We’re in the midst of a big moment in the clean energy transition, but you might not have noticed.
Democratic presidential nominee Joe Biden recently proposed a climate and clean energy plan that aims to get the country to net-zero emissions by 2050. Although there was predictable opposition from the Trump administration and fossil fuel interests, there was little backlash to speak of otherwise.
The lack of broad-based objection to the plan shows that the idea of net-zero emissions by 2050 has gone from the fringes to near the mainstream of U.S. politics.
How did that happen?
I asked experts at two leading energy policy nonprofits about this: Sonia Aggarwal, vice president at Energy Innovation in San Francisco, and Carla Frisch, a principal at the Rocky Mountain Institute in Colorado.
Aggarwal said the big change has been the growing competitiveness of clean energy, demonstrating that the clean energy transition is a boon to the economy, Aggarwal said.
“We are just in such a different place with technology readiness and cost than we were in the last go-around,” she said.
She told me that some of the most striking contrasts were between the way politicians talk about the energy transition today and the way they did in 2009, when Congress was debating the Waxman-Markey bill, which would have started a national carbon-trading system. The bill passed the House but never came up for a vote in the Senate.
In that debate, supporters of the bill said the long-term benefits of carbon trading outweighed the costs of not addressing climate change, but they had to concede that there would be substantial costs in the short-term.
Today, the economics have changed so much that this debate would be different in fundamental ways. Utilities have shown that replacing old fossil-fuel plants with wind, solar and battery storage can lead to a net savings for consumers. State and local policies also have changed substantially, with about 1 in 3 Americans living in a state or city that has adopted a plan to get to 100 percent carbon-free electricity.
“We can decarbonize while also delivering incredible economic benefits,” Aggarwal said.
Frisch said one of the key factors is that Americans are feeling the effects of climate change much more than before, with extreme heat and weather, which makes the issue seem more real to them.
“We know there will be more extreme weather, more extreme storms, more extreme impacts,” she said.
While the federal government has done little to act on climate change during the Trump administration, others have risen up to fill the void.
Cities, states, corporations and churches have become the leaders in addressing climate change, she said, many with commitments to get to 100 percent renewable energy and net-zero emissions. Those commitments have helped to push the idea of net-zero emissions into the mainstream to the point that Biden’s proposal isn’t nearly as controversial as it would have been a few years ago.
When Trump talks about energy, he tends to focus on preserving fossil fuel jobs and he often makes unsubstantiated claims about the perils of wind energy.
Biden is “against God, he’s against guns, he’s against energy, our kind of energy,” Trump said last week in Ohio.
In addition to being nonsensical—Biden isn’t “against energy”—it’s notable that Trump is framing this as a matter of tribal loyalty rather than a pocketbook issue. It shows how the pocketbook arguments against renewable energy have mostly vanished.
Aggarwal was co-author of a June report that showed the policies that would support moving the economy to 90 percent clean energy by 2035. A companion report from the Goldman School of Public Policy at the University of California, Berkeley, found that this transition could be done with no increase in costs for consumers.
The findings in those reports help to explain why Biden can say that his $2 trillion climate plan will lead to a net financial benefit for consumers, in addition to benefits for the climate and environment.
This doesn’t mean climate change and clean energy are top-tier issues for the candidates.
But it is remarkable how the playing field has shifted to now favor the clean energy transition.
Does Tesla Really Want to be a Leader in Rooftop Solar?
This summer, we’ve seen the top two rooftop solar companies—Sunrun and Vivint—join forces in a proposed merger, and the third-leading company, Tesla, announce a new strategy that focuses on having the lowest costs.
Tesla is betting that a shift to offering the lowest prices will be enough to appeal to customers and make up for a lack of spending on sales staff and customer outreach.
Analysts are questioning whether Tesla’s plan will give the company what it needs to increase market share and compete, now that its two leading rivals have joined forces. Tesla became a player in rooftop solar in 2016 with the acquisition of its sister company, SolarCity, but then saw its market share fall every year since then.
Wood Mackenzie took a critical look at Tesla’s strategy in a recent report to clients, and I traded questions and answers with two analysts at Wood Mackenzie to try to figure out what Tesla is doing.
I started by asking whether Tesla is in danger of being an “also-ran” in the solar business.
“At the end of the day, the extent of ‘danger’ depends on what Tesla wants out of its solar business,” said Molly Cox, a Wood Mackenzie analyst. “Its quarterly installation numbers are trending at about a tenth of its peak in pre-acquisition SolarCity days. If the goal is to continue to operate as a distant second or third largest installer, then we don’t think its solar business is in any significant danger of losing that spot. But if its ambitions are to recover some of the lost market share ground, that has become harder with the proposed Sunrun/Vivint acquisition.”
Ravi Manghani, global head of solar research for Wood Mackenzie, said he has doubts about Tesla’s strategy because it relies on cutting costs on the sales side by expecting customers to pick their own systems online, rather than being led through the process.
“Solar customers today require more attention than Tesla anticipates,” he said. “Steering customers to Tesla’s website to purchase a new solar system with a click of a button may not yield success in the near term, even with the reduced price tag.”
This leads to a big question: Why isn’t Tesla dominating rooftop solar? The company has the resources and brand awareness to be a much bigger player, but it’s chosen not to.
