Is American Renewable Energy Falling Behind?

In last week’s article, we took a look at how Germany’s investing heavily in renewable energy as part of what they call the Energiewende, which translates to energy transition or energy shift in English.

 

renewable energy, image by huffington post
renewable energy, image by huffington post

 

Let’s Take a Look at How American Renewable Energy Production Stacks Up Against the Europeans

Are we falling behind? In some ways renewable energy has pretty much fallen off the radar for most US manufacturers thanks to the revolution in unconventional extraction technologies, like fracking. Fracking has brought us an abundant surplus of natural gas, which in turn has helped American manufacturers by lowering their energy costs. As we discussed last year, these lower energy costs are one reason that American heavy industry manufacturing has stayed relatively competitive. So just where are we with renewable energy production capacity in the U.S.?  In the chart below which we created from data provided by the U.S. Energy Information Administration, we show the percentage breakdown, or mix, of energy production capacity (not usage) during July 2014.

 

Renewable energy sources only made up 16% of US energy production capacity in July 2014. Fossil fuels dominate with 73% of capacity. Data courtesy US Energy Information Administration (eia.gov)
Renewable energy sources only made up 16% of US energy production capacity in July 2014. Fossil fuels dominate with 73% of capacity. Data courtesy US Energy Information Administration (eia.gov)

 

Based on this graph, things don’t look particularly auspicious for renewable energy. Fossil fuels are the 800 pound gorilla in the room at 73% of energy production capacity.

 

Let’s Dig a Little Deeper and See the Effect of Our Domestic Natural Gas Boom

When we look at the detailed break out in the next chart, it’s clear that natural gas at 40% has overtaken both coal at 29% and petroleum liquids (fuel oil) at 4%. Nuclear power and hydroelectric power are running neck and neck at 9% and 8%, respectively. Among the renewable energy production capacity, hydroelectric is the largest 8%, but surprisingly wind is not too far behind at 6%.

 

When broken down further, we see Natural Gas (40%) followed by Coal (29%) dominated US energy production capacity in July 2014. Nuclear (9%) barely edged out Hydroelectric (8%). Data courtesy US Energy Information Administration (eia.gov)
When broken down further, we see Natural Gas (40%) followed by Coal (29%) dominated US energy production capacity in July 2014. Nuclear (9%) barely edged out Hydroelectric (8%). Data courtesy US Energy Information Administration (eia.gov)

 

Current Renewable Energy Capacity is Still a Minor Player Today, but What About Projected Growth?

You may recall that we wrote about a surprising development that took place last week: the wealthy heirs of oil tycoon John D Rockefeller announced they were divesting from fossil fuel energy stocks. We asked if this was an environmental advocacy publicity stunt or if there really was a legitimate business case at play. Well, we crunched some more numbers provided from the U.S. Energy Information Administration, and we came up with our next chart, the horizontal bar graph below.

This graph illustrates the EIA’s latest energy capacity projection, for the period from July 2014 to July 2015. There’s no two ways about it: the projected growth in solar energy capacity — at 56% — is a barn-burner. Even the second-fastest projection for wind at 11% is still in the double digits. If both these renewable energy sources could continue this growth rate it wouldn’t take too many years for wind and solar to become top-tier players in U.S. energy production.

 

The US Energy Information Administration (eia.gov) reports projects capacity changes from July 2014 to July 2015. Only Solar (56%) and Wind (11%) are projected to grow at double digits. Both Coal and Petroleum energy source capacity are projected to decline.
The US Energy Information Administration (eia.gov) reports projects capacity changes from July 2014 to July 2015. Only Solar (56%) and Wind (11%) are projected to grow at double digits. Both Coal and Petroleum energy source capacity are projected to decline.

 

As we continue to look at the horizontal bar graph above, we note that coal capacity which (pardon the pun) has come under fire from the EPA due to air pollution, is projected to decrease by 4%. Petroleum liquids (fuel oil) are also down, by 2%. Nuclear is flat, with a 1% decrease. Given the natural gas bonanza brought about by fracking, one might have expected something higher than the 2% projected growth in natural gas energy production capacity.

