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Renewables in the USA

By Dave Elliott

The USA current generates nearly 15% of its electricity from renewables and they are still expanding quite rapidly, with wind at 66 GW and PV soon at 20 GW. This growth has mainly been driven by the simple fact that these options are getting competitive, although, despite continuing political uncertainties and delays, state and federal tax concessions, support schemes and production quotas have obviously also helped.

The long-term potential seems very substantial. The US National Renewable Energy Laboratory has claimed that the US renewable resource base was sufficient to support 80% renewable electricity generation by 2050, even in a higher demand growth scenario. It also looked at a 90% option, with 700 GW of wind and solar PV, which would require significant grid upgrades and other balancing measures:

However, as yet, there are no long-term targets for renewables and the path ahead seems tough. That is not because of lack of political vision. In his 2009 Presidential address Barack Obama said “the country that harnesses the power of the clean, renewable energy will lead the 21st century” and his policies on energy have at least partly been shaped by that conviction. Along with a conviction that climate change was real, human activity-related and in need of an urgent response.

Tragically though, it has not been easy to respond, with the Republican right opposing at every stage. Obama was unable to get a Climate Bill accepted – despite including a carbon trading system, which you might expect to appeal to free-market zealots. But, as part of the response to the recession, under the American Reinvestment and Recovery Act, he did manage to get a significant boost for renewables, via a £150 bn 10 year stimulus funding programme, including a series of loan guarantee schemes. They didn’t all work out. A lot of fuss was made about the $563 m the Obama administration offered in loan guarantees to solar company Solyndra, which then went bust. However, that paled into insignificance compared with the multi-billion dollar loan guarantee support given to new nuclear projects, some of which also failed to progress.

In backing nuclear along with renewables, and also clean coal, Obama’s approach was in effect bipartisan, with most Republicans backing nuclear, most Democrats backing renewables, and “clean coal” dividing loyalties. As he put it in his 2011 State of the Union speech, calling for 80% of US electricity to come from “clean” sources by 2035, “some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all and I urge Democrats and Republicans to work together to make it happen.”

That hasn’t happened. Indeed the splits have become if anything more entrenched. The result has been that, with the Republicans controlling Congress/Senate, Obama has had to resort increasingly to using Presidential Executive Orders to purse progressive policies, including adjustments to the Environmental Protection Agency’s rulings on emissions, with CO2 now included as a pollutant. The most significant recent initiative was his call for CO2 emissions from existing coal-fired plants to be cut by 30% from 2005 levels by 2030 via an EPA ruling. That fed into the USA’s joint announcement on emissions policy, alongside China, in late 2014: the US committed to a 26-28% emission cut by 2025. Subsequently, Obama has announced ambitious funding proposals for the 2016 budget – including a new $4 billion fund, dubbed the Clean Power State Initiative Fund, to help states comply with, or even exceed, the new draft EPA emission regulations:

The gains from this programme seem clear: the EPA says that “in 2030, the significant reductions in the harmful carbon pollution and in other air pollution, to which this rule would lead, would result in net climate and health benefits of $48 bn to $82 bn.” However so do the political costs: coal would be hit, even though the EPA stresses that “coal and natural gas would remain the two leading sources of electricity generation in the US, with each providing more than 30% of the projected generation.”

The US National Coal Council sees it very differently: “The existing fleet of coal-fired power plants underpins economic prosperity in the US. Coal-based generation has dominated US electricity supply for nearly a century. In 2013, coal again led US generation, at 39%. Low cost coal keeps US electricity prices below those of other free market nations. For example, in 2013 the average price of residential and industrial electricity in the US was one half to one third the price of electricity in Germany, Denmark, Italy, Spain, the UK and France. These price differentials translate into more disposable income for US consumers, and a competitive edge for US industry in global markets. If the existing coal fleet were replaced with the next cheapest alternative generating source, natural gas combined cycle power plants, a conservative estimate of the impact on the US economy would be a 1.5% drop in Gross Domestic Product (GDP) and a loss of 2 million jobs per year.”

The rise of shale gas has undermined coal use in the US to some extent (although that has meant it has been exported), and it has also undermined the economics of nuclear – leading to several old plants closing early and new projects being abandoned. With prices generally falling, renewables do not seem to have suffered quite so much so far, although the next couple of years could be tight:

Obama’s plans for further expansion are bound to be fought line by line by the Republicans. So we may be left with a continued rather pathetic stalemate. For example, it has already forced Obama to bypass a deadlocked Congress by using his executive authority to release $2 bn for energy-saving at federal government buildings, and new financing and training programmes for PV installations. As something of a symbolic gesture, he also installed solar panels (again) on the White House – those installed by Carter were removed by Reagan.

However, it seems inevitable that, longer-term, given its huge renewable resource, and indigenous technical expertise and technological élan, coupled with the increasingly obvious negative impacts of fossil fuel use, renewables will continue to expand in the USA. A new US Department of Energy report says that wind could supply 10% of US electricity by 2020, 20% by 2030, and 35% by 2050:  And a new report on solar from MIT says that the deployment of PV could and should be accelerated to deliver TWs of power in the years ahead in “a massive scale-up”:

The International Renewable Energy Agency’s new report on the USA says that it can increase the use of renewable energy in its energy mix from 7.5% in 2010 to 27% by 2030 (the same as the EU’s target), and in the power sector alone to almost 50%. There would be a fivefold increase in US onshore wind capacity, to 314 GW by 2030, and 40 GW of offshore (so far it has none). And by 2030 total installed solar PV capacity could reach 135 GW. Biomass offers the potential for an additional 46 GWe of power capacity, taking the total to 84 GW by 2030. There could also be an additional 18 GW in power generation from geothermal. But by 2030, 55% of all renewable energy in the US would be in the form of non-electricity energy use, i.e. bio-energy in solid, liquid or gaseous forms, or solar thermal or geothermal heat, for heating, cooling and transport applications, with the total use involving a 3- to 4-fold increase of renewables over 2010 levels. If biomass use on the scale envisaged was constrained, electric vehicles and heat pumps could play more of a role.

The report says that to reach these levels would need an annual investment in renewables of $86 bn between now and 2030 – $38 bn above business-as-usual. But it says this will result in annual savings of $30-140 bn by 2030 due to benefits resulting from reduced health effects and CO2 emissions. A bold green future. Given that China is in the game too now, it will be interesting to see if the US will rise to the challenge.

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