“We can only speculate, honestly,” Cox said. “We don’t have any definitive answer. One theory is that Tesla considers its solar business is a cost center only to help grow its broader energy business.” The broader energy business includes manufacturing and selling the Powerwall battery system, among other products that Tesla sells and that are also sold by others, including Sunrun.
Tesla, which did not respond to my request for comment, has repeatedly proven doubters wrong on its automotive side, but we are still waiting for that to happen in the company’s solar business.
Railroads and Oil and Gas Pipeline Routes Could Also Carry Electricity
One of the nagging limitations in the clean energy transition is the difficulty of building transmission lines, the heavy duty power lines that act as interstate highways for electricity.
The country needs new transmission lines to deliver wind and solar power from rural areas to population centers.
But developers who want to build the lines face years of regulatory hurdles and legal challenges because of opponents who don’t want to look out their backyard windows at giant power lines.
The Federal Energy Regulatory Commission has delivered a report to Congress that talks about the many challenges, along with an intriguing opportunity: building power lines in the rights of way now used by railroads and oil and gas pipelines.
The idea is that building alongside or under existing infrastructure would make for a speedier process, require fewer regulatory approvals and lead to less local opposition.
Just the existence of the report is a step in the right direction, said Rob Gramlich, executive director of the nonprofit Americans for a Clean Energy Grid.
“This report starts a national conversation to begin assessing what corridors are available out there that could potentially be used and what if any barriers stand in the way,” he told me.
Gramlich said projects that build in existing rights of way are more likely than they were before because of falling costs for building underground lines. Also, the idea of leasing space is becoming more attractive to railroad companies, because they are seeing a drop in income from shipping coal as coal-fired power plants close.
So far, there is just one major power line project proposed along a railroad line, the SOO Green project, would run underground for about 350 miles from Mason City, Iowa, to Plano, Illinois. I don’t know of any major project that would be along the route of an oil or gas pipeline.
The project, which is still in the early stages, would transport wind energy from Iowa, Minnesota and the Dakotas to be sold in the PJM Interconnection electricity market, which runs from Chicago to the East Coast.
The FERC report shows that the SOO Green project may end up being a trend-setter, and that would be a good thing for the clean energy transition, giving owners of wind farms and solar arrays access to more places they can sell their power.
Rural Texas Still Loves Oil, But Renewables Are Increasingly Paying the Bills
Renewable energy continues to rise in Texas, providing desperately needed incomes for land owners and local governments at a time when the oil industry is faltering.
Texas is the nation’s leader by a mile in wind energy, and also is among the top five states for installed solar power capacity. Two new reports this week help to explain what’s happening and how locals benefit.
“For ranchers, renewables can act basically as a kind of insurance,” said Joshua Rhodes, author of a report by IdeaSmiths, a Texas-based research firm. “It’s a diversification of their investment in their land. I was told point blank that this is a drought-proof source of revenue.”
His report looks at how wind and solar energy are helping the finances of local people and governments, with an estimated 70 percent of taxes and landowner payments going to rural counties.
He found that existing solar and wind projects in the state will pay landowners between $4.8 billion and $7.3 billion over the lifetime of the projects.
The report was financed by two groups—Conservative Texans for Energy Innovation and Powering Texas—that advocate for expanding renewable energy. While the sponsors clearly have an agenda, the findings are well-documented and Rhodes is a well-known writer and researcher.
The second report comes from the Institute for Energy Economics and Financial Analysis, focusing on how the wind industry has helped Nolan County, Texas, in a way that is much more dependable than the booms and busts of the oil and gas industry.
Wind farms are six of the top 10 property tax payers in this rural county and the county seat, Sweetwater, has attracted new businesses in renewable energy. Texas State Technical College in Sweetwater now has a program to train wind turbine technicians, with 50 to 75 graduates per year.
Rhodes told me that Texas can be looked at as an energy state, and wind and solar are part of that to an extent that is not widely appreciated. He doesn’t expect income from wind and solar to surpass oil and gas any time soon, but he expects to see a gradual shift as more people in the state realize what they have and can build upon in renewable energy.
The Covid-19 Resurgence Put the Brakes on Recovery of Clean Energy Jobs
The recovery of U.S. clean energy jobs slowed almost to a stop in July, which is not a surprise considering the surge in coronavirus cases.
The clean energy sector added 3,200 jobs for the month, according to the new edition of a monthly report from BW Research Partnership, issued on Wednesday.
After five months of chaos across the economy, the clean energy sector has had a net loss of 511,075 jobs, or 15 percent.
California, the country’s leader in clean energy jobs, gained 723 jobs, or 0.2 percent, in July. The state’s total over five months is a loss of 89,158 or 16.2 percent.
This follows large gains across the country and in California in June, following job losses in March, April and May. But even as some jobs returned, analysts were saying that the recovery was likely going to happen in fits and starts.
“The economy is currently reacting to viral resurgence as well as the drag from extended unemployment and related economic losses,” said Philip Jordan, of BW Research, in a memo.
“The continued viral spread, reversal of travel advisories and reopening plans, and the exhaustion of many programs from earlier stimulus have added to this volatility,” he said.
The clean energy sector was a fast-growing source of jobs before the pandemic, and it can be an important part of the recovery. But at this point, it’s anyone’s guess when the recovery will begin in earnest.
Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to email@example.com.