Reflections-The Economics of Renewable Energy in the United States

Abstract

Greater use of renewable energy is seen as a key component of any move to combat climate change, and is being aggressively promoted as such by the new U.S. administration. Yet there has been little economic analysis of renewable energy. This article surveys the literature on the economics of renewable energy and adds to it. The conclusion is that the main renewables face a major problem because of their intermittency (the wind doesn't always blow nor does the sun always shine) and that this has not been adequately factored into discussions of their potential. Without new storage technologies that can overcome this intermittency problem, much of the decarbonization of the economy will have to come from nuclear, carbon capture and storage (CCS), and energy efficiency, with geothermal and biofuels making small contributions. Nuclear and CCS are not without their problems. New energy storage technologies could greatly increase the role of renewables, but none are currently in sight.

Keywords: Q3, Q4, Q5