Ecocentric

2013: A Cloudy Forecast for Renewable Energy, with a Silver Lining

Wind and solar power had a great 2012, but they face major challenges in the new year

  • Share
  • Read Later
Robert Nickelsberg / Getty Images

Photovoltaic panels track and rotate along the path of the sun in Hinesburg, Vt., on Dec. 24, 2012

On the surface, it looks like the renewable-energy industry has never been healthier. This year, wind-turbine installation in the U.S. actually outpaced the installation of new natural-gas capacity — despite the shale-gas boom, which has pushed down the price of natural gas. In 2012 new wind capacity reached 6,519 MW as of Nov. 30, just edging out gas capacity and more than doubling new coal installations. Meanwhile, new solar capacity in the U.S. reached nearly 2,000 MW, beating out 2011’s numbers. Globally the stock of installed wind and solar power hit 307 GW in 2011, up from 50 GW in 2004, while total investment in the sector hit $280 billion last year. Those are some bright numbers.

Yet there are clouds on the horizon for renewables. (Sorry — weather metaphors are hard to avoid with wind and solar.) The wind industry faces the loss of the valuable production tax credit next year if Congress can’t get its act together to renew it — and indeed, some of the growth the industry experienced this year may be due to companies rushing to get their projects in while the credit is still in place. (And those capacity figures comparing wind to gas or coal are a bit misleading — the intermittency of renewables means that a megawatt of wind doesn’t deliver the same amount of actual juice as a megawatt of gas.) The solar industry faces serious global oversupply, which has driven a number of manufacturers in the U.S. and elsewhere into bankruptcy and helped depress the recent IPO of the major panel installer SolarCity. According to the Financial Times, total investment in wind and solar in 2012 may well fall compared with 2011 — the first time that’s happened in nearly a decade.

So what’s the real forecast for wind and solar power?

(MORE: Debating the New Environmentalism)

That’s dependent — as it always is with the power sector, regardless of whether it’s renewable or not — on policy. For the wind industry in the U.S., continuation of the tax credit would be vital. It pays wind-farm owners 2.2 cents per kilowatt-hour of electricity they produce over 10 years. If Congress fails to renew the tax credit, Bloomberg New Energy Finance predicts installations could fall by 88% next year to just 1.5 GW, at the cost of nearly 40,000 jobs, according to a study sponsored by the American Wind Energy Association (AWEA).

A quick check at the headlines will show how unlikely renewal is in the current political atmosphere. It’s so bad that the AWEA, in an effort to get fiscal conservatives on their side, this month proposed a six-year phaseout of the credit. But while a bill to renew the credit was passed by the Senate Finance Committee in August and is sponsored by a Republican — Senator Chuck Grassley of wind-rich Iowa — little has happened since, and producers are getting ready for the fallout. Already turbinemakers have announced hundreds of layoffs.

As for the solar industry, the low costs for modules that have driven installation are a double-edged sword for manufacturers, who increasingly can’t make money off their products at current prices. That’s also led to something of a trade war — the U.S and Europe have charged Chinese solar manufacturers, with ample help from Beijing, of selling solar modules at below cost. The E.U. opened up an antidumping investigation in September, and the U.S. slapped tariffs on Chinese solar panels. That might be good for domestic manufacturers, but a trade war would likely hold back global growth of solar power.

(MORE: U.S. Slaps Tariffs on Chinese Solar Panels, but the Trade War May Be on Hold)

There is good news, though. Both wind and solar are becoming more competitive against fossil fuels — solar modules are 75% cheaper than they were four years ago, while the cost of wind turbines has fallen by 25% over the past three years. And that’s not just due to government help — technological advances have continued to drive down the cost of renewable energy, and grid parity has already been achieved in some areas. It’s important to remember that a decade ago renewable energy was just a hobby. We’ve come a long way.

That’s why I’m ultimately pretty optimistic about both the immediate and long-term future of renewable energy. There’s still an enormous market out there for new electricity generation, especially in untapped markets like Latin America and the Middle East. Renewable power is an excellent option — sunny Saudi Arabia, for its part, has said it wants more than $100 billion in renewables, while Japan and Germany need renewables to replace forsworn nuclear power. As wind and solar improve, the need for supportive public policy will drop away, like the scaffolding that surrounds a rocket at liftoff. The year 2013 may not be as good for renewables as 2012 — a lot will depend on how the larger global economy fares — but we won’t be going backward.

