The costs of a high-renewables future are manageable, especially when considering the risks of climate change.
The historic climate strikes have captured the sense of urgency required to address climate change, as protestors called for a massive transformation of our global economy to rapidly reduce emissions. Seizing upon these sentiments, many clean energy advocates and legislators have rallied behind the Green New Deal, and its goal of replacing fossil fuels with renewable energy technology, as the main vehicle to get us there.
Pouring cold water on these ideas, Benjamin Zycher, of the American Enterprise Institute, offers a blistering critique of the GND, describing it as “authoritarian” and inherently “anti-human.” Wrapped up in Zycher’s critique of the GND is a condemnation of renewable energy, which Zycher argues is less practical than its champions claim. But while skepticism of the expansive ambitions of the GND is warranted, we should evaluate clean energy (and climate action) on its own merits. The practical concerns Zycher raises about renewables are manageable, and the benefits of this technology are apparent.
Zycher argues that renewables are artificially cheap, and that the intermittency of wind and solar power hides the true cost of building more. While it is true that high levels of renewable energy penetration will require more transmission and storage infrastructure, careful analysis demonstrates that these costs are manageable. A 2014 Deep Decarbonization report found average electricity rates in a high-renewables future where wind and solar provide more than 50 percent of the energy supply to be roughly $.04 per KWh (25 percent) higher than the baseline case. In modeling analysis, well over half the total electricity costs in the high-renewables future are a result of the fixed costs of renewable generation, which are primarily made up of the capital costs of this technology. Reducing the capital costs of wind, solar, and battery technology will thus reduce the systemwide costs of a high-renewables future.
These technologies have become so cheap that certain states will save significant amounts of money through switching to electric passenger vehicles greening their power grid. Recent modeling results of Colorado’s electricity system found that the state can run on electric vehicles and mostly renewables, without affecting its ability to supply affordable and reliable power. In fact, deep decarbonization of the electricity, transport, and heating sectors would result in combined savings of $28.6 billion by 2040, relative to a business as usual scenario. In addition to savings from reduced fuel consumption, the reason the deep decarbonization scenario comes in the cheapest is because actual electricity rates in the power sector go down, even as electricity demand goes up. These lower rates are driven by extremely inexpensive renewable electricity generation.
It must be said Colorado does well in this analysis because it is relatively rich in solar and wind potential. According to National Renewable Energy Library data, the state has the fifth highest technical renewable energy potential (combined wind and solar) in the U.S and ranks higher in its solar and wind potential than it does in population size or electricity consumption. However, it is not without analogues, states like Texas, Kansas, and Oklahoma that are well-endowed with renewable energy potential could stand to benefit from higher levels of renewable energy penetration, especially as these technologies are set for even more aggressive cost reductions.
Further doubt about the prospects for renewable energy should be relieved by what the market is actually choosing. Last year, U.S. clean energy investment hit a record-breaking $64.2 billion, driven by investment in wind and solar power generation technology. Solar and wind resources will make up 64 percent of utility-scale additions in 2019, and utility companies across the country have decided to retire coal plants early and replace them with a mix primarily made up of renewables and battery storage technology.
No energy source is without adverse environmental side effects. As renewables continue to enter the marketplace, we will have to manage their material and land use. But life-cycle analysis of different electricity generation technologies confirms that fossil fuels place a significantly higher burden on human and ecosystem health than renewable sources, even after accounting for land-use impacts of wind and solar power. Materially, 90 percent of a typical photovoltaic panel is made up of glass, polymers, and aluminum, all of which are recyclable and nonhazardous. The market value for photovoltaic panel treatment and recycling could amount to $450 million by 2030, up from just $63.8 million in 2016. As renewables move from niche to mainstream, so too will the industries that recycle and dispose of their components efficiently.
Meanwhile, expanding the use of renewables will reduce air pollution and greenhouse gas emissions. Criticism of the GND as a progressive wishlist stuffed into climate policy is justified, but that does not mean that climate change is not worthy of our attention. It is a matter of firm agreement that increasing CO2 emissions lead to a rise in global temperatures, and in turn an increase in climate risks. We can also be confident that as we reduce emissions, we are reducing the risks faced by society from climate change. Global deployment of renewable energy avoided roughly 2 billion tons of CO2 emissions in 2018, and is proving itself as one of the best strategies to achieve immediate emissions reductions.
All electricity generation systems have their particular attributes and associated costs. Ultimately, we have to decide which of these costs are more manageable, keeping in mind that the costs associated with a renewables-dominated grid can be engineered away (increasing energy storage deployment, transmission lines, etc.), while at least some of climate damages associated with rising emissions cannot. Considering the promising economic trends of renewables and the climate risks of increasing greenhouse gas emissions, the case for a transition to a renewables-based power system is becoming increasingly persuasive.
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