Public Power Magazine

Out with the Old, In with the Renewable

From the May 2011 issue (Vol. 69, No. 3) of Public Power

Originally published May 1, 2011

May 1, 2011
In the wake of an offshore oil spill in the Gulf of Mexico, an apparently jobless economic recovery in America, and the burgeoning Chinese appetite for fossil-fuel powered electric plants, renewable energy has captured widespread attention and is a topic of regular discussion by the media, elected officials, and ordinary Americans.

Public awareness of renewable energy—solar, wind, geothermal, hydropower, and biomass—is at an all-time high.  As the fledgling environmental movement of the 1960s morphed into the modern green movement of the 21st century, knowledge of and concern about sustainable energy has entered the parlance of the body politic.  

Nor has legislative effort been lacking.  Mandatory renewable energy portfolios have been enacted in 29 states; these targets require that a set percentage of energy within a state be generated through renewable sources by a certain date.  California, often considered a bellwether in environmental and sustainable law, has decreed that 33 percent of all electricity generated in the state must come from renewable sources by the year 2020.  

The specter of high unemployment has led many to suggest that new jobs will be created as a result of the large-scale commercial development of renewable energy.  Limited examples of job creation in the renewable energy sector exist in the form of smaller entrepreneurial businesses; whether this activity will evolve into greater job creation remains to be seen.  Our nation’s innovative history of new technologies supplanting older ones seems to point to an expanding economic role for renewable energy research, development, manufacturing, and construction.

The renewable energy challenges
Significant challenges exist to the growth of renewable energy sources and the resolution of those challenges will shape the American energy future.  What are those challenges?

Geography.  Geography in the United States does not favor all renewable energy sources equally.  Sunshine, in adequate quantities to make solar generation feasible, is prominent in the South, Southwest, and parts of the West.  Wind energy is currently concentrated in the Great Plains states with potential for on-shore and off-shore installations along the coasts.  Geothermal sources exist largely in the Northwest and West.  This highly uneven distribution of resources means that power will be generated with a different mix of renewables depending on location.  A complex electrical distribution system to transmit energy across very long distances is a necessity to overcome the challenge of geography.

Environmental impact.  The environmental impact of utility-scale renewable energy plants is still largely undefined.  Solar and wind farms large enough to replace fossil-fuel plants will use significant amounts of land.  The impact of their construction and operation on ecosystems may entail complex or costly mitigation efforts that increase costs.

NIMBY—Not in My Back Yard.  The “not in my backyard” complaint reveals a contradictory truth that potentially will plague the development of large-scale renewable energy plants.  Simply put, we like the idea of renewable energy but don’t want to see where it comes from.   A good example of this is the controversial Cape Wind Project.  The proposed 468-MW project consists of 130 wind turbine generators to be located in Nantucket Sound.  In April, the project received approval from the U.S. Department of the Interior. In November, the Massachusetts Department of Public Utilities approved the power purchases agreement between National Grid and Cape Wind.  It took over nine years to reach this point and the project still faces a number of hurdles including the procurement of additional permits and response to a number of lawsuits.   

High capital costs.  Of all the obstacles to renewable energy, high capital costs are probably the most significant.  Every economic analysis to date demonstrates that solar and wind power, in particular, are not cost effective when compared to coal, oil, or natural gas.  Table 1 presents a comparison of the average retail cost of electricity in the United States versus the forecasted levelized cost of electricity from new hydro, solar and wind power installations. 


Table No. 1

Forecasted Cost of Renewable Power versus Retail Electric Cost

Levelized Cost of New Renewable Power Installations

Cents/KWH (2009$)

Conventional Hydro


Wind – Onshore


Wind – Offshore


Solar – Thermal


Solar  - Photovoltaic




Average U.S. Retail Cost of Electricity


Source: Energy Information Administration Annual Energy Outlook. 

The table shows that the cost of electricity from new renewable power installations is still significantly higher than the average cost of electricity.  This price differential may in the future  be eased through legislative and/or regulatory means such as CO2 regulations, federal renewable portfolio standards, or additional tax subsidies. Over time, equipment costs may be diminished as research and mass production of solar panels or wind turbines grows.  The complexities of political and financial realities and trade-offs may stymie renewable energy production for the foreseeable future.

Base load power requirements.  Contrary to popular thinking, renewable energy will not eliminate the need for conventionally produced electricity.  Solar and wind power, dependent as they are on weather and daytime cycles, cannot be created on demand.  Coal, oil, natural gas, and nuclear plants will continue to play a role in the American energy mix.

Varying Energy Contributions
A brief review of four areas of the country (California, Texas, Michigan and Florida) shows how renewable energy’s contribution varies.  Table 2 shows forecasted 2011 data for the amount of installed hydro, solar and wind generation in each of these states and how much of the state’s energy is derived from each of these renewable sources.  The average price of retail electricity is also provided in Table No. 2.  


Table No. 2

Hydro, Solar and Wind Generating Data






Generating Capacity – MW





















Percent of Total MWH Generated in State






















Average Retail Electricity Cost – Cents/KWh





Source: Energy Information Administration Annual Energy Outlook


California with its variety of natural resources, high retail electric costs and its aggressive renewable portfolio standard generates over one-fifth of its electricity from hydro, wind and solar, with hydro power being the major component.    

Texas, long dependent on fossil fuel for its electrical generation, has added substantial amounts of wind power in recent years and is now at the point where there is over 10,000 MW of wind providing over 8 percent of the state’s kWH generated.  This state’s increase in wind power generation is driven in large part by its large wind potential and a state renewable portfolio standard that required 2,000 MW of additional renewable energy by 2009 and 5,880 MW by 2015.   

In the past, Michigan and Florida have used fossil fuel and nuclear power to meet their electrical needs, with renewable power only providing a small portion of the electrical needs.  The renewable electrical generation that has been developed is driven mostly by available natural resources.  In Michigan, this has been predominately hydro, while Florida has been predominately solar.  For Michigan, it is expected that the amount and variety of renewable energy will increase in coming years due to the passage in 2008 of a renewable portfolio standard that requires 10 percent of the state’s electricity be generated from renewable power by 2015.  Florida has yet to enact a statewide RPS, so growth in renewable power may not be as rapid or as diverse as other states.  

The public, elected officials, government agencies, and the electric power industry face a historic opportunity to decrease our dependency on foreign energy sources and create an energy-sustainable future.  Analysis from the power engineering community must provide the factual options for renewable energy; neither wishful thinking that renewable energy solves everything nor a refusal to consider alternative energy will suffice.  

Renewable energy will and must play a part in America’s energy future.  Public opinion and awareness, legislative targets in response to that opinion, energy security and independence, and the potential for economic benefit all combine to make increased reliance on renewable energy a virtual certainty.  The challenges remain great; geography, environmental impact, NIMBY sentiments, and high capital costs are complex factors that will demand ingenuity tempered with compromise. 
Ronald Lutwen is a senior associate and power division manager at SSOE Group (, an international engineering, procurement, and construction management firm. With over 40 years of experience in the power industry, Lutwen specializes in boilers.


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May 2011
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