With the greatest part of American electricity coming from coal and much of the rest coming from natural gas, many in the U.S. have the misperception that electricity companies are all strongly opposed to renewable power. Many cast the issue as pro-business versus pro-environment without realizing that many in the industry are actually some of the biggest supporters of renewable energy.
Yale Environment 360 spoke with David Crane, the chief executive officer of Princeton, New Jersey-based NRG Energy and a major proponent of solar power. NRG owns more than 25 gigawatts of generation capacity, nearly 2.5 percent of the total U.S. capacity, according to the U.S. Energy Information Administration.
More than 90 percent of that capacity comes from fossil fuel-based power plants, as well, yet the company has made a massive investments in renewable power. Platts reports that 85 percent of NRG’s investments over the next three years are committed to solar power, from utility-scale projects to residential solar installation programs. All told this amounts to more than $705 million in solar investments.
But Crane noted that the market has begun to shift from historical norms. Whereas electricity companies previously had to worry primarily about actually producing enough energy to fulfill demand at a sustainable price, declining demand for electricity has pushed different energy sources into direct competition. While the environmental benefits of solar power are obvious, it also offers the potential for long-term competition in a way that no fossil fuel can. Crane noted a sort of “Moore’s Law” of solar to Platts that illustrates the consistently improving price-per-watt of solar, while energy resources like oil and natural gas remain largely up to whims of exploration and the market. He calls the prospects for further coal-fired generation in the Northeast “phenomenally challenged.”
Instead, Crane told Yale that NRG hopes to take a three-pronged approach to encouraging cleaner solar power while also tapping into a market dominated by that other crucial energy resource: oil.
“The electricity side of the energy sector is 50 percent coal and 20 percent natural gas and 20 percent nuclear,” Crane explained. “The transportation side is almost all oil. And it doesn’t matter whether you’re on the left or the right of the political spectrum, no American wants to keep importing 3 million barrels of oil a day from the Middle East. So there’s huge public policy benefit to shifting the transportation sector to something other than oil.”
The first and most crucial step is to create programs encouraging distributed generation with solar power. Some of the comes from small-scale rooftop solar installations, but NRG has also invested in larger warehouse and parking lot solar systems. Crane notes that the company installed solar panels at the Washington Redskins’ Fedex Field and is in discussions to power the New Meadowlands, which houses the New York Giants and Jets.
Then company hopes to encourage the use of electric vehicles, serving both to cut into the oil market as well as to provide an outlet for the intermittent generation from solar panels and other sources of renewable energy. The U.S. Department of Energy recently released a report suggesting 2 million electric vehicles would account for most variations in energy production. Crane suggests that wider adoption of these technologies would provide a measurable benefit from the third prong, smart meters, which are most visibly helpful to utilities, but could provide huge economic benefit for electric car owners.
“I think the most important thing is to make the American public aware that now they have energy choices in a way that they never really did,” Crane noted. “You don’t just have to settle for using electricity in your house that is supplied by coal-fired power plants on the grid. And you don’t just have to put oil that comes from the Middle East in your gas tank. You can buy an electric car. You can put solar panels on your roof. You have choices now.”