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Why isn’t the U.S. electrical grid run on 100% renewable energy yet?

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Solar panels are set up in the solar farm at the University of California, Merced, in Merced, California, August 17, 2022.

Nathan Frandino | Reuters

Generating electricity to power homes and businesses is a significant contributor to climate change. In the United States, one quarter of greenhouse gas emissions come from electricity production, according to the Environmental Protection Agency.

Solar panels and wind farms can generate electricity without releasing any greenhouse gas emissions. Nuclear power plants can too, although today’s plants generate long-lasting radioactive waste, which has no permanent storage repository.

But the U.S. electrical sector is still dependent on fossil fuels. In 2021, 61 percent of electricity generation came from burning coal, natural gas, or petroleum. Only 20 percent of the electricity in the U.S. came from renewables, mostly wind energy, hydropower and solar energy, according to the U.S. Energy Information Administration. Another 19 percent came from nuclear power.

The contribution from renewables has been increasing steadily since the 1990s, and the rate of increase has accelerated. For example, wind power provided only 2.8 billion kilowatt-hours of electricity in 1990, doubling to 5.6 billion in 2000. But from there, it skyrocketed, growing to 94.6 billion in 2010 and 379.8 billion in 2021.

That’s progress, but it’s not happening fast enough to eliminate the worst effects of climate change for our descendants.

“We need to eliminate global emissions of greenhouse gases by 2050,” philanthropist and technologist Bill Gates wrote in his 2023 annual letter. “Extreme weather is already causing more suffering, and if we don’t get to net-zero emissions, our grandchildren will grow up in a world that is dramatically worse off.”

And the problem is actually bigger than it looks.

“We need not just to create as much electricity as we have now, but three times as much,” says Saul Griffith, an entrepreneur who’s sold companies to Google and Autodesk and has written books on mass electrification. To get to zero emissions, all the cars and heating systems and stoves will have to be powered with electricity, said Griffith. Electricity is not necessarily clean, but at least it it can be, unlike gas-powered stoves or gasoline-powered cars.

The technology to generate electricity with wind and solar has existed for decades. So why isn’t the electric grid already 100% powered by renewables? And what will it take to get there?

The economics of power generation

Economics play a big part.

First of all, renewables have only recently become cost-competitive with fossil fuels for generating electricity. Even then, prices depend on the location, Paul Denholm of the National Renewable Energy Laboratory told CNBC.

In California and Arizona, where there is a lot of sun, solar energy is often the cheapest option, whereas in places like Maine, solar is just on the edge of being the cheapest energy source, Denholm said. In places with lots of wind like North Dakota, wind power is cost-competitive with fossil fuels, but in the Southeast, it’s still a close call.

Then there’s the cost of transitioning the current power generation infrastructure, which was built around burning fossil fuels.

“You’ve got an existing power plant, it’s paid off. Now you need renewables to be cheaper than running that plant to actually retire an old plant,” Denholm explained. “You need new renewables to be cheaper just in the variable costs, or the operating cost of that power plant.”

There are some places where that is true, but it’s not universally so.

“Primarily, it just takes a long time to turn over the capital stock of a multitrillion-dollar industry,” Denholm said. “We just have a huge amount of legacy equipment out there. And it just takes awhile for that all to be turned over.”

Intermittency and transmission

One of the biggest barriers to a 100% renewable grid is the intermittency of many renewable power sources. The wind doesn’t always blow and the sun doesn’t always shine — and the windiest and sunniest places are not close to all the country’s major population centers.

Wind resources in the United States, according to the the National Renewable Energy Laboratory, a national laboratory of the U.S. Department of Energy.

National Renewable Energy Laboratory, a national laboratory of the U.S. Department of Energy.

The solution is a combination of batteries to store excess power for times when generation is low, and transmission lines to take the power where it is needed.

Long-duration batteries are under development, but Denholm said a lot of progress can be made simply with utility-scale batteries that store energy for a few hours.

