Published on September 26th, 2011 | by Silvio Marcacci1
Chu: Solar Power on Track For Cost Parity With Fossil Fuels
September 26th, 2011 by Silvio Marcacci
Even before Solyndra filed for bankruptcy, the U.S. clean energy industry was facing an uncertain future because of the slow economy, low-cost overseas competition, and political gridlock in Washington, D.C. But in spite of these headwinds, Energy Secretary Steven Chu says clean energy cannot be abandoned and is on track for cost parity with fossil fuels.
In this exclusive one-on-one interview, energyNOW! anchor Thalia Assuras discusses the outlook for clean energy funding, the Obama’s Administration’s plans to advance energy technology, and global competition with Secretary Chu. You can watch the full video below:
According to Chu, competition from China and Western Europe has made the market for renewable energy technology “very competitive” but the U.S. shouldn’t abandon efforts to lead the way. When individual companies fail, they could hamper the overall effort, but “while it’s a setback, I think you shouldn’t give up the fight,” he said. “The market for solar energy, for renewable energies of all kind, and for the energy market in general is so vast that we have to hang in there and prevail.”
Chu’s resolve seems to fly in the face of Congressional Republicans who have slowed federal action on clean energy funding, but he thinks alternative policy avenues exist for President Obama. “There’s a few things we can do that cost very little or nothing, for example a clean energy standard” that includes natural gas and clean coal, coupled with a low-cost research and development program, he said.
R&D is key to Chu’s vision because technological advances can drive costs down, as evidenced by solar power’s march to cost parity. “Its’ price has come down 50 percent in the last five or six years, it’s going to come down by another 50 percent, and we think there’s a chance it could come down by 70 percent,” he said. “At that point, you’re talking about wholesale electricity at utility scale, at 6 or 7 cents levelized cost per kilowatt hour – that’s as much as you would have to spend for any fossil fuel plant without subsidy.”
Critics say this equation is based on subsidies and renewables can’t be cost-competitive without them, but Chu thinks they will soon be able to stand on their own. “Oil and gas subsidies have been continued for about a hundred years,” he said. “I think we can pull the plug on renewable energy way before that, another 10 or 15 years, because of the driving need to get to this clean energy transition.”
Even though Chinese investment threatens America’s success in a clean energy economy, it also holds lessons for the U.S. to learn. China “sees a great economic opportunity, because of these huge markets,” Chu said. “They’re generating within their own country the largest renewable market in the world, in their own country,” he said. “That creates manufacturing in their country, and that manufacturing can be used for export.”
America needs to take note of China’s march, concluded Chu. “10 and 20 years from now, the world’s going to need this (clean energy and infrastructure). Are we going to be buying or selling? We’d rather very much be selling.”