Reality Check: The Clean Energy Transformation is a Done Deal

There’s been a lot of punditry and press coverage of the Green New Deal proposed by key U.S. House Democrats. It has been equally praised, panned, and politicized, sparking much debate about aspirational vs. achievable goals in our nation’s transition to a decarbonized clean energy future. But there’s a key and critical point to be made: the nation is already on an inexorable path toward a robust, low-carbon, clean energy future and the world – for the most part – has the technologies needed to get there. Twenty years into the 21st century, we see five major trends that are driving this transformation in the U.S. and around the globe.

1) Declining Costs

A dozen years ago, we predicted in our book The Clean Tech Revolution that dramatic drops in the price of renewable power would be a key driver in the coming energy transformation. If anything, utility-scale solar and wind have reached parity or near parity with fossil fuel-fired generation even sooner than we projected. Solar PV costs have plummeted 78% from $350 per MWh in 2010 to $80 today, according to the International Renewable Agency’s Carbon Tracker initiative. More than half (285) of the nation’s 530 coal-fired power plants, mainly because they can’t compete on price, have been retired or plan to be, and only one new plant is planned for the next five years. Nuclear power is seeing similar declines, and renewables now compete favorably with natural gas plants in most areas. Unsubsidized solar and wind are now the cheapest source of new generation in every developed nation (including China and India) except Japan, according to a Bloomberg New Energy Finance report (BNEF) in November 2018.

This clearly impacts the load planning decisions of the utility sector, where even the largest fossil-fuel stalwarts of the past century are aggressively expanded their clean energy portfolios. American Electric Power (AEP), one of the nation’s largest utilities, recently more than tripled its renewable energy assets to 1,302 MW with the $1.06 billion purchase of seven wind farms and a battery storage installation from Sempra Energy. AEP is also seeking to build a 300 MW solar farm in Ohio, which would be the largest in the state. Other large utilities such as Xcel, MidAmerican Energy, and Southern California Edison, are also moving aggressively on developing and purchasing renewable power.

Cost-effectiveness is also the key driver behind the dramatic growth of corporate power purchase agreements (PPAs) for renewable power. Corporate procurement of renewables has grown more than 500% in five years, reaching 6.53 GW in 2018 with Fortune 500 titans such as Facebook, Walmart, and ExxonMobil (yes, ExxonMobil) among the biggest buyers.

2) Shifting Investments 

Global investments in clean energy totaled $332 billion in 2018, up nearly six-fold from $62 billion in 2004 (and the fifth year in a row where investments exceeded $300 billion), according to BNEF. Where’s the money going? In recent years, the top three areas of clean energy investment have been solar, wind, and energy smart technologies such as efficiency, demand response, energy storage, and electric vehicles. Moving forward, investments in renewables are projected to outpace those for traditional fossil fuel-generated electricity by a significant margin. BNEF projects that renewable energy is set to attract nearly three quarters of the $10.2 trillion that the world will invest in new power generating technology through 2040.

This represents a once-in-a-lifetime investment opportunity as corporations, governments, and other institutions shift their support from fossil fuels to clean energy, electrified transportation, and a smart, resilient 21st century grid. A growing number of utilities and energy producers are transforming their operations to meet these new realities, as are auto manufacturers, who are allocating billions of dollars to transform their operations from internal combustion engines to electric vehicles.

Even some of the major oil companies (long holdouts on this transition), perhaps finally seeing the writing on the wall, are positioning themselves for this new future. Earlier this year, Shell acquired German battery storage startup Sonnen as well as Greenlots, an EV charging company, and has made investments in three other clean-energy companies: Makani (airborne wind turbines), Aurora (self-driving vehicles), and Nordsol (biogas from organic waste streams).

3) Convergence of Clean Technologies

The advancement and maturation of clean technologies is resulting in an important phenomenon. Instead of discrete technologies competing against both each other and incumbent energy technologies, we are seeing the mashup of clean technologies, such as wind turbines with offshore platforms; hydroponics with LEDs; and distributed energy resources with blockchain. Of particular note is the convergence of renewable energy, battery storage, electric vehicles, and connected mobility. What’s driving this convergence?

As battery prices fall, a growing number of utility-scale wind and solar farms are being paired with battery storage – with storage increasingly considered a major energy source in its own right. Arizona Public Service, the largest utility in the Southwest, has announced plans to deploy 850 MW of battery storage by 2025 – more than triple the 217 MW interconnected by the entire U.S. utility industry in 2017. In February, Portland General Electric and NextEra Energy announced the nation’s first solar-wind-energy storage development, with plans to combine 300 MW of wind generation, 50 MW of solar generation, and 30 MW of battery storage in Eastern Oregon.

