Design innovation, global competition driving clean energy trends

The falling cost of wind and solar energy has been driven by design innovation and global competition surrounding the technologies required for generating clean energy.

So says Tyler Huebner, executive director of RENEW Wisconsin, a Madison-based clean energy advocacy group. He spoke yesterday at a breakfast event put on by the Customers First Coalition.

“The game-changing reality that’s occurred in this industry in the past decade is that the cost for utility-scale wind and all scales of solar has dropped dramatically,” he said.

Huebner notes the cost of generating wind energy has fallen 69 percent in the past 10 years, while the cost for utility scale solar has fallen 88 percent.

“The chief advancement behind wind’s dramatic decline has been an improvement in technology,” he said.

He says the capital cost of installing a wind turbine hasn’t changed much, but turbines are now being designed to catch more wind and produce energy more efficiently. Since winds are stronger and more consistent higher up in the sky, Huebner says turbines are being built taller and with larger blades.

“There’s an old physics equation that says when you can double the speed of the wind you are catching, the power that you’ll produce goes up eightfold,” he said. “It’s a cubed relationship.”

While design changes to wind turbines are helping make wind energy cheaper, Huebner says global market factors are behind the falling cost of solar.

He said the trend began with Germany and other European countries making sweeping commitments to reduce their reliance first on nuclear power, and then on coal.

“That drove the market to the point where China saw this as a huge opportunity for manufacturing,” Huebner said. From there, he said it became a “global war of economies of scale,” as various nations raced to see who could build the biggest solar factory.

“As those factories got bigger, they were able to drive the cost of the panels down,” he said. “That process has fed itself for the past decade or so.”

Huebner notes that solar panels are now manufactured domestically, as well as in Canada, Mexico and elsewhere. He acknowledges the pace of price declines has been slowing, but says RENEW expects the price of clean energy tech to continue to fall.

He says the price of solar energy generation effectively halved between 2009 and 2011, before doing so again in the following three years. Then it took four years to drop by half once more.

“If we look forward from here, maybe it takes five years to drop again,” he said. “There’s still a lot more cost declines that are possible with solar.”

Huebner also pointed out that some of the country’s most well-known companies are helping drive the trend toward clean energy. A Super Bowl commercial this year from Budweiser highlighted the company’s commitment to wind energy with the tagline “wind never felt better.”

CBS, the host network for this year’s Super Bowl, charged more than $5 million for each 30-second spot during the game held earlier this month.

“This was an extremely expensive and public example of a corporation publicly stating we are committing to wind,” Huebner said. “They are not alone … A lot of our Fortune 500 companies, major corporations are making commitments to renewable energy.”

He says these companies are looking for ways to power their operations with more renewable energy, because “they have seen the same cost curves that many in this industry have.”

“They are hearing from customers, investors on Wall Street … but they’re also trying to attract the next generation of talent,” he said. “That’s also pushing companies to make these transitions.”

–By Alex Moe