Tag Archives: Economic Impact

Transitioning to Renewable Energy Gains Momentum

The clean energy transition continues to gain pace.

Wind Power Statistics

The state of Texas now ranks first in the nation for installed wind capacity and number of turbines, according to the US Energy Information Administration. (EIA, July 2019)

Texas ranks first in United States installed wind capacity and number of turbines from US Energy Information Administration

At least one installed wind turbine can be found in 41 states. Naturally, as the saying goes, everything is bigger in Texas: and Texas has more than 13,000 turbines and the most installed wind capacity at 24.2 gigawatts (GW).

And as you’d expect, turbine technology has advanced. Larger turbines provide more wind power density, which means more power capacity per individual turbine.

The evolution of the wind turbine over time from BloombergNEF

Other states transitioning to renewable energy with wind production and turbines are California, Iowa, Oklahoma, Kansas and Illinois. States with the highest turbine heights are those that have adopted renewable power generation more recently and are taking advantage of the larger turbine efficiency. Those with turbines above the national average in height include Connecticut, Rhode Island, Ohio, Michigan, and Missouri.

Evolution of wind turbines show the promise of transitioning to renewable energy with wind power density

Texas Keeps Transitioning to Renewable Energy Through Incentives for Solar and Wind

A new law in Texas (known in the state’s economic development sector as the “Chapter 312 abatement program” – from H.B. 3413) extends the deadline for wind and solar generation property tax abatement programs. The economic development programs were set to expire on Sept. 1 of this year. The new deadline is Sept. 1, 2029. The abatements will continue to boost solar and wind development in Texas. (Solar Industry Magazine, August 2019)

The below chart shows a sample project tax impact with Chapter 312 abatements, and why this is a boon for renewable economic development in states like Texas which have no income tax and rely heavily on property taxes:

Texas Chapter 312 Abatement Tax sample showing positive economic development impact of renewables

Renewable Capacity Exceeds Coal in US

As coal generation has declined due to several market forces, renewable energy has surged—for the first time producing more power in the US than coal. (Yale Environment E360 Digest, June 2019)

The Federal Energy Regulatory Commission (FERC) reported 21.56 percent of the nation’s generating capacity as of April 2019 was from solar, wind, hydropower, biomass and geothermal.

Coal continues its 40-year downward trend, accounting for 21.55 percent of generation in the US. Natural gas continues to grow to produce more than 44 percent of the US total energy capacity as of last April.

FERC forecasts renewables could account for one quarter of the nation’s capacity in just three more years.

The Duck Curve Part 2: Smoothing Out the Curve

 As mentioned in our previous post “The Duck Curve Part 1: The Challenges of Demand Flexibility,” the Duck Curve is a result of when large amounts of renewables, particularly solar, are added to a power system. Now, let’s build on what we learned in Part 1 and discuss ways in which we can possibly “smooth” out the Duck Curve.

1. Improving Power System Flexibility

When a Duck Curve begins to take shape its important to start looking at the overall “flexibility” of the power system that is responsible for generating electricity. We define power system flexibility as the ability of a generating or storage technology in a power system to ramp up and down to meet demand.

If a technology is flexible (think batteries or some advanced thermal technologies) then that equipment could turn on and off and cycle power outputs up and down extremely fast.

If a technology is inflexible (think coal, nuclear or large gas plants) then there is no magic “on/off switch.” With inflexible technologies you have to literally wait for the science of physics & thermodynamics to do their work first to get your plant to a point where you can control your power output.

Turning off and on quickly and fluctuating generating output up and down is operationally and economically unviable. Inflexible or traditional power plant technologies attempting to operate this way will cause equipment to be damaged and emissions to increase. The excerpt below from Part 1 emphasize the challenge that system inflexibility creates;

“Plant operators are forced to keep inflexible plants that run on coal, oil, and gas operating all day, still burning fuels and producing emissions even though there is no demand need because they have to be ready to ramp up their generation when the sun goes down and the demand goes up”

So, if a system is made up of enough flexible technologies then plant operators can properly utilize the renewable energy .Which means no wasting (often called “curtailing”) of energy that was generated from renewables. This is because flexible technologies are able to turn completely off and then quickly turned back on to meet the evening ramp caused by our Duck Curve. If the goal is enabling renewables while flattening the curve, a power system could add advanced storage systems and modern cleaner thermal technologies.

