Navigating The Transition to Cleaner Energy
Recently reported by Bloomberg news the U.S. government rejected the sale of coal in Wyoming after an auction drew the lowest top bid in 15 years. The low bid is viewed as a result of coal energy weakening because of cheap natural gas and new coal carbon capture rules coming out this week. The bid for a ton of coal is 20% of what it was just one year ago, according to Bloomberg news. New regulations being passed at the United States Federal level require future coal power plants to not exceed 1,100 lbs of carbon emitted per MegaWatt hour, MWh. Currently a coal power plant emits 2,220 lbs of carbon emitted per MegaWatt hour, MWh. This new regulation is expected to increase to cost of coal that some say will make it non-competitive with natural gas. The shift to cleaner energy away from coal is starting.
A recent article talked about new California homes having solar energy integrated into them and it is happening in other states as well. According to the September 11 Bloomberg article, approximately 494 megawatts of panels were installed atop new and existing U.S. homes in 2012, according to the solar trade group. That figure is expected to swell to 770 megawatts this year as prices continue to slide and may reach 2,175 megawatts in 2016.
Why is this significant? It is signaling a shift in the energy markets. All this is great for the path to cleaner energy, but it may come at some cost. In the article about solar homes, California's Pacific Gas and Electric has said this jeopardizes the power grid because there’s less revenue to maintain the infrastructure. In response, utilities are raising rates and in California they may eventually pass on as much as $1.3 billion in annual costs to customers. The customers who this will mainly hit are those who don’t have solar panels.
Germany is a leading example of pushing to renewable energy and the difficulties it creates in the transition. Germany has an ambitious plan to shut down the last of its remaining nine nuclear reactors by 2022, cut greenhouse gas emissions by 95% compared to the 1990 level by 2050, and expand power production from technologies like wind and solar to 80% of electricity output through the middle of the century. Germany's incentive programs have generated an abundant increase in renewable energy output it has come at a steep price. Since 2000, electricity prices for industrial customers in Germany have more than doubled to €0.1487 per kilowatt-hour in 2013, from €0.0606 in 2000, while prices for private households climbed to €0.2873 from €0.1394 in 2000, according to a September 21, 2013 Wall Street Journal article. Germany has had to deal with the extra grid infrastructure costs to bring solar and wind generated electricity from new areas and setting up fossil fuel reserves when wind and solar energy are not in abundant supply.
Renewable energy sources have made dramatic improvements in price reductions over the last decade and are becoming competitive with fossil fuels in many parts of the world. However, like any transition, it can have unintended consequences that if not managed properly could cause significant disruptions. Rapid increase in energy prices could cause a nation's industrial sector to become uncompetitive globally. It could cause high unemployment in displaced energy regions, such as the coal mining regions. Energy continuity could be affected by grid infrastructure deterioration and the inconsistent output of renewables. If not managed properly these effects could cause policies to shift back towards dirtier fuels as populations react to remain competitive and maintain costs.
The shift to cleaner energy is required to meet the worlds increasing energy needs while sustaining our planet. We must make sure this transition is managed as to not cause large disruptions to economies and people.
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Recently reported by Bloomberg news the U.S. government rejected the sale of coal in Wyoming after an auction drew the lowest top bid in 15 years. The low bid is viewed as a result of coal energy weakening because of cheap natural gas and new coal carbon capture rules coming out this week. The bid for a ton of coal is 20% of what it was just one year ago, according to Bloomberg news. New regulations being passed at the United States Federal level require future coal power plants to not exceed 1,100 lbs of carbon emitted per MegaWatt hour, MWh. Currently a coal power plant emits 2,220 lbs of carbon emitted per MegaWatt hour, MWh. This new regulation is expected to increase to cost of coal that some say will make it non-competitive with natural gas. The shift to cleaner energy away from coal is starting.
A recent article talked about new California homes having solar energy integrated into them and it is happening in other states as well. According to the September 11 Bloomberg article, approximately 494 megawatts of panels were installed atop new and existing U.S. homes in 2012, according to the solar trade group. That figure is expected to swell to 770 megawatts this year as prices continue to slide and may reach 2,175 megawatts in 2016.
Why is this significant? It is signaling a shift in the energy markets. All this is great for the path to cleaner energy, but it may come at some cost. In the article about solar homes, California's Pacific Gas and Electric has said this jeopardizes the power grid because there’s less revenue to maintain the infrastructure. In response, utilities are raising rates and in California they may eventually pass on as much as $1.3 billion in annual costs to customers. The customers who this will mainly hit are those who don’t have solar panels.
Germany is a leading example of pushing to renewable energy and the difficulties it creates in the transition. Germany has an ambitious plan to shut down the last of its remaining nine nuclear reactors by 2022, cut greenhouse gas emissions by 95% compared to the 1990 level by 2050, and expand power production from technologies like wind and solar to 80% of electricity output through the middle of the century. Germany's incentive programs have generated an abundant increase in renewable energy output it has come at a steep price. Since 2000, electricity prices for industrial customers in Germany have more than doubled to €0.1487 per kilowatt-hour in 2013, from €0.0606 in 2000, while prices for private households climbed to €0.2873 from €0.1394 in 2000, according to a September 21, 2013 Wall Street Journal article. Germany has had to deal with the extra grid infrastructure costs to bring solar and wind generated electricity from new areas and setting up fossil fuel reserves when wind and solar energy are not in abundant supply.
Renewable energy sources have made dramatic improvements in price reductions over the last decade and are becoming competitive with fossil fuels in many parts of the world. However, like any transition, it can have unintended consequences that if not managed properly could cause significant disruptions. Rapid increase in energy prices could cause a nation's industrial sector to become uncompetitive globally. It could cause high unemployment in displaced energy regions, such as the coal mining regions. Energy continuity could be affected by grid infrastructure deterioration and the inconsistent output of renewables. If not managed properly these effects could cause policies to shift back towards dirtier fuels as populations react to remain competitive and maintain costs.
The shift to cleaner energy is required to meet the worlds increasing energy needs while sustaining our planet. We must make sure this transition is managed as to not cause large disruptions to economies and people.
.