Guest essay by Eric Worrall
According to Forbes, plunging renewable costs is a profitable opportunity for the Federal Government to finance renewable energy at no additional cost to consumers, but they should make sure the market treats renewable energy “fairly”.
Plunging Renewable Energy Prices Mean U.S. Can Hit 90% Clean Electricity By 2035 – At No Extra Cost
Energy Innovation: Policy and Technology
We are a nonpartisan climate policy think tank helping policymakers make informed energy policy choices and accelerate clean energy by supporting the policies that most effectively reduce greenhouse gas emissions.
Silvio Marcacci Communications Director
Renewable energy has historically been considered too expensive and too unreliable to power our grid, but new research has overturned that trope for good. Plummeting wind, solar, and storage prices have fallen so fast that the United States can reach 90% clean electricity by 2035 – without raising customer costs at all from today’s levels, and actually decreasing wholesale power costs 10%.
Building a 90% clean electricity system by 2035 would catalyze massive economic growth that helps pull the U.S. out of the COVID-19 recession by supporting more than a half million new net jobs per year, injecting $1.7 trillion into the economy, and recharging domestic manufacturing. Technology-neutral policies can reach a 90% clean power system, help energy developers and investors prosper, and pave the way for technologies of the future.
Fast-falling renewable and energy storage costs have changed this outlook – clean energy is now cheaper than fossil fuels, and actual costs in 2018-2019 were lower than previously projected costs for 2030-2035. Research has shown that by 2025 86% of the U.S. coal fleet will cost more to run than replacing it with local wind and solar generation, and clean energy portfolios of renewables and storage are cheaper than new natural gas generation.
The 2035 report was accompanied by technology-neutral policy recommendations for Congress, federal department and national labs, governors and state legislatures, and electricity market regulators to help reach a 90% clean electricity future:
- Congress should adopt a federal clean electricity standard reaching 55% by 2025, 75% by 2030, 90% by 2035, and 100% by 2045; states should adopt clean energy standards of 90% by 2035 or earlier and 100% by 2045 (or earlier).
- Congress should extend existing federal clean energy investment and production tax credits, making energy storage eligible, and convert credits to more liquid incentives.
- Federal and state policymakers should help refinance bad coal debt to reduce the costs of a coal-to-clean transition, and support coal-dependent communities by shoring up pension and healthcare services while funding worker retraining for the clean energy economy.
- Congress and federal officials should streamline renewable energy and transmission siting and regional planning, while reducing interconnection costs.
- Federal and state policymakers should invest in R&D policies to develop the future technologies needed to reach 100% clean electricity.
- Federal and state policymakers should reform wholesale markets and utility business models to fairly value clean energy and support investment in a least-cost, technology-neutral portfolio of energy resources.
If renewable energy is such a winner, if “clean energy is now cheaper than fossil fuels”, why don’t renewable energy entrepreneurs get private bank finance like everyone else, and simply drive the competition out of business with their superior technology?
Why do they need reform of wholesale markets, and federal clean energy standards to drive progress?