Comments due by March 18, 2017
When President Obama first took office in 2008, it was hard to imagine how solar and wind would ever stand on their own as viable alternative sources of energy. Today, solar and wind are so price-competitive that players in the renewables industry were among the few that could afford to be cavalier about who won the U.S. election.
“The increasingly favorable economics of renewables are more important than the presidential election’s impact on the industry, in our view,” says Stephen Byrd, a senior analyst with Morgan Stanley. “Wind and solar are price-competitive in many parts of the U.S. It’s the economics and not the politics that’s driving the use of renewables.”
Over the past seven years, the cost of wind power has dropped from $60-$100 per megawatt-hour (MWh) to around $15-$25/MWh in the middle third of the U.S., and for large solar installations, it’s gone from $100-$300 to $40-$70 per MWh. Wind power is currently the cheapest source of energy in the middle third of the country, with its all-in cost of $15-$25/MWh, comparing with the $55-$65/MWh for a new natural-gas-fired plant.
Improving Economics
Driving their growing competitiveness are improvements in wind and solar technology, as well as some technical efficiency gains. Product Tax Credits, passed by Congress in 2015, will now provide the next bridge to ever-improving solar and wind economics going into 2020, although Morgan Stanley’s analysts argue in a recent report that neither depend on tax credits for survival.
“By the next decade, we project that wind and solar will be the cheapest resources in certain parts of the country, without any subsidies,” they state in the report. “Even without the Production Tax Credit, wind would be cheaper than gas-fired power by a wide margin. And by 2017, we project that large-scale solar projects in Texas will require revenue of about $45/MWh, lower than that required for a natural-gas-fired power plant.”
Changing Political Winds
President-elect Donald Trump has yet to lay out a comprehensive energy policy, although his comments during campaign speeches reveal his position on climate-change regulation. In May, he told audiences in North Dakota that he was opposed to the Obama Administration’s regulations “that shut down hundreds of coal-fired power plants.”
On the same day, he added: “We’re going to rescind all the job-destroying Obama executive actions, including the Climate Action Plan. We’re going to cancel the Paris Climate Agreement and stop all payments of U.S. tax dollars to UN global-warming programs.”
Analysts say it isn’t clear whether a new president can cancel U.S. signatory to the Paris Climate Agreement. But the climate-change views of Trump’s coming appointment of the ninth Supreme Court Justice could be crucial, should pending legal challenges to the Environmental Protection Agency’s Clean Power Plan ever reach the high court.
Yet, even the failure of the Clean Power Plan wouldn’t slow the growth of renewables, according to the Morgan Stanley report. “Given the favorable economics relative to coal-fired generation of wind power in the middle third of the U.S.; solar in the West and Southwest U.S. and gas-fired generation throughout most of the U.S., we view the impact of the EPA Clean Power Plan as being relatively modest,” says the report.
(Morgan Stanley)
9 comments:
The President's ideas on climate change and environmental protection are concerning. It is helpful that green energy is becoming price competitive and I do think that it won't be long before it is the most price efficient. In a way it already is. The problem with institutions and politicians is that they assign value in singular dollar terms, based almost always only on direct cost. If we factor in that renewable energy has the ability to use its own generate energy to produce more, then the marginal costs of green energy would actually be declining. High research and implementation costs offset this in the present, and present bias comes into play when those in power make decisions. Not only that green energy is cheaper, but fossil fuel costs are not accurate when we are not accounting for the externality costs on the environment, infrastructure, healthcare, etc. Green energy becoming 'per-unit' cheaper than oil and gas is the only hope for progress, as too many are blinding by short-term profit.
Let us not forget that the current POTUS had once stated that, ”The concept of global warming was created by the Chinese in order to make U.S. manufacturing non-competitive.” That is a crazy thought. We have a President who thinks that climate change is a hoax, and has promised to pull out of the Paris Summit. And the current head of the EPA has long been a critic of the EPA, and is in cahoots with the oil companies. But on a brighter side, moving towards green technology is the next logical step for most companies. And optimistically most companies have made great investments in green technology. For instance, yesterday my friend and I drove from New York to North Carolina in a Ford Fusion Hybrid car, and we only needed thirty dollars worth of fuel. It was a 550-mile journey and we barely used half of the fuel tank. That is almost absurdly good, and the car had the features of most modern cars. I know for a fact that our dependency on oil is something we cannot just get rid of, but if companies push towards more green technology, it will be a step towards the right decision.
