This blog originally ran as a guest post on Clean Technica.

I’m looking forward to speaking at Senator Reid’s National Clean Energy Summit next week in Las Vegas. I’ll be on the “21^st Century Energy Market” panel where we’ll address what can be done to make the grid friendlier to renewables while ensuring long-term access to affordable and reliable electricity. 

This is an important conversation to have right now. Huge progress on costs has made renewables like wind and solar affordable and competitive. As a result, wind and solar are now two of the top three sources of new power generation planned by utilities. We’re entering the era of mainstream renewables where an increasing proportion of new power comes from clean sources.

With cost receding as the primary objection to renewables, our nation can “get clean” without breaking the bank. But that doesn’t mean we’re automatically going to get everything renewables have to offer. In order to get maximum impact—think 70% or more of our power coming from renewables—we need to begin making big changes to the way we operate the electric grid to make it more renewables-friendly.

The electric power grid (actually many regional grids) we have today is an amazing piece of engineering. It connects thousands of generators to millions of customers and delivers power so reliably we simply take it for granted. But it was built on a set of design assumptions that don’t fit today’s priorities. It assumed we’d have a big base of nuclear plants that ran steadily night and day, with hydro, gas- and coal-fired plants that could be ramped slowly up and down to meet demand for power.

By various estimates, today’s grid can probably accommodate 30%-40% renewable power with a few adjustments here and there. This is largely the approach we’ve taken so far to integrate renewables in the U.S. But getting to a 70%+ renewable scenario requires us to incorporate a different design assumption—that most of our power in the future will come from variable generators that create electricity when the sun shines and the wind blows.

Experts tell us that building a more renewables-friendly system requires us to evolve to a “flexible grid” designed around exactly that variability. A flexible grid can move power fluidly across regions from where it is generated to where it is used. It features large amounts of distributed generation and the ability to manage power demand by controlling large equipment that doesn’t have to run all the time. And it has quick-response resources like hydro and gas-fired generators (and storage) that can be ramped up and down quickly to cover short-term imbalances between supply and demand.

Broadly speaking, the changes needed to realize a “flexible grid” fall into four major areas:

1. Regional Integration – we need more transmission lines and (just as important) we need agreements between regions to share resources and information about demand and available generation
2. Demand-side Resources – we need to create markets or tariffs for distributed generation and demand-management that enables system operators to reduce, forecast, and control load
3. Flexible Generation & Storage – we need to create markets for generation and storage that place value on the capability to ramp up and down quickly and maintain local power quality
4. Forecasting & Scheduling – to make the most of all of the above, we need to give system operators access to current information about supply and demand plus the controls over transmission, generation, and load to make it all work together seamlessly

Moving forward on these efforts will be incremental and involve technical, market, and regulatory complexities. The form it takes will vary from region to region depending on resources and politics. And it will likely also force us to examine the role and business models of utilities; the current net-metering conflicts in the West demonstrate this challenge.

As always, it will also require us to sort out the costs and benefits and cost allocation. Some have already suggested imposing the cost of building flexible resources solely on renewable generators as an ‘integration cost,’ which creates a disincentive to building exactly the kind of resources we want to prioritize—these costs should instead be seen as part of the overhead of a flexible system that is necessary to achieve our overall system goals. While new investment in transmission and generation will certainly be required, most analysts also agree that there will be significant efficiencies from regional resource sharing that could create billions of dollars of annual savings.

In the West, this process of change is already underway. The California Independent System Operator (CAISO) recently announced an agreement with Pacificorp to create an energy imbalance market (EIM). The EIM is an important step forward in regional integration that will connect California’s grid to large areas of the Northwest. The two regions will exchange information on generation on 5-minute intervals and enable automated sharing of resources. The EIM’s success will hinge on our ability to remove barriers to new transmission. It will also require close harmonization with state RPS goals to ensure that sharing resources doesn’t create unintended consequences.

Bottom line: Change is required to evolve the kind of renewables-friendly “flexible grid” that will put us on path to a clean energy future. This kind of change won’t be easy and it will happen incrementally. But the effort and investment this evolution requires will be well worth it. The reward will be a cleaner, more reliable and affordable electrical system that can meet the needs of future generations for decades and centuries to come.

In another exciting milestone this year for Recurrent Energy, two of our solar power projects reached commercial operation in California. The two plants contribute 40MW of additional renewable capacity towards the state’s RPS goals and are now owned and operated by NRG Solar.

