These untapped Western US states could make renewables cost-competitive by 2025

28 August 2013

NEW YORK: Wind and solar power could become cost-competitive in Western US states by 2025 if identified regions of untapped clean energy are utilized, according to a new US Government Energy Department report.

The study, Beyond Renewable Portfolio Standards: An Assessment of Regional Supply and Demand Conditions Affecting the Future of Renewable Energy in the West, conducted by the  National Renewable Energy Laboratory (NREL) -- the US Department of Energy’s primary lab for renewables research -- compares the cost of renewable electricity generation from the most productive US locations, with the cost of energy from a new local natural gas-fired generator.

Untapped regions

The report analyzes where the most ‘productive’ locations -- those with the largest amounts of untapped, most cost-effective renewables potential – will be in 2025, the date that the last of the state mandates expire

NREL finds that wind and solar electricity generation could become cost-competitive without federal subsidies, if renewables are properly developed in the following potentially high-productivity regions by 2025:

  • Western US states Wyoming and New Mexico are likely to have strong wind potential, becoming real competition among projects vying to meet the energy demands of California and the Southwest.
  • Montana and Wyoming could also become very attractive areas for wind developers hoping to produce energy for the Pacific Northwest. Wyoming could also be a low-cost option for Utah customers.
  • Colorado will likely have a surplus of wind potential for its region, although transmission costs from its Rockies location could be limiting.
  • As for solar, California, Arizona and Nevada could have the best resources.
  • New geothermal development from Idaho could be competitive in California as well as in the Pacific Northwest.

David Hurlbut, Senior Analyst, NREL, commented: “The electric generation portfolio of the future could be both cost-effective and diverse. If renewables and natural gas cost about the same per kilowatt-hour delivered, then value to customers becomes a matter of finding the right mix.”

American renewables

The identified potential for renewables growth in Western states comes at a time when clean energy across the country is becoming increasingly cost-competitive. According to a recent report published by GTM Research, the average cost of residential solar in the United States decreased by 15.8% from the previous year to US$4.93 per watt in the first quarter of 2013

Amy Davidsen, US Executive Director, The Climate Group, said: "Wind and solar energy are already cost-competitive with fossil fuels in some parts of the world.  Reaching this milestone throughout the US is critical if renewable energy is to reach the scale needed to drive significant emission reductions. And this report shows that it is achievable in the near future." 

Read Beyond Renewable Portfolio Standards: An Assessment of Regional Supply and Demand Conditions Affecting the Future of Renewable Energy in the West

Our report: American Clean Revolution: Why the US should play to win on the clean economy

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By Maria Mateeva

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