Clean Power PTC for wind energy ripple effect

Published on December 5th, 2014 | by Tina Casey


As Coal Crashes, US Governors Push Wind Energy

December 5th, 2014 by  

Forget the annual war on Christmas, things are really cooking up over the war on wind energy. The fight over wind energy has become something of a new American holiday ritual around this time of year, and now the stakes are higher than ever.

In the latest twist, a coalition of US Governors has waded into the fray with a letter to House leadership, citing a drop — yes, a drop — in electricity prices over the past five years, in states that have been producing more wind energy.

PTC for wind energy ripple effect

The ripple effect of PTC for wind energy: manufacturing jobs (courtesy of AWEA).

What’s All This About A Tax Break For Wind Energy?

For those of you new to the topic, the big wind energy blowup is all over a tax break called the production tax credit (PTC) for wind energy.

As a matter of sound public policy, namely, for economic development and national defense, Congress routinely exercises its ability to support domestic energy production through various subsidies, including tax breaks. For generations, that kind of nanny-state coddling was pretty much exclusively directed at fossil fuels and nuclear energy.

In 1992, Congress passed the first PTC for wind energy as a temporary kickstart to help get the nascent industry on a level footing with other energy sectors. The credit was routinely extended, along with virtually every other energy subsidy, with support from red and blue lawmakers alike.


The initial champion of the PTC for wind was (and still is) Iowa Republican Senator Chuck Grassley. Here he is explaining the legislative intent in an interview with The Toledo Chronicle a couple of years ago:

… [A]s much energy as possible, both traditional and renewable, should be produced at home to create jobs and strengthen national security. Wind energy is a free resource, and it’s abundant in many places around the country … [A] clean renewable source like wind is not dependent on far-away countries with leaders who are hostile to the United States even as they take our energy dollars.

Who could hate it? Nevertheless, as with all things Obama, support for what was in essence a good, solid Republican idea (Affordable Care Act, much?) withered to the point of extinction among Republican leadership in Congress after the President took office in 2009.

So now, every time the PTC for wind energy comes up for renewal, there is a huge knock ’em down, drag ’em out fight.

Republican Governors For Wind Power!

Despite some ham-handed attempts at monkey-wrenching the wind energy sector by our friends over at Koch Industries, there’s no arguing with the economic track record of wind energy now that the technology has matured.

That’s why you’ll find a much more bipartisan effort at the state level, in the form of the Governor’s Wind Energy Coalition.

The current membership is a healthy purple, including Arkansas, Kansas, New Mexico, South Dakota, California, Kentucky, New York, Washington, Colorado, Maryland, North Dakota, Delaware, Massachusetts, Oklahoma, Hawaii, Michigan, Oregon, Illinois, Minnesota, Pennsylvania, Iowa, Montana, and Rhode Island.

Check out this interactive map from the American Wind Energy Association and you’ll get the a similar red+blue= purple picture in terms of job creation and economic activity.

Not for nothing, but as a counterbalance to the Koch brothers the Governors Wind Energy Coalition’s smallish group of corporate affiliate members also includes MidAmerican Energy. Yes, that MidAmerican Energy.

In a letter to House and Senate leaders dated December 2, the Coalition urged another extension for the PTC for wind energy, citing these highlights as “directly attributable to the PTC” (breaks added for readability):

Today, 26 percent of South Dakota’s power generation comes from wind. In Washington State, developers added 2,800 megawatts of wind energy between 2001-2012…

Oregon generates over 12 percent of its electricity from wind…

In Iowa, where 27 percent of the state’s electricity generation comes from wind, MidAmerican Energy made the largest capital investment in the state’s history — building a wind farm that will add over $2 billion to Iowa’s economy.

The Coalition also hints at the ripple effect of all this activity on other economic sectors, which could get a boost from lower energy costs. According to their figures, states that produce seven percent or more of their electricity from wind have seen the price of electricity drop over the past five years. Meanwhile, prices have gone up in other states.

Death Blow For Coal

No, we didn’t forget about coal. Domestic consumption of coal has stalled out and is on the verge of dropping off the cliff. Although wind energy and other renewable sources have been blamed in some quarters, natural gas has actually been the biggest headache for coal producers.

We’re waiting for the other shoe to drop, as today’s glut-fired cheap natural gas heads into the inevitable cycle of falling production and rising prices. All else being equal, that would be good news for coal, but that’s where the game-changing aspect of renewable energy comes in: you’re not going to see that same kind of boom and bust cycle, since the source is free.

Meanwhile, coal has sunk into the doldrums. According to the latest Federal Energy Regulatory Commission report, no new coal powered generating plants have been put in service or expanded this year, through October. Yes, that would be zero.

Natural gas weighed in at 45 units for an installed capacity of 5,373 megawatts during the same period.

Renewables have also fared well so far in 2014. Solar and biomass have been leading the pack in terms of units, but FERC toted up 2,189 megawatts for wind energy, beating the other two by a wide margin and looking pretty good against natural gas.

As for coal facing more competition from wind energy, you ain’t seen nothing yet. The wind industry has been expanding exponentially without even beginning to tap into the country’s vast offshore wind energy resources, so hold onto your hats.

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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

  • eveee

    Governors Wind Energy Coalition is a good reference. They have some info on the Energy Imbalance Market just set up by the FERC. This is a big deal. Provides more power cooperation between Western states.

  • eveee

    Zach – The letter to house and senate is not working.

    • Ha, I almost went and checked every link. Fixing now…

      • eveee

        Yes. I really…. really,… am a nerd. 🙂

  • eveee

    Tina, the Governor Wind Energy Coalition link appears broken.

    • http:// got deleted. I fixed it. Thanks.

      • eveee

        If you wanted proof that everyone does not read references, there it is. I am an exception, a nerd. Guilty as charged. 🙂

        • Believe me, I have plenty of proof! 😀 Almost nobody clicks through on links… But the ones who do are better informed. 😀

  • eveee

    There was an NGO Governors Coucil on Climate Change, organized by Gov Schwarzenegger and some of the Western State governors. That was several years ago. This trend is continuing. Now pressure will be on from the Republican governors. Activitsts have recognized that governments are slow wheels to turn, so have turned to NGOs instead. That will start to change as momentum builds. Central government will be the last to acknowledge change. The US-China carbon agreement is evidence that matters are about to change. In the beginning change is resisted. Once it appears inevitable, there will be a race to avoid being the last one.