Located in Lancaster and Kings County, the plants are delivering electricity to Southern California Edison and Pacific Gas & Electric (shown above), each with a peak capacity of 20 MWac. The project in Lancaster reached commercial operation in March of this year, while the Kings County project began operating this June.

During their first year of operation, the projects are expected to generate enough clean solar power to offset the electricity use of roughly 11,811 average U.S. homes.

This was our first agreement with NRG Solar. I have to say they are the head of the class when it comes to owning and operating solar assets. Both of our companies are proving that solar energy is not only good for the environment, but also good business. I hope this is merely the beginning of a long relationship of bringing solar into the mainstream.

On a personal note, it’s great to see the fruits of years of development finally result in projects like these that are delivering clean, affordable electricity to the grid. Recurrent Energy now has now delivered over 260 MWp (206 MWac) of solar plants to operating status. We are working to complete an additional 315 MW in 2013, bringing our total operating portfolio to well over half a gigawatt! 

Yesterday was a big day for Recurrent Energy. We spent the evening in Ontario, Canada with Premier Kathleen Wynne and Minister of Energy Bob Chiarelli celebrating the completion of our first six solar power plants in the province. These six plants will provide a total of 52 MWac (70 MWp) of clean solar power for Waubaushene and Smith Falls in Ontario.

In 2009, the Ontario government committed to transition much of the province’s electricity supply to clean, renewable resources harnessing the power of the sun. This transition has already made a major positive impact on both the environment and the economy. Recurrent Energy was selected to build a total of 20 solar power plants, providing 159 MWac (220 MWp) of clean solar power across southern Ontario as part of the province’s commitment to clean energy.

An incredible team came together to bring these projects all the way to operation, including the dedication and commitment of our Ontario and San Francisco staffs, our partners Mitsubishi Corporation and Osaka Gas, and of course the Ontario government, in particular the Ministry of Energy and the Ministry of the Environment, the Ontario Power Authority and Hydro One. It’s gratifying to see years of work put in by hundreds of dedicated people finally come to fruition.

This was originally posted on National Journal’s Energy Expert’s Blog in response to the question “How Can Congress Boost Renewable-Energy Investments?”

Renewables, particularly wind and solar, have made tremendous strides in recent years. Massive cost reductions are enabling them to play an increasingly mainstream role in conventional power markets. These industries now stand ready with the manufacturing capacity necessary to deliver hundreds of gigawatts of clean power plants.
 
Delivering that kind of scale in electric power requires significant investment. So it is important to note that renewables have already begun earning the trust of private investors. Of the $269B that Bloomberg reports was invested in renewables last year, the largest portion came from conventional project finance sources.
 
While this demonstrates that renewable projects are now an accepted asset class, it also highlights their disadvantage. Project finance is a considerably more expensive source of capital compared to the kind of low-cost, tax-advantaged financing sources that oil and gas enjoy.
 
Master Limited Partnerships (MLPs) are a perfect example. They allow oil and gas projects to tap public capital markets in a way that avoids an additional layer of taxation. This gives them access to lower cost capital than wind and solar get from project investors. Restrictions embedded in the MLP code prevent these structures from being used for renewables, thus conferring an arbitrary advantage to fossil resources.
 
Senator Coons is to be commended for his thoughtful and determined leadership on the MLP Parity Act. If passed, the bill would remove anti-renewable restrictions and enable access to low-cost capital via MLPs. It’s another common sense step we can take towards leveling the playing field and putting renewables on equal footing with fossil fuels.
 
My only concern with passing the MLP Parity Act is the risk it creates for confusion in Washington. Some may erroneously conclude that expanding MLPs can serve as a substitute for other federal renewable incentives. This would be a big mistake.
 
Some of this confusion is being sown intentionally by renewable foes. This was highlighted recently when Jack Gerard of the American Petroleum Institute gave renewable MLPs a proverbial “bear hug” by expressing his support for the Act while sniping that it “might help renewables transition off of subsidies sooner.”
 
It shouldn’t be necessary to point out that oil and gas continue to enjoy numerous subsidies and access to MLPs. A century’s worth of subsidy have helped the fossil fuel sectors to build a massive head start that continues to enhance their market position. It’s only fair to extend the same combination of incentives to renewables.
 
Bottom line, the Coons bill is a positive step towards giving renewables parity with fossil fuels in one corner of the tax code. But true parity will require a sustained, stable policy environment to sustain positive momentum in our nation¹s development of renewable resources. The benefits should be obvious: economic development and jobs combined with a path to a secure, clean, and affordable energy future.

