As we continue to debate what the future mix of grid generation will be, we should also critique projections of grid demand that suggest the largest share of future generation will continue to derive primarily from central power sources. Distributed resources like on-site wind, solar, and energy efficiency are filling U.S. power needs in greater amounts every year while also offsetting central generation requirements. The structure of our system is changing in ways many policy makers and investors are not seeing.
In 2015, the Energy Information Administration’s (EIA) figures were challenged by the Solar Energy Industries Association (SEIA) after SEIA calculated solar generation is actually 50% higher than EIA’s numbers. This difference is attributed to EIA’s data collection practices, which excluded 700,000 behind the meter solar installations included in a collaborative analysis by SEIA and kWh Analytics. Another problem with the agency’s numbers is that “EIA assumes renewable growth will lag once subsidies end after 2020” dramatically underestimating the future expansion of renewables.
Bloomberg New Energy Finance’s findings also exceed EIA’s projections with some analysts predicting wind and solar reaching 30% of total U.S. generation in the next 10 years. This growth of wind and solar is driven in part by corporations buying renewable energy, not simply to meet sustainability targets but also to reduce utility expense. An Edison Electric Institute whitepaper reported nearly half of Fortune 500 companies and 60% of Fortune 100 companies now have climate and clean energy goals suggesting a substantial expansion of distributed generation.
Finally, according to ACEEE, a well-designed set of efficiency policies could help the United States avoid a total of 800 power plants by 2030. In fact, efficiency is responsible for the greatest reduction in CO2 emissions over the last 10 years.