Renewables could be cost competitive by 2025
August 27, 2013 | By
Barbara Vergetis Lundin
By 2025, wind and solar electricity generation could become cost competitive without federal subsidies, according to a new Department of Energy study conducted by the National Renewable Energy Laboratory (NREL). That is, if new renewable energy development occurs in the most productive locations.
"The electric generation portfolio of the future could be both cost effective and diverse. If renewables and natural gas cost about the same per kilowatt-hour delivered, then value to customers becomes a matter of finding the right mix," said NREL senior analyst David Hurlbut, the report's lead author. "Renewable energy development, to date, has mostly been in response to state mandates. What this study does is look at where the most cost-effective yet untapped resources are likely to be when the last of these mandates culminates in 2025, and what it might cost to connect them to the best-matched population centers." The study draws on an earlier analysis the lab conducted for the Western Governors' Association to identify areas where renewable resources are the strongest, most consistent, and most concentrated, and where development would avoid protected areas and minimize the overall impact on wildlife habitat. The research found that Wyoming and New Mexico could be areas of robust competition among wind projects aiming to serve California and the Southwest with both states likely to have large amounts of untapped, developable, prime-quality wind potential after 2025. Wyoming's surplus will likely have the advantage of somewhat higher productivity per dollar of invested in generation capacity; New Mexico's advantage is being closer to the California and Arizona markets. Montana and Wyoming could be attractive areas for wind developers competing to meet demand in the Pacific Northwest. The challenge for Montana wind power will be the cost of transmission through the forests dominating the western part of the state. Wyoming wind power could also be a low-cost option for customers in Utah, which has its own diverse portfolio of in-state resources. Colorado is a major demand center in the Rockies and will likely have a surplus of prime-quality wind potential in 2025. However, the study suggests that Colorado is likely to be isolated from future renewable energy trading in the West due to transmission costs between the state and its Rocky Mountain neighbors. California, Arizona, and Nevada are likely to have surpluses of prime-quality solar resources but no one state is likely to have a strong comparative advantage over the others unless environmental or other siting challenges limit in-state development. Consequently, development of utility-scale solar will likely continue to meet local needs rather than expand exports. The research notes future electricity demand will be affected by several factors including trends in the supply and price of natural gas; consumer preferences; technological breakthroughs; further improvements in energy efficiency; and future public policies and regulations. For more: Related Article: Sign up for our FREE newsletter for more news like this sent to your inbox! |
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