This was originally posted on National Journal’s Energy Expert’s Blog in response to the question “What’s Holding Back Energy & Climate Policy?”

As the recent failure on gun control showed, favorable public opinion does not translate into legislative success in a divided Congress. Despite the fact that study after study demonstrates large majorities of Americans favor action on climate change and they want more clean energy, we’re unlikely to see energy or climate legislation pass anytime soon.
 
We won’t get comprehensive climate change legislation until a majority of House members and a supermajority of Senators not only see it in their political interest to take action, but also come to general agreement on what the shape of action should look like.
 
However, I take issue with the premise that climate and energy policy are therefore dead in the water. In the absence of congressional action, the Environmental Protection Agency (EPA) has rightly exercised its court-ordered authority to control greenhouse gas emissions. With the White House’s blessing, EPA pursued an aggressive regulatory agenda during the President’s first term, and with the prospect of carbon rules for existing plants in the offing, EPA action is poised to become the centerpiece of President Obama’s environmental legacy.

To that end, the “sea change” moment may have already occurred. Massachusetts v. EPA (2007) gave EPA the legal mandate to regulate carbon and other greenhouse gases as pollutants. Given the urgency of climate change and what is at stake, it would be more satisfying to launch a grand piece of legislation memorializing our nation’s resolve on this issue. However, this is a situation where it may be wiser to focus on playing the cards in hand rather than wishing for cards that don’t exist.

The other positive factor in the mix is the tremendous reduction in cost achieved by mainstream renewables like wind and solar. Just as shale gas has transformed our view of our nation’s fossil resources—the achievements in wind and solar have transformed our view of renewables from “expensive” to “affordable and plentiful.” As long as policymakers don’t undo the policies supporting their expansion, market momentum will propel wind and solar to an ever-increasing role in electric power.
 
While there are clearly risks and potential setbacks ahead, the combination of increased regulatory pressure on carbon and industry cost reductions will likely keep our public policy headed in the right direction. Will that be enough to get us off the course we’re on to a 6-degree shift in global temperature? Probably not, but progress today will form the basis for making the changes necessary when the factors that drive legislative success are better aligned.

On the heels of a successful 2012, here at Recurrent Energy we are looking forward to some major milestones in 2013 as we continue to build out our utility-scale portfolio. It’s not just a big year for our company, the solar industry as a whole is putting some big numbers on the board. We are
clearly seeing solar’s transition to playing a mainstream role in energy markets.

Our 2012 activity brought Recurrent Energy’s total completed projects to 138MW now in operation. Operating results were above plan, as we completed our second year with solid profits. On the capital raising front, we’ve secured well over $2B in cumulative project finance commitments to support our build-out. Last year was also a good year in terms of new development successes. Our team added another 114MW of new utility contracts, pushing our total portfolio to just over 700MW.

In 2013, we have over 300MW of projects lined up for completion—more than 200% of what we’ve built to date as a company. This includes the first two waves of our 220MW of Ontario projects, another major milestone for the company. We’re firing on all cylinders across the organization as we execute a historic push to get these projects out the door successfully. I have to say it’s gratifying to finally see years of development work come to fruition.

What’s even more exciting is that our results are just one example of the growth and success we’re seeing across the solar industry as it transitions to the mainstream. Today, SEIA and GTM Research released their U.S.Solar Market Insight Report: 2012 Year In Review.

Here are just a few of the highlights for 2012:

• US solar installations came in at over 3.3
  gigawatts (GW), a 76% improvement over the previous year
• The U.S. accounted for 11% of all global PV
  installations, its highest market share in at least fifteen years
• Cumulative PV capacity operating in the U.S. stood
  at 7.2GW at the end of the year

Despite the magnitude of these numbers, they fail to express just how exciting and dramatic of a transition the industry is going through. I’ve heard stories from natural gas insiders about how hard it was to get people in the outside to see the revolution that was occurring with shale gas in the early 2000s. I think solar is reaching a similar inflection point, and we are only scratching the surface of what solar can offer our country. 

Over the last several years, massive cost reductions drove solar to competitive parity with other wholesale power sources. As a result, solar – once the most expensive source of electric power – is now one of the three least expensive sources of power (solar, wind, and natural gas).  This remarkable
transformation has all but guaranteed solar will have a mainstream role in our energy future. And it means our country can ‘get clean’ without breaking the bank.

