NREL: Western renewable energy could be cost-competitive by 2025



A new study forecasts that renewables, such as wind and solar power, could be cost-competitive by 2025 when Renewable Portfolio Standards, renewable energy production goals determined by state federal agencies, expire.

Prepared by the U.S. Department of Energy's National Renewable Energy Laboratory (NREL), the study suggests that in the absence of federal subsidies, renewable energy could be cost-competitive if new development occurs in the most productive locations.

Titled, "Beyond Renewable Portfolio Standards: An Assessment of Regional Supply and Demand Conditions Affecting the Future of Renewable Energy in the West," the report compares the cost of renewable electricity generation (without federal subsidy) from the West’s most productive renewable energy resource areas—including any needed transmission and integration costs—with the cost of energy from a new natural gas-fired power generator built near the customers it serves.

“The electric generation portfolio of the future could be both cost effective and diverse,” said NREL Senior Analyst David Hurlbut, the report’s lead author. “If renewables and natural gas cost about the same per kilowatt-hour delivered, then value to customers becomes a matter of finding the right mix.

"Renewable energy development, to date, has mostly been in response to state mandates," said Hurlbut. "What this study does is look at where the most cost-effective yet untapped resources are likely to be when the last of these mandates culminates in 2025, and what it might cost to connect them to the best-matched population centers."

Utilizing data from the Western Governors’ Association that identified geographic areas that are prime for renewables development, the study located areas in Nevada, Arizona, California and New Mexico that pose advantages for solar development, and areas in Wyoming and Colorado poised for wind growth. 

The study notes future electricity demand will be affected by several factors including: trends in the supply and price of natural gas; consumer preferences; technological breakthroughs; further improvements in energy efficiency; and future public policies and regulations. While most of these demand factors are difficult to predict, the study’s supply forecasts rely on empirical trends and the most recent assessments of resource quality.

Read the full NREL report here: Beyond Renewable Portfolio Standards (pdf)

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