No question, 2016 was an extremely eventful year for clean technology. At Scaling Green and Tigercomm, we’re very interested in what 2017 brings. Before we get to 2017, though, here are 10 clean energy stories that industry analysts, ourselves included, consider to be among the most significant in 2016.
- Wind and solar prices keep falling. We wrote last week about Lazard's new "Levelized Cost of Energy" (LCOE) analysis, which found: "For wind, the cost range is down from $101-$169 per MWh in 2009 to just $32-$62 per MWh in 2016. That’s a 66% decline — and that’s huge. For utility-scale solar, the cost has fallen off a cliff, down 85% from 2009 ($323-$394 per MWh) to just $49-$61 per MWh today." Also, as Bloomberg reported recently, "'Renewables are robustly entering the era of undercutting' fossil fuel prices." The best news of all is that there's every sign that these trends will continue indefinitely, as solar and wind power technologies continue to improve and as costs continue to fall.
- Wind and solar power capacity continue to grow rapidly. On December 13, Greentech Media (GTM) reported, the U.S. solar market "just shattered all previous quarterly solar photovoltaic installation records," as "4,143 megawatts of solar PV were installed in the U.S. in the third quarter of the year, a rate of 1 megawatt every 32 minutes." GTM added that, "[b]y the end of 2016...the United States will have installed 14.1 gigawatts this year alone, up 88 percent over 2015’s total." Worldwide, according to Bloomberg New Energy Finance (BNEF), "there will be almost 70 gigawatts of photovoltaics added globally in 2016, up from 56 gigawatts in 2015." As for wind power, BNEF estimates new installed capacity worldwide at 59 gigawatts in 2016, with Clean Technica reporting, "Global wind energy capacity reached 456 GW at the half-year mark of 2016, and is set to hit 500 GW by the end of the year, according to new figures from the World Wind Energy Association."
- Offshore wind takes a major step forward in the U.S. The Energy Information Administration reported on December 2, "Federal leasing for offshore wind grows as first U.S. offshore wind farm comes online." As the Boston Globe put it, "Two years after the infamous collapse of Cape Wind and its 130-turbine project in Nantucket Sound, a much more humble US entry into offshore wind is still a towering source of optimism for joining an industry that has more than 3,300 turbines spinning in European waters." States are pushing ahead as well. For instance, "Massachusetts has committed to 1,600 megawatts of offshore wind by 2027," while New York State's "clean energy agency, NYSERDA, plans to play a pioneering role in the early development of our region’s first federal offshore wind energy area, an 80,000-acre parcel located twelve miles south of Long Beach and the Rockaways, off Long Island." And Statoil "is set to explore the potential for an offshore wind farm that it says could provide both New York City and Long Island with 'a significant, long-term source of renewable energy,'" following Statoil's $42 million winning bid on "a lease sale for 79,350 acres off the coast of New York."
- Major corporations continue their push for more clean energy. Earlier this month, the New York Times reported that “Amazon reiterated its long-term commitment to power its machines entirely with renewable energy,” and that “all of [Google’s] data centers around the world will be entirely powered with renewable energy sources sometime next year.” And as The Motley Fool explained recently, "Corporate customers are becoming a really big deal for renewable energy developers, and 2017 could be another big year," with major corporate purchasers of clean energy including (in addition to the aforementioned Amazon and Google) Walmart, Target, Apple, Microsoft, Facebook, Dow Chemical, and many others.
- The coal industry is still in very deep trouble. As Time Magazine wrote in mid-November, " policymakers on both sides of the aisle say they cannot envision any way for Trump to save the coal industry, whose decline they attribute as much to market forces as Obama-era regulation." Time adds: "Coal also struggles to compete with renewable energy sources like wind and solar in locations where those resources are abundant. The cost of solar panels in particular has declined precipitously thanks to technology advances in recent years. Even conservative states like Texas and Oklahoma have become fast adopters of widely available wind energy." Finally, note that "approximately 44% of US coal now comes from companies that have declared bankruptcy sometime in the last four years." In sum, things are not looking good for old "King Coal."
