You’ve seen the stats: it’s been a banner year for renewable energy. For solar, a first-quarter record of 506 megawatts (MW) installed brought total photovoltaic capacity to 4,427 MW in 2012. Earlier this year, wind saw its busiest first quarter in history, bringing cumulative U.S. wind power to 48,611 MW. While the future looks bright for these and other renewable technologies, how will changing conditions play out in these markets, and what does this mean for energy producers and utilities? In this post, we take a look at how renewable energy will impact the way the energy industry operates in the future.
The Way It Was
From the 1970s through late 90s, renewable energy sources were still ideas of the future: experimental, expensive and not broadly deployed. Solar was mostly rooftop and not always practical, nor popular. In the case of wind power, federal tax credits, decreasing capital costs and increasing performance bolstered adoption through the mid-2000s. In spite of the negative changes in investment, policy and oil prices, renewable energy became a $257 billion industry by 2012.
The Way It Will Be
Though important to a clean energy future, renewables still comprise a small percentage of our total energy production mix, and it’s not a silver bullet. This holds true for a couple of reasons:
1) Research, development and implementation are costly, especially when talking about infrastructure to distribute it—and when capital costs are increasing and production tax credits may be ending.
2) Renewable technologies are, for now, region-specific. For wind, the growth markets are in naturally windy regions, like the Midwest. And while sun is everywhere, sun energy isn’t equally distributed, and it takes a lot of panels to collect it. The same problems hold true for other sources, like hydro.
While it’s true that utilities and producers need to get a toehold in renewables immediately, to succeed they must look at where the real opportunities are, whether power can be cost-effectively generated in their specific markets, and how renewable products will compete against cheaper, more abundant fossil fuels. So get creative and innovate, but stay realistic. And Talk to Southwire. Always ahead of trends, we’re happy to discuss how our solutions can help you leverage industry changes and come out on top.
Tell us, what part does renewable energy play in the future of your utility?
Stay tuned for the next energy megatrend post where we’ll discuss how the nation’s aging energy infrastructure is impacting the future of the industry.
– Carol Godfrey