Navigant Research Blog

100% Renewable Energy by 2050

— May 15, 2017

In April 2017, the City of Portland and Multnomah County in Oregon committed to 100% renewable energy by the year 2050. Ted Wheeler, the mayor of Portland, said, “While it is absolutely ambitious, it is a goal that we share with Nike, Hewlett-Packard, Microsoft, Google, GM, Coca Cola, Johnson & Johnson, and Walmart. We have a responsibility to lead this effort in Oregon.” Other cities in the United States have also committed to renewable goals. Chicago, for example, has committed to 100% renewables for its municipal buildings and operations by 2025. Renewable goals are often tied with increased efficiency in buildings, as this assists in reducing the overall needed energy production, making it easier to rely more heavily on renewables.

At a National Level

Following in footsteps of Portland’s ambitious goal, Oregon Senator Jeff Merkley (D), Vermont Senator Bernie Sanders (I), and Massachusetts Senator Edward J. Markey (D) introduced legislation for the United States to reach 100% renewables by 2050. This 100 by 50 Act creates a plan for 50% of US electricity to be generated by renewables by 2030 and 100% by 2050. Additionally, it would require zero carbon emissions vehicle standards and ban government approval of oil & gas pipelines.

Both Merkley and Sanders understand the importance of local initiatives to propel these aggressive renewable energy goals into reality for the country as a whole. “Starting at a local, grassroots level and working toward the bold and comprehensive national vision laid out in this legislation, now is the time to commit to 100% by 2050,” said Merkley. Sanders already sees these changes occurring, and he believes in the importance of not being limited: “In Vermont and all over this country, we are seeing communities moving toward energy efficiency and we are seeing the price of renewable energy plummet. Our job is to think big, not small.”

The 100 by 50 Act is the first legislation introduced to Congress aimed to completely eliminate fossil fuels for the United States. While it is unlikely such a progressive proposal like this will initially pass, it opens the doors to additional discussions and ideas. The declining costs of renewables provide further incentive to assist in a shift toward greater reliance on renewable energy, such as solar and wind power. Local community initiatives and the individual sustainability goals of leading US companies are helping create a future that does rely 100% on renewable energy. Coupled with these siloed goals, members of Congress will continue to push toward more encompassing legislation, though it will inevitably be a long and trying endeavor.

 

Corporate Renewable Energy Goals Stimulate Solar, Wind Demand, and Business Models

— May 4, 2017

Large retailers, data centers, manufacturers, and even government facilities are among the growing number of entities shifting away from the standard electricity model where utilities decide the generation source and technology for consumers. As the costs of wind and solar energy continue to decline, owners of these energy-intensive buildings are taking advantage to meet their renewable energy goals. The combination of these two factors has led to the manifestation of corporate procurement as a major driver in the deployment of renewable energy, forcing utilities to continuously adapt to meet a wide range of consumer needs.

Leading companies such as Microsoft and Google paved the way early on for renewable energy procurement, but more and more companies are joining in. Notably, the online retail giant Amazon is building (and has built) wind and solar farms in North Carolina, Texas, Virginia, Ohio, and Indiana as part of its goal to achieve 100% renewable energy usage. Worldwide, nearly 20 GW of corporate renewable energy procurement contracts have been signed to date, with 240 Fortune 500 companies now having set renewable energy goals.

Achieving Renewable Energy Goals

Making things more interesting are the growing number of methods companies use to meet their formidable renewable energy targets:

  • Physical power purchase agreements (PPAs) were the preferred method for many years; a third-party developer would install, own, and operate a solar PV system (often onsite) and sell that energy to a company at a fixed price.
  • Financial or virtual PPAs are becoming more common. A utility or independent renewable developer sells power from wind or solar into the wholesale energy market at an agreed upon price via a third party (in this case, the companies looking to fulfill renewable energy targets). The company gets credit for bringing renewable energy to the grid and can count this toward its goals without directly sourcing its energy from renewables. Amazon’s 80 MW solar farm in Virginia operates under this structure through a deal with Dominion Energy.
  • Utility tariffs or green tariffs are agreements between a company and utility to purchase renewable energy from a specific facility in the utility’s service territory instead of negotiating a PPA directly with the developer. Google and Duke Energy announced a partnership under this arrangement.
  • Exiting the utility entirely is another method, though it is uncommon. Companies that are able to exit can separate from the utility entirely and purchase energy from private providers. MGM Resorts International and Wynn Resorts recently announced their plans to part ways with the local utility, NV Energy.

Favorable Future for Aggressive Movers

Looking ahead, it’s still to be determined if any one procurement method will emerge as the preferred path to meeting renewable energy goals, and it is unclear how utilities will respond. The demand doesn’t seem to be waning: Google, a leader in procured renewable energy, announced a plan to be 100% renewable powered on a real-time basis. To meet these bold targets, companies will need to continue to be creative in coming up with arrangements that work for both sides. Competitors are becoming more aggressive in this expanding space, and the evolution of this nuanced renewable energy application will be one to watch for the foreseeable future.

