The New Renewable Reality
Economics will drive renewable energy growth under the new administration, representing a transition away from policies supporting a mandate-driven push market and toward a customer-driven pull market.
The new administration will do little to slow the fast-growing wind and solar power markets, according to a range of energy and federal policy analysts—and some of E & E’s clients in the electric power industry.
The key market drivers—rapidly declining costs, state energy policies, and federal tax credits—are beyond the reach of the executive branch. And while the new focus for energy policy is fossil fuel development, since the election the administration has also promised to support renewable power.
Some of Trump’s appointees and his pledge to overturn the Clean Power Plan are reasons for concern. And it’s also true that a large reduction in the corporate tax rate, as has been pledged, would reduce the value of tax credits to investors. But the favorable economics that have led utilities to procure growing amounts of renewable energy—including utilities in states with no renewable energy mandate—are expected to remain strong at least into the early 2020s. “What is clear is that economics will drive energy choices with a transition from policies supporting advancement of alternative energy to a customer-driven pull market, not a mandate-driven push market,” said Kevin Donovan, E & E senior vice president. “With solar energy costs falling rapidly, solar energy is at the point of being cost competitive in the open market.”
In the Southeast, for example, utility-scale solar is taking off even without renewable portfolio standards. “The utilities themselves are driving the investment in solar in the Southeast, not state policymakers,” said E & E’s solar sector lead Richard Stephens. TVA, Georgia Power, Alabama Power, Gulf Power, and others are procuring hundreds of megawatts (MW) annually, and TVA projects alone will add up to 800 MW of solar by 2023 and up to 3,800 MW by 2033.
And it isn’t just utilities buying wind and solar energy. “Electricity-hungry tech giants including … Google, Amazon, and others have increasingly sourced [renewable energy],” wrote Bloomberg News recently. Bloomberg’s research arm, New Energy Finance, estimates that U.S. corporations have committed to adding an additional 17 GW of renewable power by 2025.
To manage this continued rapid growth, the wind and solar industries must pay rigorous attention to identifying and mitigating the environmental and community impacts of their projects—and continue developing new solutions to the most difficult environmental challenges.
In the wind power industry, impacts on birds and bats continue to be major issues. While wind generation has become more bird-friendly, with larger, slower-moving rotors and improved site selection criteria, the industry will have to continue to innovate with new imaging technology and operational changes to minimize avian mortalities. (See Advancing Avian Detection on the key issues and developments.)
But it’s not just birds and bats that are impacted by wind turbines. As rotors have gotten larger and towers have increased in height, wind turbines can now be operated profitably on parcels with relatively poor wind resources—and that means more projects are being proposed closer to homes, translating into increased concerns about noise and shadow flicker.
New challenges in the Southeast
Large utility-scale solar projects have their impacts as well, and as solar enjoys new growth in the Southeast, new issues arise. For starters, topography and land ownership patterns in the East can trip up developers used to building in the West. “While there are a lot of sensitive species in the West, the terrain is relatively open and you can use a light-on-the-land approach, installing panels over certain types of substrates and habitats while mitigating the impacts,” said Cheryl Karpowicz, E & E’s senior vice president of development. “When you go East, you have a lot of forested land and wetlands, so the concerns are different.”
Although utility-scale projects in the Southeast tend to be smaller than those in the West, typically between 5 and 50 MW, the impact on species of concern can be just as hard to mitigate. A prime example is the gopher tortoise, a keystone species whose enormous burrows provide habitat for hundreds of other creatures. In Florida, the state-listed creature can only be trapped and relocated by someone authorized as a Gopher Tortoise Agent by the state Fish and Wildlife Commission.
E & E has managed gopher tortoise relocation for two Florida solar power developers, and expects these ancient reptiles will be found on many more solar projects elsewhere in the Southeast. (For more on gopher tortoises and utility-scale solar, see New Regions, New Issues.)