MORE: Air Pollution Becomes a Major Global Killer

29 comments
RonMcNichol
RonMcNichol

The problem with remotely generated power is I^2R losses in the wires that only serve to warm the feet of birds. Since wind and solar an non-polluting they should be built closer to where they are used. Wind power may be noisy and bad for birds, so I am not sure about that part, but I don't see the downside of building solar at home, or near towns or cities. Our nearest wind farm is probably 20 miles away on a Native American Reservation (across from the Golden Acorn Casino. Solar should be closer!


LeeNhan2
LeeNhan2

Target - green environmental forever needed new initiatives 

Intended to find solutions Technology and Alternative Energy for the energy crisis and aims to develop new ideas with impact on Economics and the Environment. 

Please add my new energy sources 100% Green

Activities such as wind power, but not necessarily placed outdoors, working 24/24h

See my model wind energy. simple - mild-effective-inexpensive, can be placed anywhere in the southernmost islands north pole ( the Arctic and Antarctica )(even cold weather)

It is located in a closed cycle -not too noisy - not interfere with the direction of the wind

Details at  www.trongdong.weebly.com

AnumakondaJagadeesh
AnumakondaJagadeesh

Excellent post. I am optimistic about the progress of Renewables in 2013 around the globe.

Dr.A.Jagadeesh  Nellore(AP),India

amrokader
amrokader

@a_sayyad من حقنا عليك أن تدلنا على الحقيقة التى نجهلهاـ من حقنا عليك أن ترشد من يثقوا فيكم عن مواضع الفتن.أرجوك تكلم

amrokader
amrokader

@a_sayyad من حقنا عليك أن تدلنا على الحقيقة التى تجهلهاـ من حقنا عليك أن ترشد من يثقوا فيكم عن مواضع الفتن.أرجوك تكلم

ashly_ansalam
ashly_ansalam

@TIME Solar and Nuclear energy can play vital role in Energy ndustry.The importance for Hydro projects reduced due to increase in drought

House_CR
House_CR

@RenecastroCR feliz año don Rene muchos exitos para usted y los suyos

chr4
chr4

There are no subsidies for solar in Spain anymore and yet there are lots of companies planning to invest. In the USA cheap shale gas delayed grid parity for solar but in southern Europe it is a reality. In Europe wind has been cheaper than gas for quite a while. 

KerryKearney
KerryKearney

It's sad that these goverment programs to support wind energy have created a welfare state for so many companies, and now that the're off the dole the're laying off thousands of workers.  I thought liberals understood that things have to be organic - stimulating growth artifically just doesn't work.  Sure, keep feeding it money and you'll keep the ball rolling... but we're broke.  No more handouts.  No more feel-good projects.  It takes over 1000 wind turbines to equal a conventional power plant; in 100 years we'll (...they'll) laugh at this idiotic initiative.   

JKBullis
JKBullis

Ah yes, windy Iowa.

Many if not most of Iowa farms had windmills (turbines we say now), these being set up over wells to keep a steady flow of water.  By the time I was aware of such things, these still were standing, though nearly all were inoperative, if they ever had been.  There must have been a powerful government program to have left such a widespread legacy.

I surmise that the farmers got tired of hauling away dead cows every time there was a pause in the great Iowa wind.  So these farmers generally installed electric pumps, maybe thinking they would act as backup.  But amazingly, they soon forgot about the windmill, except to curse it as the chore it became as a magnet for curious brats.   And realizing some day they would have to haul it away. 

Do you suppose there was parity of some kind here; dead cow count versus time saved of not pumping sometimes? 

JKBullis
JKBullis

(continued from previous)

Another element of the 'parity' achievement is in the heavily obfuscated cost analysis, where some mix of tax credits, rebates, investment credits, production credits, and such, payable through the utilities that recover the costs through rates charged to others or payable by some government machination of taxes and direct payments.
The parity seems to usually devolve to some song and dance about payback which is about as convincing as a car dealer's pitch about leasing a car, where the headline cost is only the monthly fee. For solar installations, the cost of the cell is correctly stated to be lower than it once was, but installation, maintenance, cost of money, risk carried by the homeowner, and simply the annoyance of it all are on the list of things that might not counted.