2013 will be the year this transformation becomes apparent to the outside world. This is the year solar will exceed all but gas in terms of new power plants put into operation. GTM is forecasting the industry will deliver 4.3 GW of new generation—the first year solar will deliver more than new wind or coal. And I have a feeling that number may actually be a bit conservative.

This will also be the year Americans start to realize just how affordable solar has become. Rooftop solar can now be installed for under $4 per Watt, making it competitive with retail electric rates in many regions. Meanwhile, utility solar costs have broken through the $2 per Watt barrier. As a result, the price utilities pay for solar electricity from new plants has declined to $60-$70 per MWh ($0.06-$0.07 per kWh). In fact First Solar just announced a contract with El Paso Electric Co. just below that at $57.9 per MWh.  

Pricing in this range makes solar just about competitive with existing gas-fired power and arguably competitive with a new-build gas plant, once you figure permitting and operating costs into the equation. Even more profound, a solar plant has low operating costs and zero fuel costs. It will generate power at that low fixed price for the entire 25-year plus lifetime of the plant. Yet in that same period of time, the cost of natural gas-fired power is forecast to rise to well above $90 per MWh.

All signs point to 2013 being a watershed year for solar. What lies behind us is the history of solar’s maturation from an expensive technology to affordable power.  What lies ahead is a future in which solar plays a mainstream role in generating the power we use every day. In fact, the latest forecast from IHS indicates that by 2030, solar and renewables will deliver as much power in the U.S. as the nuclear sector does today. 

I have one problem with this tremendous progress – it is not enough. Status quo projections do not come close to tapping the potential of solar and other renewables. So while I am excited about how far solar has come, I know we have a long way to go to realize the full benefit renewables offer our nation. Getting there will require a frank discussion about what to do with our natural gas bounty, putting a real and meaningful price on carbon, and redesigning our energy grid to manage a high penetration of intermittent clean resources.

More on that in later posts.

I spent last week in Houston for CERAWeek, one of the premier conferences for the global energy industry put on by IHS. This was the first year they had a panel on renewables and I was honored to participate as a speaker. CERAWeek convenes senior business and government leaders to assess the current state of oil, natural gas, coal, renewables, and nuclear power. It’s all about energy on a vast scale.

I found the conference humbling and inspiring at the same time. Humbling because the vastness of our global energy needs is difficult to grasp. Humbling because the immensity of activities going on to extract fossils from some of the most inhospitable places in the world to meet that need is also hard to visualize. Humbling because on that scale renewables today are still so small. I’ll get to the inspiring bit in a moment. 

The theme of CERAWeek this year was “transformation and change.” The main focus of this theme was clearly the upheaval wrought by fracking and other unconventional fossil recovery methods. Driven by new technologies and new drilling techniques, the global assessment of recoverable resources has been turned upside down.  

In short, the US—once thought to face a bleak future of endless oil and natural gas imports—now sits on an abundance of oil and gas that could make us energy independent by 2020. And a world which not so long ago was thought to be at “peak oil” is now at the beginning of a multi-decade (if not a century’s) upswing in production.  

So radical is the transformation that an oil economist like Philip Verleger Jr. can ask quite reasonably whether the U.S. ought “to consider joining with other energy-exporting countries, like those in OPEC, to sustain high oil prices.” Wrap your head around that. 

This wasn’t supposed to happen this way. The last decade was supposed to be about dwindling fossil resources. It was supposed to be about the transition to an innovation-led effort to supplant fossils with new renewable technologies. If there is one constant in energy, it is that surprises are the norm.

Now to the inspiration. The other focus of CERAWeek’s “transformation and change” was the revolution that’s occurring in renewables, particularly solar and wind. For decades considered expensive and impractical, solar and wind have leapfrogged their way into the top three least expensive sources of electric generation. And they’re now the fastest growing segment of energy overall.

As you might expect, this means wind and solar are going to be a big part of the future of electric power. In fact, IHS’s own analysts forecast that by 2030 solar and wind will generate as much solar power as the nuclear sector does today. That’s the status quo scenario and that’s almost as hard to wrap your head around as what’s happened with oil and gas.

Here’s the thing. I think we can do even better. And we have to if we’re going to make real progress on climate change. After all while it’s wonderful to have lots of cheap oil and gas, they’re still part of the carbon problem. Even ‘clean’ natural gas is only preferable when compared to its dirty cousin coal.

