Renewable Energy Sizzles, Natural Gas Fizzles

Businesses seeking renewable energy to fuel their operations received some good news from the U.S. Energy Information Agency (EIA) last week. In its latest update, EIA noted that renewables have begun to catch up to coal for a share of the U.S. power generation market. If the trend continues, renewables will be able to claim the second-place slot, behind only natural gas.

That’s a stunning reversal of fortune in just a few short years. Coal played a dominant role in U.S. electricity generation through much of the 20th century. As recently as 2015, coal was still edging out natural gas for the position of power generation leader, and renewables were lagging far, far behind.

Coal fortunes continue to fall as renewable energy rises

The latest EIA monthly report on electricity is dated May 2019 and was released on July 24. It demonstrates how much the U.S. energy landscape has changed over the past four years.

From January through May of 2019, coal power plants under the umbrella of electric utilities, independent producers and other sources accounted for 391,567 gigawatt-hours of electricity generation. That’s down from 440,167 GWh during the same period last year.

As would be expected, natural gas easily beat coal during the first five months of 2019, at 560,350 GWh. However, the real story is the growth of renewable energy.

For the first five months of 2019, renewables—including conventional hydropower, biomass, wind, solar and geothermal—were closing in on coal, with 317,731 GWh generated.

May was an especially strong month for renewables compared to coal. The organization Sun Day Campaign took a closer look at the numbers and noted that renewables edged out coal for the month of May.

The totals vary depending on which categories of producers are included. According to Sun Day’s metric, renewables claimed 73,779 GWh in May compared to 71,988 for coal.

A long, hot summer for coal

Due to regional and seasonal energy use patterns, renewables may lose their lead over the short term, but EIA expects renewables to put in a strong showing this summer. In May, the agency issued a forecast for the summer of 2019 under the somewhat ominous headline, “EIA expects less electricity to come from coal this summer as natural gas, renewables rise.”

EIA anticipates a slight decrease in electricity demand this summer, from June through August, compared to 2018. The agency forecasts that coal will be especially vulnerable, sliding to a 25 percent share of U.S. electricity generation for the three-month period.

By way of comparison, in the summer of 2015, coal’s share was 35 percent.

Natural gas will once again top coal by a wide margin this summer. According to the forecast, gas will account for 40 percent of U.S. power generation for the summer of 2019, up slightly from its 39 percent share in 2018. Meanwhile, EIA expects hydropower and other renewables to account for a respectable total of 16 percent for the summer of 2019, up slightly from last year.

Renewable energy lowers the boom on coal and natural gas, too

As for the forces behind the rapid growth of the U.S. renewable energy sector since 2015, early large-scale adopters in the business community can claim a good share of the credit.

Other factors to emerge recently are economies of scale, technological improvements, state policies supporting community choice aggregation and new financial instruments.

Now that the market is maturing, some utilities are also driving the demand for renewable energy in order to provide their customers with competitive rates. One good example is Missouri’s Liberty Utilities-Empire District. Midwest Energy News profiled the company earlier this week and noted that it has made a sharp pivot away from its earlier projections for electricity generation.

The previous plan was to rely primarily on natural gas and coal for the next 10 years, then gradually add relatively small amounts of both wind and natural gas. That changed after Canada’s Algonquin Power & Utilities Corp. acquired the utility in 2017, through its Liberty Utilities branch.

Liberty-Empire’s plan for the future is now a much more ambitious one, as described by Midwest Energy News:

“In its new 2019 integrated resource plan, Liberty-Empire  In it, Liberty-Empire proposes to retire the 200 MW Asbury coal plant by the end of the year and over the next two decades add hundreds of megawatts of wind, solar and storage.”

Liberty-Empire is expecting the combination of solar, wind and energy storage to save money over coal power. That same dynamic is also in play for rural electric cooperatives in Minnesota and Oklahoma, which have begun looking at “hybrid” wind and solar power plants to provide for both low cost and grid reliability, as well as a long-term alternative to coal and natural gas.

Two steps forward, one step back

On the other end of the renewable energy spectrum, last week Ohio lawmakers established a new energy policy framework that supports coal and nuclear at the expense of renewables and other resources.

It’s yet another demonstration of the impact that state-level policies can have on the pace of renewable energy adoption in the U.S., regardless of White House policies. That dynamic was in force during the Barack Obama administration and it also holds true under the current occupant of the Oval Office.

Fortunately, state barriers are beginning to fall alongside the cost of renewables and other clean technology. The new Ohio policy could be the last gasp of a dying era.

Image credit: Aniek Wessel/Unsplash