Panel, Conference Presentation
For Renewable Energy, a Painful Transition to Maturity
Milken InstituteStephen Gatto, Arno Harris, Peter Rothstein, Eric Spiegel, Howard Wenger, Joel Kurtzman, David Carr, Paul Tullis, Claire Tram, Ira Herbst, Ed White
- Renewables are projected to grow faster than other energy sources for five to six years, with solar expected to rank second in total capacity installed immediately after natural gas this year and wind and solar collectively reaching current nuclear capacity levels by 2030.
- Renewable energy on the grid is anticipated to double over the next 5, 10, and 15 years, driven by a market shift toward a few major global players similar to the gas and steam turbine sectors, a transition expected within three to four years or within the next decade.
- Solar photovoltaic costs are expected to continue declining after dropping by a factor of 10 over the last 20 years and 50% in the last two years, with power delivery already achieved below 10 cents per kilowatt-hour at scale.
- The biochemical energy market is forecast to expand at roughly 19%, while the sector expects to drive longer-term growth by intersecting with petrochemical infrastructure to achieve 20%, 30%, and 40% productivity increases at existing plants.
- Grid infrastructure will undergo significant transformation, with the transmission market expected to grow faster than almost any other U.S. technology market this year, alongside increased high-voltage direct current projects in the U.S. and Canada.
- Energy storage is expected to become a critical industry component moving from pilot stages to early commercialization, with large-scale battery storage essential for shifting energy from high-production periods to times of higher demand.
- A shift in power generation capacity is expected over the remainder of the decade driven by coal and nuclear plant retirements rather than new load growth, creating a significant capacity gap.
- Natural gas is positioned as a critical transition fuel for ramping capabilities to balance intermittent renewables, while the U.S. military aims to reach 25% renewable usage by 2025 and 1,200 new coal plants are planned globally, 75% of which are in India and China.
- Distributed energy systems, including microgrids and solar-plus-battery solutions, are expected to emerge rapidly for village power, telecom, and community lighting, with Verizon planning a $100 million investment in fuel cells and solar across seven states.
- Energy efficiency investments are projected to have a growing impact on load, with peak electric demand in the U.S. expected to remain below 2007 levels for another couple of years due to efficiency gains and smarter grids.
- International competition and opportunities are expected to expand in Malaysia, Indonesia, and Singapore, while the U.S. risks losing leadership in renewable chemicals if it fails to control the opportunity.
- Despite global emission risks due to U.S. coal export absorption, countries without large electric grids are expected to develop clean energy grids from a "clean slate," potentially assuming a large portion of renewable capacity.
- Biofuel proliferation in the transportation sector remains limited until policy frameworks change point-of-sale metrics to enable consumer choice and cost-competitiveness.