Five Questions: What Impediments Are Slowing the Growth of Renewable Energy?
Mark Kapner has 30 years of experience in energy technology and environmental engineering and policy as senior strategy engineer at Austin Energy. He sat down to answer a few of our questions about the outlook of renewable energy programs, a few clean-energy myths, and how campuses can get in the game.
CE: What is Austin Energy’s role in building clean energy options and how are you doing that?
MK: AE has specific clean energy goals, which were established by the city council of Austin, which is also our board of directors. First, by 2020, we will be obtaining at least 30% of our total electric supply from renewable sources. The second goal is that by 2020, we want to have at least 100 MW of our total energy supply coming from solar energy. There are interim milestones: 30 MW of solar by the end of 2010, and 50 MW by 2014. We have recently entered into a contract for purchasing all the energy produced by a solar plant that’s going to be built just east of Austin and in operation by the end of next year.
Our third goal is related to overall improvement of the use of energy, so energy efficiency. We have a goal that’s expressed as avoiding the demand for new plants by investing in conservation instead of investing in power plants. It’s a little more difficult to describe precisely. We’re going to budget and spend about $30 million a year to improve the efficiency of electric use of our customers, by giving them rebates to offset the cost of conservation measures such as more efficient home air conditioning units, building chilling systems, installation of high efficiency lighting, increased attic insulation and residential duct sealing.
CE: What impediments are slowing the growth of clean energy?
MK: In cases where the utility industry has to choose between something that’s less or more expensive, and the option with the higher first cost happens to be a clean energy technology, the tendency has been to go for the cheapest. Particularly if you’re only considering initial capital costs, like those of building the power plant, fossil energy is often cheaper. There’s been a lot of growth in natural gas because those plants are relatively inexpensive in relation to wind or solar. So yeah, generally, the obstacle has been cost, even if it’s only a perception. Clean technologies are often perceived as being more expensive, and decision-makers will go for the cheapest option.
However, for a time wind energy was actually less expensive for Austin Energy than generating our own power from natural gas. Wind power has experienced a U shaped-curve in terms of cost per kWh. Wind turbine manufacturing costs (ie expressed in $ per kW of capacity) have declined with improvements in the technology over the past 30 years. The selling price of wind turbines also declined during the 1980s and 1990s until around 2003, but turbine prices have increased significantly since 2003. The price increase has been largely due to the very tight market – ie rapidly increasing demand due largely to various government incentives that promoted wind development. So these incentives (ie production tax credits in the US and feed-in tariffs in Europe) which had very good intentions also had un-intended consequences. They led to higher prices for wind energy and (since selling prices have gone up while manufacturing costs have either gone down or stayed level) much larger profit margins for wind turbine manufacturers.
CE: What are some of the myths about clean energy that make progress difficult?
MK: The myth is that renewables, particularly weather-dependent ones, can’t really make much impact because utilities need base load energy. A lot of people talk about “the need for base load generation” who really don’t understand how modern power systems operate. This is frustrating because “base load” is actually an antiquated term. What utilities need is a mix of resources to assure that they can match supply to demand at all times. Those resources will be a mixture of dispatchable generating units and non-dispatchable units (such as wind and solar) as well as energy storage (whereby the utility can control their rate as both a load and generator) and controllable demand (now termed demand-response).
Energy storage is another one of those myths. I’ve heard people say “you can’t store electricity”, which is silly. Rechargeable batteries are only one form of energy storage, and there are others which utilities use, like pumped hydro-electric or compressed air energy storage, which you can “charge up” when the demand is low, and then release that energy during high demand hours.
CE: What do you see as the role of colleges and universities in helping build out clean energy options?
MK: The most important thing is to educate students in the sciences and economics and other skills needed to create the energy future that we need. There are all these supporting disciplines, accounting and so forth, and we need the colleges to train these students to design that future.
Second, to the extent that colleges are energy users themselves, and have a longer planning horizon than most companies, they can vote with their dollars. Unlike many businesses, universities and colleges don’t have to show a profit to their shareholders every quarter. They ought to be willing to invest their money in energy supply options like clean energy that they themselves will use.
CE: What would you say to a campus president or utility director weighing energy options? How can they work with their local utility to take advantage of existing clean energy incentives or help create new ones?
MK:It depends on what the utility offers. At Austin Energy, we offer a green energy option, and if utility-supplied green energy is available and it’s verified and real, it’s the best way to proceed. But if your utility is not offering a green energy option, don’t give up! A large user, like a campus, has much more clout and more options than they did in the past. It’s possible to develop your own energy supply agreements, independent of the utility. For example, you could create a solar farm that’s connected to the grid, and that you get credit for. You will have to arrange for energy transmission and every state has its own rules about these things so the solution will have be tailored to the utility regulations that apply. But there are options.
Mark Kapner, P.E., is currently the Senior Strategy Engineer at Austin Energy, and was previously the utility’s Manager of Conservation and Renewable Energy. Before coming to Austin, Kapner launched TerraSolar USA, a solar photovoltaics company based in New Jersey. He was a research and development manager in the New York Power Authority where he developed demonstration projects in energy storage, biomass energy, solar, and cogeneration. Kapner spent ten years as a consultant to federal government agencies, including the National Science Foundation, Department of Energy and Environmental Protection Agency. He has a BS in Engineering Science from the State University of New York and a Masters in Public Policy and Management from Carnegie Mellon University.
Austin Energy is the municipally-owned electric utility that serves Austin, TX and the surrounding communities. It is the ninth largest public power system in the US, with approximately 400,000 customers and annual energy sales of over 12 billion kWhs. Its generation mix consists of wind (approximately 10%), natural gas (28%), nuclear (27%) coal (34%), and bio-energy and solar (approximately 1%). For the past seven years, Austin Energy has had the nation’s leading green energy pricing program, called GreenChoice, according to the National Renewable Energy Laboratory. Its extensive energy efficiency incentive programs have been viewed by many utilities as a model for successfully limiting load growth through conservation and demand-side management.