Renewable energy generation has become economically viable in many parts of the United States due to the recent rapid decline in the costs of technology, according to a new report by the U.S. Energy Departments National Renewable Energy Laboratory (NREL).
The report, Estimating Renewable Energy Economic Potential in the United States: Methodology and Initial Results, presents results from NREL analysts who applied a new geospatial analysis method to estimate the economic potential of several renewable resources, including PV, wind, geothermal, biomass and hydropower. Economic potential is a metric that quantifies the amount of economically viable renewable generation that is available at a specific location. The falling renewable energy technology costs are expected to help renewable energy continue to grow across the U.S.
"This report presents one method for estimating economic potential," NREL energy analyst Philipp Beiter said. "The initial results are intended to explore this method as a screening metric for understanding the economic viability of renewable generation at a detailed geospatial resolution."
Looking at the potential at developable sites, the report finds that when the social cost of carbon is taken into account, renewable generation is economically viable in many parts of the country. At 2014 costs, the technologies combine for 820 terawatt-hours of estimated economic potential beyond the generation from renewable energy facilities already in operation. This additional potential is equivalent to nearly 20% of total U.S. annual electricity generation from all sources in 2014.
"Declining renewable technology costs are a significant driver for these results," Beiter said. "Economic potential has more than tripled as a result of cost reductions already realized for renewable generation technologies between 2010 and 2014, particularly for wind and solar PV."
The trend is likely to continue as the U.S. deploys more renewable energy and continues driving down costs. With projected renewable energy costs in 2020 and 2030, economic potential increases considerably. At 2020 costs, economic potential equals almost half of U.S. annual electricity demand, and 2030 costs bring that number to over 75% with the potential for cost-effective renewable energy to be generated in every state in the country.
NREL adds that as the study illustrates, with continued cost improvements, renewable energys potential in the United States may not quite be unlimited, but it certainly is enormous.