Interview: ABB Discusses Unrelenting Growth of Wind, Solar in America in the Face of Major Policy Setbacks

Kathy Jones is a consultant with ABB who has focused on energy markets, renewable and environmental issues for nearly two decades. Jones, who forecasts and analyzes the North American renewable market, talked about the continued  rise of renewables in the wake of policy setbacks for wind and solar advocates. The following is edited for clarity and brevity.  

EnerKnol: The Trump administration just pulled the U.S. out of the Paris climate accord, as well as scuttled or stalled several federal environmental rules, including the Clean Power Plan. How do you see these actions altering the growth of renewables in the U.S.?

Kathy Jones: I don’t feel that the Paris climate accord was a driving force for renewable growth. There was an expectation that the Clean Power Plan would generate “additional” growth but as seen by developers, utilities and states continue to pursue renewable development as well as a number of states are on target to meet the CPP with current actions.

EnerKnol: With a number of federal incentives for renewables in limbo or scrapped, to what extent can wind and solar developers rely on state Renewable Portfolio standards to propel additional growth?

Jones: A number of states such as Texas and Kansas have exceeded their RPS requirements and this has not slowed the expansion. The continued growth is more attributable to the competitive pricing of renewable generation in comparison to traditional gas-fired resources.

EnerKnol: What are states doing as they blow past their renewable targets?

Jones: Texas has taken no action whereas Kansas did make their RPS voluntary. California on the other hand reached 27% in 2016 and is on target to exceed 33% in 2017 much earlier than the RPS requirement mandates. Current legislation has been introduced to increase the California RPS to 100% by 2045. So states will vary on how they address dependent upon the climate appetite.

EnerKnol: Corporations are starting to buy up renewables. Is this just good PR, or does it really help their bottom line to boost procurement of renewable energy?

Jones: Corporate sustainability is definitely good PR for today’s “prosumers” (consume and produce electricity); but it is more than that.  With the decline in purchased power agreements the procurement of renewable energy is the lowest-cost source. Also, from a financial perspective, rating agencies such as Moody’s and Standard & Poor’s have a carbon risk measurement evaluating your carbon footprint which could further impact your cost of doing business.

EnerKnol: Low natural gas prices have been to blame for a lot of power plant retirements. To what extent and where in the country are renewables driving premature closures? Do you see the trend accelerating and why?

Jones: Take California for example with the early retirement of the Diablo Canyon nuclear plant. The expectation there is that it will be replaced with a tranche of renewable capacity and another tranche of energy efficiency. That’s against traditional thinking for an intermittent resource to replace a baseload type resource. Whether this trend will accelerate depends on if the cost of wind and solar continue to decline in addition to the penetration and cost decline for storage.

EnerKnol: Have we approached peak renewable penetration in areas of the U.S., like in Texas and Iowa where there’s a ton of new wind generating capacity?

Jones: Absolutely not. If you review the wind and solar potential by state it is just the tip of the iceberg depending on what source you look at. Some estimates are more technical and don’t account for land usage. Certainly there are regions where peak penetration has occurred because you run out of acreage. However, technology changes could accelerate such that wind and solar footprints could continue to shrink.

EnerKnol: What are some of the regions you expect to see the greatest growth in renewable generation and why?

Jones: Not that I’m biased, jokingly, but I see the southeast as a solar hot bed. No pun intended. Being a Carolina girl I didn’t think I’d ever see North Carolina in 2nd place next to California for total solar installations. South Carolina and Georgia are expected to follow suit and may outpace even North Carolina.

EnerKnol: Tell me about how ABB tracks these developments? How does someone benefit from ABB’s products and services to track the growth in renewables?

Jones: We track these developments using our Energy Velocity Suite as well as general market research by the ABB Enterprise Portfolio Management Advisory team. The Energy Velocity Suite compiles data on development of renewables as well as traditional resources. This data can assist in determining appropriate sites by mapping the nodes of connection and determining the pipeline at a specific point as well as the price differential and curtailment in the nodes. This helps assist in the curtailment risk before you put the metal in the ground. The ABB North American Reference Case provides the benefit of an unbiased assessment of the merchant power markets to assess post PPA revenue as well as ISO market prices for determining profitability without a PPA.