    • Will E

      and the race is on. Solar and Wind have proven to be big money makers.

  • Bruce Morgan Williams

    It’s nice to come here and preach to the choir once in a while, but we should also be posting at the mainstream news sites if we want to make a difference. The amount of anti-science anti-environment lies out there is stupendous. Someone should respond to every one.

    • Bob_Wallace

      Some of us do. Feel free to join the effort. ;o)

      I’d suggest that if you are most interested/best informed about a particular issue or two that you set alerts for articles on those topics. I use Google Alerts and use the articles that pop up on a daily basis to jump into conversations where I think I can bring some facts which aren’t being covered.

      Also realize that this site reaches a lot of eyeballs. Many times more than most newspapers.

      • David in Bushwick

        What is the daily count? They say they are #1 but what are the numbers, out of curiosity.

        • Bob_Wallace

          Here’s the sites Alexa page. Lots of people with graduate degrees. And a higher percentage of females than I would have expected based on comments.

          Comments are running above 10,000 per three months according to Disqus.

          Here’s a couple other ranking sites that Zach uses (About – top of page). I am just taking my first look at them so I can’t say anything about them yet.

          307,000 unique visitors in Oct 2014.

          • Bob_Wallace

            I put up the Zach signal. I’ll bet he jumps into his Zachmobile and rushes to answer our question before long.

          • eveee

            Not to mention references by commenters on other sites and references in articles. There is a healthy exchange between such sites across the globe. Its a bit of a community. 🙂

          • Indeed. It’s a wonderful cleantech community.

        • To compare with other sites, I’ve used Quantcast and Compete, but for more regular use on a daily or monthly basis, we have other services. In recent months, we’ve passed 1 million visitors a month. 😀

          We do try to influence major media, and this is part of the reason for our existence. CleanTechnica has been referenced by the NYTimes, Washington Post, Forbes, Slate, MSNBC, and many others, so we are making somewhat of an impact. But, basically, the more viewers and social media shares we get, the more journalists at these outlets will find us and reference us. So, share as much as you feel inspired to! 😀

    • David in Bushwick

      I’m sure many of us do as I do and the replies can be quite interesting.

    • Thanks. And when you do, reference CleanTechnica, so more people know where to go for news and analysis on this subject. 😀

      • Bob_Wallace

        Honestly, I tend to not link to CT when I’m commenting on some sites. The ones with large concentrations of nutters.

        I’m afraid that they will show up here and then I’ll have to deal with them…. ;o)

  • harisA

    Coal is ‘crashing’ because of cheap natural gas and not wind.

    • Bob_Wallace

      Both, actually. And solar will soon be helping coal to its hospice bed.

      Renewables are killing coal in Germany. They have no cheap natural gas.

      • David in Bushwick

        No cheap NG is Germany’s big hole to dig out of. And they burn soft, dirty coal too. Solar is much more limited given the latitudes and Germany is running out of space for turbines unlike the US. Offshore will boom but their territory is limited too.
        The wealthy Germans have played a big part in bringing down renewable energy cost with new technology and raw purchase power.

        • Bob_Wallace

          Germany has a lot of lower performance older onshore turbines that are in the process of being swapped out. At those sites performance is likely to move from ~15% CFs to ~40% CFs. Plus the new turbines are likely to be a lot larger, multiple MW replacing <1MW.

          With the new offshore monsters I suspect Germany will have plenty electricity coming in from the wet. Germany is going to have to build more transmission to move some of that power southward.

      • harisA

        For future I do agree, however, I believe, the article implies a direct correlation to what has already happened.

        Environmental regulation Energy efficiency, renewable and storage do not bode well for the future of coal, but it has a very strong and effective political backing.

        Also, as US oil production increases, fuel oil, which is a by product of Gasoline/diesel production mix may also creep into energy production mix.

        • Bob_Wallace

          As the coal industry shrinks, so does its political power. And at the same time the wind and solar industries are growing and starting to swing more political weight.

          I really doubt that we’ll see fuel oil get used for new generation in the US. I suspect any plant license applications would be turned down by the EPA. Besides the cost of petroleum generated electricity is quite high.

          • harisA

            Probably will be cracked and sold as distillates and lighter fuels.

          • Matt

            Or ship overseas to someone how already has the plants.

          • Ronald Brakels

            Fuel oil electricity is definitely economically impossible. I’m embarrassed by the fact that Australia build a kerosene plant in 1998. Nowadays it’s unthinkable. At $70 a barrel the fuel cost alone is about 13 cents a kilowatt-hour.

        • David in Bushwick

          NYC is, thankfully, replacing the fuel oil boilers a few thousand buildings have but contribute to 70% of the winter air pollution. NG is the replacement.
          But demand for oil for other uses won’t go down as fast as coal is dropping. Eventually, coal will become expensive due to its very limited market. Those days can’t come soon enough.

          • Will E

            oil will go as fast as coal. as divestment explode on oil.
            with no money no oil.
            prices high, cannot compete
            prices low, cannot produce.

          • David in Bushwick

            We need to convince the fundamentalists that fossil fuel is the Third Anti-Christ.

        • Mike Shurtleff

          I remember reading somewhere oil generated electricity in the US has recently dropped from 4% to 1%. I think that’s correct. In places like Hawaii, that have been depending on expensive oil generated electricity, you are already seeing solar, wind, and low-cost storage displacing the use of oil. Increased use of oil for electricity generation is extremely unlikely. Hydro and NG are far more cost effective fillers for the infrequent times solar, wind, and low-cost storage cannot meet electricity demand needs. Use of oil for electricity generation will continue to decline.

        • Mike Shurtleff

          “solar remains marginal for the forseeable future”

          This comment is just dead wrong.
          You need to understand exponential growth. Here:
 – July 2014
          “The Continuing Exponential Growth Of Global Solar PV
          Production & Installation”
          Solar is still growing exponentially. (It will change to linear growth at some point and later level off. I can’t say when. What I can say is there’s no good evidence for other than exponential growth of Solar PV right now.) If the exponential growth keeps going, likely imo, then it will be make huge contributions to our electricity supply in a relatively short time. Solar PV is the cell phone of the power industry. A neat over-expensive toy one day. Cheap and ubiquitous the next day.

