To Avert an Energy Crisis, America Needs to Accelerate the Renewable Transition

To Avert an Energy Crisis, America Needs to Accelerate the Renewable Transition
(AP Photo/Evan Vucci, Pool)
X
Story Stream
recent articles

From Asia to Europe, electricity is currently in high demand and short supply. Global markets for natural gas, coal and oil have spiked as prices reach unsustainable levels.

While part of this energy crunch can be attributed to surging electricity demand as the global economy recovers from the pandemic, much of the problem is due to the vulnerability of the fossil fuel economy to extreme weather, poor planning and deliberate market manipulation.

Flooded coal mines in China have that country turning to imports of liquified natural gas, which in turn puts pressure on global natural gas prices. Poor planning in India has likewise led to inadequate fuel supplies and insufficient power generation there. Meanwhile, oil and natural gas providers are incentivized to restrict supply to keep prices high and maintain profitability. And there are important geopolitical considerations as European nations consider the impacts of reduced natural gas flow from Russia. 

The repercussions are serious. Major global economies could be impacted, and America’s economic recovery is at risk as consumers of our fossil fuel-dominated electric and transportation systems find themselves at the mercy of global markets and foreign actors. This is not the first time the world’s economy has been hammered by the gyrations of fossil fuel markets. But it could be the last.  

The ongoing transition to clean energy and an electrified economy is not only a critical climate solution. Relying on naturally available and self-replenishing sources of fuel such as sunlight, wind, the earth’s heat, or the kinetic energy of flowing water, renewable energy empowers consumers with affordable electricity that is not subject to the volatility and price spikes associated with the global fossil fuel marketplace.  

While today’s fossil fuel prices are rising rapidly, renewable energy costs are declining at an impressive pace. Over the past decade, the unsubsidized costs of solar and wind power have decreased by 90% and 71%, respectively. According to BloombergNEF, solar PV and onshore wind are now the cheapest sources of new electricity for at least two-thirds of the world’s population. It’s more cost-effective today to build a new solar PV or wind farm than to run existing coal- and gas-fired power stations in countries like China, India, Germany, France, Italy, Spain, Portugal and Greece.

The European Commission has taken note. Calling the energy crisis “a clear wake up call,” Energy Commissioner Kadri Simson recently told reporters, “The only long term remedy against demand shocks and price volatility is a transition to a green energy system.”

The same is, of course, true here in the U.S., and important progress is at hand. 

Congress recently passed a bipartisan infrastructure bill containing essential programs to upgrade the nation’s antiquated electric transmission infrastructure. That legislation, combined with the Build Back Better budget reconciliation proposal currently pending in Congress, will help spur the necessary investment in not just wind and solar power, but also in crucial energy storage and advanced grid technologies through a set of long-term, stable tax incentives.

Heading into the winter months, the reliability of our electric power system is more important than ever. During February’s Winter Storm Uri in Texas, natural gas pipelines froze and drove gas generators offline, tragically underscoring how vulnerable the fossil fuel supply chain is to increasingly severe and frequent extreme weather events. Investment in more interregional transmission through a U.S. Macro Grid that better connects our largest population centers with our lowest-cost renewable resources will enhance grid reliability, save consumers billions of dollars, deliver significant job creation and dramatically reduce carbon emissions.

We have a once-in-a-lifetime opportunity. We can make America’s energy system more resilient, protect our economy and security from foreign fuel suppliers, and avoid the worst impacts of climate change if we at long last adopt smart policies to free ourselves from reliance on global fossil fuel markets. That’s an investment worth making. 

 

Gregory Wetstone is President and CEO of the American Council on Renewable Energy, a national nonprofit that unites finance, policy and technology to accelerate the transition to a renewable energy economy.



Comment
Show comments Hide Comments