Rural Electric Co-ops Finding that Renewables Make Good Business Sense

A few short months ago, the International Renewable Energy Agency (IRENA) projected the share of the world power market held by renewables will grow from 24 percent in 2016 to 30 percent by 2022. IRENA says that the three nations accounting for two-thirds of the expansion leading that shift will be India, China and the United States.

That the United States is among those countries ultimately moving the world towards the inevitable transition to a future of low- and no-carbon energy sources – despite current policy uncertainty at the federal level – is not surprising given the uplift to clean power sources by states and businesses.

From Massachusetts to California, states are directing utilities to raise the amount of renewable energy they provide, in large part to reduce emissions that pose health risks and the high costs that come with them. Corporations of all sizes are expanding their carbon-free footprint, recognizing the cost savings that continue to grow with renewable sources of electricity and improve their bottom line.

In those contexts, it is not surprising that our nation’s electrical cooperatives – the principle source of power for most of rural America – are among those in the sector leading a trend away from coal as their major power source and boosting their use of renewable resources like wind, solar and biomass in the process.

The National Rural Electric Cooperative Association (NRECA) represents nearly 900 consumer-owned, not-for-profit electric cooperatives, public power districts and public utility districts in the United States. These co-ops are unique within the $391 billion U.S. electric utility industry. More than 900 cooperatives in 47 states provide electric service to almost three-quarters of the nation’s landmass.

NRECA’s co-op members serve an estimated 42 million people in 47 states. They provide the power for more than 19 million businesses, homes, schools, churches, farms, irrigation systems and other establishments in 2,500 of 3,141 counties in the United States.

So, when the NRECA says its members are making massive strides away from coal and toward more renewables and natural gas, it’s a move that reaffirms the transformation underway in this country towards a clean energy future.

Like other businesses across the nation, the association cites lower costs and a need to reduce emissions as driving the boost in lower-emission energy sources.

The share of co-op electricity coming from coal was at 41 percent in 2016, the latest year pertinent data was available, compared with 54 percent just two years earlier. Association analysts attribute the reduction in coal as a fuel to the changes in the electric industry, specifically changes in market fundamentals, including lower renewable energy technology costs along with low natural gas prices and increased coal power plant retirements.

As coal use decreased, the share of non-hydropower renewable energy resources doubled from 4 percent to 8 percent over the same period. Hydropower resources remained constant at 9 percent. Natural gas grew from 18 percent in 2014 to 26 percent in 2016. Nuclear power remained about the same at 15 percent.

The transition is even more significant when looked at in a historical perspective. In 2009, coal accounted for 58 percent of the national retail electric fuel mix for co-ops, while renewables had only a 3-percent slice. Natural gas accounted for 12 percent nine years ago.

Another perspective on NRECA’s role in promoting clean energy development is offered by a look at the association’s overall renewable energy capabilities. Currently, 95 percent of NRECA’s distribution members offer renewable options to 40 million Americans. Including federal hydropower, co-ops own or purchase roughly 10 percent of all U.S. renewable capacity. Co-ops own more than 1.3 gigawatts (GW) of renewable capacity and have long-term power purchase agreements for nearly 7.4 GW – in addition to roughly 10 GW of preference power contracts with federal hydroelectric facilities.

The 25x’25 Alliance commends our rural electric co-ops who are taking a lead role in the development of renewable energy in this country. Co-ops are currently set to add more than 1 GW of additional renewable capacity over the next few years, with more announced every day. It’s strong evidence of the role rural America is playing in meeting our changing energy needs.

 

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