A confluence of forces is undermining the policies that have been driving renewable procurement: recession, election year politics, and demand for power.
Judging by the numbers, you’d be half-right to conclude that 2011 was a boom year for U.S. renewables. Solar showed explosive results as installations more than doubled, delivering 1.86 new gigawatts in a market that previously was measured only in megawatts. Wind too had a successful year with 6.8 gigawatts of new turbines connected to the grid. Looking at the long list of projects readying for construction, 2012 looks likely to put even more impressive numbers on the board.
But behind the impressive installation numbers is a worrying trend for anyone who wants our country to stay on the path to a clean energy future. The reality is that utilities are not contracting nearly enough new renewable energy to sustain the pace of progress we’re seeing today – and developers are starting to mothball their development pipelines. Unless we make policy changes now, new wind and solar construction starts will slow to a trickle in the second half of this decade.
Because power plants take anywhere from two to five years to complete, the construction activity we see today is the result of long-term utility power purchase agreements (PPAs) signed several years ago. Thus most of the large renewable energy projects driving this year’s numbers flow from PPAs issued between 2007 and 2010, and unfortunately, the flow of PPAs has been reduced to a trickle. Nowhere near the number of PPAs is being issued to maintain the pace of construction into the second half of this decade.
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Source: Arno Harris | Forbes