It could be because of their relatively small environmental footprint; it could be their tremendous positive local economic impacts; or it might be the fact that they use fuel that is produced right here at home. However, the real reason renewable-energy technologies have been growing is the same reason any successful business is sustained: the almighty dollar.
Over the past several years, the rising cost of fuel for fossil plants has had Tennessee residents, lawmakers, and business owners paying a bit more attention to their monthly utility bill, wondering just where their money is going. In Tennessee, we've spent the past 20-plus years with the luxury of relying on old power plants, built decades ago. However, the need to retire some of the more costly fossil plants, coupled with rising fuel costs, are causing this region to once again debate which generation resource will produce the most cost-effective, reliable power in the future.
Across the nation, utilities are backing away from building large power plants as they traditionally have.
New coal plants have much higher construction costs; the fuel is more costly, and the industry is staring down the barrel of future regulation.
The cost of new nuclear plants, which several years ago appeared attractive, is now being seen as economically irresponsible.
Recently, Federal Regulatory Energy Commission Chairman Jon Wellinghoff stated that new nuclear cost was around $7,000 per kilowatt (approximately the same as the cost of solar, and much more expensive than the $1,800 per kilowatt for wind energy). He continued speaking about new nuclear and coal plants stating, "We may not need any, ever."
This could not be true if there was not another proven, reliable, cost-effective answer. That answer is renewable energy.
The reality of new traditional generation costs has paved the way for the cost-competitive renewable energy technologies of wind, solar and biomass. As the costs of traditional electricity sources have escalated, renewable-energy costs continue to fall.
Utilities across the nation have used renewable-energy technologies as a price hedge against today's rising fuel costs to lock in long-term competitive electricity rates. When coupled with smart-energy efficiency investments, utilities including TVA should start to bank on renewables for a growing percentage of our future generation.
The question of whether we can hedge our prices by deploying large-scale renewables was answered in 2008, when TVA's own study, conducted by McKinsey and Co., showed that the TVA region has more than 13,000 gigawatt-hours of cost-competitive renewable energy generation sources.
This did not include any solar generation, which has experienced the most dramatic drop in prices over the past 12 months, resulting in the industry claiming they will reach "grid parity" by 2012 the point at which ratepayers can produce electricity at a cost equal to electricity purchased from a utility.
Ultimately, the question is not "What is the cost of renewables?" It is, "What is the cost of the alternatives?"