Tasfin Hossain
I think that wind and solar energy sources are one of the best sources of energy that money was invested in. Not only does it show that green economics is becoming more important to the society and politicians but also it will benefit the environment after years and years of using bad energy sources that led to the pollution problems we are facing with today. Not only are we using the cleaner energy sources as everyday sources of energy for many people to use but we are also innovating and trying to make logistics sector more green too with all the hybrid cars being created. I believe that yes at first the clean energy sector was at a very high price point however it makes sense that with the ease and innovation in technologies the price was driven down and became much more affordable. I think that our current president also is very old fashioned and blames jobs being lost on the clean energy sector and wants to revive that sector however he is not really thinking of the consequences for the next generation like the problems that will arise and how it will just create more pollution for the next generations to clean up.
CAN KARAKO
The first half of the article makes me very optimistic about the future for clean energy, specifically the statement of solar and wind energy become more affordable in the future. If these projections come more people that can afford electricity and more consumers switching over to solar and wind energy. The switch to solar and wind energy will cause the United States to be slightly more environmentally friendly. We often hear negative news about the industry over positive improvements like, the decreasing prices of clean energy. However, the last third of the article made me worried. After making these positive projections the uncertainty of the United States role in the Paris climate agreement is somewhat a step backwards. Uncertainty, can not only lead to worry from the United States consumers but also can reflect on the economy. The past has shown that uncertainty makes the economy fluctuate and my concern is what would happen to the working class
Victoria Viguera
When methods of clean energy was introduced, it was clear that these methods were going to costly than gas or coal. With the policies that were enforced through the Obama administration, we have seen clean energy costs get cut in half. This is even more incredible given that there are no subsidies involved. If this does not prove to consumers that clean energy is the better route than I am not sure what would. Unfortunately, with the new administration, the future for these methods could be dimmed. Clean energy is one of the many solutions to climate change, and so if the new president is not for putting an end to climate change he will not continue with clean energy. At this point we can only wait and hope that clean energy is given more importance.
As technology becomes more advanced, it makes the production of renewable energy more cost efficient. As we continue to invest into these industries, we truly learn how to harness these energies in efficient matters that could even make them profitable forms of energy. Renewable energy is the way of the future. Many politicians speak about it all the time. It becomes a big discussion because cleaner energy sources like wind and solar are the ways of the future. We cannot afford to continue to rely on fossil fuels or the environment will continue to diminish. These types of clean renewable energy need to be focused on. As a society, we need to keep investing in renewable energy sources in order to preserve our future. However, with some of the proposals President Trump has, it seems that we are in a quite scary situation. Renewable energy needs to be a main focus in the way of producing today's energy; globally.
Nick Arciszewski
I believe that with technology, renewable energy can be cost efficient. I think that being green is the way to go and that this is a political issue that is not being addressed. It is stated that renewable energy will generate 80 percent of the energy by 2050. This could potentially reduce water use by 50 percent. President Trump needs to focus and establish a US long term clean energy program to continue the success of this.
http://www.ucsusa.org/clean_energy/smart-energy-solutions/increase-renewables/renewable-energy-80-percent-us-electricity.html#.WNGFXxLyuu4
Renewable energy has always been controversial. Personally, I am a huge advocate of renewable energy and cutting down on greenhouse emissions. However, wind power is a point of major concern due to the fact that it possibly can cause more harm than good. The building of wind turbines often hurts the environment more than helps it. Many wind turbine sights disrupt the ecosystem they are being built in. Also, the metals and materials used to build them are not environmentally friendly. On an economic level, wind turbines are also costly to maintain over time. They often have major malfunctions and require a lot of maintenance as well. In my opinion, solar power is much more environmentally friendly to build and maintain, as well as economical.
To address the issue of the new president, we are clearly facing major problems with climate related issues in the next four years. The president is dismantling the cabinets that deal with climate issues and the environment... most recently he is shutting down NEPA. As citizens, we must remain aware of these environmental issues and deal with them ourselves. If our president will not address them, then it is our job to address them for the sake of our planet.
Also, with the Paris Climate Agreement and other climate agreements such as the Kyoto protocol, I always wonder who is enforcing these agreements and what the consequences are to not following it. If president trump doesn't want to follow it, then he simply will not. Nothing is really in his way to stop him, which is upsetting.
The discussion about renewable energy and climate change is a controversial topic as our country transitions into a control under the new POTUS. As many know, Trump has not been supportive of green efforts, even going as far as to call climate change an international hoax. It is unfortunate that corporations are not all taking advantage of the benefits of renewable energy sources, but some are making efforts towards greener technologies. It is my hope that larger corporations can make their own "green" efforts by utilizing green technology and recognizing the cost benefits these assets have. I also hope that the current administration does not stick to their plans on backing out of the Paris Climate Agreement. Taking steps backwards will be detrimental to our environment.
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