Transition to Renewable Energy: What Will Drive It?
By Sam Merrill, Contributing Writer
Now that Thurston County and the cities of Lacey, Olympia and Tumwater are developing the Thurston Climate Mitigation Plan, it is time for us to advocate for a major step toward that goal: the transition to renewable energy.
The fossil fuel sector of the energy economy is highly vulnerable to change at the best of times. It is low growth, has high fixed costs, is propped up by the OPEC+ cartel, and faces an environment of constantly rising regulatory pressure and falling renewable prices. In part because of these pressures, by the time that the world recovers from the economic downturn brought on by the COVID-19 crisis and demand picks up again, all of the growth may be supplied by renewable energy sources.
Likewise, according to Bloomberg New Energy Finance, demand for internal-combustion-engine (ICE) cars is likely to peak when electric vehicle (EV) sales are still relatively small. The latter are about 2 million now and growing fast. By the time total car demand begins to grow again, all that growth in demand is likely to be provided by EV’s.
By the time growth in demand returns in the electricity sector, solar and wind will likely be large enough to supply all the growth. We have seen this before. Horse demand famously peaked when there were just 3 percent as many cars as horses, and gas lighting demand peaked when electric lighting was just 2 percent of supply. To support the needed changes, governments need to remove wasteful fossil fuel subsidies and install a fee between the falling price that the fossil fuel sector gets and the price that the consumer pays.
While wind and solar are not the only forms of clean or renewable energy generation, they are growing much faster than hydro, biomass, or geothermal power. Europe is farther ahead than the rest of the world (as of 2019), with a full 17.6 percent of its electricity coming from wind and solar: 13.4 percent from wind, and 4.3 percent from solar. The raw output of EU wind and solar have increased 260% since 2010. In the percent of energy produced by wind and solar, Denmark leads the world with 50%; Uruguay is second with 38%, and Germany third with 30%.
In the U.S., the percent of energy production by wind and solar is 10%. Growth is still being driven by state-level mandates, but increasingly voluntary corporate and utility purchases of solar and wind are also big drivers, with more and more utilities realizing that it is cheaper to retire existing coal plants and replace them with wind and solar than to keep them running.