"Fact Sheet: 6 Things You Should Know About The Value Of Renewable Energy"
by Adam James
Clean energy should play a central role in revitalizing our economy, putting Americans back to work, and keeping America on the cutting edge of innovation and growth. Recently a slew of misguided attacks on the merits of clean energy have exchanged petty partisanship for hard facts.
Here are the top six things you really need to know:
- Clean energy is competitive with other types of energy
- Clean energy creates three times more jobs than fossil fuels
- Clean energy improves grid reliability
- Clean energy investment has surpassed investments in fossil fuels
- Investments in clean energy are cost effective
- Fossil fuels have gotten 75 times more subsidies than clean energy
Here are the supporting details:
1. Clean energy is competitive with other types of energy
- Renewable energy is cheap today.
- In California solar developers have signed contracts for power below the projected price of natural gas from a 500-MW combined-cycle power plant.
- Some wind developers are signing long-term power-purchase agreements in the 3 cents a kilowatt-hour range, far cheaper than any other new power source.
- New analysis from Bloomberg New Energy Finance projects wind will be “fully competitive with energy produced from combined-cycle gas turbines by 2016″ under fair wind conditions.
- Renewable energy competes well with natural gas. Even with unsustainably low prices for natural gas, large-scale renewable energy is still nipping at its heels and in some cases keeping pace.
2. Clean energy creates three times more jobs than fossil fuels
- A national study showed that job creation in clean energy outdoes fossil fuels by a margin of 3-to-1 — every dollar put into clean energy creates three times as many jobs as putting that same dollar into oil and gas.
- Wind energy has already created 75,000 jobs, which could grow to as many as 500,000 if we transitioned to getting 20 percent of our energy from wind.
- Job quality is better. Twice as many medium- and high-credentialed jobs are being created in the clean economy as in fossil fuels.
- Median wages are 13 percent higher in green energy careers than the economy average. Median salaries for green jobs are $46,343, or about $7,727 more than the median wages across the broader economy. As an added benefit, nearly half of these jobs employ workers with a less than a four-year college degree, which accounts for a full 70 percent of our workforce.
- The clean energy sector is growing at a rate of 8.3 percent, nearly double the growth rate of the overall economy. Solar thermal energy expanded by 18.4 percent annually from 2003 to 2010, along with solar photovoltaic power by 10.7 percent, and biofuels by 8.9 percent over the same period. Meanwhile, the U.S. wind energy industry saw 35 percent average annual growth over the past five years, according to the 2010 U.S. Wind Industry Annual Market Report.
- In Europe 1.1 million people are employed in renewable energy. Reports from the Bureau of Labor Statistics and the Brookings Institute show that this kind of employment has already started to take hold here and shows enormous promise and potential for the future.
3. Clean energy improves grid reliability
- In Texas a 2011 power emergency was averted due to the state’s commitment to wind farms, which picked up the slack from failing power plants and prevented catastrophe. Tripp Doggett, the chief executive of the nonprofit Electricity Reliability Council of Texas, responsible for controlling the flow of electricity to 23 million consumers in Texas, thanked the wind industry by name for their contribution.
- We could reach a point where 20 percent of our energy comes from wind with no negative impact on electric grid reliability. Wind power is easier to manage when we have more of it. Case in point: Energy can be predictably delivered across the 350 MW of German wind farms, showing that renewables can be managed well without serious effects to consumers. Spreading wind farms across wider geographic areas, which we are able to do in the United States, would increase predictability even more.
- Other countries are proving that large-scale integration of renewables is possible, with 21 percent of Denmark’s electricity now coming from wind. There are times when wind power fulfills more than 100 percent of demand in western Denmark.
- Any additional costs of integration will be small. The “balancing cost,” or how much it costs to provide backup power for a resource, of wind is less than 10 percent of total wind generation costs, and the effect on consumer power price is close to zero.
4. Clean energy investment has surpassed investments in fossil fuels
- Last year was the first time global investments in renewable energy surpassed investments in fossil fuels.
- The global market for clean energy was worth a whopping $250 billion.
- The United States is currently leading in corporate R&D and venture capital investments in clean energy globally, and last year retook the top spot in overall investment with a 33 percent increase to $55.9 billion.
5. Investments in clean energy are cost effective
- U.S. government investments in clean energy have been vital to meeting their goals of keeping America on the cutting edge of innovation and competitiveness globally without added risk. The Loan Guarantee Program brought important clean energy projects across the valley of death — the apt description of the financing gap between creating a product and commercializing it — and has helped create a vibrant and valuable market.
- The production tax credit has successfully lowered the cost of wind power by 90 percent since the 1980s.
- An independent report conducted by Herb Allison, ex-national finance chairman for John McCain, found the Department of Energy loan guarantee program will cost $2 billion less than initially expected.
- The five states with most solar and wind installed capacity have actually had the lowest rise in electricity prices from 2005 to 2010. Rate increases in these states were 1.35 cents over five years, against the national average of 1.8 cents.
6. Fossil fuels have gotten 75 times more subsidies than clean energy
- To date, the oil-and-gas industry received $446.96 billion (adjusted for inflation) in cumulative energy subsidies from 1994 to 2009, whereas renewable energy sources received just $5.93 billion (adjusted for inflation).
- Renewable energy investments should be put in proper historical perspective. According to the Energy Information Agency, “focusing on a single year’s data does not capture the imbedded effects of subsidies that may have occurred over many years across all energy fuels and technologies.”
- The U.S. government is showing a smaller commitment to renewables than it showed in the early years of the oil-and-gas industries. A study showed that “during the early years of what would become the U.S. oil and gas industries, federal subsidies for producers averaged half a percent of the federal budget. By contrast, the current support for renewables is barely a fifth that size, just one-tenth of 1 percent of federal spending.”
Renewable energy will be the engine of U.S. economic growth and prosperity for years to come, but it is not without opposition. Leaders in policy and business must get behind the Americans who are and will be empowered by renewable power and work together to overcome market barriers and false information. The facts are in and we should seize this opportunity to put Americans back to work and maintain a place at the cutting edge of innovation and competitiveness.
Adam James is a Special Assistant for Energy Policy at American Progress.