Gas it is
Renewables take back seat
Bill Opalka | Mar 20, 2012![Share/Save]()
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The shine is off renewable energy and shale gas is the new disruptive technology in power generation.
Harnessing Disruption is the theme of this year’s EnergyBiz Leadership Forum in Washington, D.C. this week, and that means gas-fired generation from unconventional sources is jumpin’.
Recession, rising energy costs and competing interests that could hamstring the power sector all play a role. And renewables are sometimes seen as a stress point as utilities seek to meet state mandates for their renewable portfolio standards. The dim prospects for any carbon legislation for the foreseeable future are responsible, combined with downward price pressures from the gas glut.
“Low gas pricing is really giving us some breathing room,” said Anthony F. Earley Jr., chairman and CEO of PG&E Corporation (NYSE: PG&E).
Renewable energy is competing for attention, and even as its costs decline, natural gas dominates the discussion.
Earley, the new executive at the San Francisco utility, is a different circumstance than many of his colleagues. With California’s 33% renewable portfolio standard by 2020, he said that’s effectively 50% as most hydropower doesn’t count under the standard.
But there was little talk about state renewable portfolio standards this year.
Consider some of the headline speakers of the first three forums to get a sense of how the landscape has shifted. Three years ago Boone Pickens was touting massive wind farms in the Great Plains. In 2010, Representative Ed Markey (D-Mass.) was shepherding cap-and-trade legislation through the U.S. House of Representatives. A year ago, Google caused a stir with plans for a backbone transmission plan for offshore wind, with the Atlantic Wind Connection outlining its $5 billion project.
But now the issue is managing expectations as costs rise and much of the public is still ill-informed, and sensitive to price shocks as gasoline tops $4 a gallon.
“A certain part of the public thinks we can get off Mideast oil by building windmills, but we only get 1% of power from oil,” said Thomas F. Farrell II, president and CEO of Dominion (NYSE: D).
“The industry has $2 trillion in refurbishment of the grid, as we try to optimize how we handle our investments of what to build over the next two decades,” said Nick Akins, president and CEO of AEP (NYSE: AEP).
Even as recent as a year ago, the choice seemed to be renewables or nuclear, with much talk of natural gas as the bridge fuel. Now, gas is the fuel of choice due to its low cost and quick turnaround in building plants.
A slow decline in attention paid by government support may not change, as wind and solar are under threat of collapse if tax credits expire, particularly for wind, at the end of 2012.
Regardless of the resource base or the preferred resource of any CEO, the detrimental lack of a national energy policy is something on which all can agree, regardless of the year.The editorial staff at RenewablesBiz.com is passionate about exchanging ideas and dedicated to promoting ongoing conversation about renewable and sustainable energy issues. We invite you to join and contribute to our online community. If you have an idea for an article or editorial contribution, please contact me via email, bopalka@energycentral.com, or phone, 860.633.0090.
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William V. DePaulo, Esq.
179 Summers Street, Suite 232
Charleston, WV 25301-2163
Tel 304-342-5588
Fax 304-342-5505
william.depaulo@gmail.com
www.passeggiata.com
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