Energy Revolution

The Renewable Boom

Solar, wind – and efficiency herald a broad change in US energy consumption

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Daniel Acker / Bloomberg / Getty Images

Windmills in a corn field outside Tiskilwa, Ill., July 2, 2013

Earlier this year, the U.S. became a net exporter of oil distillates, and the International Energy Agency projects that the U.S. could be almost energy self-sufficient in net terms by 2035.

Domestic oil production hit 7.75 million barrels a day in September, the highest level since 1989, while oil imports are at 7.5 million barrels a day and falling.

The country that was spending $341 billion on crude-oil imports in 2008 managed to export $117 billion worth of processed oil products in 2012. That’s a lot of money that is staying in the U.S.

But the biggest source of new electricity in the U.S. last year wasn’t a fossil fuel. It was the humble wind. More than 13 gigawatts of new wind potential were added to the grid in 2012, accounting for 43% of all new generation capacity. Total wind-power capacity exceeded 60 gigawatts by the end of 2012—enough to power 15 million homes when the breeze is blowing.

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Nine states, including Iowa, South Dakota and Kansas, rely on wind for more than 20% of their total electricity consumption. “We went mainstream,” says Tom Kiernan, president of the American Wind Energy Association.

Solar is not far behind. The price of a crystalline solar panel has dropped from $76.77 per watt in 1977 to less than $1 per watt today. Over the same period, solar generation has gone from essentially zero to 4.3 million megawatt hours.

This fall will see the full launch of the Ivanpah Solar Electric Generating System in the Mojave Desert on the California-Nevada border. At 377 megawatts, Ivanpah—which has curved mirrors to reflect the desert sunshine and generate steam—will be the largest solar power plant in the world, using the sun’s heat to create electricity.

Meanwhile, production of corn-based ethanol—though down a bit thanks to a major drought in the Midwestern Corn Belt—reached 13.3 billion gal. in 2012, displacing nearly half a billion barrels of oil. And the first commercial cellulosic biofuel plant—which relies on sources like wood chips and switchgrass that can’t be used for food—opened in Mississippi last fall. The industry as a whole expects to produce about 200 million gal. this year.

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A green future hasn’t arrived yet—solar still accounts for less than 1% of the total energy consumed in the U.S., and dumb meters still outnumber smart ones. But there’s another boom, little noticed, that’s already under way in the nation: efficiency. When the Middle East oil embargo struck in 1973, the average vehicle got just 11.9 miles per gallon. Today the U.S. uses less oil as a whole than it did 40 years ago, when the economy was a third of its current size. Some of that shift is due to deindustrialization and the end of oil-fired power plants, but the amount of crude-based distillates used in vehicles, homes and businesses has declined as well, down 14% last year from a peak in 2005.

The growth in electricity demand has fallen behind growth in population, as everything—from TVs to refrigerators—has become more efficient.

Under Obama, Washington has dialed up efficiency in a big way. The corporate average fuel efficiency standard, which governs auto gas mileage, will rise to 35.5 m.p.g. in 2016 and 54.5 m.p.g. by 2025, enough to save 12 billion barrels of oil over the lifetime of the regulation.

A decade after a cascading power failure led to a major blackout in the Northeast, the electrical grid is stronger and more resilient. Smart software can identify where energy waste is occurring, allowing utilities to reduce power use during peak periods like hot summer days, which in turn means fewer power plants need to be built and operated.

All told, the U.S. gets twice as much economic value out of a single unit of energy today as it did in 1980, and we’ll keep getting more in the future. “You can look at natural gas, nuclear, new oil drilling,” says Ralph Cavanagh, a co-director of the energy program at the Natural Resources Defense Council, “and all of it together is less important than energy efficiency.”

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