2. Storing as Much Excess Energy as Possible

Though the deployment of an adequate amount of large storage assets isn’t economically viable today, it has a vital role to play in smoothing out the Duck Curve.

Even states leading the charge in energy storage – like California – are struggling with the economies scale in addressing the challenges the duck curve is causing. According The University of Michigan 2018 U.S Grid Energy Facts Sheet “California leads the U.S. in energy storage with 220 operational projects (4.2 GW), followed by Virginia and South Carolina”. This is not to say that California must stop investing in storage, in fact as storage assets become more cost effective over time, California should add more to reap the benefits of the energy produced in the day. Then, as the sun goes down discharge that stored energy to offset the afternoon ramp.

benchmarks of battery storage for power system flexibility

As you can see from the above graph from GTM, storage will continue to become more and more cost competitive and will play a vital role in high renewable power systems of the future.

3. Improving Energy Efficiency

Everyone should play a part in helping to achieve 100% renewables while flattening the Duck Curve. That means re-thinking the old ways of how we handled the idea of energy efficiency.

One example of how an entity can play their part comes from the Alabama Smart website. Author Daniel Tate writes that one of the more viable methods for smoothing out the duck curve is for utilities to commit “to the storage of energy generated by solar and wind, instead of immediately sending that energy directly to the grid.” He goes on to explain, “The energy can then be ‘dispatched’ when it’s needed and would almost definitely flatten the curve.” (Energy Alabama, May 2017)

Another solution targets energy efficiency in the building sector. University of Berkeley Lab physicist Dr. Mary Ann Piette notes that buildings use more energy than any other sector and so they produce more greenhouse gases. The solution she and her colleagues are developing technology to see energy use at the equipment or appliance level—rather than at the household level as we do today. With this innovative technology, we enable “smart buildings” – meaning that the entire building would communicate with the power grid and respond to generation and price signals automatically. Systems could self-regulate: lower air conditioning use after sunset, recharge electric vehicles during peak wind generation, and so on.

Dr. Pette notes, “The belly of the duck means that there is a lot of electricity available, and it’s becoming cheaper in the middle of the day. For decades we’ve been concerned about time of use, and we tried to use less in the middle of the day and more at night. But we’re actually now very interested in using more during certain times of the day.” (Berkeley News, January 2018)

The Duck Waddles On…

The challenges of the Duck Curve will have to be addressed over time – and we will find that facing these challenges gets easier as both generating and storage technologies continue develop and improve. In the here and now, however, we can make incremental steps such as adding flexible technologies or by avoiding the building of traditional inflexible power plants. Such steps should all be made in parallel with finding ways to reduce curtailing (wasting) of plentiful energy during key hours – by focus on technologies at the building level, for example.

We must then take all of these incremental steps and execute them in combination with increased deployment of energy storage and new energy efficiency programs.

Only then can we smooth out the Duck Curve.

The Duck Curve Part 1: A Challenge of Overbuilding Renewables

Part 1 of a 2-Part Series
Read Part 2: “Smoothing Out the Curve”

What is a Duck Curve, and what does it have to do with renewable energy?

One of the more interesting terms unique to the energy industry is the ‘Duck Curve’ – when taken at first glance one wonders what a duck, an electric grid, demand flexibility, and renewable energy all have in common.

The ‘Duck Curve’ is a term used to describe the shape of the demand curve (which displays how much electricity is needed from the power grid to meet fluctuating customer demand throughout a 24-hour period) when a large amount of renewables, particularly solar, are part of the power system.

To understand where the Duck Curve graph comes from, it’s important to know what factors go into shaping it. Let’s start with the concept of Net Load. Net Load is the difference between the amount of electricity we predict to use and how much electricity we end up producing from renewables. Thus, the Net Load will tell us how much power needs to come from traditional power plants; like those running on coal, gas, nuclear, etc.

The below graph comes from California Independent System Operator (ISO)

The Duck Curve graph shows the need for energy demand flexibility.

(Chart from Energy Alabama, May 2017)

How does the Duck Curve happen?

Look first at the line in 2012, above – this line shows a more traditional demand curve. To be clear, this is what energy system operators in the past would use as a baseline forecast when scheduling the amount of electricity their power plants would need to generate every day.

