Jessyca Sheehan, director, is a member of APCO’s global energy and clean tech practice.
Earlier this week, the clean tech research and advisory firm Clean Edge hosted a webinar on finding synergies for growth for renewable energy and natural gas. In other words, while often presented as “either/or” energy alternatives, can the two low carbon energy sources in fact complement one another as the U.S. continues its transition toward energy independence?
The guest speakers represented a cross-section of the energy landscape, from finance (Michael Butler with Cascadia Capital) to government (Doug Ardelt with DOE’s National Renewable Energy Laboratory) and the NGO and corporate perspective (Don Furman, chair of the Wind Energy Foundation and former SVP of Iberdrola Renewables). Highlights from the engaging dialogue included:
- Together, renewable energy and natural gas have comprised more than 80 percent of all new U.S. energy generation capacity in three of the past four years. With the price of natural gas expected to remain low for the foreseeable future, and renewable energy becoming more competitive in certain regions, their combined market share is expected to remain strong.
- Recently, we have seen capital leave renewable energy (solar, wind, biomass) and instead move toward clean tech (smart grid, energy efficiency, storage) as well as to the demand side of natural gas e.g., conversion technologies to transition vehicles and industrial facilities to natural gas. Butler predicted that over the next 12 – 24 months we’ll see funding migrate towards technologies and infrastructure that allow for the integration of renewable energy and natural gas, similar to the hybrid power plant GE is pioneering.
- Where the speakers saw the most opportunity for renewable energy and natural gas to play together is on the operating side. Namely, new tools for those managing the electric grid that provide the forecasting capability and flexibility needed to integrate renewables with natural gas and other conventional fuel sources in order to safeguard power reliability.
- All agreed that the prospect of a national renewable portfolio standard (RPS) is unlikely. With around 30 states now having their own RPS, defending, expanding and enacting new RPS’s at the state level is where the action is expected to remain. The point was made that a national RPS would need to be flexible enough to take into account regional differences in energy supply and infrastructure, e.g., the Pacific Northwest has a sizable hydro supply readily available, while Iowa and South Dakota already produce 20 percent of their electricity from wind. Thus making a federal RPS unlikely.
Clearly, the combined power of natural gas and renewable energy fits nicely into President Obama’s often espoused “all of the above” energy strategy. What remains to be seen, however, is whether or not any sort of strategic energy policy will come out of Washington to provide guidance to energy providers, regulators, consumers, and investors.
*Clean Edge and GE are APCO clients