Summary
President Obama has been initiating policies for the renovation of the national energy transmission network, which is a dinosaur rearing its ugly head and delaying the growth of renewable energy. The stalled growth of clean energy and falling power rates of this sector may allow for a more lean and streamlined industry in years to come, which will grant time for the US to revamp its grid in order to utilize these alternatives; thus stimulate job growth in the process.
Analysis
The North American power grid is a highly complex mechanism that represents $1 trillion in assets and encompasses approximately 340,000 km (~211,000 mi) of high voltage transmission lines, to support ~830 GW and ~334 million people, according to the North American Electric Reliability Corporation (NERC), which develops and enforces energy reliability standards for Canada and the United States.
The grid has emerged over time as a patchwork of remedies, rather than a singular co-ordinated unit. While progress has been made in grid reinforcement since 2005, public and government opposition to new lines due to environmental impacts and cost concerns has impeded the $1.5 trillion in new investment needed by 2030, according to American Society of Civil Engineers.
President Obama has been initiating policies for the renovation of the national energy transmission network, which is a dinosaur rearing its ugly head and delaying the growth of renewable energy. Recently, he stated that “We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country, and we will put Americans to work making our homes and buildings more efficient, so that we can save billions of dollars on our energy bills.” A project of this nature is reminiscent of the public works program under former President Franklin Delano Roosevelt in his New Deal initiative during the Great Depression. Obama has also linked the issue to that of climate change and national security- due to its agedness and subsequent vulnerability to either cyberhackers or foreign terrorists.
Proponents of renewable energy have applauded Obama’s bold measures, since renovation of the grid is of the utmost necessity so that it is capable of incorporating the fluctuations of power output from wind, solar and geothermal energy. Many recent renewable energy-based power stations have been adversely affected by their inability to connect to the surrounding grid. Numerous backlogs exist across the United Stated including 70,000 MW of wind projects in the upper Midwest, 40,000 MW in the lower Midwest, 40,000 MW in the Great Lakes/Mid-Atlantic, and 50,000 MW in Texas, according to a AWEA/SEIA white paper document, entitled “Green Power Superhighways: Building a Path to America’s Clean Energy Future.”
Solar utility companies are dealing with a similar problem, especially since solar in general, and namely concentrating solar power (CSP) by companies such as Phoenix-based Stirling Energy Systems, are the most efficient in the unpopulated desert regions of the country. More than 4000 MW of large solar power plants are planned in the next five years, requiring transmission grid upgrades or construction.
However, amidst the ~40 percent global revenue growth of the solar energy market in recent years, it has tumbled along with other industries during the global recession. In a press release issued late last week, the market analyst firm, iSuppli Corp., predicted that worldwide installations of photovoltaic (PV) systems will decline to 3.5 gigawatts (GW) in 2009, down 32 percent from 5.2 GW in 2008. As the average price per solar watt declining by 12 percent in 2009, global revenue generated by PV system installations will plunge by 40.2 percent to US $18.2 billion, down from $30.5 billion in 2008. According to the firm, Spain, the world’s leader in solar capacity, is the culprit, since this country has accounted for 50 percent of worldwide installations in 2008, while an artificial surge in demand was created in the country prior to the reduction in the feed-in-tariff rate subsidy while a new cap of 500 MW already loomed for projects qualifying for the high tariff. Thus, a well-defined deadline for market growth was set by the Spanish government in 2009 and 2010. As a result, there is a surge in excess inventory and falling prices for solar cells and systems; however, this will not stimulate sufficient demand to compensate for the lost sales in 2009, according to iSuppli.
The company believes that even with recent enhanced incentives for the solar market from nations like the U.S. through its economic stimulus program overall global revenue growth will drop to 29.2 percent for 2009. Furthermore, the global bank credit limitations will contribute to a slowdown in solar as well as other renewables, as companies struggle to raise capital to meet new benchmarks and goals for clean energy conversion away from fossil fuels. The stalled growth and falling power rates of this sector may allow for a more lean and streamlined industry in years to come, which will grant time for the US to revamp its grid in order to utilize these cleaner alternatives; thus stimulate job growth in the process.
Please see my follow-up article later this week on university-level collaborative programs in Arizona and California to propagate the development of clean energy such as solar power.
For more info: Check out this Green business website: http://www.examiner.com/x-8178-Phoenix-Green-Business-Examiner for previous related and upcoming follow-up articles.