 

How Does US Renewable Energy Capacity Compare with Europe and Germany?

Now we are going to shift gears a little bit to see if the Europeans are onto something in the renewable energy production market that we aren’t (or vice versa), by making some head-to-head comparisons. In the next graph, we show the relative mix of US renewable energy production capacity reported for July 2014. Only wind and hydroelectric break the double-digit capacity barrier.

 

Blue bars indicate the relative amount of capacity within the renewable energy sector. Red bars compare the capacity of each renewable energy source will ALL energy production capacity, including fossil fuels, etc. Data is for July 2014, courtesy US Energy Information Administration (eia.gov)
Blue bars indicate the relative amount of capacity within the renewable energy sector. Red bars compare the capacity of each renewable energy source will ALL energy production capacity, including fossil fuels, etc. Data is for July 2014, courtesy US Energy Information Administration (eia.gov)

 

How Similar or Dissimilar is this to European Renewable Energy Capacity?

To analyze this, we researched publications from the European Union (EU). Fortunately, the EU’s reporting agency, EuroStat, has recently published information we are looking for, but unfortunately, the newest data available is for the year 2012, not 2014. Nonetheless, when we put the renewable energy production from the 28 nations of the European Union into our graph format below we see the overall European renewable energy mix is dramatically different than here in the US.  

 

Here is European Union renewable energy capacity formatted in a similar graph as the one for the US above. Blue bars indicate the relative amount of capacity within the renewable energy sector. Red bars compare the capacity of each renewable energy source will ALL energy production capacity, including fossil fuels, etc. Data is 2012,  courtesy of EuroStat (epp.eurostat.ec.europa.eu)
Here is European Union renewable energy capacity formatted in a similar graph as the one for the US above. Blue bars indicate the relative amount of capacity within the renewable energy sector. Red bars compare the capacity of each renewable energy source will ALL energy production capacity, including fossil fuels, etc. Data is 2012, courtesy of EuroStat (epp.eurostat.ec.europa.eu)

 

In the EU, one dramatic outlier that catches your eye immediately: renewable energy capacity from wood, wood waste and biomass, which weighs in at over 65%! Coming in second at bit above 15% is conventional hydroelectric, which you may recall, is the largest of renewable energy capacity in the US.

 

Given the Great Publicity Around the Energiewende, is Germany’s Renewable Energy Capacity Market Markedly Different?

Having read so much about Germany’s initiatives for wind turbines and solar energy, the next graph is not what we expected to see! Certainly wind and solar are higher renewable energy contributors compared to Europe overall. But what was unexpected — at least for us — was that wood, wood waste and biomass constitute more than 70% of the German renewable energy mix! Of course we wish we had this year’s figures to see what changes have happened over the last two years, but clearly we have a lot to learn about this biomass renewable energy category, which was not on our radar from our admittedly American-centric perspective.

 

Here is German renewable energy capacity formatted in a similar graph as the ones for the US and EU above. Blue bars indicate the relative amount of capacity within the renewable energy sector. Red bars compare the capacity of each renewable energy source will ALL energy production capacity, including fossil fuels, etc. Data is 2012,  courtesy of EuroStat (epp.eurostat.ec.europa.eu)
Here is German renewable energy capacity formatted in a similar graph as the ones for the US and EU above. Blue bars indicate the relative amount of capacity within the renewable energy sector. Red bars compare the capacity of each renewable energy source will ALL energy production capacity, including fossil fuels, etc. Data is 2012, courtesy of EuroStat (epp.eurostat.ec.europa.eu)

 

So please look for a future report from us on biomass, wood and wood waste energy sources as it looks like there is something interesting going on here! We also plan to take a look at some of the nuts and bolts — or some might say blocking and tackling — necessary to make the projected rapid growth in wind and solar energy production capacity a reality. In particular, we will take a look at a key component, construction of new long-distance transmission lines that extend our current electrical grid by hundreds of miles to connect population centers with remote solar and wind turbine farms. Stay tuned.

 

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