Similarly, the electrification of transportation is poised to dramatically disrupt conventional industries. Although Tesla defined the current EV market, a host of companies from Kia to Volkswagen are jockeying for leadership in multi-modal electric transportation. It’s not just cars and SUVs, but also buses, long-haul trucks, industrial vehicles, and even early-stage experimental airplanes and ships that are increasingly being fueled by electric plugs instead of gas pumps. Electric buses from California startup Proterra now operate in 31 states, while Chinese electric bus maker BYD is moving aggressively in the U.S., European, and Chinese markets. The Chinese city of Shenzhen recently converted its entire city fleet of 16,359 buses to battery-operated vehicles. Charging stations, grid networks, and autonomous operations are creating entirely new business opportunities for both current and emerging players. 

4) 100% Renewable Energy Goals

Once dismissed as a fantasy, the aim to be fully powered by renewable energy has been embraced by states, cities, and corporations around the world. California, the world’s fifth largest economy, is the most populous jurisdiction with a 100% RE mandate (by 2045), and Hawaii also has a 100% goal by the same year. More than 90 U.S. cities have made the commitment to 100% RE as part of the Sierra Club’s Ready for 100 initiative, including Atlanta, Denver, Minneapolis, Salt Lake City, San Diego, San Francisco, and St. Louis; six smaller cities have already reached the goal. Chicago just joined the 100% RE initiative in mid-February, bringing the nation’s third-largest city on board.

Among nations, Iceland is already 100% clean-powered, Costa Rica has reached 100% in some months in the past two years, and both Scotland and Portugal have had 100% clean-powered months. Germany, the world’s fourth largest economy, has briefly hit 100%, and had 36% of its power generated by renewable sources in the whole of 2018.

On the corporate side of the equation, five of the world’s six largest market-cap companies – Apple, Alphabet (Google), Microsoft, Amazon, and Facebook – have 100% renewable commitments. The Climate Group’s RE100 now counts 165 companies around the world as members with 100% goals, including iconic global brands such as BMW, General Motors, Unilever, Kellogg’s, Philips, Citi, IKEA, Fujitsu, and Tata Motors. To reach their goals, many of these companies are signing PPAs for large-scale wind and solar power as mentioned above.

5) Public Opinion

Simply put, people around the world want a clean energy-powered future. In a landmark 2018 survey of 26,000 people in 13 countries across North America, Europe, and Asia, a stunning 82% agreed that “it is important to create a world fully powered by renewable energy.” The Green Energy Barometer, conducted by Edelman Intelligence for Danish energy company Orsted, is the largest-ever global survey of clean energy opinion. In the U.S., 83% of respondents agreed with the statement as did 93% in China, the world’s largest emitter of greenhouse gases. A 2018 Consumer Reports survey of 1,200 Americans yielded similar results, with 76% agreeing that increasing renewable energy is a worthwhile goal. And a Yale Program on Climate Change Communication survey released last week says 71% of Americans (87% of Democrats and 51% of Republicans) think clean energy should be a high or very high priority for the president and Congress. These overwhelming majorities show that, despite what some politicians think or say, there is widespread bipartisan support for clean energy at the grass-roots level.

The combination of these five major trends – spanning innovation in technology, policy, and capital – are setting the stage for a very different energy future. While President Trump and many of his supporters (and funders) might pine for a resurgent era of coal and nuclear power their goals are more pipe dream than realistic, as economics, public opinion, and governmental and corporate actions reshuffle the energy deck.  The Green New Deal resolution, though it doesn’t offer specific details and recommendations on how to achieve its goals; is perhaps overly overambitious regarding certain timelines; and is a grab bag of progressive goodies (from employment and labor rights to ensuring quality healthcare for all Americans) – is certainly an important conversation starter.

But the reality is that we already have the technologies – and increasingly the systems – in place to reach aggressive clean-energy aspirations over the next two to three decades. In a new Clean Edge project, we are looking to shine a light on the technologies, finance innovations, and policy solutions that are taking shape both in the U.S. and around the globe to rapidly accelerate the clean-tech revolution. We've touched on a number of them here – and we'd also love to hear from you. Please share your ideas, recommendations, and real-world examples with us at innovate@cleanedge.com.


Ron Pernick is founder and managing director and Clint Wilder is editor-at-large at clean-tech research firm Clean Edge, Inc. They are co-authors of two books on clean-tech business trends and innovation, Clean Tech Nation (HarperCollins, 2012) and The Clean Tech Revolution (HarperCollins, 2007).