- Energy storage has a "transitional year." According to Utility Dive: "Following on the heels of record breaking year, energy storage in 2016 is on track to break through last year’s record. The year-over-year increase will likely not be as dramatic as 2015’s 243% increase over 2014, but several developments in 2016 show that the storage market is developing in ways that could clear a path for accelerated growth in future years." And as Energy Storage News reports, "The cost of energy storage technologies is set to reduce significantly over the next five years driven by economies of scale and improvements in both technology and standardisation, according to a new report from financial advisory and asset management firm Lazard."
- The Trump Administration's energy team takes shape. So far, the nominees include: former Texas Gov. Rick Perry for Secretary of Energy, ExxonMobil CEO Rex Tillerson for Secretary of State, Oklahoma Attorney General Scott Pruitt for EPA, and Rep. Ryan Zinke (R-Montana) for Secretary of Interior. The question is what impact this team will have on the transition from fossil fuels to clean energy. For instance, as The Guardian writes, "Trump has picked climate sceptics and oil industry executives for key positions in his administration, promising to scrap President Obama’s clean power plan and withdraw from the Paris climate agreement." On the other hand, The Guardian quotes SolarWorld's Vice President Milan Nitzschke as having "no concerns that the US [solar] market will not grow in the next years, as it did before," as "Mr Trump is a businessman and will already know that solar is one of cheapest sources of electricity." There's also the optimistic view expressed in this Bloomberg article, that economics are driving clean energy deployment, with wind and solar power projects now cheaper (and faster to build) than fossil-fuel-fired power plants in many areas of the country. Finally, consider that renewable energy polls "extremely well among Trump voters," as "75% of Trump voters support taking action to accelerate the development and use of clean energy in the United States." So, stay tuned, as we find out in 2017 and beyond how strong the clean energy industry has become -- politically and economically.
- California enacts sweeping legislation to slash greenhouse gas emissions. In early September, California Gov. Jerry Brown signed SB32 into law, "requir[ing] the state to slash greenhouse gas emissions to 40% below 1990 levels by 2030, a much more ambitious target than the previous goal of hitting 1990 levels by 2020." As Vox's Brad Plumer explains, "It’s hard to overstate how ambitious this is," potentially resulting in "a world where California gets more than 50 percent of its electricity from renewables in 2030 (up from 25 percent today), where zero-emissions vehicles are 25 percent of the fleet by 2035 (up from about 1 percent today), where high-speed rail is displacing car travel, where biofuels have replaced a significant chunk of diesel in heavy-duty trucks, where pastures are getting converted to forests, where electricity replaces natural gas in heating, and on and on."
- Positive news for Nevada solar. As Vote Solar reports, the Silver State appears to be getting "back on track" when it comes to solar net metering, with the state PUC agreeing "to a settlement reversing their decision and grandfathering existing solar owners onto net metering rates," and with "the legislature [having] flipped," with "clean energy advocates...in leadership positions, the governor [having] agreed to sponsor legislation restoring net metering, and advocates...pursuing community solar programs and a large increase to the state’s renewable energy standard."
- The "Sunshine State" starts to live up to its name? According to Vote Solar, PACE financing is picking up in Florida, while "[r]ooftop heavyweights SolarCity and Vivint have both entered the state with loan products." Meanwhile, Florida voters weighed in as strongly supportive of solar power: " In August, voters passed a ballot initiative, by a 73 percent margin, in favor of property tax abatement for solar. It now goes to the legislature for implementation, and when it is in effect, it will mean about a 20 percent reduction in solar costs. And in November, voters defeated a deceptive anti-solar ballot initiative that utilities had spent $25 million promoting."
That's really just the tip of the cleantech iceberg, of course; needless to say, there's a great deal more going on than we covered here. For other year-end clean energy wrapups, we recommend RenewEconomy's year in review, The Energy Gang's 2016 Year-End Extravaganza and Midwest Energy News' year in review. Enjoy -- and have a great holiday season!