I left Houston inspired by the progress renewables have made and fired up about the road ahead. We have to focus now on building an upside to the status quo. The new conversation is now longer how to afford renewables, it’s about how to integrate as much of affordable solar and gas as our grid and our nation can take. Hopefully five year’s from now that’s the status quo we’ll be talking about.

Carl Zichella over at NRDC provides a compelling and thorough examination of what’s really needed to address reliability challenges ahead for California’s grid. Here’s an excerpt and link:

At an extremely rare joint meeting this week, the entire membership of the California Public Utilities Commission (CPUC), California Energy Commission (CEC) and California Independent System Operator (CAISO) explored ways to make the state’s electricity grid operate more smoothly as new resources come into the system and displace older, dirtier and less-efficient types of fuel.

Complete article here…

The Wall Street Journal published an alarmist piece yesterday  depicting California’s electrical grid as the victim of a ‘looming crisis’ brought on by the state’s ‘growing reliance’ on wind and solar. While the success of wind and solar certainly raises new issues in terms of how to plan and operate the future electrical grid, the article overstated the severity of the problem California currently faces. Worse it sensationalized an issue in a way that offers little real insight into the challenges or potential solutions.

Before we get into that, let’s first just look at the facts in California. What better resource to turn to than the California Independent System Operator (CAISO) website. Here we find a snapshot of the state’s electrical load and resources for yesterday (27 Feb 2013): 

What does this tell us? California’s daytime load today peaked at just over 27 gigawatts, followed by the evening load peak of around 29.5 gigawatts. Minimum load never went lower than 20 gigawatts. Meanwhile CAISO had between 32-38 gigawatts of generating resources available during that period to meet that demand.  

Now let’s look at what role renewables played in the state during the same period:

Solar was the highest contributor from the renewables camp today, contributing just over 1.5 gigawatts of peak output. Altogether if you add up the other renewable resources, they maxed out at just under 3.5 gigawatts. But that includes 920 MW of geothermal which you can see is almost rock steady—plus 300 MW of hydro which is 100% dispatchable.

 So the real ‘intermittent’ supply today maxed out at about 2.3 gigawatts. That’s less than 10% of peak daytime load and less than 8% of the maximum load. Note that the intermittent supply barely crosses over 10% of minimum demand of 20 gigawatts and CAISO had way more resources available than it needed to meet the peak.  

Clearly California is not ‘overly reliant’ on wind and solar and this is clearly not a situation ‘out of control.’ In fact it looks very much in control—and it looks very much like there’s more capacity to absorb intermittent resources. 

Just for perspective, let’s compare California to Germany where they really do have high penetration of solar and wind relative to load. Below are graphs showing various power sources contribution to meet load for two different weeks in 2012. The upper graph shows a period in January when wind supplied over 40% of Germany’s power needs. The lower graph shows a period in May when solar provided about 40% of Germany’s power needs. Guess what. Germany didn’t fall of the map and didn’t experience major blackouts.

How does Germany make it work? By combining intermittent and dispatchable resources in a way
that reflects their features and strengths.  

They use baseload resources like nuclear and large gas- or coal-fired turbines to meet the predictable and consistent load at the bottom of the chart. Next they let wind and solar generate whatever they can as the wind blows and the sun shines—both of which are lot more reliable than they sound and can be accurately forecasted a day or two in advance. They then fill the remaining ups and downs with highly
dispatchable load-following resources like hydro and gas-fired peakers. And they maintain a prudent amount of dispatchable capacity in reserve in case load rises or intermittent resources fall off.

It’s not magic –  it’s actually pretty logical and straightforward. And the benefit Germany gets is tremendous: a high proportion of 100% clean electricity with solid reliability.

To be fair, California’s grid and operating topology are a lot different than Germany’s. A more complete analysis has to look at operating issues year round. And the issues can get highly complex when you look at isolated segments of the grid. Currently there are big issues in the western Los Angeles basin as a result of the loss of the San Onofrio Nuclear Generating Station and legal issues related to contracting existing gas resources to fill the gap.

However, what is clear both from the California and Germany examples above is that there’s strong evidence the technical capabilities exist to enable California can absorb a lot more renewables without threateaning overall reliability.

The Conversation About Reliability We Should Be Having

The last thing we need is an alarmist, sensationalized ‘chicken little’ conversation about the reliability issue. What we do need to have is a pragmatic, constructive conversation about grid reliability in California and the implications for the rest of the nation.

