There are several reasons why the United States is still dependent on fossil fuels for the country’s energy consumption needs. Some of the larger reasons for the slow shift to renewable energy resources are issues regarding transportation or transmission of energy, the corporate and political inertia present within the fossil fuel industry, and investment priority challenges. The transition to renewable energy resources is gaining more momentum despite these challenges but more work is needed to reduce the barriers for broader adoption and investment.
The movement of electricity from the generation source to the location of demand requires transmission lines. Fossil fuel generating plants have physical quantities of energy that is stored in coal, natural gas, and oil. These can be shipped and stored, often using conventional methods like truck and railroad cars. However, renewable energy resources are typically producing electricity from locationally dependent generating sources. This requires more transmission networks to connect all of the different generation sites to the grid to ensure the management and capacity of unscheduled energy flows are handled appropriately (Northwest Power and Conservation Council 2021). The transmission systems already in place have been difficult to site and approve for any necessary expansions. The need for even more transmission lines to accommodate a larger share of intermittent renewable energy resources is a critical limitation in the move away from fossil fuels.
The fossil fuel industry is deeply ingrained in our corporate and political environment which makes shifting to newer methods difficult as well. The fossil fuel industry employed over one million people in 2016, which is approximately 56% of energy industry jobs (Williams 2016). Most of the companies providing these jobs are large companies that spend millions of dollars in lobbying politicians each year. These corporations get energy subsidies that create unfair advantage in the marketplace and further incentivize fossil fuel companies to expand their power and influence. Shifting to new technologies requires new businesses that typically start smaller and still have feasibility issues to overcome in scaling up innovative solutions. The shift from an entrenched fossil fuel infrastructure, employment, and outdated policies will take time to educate workers and policymakers to provide better balance to the market and incentivize the shift to renewable energy resources.
Corporations are also now looking to create more resilient business models in an ever-changing world as well. With the costs of renewables coming down and the risks from regulatory costs going up for carbon-based fuels, many fossil fuel companies are beginning to shift their business models away from fossil fuels. Engie is a multinational corporation that once was focused primarily on fossil fuels for energy generation but has now shifted to divesting those fossil fuel assets and investing in renewable assets (Engie 2020). This shift to allocating investment dollars is not easy, even for a large global corporation. Smaller utilities and companies looking to invest more in renewable energy face investment challenges as these new investments often require new infrastructure that lead to much higher costs.
While the challenges from energy transmission, market inertia, and investment limitations have created resistance in the adoption of clean energy resources, those factors have been shifting in the past decade. Microgrid technology, policy updates, and investment grants are beginning to provide more momentum to the shift to clean energy for the United States. Continued focus on policy updates that balance the market and incentivize solutions that reduce externalities will be important for the United States to make the clean energy transition.
Author: Logan Callen
Engie. 2020. ENGIE to Refocus and Accelerate Growth in Renewables and Infrastructure Assets. Accessed April 7, 2021. https://www.engie.com/en/journalists/press-releases/refocus-renewables-infrastructure.
Northwest Power and Conservation Council. 2021. Transmission. Accessed April 7, 2021. https://www.nwcouncil.org/reports/columbia-river-history/transmission.
Williams, Todd. 2016. Fossil Has More Than 50% of Energy Industry Jobs Yet Renewables Drive Future. ScottMadden. Accessed April 7, 2021. https://www.scottmadden.com/insight/fossil-50-energy-industry-jobs-yet-renewables-drive-future/.