Policy Makers Need to Include Renewables in Planning for Power Needs

There is a growing debate within clean energy circles centered on some academic contentions that by 2050 this country can generate all its electricity from renewable technologies like wind, solar, geothermal, hydropower and biomass.

It’s an incredibly ambitious goal, and it would require a significant reconfiguration of current energy policies at the federal, state and local levels to sufficiently accelerate the growth and development of renewable technologies to achieve success.

Until that day comes, even the most strident renewable energy advocate would concur that a diverse array of energy sources is absolutely essential to meet U.S. energy demand, at least over the next several decades. In addition to renewables – the fastest growing sector within the energy market – the range of power sources for the foreseeable future will likely include natural gas, which has grown to dominate the electricity-generation market in recent years, followed by nuclear power and, yes, for now, coal.

Some recent events and decisions have underscored the urgent need for energy diversity. Legacy energy interests have been increasingly challenged by a rapidly changing market that have been making big “baseload” power investments in new coal or nuclear plants too risky, as well as other instances where demand growth has slowed to make investments unnecessary.

One example is Georgia Power, which turned over construction of two additional reactors at the utility’s Plant Vogtle to Southern Nuclear, a subsidiary of Southern Company, which also operates two existing units at the plant in Waynesboro, GA. The change comes after Toshiba Corp., the parent company of Vogtle’s previous contractor, Westinghouse Electric, declared bankruptcy, citing cost overruns and design problems with the Japanese firm’s reactors.

Meanwhile, this week Santee Cooper and SCANA Corp. said they will halt construction on two new nuclear reactors at their V.C. Summer Plant in South Carolina, citing expenses that could reach more than $25 billion due to soaring cost overruns and the design issues of the Toshiba reactor.

With the end of construction at the Summer plant, the Vogtle reactors are now the only new nuclear project being built in the United States. However, reports indicate Southern Company could well decide this month to close it down as well.

Of course, nuclear is not the only energy sector running into market negatives. As detailed in our blog last month, Mississippi Power and parent company Southern suspended what was a singular effort in this country to develop clean coal technology at their Kemper County Power Facility. Once again, cost overruns tallying in the billions of dollars prompted the firms to suspend development of the technology that sought to convert coal to a synthetic gas. They have chosen instead to fuel the plant on natural gas alone.

Even though 25x’25 is a renewable energy advocacy group, we contend that no one dedicated to our nation’s energy future should take any satisfaction in these recent legacy energy shortfalls. In fact, the leaders of these utilities should be commended for having the courage to pull the plug on ventures that eventually could not be justified.

The reconsideration of these investments does give rise to the need by utilities and state leaders to undertake a risk-versus-reward analysis before proceeding with any future, large baseload projects. Instead, stakeholders should make the case to policy makers that choosing scalable, less expensive renewable energy – whether it be residential, commercial or utility-scale generation – is the best option, as it can be distributed across states while also dispersing economic benefits to a broader base of stakeholders. (It should be noted that DOE reported this year, for the first time, renewable energy surpassed nuclear as a percentage of U.S. electricity generation.)

Cost-effective energy efficiency is another resource that utilities should take into consideration. It can yield demand savings that can displace electricity generation from fossil fuels. Energy savings from customer-funded energy efficiency programs are typically achieved at one-third the cost of new generation resources.

We urge all concerned with this nation’s energy future to make policy makers fully aware that the operators of the nation’s electricity grid are increasingly turning to more flexible resources, including efficiency, and low-cost renewable energy options like wind and solar. The transition is nullifying the notion that only “baseload” generating plants can reliably power America’s homes and businesses.

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