An increasing number of experts believe that the state is actually overbuilding the amount of gas-fired resources it needs in an attempt to ‘over-insure’ against the issue of intermittency as it approaches its 33% RPS goals. The risk of over-insurance of course is that state ratepayers will end up footing the bill for an overbuilt system—and ratepayers will blame rising rates on renewables rather than bad grid
architecture or poor integration planning.  

The problem lies in the way California regulates its power industry. As a recent report from the Hoover Institution points out, “No single state entity is in charge of integrating initiatives and addressing gaps, decision making is slow and siloed, and—most importantly—there is no consolidated roadmap and decision-making schedule.” In California, the CPUC oversees procurement and the CAISO oversees reliability. And while they are increasingly trying to coordinate, there is no systematic technical or economic optimization in place to balance cost, reliability, and growth.  

That’s a problem worth fixing. The state’s 33% goal is just the beginning. Complying with California’s landmark carbon regulation (AB32) will require the state to reach 80% renewables by 2050.

No one’s saying it will be easy, but it is important enough that we shouldn’t just throw up our hands. The technical and regulatory issues that have to be resolved are complex and entangled in energy politics. We should not allow the alarmists to tell us that something that is hard is not worth doing. California is a state that has solved big problems before and the U.S. is a place where we pride ourselves on our exceptional place. Surely a matter this important can be solved with a little ingenuity, grit, and determination.

KCET’s REWIRE blog records yet another record utility-scale solar day in California. Utility solar generation peaked at 1.45 gigawatts, exceeding wind and all other renewables for the day. What’s more the blog notes that with sunnier days ahead and tons more utility solar coming online, those numbers have only one way to go from here–up!

Couldn’t resist posting this amazing aerial shot (click on the picture to see it full size) of our McKenzie solar farm which was completed late 2012. Located just south of Sacramento, McKenzie is one of 88MW of now-operating solar power projects Recurrent Energy developed for SMUD.

I love how beautiful the project looks against the green fields of California’s central valley in spring. It visually conveys how compatible medium-scale utility solar can be with the environment and farming communities.

With 109MW currently in construction and 315MW planned for the year ahead, we’re going to have a lot more projects like McKenzie to look at in the near future!

“We are finally in a position to control our own energy future” – strong words from the president during his State of the Union address. His remarks reflect how deep changes in our nation’s energy picture have profoundly changed our expectations for the future. These changes have brought us much closer to a secure, clean, and affordable energy future than most people realize. 

We have heard the astounding story of  how newly abundant natural gas has driven down cost in a remarkably short period, creating thousands of jobs and knocking coal plants offline. But we also heard how economies of scale and maturing industries are also pushing down cost and driving renewable energy forward in much the same way. Indeed, despite gridlock in Washington, we’re witnessing the dawn of a new era of mainstream clean energy.

You don’t have to look far to find the evidence of this transformation. A report recently published by the Business Council for Sustainable Energy (BCSE) highlights that renewable energy, including wind, solar, geothermal and hydropower represented the largest single source of new energy capacity in 2012, with more than 17 gigawatts added.

President Obama noted the incredible progress the solar industry has made in recent years bringing down cost. The same BCSE report mentioned above reveals that the cost per kilowatt-hour (kWh) of solar has fallen 55 percent since 2009, even while excluding tax credits and incentives, and is well within the range of traditional energy. The impact of this price drop can be seen already, as El
Paso Electric Co. signed a twenty year agreement at the end of January to purchase solar power at half the average rate of new coal.  

The president called attention to the remarkable fact that wind made up 45% of all new generation brought online last year, exceeding additions from all other fuel sources, including natural gas. Not to be outdone, the solar industry was on pace to install more than 3,200MW of new generation at the end of 2012. Duke Energy, one of the nation’s largest utilities, is projecting that continued explosive growth will
move solar into second place behind natural gas for new capacity in 2013—exceeding new generation additions of both wind and coal this year.

Looking ahead, the rise of mainstream renewables is driving such a significant transformation that the EIA is projecting renewable energy to make up a majority of all new capacity additions through 2015.

Let’s be clear about what a continued and successful energy transformation will look like. Our country is preparing to replace an aging fleet of dirty coal plants in a world where solar, wind and natural gas are all at historically low prices. And as the president rightly pointed out, these now abundant and affordable resources give us new chioces and a new level of control over our energy future.

Clearly natural gas is a critical part of the picture. In fact natural gas enables more renewable generation to be brought onto the grid, because of the reality of renewables and how the power grid works. But we shouldn’t fool ourselves into believing that simply replacing coal with natural gas is enough.