“One of the biggest problems right now is shifting a little bit of solar energy, for instance, from say, 11 a.m. and noon to the peak demand at 6 p.m. or 7 p.m. So you really only need a few hours of batteries,” Denholm told CNBC. “You can actually meet that with conventional lithium ion batteries. This is very close to the type of batteries that are being put in cars today. You can go really far with that.”

So far, battery usage has been low because wind and solar are primarily used to buffer the grid when energy sources are low, rather than as a primary source. For the first 20% to 40% of the electricity in a region to come from wind and solar, battery storage is not needed, Denholm said. When renewable penetration starts reaching closer to 50%, then battery storage becomes necessary. And building and deploying all those batteries will take time and money.

Solar resources in the United States, according to the the National Renewable Energy Laboratory, a national laboratory of the U.S. Department of Energy.

National Renewable Energy Laboratory, a national laboratory of the U.S. Department of Energy.

Transmission lines are another limiting factor.

“We have been able to build a fair amount of wind and solar without adding new transmission, but we’re really kind of running up to the limits, especially for wind, because there’s not a whole lot of transmission located in the places in the country where it’s super windy,” Denholm said. “So we absolutely do need to build more transmission to tap into those super-high quality wind resources, particularly in the middle of the country.”

The transmission system in the U.S. is built for the electricity capacity that is already on the grid, and building new transmission lines that run hundreds of miles can take anywhere from 10 to 15 years, John Moura, the director of reliability assessment at the North American Electric Reliability Corp., told CNBC. “The type of transmission we’re talking about here are 1,000 [or] 2,000 miles long, large projects.”

Currently, when a utility wants to add electricity to the existing grid, it has to pay for the upgraded transmission line and for the interconnection, which is where multiple local grids are brought together. Those grid upgrades are expensive, and the permit process is slow.

Several components of the Infrastructure Investment and Jobs Act signed in November 2021 gave the Federal Energy Regulatory Commission much stronger permitting authority, transmission line analyst Rob Gramlich told CNBC. Still, some key rule changes did not get across the finish line. There was no transmission tax credit included in this year’s Inflation Reduction Act, and efforts by Sen. Joe Manchin, D.-W.Va., to reform permitting have so far failed to pass.

“Transmission was not meaningfully addressed in the 117th Congress. There is a lot of unfinished business on the transmission front, for sure,” Gramlich told CNBC.

Putting transmission lines underground is another option, but that’s prohibitively expensive.

“Your classical old-school, large overhead transmission lines are pretty much the only thing that we are likely to see at least in the next decade or two,” Denholm said.

Land requirements? Not that big a deal

One commonly cited worry is that going 100% renewable will require massive tracts of land covered with solar panels or wind farms.

But “that is definitively not the challenge,” Moura said.

It would take a total of 0.84 percent of U.S. land to support an entirely renewable-powered energy system, Stanford professor Mark Jacobson told CNBC. By comparison, the fossil fuel industry takes up 1.3 percent of U.S. land.

“Offshore wind, tidal, and wave power do not take up any new land. Rooftop photovoltaic does not take up any new land,” he said.

So really, the only new land required would be for solar facilities run by utilities, and for wind turbines on land.

But many people are reluctant to embrace a new way of doing things when they can’t see what the future will look like, and when maintaining the status quo is the path of least resistance, according to Griffith, the mass-electrification advocate

“The biggest barrier is a lack of imagination,” Griffith told CNBC in a video interview from Australia, where he currently lives. “So everyone is like, ‘Well, I’m not quite willing to do this, because I don’t know what it’s going to look like. And maybe it’s going to be terrible.'”

So what would a 100% renewable-powered world look like, according to Griffith?

“It’s going to look like every house has solar on its roof. There’ll be solar over every parking structure. Some roads will probably have a solar panels elevated down the middle of the road. And every time you go driving in the countryside, you’ll see some wind somewhere on the horizon,” Griffith said.

