David Jenkins: More renewable energy needed to prevent rate increases
Nevada’s unique geology holds many wonders and riches, but one thing it does not hold is natural gas. This state has virtually no natural gas reserves. Yet, roughly three quarters of Nevada’s electricity is generated using natural gas. Being so heavily reliant on out-of-state natural gas, which is a globally marketed and finite fossil fuel, makes Nevadans extremely vulnerable to inevitable gas price fluctuations.
A myriad of factors, from pipeline disruptions to increasing demand for gas halfway around the world, can cause electricity prices here to soar with little or no advance warning.
This vulnerability — and the stunning lack of diversification behind it — cannot be fixed overnight, but there is a bill moving through the state legislature that will address the problem. The bill, A.B. 206, seeks to diversify Nevada’s electricity generation with something this state can produce plenty of, renewable energy.
If passed, this legislation will require utilities to produce 50 percent of Nevada’s electricity from renewable energy by the year 2030. Not only will that greatly reduce ratepayers’ exposure to unpredictable gas prices, it will diversify the state’s electricity production with energy that is only getting cheaper.
The price trend with renewable energy, which currently costs about the same as gas, has always tracked downward. For example, the cost of solar energy has dropped 53 percent since 2010. According to a study by Bloomberg New Energy Finance, every time the amount of installed solar power doubles, its costs fall 24 percent.
In addition, because most of renewable energy’s cost is up front in technology and facility development, not fuel, producers sell it to utilities via long-term fixed-price contracts. This insulates energy users from the price swings we often see with gas and other globally priced fossil fuels.
As most Nevadans recognize, no state is in a better position to advance renewable energy and reap the resulting economic benefits than Nevada.
This state is blessed with unparalleled geothermal resources and some of the most intense solar rays in the nation. In addition to its enormous solar and geothermal potential, Nevada is home to the world’s largest battery factory and just happens to sit next door to California, one of country’s largest renewable energy markets.
Tapping fully into this renewable energy gold mine requires a clear market signal that the state’s demand for renewable energy will justify the required investments. The renewable energy targets established by A.B. 206 do just that.
Furthermore, renewable energy investments in Nevada will stay right here in Nevada as long-term assets. This is certainly not the case with piped in fossil fuels.
The economic benefits of renewables also extend beyond the energy sector. Tech-oriented companies like Amazon, Apple, Switch, and Tesla decided to locate in this state, at least in part; because Nevada’s renewable potential can help them meet their clean energy goals.
A commitment to maximize renewable energy here will help draw even more investment to Nevada. On the other hand, remaining overly reliant on natural gas will adversely affect the state’s ability to attract and keep businesses.
A little more than 20 percent of Nevada’s energy currently comes from renewable sources. Phasing in an additional 30 percent over the next 13 years is not a heavy lift. Especially given the state’s geothermal resources and the phenomenal growth of solar energy.
In fact, the amount of solar energy capacity in the U.S. nearly doubled in a single year, between 2015 and 2016. That includes a 148 percent increase in utility-scale solar installations. This growth is going to continue, with experts projecting U.S. solar capacity to triple over the next five years.
This is all good news for Nevada because renewables offer the only viable path to diversifying the state’s energy mix. Nuclear energy is too expensive, and building coal-generating capacity is not practical for numerous reasons.
Becoming less dependent on out-of-state gas must be an urgent priority if Nevadans want to ensure low and stable electricity rates going forward. Fully developing Nevada’s unique potential for renewable energy is the obvious answer, but it is up to state lawmakers to jump-start that transition by passing A.B. 206.
David Jenkins is president of Conservatives for Responsible Stewardship, a national nonprofit organization with members in Nevada.