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Utility-Scale Renewables, Too Risky?

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Nevelyn Black is an independent writer with a background in broadcast and a keen interest in renewable energy.  In the last few years, she transitioned from celebrity interviews and film shoots...

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The challenges that face utility-scale renewables persist and the list is long.  Continuing global supply chain disruptions, spiking commodities costs, land use permitting uncertainties and overwhelmed interconnection queues were among market predictions.  The International Energy Agency (IEA) Renewable Energy Market Update stated, ‘While supply disruptions may lead to local transitional price fluctuations, there is no sign to date that the Covid-19 crisis will change these declining cost trends. For instance, in the case of solar PV, manufacturing overcapacity is expected to reach record levels in the coming years… which will put further downward pressure on module prices.’  A seller’s market for renewable power purchase agreements (PPA’s) and a need for novel solutions were also forecast for 2022.

Have these predictions become a reality?  State utility, Idaho Power, has partnered with Micron, a computer storage manufacturer, to facilitate the construction of a new 40-MW solar project.  The utility has asked the Idaho Public Utilities Commission (IPUC) to approve a power purchase agreement with Black Mesa Energy, an oil and gas production company, to develop a dedicated solar facility for Micron’s renewable energy use. “This agreement with Micron is an example of the innovative thinking that will be required as we all move toward a clean energy future,” said Lisa Grow, president and CEO of Idaho Power. “We are excited to be a part of Micron’s goal of sourcing 100% renewable energy for their U.S. operations, and we’re proud that they are starting that journey with us, right here in Idaho where they have been an important part of our community for more than four decades.”  

Michigan utility, DTE Energy said it plans to double its renewable energy generation by 2025, by investing $3 billion into their renewable infrastructure.  The utility’s MIGreenPower program gained 50,000 subscribers.  The program has grown in popularity and caused a boom in wind and solar with the number of new customers increasing by 500 a week.  These customers have voluntarily signed up to pay a premium to be tied to a new renewable energy generation site.  “Our customers are demanding a Grid of the Future, a modern new grid delivering clean and reliable energy, and we’re delivering it.” Jerry Norcia, president and CEO, DTE Energy.

Dominion Energy Virginia received approval from the Virginia State Corporation Commission (SCC) to expand its portfolio of solar and energy storage with 15 new projects and 24 PPA’s with a total capacity of 1 GW.  “This is another significant milestone in Virginia’s transition to energy independence,” said Ed Baine, president of Dominion Energy Virginia. 

The IEA update addressed costs, stating, ‘The continuing decrease in cost trends alone will not shelter renewables projects from a number of challenges,’ and some argue renewables are still not a ‘reliable’ investment.  The Tennessee Valley Authority (TVA) plans to invest in fossil fuels instead instead of renewables.  The federally owned utility plans to invest more than $3.5 billion in new gas-burning electric plants.  According to Catherine Butler, a spokeswoman for the TVA, solar or other zero-emissions sources would be less dependable and more expensive than gas.  “We have an obligation to serve, and ensure the lights come on,” she said. “So, when renewables aren’t available, natural gas will be available to ensure that reliable, resilient service is available to power our communities.”  

Despite renewable energy’s many challenges, IEA concluded that ‘most renewables for electricity generation, especially wind and solar PV, have high investment costs but low operating and maintenance costs. Once operational, renewables projects with long-term power purchase contracts can provide stable revenues to investors.’  Can they also shelter buyers from future electricity and fuel price volatility?

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