No energy source is perfect. Few are as divisive as renewable energy.
Arguments against have focused on high costs, low reliability, and the inability to build a grid based on renewable energy. It’s easy to disprove these arguments with real-world data.
For example, wind and solar offer the lowest-cost electricity, on average, in the United States. Meanwhile, eight different states lean on wind power for at least 20% of their electricity. Texas generates more electricity from wind power alone than 39 states generate total. Include solar, and the Lone Star state generates more electricity from renewables than 42 states generate from all sources combined.
Imperfect arguments that gloss over nuance (or reality) will continue so long as renewable energy remains a political football. But the most misleading argument is one being increasingly used to dismiss zero-carbon energy altogether: Renewable energy contributes only 12% of all energy consumed in the United States. Look at just wind and solar and the number shrivels to 4.7%.
Why is there so much focus on renewable energy if it makes such a paltry contribution to total energy use? Let’s dig in.
The Five Energy Sectors, Explained
It’s true. Wind and solar comprised just 4.7% of total energy consumption in the United States in 2021. However, “energy” and “electricity” are not the same thing in this context.
Total energy consumption spans electricity (the power sector), liquid fuels (the transportation sector), and heat (across industrial, commercial, and residential sectors). Wind and solar farms generate electricity and contribute to the power sector. Therefore, it’s misleading to gauge market share or viability by factoring in transportation and heating, too.
Indeed, the United States leaned on renewable energy for 25.3% of total electricity generation in the first six months of 2022. A record 16.5% of electricity generation was sourced from wind and solar alone in that span.
That’s not to say renewable energy will never grab a majority share of total energy consumption. Rather, the energy transition may look different in each sector.
Scroll to Continue
- Power: Electric utilities and power generators must plan grid changes years in advance to ensure stability. Almost all new capacity being added for the next decade comprises wind and solar, while almost all old capacity being retired comprises fossil fuels. It all comes down to economics. Wind and solar farms don’t require ongoing fuel expenses, which results in low-cost energy output for the life of the asset. Meanwhile, older coal-fired and gas-fired facilities have fuel expenses and higher maintenance costs. Current trends suggest wind and solar could supply at least 40% of the nation’s electricity by 2030. The power sector represents 38% of total energy consumption in the United States today.
- Transportation: Several emerging technologies will shift energy demand to the power sector. For example, the energy transition in the transportation sector will see liquid fuels (petroleum) displaced by electric fuels (electricity). Keep in mind the transportation sector spans passenger vehicles, heavy-duty trucks, ships, and airplanes – not all of which can be electrified soon. That’s where renewable liquid fuels, such as renewable diesel or emerging electrofuels, could make an impact. The transportation sector represents 28% of total energy consumption in the United States today.
- Industrial: Some industrial processes can be electrified, too. Newer steelmaking processes use electric arc furnace technology to replace older blast furnace processes. It’s more efficient with respect to time, energy use, and cost. Similarly, many industrial processes could theoretically lower their carbon footprint by using hydrogen or biomass instead of dirtier inputs. The industrial sector represents 23% of total energy consumption in the United States today.
- Heating: Large parts of the United States rely on natural gas or liquid fuels for heating. These could be decarbonized by switching to electric heat, although dropping in renewable natural gas or renewable liquid fuels might be easier. Some utilities are even exploring mixing hydrogen into their natural gas supply, but that’s unlikely to become a meaningful decarbonization tool due to the limitations of steel pipelines.
It’s also worth pointing out that different sectors and energy sources will move at different speeds. Consider the time it took each major energy source to become the dominant supply of energy, only starting the clock once each reached 5% of global supply:
- Coal needed 60 years to displace biomass (wood) as the world’s top energy source, primarily contributing to power, industrial, and heating markets. It still only accounted for 50% of global energy supply when it reached that milestone in 1900.
- Crude oil needed 60 years displace coal from the top spot– and it only accounted for 40% of global energy supply in 1975.
- Natural gas is becoming increasingly important in the global energy supply, but it has yet to become the top source nearly 100 years after eclipsing 5%.
History provides perspective for the daunting task ahead. It will take decades for each sector to make the energy transition. However, current trends suggest each could happen in less than half the time of past transitions from wood, coal, and crude oil. That’s true on a global basis, but especially for the United States.
In the power sector, wind and solar energy could comprise at least 40% of the nation’s electricity generation by 2030. They contributed just 0.8% combined in 2007. There’s literally no historical precedent for how quickly the electric grid is transitioning.
The transportation sector’s transition will be even swifter. Every major automaker is going all-in on EVs, while electrifying heavy-duty trucks won’t be far behind. Over one dozen battery factories are expected to be constructed domestically in the next decade. Throw in generous tax credits, lower fuel costs, and much-needed competition on pricing; and consumers have significant incentive to make the switch. Considering the average age of a passenger vehicle in the United States is about 13 years, EVs should easily comprise most vehicles on the road by 2040. In fact, EVs represented nearly 13% of all new vehicle sales in Q2 2022.
Believe it or not, even that’s unlikely to be the fastest energy transition. The industrial sector can decarbonize even more quickly. If switching to alternative inputs and processes saves costs and boosts margins, then manufacturers will be heavily incentivized to make upfront investments – assuming ample supply exists, and capital costs aren’t prohibitive. The onshoring of supply chains in the name of national security has led to a flood of tax credits that can help nudge the industrial sector into the future. Of course, “the industrial sector” is a broad term, but energy-intensive processes ranging from aluminum production to steelmaking to cement manufacturing are already finding economic benefits from making the switch.
Don’t Be Misled: There’s No Stopping the Energy Transition
It’s not bad to question conventional wisdom or go beyond bumper-sticker slogans in your research. Not every renewable energy technology will become viable in the marketplace. For example, green hydrogen appears a little too hyped at the moment relative to the challenges and drawbacks it faces. It could find an important niche in many industrial processes, but is unlikely to make meaningful contributions in the power or transportation sectors. Additionally, the cold-hard truth is natural gas will be a significant energy source for decades to come.
However, it’s also important to acknowledge nuance. Energy consumption is spread across multiple, disconnected (for now, anyway) sectors. It’s misleading to downplay the contributions of wind and solar by measuring them against energy use in all sectors.
All trends suggest the energy transition is an unstoppable force. It began in the power sector, but will soon progress to transportation (displacing liquid fuels) and industrial (displacing coal natural gas, albeit slowly). Don’t be surprised if America’s energy consumption goes much greener much faster than expected.