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Where do Renewables Go in the Era of Covid19?

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David Gaier's picture
Owner David Gaier PR

David Gaier is a communications professional, former spokesman for NRG Energy and PSEG Long Island, and consultant to energy advisory agencies. His 30+-year career includes crisis communications...

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  • May 18, 2020
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It’s a cruel irony that while moisture droplets breathed out in the normal course of life can today infect a person with a deadly virus, the air in many metropolitan areas is notably, and visibly, cleaner. The price of crude oil has dropped precipitously, so much so that a couple weeks ago it was in negative territory, meaning that producers were actually paying to have it taken off their hands. The price is gasoline is way down, certainly because far fewer people are driving, and when they are, it’s often short distances to the pharmacy, doctor, or grocery store. The US Energy Information Administration (EIA) now predicts that retail sales of electricity in the commercial sector will fall by 6.5% in 2020 because many businesses have closed and many people are working from home, and forecasts that total U.S. electric power sector generation will decline by 5% in 2020

At the same time, under economic and political pressure from many corners, the economy is starting to “open up” again, and it’s reasonable to expect that will bring back at least some energy consumption. To underscore that assertion, at 12:54 pm today (May 15), President Trump announced live that “Vaccine or no-vaccine, we’re back.” On the other side, legions of epidemiologists, emergency medicine doctors, vaccine and pharmaceutical researchers and other scientists say that a safe and effective vaccine is far in the future…very far, and that a resurgence of Covid19 could come next fall, leading to the “darkest winter in modern history.”

Yet many sectors of the economy in many states are regions are indeed coming back, and the pace of that resurgence will, by all accounts (not least the which have been “vigorous” anti-lockdown demonstrations in state capitals and reopening of “non-essential” businesses contrary to state governors’ orders), continue apace and will certainly increase after Memorial Day. And if per-capita Covid19 testing can be appreciably increased, more employees testing negative will feel comfortable returning to the workplace.

Well, where does all of this leave renewables?  According to a brand new analysis by the BW Research Partnership titled “Clean Energy Employment Initial Impacts from the COVID-19 Economic Crisis, April 2020,” many states lost large numbers of renewable and clean-energy jobs over just the last two months, including New Jersey and New York, which lost 21% and 13% respectively; California, which lost the largest total number of clean-energy workers (77,000) while the country as a whole lost over 18% of clean and renewable-based jobs. Energy efficiency was hit hardest, followed by renewable generation; clean vehicles, T&D and storage, and clean fuels. According to the report, “(we) conservatively project that the clean energy sector will lose about a quarter of its workforce or 850,000 jobs by the end of the second quarter if no actions are taken to support the clean energy industry and its workers.”

These are not trifling numbers. They not only represent lost incomes for families and individual workers, but major downstream retail losses, major project delays, supply chain losses and interruptions, and the threat of cancellation of entire projects. Much of the production of solar panels, e-Vs, LED lighting, wind turbine parts, and energy-efficiency contracting services were shuttered or dramatically reduced on account of the virus, and re-starting these isn’t like flipping a switch. In addition, the Federal Production Tax Credit (PTC) for terrestrial wind development (already reduced over the last few years) sunsets at the end of this year. The Investment Tax Credit (ITC) for solar and offshore wind got a bit of reprieve last year, but the full credit was already reduced for this year, and will ratchet down in the next couple years. So, the delays in construction and equipment investment that Covid19 created may make many projects less economic, or entirely uneconomic, taking more jobs with them.

The picture is not entirely bleak. Many pundits say that a Democrat victory in November for the White House, Senate, or both could dramatically improve the picture, and in any event, clean and renewable energy projects already have momentum than may be slowed, even interrupted, but probably not entirely halted. Sheer economics and the end of their useful operational like will continue to shutter coal-fueled power plants, and dispatchable, utility-scale energy storage, which many say is the key to making renewables viable, improves its efficiency and capacity seemingly month-over-month. EIA estimates that electricity generation from coal will fall by 25% in 2020, while generation from renewables will rise by 11%. That, I think, would be historic.

But there’s also an unfortunate issue here. New York and New Jersey have among the most ambitious clean energy programs—especially offshore wind---renewable energy goals, and supportive governors, but have also been hit the hardest by Covid19—and so have their budgets.

And yet there’s hope…one hopes. For example, according to ROI-NJ, Bellwether Research, on behalf of Ørsted, in a recent survey found most New Jersey voters (82%) favor expanding wind energy in the state, compared to 13% who don’t approve. Nearly two-thirds (73%) said that offshore wind will impact the environment in a positive way.

