Renewable energy falling in price and becoming more readily available
Thursday, April 14, 2011 at 8:41 am
During a session about energy at the 2011 Sustainable Opportunities Summit in downtown Denver this week, a speaker said “the prospect of a hanging focuses the mind wonderfully.”
The hanging, in this case, is catastrophic climate change caused by burning fossil fuels, the major driver of change. Still, agnosticism prevailed as speakers from government, business and non-government organizations admitted to no single answer, either locally or globally.
“This state is unique because it has such high capacity for solar, for wind, natural gas, oil and geothermal—you can go on down the list of all the energy sources,” said Colorado Gov. John Hickenlooper. “You truly have to be agnostic.”
That includes coal, he said, and he said it would be “foolish” not to continue exploring the feasibility of sequestering emissions of carbon dioxide.
“What is going to change is the composition, the matrix,” he said. “We need to make sure we are relentlessly aware of all the risks and benefits, costs and rewards, that come from each of these energy sources.”
Hickenlooper also extolled natural gas, despite admitted environmental risks in extraction, because of its lower costs, the cleaner air from burning it compared to coal, and the greater security it would provide if more of the transportation sector is adapted to use it. Noting the $500 to $600 billion spent each year to purchase oil from foreign dictatorships, Hickenlooper said; “That’s not sustainable.”
At an earlier session, Hickenlooper’s chief energy adviser. T.J. Deora, director of the Governor’s Energy Office, said that renewables are now producing nearly a third of Colorado’s electricity, with the rest coming from coal and natural gas.
Aging coal plants, being fully depreciated, deliver cheap electricity, but Deora suggested the decision time is coming as to their replacement. “It gives us about 10 years to figure out what happens next.” That time, he said, may allow us to know whether – as natural gas boosters insist – we truly do have a 100-year supply. Too, we need to continue to learn how to better integrate renewables.
Renewables aren’t fully competitive yet without subsidies, he admitted, but he noted that solar prices have dropped 40 percent in the last two years, and reported that some analysts believe solar will reach grid parity – costing no more than fossil fuels – by 2017 or 2018.
“The reality is that all forms of energy are subsidized. Some are subsidized through tax credits. Some are subsidized through their externalities,” he said, citing the pollutants of nitrous oxide, sulphur dioxide and mercury, all of which are produced by burning coal and some of which are unleashed in the burning of natural gas. Modern methods can remove some or more of these pollutants.
If all subsidies – including environmental – were wiped out, the costs of wind and solar would be competitive with the newest coal-fired power plant in Colorado, Comanche 3, said Deora
That statement provoked a rebuke from Tisha Conoly Schuller, president and chief executive of the Colorado Oil & Gas Association. “It’s easy to sit in a conference room and say we should get rid of all subsidies for energy,” she said. The reality, she went on to argue, is far more complicated.
She admitted to “tradeoffs while we make our energy choices,” but called for a “thoughtful, reasonable, balanced and engaged conversation about energy.”
But Schuller did make the case for natural gas as both reliable and affordable. In the past, she noted, oil and gas prices rose and fell in tandem. But now, as oil prices rise, natural gas remains relatively inexpensive, thanks to several “shale plays” across the nation.
And finally, she noted a surging world population, now at 6 billion and headed to 9 billion by mid-century, with people across the world aspiring to a higher standard of living. Even now, 14 percent of Americans live at or below poverty levels, and 20 percent of their income goes to energy. Affordability will matter, she said.
Hickenlooper, speaking later, made a similar point. Energy availability is one of the most crucial ingredients for improving the quality of life in developing nations, he said. “That is progress. That is what everyone in this room wants,” he said. But in seeking to elevate the quality of life today, he added, the cost to future generations must be weighed.
James Newcomb, program director for the Rocky Mountain Institute, delivered a cheery note with a report of credible evidence that, with just a 25 to 30 percent cost premium, 80 percent of electrical generation can be delivered from renewable sources by 2050. That indicates technology is not the hurdle.