June 15, 2017 Read More →

U.S. Utility Industry Execs Say Renewables Trend Unstoppable

Bloomberg View:

Why is it that all of the people I’ve talked to and heard speak on panels this week in Boston at the annual convention of the Edison Electric Institute, a utilities trade group, seem to think the shift toward renewables and away from coal is just going to keep going?

Mainly because they think Trump is too late (and my Bloomberg View colleague Noah Smith agrees). “We’re over the tipping point now,” said Jan Vrins, head of the global energy practice at the consulting firm Navigant. “I think the train has left the station.” Said Gerry Anderson, chief executive officer of Detroit-based utility DTE Energy Co.: “The administration can’t turn a 70-year-old coal plant into a 20-year-old coal plant.”

When a utility needs to “invest in more modern generation facilities,” said DTE Energy’s Anderson right after his comment about 70-year-old coal plants, “the choices for new generation are natural gas and renewables.”

Utilities have also been coping for the past decade with a decline in per-capita electricity use in the U.S., driven by efficiency gains and new technologies such as LED lightbulbs. That actually may be one more reason, though, for them to embrace the transition away not just from coal but also from fossil fuels in general. The only way to achieve sharp drops in overall carbon emissions is for electrification to “move more deeply into transportation, heating, industry,” said Susan Tierney, a veteran federal and state energy official who is now a senior adviser at the Analysis Group, a consulting firm. So electrical utilities have an opportunity to reverse their demand downtrend in a big way — but only if the electricity they generate is largely carbon-free.

Put it all together and, as EEI senior vice president Philip Moeller summed it up for me, “the cost of renewables has come down significantly and customers want them, and those trendlines are going to continue.” They’re not always going to continue uninterrupted — as you can see in the above chart, natural gas has actually lost ground to coal in recent months as rising gas prices drove utilities to use less of it.

I guess it’s also possible that those in the electrical utility business are underestimating the regulatory changes in store from the Trump administration. But it still seems quite significant that the people who generate the nation’s electrical power appear to have no plans to halt the transition away from coal and toward wind and solar.

Trump Is Too Late to Stop the Windmills

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