          Again, the low-cost storage technologies now scaling their production (several different technologies) are going to enable the wind and solar markets. This will improve the cost effectiveness of Solar and will further stimulate the Solar market.

          Plan on a continuing reduction in the use of coal over the next decade or two.

    • eveee

      As Tina pointed out, natural gas has an impact, but it is volatile. Renewables keep steady pressure.

    • It’s a combination of natural gas, solar, and wind. See our monthly capacity addition reports that show those are the big three that have been growing in the past couple of years. The trend will continue.

    • Steven F

      Coal is ‘crashing’ because of cheap natural gas and not wind.

      The biggest cause of coal plant closures is now probably EPA regulations on Sulfur and mercury. The new regulations will require in installation of scrubbers on most coal power plants. If coal plant is profitable that will probably happen.

      However if the plants profits are under pressure do to competition from natural gas and renewables then yes the plant will probably be shut down.. If you then factor in the rapid growth in home solar installations and the switch to more efficient LED lighting ,even profitable coal plants will start to look like a bad investment.

      In 2011 it was projected that 28 GW of coal would be shut down due to EPA regulations. The most recent projections indicate 72 G W of coal will be shut down. According to the article in the link below that is about 1/5 US coal generation. Every year the numbers keep getting worse for coal.

      • Bob_Wallace

        Stephen, the Institute for Energy Research is a right wing disinformation site. Please do not link to it here.

        Now, if you have some reliable information that wind has played no role in coal plants losing money I’d like to see it.

    • Carl Borrowman

      Agreed. With emphasis on the quotes. It seems coal is still at about 50% the national average of electricity sourcing, while gas is about 19%, and wind hasn’t even broken half a percent yet.

      • Bob_Wallace

        Carl, you’re quoting 2005 numbers. It’s the end of 2014.

  • Michael G

    One over-looked but very positive aspect of wind and PV solar is that it is incremental. If a consumer adds one light bulb’s worth of electric consumption than the existing capactiy allows for, you can either build an entire new thermal plant at the cost of many $millions with much unused capacity, or you can add one windmill, or sq. meter of PV at considerably less cost.

    Setting up the wind or solar farm is the biggest expense with all the roads, cables etc. Adding one more windmill or improving the efficency of each one a tad now and again is minor. As thermal plants age, there will be an ever increasing $ advantage to replacing them with RE.

    As this steady increase in capacity continues we will see more and more “special interests” see where their economic future lies and get on board. For most people here it is about preserving an inhabitable planet. For most people in power it is the next election or the next qtrly earnings report (and bonus time).

    • Larmion

      Most thermal plants do allow for limited uprates and/or the addition of new boilers at fairly minimal cost. They can’t be upgraded nearly as incrementally as PV plants, but they’re not as bad as you make them sound.

      And of course, a thermal plant typically has room on site for an extra boiler or two, while wind farms don’t. And getting planning permission for extensions to wind farms is a horribly slow process in many jurisdictions.

  • Bob_Wallace

    The House passed a one year (all the way to the end of this month) extension of the wind PTC. In other words, a joke. No wind farms will get ‘underway’ in less than a month in order to qualify.

    But there may be more to it. The Senate has asked for an extension through the end of 2015. Now the two bills will go behind closed doors for ‘reconciliation’. The final product could be the Senate’s version.

    Behind closed door horse trading and maneuvering is a way for one body of Congress to publicly vote one way but allow things to go another. It’s kind of a “wink, wink, nod, nod” system for allowing something to happen while maintaining the ability to deny that you supported it when you get back home.

    By approving a short term extension and giving its representatives permission to negotiate with representatives from the Senate they leave room for a bill to go forward with wind subsidies through 2015.

    Lots of the dances in Congress are carefully choreographed and rehearsed prior to the performance.

  • Mike333

    Why did E.ON of germany divest itself of all old energy generation? Land based Wind Power now cheaper then all old carbon solutions.

    What’s coming down the pike is Wind Turbine generation without gears, new turbine system will use what maglev uses.

    • Larmion

      They didn’t ‘divest’. They split up into two seperate companies, simply because having two radically different and competing businesses in a single entity is a management nightmare and leads a massive conglomerate discount on the stockmarket.

      Don’t expect ‘New Company’ to disappear overnight; it’s not designed as a ‘bad bank’, but as a viable, rival business (it includes assets like hydro power whose commercial prospects improve as power generation becomes more variable for example).

      • Bob_Wallace

        “simply because having two radically different and competing businesses in a single entity is a management nightmare”

        There are many, many corporations that successfully manage quite divergent divisions. It’s simply a matter of creating the right management structure.

        ” leads a massive conglomerate discount on the stockmarket.”

        Or the market is now recognizing that coal is dying and could easily clean out the corporate coffers while on its deathbed.

        Separate coal from the part of the corporation that will continue to have value and protect that value from the bankruptcy court. That separation has to be done early enough and for a “legitimate” reason to keep the court from reaching back through the separation and seizing assets of the successful part.

        If “New Company” disappears too quickly then the ruse fails.

        • Larmion

          Those succesful businesses pay a price in the form of a conglomerate discount though. Not a single company owning multiple disparate businesses currently has a valuation as high as the sum of its parts.

          And while many companies maintain divisions doing different things, very few indeed have divisions that are directly in competition with one another. It’s utter madness.

          New Company is more than a coal company (although the recent energy laws passed in Germany make coal much more profitable as some excess capacity is shed). It’s also a significant operator of hydroelectric plants and natural gas plants, both categories that gain from more renewables.

          • JamesWimberley

            I suppose the greener half keeping the brand name will be the one that has retail customers, Sootco GMBH can hide in the wholesale market. It’s a clever but cynical move.

        • Will E

          this is a strange conversation.
          Eon going clean and will make money. New Company will take over old steam technic. and go bust. State Pensionfunds Taxpayer pay the fossil nuke losses.

