Apr 29, 2014, 1:09 AM ETPanel

Are Renewables Still Relevant?

Relevance of Renewables: The panel unanimously agrees that renewables are not only relevant but are currently the dominant source of new global power generation capacity, with solar investments exceeding $100 billion annually (larger than wind, nuclear, gas, and coal combined).
Systemic Disruption: The transition is viewed not merely as a fuel swap but as a fundamental restructuring of the energy delivery system, shifting from centralized fossil-fuel generation to distributed, smart-grid-enabled renewable networks.
Natural Gas Role: Natural gas is characterized as a "bridge fuel" expected to transition coal out of the mix until at least 2030–2035, though panelists warn against over-exuberance regarding its long-term stability.
Market Dynamics: Despite the abundance of capital seeking yield (with "long money" chasing deals), the primary bottleneck has shifted from funding to finding investable projects ("long money and short deals").
Investment Returns: Renewable investments are delivering significant returns, with solar companies like SunEdison and Canadian Solar showing stock increases of roughly 800% and solar ETFs up 130% in recent periods.

Policy Reliability vs. Volatility: Richard Sandor argues that legislative support for renewables is permanent ("legislation is never reversed"), while James Cameron contends that political momentum is fragile, citing the 180-degree policy shift in Australia and carbon price instability in Europe.
Economic Viability of Gas: Jigar Shah disputes the narrative that natural gas is a stable, low-cost solution, noting that it is the most volatile commodity in the world; he highlights that 15% of deregulated electricity suppliers went bankrupt in one month due to gas price spikes.
Utility Business Model Conflict: Incumbent utilities oppose renewables not due to technology failure, but because distributed generation erodes their traditional business model, creating a "death spiral" where rising fixed costs drive more consumers to leave the grid.
Asset Valuation Risk: Institutional investors are beginning to reprice fossil fuel assets, recognizing that "carbon in the ground" may become stranded liabilities if regulations force a cessation of extraction before reserves are fully utilized.

Grid Expansion: Approximately 70% of all new capacity added to the US grid since 2008 has been renewable.
Global Deployment Scale: The global solar market is characterized by democratization, with 130,000+ projects averaging $200,000 in size, totaling $100 billion in new assets annually.
International Markets: India is projected to generate a $16–$20 billion renewable market within 3–5 years via REC programs; China operates seven climate exchanges, indicating a massive, centralized push for clean energy independent of US federal policy.
US Legislative Landscape: 29 states, plus DC and Puerto Rico, maintain Renewable Portfolio Standards (RPS), creating a "bottom-up" regulatory environment that defies federal gridlock.
European Efficacy: The EU reduced emissions by 17% (double the 8% target) between 2008–2012, proving that regulatory mechanisms can succeed even when carbon price signals were initially oversupplied.

Electric Vehicles (EVs): EVs are redefined not by battery cost reduction but by grid integration potential; when vehicles can sell power back to the grid (V2G), their economic value exceeds the cost of gasoline cars, potentially making utilities pay owners more than their car payments.
The 20-Year Cycle: Historical data on technology adoption (PCs, financial futures) suggests a consistent 20-year lag from invention to mass disruption; electric vehicles are currently in the "first 15%" phase of this cycle.
Infrastructure Requirements: The US transmission and distribution grid is aging (equivalent to 1865 tracks); modernizing this infrastructure is identified as a primary pathway to create hundreds of thousands of jobs and lower costs, but remains stalled by Washington DC.
Value Proposition: The future energy system is valued for its robustness, security, and consumer control (via mobile data integration), which collectively outweigh the low cost of current fossil fuel systems.
Climate Timeline: Scientists indicate a critical deadline of approximately 2030 to drastically reduce emissions, a timeline that current investment trends alone may not meet without accelerated policy intervention and the removal of fossil fuel subsidies.

Consumer Power: The primary driver of renewable adoption in the US is the cultural preference for energy independence, with consumers rejecting the monopoly status of utilities in favor of self-generation rights.
Media Narrative Gap: There is a significant disconnect between the mainstream media narrative (focused on the Solyndra failure) and market reality, where the vast majority of public investment in fossil fuels has historically gone unreported compared to the scrutiny of renewable subsidies.
Corporate Lobbying: While Koch Brothers and utility incumbents actively lobby against solar mandates (e.g., in Kansas and Oklahoma), renewable advocates have successfully defeated 11 such initiatives in the last eight months, framing the issue as a fundamental American right rather than a climate debate.
Global Leadership: The panel notes that the most active renewable innovation is occurring furthest from Washington DC, with Europe, China, India, and California leading the global transition.