More Utilities Are Shifting to Renewable Energy

The “new reality” facing electricity consumers and their utility companies is that renewable energy is meeting an increasingly larger share of U.S. energy needs, according to a report released this month from Ceres and Clean Edge.

That translates into more and better choices and a clean energy future.

“Renewables — including wind, solar, biomass, geothermal, waste heat and small-scale hydroelectric — accounted for a whopping 49 percent of new U.S. electric generating capacity in 2012, with new wind development outpacing even natural gas,” writes Jon Wellinghoff, partner at Stoel Rives LLP and former chairman of the Federal Energy Regulatory Commission in the report.

"Benchmarking Utility Clean Energy Deployment: 2014," the first report from Ceres in partnership with Clean Edge on this subject, ranks the nation's 32 largest electric utilities and their local subsidiaries on their renewable energy sales and energy efficiency savings.

The report says the different components of clean energy — energy efficiency, demand response, renewable energy, distributed generation, and the “smart” infrastructure required to integrate and optimize them — are critical elements of the 21st century electricity market.

“Traditional utilities and third parties will compete to offer consumers a range of customized energy-related products and services that extends far beyond today’s electricity service — and probably sooner than we think,” Wellinghoff says.

Companies were benchmarked on three major indicators of clean energy deployment:

• Renewable energy sales, or the total amount of renewable electricity sold to retail customers


• Cumulative annual energy efficiency savings


• Incremental annual energy efficiency savings, or the energy savings from new programs or new participants in existing programs

The report, which will be released annually, focuses on renewable energy delivered by electric utilities; it does not cover independent power producers. The renewable energy sales data provided in this report is considered a “strong indicator of the utilities’ clean energy deployment.”

But “wide disparities” were found in the extent to which electric utilities currently deliver renewable energy and energy efficiency, the report says. For example, five of the 32 companies included in the report accounted for nearly 54 percent of renewable energy sales.

NV Energy, Xcel Energy, PG&E, Sempra Energy and Edison International ranked the highest for renewable energy sales; their renewable resources accounted for about 17 to 21 percent of their retail electricity sales in 2012.

Meanwhile, SCANA, Southern Company, Dominion Resources, AES and Entergy ranked at the bottom of the report’s rankings, with renewable energy sales accounting for less than 2 percent of each of their total retail electricity sales.

Energy efficiency top performers included PG&E, Edison International and Northeast Utilities, each of whose cumulative annual energy efficiency savings was equivalent to 16 to 17 percent of their annual retail electric sales in 2012. Pinnacle West, Sempra Energy, Portland General Electric, Puget Sound Energy and Northeast Utilities performed the best on incremental energy efficiency savings.

Other key findings from the report reveal:

• State policies are a key driver in utility clean energy investment.


• Two of the EPA’s Clean Power Plan’s building blocks, energy efficiency and renewable energy, are increasingly economically feasible options for electric utilities.


• Even among companies in similar market and regulatory environments, however, there is a range of performance, suggesting that strong state-level policies are not the only factor in utility investment in clean energy.


• Customers are increasingly in the driver’s seat in influencing clean energy policymaking.

In addition, the report finds that “better, more up-to-date data is paramount” and needed. This is because data on utility clean energy deployment is “is too scattered among numerous sources.”

Bottom line: Ignoring the clean energy shift “is dangerous, for both the traditional utility business and the environment.” The U.S. Department of Energy recently found that renewables could feasibly provide 80 percent of the nation’s energy by 2050.

“The main obstacle is not the price tag (which is comparable to a business-as-usual scenario) or the technical challenges, though both are considerable,” the report says. The basic issue “is largely a question of leadership, market structures and political will.”

Amen to that.

Image credit: Cover from Benchmarking Utility Clean Energy Deployment: 2014