        • Matt

          That or maybe they see the coal/nuke divestment wave coming and want to protect at least part of the company. Notice the the”new” company get most of the risk for those. So if the $s turn away from coal/nuke E.On and it’s stock are not hit.

  • Larmion

    The EIA, and most other forecasters, certainly don’t predict a ‘coal crash’. Stagnation and then gentle decline after 2020, yes. A big cliff? Nope.


    And most of that limited decline in coal is due to natural gas. An improvement, but still a far cry from what we need.

    • onesecond

      The EIA massively understimated the development of renewable energy deployment consistently for the last two decades. I wouldn’t bet on them being right this time after years and years of being wrong.

      • Larmion

        True. However, there are good reasons to assume their last reports are more reliable. For a start, the technology side of energy is now much more predictable than it used to be. Wind is a mature technology where most innovation now comes from steady process improvements rather than fundamental design and materials engineering work. The price decline in solar too has slowed markedly.

        And of course, there’s the simply fact that announced or expected plant closures of coal plants are rather few in number. Extrapolating from that, we’ll see coal go into decline sooner than the EIA predicts, but nothing like the sudden, massive decline this article predicts.

        We musn’t be complacent. Renewables are still far away from ‘winning’, despite what renewable optimists suggest. Geothermal is still going nowhere, solar remains marginal for the forseeable future, hydro has been largely stagnant for decades. Wind is beginning to have an impact, but just look at the recent installation figures: even with tax incentives, it’s still far slower than in its heyday.

        Change is slow, too slow to achieve any of the goals the IPCC recommended. Perhaps not surprisingly, scientific research in the areas most affected by climate change (crop science, storm and flood protection,…) has long ceased to live in hope and is focusing on adaptation strategies.

        • Matt

          Yes “coal crash” is another example that this site has gone to the internet approach of extreme headlines to get click counts. Sad but true. The story has very little content on coal at all. Except to say none are being built, nothing to back up a claim of “crash” or “falling of a cliff”.

          • Bob_Wallace

            There’s the price of coal stocks which have fallen significantly over the last two years.

            There’s the fact that we are in the process of closing about 25% of our coal plants in the US and we have essentially quit building new ones.

            There’s the fact that several coal companies have gone bankrupt recently.

            Some of that is mentioned in the last section of the paper.

          • eveee

            Don’t forget EONS coal divestment and recent 20% price decline.


            FF divestment is now an open topic and the “Carbon Bubble” is making it open season on FF.


            We are not talking the party is over and it happens yesterday. What I am saying is that there is a change going on. BAU was growth in FF. Not so much anymore. Thats a change. Growth is stagnant. Funds will begin to flow where they are more useful. FF economic payback is starting to lag. We now see the drag showing up as open admissions by China and the US governments, and form major industrial cos like EON. Its a matter of time. As funds flow out of declining FF opportunities, some will flow toward new opportunities. Solar, wind, EVs, and so on. The single most relevant and important factor in all of this is that as a whole, the changes are so fast that many are simply unable to keep up. Despite the present low levels of renewables, the pace is rapid, quickening, and have deep impacts on infrastructure and society. With all the backwash, its easy for even astute renewable industry watchers to be surprised by such events as the announcement by EON to divest from centralized FF PP. But the evidence was there and talk of utility death spiral predated events. EON just does not want to become a victim of the death spiral.
            IMO, If I may say, the article is about coal and wind energy and the governors. It has enough factual references to coal decline. It might be good to add more text about coal decline in the body next time. Not everyone clicks the references. Other than that, its a great article.
            Thanks, Tina.

          • Matt

            Bob, I do think coal is on the way out. My comment is the headline is not supported by this story. There is a lot of data to show coal is shaky. You’ve included some, and there is much more. For that headline at least a set of bullet points with link was called for. Counting on you to fill it in, is a mistake. If all I do is read the headline and story, and have no background, I just as likely to assume that the whole thing is hype.

          • Hi Matt,

            Not to take anything away from the many good points you’ve raised, but I’m an experienced editor and it’s usually the Headline Editor that chooses the headlines.

            If a publication is too small for a dedicated Headline Editor, then the headlines are chosen by the Content Editor and SEO can factor into the editor’s choice for a headline.

            Almost never does the writer’s ‘working title’ ever get published — unless they are publishing it at their own blog or website, of course.

            Best regards, JBS

          • Carl Borrowman

            There is that, but then we are still faced with this:


            Solar isn’t even a blip and wind is .44% while coal is still 49.61% of electricity source generation.

          • Bob_Wallace

            Coal supplied 49.6% of US electricity in 2005. That data is almost a decade old.

            Coal is now about 40%. Wind is running about 5% for 2014 and solar about 0.4%.

            Here’s how things have been changing since 2005.

          • Carl Borrowman

            “Coal is now about 40%. Wind is running about 5% for 2014 and solar about 0.4%.”


          • Bob_Wallace

            Annual numbers through 2013.


            Monthly numbers – current to the end of August.


          • Carl Borrowman

            I may be misinterpreting your chart, if so, please feel free to correct… it looks like fossil combined lost only five percent of market share over the last six or so years (since ~2008), while renewables combined only gained about 5%?

          • Bob_Wallace

            That’s about right. Don’t overlook the acceleration.

            Are you aware what has happened to wind and solar prices in the last couple of years?

          • Carl Borrowman

            Yes, I expect they will only continue to fall in the future.

            So, going by EIA’s 2013 numbers and projecting forward with a purposeful over simplification (I know it’s not perfect, ORW could grow faster with falling prices, etc., just a thought):

            2013: Fossil Fuel (FF) – 68%, Other Renewable (ORW)-6%
            2019: FF – 63%, ORW – 11%
            2025: FF – 58%, ORW – 16%
            2031: FF – 53%, ORW – 21%
            2037: FF – 48%, ORW – 26%
            2043: FF – 43%, ORW – 31%
            2049: FF – 38%, ORW – 36%
            2055: FF – 33%, ORW – 41%

            Being a little more optimistic at 1%/yr loss/growth would put it at 2048: FF – 33%, ORW – 41%.
            And extremely optimistic at 2%/yr loss growth would put it at 2030: FF – 34%, ORW – 40%.

          • Bob_Wallace

            I’d suggest you put little faith in EIA projections.

