Renewables Overtake Coal: Is It for Real?

By Traver Kennedy, Chairman and CEO on November 15, 2016
Traver Kennedy
Home  / Blog  /  Renewables Overtake Coal: Is It for Real?

Over the past few weeks, renewables have attracted strong headlines like this one from the BBC, “Renewable Energy Capacity Overtakes Coal.” These headlines were based on a newly released report from the International Energy Agency (IEA) which revealed, “Led by wind and solar, renewables represented more than half the new power capacity around the world, reaching a record 153 Gigawatt (GW), 15% more than the previous year.” The report also indicated that renewables’ strong performance is the result of three factors: a) climate change mitigation; b) curtailing deadly air pollution (especially in Asia); and c) diversifying energy supplies to improve energy security. Last year, half a million solar panels were installed around the world every single day; and in China alone, two wind turbines were installed every hour.

Renewables now represent the “largest source of installed power capacity in the world,” according to the report. The IEA subsequently increased its five-year growth forecast for renewables by 13% between 2015 and 2021. Without question, this is great news and cause for celebration as the world progresses towards a low-carbon economy. After all, the cumulative installed capacity from renewables just overtook coal, right?

Yes, but…

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Solar wall? The sun in Qaqortoq, Greenland travels sideways in the summer and is nearly gone in the winter.

Renewables Rely on “Moody” Factors Such as Weather and Location

Solar and wind technology have made substantial strides over the past decade. In many ways, these renewables have grown much faster than expected. Headway makes headlines quite often. The same week that the IEA report was released, Tesla unveiled new solar roof tiles that are poised to boost solar adoption significantly. Techcrunch calls Tesla’s new solar panels and batteries “a big deal” for a good reason: it is the first time solar panels for homes are actually designed to look good and not just panel over a roof. Their article reinforces the idea that “looks matter” for homeowners. Tesla’s Powerwall batteries can store the energy from these tiles to better administer a home’s supply and demand for power. In a single stroke, Tesla is working to solve two big barriers for solar adoption.

But as sleek as Tesla’s new tiles are, and as efficient as China’s turbines have become, both technologies depend on the right weather and location. If (or where) the wind doesn’t blow, there is no turbine on Earth that will move an inch. And when the sun is gone (the further north you go, the longer it’s gone), those glossy tiles send nothing to the equally stylish batteries in your garage.

Renewables Need Overwhelming Capacity

To really overtake coal, or any other hydrocarbon, the cumulative installed power capacity of renewables such as solar and wind needs to be overwhelming because they are “variable” resources whose actual energy production varies depending on weather, location, and time conditions. The production capacity, thus, needs to outnumber the capacity of fossil fuels by several orders of magnitude for the simple reason that mining coal or pumping oil can be done 24/7 regardless of climate or location—all you need is the source.

Here’s some perspective on why just matching installed production capacity is not enough for renewables to overtake fossil fuels. The picture we chose for this article actually tells the whole story. In a place like Qaqortoq, which is the most northerly town in Greenland, the sun travels sideways. You never see the sun straight up, so the panels on the house are affixed to the walls. However, the light from the sun has to travel through a lot more atmosphere when it is sideways than if the sun were straight up. This means that on a clear, sunny day, these panels get less solar energy than the same panels on a rooftop somewhere in the tropics. Furthermore, for four months of the year, the solar panels are mere decorations because the sun never comes above the horizon during winter’s long polar nights.

Greenland may be an extreme case when it comes to location, but in places like Boston and New York, the sun sets around 4:30 for three months during winter. One reason Tesla is working on their home batteries is to improve the technology so that they can store energy from solar panels much more efficiently than they do today. Some day in the near future, location and weather won’t limit solar. But they do today.

Wind suffers from a similar dependence on location, weather, and battery storage technology—with the added complexity that you can’t just put a windmill on your roof. Wind turbines output is optimized for wind speeds of 30 to 55 mph. If wind speeds are lower, energy production falls way off, which happens quite often. In fact, wind turbines do not generate near their capacity. The industry estimates that the actual annual output of wind is only 30 to 40% of its installed capacity, while that of solar is 20 to 30%.

Renewables and Utilities

Utilities are working to manage renewable resources, yet these variable sources of clean energy often exacerbate the challenges. For instance, solar enables people to get some of their energy off the grid; in turn, consumers usually expect lower energy charges from their electricity company. The problem is that the grid needs to be available to all households because solar, as we saw above, is not a 24/7 resource. Maintaining the grid is costly. If too many households and businesses go off the grid, it can’t simply shrink; the cost of maintaining it remains the same. There are several regulations in different cities and states to deal with these issues, which are quite complex. To de-carbonize their business while providing for peak energy periods, utilities will need a richer mix of renewables, which together, can reliably provide electricity around-the-clock that is clean and affordable.

Renewables Are for Real, but They Need More Time

The IEA is right to be celebrating the milestone of renewable installed capacity overtaking coal. It is significant progress. Even though the BBC article points out, “Renewable technologies inevitably generate a lot less than their capacity,” for the reasons we have explored here, we have reached a tipping point where a fossil-free future is finally coming into focus—and sooner than most people predicted. The business and sustainability incentives for clean energy are in place. It is now up to all of us in the energy industry, including hydrocarbons, to work together to make it happen sooner rather than later.

 

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