If there were any doubts about the global potential for renewable energy, Michael Lewis, COO at E.ON Renewables, quickly put them to rest. Opening up Thursday's keynote at this years RETECH conference in Washington, D.C., Lewis told the audience renewables will continue to expand, with global capacity expected to increase three-fold by 2020. "When people ask me if renewables are just a niche, I show them the data we've put together," he said.
Lewis expects the industry to grow between seven to fourteen percent leading up to 2020. And he thinks investment dollars will follow, citing the seventeen percent year-over-year growth for renewables in 2011. He explained that in spite of the natural gas surplus in the United States, renewables like solar bring predictability to pricing, which reduces volatility in wholesale and retail utility markets.
He emphasized the importance of stable policy, saying job creation and energy security would be uphill battles if governments can't come to terms. "While early stage industries need subsidies, they have to be smart subsidies that insure each dollar is invested wisely." And perhaps with a slight nod to the Production Tax Credit, he reminded the audience that renewable subsidies are still relatively small compared to other industries.
Climate change was one of the other points Mr.Lewis cited as a driver for E.ON's renewable business. While he described it as a nebulous concept, he urged leaders to focus on what would resonate, something more tangible. "People can see clean energy jobs, that's something we continue to move forward in the discussion," he said.
As Lewis outlined E.ON's renewable footprint in the EU, he said the U.S. should reconsider its approach to offshore wind. With much more land mass than the EU, Lewis urged the U.S. to develop more onshore farms, citing the high costs of logistics and high-seas deployment. But even with exorbitant costs, E.ON has significant investments planned for offshore farms, in part due to land density in the EU.
In closing, Mr.Lewis described E.ON's strategy for how it planned to take costs out of the system, something echoed by all renewable companies we spoke with, especially as subsidies are delayed or disappear. "We need to focus on driving down our costs," said Lewis. For wind farms, the cost of turbines can be eighty percent of the capital costs when building out the site. "We're bringing new suppliers into the supply chain and scrutinizing every dollar to build these machines. We have to industrialize the supply chain to drive the economies of scale needed."
Another industry fighting for policy support was also on hand this morning to discuss the Renewable Fuel Standard (RFS). The EPA is considering waiving the standard for at least a year, something Biotechnology Industry Organization (BIO) President Jim Greenwood thinks would be devastating and erase many of the gains made in advanced biofuels. “In fact, it could extend by several years the drought that has endured in investment capital for new advanced biofuels technology,” he added.
Greenwood says that could affect thousands of near-term jobs and added that by 2022, the advanced biofuel industry is on pace to add 800,000 new jobs if it can maintain momentum.
"These are good jobs, these are high-paying jobs," said Greenwood. According to BIO, the U.S. now has renewable fuel facilities in thirty-seven states, with almost forty pilot biorefineries in operation. Commercial biorefineries are also starting to come online, with applications ranging from cellulosic biofuels, to algae production, and biobased products.
Greenwood's organization has also formed a new coalition to mobilize support for the RFS, Fuels America. "Our children’s future rests upon our ability to shift as fast as possible to renewable energy sources. But we won’t succeed unless we can convince our political leaders that renewables are ready, reliable and competitive. And that they need the vision and the commitment to provide America with the policies, incentives, and investments necessary to make that happen,” Greenwood said.