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There is a great deal of uncertainty surrounding the renewables market, but don't let those question marks misdirect your perception of the future. Many of the discussions underway in the renewables sector center around the nuances of how generation capacity will be increased and managed, not if large-scale investments will take place. New York stands as a shining example of the uncertainty surrounding renewables, but also highlights its potential.
Renewables poised for expansion in New York
New York has ambitious plans for adding solar generation capacity. The state has a goal of generating 50 percent of its energy using renewables moving forward. The goal is clear and various initiatives will be working toward this end. However, a recent Utility Dive report explained that there is a great deal of dissension around how the state should go about striving for large-scale renewables investments.
"Don't let renewables question marks misdirect your perception of the future."
Investing in large-scale renewable energy strategies can be incredibly complex, and integrating those resources into the grid presents major challenges. According to the Utility Dive report, utilities in New York believe they are best positioned to minimize costs while getting the state to its 50 percent renewables goal. The theory here is that between subsidies that reduce the cost of capital and expertise managing large-scale grid integration projects, utilities are best suited to support large-scale renewable generation while minimizing costs for consumers.
While utilities may have a point, the news source explained that renewable producers and similar energy industry groups believe they are better placed to drive large-scale renewables adoption. To support this claim, they point to the way that diversification within the power supply segment has driven costs down for consumers during the 2010-2013 period, with wholesale consumer price declines reaching approximately 34 percent during that time, one expert told the news source.
There are clearly two sides that are entrenched in the renewables development sector in New York, but regardless of where you fall, one thing is clear – power generation models are poised for a major change, and renewables are at the center of these developments.
Renewables' potential is clear
The uncertainty in areas like New York, where the nuances of renewables deployment are up for debate, do not undermine the rapid pace of innovation happening in the sector. This is particularly evident in the way that companies are investing in renewables. Pointing to a PricewaterhouseCoopers study, merger and acquisition activity in the renewables market has led to significant funding emerging in the sector.
"Energy storage can erase the operational doubts surrounding renewables."
According to the study, raw spending figures in the renewables sector declined during the second quarter of 2015. However, spending on renewable M&As was still substantial, creating a new fiscal milestone for the sector. Furthermore, this year's investment activity surrounding renewables was by no means a sign of lean times in the sector. Investment conditions are still incredibly favorable, but Q2 2014 featured numerous megadeals that made the period uniquely active. This year's M&A activity may not be as exciting, but it shows a significant and consistent interest in renewables.
In sectors like renewables, where innovation has been happening at an uncertain pace, largely fueled by subsidies and tax breaks, consistent progress is extremely exciting.
Moving past operational uncertainty
There are still questions in the renewables sector, including concerns about how generation providers and utilities will maximize the value of variable wind and solar resources. Energy storage systems can erase these doubts by providing backup power resources, supporting load balancing throughout the grid and enabling better distribution and transmission processes. Battery storage can eliminate the operational uncertainty.
With batteries becoming more accessible from a cost perspective, much of the operational uncertainty surrounding renewables is disappearing. Furthermore, the continued health of the investment environment around renewables is a positive indication that debates about how to best ramp up renewable generation aren't holding the industry back.