Before the introduction of variable resources (like renewable energy), the forecasted Net Load was fairly accurate and easy to predict. Over the years, however, the amount of renewable generation has increased significantly and the ability to forecast and predict demand has become increasingly difficult. The need for demand flexibility is higher than ever. This is clear when observing the Net Load for other years on the above graph.

The decrease in Net Load for 2014 and onward is a result of introducing of more and more renewables (particularly solar) into the system. You’ll immediately notice that there is minimal, if any, of the load that needs to be met by power plants during the middle hours of the day. However, as the sun goes down and evening demand begins to increase (people going home, cooking, turning on their TVs, charging their phones, cars, etc.) there is a tremendous amount of strain on the system as plant operators must ramp up all available power plants to keep the lights on.

Still don’t see a duck? How about now?

Duck superimposed on a duck curve

(Chart from Berkeley News, January 2018)

The shape of the power demand curve has changed to the sinking curve in the middle of the day because more power is being met by solar or wind generation. As a result, less power is needed from utility fossil fuel or nuclear power plants as the sun shines and the wind blows.

On the flip side, as we get into the evening hours, more power from coal, oil, gas and nuclear plants is required—and required quickly—to ramp up to meet peaking customer demand as the sun goes down.

Why is this steep ramping every day a problem?

If we stick with the California ISO example from earlier, we see that California over the last decade has been, hands down, the leader of solar installations in the U.S.: as a whole, the state surpassed 11.2 GW of installed solar capacity by the end of 2017. Introducing this large amount of solar energy is what causes the “Duck Curve” along with the evening ramp-up challenges utilities face when the sun sets each day in states like California.

The key here is to keep in mind that traditional power plants (those running on fossil fuels) are not very flexible and cannot just be “switched on” like a light switch every evening to meet this increased demand.

The end result? Plant operators are forced to keep inflexible plants that run on coal, oil, and gas operating all day, so they’re still burning fuels and producing emissions in order to be ready to ramp-up their generation when the sun goes down. This inflexibility is why California’s traditional fossil fuel plants are forced to run as much as they are in spite of all the solar.

This is the solar power dilemma that California is facing. This same challenge is seen in other places, like Hawaii, where a large amount of solar generation has been installed into a power system that is made up of inflexible fossil fuel plants.

Drilling down by the hour: how power is generated to meet customer demand.

People use the most electricity from 6-9 a.m. and 2-7 p.m.

When you think about this, it makes sense because most households need their homes warm in the winter and cool in the summer when they are preparing for work or school from 6-9 a.m. The second peak is when they return from work and school between 2-7 p.m. Most businesses and plants require the bulk of their power during the day, so residential demands are dropping off as solar input is going up.

Traditional oil, gas, and coal power plants are cycled up and down throughout the day to meet demand. It puts wear and tear on the plant equipment and adds pollution to the environment. Some may say “just add storage” – and while yes, some of this commercial power storage technology does exist, it has not progressed to a point that it solves all the problems. Given the current technology of storage as it is, it doesn’t make economic sense to install at a scale that would be necessary to cover the gap.

The Duck Curve highlights how, when we add solar and wind energy to the mix, we must rethink how we meet fluctuating demand in the smartest way possible. The goals we must shoot for are

  1. keeping energy costs affordable,
  2. maintaining system reliability and
  3. minimizing the need for fossil fuel power generation and resulting environmental effects.

Continue reading in Part 2, where we explore some steps we can take to smooth out the Duck Curve.

Green Initiatives that Benefit the Economy: How US States and Cities Fuel Job Growth with Renewables

The accelerated closure of coal plants across America fuels a new era of green initiatives, clean energy production, investment, and jobs.

Economic Impact of Green Initiatives

Last year more than 20 coal plants, representing about 16 Gigawatts of power, either switched to natural gas or shuttered their doors altogether due to cheap gas and renewable sources putting them out of business. An additional 4 Gigawatts of coal facilities are expected to close in 2019 and the trend is only increasing in that direction. (Taken together, the closures are the equivalent of powering 14.5 million homes).

At the same time, solar installers and wind turbine technicians have become So what do all of the coal plant closures actually mean in terms of new job opportunities and greater energy savings for American consumers? State by state, the evidence is becoming clear.

