While energy efficiency and renewable energy businesses in the United States will gain when fossil fuel prices eventually rise, the industry is already prospering in an era of low oil prices, Bloomberg New Energy Finance (BNEF) will report tomorrow in its 2016 Sustainable Energy in America Fact Book.
“There was a record amount of gas burned for power generation last year,” said Ethan Zindler, one of a team of authors behind the report. “But there was also a record amount of photovoltaics and the second-highest amount of renewables that we have seen added in a year.”
The BNEF report “will show that not only have green alternatives to fossil fuels survived the plunge in fuel prices, they’ve hit new records,” CBC reports. “And green advocates expect business will only improve as [fossil] prices rise and governments get more serious about their climate change commitments.”
Bloomberg points to both natural gas and renewables expanding at the expense of coal, but “the falling price of technology plus greater efficiency mean that solar panels and wind often remain cheaper than gas,” Pittis writes. “Even at commercial prices, wind remains the cheapest alternative in many parts of the continental United States, including West Texas, Oklahoma, and Iowa.”
BNEF low-carbon energy analyst Stephen Munro said investors are already becoming concerned about the risk of stranded fossil assets. “These are regulatory risks and policy risks that are going to be applied to fossil fuels and are not going to be applied to alternative energy,” he said. “Investors are taking note of that. It’s making them look at alternative energy on a lot more of a favourable basis than they did just a couple or three years ago.”
The U.S. Energy Information Administration reported yesterday that the country’s renewable electricity generation is expected to grow 9% this year.
“Much of the growth comes from new installations of wind and solar plants and increases in hydroelectric generation after a relatively dry 2015,” the EIA states. “In 2016, electricity from utility-scale renewable sources is expected to account for 14% of the total electricity generated in the United States, with wind and solar contributing 5.2% and 0.8%, respectively.”