Editor’s note: Ken Smith is the policy director for Arkansas Advanced Energy Association. Opinions, commentary and other essays posted in this space are wholly the view of the author(s). They may not represent the opinion of the owners of Talk Business & Politics.
When it comes to energy policy from a Donald J. Trump administration, much is unknown. It is uncertain how Mr. Trump’s campaign support of the coal industry and his statements to rescind EPA water and air regulations such as the Clean Power Plan will play out.
However, it is certain that the advanced energy industry – otherwise known as clean energy – will be an industry that will continue to grow unabated, including here in Arkansas.
Following are five reasons why advanced energy has prospered and will continue to do so.
1. Millions of Americans are embracing energy conservation and renewable energy to reduce their utility bills and to be more sustainable. More utilities are helping customers conserve energy through programs and incentives. New homes and commercial buildings are designed and constructed with energy efficiency in mind. Existing home and business owners are undergoing energy audits. Home and commercial building owners often take the next step and decide to generate their own electricity through rooftop solar, community solar gardens or green power purchases through local utilities. (In fact, my wife and I took that step and purchased 12 solar panels in the Ozarks Electric Cooperatives’ solar field near Springdale. We and many other co-owners of the solar field are now seeing a solar credit on each month’s electric bill.)
2. Corporations – including Walmart, Mars, Coca-Cola, Proctor & Gamble and hundreds of other American companies – have sustainability goals that embrace energy and water consumption, reduction of greenhouse gas emissions and generation of renewable energy. On November 4, 2016, just four days before the presidential election, Walmart CEO Doug McMillon outlined his company’s commitments to reduce energy consumption and to power half of Walmart’s energy from renewable sources under a plan designed to achieve science-based emissions targets. That’s 50 percent by 2025. Walmart is the first retailer with an emissions-reduction plan approved by the Science Based Targets Initiative, in alignment with the Paris Climate Agreement. It’s a safe bet that wherever Walmart goes, other Fortune 500 companies will follow.
3. Renewable energy has been on a meteoric growth trajectory the past ten years. The reason is price. Wind and solar are much cheaper alternatives than expensive fossil-fuel power plants. Renewable generated electricity accounts for nearly 20 percent of generation capacity in the U.S. In Texas, more than 10 percent of electricity comes from wind power. And as renewable energy technology improves, prices for clean energy will continue to decline and it will win on its own merits.
It is likely we will never see another coal-powered plant built in Arkansas or in the region. The 600-megawatt John Turk plant north of Texarkana cost about $2 billion to build and costs millions of dollars each year to operate. The Kemper Power Project in southern Mississippi has a growing price tag of over $7 billion and it is still not operating. Kemper is the most expensive power plant ever built for the megawatts of electricity it will generate. Though both coal plants are utilizing the latest and most advanced coal technology for reducing environmental pollutants, neither plant can nor will ever be able to compete in price or in reducing emissions compared to wind, solar or natural gas.
4. The coal industry is not built for the 21st century economy. Neither the coal companies nor President-elect Trump can revive the dying coal industry. The economics behind coal are not there and the power companies would rather have a gas plant than a risky coal plant. Clean energy is the most popular and cost-effective option for new electric generation. A Brattle Group report on the Texas power grid finds that cheaper natural gas and the declining cost of solar energy are cleaning up the state’s power industry, lowering emissions and leading to the retirement of older coal plants. By 2035, the report concludes that gas plants and renewable power may provide over 85 percent of all energy used. Coal plants would provide only 6 percent by then.
5. Clean energy technologies are extremely popular. Recent energy surveys of Americans provide more evidence about our energy preferences: more than 80 percent of us support clean energy and the jobs that clean energy technologies deliver. The solar industry recently achieved the 1 million solar installation mark this year. It is expected that the industry will take only a couple of years before it reaches 2 million solar customers. Once battery storage technology is cost-effective and reliant, many of these customers will be relying less on their local utilities for energy needs.
As the business voice for Arkansas’ advanced energy economy, we would urge the Trump Administration and Congress to support funding for energy research and development necessary for energy breakthroughs of the future, which help spur job creation here in Arkansas.
It is important to remember that the energy sector is driven more by market forces and consumer demand than by Washington policymakers. The clean energy progress of the past ten+ years has been in absence of a federal energy policy.
The development and deployment of energy efficiency, wind turbines, solar panels, high capacity DC transmission lines, electric vehicles, electric battery storage and fuel cells will continue and will immediately be utilized as soon as these technologies become cost effective and available.