We need as much cost-competitive renewables as we can get if we’re going to make the most of our resources and take on climate change. If we get the formula right, we’ll end up with an optimal combination of solar, wind and gas that can deliver the trifecta of low emissions, reliability, and affordability.

There is still much work to be done, as wind and solar, even though rising fast, still only add up to less than 6 percent of all electric power capacity in the U.S. Meanwhile, the glut of cheap natural gas may tempt regulators and utilities to overbuild gas-fired power plants in the short term. It’s imperative we plot a thoughtful course now towards an energy future in which this ideal energy trifecta is a reality. 

We are just beginning the mainstream clean energy era, but the facts show the transformation of our energy economy is already underway. To ensure we make the right use of the resources available to us, we need predictable and market-based policies that increasingly put a price on carbon – whether through legislation or emissions regulation.

I urge the president to  deliver on the promise he made last night to take bold action on climate change – specifically to exert his executive authority to guide our nation’s energy choices – and seize the opportunity of our newfound control of our energy future.

Exporting natural gas would be more likely to displace coal both at home and abroad, resulting in a lower net carbon emissions overall. 

By Arno Harris, contributor

FORTUNE — America is awash in natural gas. Prices are low and by some estimates we have a 100-year supply of it. Today we produce more than we use so why not export it? By doing so, natural gas could act as the driver of a comprehensive U.S. energy plan that would make sense in terms of our economy, national security and public health. Better yet, it could rally support from interest groups previously at odds. How? Embracing natural gas exports would not only take the slack out of the U.S. natural gas market, which would help producers, but also would enable renewable energy to replace natural gas as the backbone of America’s power-generation infrastructure. In other words, there is a clear alignment between renewable energy supporters and the oil and gas industry based on a shared interest in seeing natural gas prices rise a notch or two…

Link to rest of article on CNNMoney site…

Advances in drilling and fracturing underground rock (a.k.a. “fracking”) have unlocked massive supplies of natural gas previously trapped deep under the United States, positioning the U.S. to become the world’s largest producer of natural gas by 2015. Ironically, this gas is now trapped within the geographic boundaries of North America because we don’t have the facilities to export gas to markets in Europe and Asia.

The oversupply trapped in the U.S. has caused the domestic price to collapse to by more than 50% to $2-$3 per thousand-cubic-feet (Mcf). That’s a fraction of prices in Europe where gas goes for $10-$11 per Mcf or those in post-Fukushima Japan which are over $17 per Mcf.

The severity of oversupply in the U.S. relative to global markets offers an opportunity for the United States to achieve something it has never had: a comprehensive energy plan that makes sense in terms of our economy, national security and public health. Better yet, it could rally support from interest groups previously at odds. How? By embracing natural gas exports. This would not only  take the slack out of the natural gas market , but by doing so enable renewable energy to become the backbone of our power generation infrastructure.

In today’s energy conversation, much has been made of the benefits cheap natural gas confers on Americans. Today’s cheap gas can be burned to generate electricity at a cost of about $30-$50/MWh (3¢ – 5¢ per kWh). Compare that to utility solar power at $70-$80/MWh and wind power at $40-$60/MWh, both of which are cheap by historical standards but higher than the apparent price of gas-fired power. For consumers and businesses, that looks like a windfall (at least for now) in the form of lower electricity rates. However it’s increasingly apparent that cheap gas has some downsides because it is actually distorting power markets.

The siren song of cheap gas is tempting regulators and utilities to pursue a disproportionate build out of gas-fired power plants. The danger with this trend is that a gas-dependent infrastructure is vulnerable to future gas price shocks. Whereas stability can be found in a portfolio of both renewables and gas offering more predictable prices and greater energy security. The bottom line is that artificially low gas prices are distorting energy markets and complicating our nation’s progress towards a truly secure, clean and affordable energy future.

Promoting a gas export policy will provide an important shift in our national energy debate. This as an opportunity for groups that typically find themselves on opposite sides of energy issues to come together. There is clear alignment between climate advocates and renewable energy industry with the oil and gas industry based on a shared interest in seeing natural gas prices rise a notch or two.

Gas producers clearly stand to benefit from export. One of the lesser known realities of the gas fields is that today’s prices are not sustainable as they don’t offer producers enough value to drill profitably. Even accounting for the cost of gas liquifaction and shipment, the spread between U.S. prices and global prices ensures them a better profit from export than they currently get at home.

