Cooperative Living July 2017 - 26

CloserLook | by Paul Wesslund, Contributing Writer
National energy trends are changing
how your power is generated
Solar, wind and natural gas are changing the energy landscape.
T
he mix of fuels that keeps your lights
on is changing. In fact, the fuel mix
has changed so much over the last
three years that energy statisticians have
revised the way they collect data to get more
information on things like rooftop solar and
how utilities are using batteries to manage
the power grid.
The trends creating that new fuel blend
will continue for the next several years, says
a report released in April by a panel of
electric co-op experts in the Business and
Technology Strategies Department at the
National Rural Electric Cooperative
Association (NRECA).
The rise of renewable energy paired with
less expensive and abundant natural gas
have cut into coal's dominance as the top
fuel source for electric generation. The
report by NRECA says the forces behind
those trends are so strong they will continue
even as President Trump has come into
office with plans to reverse previous
energy policies.
" The electric industry has changed
dramatically in just the last few years, " says
the report, titled " Electric Industry
Generation, Capacity and Markets Outlook. "
The report continues: " Although the new
administration in Washington may provide
relief from pending environmental
regulations, the industry is still faced with
future uncertainty as electricity market
fundamentals are driving substantial
changes in the energy outlook. "
THE NATURAL GAS ADVANTAGE
The biggest shift shows up in the decline
of coal as the main electricity fuel, with the
retirement of dozens of coal-fired generating
units every year for the past five years. In
2013, coal generated 39 percent of the
nation's electricity, with natural gas in
second place at 28 percent. Preliminary
figures for last year show that natural gas
moved into the lead, generating 33 percent
of the electricity in 2016, compared with
coal's 30 percent.
Coal's electricity market share could
rebound in the next year or two. However,
24 | Cooperative Living | July 2017
new reports from EIA forecast that natural
gas will remain the largest source of
generation through at least 2018, says one
of the authors of the report, Lauren Khair,
regional economic analyst at NRECA. But
over the long term, she says, " You are
going to see that natural gas is going to be
the largest share of electricity generation
on an annual basis. "
The team that wrote the NRECA report
cites several reasons why natural gas is
overtaking coal:
* The shale gas revolution has
dramatically increased the supply and
lowered the price of natural gas.
* Environmental regulations, specifically
rules limiting emissions of mercury,
have forced coal plants to either invest
millions of dollars in pollution control,
or shut down.
* Natural gas plants, which are smaller
and quicker to build, are more flexible,
meaning they are capable of starting up
and shutting down, and adjusting their
output as power demand changes.
Wind and solar energy are also factors
in the fuel mix changes. Wind and solar
supplied 3 percent of the electricity in
2008, then more than doubled that figure
to 7 percent in 2015.
The changing fuel trends have caused
the government's collector of energy
data, the Energy Information
Administration (EIA), to ask utilities
for more information. The number of
large solar power installations owned
by utilities is growing, as well as the
number of homeowners with solar
panels on the roof.
" They saw a hole in the data and
changed their forms to capture more of
this information, " says Khair. She says
EIA is adding questions to their survey
that indicate another change - questions
about how utilities are using batteries
and additional storage devices to avoid
some of the problems caused by power
outages, and to store renewable energy for
times when the sun isn't shining or the
wind isn't blowing.
THE VALUE OF RELIABILITY
The NRECA report says solar and wind
energy will continue to increase their share
of electricity generation because of falling
prices resulting from improved technology
and mass production, and from tax
incentives and other government programs
supporting renewable energy.
Although renewable energy is growing
fast, there's still a lot less of it than other
fuels, so it's only beginning to make a
difference in the share of electricity it
generates. In 2013, non-hydroelectric
renewables generated 6 percent of the
nation's power. By 2015, that number grew
to 7 percent, and NRECA says it is projected
to reach 10 percent by 2018.
The original source of renewable
electricity, hydroelectric dams that generate
power from flowing water, has been more
stable, producing 6 percent of the electricity
in 2015. That could increase, says another of
the NRECA report's authors, because of recent
heavy rain and snow in the western U.S.
" Hydro is driven by rain and snow, and
there was a very bad drought in California
and the west for the last few years, " says
Michael Leitman, strategic analyst at
NRECA. " You have seen a real turnaround
in the snowpack and the rain. So it's likely
that 2016 and 2017 will show up with
much more hydroelectric output. "
The steadiest share in the electricity
fuel mix has been nuclear power, which
has generated about a fifth of the electricity
for decades.
Utilities value that kind of consistency,
because consumers want electricity available
all the time. While the popularity of
renewable energy grows, wind and solar are
referred to as " intermittent " power sources
because they're not always available.
Another of the report's authors, Joe
Goodenbery, senior economist at NRECA,
stresses the value of using several fuels -
coal, natural gas, nuclear, hydroelectric
and renewables: " With the changing
generation mix, we shouldn't overlook the
continued importance of fuel diversity to
ensure reliability. " 
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Cooperative Living July 2017

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