The four biggest sources of electrical power generation in the United States are coal, natural gas, nuclear, and hydro. But very quietly a very big change is taking place.
Wind generation accounted for 4% of all the electricity in the U.S. in 2013. No numbers yet for last year but given the technological improvements in wind turbines it is reasonable to expect that number to be even higher for last year. We know for example that wind turbines accounted for 10% of the electricity generated in Texas last year, reaching a peak in November at one point of 38%.
In the United Kingdom, renewable energy accounted for almost 15% of the country’s electrical generation in 2013, according the right proper sounding Office of National Statistics. Overwhelmingly, most of this came from wind and solar facilities. In the UK, as here, nuclear accounts for about 19% of electricity generated. In the U.K, renewable sources are expected to replace nuclear plants on a permanent basis by the end of next year. Yes, it’s a trend "there" but it is worth noting for its importance to the trend here.
Add to this slight pile of information the news that solar power is the fastest growing source of electricity in America. That piece of news comes courtesy of the American Petroleum Institute (API). You can read their paper on The State of American Energy Report here.
The temptation in the world of energy seems to be to polarize our sources of energy. As readers know, I am an agnostic when it comes to sources of energy. Cheap, abundant and reliable are my three top criteria. It is my view that we in the U.S. are in the grips of a massive energy revolution. My view is shared by the president & CEO of API, Jack Gerard. He notes in his report that, “The United States is in the midst of a new era in domestic energy abundance characterized by rising use of renewable energy and increased oil and natural gas production that is strengthening our economic outlook and enabling America to emerge as a global energy superpower.”
Amen Jack, amen. Energy diversification is a great source of strength and it could be the power that lifts us up out of our moderate, ho hum economic recovery to stronger growth and greater employment.
The API’s report was released in January. Further confirmation of the growth of solar is being reported on by the website CleanTechnica (bet you thought you’d never read about API and CleanTechnica in the same column). For those who aren’t familiar with CleanTechnica, it is a website devoted to the coverage of “clean” technology and power sources. And one of their top stories today (March 9) is about the doubling of solar power on a global basis last year.
All of which is fine and good but we need to keep one thing in mind, oil and natural gas have a proven and existing infrastructure. Renewables are just beginning to come on line in a meaningful way and as I have noted before battery technology is rushing to play catch-up with electricity generation. Batteries have another name they go by: energy storage devices. They also have their own industry group, the U.S. Energy Storage Association (ESA) which I guess sounds more important that the Battery Association. ESA has just published a report which is decidedly in its own best interest about how Energy Storage is expected to grow 250% this year alone. I would typically be wary of an industry touting its own triple digit growth rate but I have written about batteries...err, energy storage devices... before and given the increasing growth of renewable energy it is likely an area investors should begin to investigate.
In full disclosure I own shares of Tesla (TSLA) and Solar City (SCTY) which are both mentioned in the report. I don’t make specific stock recommendations but I do encourage investors who are interested to investigate the sector and make their own decisions.
