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Future hinges on new energy infrastructure

Daniel Baldonado, a contract worker for a steel fabrication company, Ironco Enterprises, installs a series of solar panels on the roof of Wells Fargo Arena on Arizona State University’s Tempe campus in 2011. (Photo by Brandon Quester/Cronkite News)

The U.S. energy market is changing more rapidly and dramatically than anyone would have predicted. A steep decline in the price of solar-generated electricity, combined with the rising cost of coal and gas-fired electricity, has turned energy economics on its head. This is particularly true here in the Southwest. 

For example, solar+storage projects being built today are selling electricity below $25 per megawatt hour (MWh), and guaranteeing that price for the next two decades. By contrast, the price of natural gas-generated electricity is roughly double that and projected to get more expensive over time. Coal generation today is even more costly. 

David Jenkins

This can be a true game-changer here in Arizona, a state blessed with the some of the strongest solar rays in the nation. That means this state has virtually limitless potential to take advantage of these new market realities 

Replacing aging coal and gas plants as they are retired with much cheaper solar+storage will not only save Arizonan’s money in lower electric bills, it will also spur economic growth. Cheaper electricity attracts companies from out of state and fuels business expansion. 

The only real question mark is the speed of that transition here in Arizona. Will it be slow and sporadic, beset by inadequate infrastructure and regulatory uncertainty, or will it—along with those associated economic benefits—speed along quickly with the necessary level of planning and investment? 

As a fiscal conservative, I worry a great deal about the massive spending binge our nation has been on over the past few years. Too often, we seem to spend money on everything but the things we need most. Nowhere is that more apparent than in our neglect of infrastructure. 

Despite all of that federal spending, we have not even kept up with the repair and maintenance needs of essential assets like bridges, roads, sewage treatment plants, and dams. Digging ourselves out of that backlog will take time. 

With energy infrastructure, we simply do not have the luxury of time. 

The choice is to either keep up with a rapidly changing energy market that promises to reduce energy costs and boost our economy, or fail to do so and be stuck relying on aging natural gas and coal-fired generation that becomes more costly by the day. 

Does anyone really want to pay between $60 and $100 per MWh for electricity generated by old gas and coal plants, when we can pay less than $25 per MWh for electricity from solar? Companies looking for the best place to build or relocate certainly do not. 

This new energy market offers incredible opportunity, but maximizing that opportunity requires additional transmission and distribution infrastructure, smart grid technology, robust security and resilience measures, and policies that foster more U.S. production of key components. 

Our energy landscape is also changing rapidly in the transportation sector. Virtually every semi-truck manufacturer is rolling out all electric trucks. Companies like Walmart, Anheuser Busch, and UPS have already placed orders. UPS has also ordered more than 10,000 delivery vans. Amazon has ordered ten times that, deploying 100,000 over the next decade. 

On top of that, General Motors announced plans to produce only electric passenger cars and trucks by 2035. 

This electrification of our transportation sector also requires additional energy infrastructure. Most importantly, a comprehensive nationwide network of electric vehicle charging stations and deployment of ultra-fast charging capability (10-12 minutes). 

Building that EV charging network today will be the biggest boon to the transportation of goods across the U.S. since President Dwight D. Eisenhower developed our nation’s interstate highway system. 

Valid concerns about spending should not derail the smart energy investments contained in the pending infrastructure bills before Congress, as those will pay for themselves many times over in future economic development. 

Nowhere is this more critical than solar-rich Arizona, a state that stands to benefit disproportionally from federal investments in this new energy market. 

Should we fail to make these necessary investments today, much of this great new economic opportunity will be lost — crumbling away far faster than the most neglected bridge or highway. 

David Jenkins is president of Conservatives for Responsible Stewardship, a national organization with more than 800 members in Arizona. 

 

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