Panel
Are Renewables Still Relevant?
- A systemic energy shift is expected to occur to maintain economic development within climate limits, driven by a combination of renewables and natural gas that is projected to displace coal and dirtier fossil fuels.
- Natural gas is anticipated to serve as a bridge fuel facilitating coal substitution on the peaking side, potentially extending through 2030 or 2035, though experts warn that an over-reliance on this extension could stall renewable momentum.
- Renewable energy, currently comprising 16% to 18% of the mix, is predicted to match or exceed nuclear power and will increasingly drive U.S. grid additions, with roughly 70% of new capacity since 2008 already being renewable.
- Specific deployment forecasts include 10 million solar home systems in the United States by 2020, a potential $16 billion to $20 billion renewable market in India over the next three to five years, and continued growth in China involving seven climate exchanges.
- Global capital flows are expected to shift from fossil fuels to infrastructure and clean energy assets to maintain dividend yields, while institutional investors increasingly strip negative externalities like carbon pricing from fossil asset valuations.
- Solar energy is projected to outpace all other technologies with $100 billion in annual global production, and renewable electricity is ahead of schedule in meeting the two-degree goal with required trillion-dollar annual deployment.
- Market dynamics for electric vehicles are expected to reverse in the next few years as grid integration allows utilities to pay owners more for backup services than their car payments, making renewables economically superior to fossil fuels without subsidies.
- Legislative trends indicate Renewable Portfolio Standards will remain sticky and irreversible, with policy likely developing through a bottom-up approach at the local level before reaching federal government.
- Significant risks include the potential for natural gas price volatility to disrupt grid stability, the failure of natural gas reserves to deliver low bills due to rapid pressure drops, and the serious consequences of failing to scale renewables within the next decade to control emissions.
- Utilities face a "death spiral" driven by consumer disconnection and self-generation, prompting a value shift from generation to transmission and distribution, with solar integration and big data expected to make renewables cheaper than fossil fuels.
- Policy and market events such as the repeal of Renewable Portfolio Standards are predicted to fail due to shifting public belief, while a legislative act enabling interstate transmission is forecast to generate $100 billion to $200 billion in private sector value and hundreds of thousands of jobs.
- Industrial activity is expected to drive a significant increase in natural gas demand by 2017 as capacity returns to the United States, though utility leaders remain cautious about building grids solely on natural gas due to historical deregulation failures.
- Innovation cycles suggest the electric vehicle sector is past the initial 15-year novelty phase and is poised for rapid tipping within a 20-year development timeline similar to the personal computer.