June 14, 2016
by Scott Armbruster
Are we there yet? …Are we there yet?…I’m Hungry!….Are we there yet? Yes, its vacation season. It’s time to continue the American tradition of hitting the road on long car trips while listening to your kids ask a hundred times…“are we there yet?” This simple, four word question coming from the back seat can increase most everyone’s level of frustration, and possible cloud your decision making. This same type of thought process is how I see the current state of renewable energy in the US. Some believe the trip is taking too long, and as a result believe that incentivizing and or forcing the switch to renewables is the way to get there quicker. Others believe we shouldn’t take shortcuts. They believe the market itself should determine the appropriate timeline being careful not to intentionally burden the fragile economy. This division will likely continue well into the future, and will especially be prevalent in this election year. While we all can agree that renewable energy is the future, how we get there, and how soon we get there has yet to be determined.
Renewable energy resources are great, technology has come a long way, and both wind and solar have shown that they are here to stay. One of the biggest unanswered questions relating to this technology is how do we generate electricity during those times where the wind is not blowing or the sun isn’t shining? Relying on Mother Nature and human predictability has its risks, and when the Federal and State governments layer on incentives the competitive advantages created by the market are disrupted. This only further exacerbates issues increasing the probability of having a reliability issue or adding price volatility.
States continue to implement stringent Renewable Portfolio Standards, picking and choosing the renewable technology they feel will be best. Those decision makers have done little to address the potential supply gap left from fossil fuel assets exiting market. It is clear that renewable generation is still long way away from providing base load generation, with most renewable solutions continuing to require significant incentives to remain competitive. Let’s not forget that this doesn’t address the fact that we cannot “make” the wind blow or the sun shine.
From my view point, incentivizing renewables that are dependent on unpredictable primary fuel sources come with both price and reliability risks. Without having economically viable solutions for storing electricity during times of plenty, we may see increased price volatility in some markets and of course higher costs as the economy is forced to adopt renewable energy, artificially inflating energy costs. From my desk I think additional focus needs to be on global participation, making other nations support this renewable push, because why should we as America hamstring our own companies further when competing globally against countries who don’t share the same environmental objectives.
Confidential: Choice Energy Services Retail, LP.
