What is Driving the Renewable Transformation

You know that the economy is shifting gears to renewable energy. But do you know the factors driving this massive transformation? According to Clean Edge, a San Fransisco research and advisory firm devoted to the clean-tech sector, the main contributors are decreasing costs, supportive regulating environment, market demand and unavailability of coal power plants.

1. Declining costs are the main driver fueling the renewable movement. Lazard’s 2017 annual Levelized Cost of Energy Analysis shows a continued decline in the cost of electricity generation from alternative energy technologies, particularly utility-scale solar and wind. 

2. Another factor impacting the shift to renewables is supportive policies and regulations. As of August 1, 2017, 29 states now have RPS (National Conference of State Legislature). In 2016, five states upped their renewable portfolio standard (RPS) targets of receiving 25 percent or more of its electrical generation from renewable energy sources. The sixth state, Michigan, extended its RPS to 15%; and the seventh state Ohio, re-activated its RPS after its two years inactivation. California, Hawaii, New York, Oregon, and Vermont have targets of 50% or greater.

3. Corporate buyers play a substantial role in the growth of renewables by increasing tdemand. The commercial and industrial market is the No. 1 client of renewables, demanding 7.5 GW of contracted wind and solar energy. Based on the estimate of Renewable Energy Buyers Alliance, commercial customers plan to procure another 60 GW by 2025. Demand is on fire.

4. Many aging coal power plants are no longer available. Throughout the U.S., coal plants are shutting down and get substituted with natural gas and renewable energy for exclusively economic reasons.

 

To read more, please visit the following sites: National Conference of State Legislature http://www.ncsl.org/research/energy/renewable-portfolio-standards.aspx Lazard’s 2017 annual Levelized Cost of Energy Analysis https://www.lazard.com/perspective/levelized-cost-of-energy-2017/ Clean Edge https://cleanedge.com/reports/2017-US-Clean-Tech-Leadership-Index