Renewables Take the Lead. They Won’t Look Back November 25, 2014

The Day has come. If even the New York Times knows, it must be getting pretty obvious.

New York Times:

For the solar and wind industries in the United States, it has been a long-held dream: to produce energy at a cost equal to conventional sources like coal and natural gas. That day appears to be dawning. The cost of providing electricity from wind and solar power plants has plummeted over the last five years, so much so that in some markets renewable generation is now cheaper than coal or natural gas. Utility executives say the trend has accelerated this year, with several companies signing contracts, known as power purchase agreements, for solar or wind at prices below that of natural gas, especially in the Great Plains and Southwest, where wind and sunlight are abundant.

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Here, Michigan Public Service Commission’s Julie Baldwin on the drop in Wind Energy prices:



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New York Times again:

Those prices were made possible by generous subsidies that could soon diminish or expire, but recent analyses show that even without those subsidies, alternative energies can often compete with traditional sources. In Texas, Austin Energy signed a deal this spring for 20 years of output from a solar farm at less than 5 cents a kilowatt-hour. In September, the Grand River Dam Authority in Oklahoma announced its approval of a new agreement to buy power from a new wind farm expected to be completed next year. Grand River estimated the deal would save its customers roughly $50 million from the project. And, also in Oklahoma, American Electric Power ended up tripling the amount of wind power it had originally sought after seeing how low the bids came in last year. “Wind was on sale — it was a Blue Light Special,” said Jay Godfrey, managing director of renewable energy for the company. He noted that Oklahoma, unlike many states, did not require utilities to buy power from renewable sources. “We were doing it because it made sense for our ratepayers,” he said.

Recently retired from Austin Energy, the municipal utility of the Texas capital, on how an integrated system works.

Times again:

According to a study by the investment banking firm Lazard, the cost of utility-scale solar energy is as low as 5.6 cents a kilowatt-hour, and wind is as low as 1.4 cents. In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low end and coal at 6.6 cents. Without subsidies, the firm’s analysis shows, solar costs about 7.2 cents a kilowatt-hour at the low end, with wind at 3.7 cents. “It is really quite notable, when compared to where we were just five years ago, to see the decline in the cost of these technologies,” said Jonathan Mir, a managing director at Lazard, which has been comparing the economics of power generation technologies since 2008. Mr. Mir noted there were hidden costs that needed to be taken into account for both renewable energy and fossil fuels. Solar and wind farms, for example, produce power intermittently — when the sun is shining or the wind is blowing — and that requires utilities to have power available on call from other sources that can respond to fluctuations in demand. Alternately, conventional power sources produce pollution, like carbon emissions, which face increasing restrictions and costs. But in a straight comparison of the costs of generating power, Mr. Mir said that the amount solar and wind developers needed to earn from each kilowatt-hour they sell from new projects was often “essentially competitive with what would otherwise be had from newly constructed conventional generation.”

Below, Energy Expert Doug Jester of 5 Lakes Energy, on why new energy is like the cell phone revolution.

In part utilities are waking up to renewables in response to customers, large and small, who are now starting to become energy producers themselves.

CNBC:

Pat Kennell’s motivation for installing sun power in his home is typical of the solar industry’s new customer: He did it to save money. The retired police officer from Stony Point, New York, said his cost of energy per kilowatt hour will go from 20 cents with the local utility company to 13 cents with his new solar technology. And it didn’t cost him anything to install. The firm Kennell worked with, SolarCity, offered him a lease program, where customers with long-term contracts can have the equipment installed and maintained for free. Rivals of SolarCity offer similar programs. “I needed to save money. I’m retired, my wife is 70, we needed to save some cash, and solar is good for the environment. I expect to save about 25 percent off my energy bill,” Kennell said. Kennell isn’t alone. The residential solar market is on fire, with homeowners installing solar systems all across the country—sometimes trying to help the environment, other times just looking to save money. And while the trend has sent solar stocks on a tear, it could disrupt some traditional energy companies.