Renewable Energy

Renewable Energy Laser Talk

Question:  How will a carbon fee help expand renewable energy?

Answer:  The price signal created under the Energy Innovation and Carbon Dividend Act will accelerate the adoption of renewables.

The term renewables generally encompasses solar, wind, hydropower, and sometimes biopower – electricity from biomass. These are all ways of getting electricity from the sun without increasing CO2 in the atmosphere, and all are mature technologies.

Under a carbon fee, as fossil energy bears a steadily higher cost, renewable sources will be more and more attractive to electric utilities and manufacturers. With the need to electrify many of our energy needs, from the cars we drive to the way we heat our homes, the demand for climate-friendly electricity will go up rapidly.

There are still obstacles to the continuing growth of renewables. The biggest one is intermittency. The wind doesn’t always blow and the sun doesn’t always shine. [1,2] Hydropower and biomass supplies tend to be seasonal and may be vulnerable to extreme weather. One important solution for intermittency is energy storage, of which there are many competing forms, [3] but most are still not fully mature, [4] so renewables today are often backed up by natural gas plants that can be fired up quickly.

Another challenge is infrastructure. [5] Renewable resources are often located far from population centers, and the electrical grid was designed around large centralized power plants. That network has to be modernized and upgraded. Complex, outdated power markets need to be streamlined. [6] Facilities for quick, easy EV charging must be expanded. [7]

All of these changes will happen much faster under this policy, because the ‘market pull’ of a rising carbon fee creates the financial incentive to attract private investment in both tried-and-true technologies and new innovations.

In a Nutshell: Renewable energy will become more economical as the carbon fee steadily raises the price of fossil energy. There are still big technical challenges like the need for extensive energy storage and supporting infrastructure and streamlining complex, outdated electric power markets. But the ‘market pull’ of a rising carbon fee will stimulate private investments in both tried-and-true technologies and new innovations.

  1. Hanania, J., K. Stenhouse, and J. Donev. “Intermittent Electricity.” Energy Education, University of Calgary (27 Aug 2017).
  2. Kreutz, T., E. Larson, and B. Williams. “Understanding Challenges with Intermittent Renewable Electricity Expansion.” 2016 Carbon Mitigation Initiative Annual Report, Princeton University (April 2017).
  3. “Energy Storage.” Wikipedia (10 Jul 2018).
  4. Rhodes, J. “Energy Storage Is Coming, But Big Price Declines Still Needed.” Forbes (18 Feb 2018).
  5. Ahmed, A. “We’re doing a great job of creating renewable energy—but we don’t have the infrastructure to actually use it.” Popular Science (18 Jan 2018).
  6. Merchant, E.F. “Renewables Demand a Revamp of Power Market Rules.” Greentech Media (19 Nov 2018).
  7. Merchant, E.F. “The Next Big Obstacle for Electric Vehicles? Charging Infrastructure.” Greentech Media (03 Nov 2017).

This page was updated on 05/05/21 at 22:40 CDT.