“The economic information on clean energy is amazing,” Lisa Jacobson, President of BCSE, told me in an exclusive interview on Electric Ladies Podcast, with Tara Narayanan Lead Analyst at BNEF, coauthors of a new Sustainable Energy 2024 Factbook. “We’re decades deep in it now, where you’re seeing the cost competitiveness of renewable technologies on an unsubsidized basis,” she said, which means, she added that, “We can do this. We can grow the economy and we can use more clean energy.”
According to this new Factbook, by the Business Council for Sustainable Energy (BCSE) and Bloomberg New Energy Finance (BNEF), that transition is well on its way.
The Inflation Reduction Act, Infrastructure Investment and Jobs Act and CHIPS & Science Acts, together invest about $3 trillion in the U.S. infrastructure and energy ecosystem. But it’s not enough. The goal, Dr. Vanessa Chan, Chief Commercialization Officer of the U.S. Department of Energy told me, for those investments to catalyze $30 trillion more in private capital to tackle this massive and urgent energy transition.
Six key trends to watch, according to the BCSE-BNEF 2024 Energy Factbook and our interview include:
· The clean energy transition is resilient: “One of the stories of this year’s Factbook,” Jacobson recounted, “big picture, it was really the resilience of the energy transition.” This is despite covid and other “headwinds,” including high interest rates and supply chain disruptions. But even technologies “in areas that were quite nascent for many years. Things like carbon capture and storage, even to some degree, hydrogen,” expanded significantly, she added.
· Renewables increasing on the grid: Renewable energy sources that produce electricity, such as solar, wind, geothermal, and biomass, Narayanan said, “they currently are the sort of fastest growing technologies that are being added to the power grid. And every year we get more and more of our electricity from new wind and solar.”
· Need to focus on the demand side, as well as the supply side of the transition: “I would also point to a lot of energy efficiency and demand side technologies. I mean, those are critical for the energy transition, especially if we’re going to increasingly electrify transportation, and do more with digitalization,” Jacobson emphasized. For example, she said, “there’s so much grid innovation where we can get efficiency,” such as by using optimization technologies.
· Electric Vehicle (EV) sales are up 50%: In 2023, “EV sales in the U.S. surged 50 percent to nearly 1.46 million vehicles sold. The surge was driven by new EV incentives, price cuts and more EV models released,” the Factbook’s executive summary stated. Though some automakers are reducing production of their electric vehicles in the short-term, when the infrastructure to support them is in place, including charging stations, sources say production is expected to pick up again.
· Big focus on strengthening the domestic supply chain: Covid demonstrated the value of a domestic supply chain, and it keeps the emissions of transporting parts and materials low. “The U.S. is really determined to have a domestic supply chain,” Narayanan said, That’s the intent of a lot of the incentives in the new legislation, for example, for batteries, semiconductor chips, solar panels, and even minerals. She explained that, “because of the IRA, the Inflation Reduction Act, which passed more than a year ago now, the number of announcements to actually build some of these factories to produce the stuff here in the US has dramatically surged.”
· Major decline in coal as percentage of energy mix: “Maybe the biggest change moment of the last decade, it has been the decline in coal generation as part of our fleet,” Jacobson told me, adding, “Our reliance on coal is now below 20%.” Those electrons are being met instead by renewables and natural gas.
Important energy challenges yet to be addressed
One of the areas yet to be addressed sufficiently, they emphasized, is the dependence on natural gas in this energy transition, because of its emissions. “Different segments of the overall end-use economy and just a bit of trade economy are a lot more reliant on natural gas right now, and, at some point, that’s something that we’re going to have to really think seriously about because it does produce emissions all the way through,” Narayanan insisted.
Another important issue that deserves more attention, Jacobson said, is carbon pricing, “we don’t have that dialogue now, and we very much need it.” She said, “It’s an iterative process, but we certainly want that conversation to be robust in Congress.”
These trends and investments create a de facto U.S. energy strategy – practical decarbonization
“We don’t have a national energy strategy, but we do have these signals that tell you, once we kind of intermingle all the different interests, and that be community need, environmental needs, the energy sector and large energy users,” Jacobson summarized, “you can see a picture.”
“And it’s a direction toward decarbonization, but it’s doing it practically. And it’s not about taking one industry off the table. It is about how do we use all of our resources in an optimal way?”
Listen to the full interview with Lisa Jacobson and Tara Narayanan on Electric Ladies Podcast coming soon, wherever you listen to podcasts.