            Do you understand exponential growth?

          • Carl Borrowman

            You do understand the part where I said it was a purposeful over simplification and not meant to be perfect, right? That was my own projection based off the chart you provided and EIA’s 2013 actual data (not projection).

            I welcome you to outlay your exponential projection here, as I have a linear one for simplicity’s sake, but I purposely put more optimistic end results in to account for exponential growth, cutting time to ORW dominance by 25 years from the original projection.

            If you think ORW dominance will happen sooner than 2029, again, I would be interested to see your line by line exponential projection numbers by year.

          • Bob_Wallace

            I will show you produced electricity to date. You should be able to see that both wind and solar are growing at accelerating rates.

            At some point those curves will likely to flatten into straight lines but most like at greater than 2% annual expansion.

            Note: These are both production graphs, not installed.

          • Guest

            “greater than 2% annual expansion”

            Okay. So what year do you think other renewables (biomass, geothermal, solar, and wind) combined will outstrip coal, natural gas, other gases, and petroleum (fossil fuels) combined?


          • Bob_Wallace

            End of 2013 fossil fuels produced 67.5% of US electricity. Non-hydro renewables produced 6.2%.

            My best guess is that over the next 2-3 years we’ll see non-hydro continue to accelerate and perhaps average 2% over the next 10 years. Efficiency should lower the overall use of electricity.

            I see a possibility of non-hydro being roughly the same as fossil fuels in about 10 years. (Notice I said “possibility”. I can make an argument for faster and slower.)

          • Carl Borrowman

            Perhaps this will be more to your liking.
            I call it the ridiculously optimistic projection:

            2013: FF – 68%, ORW – 6%
            2019: FF – 58%, ORW – 16%
            2025: FF – 38%, ORW – 36%
            2031: FF – 0%, ORW – 76%

          • Bob_Wallace

            I have a range of predictions. My most optimistic is that fossil fuel use for electricity is under 10% by 2030. That would take somewhere around an average of 4% per year move off fossil fuels. Reduced somewhat by efficiency gains.

          • Carl Borrowman

            That is very optimistic (and I’m an optimist), however unrealistic judging by current national goals.

          • Bob_Wallace

            Carl, if you don’t pay attention to what has happened to wind and solar prices in the last couple of years you may be very badly mislead by trying to predict from history.

            That is a mistake the EIA has made over and over.

          • Carl Borrowman

            Bob, if you don’t pay attention to how government and big businesses have operated and worked hand in hand over the last century, you may delude yourself into thinking they would just happily allow their business to fall from present day dominance to under 10% for electricity generation within the next sixteen years.

            Now as optimistic and all for exponential projections and the advancement of technology as I am, I still tend to hold in mind there are conservative estimates, optimistic estimates, and fairly outlandish estimates; your last one seems to fall in the latter category.

            But don’t get me wrong, I’m not saying it is impossible, just seemingly improbable given the way government, consumerism, and the fuel business works.

            If we were talking about something as small as a cell phone I could see your timeline being much more realistic. As is, there is still the matter of trucks, installers, energy pricing, billions of dollars in lobbying, good ol’ boy Republicans, side-bets and extenders like dirty hydrogen, bio-fuel like algae as a filler, mixes, etc.

            I’m all for idealism, as long as it is based in realism.

            Here’s the latest I could find from the White House. Keep in mind this is the Obama administration we’re talking about here, which doesn’t seem to be long for this world:

            “The new U.S. goal will double the pace of carbon pollution reduction from 1.2 percent per year on average during the 2005-2020 period to 2.3-2.8 percent per year on average between 2020 and 2025. This ambitious target is grounded in intensive analysis of cost-effective carbon pollution reductions achievable under existing law and will keep the United States on the right trajectory to achieve deep economy-wide reductions on the order of 80 percent by 2050.”

            Now, even if they meet this goal by 2050, 80% reduction from today’s 68% is still 13.6%. And that’s in 2050, 20 years after your prediction of less than 10% in 2030.

          • Bob_Wallace

            Carl, we’re closing about 25% of our coal plants over the next couple of years. Efficiency will continue simply because efficiency saves money. Wind, solar and natural gas will be installed rather than coal and nuclear simply because they are cheaper sources. Storage will continue to eat away at NG’s share of the pie because storage will continue to become cheaper.

            That’s the market, Carl.

            Now, can “vested interests” stop that progress? I think not. Certainly they can slow things up. But new money sees money to be made in renewables and storage and new money will out-power old industry money.

            Coal is dying much faster than anyone expected. The coal industry has lost half its value in the last couple of years Multiple coal companies have gone bankrupt. Most investment banks will no longer loan for new coal.

            The uptake in EVs may be slowed if the Saudis are willing to lose a lot of money over a lot of years. But there’s too much momentum to stop the development of better batteries and driving an EV is cheaper than $2/gallon gas. At some point the Saudis will get tired of bleeding their bank accounts (if that is their motivation) and decide they need to get what profits are available as we move off of oil.

            We’ve now got 82% of Americans saying they want something done about climate change. That number will rise some more and the importance of getting something done will increase. Give us a decent El Nino cycle and watch the pressure get ramped up.

            Wind, solar and EVs are “painless” for almost everyone (except those who leave their capital in fossil fuels or work in the fossil fuel industries). Electricity will be no more expensive, perhaps cheaper. It will be cheaper to own and drive an EV than an ICEV. Efficiency, LEDs/low draw TVs, is painless. Most people won’t even realize that their new refer is more efficient than the one they replace.

            New technologies tend to start slow and then as the bugs are worked out and prices begin to fall, accelerate. (Below)

            According to the NYT natural gas costs range from 6.2 cents/kWh upward (peaker power can be very expensive). Coal-electricity costs about 6.6 cents/kWh.


            Onshore wind is now being sold on 20 year contracts (PPA) for 2.5 cents/kWh. Solar for 5 cents. Production prices will continue to fall so that by the time subsidies expire both will likely be cheaper than the current price of coal and NG. (BTW, that’s coal from an already build/paid for plant. Electricity from a new plant would be a lot higher.)

            People and governments are starting to attend to the health costs created by burning fossil fuels. People are not going to be willing to tolerate bad air and disease once they understand there is an option and the option is cheaper than what they are now paying.

