Renewable technologies are now some of the most affordable electricity sources in the world, resulting in record renewable energy adoption. But with renewable power adoption comes increasing complexity in energy sourcing as companies begin to feel the impacts of changes to global generation mix.
For this 2-part series, Fatima Sanchez, Cleantech Operations Manager, sat down (virtually) for a conversation with two other Schneider Electric market experts – Tom Muddell, Cleantech Operations Director, and Matt Sanders, Sourcing Director – to look at the intertwined history of renewable and traditional energy, present changes and challenges related to renewable power, then, in part II, recommendations to address future complexities in your sourcing mix.
Part I: A brief history of green power, then brown power, then green power again
Sanchez: We should start with a brief history of traditional power supply — or what might be referred to as brown, gray or black power depending on the country. Why has it been the long-standing supply source?
Muddell: It’s interesting you use 'traditional' to describe brown power. I might note that mechanically-driven power — our earliest applications, really — were renewable. If you think about windmills, hydro-powered mills, etc., these used to be the norm. Then humans later figured out we could burn things to generate power.
Sanders: And, when you think about those fuel sources, it speaks to how we landed on terms like 'brown' or 'black' power, I guess. Of course, today these are blanket terms used to denote any electricity generated using non-renewable fuels — essentially the combustion of gas, coal or oil. Nuclear power would typically be classified as brown, too.
Let’s rewind to the late 1800s because this marks a significant point in the genealogy of power production. The advent of electrically-powered street lights came online in the UK and the U.S. At that time, electricity was mostly produced using steam engines, which were typically powered by the combustion of coal. The availability of coal at first, and then oil and gas, as combustible fuel sources is really the reason for the prevalence of brown power over the next 140 years.
Muddell: I’d add reliability as a key element here, too, Fatima. To power the Industrial Revolution, we needed a steady power source. And, historically speaking, brown electric power has been incredibly reliable. What we call non-intermittent (or dispatchable) today. It didn’t hurt that those brown power feedstocks we talked about have always been plentiful and cheap. So, when you think about the need for giant, constantly-running generating stations to keep the lights on for larger geographies and populations — and then you add the financial component — brown power was the obvious choice.
But let’s not forget: large-scale renewables did have a place in the advancement and adoption of grid-scale power. I think about Niagara Falls in the U.S., which had a historically significant role in electrifying New York City as an example. I think you’d agree large-scale hydro also played a key role in European development.
Sanchez: Ok, we’ve defined what we mean when we use terms like ‘brown’, ‘black’ or ‘grey’ power. Let’s pause for just a moment to define 'green' power.
Sanders: Well, that depends on who answers the question. I’d say the general catch-all answer is usually electric power that:
1. Does not emit greenhouse gas (GHG) during its production (or very low GHG), and
2. Features a renewable source of feedstock, such as solar, wind, hydro, geothermal or biomass.
With a deeper dive into more practical definitions, certain markets or organizations can define green power a bit more restrictively or more broadly. Tom, would you agree on the basics here?
Muddell: No major changes, but maybe a slight nuance. We often hear 'green power' broadly used interchangeably with 'renewable power'. Strictly speaking, green power is a subset of renewable power that is more environmentally beneficial. I like this visual from the EPA. But yes, renewables rely on resources that can be replenished quickly in addition to the elements you outline.
Sanchez: So why the emergence of green power?
Muddell: I think it’s a combination of four factors:
- Improvements in renewable generation technology,
- A decrease in the cost of that technology,
- An increase in the cost and volatility of brown power — to the point that we’ve reached cost parity in many locations, and
- Society’s views on GHG emissions
Of course, there are a lot of details beneath each of these. Matt, do you have some more specific examples?
Sanders: I do. Four, in fact, over the last few decades:
- The Oil Crisis,
- The Cold War,
- The Paris Agreement, and
- Nuclear Generation Accidents
The oil crisis of the 1970s caused many countries to rethink their policies on the security of their energy supply and with this came greater focus on renewable energy, nuclear power and domestic fossil fuels. Then, during the 1970s and 1980s, the impact of acid rain specifically (and environmentalism more generally) led to the Large Combustion Plant Directive in Europe and the Clean Air Act in the U.S.
After the Cold War, UN Summits in 1992 and 2002 looked at the development of alternative energy sources to reduce our reliance on fossils fuels given their linkages to climate change. These discussions helped build the foundation for the EU’s target to meet 20% of its total energy needs from renewable energy sources by 2020. And then the resulting legislation was another watershed moment in the growth of renewables.
From there, it was December 2015 when the UNFCCC reached a landmark agreement — The Paris Agreement — to combat climate change and to accelerate the actions and investments that are required for a sustainable low-carbon future.
And then the fourth example I mentioned, several incredibly high-profile nuclear accidents across four decades. The public and political reactions that followed the disaster at Fukushima in Japan, which is the most recent example, created ripples across Asia and into Europe. In Germany, for instance, this was certainly a key factor in their decision to shutter nuclear generation over the next few years.
But even before then, accidents at Chernobyl in Ukraine in 1986 and at Three Mile Island in Pennsylvania in 1979 undermined confidence across much of Europe and the U.S. The combined effect of these disasters was to influence — either partly or largely — countries or markets that might have otherwise increased their reliance on nuclear generation. And instead, many of those decided to pivot to other sources, renewables being one of those.
Click here to continue to part II of our conversation with Tom and Matt to explore where markets are headed and what organizations should do before. And before you go, we invite you to register for our upcoming webinar: Is Your Company Ready for Energy Convergence? This virtual event will be presented by Bill Brewer, Schneider Electric’s VP, Global Supply and Sustainability Operations. Bill will share five keys to energy and sustainability success, and examine how energy convergence is driving market evolution and innovation.