In 1776, Britain's thirteen American colonies ran on a 100-percent renewable portfolio standard and a distributed (wood- and horse-based) energy economy.
Today, as the EIA graph shows, natural gas is ascendant in the U.S. while coal is in decline and nuclear power has plateaued. Petroleum rules the world. Renewable energy survives as the small mammal beneath the dinosaurs' feet.
Will abundant and cheap natural gas dominate the energy diet of late-21st-century Americans? Or will renewables confound the conventional wisdom and lead the energy mix sooner than anticipated?
Outside of the greentech echo chamber and inside the boardrooms of utilities, new U.S. energy is not solar power or electrochemicalstorage but rather "unconventional" gas and oil -- which means horizontal drilling, fracking, shale gas and tar sands. Vikram Rao, former CTO of Halliburton, called the shale gas supply "the most important energy event in the U.S. since the discovery of Alaskan oil." This market upheaval sends a sobering message to any solar or energy storage or wind entrepreneur: you are competing with dirt-cheap natural gas.
Sean Ebert of energy investor Altira Group told me last year, "As much maligned as fracking is in the press, we [the U.S] are the envy of the world. When you're talking about energy, you're talking about competitive advantage of nations, and this is where we lead the world."
Natural gas provides 21 percent of U.S. electricity right now and that will rise to 40 percent by 2035, according to consulting and construction giant Black & Veatch, water resource limitations aside. That forecast leaves renewables to fight over the remaining 60 percent in 2035. (All of the civilian U.S. nuclear fleet, 104 reactors producing approximately 100 gigawatts, will have aged out by then.)
But the transition that the EIA graph (and even Vaclav Smil) doesn't account for is the rise of distributed generation (DG) and distributed intelligence at the edge of the grid.
More silicon (or GaN or SiC) at the edge of the grid, be it in IT, PV or power electronics, brings Moore's law to the energy industry, replacing Westinghouse's law. It allows the edge of the grid to realize its networked, efficient, and transactional potential. And it encourages innovation in an optimized and modern grid.
Factor in demand response, energy efficiency, energy storage, and microgrids, as well as cheaper solar and wind as further drivers to this transition to DG -- and we are witnessing the erosion of the utility's natural monopoly on power generation and the fall of a century-old business model. Utilities and regulators are just starting to confront these market dynamics.
While natural gas and coal still burn to make our electricity, it's this shift to DG that heralds our independence from fossil fuels in the electricity sector.
Happy July 4th. Happy Independence Day.