            IMHO we are about to see a rapid movement away from fossil fuels. You are free to predict whatever you wish.

          • Carl Borrowman

            Yes Bob. Coal plants can continue to shut down over the next 16 years until 2030 and we would still have reserves to burn. Efficiency will continue, that’s obvious. But efficiency isn’t limited to just renewables. I’m counting natural gas as a fossil fuel. Storage can continue to eat away at NG’s share of the pie, and fossil fuel would still remain at welll over 10% by 2030.

            That is the market, Bob.

            I’m not arguing “vested interests” will stop that progress. They will slow things up. New money isn’t going to phase out old money before 2030.

            Coal is dying about as fast as I expected. It was so huge to begin with that even though it’s lost half it’s value it is still the dominant source of electricity. Just because companies go bankrupt doesn’t mean the product won’t still be around in force 16 years from now. Most investment banks may not loan for new coal, but they are more than happy to continue financing old coal, which is already massive enough to sustain the industry for 20+ years.

            The uptake in EV’s already has been slowed and will continue to be slowed. Saudi’s aren’t losing money, they just aren’t making the massive amounts they used to.

            Buying an EV to replace ICEV at $2/gal gas is not cheaper unless you happen to drive longer than average.
            And even if it happened to be, Americans still decided ICEV trucks and SUV’s were what they wanted instead (top four of five bestselling vehicles in November), and that was with $2.50 to $3.00/gal.

            Hydrogen, algae, and or other drop in bio-fuels are the next move for big oil as we move off of big oil. the former can slowly replace big oil as it dies, while the latter two could extend it indefinitely as fillers.

            So “we’ve now got 82% of Americans saying they want something done about climate change” while New York and Jersey flooded, Louisiana is sinking, and SanFrans were trolling around town in boats recently. Yet the majority still seem to be clamoring for SUV/truck ICEV’s. If what’s happened already hasn’t phased them I’m not sure what will.

            The establishment is so entrenched it is going to take an extended amount of time to uproot it, no matter how “painless” wind, solar, and EV’s happen to be. Speaking of which, if EV’s are so “painless”, why aren’t the majority of Americans buying them? As is, they have what, about a 2% penetration rate? Wow. Solar? It hasn’t even broken 1%. Wind’s at 5%. So “painless” doesn’t seem to be driving adoption amongst the masses.

            “Electricity will be no more expensive, perhaps cheaper.”

            So gas can get even cheaper, because the electricity used to produce it is. Home electricity will be cheaper, so less incentive to buy rooftop solar.

            “Efficiency, LEDs/low draw TVs, is painless.”

            Lower usage, lower cost, lower emissions, more within regulations. Sounds like yet another extension for fossil fuel.

            “New technologies tend to start slow and then as the bugs are worked out and prices begin to fall, accelerate.”

            Necessity drives invention. Until now, fossil fuel has had it relatively easy. Now they have a drive to survive, and with that comes all kinds of changes within the industry to make it more efficient. Granted, they won’t make as much money, but it will still extend it’s life.

            “People are not going to be willing to tolerate bad air and disease once they understand there is an option and the option is cheaper than what they are now paying.”

            I see. This must be why people flock to the big city when it’s actually cheaper to live in the country where the air is cleaner and there is less disease. Not to mention people building smoke stacks for their trucks to “roll smoke” on high-efficiency vehicles and celebrate their “freedom” in convoys.

            You’re assuming most people act logically. My experience is they act more out of emotion and impulse, which tends to be easily manipulated.

          • Bob_Wallace

            First, Carl, you didn’t read what I wrote. I did not say fossil fuels would be gone by 2030. Here’s what I said…

            ” have a range of predictions. My most optimistic is that fossil fuel use for electricity is under 10% by 2030. That would take somewhere around an average of 4% per year move off fossil fuels. Reduced somewhat by efficiency gains.”

            If you want to argue the details of the speed at which we get off fossil fuels, I’m not interested. As I said, I can see a range of speeds but have no way of knowing what will happen tomorrow or the next day that might change the speed.

            Again, I think it likely that concern over climate change will increase. I think that cheaper (“painless”) solutions will continue to appear. If those things happen we could move very quickly off coal. And if we get a storage breakthrough like Ambri’s liquid metal battery could provide I think NG use will drop quickly. But since I can’t guarantee those things I can’t use them to say “Here’s what will happen”.

            At the other end of things we could have some sort of major global conflict that could totally stop our progress.

            We have the tools to get off fossil fuels. Now it’s a matter of how fast we change from one technology to another.

          • Bob_Wallace

            BTW, you do recognize that cheap oil is really a deal-killer for algae, hydrogen and other “new fuels”?

            And the spurt in truck/SUV sales will cause car manufacturers to have to work harder to sell efficient cars and EVs in order to hit their CAFE levels?

          • Carl Borrowman

            Yes, Bob, I read what you wrote. I never said you said fossil fuels would be entirely gone by 2030.

            If you want to argue, I’m not interested. As I said, there are realistic projections and ridiculous ones. I usually lean towards the middle in between conservative and optimistic. I think technologies like Aquion’s sodium ion batteries could also help speed adoption. No one can say what will happen, but we have been progressing, and I hope that continues with as little impedance as possible.

          • Carl Borrowman

            Sounds like a case for renewable hydrogen 😉

          • Bob_Wallace

            H2 has a possible role for deep backup. The competition at this point is flow batteries and PuHS. H2 is really hampered by its low efficiency rating.

          • Indeed. Am preparing to publish our monthly report on electricity generation and coal is still worlds ahead of renewables. And the situation on this sector doesn’t change very fast. Coal is certainly not crashing yet. More of a slow decline, sadly.

        • Will E

          renewables have reached tipping point ant fossil capsize point. as nobody cares for climate change, they go where the big money is made.
          renewables. divest in fossil invest in renewables. that is happening now. see Eon biggest European utility company

        • JamesWimberley

          “The price decline in solar too has slowed markedly.” The decline in module prices over the last few years was much faster than the learning-curve trend, and a temporary plateau is consistent with it. Have you any evidence that the learning curve itself – around 11% price decline per year, with volume doubling over 2 years – has flattened? The technology reports we read here and elsewhere don’t suggest any slowing in the pace of innovation. For instance, following JA Solar’s recent announcement of a 20% efficient poly cell made in their lab but on industrial equipment, Jinko have announced a less dramatic 18% panel – but it’s going into production next year. GCL-Poly are selling off much of their silicon wafer business to concentrate on their promising pebble-bed metallurgical silicon venture. Etc etc.

