A new report by the Civil Society Institute lays out a road map for decreasing the use of nuclear, natural gas and coal-fired power plants while ramping up the use of renewables. But can it be done in a cost-effective and reliable way? During today's OnPoint, Grant Smith, senior energy analyst for the Civil Society Institute, explains why he believes renewable energy can be cost-competitive. He also discusses the policy options for getting more renewables online.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Grant Smith, senior energy analyst for the Civil Society Institute. Grant, thanks for coming on the show.
Grant Smith: Thank you.
Monica Trauzzi: Grant, the Civil Society Institute has just released a report that tries to tackle the notion that switching to renewable energy could mean unreliable power supplies and high cost. Where does the report come down on this idea?
Grant Smith: Well, essentially that by 2050 you can phase out 100 percent of the coal-fired power in the country, plus 23 plus of the nuclear power, while maintaining reliability and achieving great social benefits in terms of public health, water availability and quality, and tackling, on a very reasonable and cost-effective basis, the global warming issue within that sector.
Monica Trauzzi: So, the big question always is how do you get there? I mean, how do you get such strong reductions in coal use and nuclear use? And natural gas use is also mentioned in the report.
Grant Smith: Yeah, first of all there's -- you don't max out any one technology. We're not talking about the technical potential of wind or PV. We're not even close in this report. But, first of all, we do significant reserve margins across the country in just about every region. Some are reserve margins, others great potential for energy efficiency, which is the least cost energy resource we have and also the least risk energy resource. And the estimate is you could ramp -- the most aggressive states now are reducing demand by 2 percent of the previous year's sales every year. The country can ramp up to that by 2020. This makes all this possible. And then you expand wind and PV significantly. There would be some geothermal additions, some biomass additions. And the study also takes into account the operation of the grid. You know, we're moving more and more towards integration of renewable resources, the use of flexible generations such as natural gas. Natural gas does play a role here, although there's much less of it, about 28 percent less used than business as usual by 2050 due to the efficiency measures, using natural gas more efficiently in combined heat and power context. And so, by the time you get to 2050, you don't have an unreasonable mix. You have like -- in terms of terawatt-hour production, you know, 33 percent maybe in natural gas, 16 percent wind, you know, 22 percent PV generation. And one of the things that's interesting is things change very quickly. In terms of PV for instance, they did a report released a year and a half ago, due to the cost reduction, this report estimates we can have five times more terawatt-hour production from PV for instance. So, we see no technological or financial barrier to this. It's essentially political will to move in this direction and it harbors many benefits across the board for the public.
Monica Trauzzi: All right, political will. How critical will something like a clean energy standard be to achieving these goals and what kind of policy options do you think could get us there?
Grant Smith: I think RESs have already played a critical role in states in moving renewable energy deployment. For instance, where I'm from in Indiana, there's been over 1,300 megawatts of wind built in 3 to 4 years and that's due to the RESs in other states. You know, we don't have one, but it has driven it. The costs of wind have come down. You know, as comparison, the wind in northwest Indiana is being installed about $2,000 a kilowatt. The coal gasification plant, on the other hand, that's being built in southwest Indiana by Duke Energy, is over $5000 a kilowatt now and counting. The ability to do this comes from the fact that these are cost effective options and they're less risky. They can be deployed more quickly. You don't get the mass of the cost overruns as you do with nuclear. These are commercial technologies. Everything in this report is off the shelf. Of course, things will change through time and this report can be updated periodically, but we can achieve this now with the technology we have at the present time.
Monica Trauzzi: So, if we take a look at where the solar industry is right now, with the Solyndra hearings happening on Capitol Hill and the debate over whether to impose tariffs on the Chinese solar industry, the fight to extend production tax credits and investment tax credits for solar, would you argue that this is just a small bump in the road for this technology or could all of these little things add up to a big hurdle for the industry?
Grant Smith: Well, I guess, you know, there's opportunity in this. In terms of Solyndra, you're looking at one company, not a technology that has failed. I mean, you know, nuclear power has been financially unviable from the beginning. They keep throwing money at it, it keeps getting more expensive. It's just a bump in the road. In the context of the Chinese, the reason they're doing that is because the price has dropped significantly and they want to protect, you know, the indigenous industry here, which is an interesting conundrum to be in. You know, it used to be solar is way too expensive. Now, it's so inexpensive that we have to protect the national boundaries.
Monica Trauzzi: You also talk about energy efficiency in the report. We always hear talk that energy efficiency is the low-hanging fruit, but is it being treated as such in the United States? Do you think it's being tackled effectively enough?
Grant Smith: I think it depends on where you are. Some states are very aggressive. As I said, you know, the best states have aggressive programs that are reducing demand 2 percent a year of sales from the previous year. That can be ramped up. There's a huge opportunity here. It is the lowest-cost and lowest-risk resource we have and this is low-hanging fruit and will continue to be low-hanging fruit. The report is very conservative with respect to efficiency in terms of cost. They ramp up the cost over time in the report to sustain that level of efficiency. But, you know, experience generally is the more you do, the less it costs. So, there are conservative assumptions in this report. You know, we don't -- in terms of incorporating the cost of doing this, we don't include the cost of carbon. We don't include the externality costs of coal, which are enormous. You don't have carbon capture and sequestration built-in. And even then it's cheaper to phase out coal then to sustain the technology. It's cheaper to reduce nuclear fleet than to build out the nuclear fleet.
Monica Trauzzi: All right, interesting stuff. Thank you for coming on the show, nice to see you.
Grant Smith: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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