For the past three decades, the United States has seen stronger and stronger demand from the public, as well as academic and scientific institutions, for the reduction and eventual abolition of energy sources that rely on fossil fuel. This is mostly due to increased concern over the impact that burning these fuels has on the environment. Electrical Apparatus reported in November that the State of California had engaged in what some consider to be an extremely ambitious goal - to completely phase out the state’s reliance on any and all fossil fuels by the year 2045. In March 2019 Puerto Rico, as part of its efforts to recover from the devastation caused by Hurricane Maria in 2017, passed bill PS 1121, which called for the creation of a new, more resilient, distributed grid system that relies entirely on renewable energy by the year 2050. In Washington, D.C., House representatives have introduced a proposed resolution called the “Green New Deal” to Congress. This proposal calls for the federal government to collaborate with state governments, academic institutions, and businesses to, among other things, reduce greenhouse gas emissions caused by U.S. industry, transportation, and agriculture by 40 to 60 percent by the year 2030, and to eliminate its greenhouse gas emissions by the year 2050, “as much as is technologically feasible.” A state like California, or an island commonwealth like Puerto Rico, is one thing...but is it possible for a huge, sprawling economy like that of the continental United States to do the same?
Even if it is not, there are multiple signs that the Sun is setting on the age of fossil fuels. It’s no secret that in the coal industry, job growth is stagnating; in 2016, roughly 2,000 jobs in coal production were created in the U.S. In 2017, that number fell to 900, recovering slightly in 2018, when 1,300 coal jobs were created. Besides environmental concerns about coal-related atmospheric pollution, there are other factors contributing to the deflation of the coal industry. In last month’s issue of EA, David Miller’s article “Mining the Sun” discussed how even in West Virginia’s former coal country, solar power businesses are taking over as a go-to career choice for the industrious residents of the Holler. Though the region was once the second-highest coal producer in the country, since 1955, coal has gone from accounting for half of the energy production in the U.S. to 27.4 percent as of 2018. Miller also explained how the low cost of natural gas was just as significant an influence on the decline of coal as the rise of renewable energy.
While the fading rate of coal consumption is a major factor leading to the overall decline of coal, the fact is that running a coal-centric business is becoming less profitable, while renewable energy is becoming cheaper. According to a new study by the International Renewable Energy Agency (IRENA), the cost of renewable energy production in “G20” countries (a collection of countries, including the United States, with large economies who account for 86 percent of the global economy) are expected to drop to $0.03 - $0.10 per kilowatt hour by 2020. By contrast, fossil fuels typically cost $0.05 - $0.17 per kilowatt hour in those same countries. This lines up with the findings of the Bloomberg New Energy Foundation’s (BNEF) findings in 2018, which said that the cost of electricity for renewable energy sources are decreasing. For example, the cost of solar power has tumbled 77 percent over the previous nine years, while fossil fuels like coal, nuclear, and natural gas have seen “only very modest reductions, at best, in that time.” The BNEF’s report also found that the cost of lithium-ion batteries decreased from $1,000 per kilowatt-hour in 2010 to $209 in 2017. Since these batteries are crucial components to renewable energy technology, this tremendous price decrease has further encouraged the adoption of wind and solar energy.
An independent think tank called Carbon Tracker published a study in 2018 that found that 42% of global coal capacity is currently unprofitable. The Carbon Tracker report said that by that time, 100% of U.S. coal capacity will have higher long-run operating costs than renewables. In fact, this may happen far sooner than 2030 - in 2018, another independent think tank called Energy Innovation found that the maintenance and operational costs of 74 percent of coal plants in the U.S. had exceeded the cost of building new, local wind or solar-powered generators.
Changing how a business works, especially a large business, has been described as “trying to turn an aircraft carrier on a dime.” It’s not easy or cheap, especially if that business has long relied on something like burning large amounts of fossil fuels for profit. Based on all the signs, it seems there are economic, as well as environmental incentives to make the shift from fossil fuels to renewables in the coming decade...just look where the wind is blowing.
(Originally published in Electrical Apparatus Magazine. Print only.)