Renewable and distributed energy sources are not the future; they are now, a group of utility executives seemed to agree at a recent gathering.
The industry leaders talked about the impacts of wind, solar and politics during the Wells Fargo Energy Symposium last month in New York. The panel included John Ketchum, senior vice president of finance for NextEra Energy; Pattern Energy Group CEO Michael Garland; Matthew Ketschke, vice president of distributed resource integration for Consolidated Edison New York, Inc.; and James Ajello, chief financial officer for Hawaiian Electric Industries.
The panel focused on how renewables—mainly rooftop and utility-scale solar to wind power—can take a more meaningful market share in the near future. The federal government’s Clean Power Plan, tax incentives and equipment pricing will drive the push to more renewables, said Ketchum, who is transitioning to become NextEra’s chief financial officer when Moray Dewhurst retires in the spring.
“We’ve never felt better about the prospects for renewable energy development than we do right now,” he said.
“On the solar side, we will continue to see panel prices decline, efficiencies improve,” Ketchum added. “It’s going to put a lot of pressure on the manufacturers. And never bet against the engineers—they always find a way to make it work.”
New York and Hawaii are two states getting particularly busy in adopting distributed energy resources. Both states have pushed past 20 percent as the renewables percentage of their power generation mix.
New York is now at 25 percent and aiming for 50 percent by 2030. Distributed energy resources (DER) such as rooftop solar and home turbines will play a big part in that rise.
“I have a job now that didn’t exist a year ago,” Ketschke pointed out. “There’s an awful lot of activity right now in New York.”
Hawaii, inspired by abundant sunshine and pushed by high conventional generation costs, has embraced DER wholeheartedly. Ajello noted that Hawaiian Electric has about 500 MW of DER mostly through rooftop solar installed in a 2,500-MW system.
This brings up all kinds of challenges from integration and system reliability standpoints. Hawaii is a system of five different island grids, he added.
“We’re now operating our system in a dramatically different way,” Ajello said.
Pattern Energy is an independent producer which owns and operates 16 wind power facilities with total capacity of nearly 2,300 MW in the U.S., Canada and Chile. Pattern CEO Garland said his company already is in negotiation for potential sizable transactions with some utilities, and the EPA Clean Power Plan—which mandates a nationwide 32-percent reduction in carbon output by power plants by 2030—should incentivize those utilities to consider purchased wind-power contracts.
Many are already moving in that direction, Garland said, so he thinks the pace of contracts will accelerate within a few years. The upcoming presidential election, however, could make or potentially break those deals.
“I hate to bring politics into it,” Garland said. “If Hilary (Clinton) gets elected” game over,” he predicted. The Clean Power Plan is likely unstoppable, short of Supreme Court intervention.
A victory by current Republican poll leader Donald Trump could, well, trump the utilities and state’s best-laid plans.
“With Trump they don’t know what the hell is going to happen,” Garland said. “They’re sitting there kind of dazed like all of us trying to figure what a Trump administration would do with the CPP.”
Ketchum thinks many states, even some of those who are challenging the Clean Power Plan legally, may be wise to begin work on compliance plans. If not, the EPA could do it for them by 2018.