Despite recent explosive growth rates, the wind and solar power industries must overcome key innovation challenges before they can contribute a substantial share of national or global energy supplies, a panel of leading technology experts said today in Washington DC. 

Speaking at the Energy Innovation 2013 Conference organized by the Information Technology and Innovation Foundation and the Breakthrough Institute, Armond Cohen of Clean Air Task Force, Fort Felker of the National Renewable Energy Laboratory (NREL), and Minh Le of the Department of Energy's SunShot Program each stressed that taking solar and wind to scale starts with taking a "cold, hard look" at the real innovation challenges facing the growing renewable energy industries.

Scale, scale, scale

Wind energy has experienced "explosive growth" in America over the last 15 years, said Felker, who directs NREL's National Wind Technology Center. With double digit annual growth rates, wind has contributed 35 percent of all new generating capacity built in the United States over the last five years, second only to natural gas-fired power plants.

Solar power has experienced even more rapid growth rates in recent years, although it lags behind wind in total installed capacity.

Despite recent growth however, wind power provided only about 3.5 percent of U.S. electricity in 2012, while solar photovoltaic and thermal power technologies contributed just 0.1 percent. The panelists each agreed that these renewable energy technologies must reach orders-of-magnitude larger scale before they can contribute substantially to the national energy supply.

To date, the U.S. has built more than 40,000 wind turbines, for example, but Armond Cohen noted that it would take 300,000 1 megawatt wind turbines to equal the capacity of the current U.S. coal fleet. (The always astute Robert Wilson notes on Twitter that taking differing capacity factors into account, it would take roughly twice that number of turbines to equal the energy output of the U.S. coal fleet). 

Felker pointed to a 2008 Department of Energy report, which outlined what it would take to bring wind energy to 20 percent of the nation's electricity supply by 2030. At that scale, wind would provide a similar share of the national electricity mix as nuclear energy provides today.

For now, the wind industry is on track. While the DOE plan was originally viewed as overly ambitious, Felker noted that recent wind industry growth rates have actually exceeded the pace necessary to reach 20 percent by 2030.

Solar would likely continue to lag behind wind in the United States, the panelists noted, but could ultimately rise to a similar scale.

If wind and solar have long-term ambitions of displacing fossil fuels as the dominant energy sources in America or the world, fundamental innovation challenges remain, the panelists stressed. Getting beyond 10, 20 or 25 percent shares for wind and solar though will require continued innovations to further reduce costs and address the challenges associated with the intermittent or variable nature of wind and solar energy output.

Moving goal posts on cost

For years, NREL targeted cost reductions in wind turbine construction and operation that would bring wind to cost parity with coal-fired power, said Felker. Working alongside industry, these efforts succeeded in yielding steady cost reductions. Even without subsidies, real costs for 20 year power purchase contracts now fall in the 5-8 cents per kilowatt-hour range, according to Felker, comparable to coal.

Yet the recent sharp decline in natural gas prices brought about by the surge in U.S. shale gas production has moved the goal posts for wind power.

"Now we have a new goal: beat gas," Felker said.

Minh Le heads the DOE's SunShot initiative, which similarly aims to bring down the costs of installed solar photovoltaic systems to under $1 per watt as rapidly as possible. That would make solar independent of subsidies and cost competitive in most electricity markets. To get there, the SunShot program targets cost reductions across the entire value chain, from more efficient and lower cost panels and modules to important reductions in the "soft costs" of marketing, installation, permitting, and financing.

The panelists all agreed that continued cost reductions to free wind and solar of subsidy dependence would be critical to bringing either renewable energy source to a larger scale.

"Current subsidies for renewables aren't scalable," said Le. According to Le, If the United States tried to drive solar energy deployment with the kind of subsidies responsible for solar's rapid growth in Germany, "it would bankrupt us."

Felker agreed, noting that NREL is now working to help the industry cut wind energy costs in half again. To get there, NREL envisions new wind turbine architectures and is helping industry develop truly massive wind turbines in the 10 or even 20 megawatt range, Felker said.

Driving these deep cost reductions may require re-prioritizing investments in renewable energy. According to Armond Cohen, public and private sectors spent about $250 billion globally to deploy commercially available wind and solar technologies in 2012. In contrast, Cohen estimates that R&D investments across all clean energy technologies totalled just $12.5 billion last year. "Something might be out of whack here," stressed Cohen.

The integration challenge

While unit costs are falling as the wind and solar industries scale up, the system-wide costs of integrating these variable renewable energy sources into the electricity grid is rising, Cohen also cautioned.

Wind and solar generation varies as the weather changes, meaning that flexible power plants must be on stand-by to ramp up or down as the renewable output rises or falls. Alternatively, large power customers such as factories can be paid to curtail energy demand if wind or solar output falls off suddenly. 

These so-called "integration" costs are relatively minor today, the panelists said, but can mount quickly as the penetration of wind and solar on a regional electricity grid rises past a key threshold. 

"At low-levels of variable renewables penetration, you can ride on the back of the stable grid," said Cohen. But a variety of studies estimate that after wind or solar penetration rises above 20 to 40 percent of the electricity system, integration costs rise steeply.

Tackling this integration challenge will thus be key to taking wind and solar to scale in the longer-term. That will require changes in the way the grid currently operates, including different compensation for providers of flexible backup power and expanded ability to modulate demand as wind and solar output changes.

In the long-term, new grid-scale energy storage technologies may be essential to achieving high penetrations of wind energy, although panelists differed on the feasibility of these technologies, a variety of which are in development. 

For now, the surge in U.S. natural gas generation may be both a challenge and a blessing for wind and solar. While it has moved the cost goal post, cheap and flexible gas plants are a great match to the variable output of wind and solar, according to NREL's Felker. 

The increase in natural gas in the U.S. is "a great story," because the added flexibility of gas plants "plays really well" with wind and solar, Felker said. Natural gas "buys us time to solve the intermittency challenge," he noted.

Jesse Jenkins is reporting for the Energy Collective from the Energy Innovation 2013 conference in Washington D.C. Check the @EnergyCollectiv timeline or hashtag #EI13 for live tweets and stay tuned here for more posts soon.