U.S. reaches ‘turning point’ in low-carbon growth

Source: Daniel Cusick, E&E reporter • Posted: Monday, February 8, 2016

The United States has reached a watershed in efforts to decarbonize its energy economy, setting records in 2015 for natural gas and renewable energy production, alongside rising investment in energy efficiency and the continued retirement of dozens of older coal-fired power plants.

Experts say the drivers behind the shifts, outlined in the “2016 Sustainable Energy in America Factbook,” stem from policy directives at the national and international levels, as well as technological revolutions in the gas industry and increasingly attractive economics for renewables such as wind and solar power.

“2015 clearly marked a turning point for American energy,” Lisa Jacobson, president of the Business Council for Sustainable Energy, said of the latest findings released yesterday.

“As we consider the post-Paris world, we should acknowledge that we’ve entered a new era here in the United States. We now have both the tools and the capacity to achieve carbon reductions and cost savings along with economic growth. Now our job is to continue to build on the progress we’ve made,” she said.

More than simply achieving carbon reductions in 2015, the United States saw power-sector carbon emissions drop to their lowest levels since 1995, according to Bloomberg New Energy Finance senior analyst Colleen Regan, a co-author of the factbook.

“And the net impact on consumers is negligible to positive as prices for electricity and fuel remained low by historic standards and customer choices expanded,” she said.

The factbook, a comprehensive snapshot of U.S. energy-sector metrics compiled by BNEF for BCSE, is intended to establish credible baseline knowledge about how the energy sector has evolved and helped shape the broader U.S. economy year over year.

Wide net of ‘clean energy’ sources

Among other things, BNEF analysts found that coal and gas are close to parity in terms of domestic electricity production. Coal accounted for 34 percent of all generation in 2015, while gas accounted for 32 percent.

Non-hydro renewable energy edged up to 7.5 percent of all generation last year, according to BNEF.

The sustainable energy factbook, while one in a string of high-level reports detailing the growth of the clean energy, efficiency and technology sectors, differs in some ways from its peer publications. That’s largely because the factbook is inclusive of resources like natural gas and hydropower, and technologies such as carbon capture and storage, that for many remain outside the bounds of “clean energy.”

But the factbook’s more inclusive approach in some ways allows for a fuller portrait of how U.S. energy markets are shifting, especially as electric utilities nationwide continue to seek low-cost, low-carbon alternatives to coal.

“The real story here is about what we all do together,” said Rob Gramlich, senior vice president for government and public affairs at the American Wind Energy Association.

“It’s not really about any one technology. It’s about rapid decarbonization and prices going down across these energy sectors, and that’s remarkable,” he said.

The analysis found that “clean, renewable sources of power now make up 20 percent of the U.S. plant stack, at 222 gigawatts,” a much higher figure than wind and photovoltaic solar claim by themselves, even as those two industries continue along phenomenal growth trajectories.

For 2015, BNEF and BCSE estimate that wind and solar accounted for a combined 103 GW of U.S. generation capacity, compared with 102 GW for hydroelectric and pumped storage facilities. New hydro, geothermal and biomass/biogas plants accounted for just under 600 megawatts of new build for the year, according to the report.

Solar poised to rise

Officials also noted that the U.S. economy grew at a faster rate in 2015 (2.3 percent) than energy demand (0.1 percent), proving that efficiency and demand-side reduction programs are having a substantial effect on the nation’s energy consumption profile.

Data show that gas and electric utilities spent $6.7 billion in 2014 on efficiency measures, up 8.1 percent from 2013.

“It doesn’t always grab headlines, but this report shows that energy efficiency is a steady contributor to a watershed year for clean energy,” said BCSE Board Chairman Mark Wagner, who is also vice president for government relations at Johnson Controls Inc.

While the 2015 snapshot shows significant year-over-year progress toward achieving a clean energy economy, some experts pointed to the report’s revelations about energy trends, especially over the past three to five decades.

Chris Mansour, vice president of federal affairs for the Solar Energy Industries Association, said solar power is poised for even greater growth over the next decade, as costs continue to decline and demand continues to rise for both utility-scale and distributed solar power.

Federal policies, such as the Clean Power Plan and the recent extensions of the investment tax credit for solar power and the production tax credit for wind energy, also bode well for the low-carbon energy sector going forward, Mansour said.