Utility strategies for using renewables

Electric utilities will play a key role in determining the contribution renewables will make in electric markets. Utility investment in renewables will be considered in the context of investment portfolios that will include a range of new technologies for generating electricity as well as new technologies for increasing the efficiency of energy use, for electric transmission and distribution, and for storing electric energy. If public policy encourages utilities to invest in ways that minimize energy service costs and environmental costs, renewable electric generation could play a major role. Renewable equipment likely to be available early in the 21st century could provide more than 80% of the energy inputs of modern utilities at prices no higher than those charged for electricity today. The appropriate mix of hydroelectric, biomass, and intermittent (wind, photovoltaics, solar thermal) systems depends on local resources. Intermittent resources should be able to meet at least one third of the utility`s energy needs without adverse effects on costs. The value of each type of renewable technology is strongly affected by its scale, location and the characteristics of other generating equipment operating in the region. Advanced natural-gas turbine systems, for example, make a good match with renewables. It is possiblemore » that advanced, fossil-powered equipment capable of very high efficiencies may be able to produce electricity at a slightly lower cost than advanced renewable equipment (both could be producing at prices below current electricity costs), but renewable equipment may still be preferred because of its environmental benefits.« less