By Blaine Collison, Senior Vice President
I was describing my work on renewable thermal to someone recently, and they asked, “so this is all about accelerating technology, right?”
The answer is “no.” Or better yet, “Yes, and….”
Many of us working on renewable thermal through the Renewable Thermal Collaborative (RTC) have extensive experience with the renewable electricity (RE) markets. That experience offers important lessons, and some key differences worth considering as we lean into decarbonizing thermal energy.
Lesson: It’s All Interconnected
The RTC is focused on accelerating decarbonization of thermal energy for industrial, commercial, and institutional energy users. This will require massive deployments of multiple technologies, and there are certainly opportunities for improved technology performance and reduced costs.
But deployment isn’t just about technology. Deployment is a virtuous circle of technology, policy, financing, infrastructure, process, markets, supply chain, and more. Addressing barriers at any of these points unlocks more deployment. And as we work the circle, we expand deployment; around and around.
Similarity: We Need It All
One of the most important lessons of the RE markets is that it’s not just about improving the specific generation technology. To realize the deployment driven by the voluntary market, we needed tradable RE instruments and soft-cost reductions. We needed innovative financing: third-party, cross-market power purchase agreements (PPAs), leases, contracts-for-differences. We needed ways for companies to demonstrate impact and make emissions reduction claims. We needed market visibility and expert advisors, and new ways to buy RE. We needed better wholesale markets and government policies that will facilitate more and better deployment that reduces emissions and reduces costs. We needed all of it. For thermal, we need technology improvement – for sure – but we need all of the other things as well. And that’s why the RTC is engaged around multiple issues in addition to technology. We’re working with our members, sponsors, partners, and stakeholders on policy, finance, instruments, claims, market visibility, and more to help create the markets, incentives, deployment models, and other tools that will allow us to decarbonize thermal energy, globally, and quickly.
Just as the PPA has been transformative for RE development, thermal energy buyers will need to leverage third-party capital to finance deployment of renewable thermal technologies across their operations. We’re starting to see thermal solutions offered via innovative financing structures, and this is genuinely exciting.
Similarity: Policy
Even in the absence of comprehensive national climate policy, policy has been critically important to RE’s dramatic growth over the past 15 years. The Production Tax Credit and the Investment Tax Credit helped shrink and close the cost gap between renewable and fossil electricity. In more than 30 states, Renewable Portfolio Standards provided market certainty and required deployment. Currently, more than a dozen U.S. states and territories have or are considering 100% clean energy targets[1]. Each of these policies could be adapted to address barriers for renewable thermal and expand deployments now.
The Big Difference: Time
I began working in the voluntary RE market in 2004. We’ve spent almost 20 years working these problems and driving progress.
We need to scale renewable thermal much more quickly; as part of dropping global greenhouse gas emissions significantly in the next decade on a pathway to global net-zero emissions by 2050[2].
What’s Next?
We have to work the virtuous circle – the technology, the policy, the finance; all of it – with best possible speed. The RTC is engaged. Our members and sponsors are engaged. If you’re working on or are interested in renewable thermal, please join us. Our first-ever annual (and virtual) Summit is on November 9-10: We’re convening dialogues on all of the topics here and more. And we’ll continue the work after the Summit. Be part of it all!
[1] https://s3.amazonaws.com/ncsolarcen-prod/wp-content/uploads/2020/09/RPS-CES-Sept2020.pdf
[2] https://www.ipcc.ch/site/assets/uploads/sites/2/2019/06/SR15_Summary_Volume_Low_Res.pdf