The cost of not knowing
Whether a wind or solar project is impacting raptors, gopher tortoises, or people sensitive to noise and shadow flicker, it’s important to involve environmental consultants early to avoid costly mistakes. A classic example: wind developers that site turbines on ridge lines to capture the best wind resources often have to redesign their projects—losing 5% or 10% of expected capacity—after studies show that raptors also favor the strong winds and updrafts. “A developer needs to know these kinds of things as early as possible,” said Jim Thornton, E & E’s lead for wind power.
Some sites are simply unsuitable for wind power because of the likely impacts on birds and bats. “That’s rare, but we have recommended to some clients that they cancel a project because of the high numbers of raptors on a particular site,” said Thornton. More typically, site selection and the number and layout of turbines can be done in a way that adequately mitigates impacts on airborne species—especially after the intensive, multi-year surveys recommended by the U.S. Fish and Wildlife Service and increasingly required by wind project lenders.
Engage the public early
E & E advises its clients to engage early and often with neighbors and other stakeholders. This has always been important, but as wind, solar, and associated transmission grow at such a fast pace, it’s becoming more critical. “The need to engage the public and get a social license for the project is trumping the typical resource and technical issues that we tend to analyze,” said E & E’s transmission sector lead, Dan Belin. (See Small Projects Are Big Trend.)
A robust assessment of potential noise and shadow flicker impacts should be done up front for projects near communities, said Thornton. “You don’t want to get halfway through the permitting process and learn that the local planning commission is hearing from neighbors worried about shadow flicker. Those studies aren’t hugely expensive, and doing one early can save design and engineering work later.”
Thornton has seen situations where a developer was falsely assured by a landowner that their neighbors supported the project—only to find out at the first public meeting that many locals oppose it simply because they were not asked about it. “It felt to them like the project just fell out of the sky,” said Thornton.
Some developers hire public relations firms to manage community concerns, and that’s often a mistake. “PR firms focus on selling their client and their client’s project, not community engagement,” said Thornton.
“On small projects where we don’t think there will be a lot of opposition, we’ll manage the community engagement,” said Thornton. “But for larger projects with a lot of potential for opposition, we will recommend a good community engagement firm that we’ve worked with.”
Immersive tools let stakeholders experience the project
Some developers suffer undue delays and opposition when they try to renew a project that had been put on hold after some initial permitting work. “Don’t go to radio silence,” advises Thornton. “Maintain communications with those regulatory staff that have put in time and effort on your project, and with the community.”
Augmented reality is one innovation E & E expects to offer clients soon as a new tool for public engagement. Using tablets or mobile phones, neighbors and stakeholders will be able to see and experience what a project will actually look like from a variety of perspectives. “We see this as a way to communicate in an immersive way,” said Jenny Mogavero, E & E IT/GIS manager. “Instead of going to a public meeting and seeing rows of two-dimensional posters, this technology makes it possible for a member of the public—or the client at an earlier stage—to put on virtual reality (VR) goggles and stand and walk through the site with the proposed project on it.”
Utility-scale wind and solar are riding a growth wave that will last at least through 2020. Beyond that, there are question marks with the production tax credit expiring January 1, 2020 and the investment tax credit for solar phasing down from 30 percent to 10 percent between 2020 and 2022 (after which no expiration is mandated).
Given the enormous growth in wind and solar expected through 2020, there may well be a slowdown in the early 2020s, especially if the Clean Power Plan does not go forward. But, even without federal greenhouse gas standards, utilities and large energy users—including those in traditionally coal-reliant states—will continue to seek more solar and wind power for economic and environmental reasons. And for states like California and Hawaii, which have sharply increased their renewable energy mandates, solar and wind are expected to provide the bulk of new generation for decades.
To manage this growth with care for the environment and adjacent communities, environmental concerns associated with the siting and operation of wind and solar power plants need to be addressed with rigor and integrity.
Interested in learning more about how these trends might impact your project? Contact an E & E expert:
Kevin Donovan – Senior VP
Richard Stephens – Solar Sector Leader
Cheryl Karpowicz – Senior VP of Development
Jim Thornton – Wind Sector Leader
Dan Belin – Transmission Sector Leader
Jenny Mogavero – IT/GIS Manager
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Economics will drive renewable energy growth under Trump, representing a transition away from policies supporting a mandate driven push market toward a customer driven pull market.