied comes from renewables and that category is growing faster than the others.

In her article, Cardwell confirms that the cost of providing electricity from wind and solar has dropped significantly in the last five years, so much so that in some markets renewable generation is now cheaper than coal or natural gas.  Several utility companies in the Great Plains and Southwest where wind and sunlight are abundant have signed power purchase contracts, known as "power purchase agreements," for solar and wind at prices below that of natural gas.

According to Lazard, an investment banking firm, the cost of utility-scale solar energy is 5.6 cents/kwh with wind as low as 1.4 cents/kwh.  Without federal subsidies that are up for renewal by Congress in 2016, solar costs are about 7.2 cents/kwh and wind would be 3.7 cents/kwh.  Natural gas is at 6.1 cents/kwh on the low end and coal is at 6.6 cents.

Both renewables and fossils have limitations.  For renewables, the wind has to blow and the sun has to shine as electrical storage technology needs a break through.  For the fossils, there are regulations and costs due to carbon emissions pollution.  One can expect this hybridization of fossils and renewables to continue for a considerable period of time.
Minor edits: 12/17/2014.

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