In the middle of a public health emergency, it’s difficult to think about much of anything besides keeping everyone safe.
But we also need to look ahead at the potential economic effects of this crisis on the transition to clean energy. With that in mind, we are getting a better idea of what coronavirus means for the growth of solar power in the near future.
Projects are likely to slow this year because of disruptions being experienced by the companies that do the work and pay for it.
But there remains a wide range of potential outcomes, depending on the answers to the questions we’re all asking about how long this crisis will last.
BloombergNEF has revised its global forecasts for 2020, saying that demand for photovoltaic solar panels will be in the range of 108 to 143 gigawatts, down from the range of 121 to 152 gigawatts that was in the forecast less than a month ago. This is an 8 percent decrease based on the midpoint of both ranges.
If the low end of this forecast turns out to be accurate, it would be the first down year for solar since at least the 1980s.
“The pandemic is really a black swan,” said Jenny Chase, BloombergNEF’s lead solar analyst. “Really as late as February we didn’t realize it was quite going to go global pandemic.”
She told me that the best an analyst can do is give an idea of the broad direction of the market, and then update that direction as things change. It helps that she’s been doing this for 15 years and has seen downturns before.
“People think it’s the end of the world, but people still need clean energy, they still need electricity,” she said. “Energy is still cheap. It still works. I think people will go back to work and build again.”
Looking long-term, she thinks the pandemic will affect renewable energy in 2020 and have reverberations into some of 2021 before we get back to something resembling normal.
In the meantime, the waters will be choppy.
Last week, Ohio state and local leaders gathered on a farm field to celebrate what, at 200 megawatts, will be the largest solar array in the state.
It was an important step for a southern Ohio region hurt by the closing of coal-fired power plants along the nearby Ohio River. It also came less than a year after the state had passed a measure loathed by most clean energy advocates: a bill that provided subsidies to nuclear and coal-fired power plants, while getting rid of renewable energy and energy efficiency mandates for utilities.
One of the people who spoke at the ceremonial groundbreaking last Thursday was Larry Householder, the Republican Ohio House speaker and a leading architect of that nuclear and coal subsidy legislation.
“This is something really big for the state of Ohio,” Householder said.
In his talk, he addressed his role in creating the legislation head-on, saying the clean energy mandates weren’t working and were too expensive—arguments that are familiar from last year’s debate and were vigorously opposed by the many people who fought against the bill.
“Any time that you do significant change, it’s always controversial,” he said.
The Hillcrest Solar project will cover 1,350 acres and be up and running by early next year, after at least three years of obtaining permits and securing financing. The developer is Innergex Renewable Energy of Quebec, which has solar, wind and hydroelectric projects, mainly in Canada and the U.S.
The overall project cost is $279 million, according to an Innergex spokeswoman.
The solar array would pay an estimated $60 million in taxes to the county, township and school district during its projected 35-year lifespan. It also would pay $69 million in wages during the construction, with the developer agreeing to make a special effort to hire Ohioans and military veterans.
“We’re honored to promote clean energy,” said Barry Woodruff, a Brown County commissioner, welcoming a tentful of guests.
Even with this new solar array and several others being planned, Ohio is projected to be near the bottom of the nation in five-year solar growth, according to Wood Mackenzie and the Solar Energy Industries Association.
Solar has grown slowly in Ohio, with 264 megawatts installed. The state ranks 28th in the country; the largest solar array currently operating is 20 megawatts.
Ohio is also near the bottom in five-year growth estimates, ranking 42nd with a projected growth of 1,854 megawatts over the next five years, according to the Wood Mackenzie and SEIA data. That means Ohio’s solar growth—including the Hillcrest project—is anemic compared to just about everywhere else.
Last year’s legislation includes $150 million per year to be split by Ohio’s two nuclear power plants operated by Energy Harbor, the company that was until recently called FirstEnergy Solutions. It also calls for an unspecified dollar figure to go to two coal-fired power plants operated by Ohio Valley Electric Corp., a consortium of several utilities, with the subsidy determined by how much money the plants need to reach a certain profit level.
The bill also has money for solar energy projects, which would split $20 million per year, subject to the approval of a state board.
The law says that utilities are no longer required to meet annual benchmarks for buying renewable energy or for helping customers reduce their energy use. The loss of energy conservation programs will have an immediate sting, since those programs translate into immediate savings for customers and had a net benefit of $5.1 billion for ratepayers from 2009 to 2017, according to one estimate.
Renewable energy advocates have been playing defense almost since the clean energy requirements were passed in 2008. As other states strengthened their clean energy standards, Ohio was going in the opposite direction.
Taken as a whole, last year’s bill is a nightmare for advocates who would rather be debating a timetable for Ohio to get to 100 percent carbon-free energy, the kind of proposals that have now passed in many other states.
“We’re in a transition,” Householder said from the dais. “We’re moving into a new era. I think Ohio can be the leader in this. I really truly believe that.”
If he’s serious, then he and his colleagues need to work much harder on a renewable energy plan to at the very least, catch up with other states that are far ahead.
While Ohio passed legislation subsidizing nuclear power, Pennsylvania considered similar proposals over several years but never passed anything.
I mention this as background for an announcement on Friday that Energy Harbor—the former FirstEnergy Solutions—has changed its mind about closing the 1,872-megawatt Beaver Valley nuclear power plant, located northwest of Pittsburgh.
The company said in March 2018 that it was going to close the plant because of deteriorating finances. The 2021 shutdown would have led to the loss of about 1,000 jobs.
So what changed? In October, Pennsylvania Gov. Tom Wolf, a Democrat, said his state was joining the Regional Greenhouse Gas Initiative, or RGGI, a carbon-trading system that covers 10 states in New England and the Mid-Atlantic region and soon will also include Virginia.
John Judge, Energy Harbor’s CEO, said the decision to keep the Beaver Valley plant open was “largely driven” by Pennsylvania joining RGGI and the way that the carbon-trading system places a financial premium on zero-carbon power sources such as nuclear.
One person not surprised by this turn of events was David Littell, a Maine energy and environmental attorney, who worked within the RGGI system for years.
“We saw the same effect for some other nuclear units in the original RGGI states,” he said in an email. “It’s good if you want to keep existing nuclear units on the grid and operating.”
Meanwhile, I don’t hear anyone in power in Ohio talking about joining RGGI. Instead, the state passed a nuclear and coal subsidy bill that will cost more than $1 billion, not counting the financial harm that will happen because of energy efficiency programs being cancelled.
Which state’s ratepayers do you think got the better deal?
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