The opportunity for growth in the renewable energy industry is more promising than ever with the combination of the 2014 Clean Power Plan and the 2015 Paris Climate COP 21 agreement. SolUnesco looks to be at the forefront of decarbonizing the current energy system in Virginia by developing large-scale renewable energy projects. Over the last few weeks Francis Hodsoll, SolUnesco President, presented at the Resilient Virginia Conference in Richmond and the VMI Environment Virginia Symposium in Lexington. In both presentations, Francis focused on the business opportunities created by de-carbonization and the transformation of electricity supply and demand.
The focus of our Resilient Virginia presentation was on the current status and trajectory of solar energy in Virginia. Nationally, solar and wind are consistently delivering double-digit year over year growth rates. In 2015, solar energy alone grew 16% year over year and installed more capacity than natural gas. More important to mention, the annual solar market has grown nearly 400 percent over a span of five years, and wind capacity 55 percent. Further, wind capacity factors have doubled in a ten-year span. The future is bright with solar efficiency advancements delivered by Panasonic, SolarCity and SunPower driving further improvements in the economics.
With the renewable energy market becoming more attractive due to advances in energy policy, the Virginia solar market is poised for a dramatic expansion of clean energy. Currently, there are 25 to 30 MWs of solar generation installed in Virginia, but the amount could increase fifteen-fold in the coming year. Dominion Power recently sought approval from the State Corporation Commission to own three solar projects totaling 56 MWs and is negotiating another 47 MW of solar Power Purchase Agreements. Dominion’s unregulated business also bought the 80 MW Amazon project developed by Community Energy. Other companies such as the Old Dominion Electric Cooperative (ODEC), Appalachian Power Company (APCO), and Council for Independent Colleges (CICV) have also announced planned solar projects.
Our presentation at the Virginia Military Institute’s Environment Virginia Symposium focused specifically on the impacts of emissions trading within the Clean Power Plan. EPA allows for two different market approaches: rate-based compliance and mass-based compliance. The different options result in very different markets for not only trading but for the incentives for power plants. Some examples of mass based trading are the Clean Air Act and carbon cap and trade. An example of rate based trading is the phase out of lead that occurred in the late 80s and early 90s. A point Francis made at the Symposium is that the US has more than 30 years of experience in these emission trading markets, which have resulted in significant cost reductions. For example, the SO2 and NOx market-based compliance resulted in 40 to 55 percent savings relative to prescriptive or non-market regulations.
The keys to being successful in emission trading markets are transparency, establishing clear boundaries, ensuring regulatory certainty, and executing meaningful and swift penalties for non-compliance. With innovation in operations, business models, and technology – businesses will be able to both achieve the desired emissions reductions and reduce costs.
The innovation in clean energy is more than R&D; business model innovation creates significant benefits.