Statewide Green Initiatives

Tennessee

The Tennessee Valley Authority voted in February to shut down two expensive and unreliable coal plants in Kentucky, the heart of coal country. One of those facilities, Paradise Fossil Plant, is 49 years old and formerly one of the national’s largest coal-burning plants, though today it is only operational about 10% of the time. The cost to upgrade the two plants? About $1.3 billion. “Let me tell you what this decision is not about—it’s not about coal. This decision is about economics,” said the TVA’s CEO, Bill Johnson, whose utility closed its first two coal facilities in 2017 and has since been phasing in natural gas with renewables that save it around $1 billion annually while also generating clean energy jobs.

Colorado

The Colorado Energy Impact Assistance Act making its way through the state legislature seeks to provide support and lessen the financial impact of coal plant closures on workers and electricity customers alike. Utilities like Tri-State and Xcel Energy, the largest energy provider in Colorado, have scheduled the closure of several large coal plants, adding to the six Xcel plants that were already shuttered or retrofitted to run on natural gas by 2017.

New Mexico

In New Mexico state legislators in February advanced a bill known as the Energy Transition Act that would create thousands of new jobs in renewable energy while providing job training and more than $40 million in assistance pay to plant and mine workers where coal facilities are shutting down. The measure earned the backing of the Public Service Company of New Mexico, the state’s biggest electricity provider, despite the utility’s historic dependence on coal. And New Mexico’s secretary of economic development, Alicia Keyes, said the bill signaled “a progressive, and responsible, thoughtful transition—especially with regards to economic development and creating green energy jobs.”

Arizona

The 2.25 Gigawatt coal-fired Navajo Generating Station, an old facility located on tribal land in the Four Corners area of the state, is due to close later this year. And in Illinois, a new bill known as the Clean Energy Jobs Act aims to power the state using 45% renewables by 2030 and 100% by 2050, while also creating a network of training centers to prepare workers for the coming wave of clean energy jobs.

Illinois

In the case of Illinois private investment in renewables is expected to generate more than $30 billion in the state over the next decade and power more than 5 million homes with carbon-free electricity. Already 1 in 50 workers in Illinois are employed in the clean energy sector, which boasts some 120,000 jobs according to the Illinois Clean Jobs Coalition, making it a proving ground for the employment and profitability potential of the renewable energy economy.

Regional Green Initiatives

Montana-Dakotas

– Also in February, Montana-Dakota Utilities announced the closure of several coal-fired plants in Montana and North Dakota, because they were “no longer cost-competitive,” according to the utility’s president, Nicole Kivisto.

Leading states like Texas, Oklahoma and Iowa are already showing how this is being done with wind power, while California, Arizona and Nevada are among the fastest growing solar energy producers. From both a business and a community perspective it makes smart economic sense to create jobs, reduce energy costs to consumers, and improve grid security. But it’s taken the widespread market closure of coal plants to reveal why gas and clean energy are definitively in—and why coal production is out. More than three-quarters of Americans now think it’s possible to build a new energy system that prioritizes renewable energy and creates greater choice.

In region after region, and study after study, strong numbers associated with the renewables market continue to bear out. Last year, for example, The Hill Group released a report showing that an increase to 12.5% renewable energy sources in Michigan would generate $3.8 billion in gross economic impact by 2019, translating to more than 20,000 job-years and some $1.4 billion in employee paychecks. Going further, if the state upped its output to 15% renewables by 2021, the economic impact would scale to $6.3 billion, reaching as high as $10.3 billion by 2027 with 30% renewables production in the state.

Local Green Initiatives

Perhaps most striking is that it is the free market itself—a combination of entrepreneurial competition and consumer choice—that is getting us there. As states recognize the numbers, they have responded with robust investment and policies to back them up; both New York and Colorado, for instance, have announced goals to produce 100% clean energy by 2040.

At the same time, cities are realizing that they can take the lead. A case in point is Philadelphia, which will create lots of jobs with its new 70 Megawatt solar plant—a facility seven times bigger than any renewable energy project in Pennsylvania—while supplying the city with one-fifth of its energy needs and lowering consumer energy bills at the same time. “This will create economic opportunities for local companies and workers, and family-sustaining jobs for the future,” said Philadelphia’s Mayor Jim Kenney.

Making the Case for Green Initiatives

With renewable energy becoming a powerful economic engine of the 21st century, utilities, cities and states are realizing it’s in their interest to help speed the transition—which is why they’re already generating and sharing in the job growth and prosperity.