What Will Happen with Energy?

With his frequent flip-flopping on any number of matters, who knows where Donald Trump truly stands on energy and the environment? You might start by looking at the president’s cabinet picks. Trump, having claimed Climate Change to be a hoax, appointed another skeptic, former Oklahoma Attorney General Scott Pruitt, to lead the Environmental Protection Agency. Trump’s choice of Rex Tillerson, the former ExxonMobile CEO, for Secretary of State suggests a soft spot for oil and gas. And Trump nominated former Texas governor Rick Perry for Secretary of Energy despite Perry’s having once called for the department’s closure…after forgetting its name.

However, whether Perry will suggest action that is environmentally friendly remains to be seen. In fact, some sources have proposed that he could be a “champion” of clean energy. As governor of Texas, Perry improved the state’s energy infrastructure to get wind-generated electricity from West Texas onto the grid. Perry also advocated for carbon capture and underground sequestration, which the EPA recommends until non-carbon-generating energy sources are further adopted.

Thankfully, it may be largely up to the market whether clean renewable energy takes off—or rather, continues to take off. Between 2008 and 2014 solar energy usage grew 50 percent annually. Its growth is due to several factors that don’t depend on U.S. Federal policy. One factor is China, which began manufacturing solar panels around 2005, and lowered profit margins for manufacturers globally. Another factor involves financing. Generally, people do not pay upfront for the solar cells, which cost around $20,000 to install. The common model for solar usage involves a third-party company that pays for and installs the panels. The homeowner makes monthly payments to the third-party at an amount less than their electricity bill, but enough for the third-party to be profitable.

One issue with residential solar power is that it leads to inefficiency for the electrical grid. During the day, users of solar power can generate their own electricity and don’t rely on the grid. However, solar users must access the grid once the sun goes down, causing energy demanded from the public utility to spike. The gap between the peak and trough of energy usage is exacerbated by solar power. This is where the inefficiency comes in. The electrical grid is designed to accommodate maximum energy usage—summer days when everyone has their A/C on max. This means that on an average day, less than 50 percent of the grid’s capacity is used. An oversized grid is costly to build and maintain.

A solution to this problem is for utilities to charge time-of-use rates, based on supply and demand. This would set a higher price for electricity consumed during peak energy usage times, encouraging people to use energy off-peak. Only Italy and Ontario, Canada have time-of-use rates and have seen reduced demand during peak hours with a relatively small increase in price. California will institute time-of-use rates in 2018, but underwent a five-year process to get through red tape.

Another solution involves batteries, which would allow solar and wind energy to be used long after it is generated and reducing the need for the grid. At its Gigafactory outside Reno, NV, Tesla is building higher capacity batteries intended for consumers to use at home. Tesla hopes to double the supply of the world’s lithium-ion batteries by 2020.

While what the next four years will look like is uncertain, it is promising that there are forces that are pushing us towards renewable energy sources. A relatively small increase in the global supply of natural gas, led to a disruption in the oil markets. It’s encouraging to think that a similar effect could be caused by a small advancement in energy technology.

 

Sources:

Graham, Thomas. “Rick Perry will ‘breathe life’ into Department of Energy.” The Hill. N.p., 13 Dec. 2016. Web. 24 Jan. 2017.

LeVine, Steve. “Battery Powered: The Promise of Energy Storage.” Foreign Affairs Apr. 2014: 119-24. Print.

Pinner, Dickon, and Matt Rogers. “Solar Power Comes of Age: How Harnessing the Sun Got Cheap and Practical.” Foreign Affairs Apr. 2014: 111-18. Print.

Warhay, Brian. “Upgrading the Grid: How to Modernize America’s Electrical Infrastructure.” Foreign Affairs Apr. 2014: 125-31. Print.

 

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