“And otherwise, the future is going to look a lot like it does.”

‘The right thing to do is not the easy thing to do’

Firm and consistent rules from the federal government are another shortcoming in the U.S., and that comes down to politics.

“In Norway, you can’t buy a gasoline vehicle after 2025. That creates a huge amount of market certainty. Everyone knows when it’s going to happen, what you have to do,” Griffith said.

The Inflation Reduction Act in August 2022 was chock full of incentives to push renewables forward, but it didn’t put any firm sunsetting dates on fossil fuel generation.

“It doesn’t really clearly send a signal to the utilities that, ‘No, you can’t install natural gas networks to heat homes anymore. No, you can’t do this or that or the other.’ So I think more regulatory, legislative certainty would help America a lot,” said Griffith.

Until then, its going to continue to be cheaper and easier to keep doing things the same old way.

Saul Griffith’s electric home in San Francisco.

Photo courtesy Saul Griffith

Griffith lived in the U.S. for more than two decades and built an all-electric home in San Francisco starting in 2014. It took him eight years and cost an estimated extra $80,000 compared to building a traditional home, he said.

“There’s sort of that inertia and red tape and at every single level the system,” Griffith said. “And then even after I finished and build that house, it’s hard to turn on. There are people who are really skilled at maintaining a digital electric house, [but] there’s no software that makes it easy yet. There’s a couple of startups working on it. … It’s like the early days of the cellphone.”

Even incremental repairs are harder to do with an all-electric home.

“If you call a contractor and say, ‘I’d like to install an induction cooktop, I’d like to get take the gas out of the kitchen,’ the contractor is probably going to tell you, ‘You’re crazy, buy natural gas instead.’ Or if you call them at midnight and say, ‘My water heater’s gone, can you please replace it with an electric heat pump,’ which would be the right choice for climate and even for economics, the contractor will be like, ‘No, no, no, I’ll have a natural gas one there in the morning, but the heat pump will take me six weeks,'” Griffith said.

“So we’ve got a skills and capacity and supply chain shortage on all of these things, which means that the right thing to do is not the easy thing to do,” he said.

In Australia, more than 30 percent of homes have rooftop solar and it’s “the cheapest energy that humanity has ever had,” Griffith said. In the U.S., only about 1 to 2 percent of homes have rooftop solar.

“In America, it’s more expensive than electricity from the grid. That’s a regulatory and a workforce training problem in the U.S.”

For instance, in Australia, Griffith said he can call 10 companies and get 10 quotes for rooftop solar the next day at 65 cents per watt. In California, rooftop solar cost him $5.80 per watt. Even given the higher cost of living in San Francisco in general, “it shouldn’t be 10 times more expensive than in Australia,” he said.

Saul Griffith’s electric home in San Francisco.

Photo courtesy Saul Griffith

It’s his view that in the U.S. it all comes down to regulation and preserving the status quo.

“America thinks it’s all about free markets and anti-regulation, but really, it’s the most over-regulated, most f—– up energy market in the world,” Griffith said.

For example, many utility companies provide both electricity and gas to their customers in the U.S.

“One of their businesses is in conflict with the other and they haven’t resolved that,” Griffith said. “So we’re still handicapping electric solutions versus natural gas solutions.”

For all of this to change, he said Americans will have to see a better alternative actually working outside of the U.S. — and then push politicians and private industry to do better at home.

“You just got to show that this works somewhere. And once you’ve done that, that might unlock America’s full political paralysis,” Griffith said.

In the U.S., the successful pitch for rooftop solar will revolve more around escaping utility bills and rebelling against utilities and governments, than it will around saving the Earth, Griffith added. Given those economic and political realities, he said it’s more likely that rooftop solar will first take off in more conservative states like Texas or Florida.

“It’ll be a company named Liberation Solar — it will be the largest solar installer in the U.S.” he said, perhaps only partly in jest.

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