          While system prices are flat in Germany thanks to the engineered slump in demand and the protectionist EU-China “anti-dumping” deal, my impression is that system prices in the USA continue to fall as installers catch up with German BOS costs. US utility solar is now as cheap as anywhere.

          There’s little sign that the EIA understands renewables in any deep way, and their record of being wrong on them does not justify giving their forecasts credence as against the consistently more optimistic and accurate NREL, Solarbuzz or IHS.

          • Ronald Brakels

            Without subsidy or tax the average cost of rooftop solar for a median sized installation is now about $1.67 US a watt in Australia. At that price, with a 5% discount rate, it would produce electricity for around 10 cents a kilowatt-hour or less in the sunnier half of the United States. The recent fall in the Australian dollar has actually increased the cost of components here, but we’re waving our hands in the air like we just don’t care.

        • Mike Shurtleff

          “Wind is a mature technology where most innovation now comes from steady process improvements rather than fundamental design and materials engineering work.”
          WInd is NOT fully matured. It is no longer growing exponentially, but it is still growing as a high linear rate. Cost of wind is still falling. Significant improvements are still being made. Low-cost storage will also have an impact.

          “The price decline in solar too has slowed markedly.”
          Yes, globally for total installation costs in the last few years, as shown here:
 “Solar keeps getting cheaper” – September 2014
          However, JamesWimberley is correct, this can be considered a temporary rebalancing to the cut-throat drops in Solar PV costs that occurred from 2009 through 2012, due to a temporary over-production. shown here:
 – June 2014
          “Solar boom! From 5 GW in 2005 to almost 200 GW by the end of this year, and this party is just starting!”

          Now demand is back up. Prices are still falling, but not as fast, and margins are increasing …which will mean motivation and capital for a more rapid expansion of production. Swanson’s Law is still alive and well. I can send you a number of links demonstrating new, price-cutting, tech scaling to production.

          The cost of Solar in the US is still dropping rapidly:
 – October 2014
          “White House Announces $68 Million For 540 US Renewable & Energy Efficiency Projects”
          We have a ways to go, just to catch up with the low installation costs in Australia and Germany. The total installed cost of solar in the US will continue to drop significantly.

        • Mint

          There’s one more innovation that will help solar dramatically soon: Automated panel installation.

          Imagine an automated truck that drills/installs mounting posts, and has robots both laying out racks and installing panels for utility scale solar. Such an innovation will take a huge bite out of the non-panel costs that now dominate the cost of solar.

          It’ll be difficult to do that for rooftop, as every roof is different, but for the most part a field is a field.

      • Bob_Wallace

        I wonder if our letter writing might have helped the EIA reconsider their predictions?

        • RobS

          Perhaps, although their reply certainly didn’t embody contrition or self reflection.

    • Matt

      I think this is the first year in the last 20 the EIA doesn’t claim that wind and PV installing will stop the next year and total capacity will be flat. That is only additions are to replace broken ones. So while they are turning they are still way off on RE predictions. Yes coal will not drop to zero over night. But as coal plants age they will not be replace by new coal. There are a lot of old coal plant up for closing in then next 5-20 years. Now what can drive that even faster is that as PV and wind grow, they eat ways at the peaks where coal/nuke make their money. This will cause closing or at least mothballing addition plants before they reach end of life. This whole dance is because coal/gas/oil have their support hard coded in law, so changing them is “raising” taxes. While PV/solar are short lived so renewing them is “give money away” or “picking winners”.

      • eveee

        Matt – Yes. Same with IEA. They have suddenly changed from almost no solar by 2050, to solar being the largest source of electricity by 2050. IMO, they are still short. EIA and IEA are not taking into account events unfolding with EVs, for one.

        • IEA had a change in leadership that resulted in big changes, thankfully. But, yes, it’s apparently hard for such forecasters to not be overly conservative, and they thus get the story wrong.

          • eveee

            One wonders where they are positioned now. With all the very bad IEA forecasting of the past, where does one turn to for more accurate forecasts? Greenpeace has had accurate forecasts for wind until now. EIA has been extremely bad, just like EIA. I think IEA may still be off.

          • Yeah, I think IEA is still off. I think a mix of IEA & Greenpeace is going to get you the most accurate future. IRENA is sort of that.

      • RobS

        I’ve just explored the EIA site for a new report I’ve missed, what report are you referring to to say that this year the EIA has started forecasting kong term solar growth because the new AEO is not due to be released until Jan 15. I can’t find anything to suggest that their woeful history of solar predictions has yet been rectified.

    • Bob_Wallace

      One probably doesn’t want to look to the EIA for good predictions. The EIA predicts some very strange futures. Here’s their prediction of solar installation.

      The EIA is predicting that the cost of onshore wind and PV solar will be significantly higher five years from now.

    • JamesWimberley

      Agreed, it’s not a crash. More a straitjacket; the deteriorating economics of coal generation, and the prospect of the EPA regulations, mean that no new coal plants will be built in the USA, ever, and the old ones shuttered for pollution or simply age will not be replaced or refitted.

      But I don’t share the “stagnation to 2020” story. Look at Germany: because wind and solar are higher up the merit order, they are creaming off more and more of the profitable daytime peak. German utilities want to close 28 unprofitable coal plants. It’s unlikely the government will let them, to preserve security of supply, but it will have to devise a bailout. Americans are much more free-market than Germans and averse to bailouts, so the death spiral could take a more dramatic form.

      BTW, the induced solar crisis in Germany doesn’t extend to wind, which is keeping nicely to the government’s 2.5GW a year target for new capacity (link). That excludes a growing volume of repowering. New turbines have much higher capacity factors than old ones, leveraging the effect of the installation – including the gravedigging of coal.

