Market forces are driving a clean energy revolution in the us

I direct Colorado State University’s Center for the New Energy Economy, which works with states to facilitate the transition toward a clean energy economy. In my view, today’s energy market reflects years of federal and state support for clean energy research, development and deployment.

And, despite the Trump administration’s support of coal, a recent survey of industry leaders shows that utilities are not changing their plans significantly. Even if the Trump administration succeeds in repealing the Clean Power Plan, U.S. electric utilities are expected to continue investing heavily in renewable generation. Transforming energy markets

Federal agencies provided funding for research and development as well as tax incentives.

States used renewable portfolio standards, which typically require that power providers supply an increasing percentage of renewable energy to their customers, to promote deployment of green energy.

The Trump administration is resisting this trend, repealing the Obama administration’s Clean Power Plan and proposing subsidies for coal-fired power plants. In doing so, it has also eliminated programs that were designed to help coal-dependent communities weather the energy transition.

But these reversals can do little to change underlying market forces, which are driving innovation, closing coal plants and promoting investment in clean technologies. Most new generating capacity added in recent years has been renewables and natural gas, while most retired generation has been coal-fired. Utilities care about cost, predictability and economic returns

A recent survey by the trade publication Utility Dive found that electric power industry leaders expect significant growth in solar, wind, natural gas and energy storage. They also project significant decreases in coal- and oil-fired generation.

– Markets emphasize the long view. As utilities look at aging coal plants that are providing decreasing value to their systems, they are making multi-decade and multi-billion-dollar decisions on investments in power plants and infrastructure to replace coal.

– Wall Street is helping utilities finance billions of dollars of investment. To ensure access to low-cost capital, they want to cite low-risk investments. Coal represents a high-risk investment from both a pollution and a resource standpoint. In 2016, 44 percent of the U.S. coal supply came from companies that had declared bankruptcy. The resource is simply too risky for investment markets.

For example, in Colorado, Xcel Energy recently submitted a plan to regulators to replace coal generation with renewables and natural gas. This shift will bring its Colorado mix of power up to 55 percent renewable by 2026 while reducing associated emissions 60 percent below 2005 levels – all without the EPA’s Clean Power Plan or a renewable mandate. Xcel is also finalizing plans to join the Southwest Power Pool, a transmission market that includes nine other states.

With storage, utilities can deliver energy when the system needs it. They also can meet spikes in demand with energy from batteries, which reduces the need to build expensive generation that is needed only to meet peak power demand. California electric utilities are investing in innovative energy storage projects to met a mandate from state regulators.

Innovation is also giving utilities and consumers new ways to manage their power needs. More energy-efficient buildings and appliances, and the ability to manage power requirements through an intelligent grid, will make it possible to do more with less electricity, lowering energy costs for everyone.