In an Era of Inexpensive Renewables, Policy Should Remove Obstacles

Published onApril 27, 2018

Driven by decades of aggressive government policy, renewable electricity generation has grown rapidly. This expansion has, in turn, contributed to lower costs and renewable power that is no longer prohibitively expensive. In fact, wind and solar power are already cheaper than coal-fired power generation or natural gas power generation. As the primary obstacles to a renewable energy transition is no longer cost, the old approach of subsidizing renewable generation until it can compete with fossil fuels no longer makes sense. Rather, the challenge stems from the need to integrate intermittent power supplies into the electric grid, and governments interested in clean energy and decarbonization can use policy to remove systemic obstacles to growth.

Governments can address this problem with real-time electricity pricing, two-way metering, demand-side management to match supply and demand, and with policies that separate electricity consumption from the cost of system maintenance. Most importantly, governments need to invest in technology innovation to support energy storage and other measures to mitigate the problem of intermittency. These policies can unleash an era of renewable energy progress and thus contribute to climate mitigation, clean air, and energy security.