JKBullis
JKBullis

Even our reporter who is alert to the emergence of new environmentalism is still a little bamboozled by the terminology of the renewable energy world. Thus we have tossed about words like 'grid parity'. What might that really mean?

We used to call a small knife a paring knife. Is 'parity' something that is achieved with a paring knife?

No, sadly, it seems to be something that is achieved by action of public utility commissions where all manner of chicanery in rates, timing of rates, tier rates, feed-in tariffs, demand response (Now there is another special term meaning something unlike its words - really it means you have to turn off your air conditioner when you need it.), and so forth, in combination with public utilities. The utilities themselves carry on a barrage of PR leading us to believe they love and care for the environment and the rate payers in varying proportions.

cascheer
cascheer

This is a misleading and poorly researched article - particularly, the last paragraph.  The author cites renewables potential in Saudi Arabia.  The truth is Saudi Arabia is shifting huge resources to nuclear power, as is the UAE.  I don't know why the author fails to mention this fact.  Also, Japan will clearly be gradually restarting all (or almost all) of its nuclear reactors.  The nuclear power void in Japan has been filled by fossil fuels, not renewables.  The void in Germany has been filled by coal and imported nuclear power.  I'm a fan of renewables but a bigger fan of transparency in reporting.

CarbonCounter_
CarbonCounter_

@atrembath @bryanrwalsh Post 2020 in Europe more likely to be different as some countries don't support a 2030 renewables target.

CarbonCounter_
CarbonCounter_

@atrembath @bryanrwalsh Agreed. Though EU targets for renewable energy in 2020 shouldn't be ignored. Decade of investment locked in.

GuillermoOrtegaTanus
GuillermoOrtegaTanus

It would be nice to have a guide of how to use these technologies for the normal house owner.

AdamSmith1
AdamSmith1

I just recently set myself free by learning to trade and anybody can do this as far as I'm concerned you just need to go to the right place. Check out the website Traders Superstore, just Google them you should be able to find them, these guys are really doing it right and make you wonder why everybody isn't like them. You can make $2000 a week trading all you need to do is learn how, if I can do it anybody can.

RenecastroCR
RenecastroCR

@House_CR gracias, te deseo lo mismo: un año feliz para vos y los tuyos...y menos pacientes complicados !

RonMcNichol
RonMcNichol

@KerryKearney 

Oil companies get huge subsidies as well while they are making money hand over fist already! Don't hear many squawks about that! So, subsize polluters as we are or subsidize clean energy?

Also, how much thought has been given to fracking enabling more earthquakes. It has been popular in the north east, and surprise, they had a never before earthquake they thought only us folks in California were in danger of.

Fracking crumbles the bedrock. The fracking fluid and crumbly pieces probably act as lubricants between formerly stable plates. All this to support an industry that is already polluting the air.


Heian
Heian

@KerryKearney I can't even start. I mean, the way you use "welfare state" displays a painful misunderstanding of either the term, or the conditions of the industry.

I did think it was funny the way you say "in 100 years we'll laugh". Assuming there's an atmosphere left to support that kind of respiratory reaction. I think in 100 years, we'll be looking back and laughing at the ignorant blowhards who are so conservative but wanted to put more money into military than a long-term energy plan.

Laugh in 100 years? You're so short-sighted, I'm laughing right now.

KerryKearney
KerryKearney

@Heian @KerryKearney Heian - You have the opportunity to educate me, instead you personally attack.

I have to assume your wallet is negatively impacted by the possibility that government funds will be cut off.  If so, I'm genuinely sorry.  

I'm not ignorant of the fact that our population is polluting our planet.  I just don't think wind turbines are a serious solution.  How much Neodynium strip mining has to happen to support wind energy equivalent to that conventional power plant?  500 tons. Wind turbines appear green standing out in the middle of a far, but pull back the curtain a bit.

http://www.dailymail.co.uk/news/article-1241872/EXCLUSIVE-Inside-Chinas-secret-toxic-unobtainium-mine.html

jayjay99
jayjay99

@KerryKearney Is it not possible that eventually wind power will become competitive with alternative energy sources (let's say fossil fuels, for now) and self sustaining? Then its success would have been due to the help of government funding at the very start.