For his part, New York Governor Cuomo, in July of last year, signed the nation's largest offshore wind agreement and the single largest renewable energy procurement by any state, selecting offshore wind projects that will create enough energy to power over 1 million homes, create more than 1,600 jobs, and result in $3.2 billion in economic activity. At that same time, the governor announced $287 million in cutting-edge infrastructure in multiple regions of the state, including the Capital Region, Brooklyn, Staten Island and Long Island. What happens now with those projects and investments is probably less certain than before the current crisis. But according to Politico NY, on a May 14, 2020 conference call meeting, the NY Public Service Commission ordered the state’s investor-owned electric utilities to submit initial plans with potential projects to support the interconnection of new renewables by Nov. 1. 

The short-term picture of generation sources, energy consumption patterns, financing, projects, renewable jobs, and the very future of renewables is far less clear now than just three months ago.  But that could all change quickly if the nation makes real progress against "the hidden enemy." 

 

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Matt Chester's picture
Matt Chester on May 18, 2020

And yet there’s hope…one hopes. For example, according to ROI-NJ, Bellwether Research, on behalf of Ørsted, in a recent survey found most New Jersey voters (82%) favor expanding wind energy in the state, compared to 13% who don’t approve. Nearly two-thirds (73%) said that offshore wind will impact the environment in a positive way.

This does offer a lot of hope-- that should mean leaders they continue to vote in will prioritize these technologies and allowing them to grow in the states. I wonder if the economics hit the wind industry in the state hard, though, will that perhaps be seen as a check in the loss column for wind energy and see some of the support perhaps dwindle as a result because they come away with the perception that offshore wind couldn't compete? 

David Gaier's picture
David Gaier on May 19, 2020

Matt, I just think we won't know until the nation returns to some semblance of normalcy, and after the November election. 

 

Bob Meinetz's picture
Bob Meinetz on May 18, 2020

"...utility-scale energy storage, which many say is the key to making renewables viable, improves its efficiency and capacity seemingly month-over-month."

David, though I agree many would say utility-scale energy storage is the key to making renewables viable, they're wrong.

Using raw numbers for the efficiency of Li-ion batteries, and the external components necessary to convert electricity from AC to DC and back again, at least 15-20% of energy stored in batteries is wasted as heat.

That's the tip of the iceberg. A peer-reviewed study (not the "research-for-hire" promotional material created by investment banks and PR firms for their clients) by Eric S. Hittinger of the Rochester Institute of Technology and Ineŝ M. L. Azevedo of Carnegie Mellon's Department of Engineering and Public Policy, and published in Environmental Science and Technology, found that

"net system CO2 emissions resulting from storage operation are nontrivial [significant] when compared to the emissions from electricity generation, ranging from 104 to 407 kg/MWh of delivered energy depending on location, storage operation mode, and assumptions regarding carbon intensity."

Translation: every MWh of electricity stored in batteries dumps at least 104 kilograms of added CO2 into the air compared to generating electricity on demand - and because renewables are incapable of generating electricity on demand, using renewables to reduce carbon emissions is going backwards. It's a mistake.

Though this fact may be deflating to renewables advocates who have pinned their hopes on "clean" solar and wind to prevent climate change, a fact it is. They were wrong, and the sooner they can admit it the sooner we can move forward with clean, dispatchable sources of energy that don't require battery storage or fossil fuel generation to fall back on.

David Gaier's picture
David Gaier on May 19, 2020

Bob, that's one view. I would say that the utility-scale energy storage market is relatively young; its ability to interconnect with and dispatch to the grid improves daily; and the changing LCOE and the practicality and scalability of these technologies lack transparency such that today's assumptions about them won't be true tomorrow. But what do you suggest instead as clean, dispatchable sources of energy that don't require battery storage or fossil fuel generation to fall back on? I'm guessing nuclear? Which I support, by the way, in a limited fashion.  And I think we need to look at SMRs, nuclear permitting, and nuclear waste disposal in a way we never have before. ZECs, by the way, have soured some on nuclear. 

Bob Meinetz's picture
Bob Meinetz on May 19, 2020

Good guess, David, and I agree that SMRs will provide the most affordable way to re-introduce nuclear energy to a skeptical public.

Curious: why do you say ZECs have soured some on nuclear? I've been quite involved in Ohio, Pennsylvania, New York, New Jersey, Connecticut, and here in California to promote them. When properly designed, they offer credits based on the EPA's social cost of carbon (currently, $42/tCO2e) to all zero-carbon sources - they level the playing field. The only opposition I've seen is from proponents of RECs (Renewable Energy Credits), who typically don't want a level playing field.

Also - why do we need nuclear waste disposed in a new way?

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