Gas power plant developers also stand to benefit from higher prices. Another hidden effect of low gas prices is that it inhibits development of new gas-fired power plants, because the spread between the cost of gas and the price of electricity is tight when gas prices are low. And few developers want to build a plant today that locks in at today’s low electricity prices. Rising gas prices would increase spreads and make new-build gas plants more attractive.

The renewable energy industry should absolutely get behind the idea of exporting natural gas. If gas prices were still at the levels they were three years ago, wind and solar would be solidly competitive with fossil-fired power. And the utility-scale renewable industry wouldn’t be fighting the headwinds it is today. Exporting gas would increase demand and raise gas-fired power prices to a level that would help wind and solar by improving their competitiveness.

But why should climate advocates get behind exporting natural gas? Wouldn’t that just increase the amount of carbon we’re putting into the atmosphere? One of the big downsides of our gas glut in the U.S. is that we’re now exporting our coal to Europe. Cheap domestic gas is replacing coal at home but that coal is simply being burned elsewhere. Thus the result of low gas prices is to increase global carbon emissions because total fossil fuel consumption is exploding.

Exporting natural gas would be more likely to displace coal both at home and abroad, resulting in a lower net carbon emissions overall. This alone gives climate advocates a reason to support the export of natural gas. Beyond that, any economist will tell you that raising the price of a commodity should increase rationing of that product. In other words, raising the price of gas should result in burning less of it and lead to more selective consumption.

The biggest objection to gas export is likely to come from domestic industries and utilities that expect to benefit from cheap gas. Chemical and fertilizer companies that use gas as a feedstock benefit from today’s gas prices, as do industries that use gas for industrial heating. Utilities and ratepayer advocates are also likely to clamor against export in order to keep cheap gas to generate electricity.

It’s important to see these arguments for what they are: industries clamoring for the government to assign them a share of the windfall from our nation’s gas glut. Cheap gas means higher profits for them, but those excess profits simply come out of the pockets of producers who can’t get their product to global markets. These claims are increasingly being cloaked in the political kryptonite known as “saving jobs.”

The fallacy of the jobs argument is made clear in a recent report on the macroeconomics of gas export from NERA Economic Research. A key finding of their report was that “the U.S. was projected to gain net economic benefits from allowing LNG exports.” And “LNG exports [would] have net economic benefits in spite of higher domestic natural gas prices.” Furthermore, the study points out that the industries likely to be impacted by export are extremely narrow and represent only “about one-half of one percent of total U.S. employment.” And as the report states clearly, “LNG exports are not likely to affect the overall level of employment in the U.S.”

The NERA study also addresses alarmist projections that export would result in disastrous price increases for natural gas at home. The report puts this fallacy to bed quickly by pointing out export would only occur when the foreign price was greater than the cost of extracting, liquefying, and shipping gas overseas. That means domestic prices will always be significantly lower than prices in either Europe or Asia–and thus domestic industries would still retain a competitively priced gas supply in the U.S. relative to their global rivals.

A gas export initiative is clearly the best policy for dealing with the current gas glut and provides the least offensive role for government to play in restoring balance to power markets. This initiative has significant potential to garner broad political support by aligning the interest of historical adversaries on energy issues. This latter point is exciting. It suggests a potential political opening for the kind of comprehensive energy plan our nation needs to move forward.

IEA’s World Energy Outlook 2012 generated a flurry of stories about the prediction the U.S. will emerge as the world’s leading oil producer by 2020. While it is important news, it is only one of several profound shifts occuring in global energy markets.

Equally profound, though less reported, was the fundemental shift in the role of renewables in electricity generation. Here are just a few of the highlights:

• Renewables (mostly wind and solar) account for almost half (47%) of the global increase in power generation between now and 2035.
• By 2025 renewables will be the second largest source of electricity worldwide, providing 27% of all electricity compared to coal at 36%.
• In the U.S. by 2025, renewables will provide 18% of total electricity, third behind coal and natural gas. However, renewables will surpass coal to become second only to natural gas in terms of total U.S. generating capacity.

There’s no doubt about it when you look at the data. We’ve entered the era of mainstream renewable energy–an era when renewables play a leading role in generating the electric power we use every day.

Just as there is a fundamental shift in production of oil and gas, a fundamental change has also occured in the last few years for renewables. It is no longer appropriate to call renewables ‘alternative’ or ‘new’ because they’re solidly in the middle of the conventional energy mix.