      • Bob_Wallace

        It’s not a bailout, but more of a capacity payment. We need deep backup for extended low wind and solar periods, rare as they are. Or if a couple of very large thermal plants go down as happened in SoCal a couple years back.

        The question will be whether it’s cheaper to pay CCNG or coal plants to furnish that deep backup. To sit idle 95%, 99% or 100% of the time, but to be there if needed.

        Coal may be the answer in Germany because they already have the coal plants and no cheap NG.

        • Bruce Morgan Williams

          Peak Shaving through Demand Response and real time market pricing will remove much of the need for peaking capacity. Distributed storage will eliminate the rest, it’s just a question of time, and cost cutting.

          • Bob_Wallace

            That’s very likely for peak shaving. EVs can be an excellent mechanism if we allow grid managers to determine actual time of charging. A perfect dispatchable load.

            But peak shaving and deep backup are different. Grid managers first job is to keep the lights on 24/365 and right now we have no affordable long term storage (other than pump-up hydro). The cheap option is to keep some fossil fuel generation on hold and fire it up for a few hours a year.

            When the two SoCal reactors (SONGs) went down the utility dusted off an old gas turbine that hadn’t been run in years to help fill the void.

            The thing we want to do, IMO, is not dismantle our fossil fuel plants as quickly as possible, but to idle them ASAP. Then use them for extreme situations and emergencies until we develop better options.

          • eveee

            Yep. All the stops should be pulled out to reduce the need for long term in the first place. RE sources are not yet well matched to annual load everywhere. And we should change the utility structure to place a value on each type of response. Some utilities are breaking the fast response out to seconds or minutes, to reflect the greater value of instant response. Likewise, seasonal storage should be properly market incentivized. Its all part of a somewhat bumpy transition to an entirely different utility market. Evidence in the utility death spiral and EONs response to the new reality base load PP face. The future is going to need more horizontal structure and cooperation, less vertical top down structure and concentration.

          • eveee

            Yes. Demand Response needs much more attention. Its low hanging fruit. There has to be improvements in renewable planning and infrastructure. So far, its just been additions to the existing grid with no other changes to BAU. A lot of improvement can come from dispersing RE and selecting RE with greatest natural load matching. That reduces the need for short and long term storage. Another is grid infrastructure and planning. Part of the reason IEA revised its estimates of renewables upwards is that they realized if the grid and infrastructure was changed to accommodate renewables, a lot more renewables could be added successfully.

            Some regulatory agencies are changing.


        • Ronald Brakels

          In Australia the price cap on wholesale electricity is about $12 US a kilowatt-hour. As a result we do have generating capacity that sits idle for 99% of the time or 99.9% of the time and only gets switched on during critical peaks in the summer. And if these critical peak generators decide they aren’t making enough money then as soon as one shuts down it restores profitability to the others.

          Now if during a critical peak not enough power is provided and rolling blackouts result, one could consider raising the wholesale price cap to encourage more critical peak generating capacity, but I wouldn’t. Rolling blackouts appear to have become a thing of the past here. Increasing solar capacity is eliminating critcal peaks from the day which is when they generaly happen and we appear to be on the cusp of widespread home and business energy storage. Perhaps we should consider decreasing the price cap?

          Allowing the wholesale price to rise to $12 US dollars a kilowatt-hour or so allows market forces to operate and means consumers get the best possible price for electricity. Hahaha! Of course it doesn’t. Maybe it works that way for ball bearings but not electricity. Having a high cap means you get ripped off. It gives large generators an incentive to withhold production to force prices up such as what South Australia’s largest power station, Torrens Island, did a while back during a heatwave. One solution is not to have any large generators, but generators will still have an incentive to become large and so will attempt to buy politicians dinner until they have permission to become large. A good solution is to have plenty of wind and solar capacity on the grid as they are price takers and reduce the ability of price setters to manipulate the market. I suggest some of the first and a lot of the second.

          • Joseph Dubeau

            How much coal do they burn while they are sitting idle?

          • Bob_Wallace

            In the US we turn off coal plants for months at a time. In the spring in the NW for example. Between hydro and wind along with lower demand there’s just no need for coal.

            And I saw data of coal plants in the upper Midwest being cycled on and off every day for days on end. They’d shut down as the evening peak dropped and fire back up some hours later to help with daytime demand.

          • Ronald Brakels

            None. Our peak generators are gas and hydro, and the ones that we almost never switch on and only use in critical peaks are often oil fired in some form, either diesel, kerosense, or I guess what would be called heating oil in the US. Most of them are very old, but the kerosene powered 414 megawatt Mount Stuart Power Station in Townsville Queensland was only built in 1998. (Sometimes we’re not very bright.) That one may not have been switched on for over a year thanks to a total decline in electricity use and the spread of rooftop solar.

      • Bob_Wallace

        “New turbines have much higher capacity factors than old ones, leveraging the effect of (replacement).”

        Plus it’s likely that the old <1 MW turbines will be replaced by multiple MW units. Moving from a 500 kW turbine to a 3 MW is a 6x increase.

        We're seeing that right now at Altamont Pass. The refurbished wind farm will have fewer turbines but produce more electricity.

        • JamesWimberley

          Yes. But the increase in nameplate capacity is SFIK included in the target. It’s only the increase in capacity factor that is under the radar.

      • Larmion

        Germany is closing a few spare plants (8 are planned), enough to crank up capacity factors in the remaining ones back into the profitable zone. The German government expects little or no decrease in coal generation in the coming years, though that generation will come from a smaller number of more recent plants.

        • Bob_Wallace

          Little or no decrease in coal generation but a decrease in coal consumption. The replacement plants are much more efficient.

          And we should remember that Germany burns a lot of coal on behalf of other European countries.

        • Will E

          read energiewende nachrichten and find out how wrong you are.

        • Ulenspiegel

          I think for the years until 2022 your predictions are more or less correct.

          However after 2022 there is no nuclear buffer that eats away 80% of the installed REs, utilities can then expect an at least 4% annual decraese of market shares of their electricity generation from coal.

          (RE grow 2% per year, coal has an market share of 45%).

          IMHO the German government has only to create a strategic capacity reserve and to wait.

    • Will E

      when you take EIA for granted you live under the cliff coal dropps off. Hold your hat on.

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