 

Portland’s New Renewables Leadership Showcased at Historic Montgomery Park Install

— April 18, 2017

An analyst’s job is to look at trends, events, movers and shakers, and data that sometimes all collide into one amazing story. One such alignment occurred on April 14, 2017 at the ribbon cutting of Imagine Energy’s 1 MW rooftop solar PV installation at the Montgomery Park building in Northwest Portland. The layers speak for themselves:

  • Solar Install: 1 MW is the third-largest solar PV installation in Portland, and it will cover 20%-25% of the all-electric historic building’s energy needs. The press release speaks for itself, “After four Historic Reviews, six crane lifts with the largest mobile crane in Oregon, the harshest winter in 40 years, detailed engineering reviews, and a 300-ton crane mobilization to set 150′ solar trusses, the 1 MW solar project at Montgomery Park is complete.” The installation included four EV charging stations, as well.
  • 100 ENERGY STAR Rating for 100th Anniversary: The solar PV installation sits atop the roof of the Montgomery Park building, and there are also three additional structures on Portland’s second-largest office building. Montgomery Park is working toward a perfect ENERGY STAR building efficiency rating of 100 by its 100th anniversary in 2020. Despite its age, Montgomery Park is the fifth most efficient building in Portland, and a score of 100 would make it No. 1!
  • History: Montgomery Park’s owner, Bill Naito, has an amazing personal history. A Japanese American who moved to Utah in high school to avoid internment during World War II, Naito went on to become one of the most prominent developers and civic leaders in Portland’s history. Imagine Energy’s founder, Jonathan Cohen, and his wife, Jessie, are two of the cities’ most active entrepreneurs and owners of other businesses in Portland.
  • 100% Renewable Energy Target: The newly elected mayor of Portland, Ted Wheeler, recently announced that Portland and Multnomah County would target 100% renewable energy for city operations by 2035—joining 25 other US cities in taking the pledge—building upon the city’s climate action plan.
  • Top Solar Drone Video: Navigant Research has covered the use of unmanned aerial vehicles for wind power inspection and for transmission and distribution monitoring. As cool as those are, nothing beats a sweet solar PV installation promo video—and Imagine Energy’s is the best I’ve seen.

While today’s solar market is led by a shrinking number of mega companies, the solar shakeout has created opportunities for small and medium companies to carve out their niche—and work on creative, challenging projects that larger companies might overlook such as the Montgomery Park project.

 

Kauai and the Quest for More Renewable Energy

— March 13, 2017

Remote islands and microgrids have been a hotbed for renewable energy resources throughout the past several years. Historically, remote systems have relied on small diesel generators to support electricity needs, but volatile fuel prices can be high in comparison to renewable alternatives. According to a recent International Finance Committee (IFC) and Navigant Research co-sponsored white paper, more than 80% of growth in renewables and energy storage for both energy production and consumption will come from new and emerging markets by 2035. Remote islands will play a huge role in this development based on evolving grid and end-user needs, physical infrastructure, and decreasing technology costs.

Ambitious Goals

Specifically, on Kauai in Hawaii, the Kauai Island Utility Cooperative (KIUC) laid out an ambitious renewable energy goal in 2008. The strategic plan previously aimed to reach 50% renewable energy by 2023, but the cooperative now expects to hit that goal in 2018, 5 years earlier than expected. The new target is to reach 70% renewables by 2023. To put this goal in context, Kauai had just 5% renewables penetration in 2009. In 2015, the island reached 37.4% renewable generation.

One of the most notable projects in Kauai’s pipeline is a 28 MW solar array paired with a 20 MW/100 MWh lithium ion (Li-ion) battery system; this will bring the island’s renewables penetration up to 58% when it comes online in late 2018. AES Distributed Energy, Inc. and the KIUC also established a power purchase agreement of $0.11/kWh, below the cost of fossil fuel power currently used to provide baseload generation to the island. Several other renewable projects dispersed around the island are up and running, pushing the plan forward. The KIUC wants the island to reach 100% renewables by 2045.

Most of the Hawaiian islands experience peak solar generation during the day, and consequently have diesel generators ramp up during peak demand at night. Several new projects are being paired with storage to help eliminate the use of these generators. Diesel plants on islands typically operate at high variable load, resulting in high variations of demand, which often is incongruent with the large size of diesel plants. Islands generally have more fluctuating power demand than mainland areas; over a year, generation can fluctuate significantly due to seasonal variation in tourism, for example. The AES project alone is expected to reduce the KIUC’s fossil fuel usage by over 3.7 million gallons annually.

Cutting Edge

Kauai and the KIUC are committed to ensuring that customers are on the cutting edge of the energy industry. By deploying emerging technologies like solar, energy storage, and smart metering systems, the cooperative is giving its members more transparency in how they can track their own energy use and set personal goals for efficiency. Making these investments and meeting these short-term goals pushes the KIUC’s vision forward to being a leader in shaping a thriving state for future generations.

Other small island nations and areas can learn from the KIUC’s goals. By engaging customers, testing grid stability, and aggressively looking for new projects, smaller markets can drastically change their energy outlook in a short period of time. Additionally, smaller markets can change rapidly in terms of renewables or storage penetration with just one or two large projects. Every market faces its own unique challenges, so it will be important for the government and private and public sectors to engage in efforts to push for ecologically and economically sustainable futures.

 

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