Study of the Renewable Energy Industry

Study Case Study of the Renewable Energy Industry in the United States Based on Policy Directions and Natural Potential Michael Kurniawan (2018123456) University of Cincinnati, 2600 Clifton Ave, Cincinnati, OH 45221, United States kurniaml@mail.uc.edu Abstract The United States is committed to achieving its Net Zero Emission target by 2050. This effort can be realized by utilizing the renewable energy potential that is widely available in the US. The country's dependence on fossil fuel-based power plants is still quite large. This study aims to examine the potential policies that can be taken by the federal government and the role of the community in supporting the achievement of the Net Zero Emission target. The results show that the opportunities for developing Solar Power Plants (SPPs) in the US are still very large, especially through utilization in the household sector, which accounts for around 92% of electricity consumers. However, this study is still exploratory in nature. Keywords: Renewable energy, SER, Net Zero Emission INTRODUCTION The President of the United States, speaking at the G20 forum, has reaffirmed his commitment to achieving a Net Zero region by 2050, where the region relies on new and renewable energy and is capable of producing Green Products. According to the Environmental Protection Agency (EPA), the concept of Net Zero encompasses three main aspects: (1) Net Zero Water, which involves limiting water consumption from specific sources, treating wastewater, and returning it to the same source to prevent excessive exploitation; (2) Net Zero Energy, which is producing energy from renewable sources in an amount equivalent to the annual energy needs of a building; and (3) Net Zero Waste, which is reducing, reusing, and repairing used items so that they have economic value without having to be disposed of in landfills. This is in line with Feng Sheng Chien's (2022) research, which states that renewable energy is not only beneficial MICHAEL KURNIAWAN 1 Study Case to the environment but also has positive social and economic impacts. Jaiswal et al. (2022) also emphasize the need for clean, renewable, and sustainable energy to improve people's welfare. Net Zero Energy components play an important role in the development of the US economy. In line with the findings of Zeeshan Fareed et al. (2022), clean energy transformation and emission mitigation are key to becoming a developed country. Yue Hu et al. (2022) also emphasize that the use of renewable energy in high-emission sectors can make a positive contribution to the economy. Meanwhile, Solarin et al. (2022) mention that renewable energy is an effective strategy for long-term sustainable development, and Jian Xu et al. (2022) emphasize that the energy crisis has a negative impact on the economic sector. Thus, the US must convert its power plants, which are currently dominated by fossil fuels, to renewable energy sources. This involves not only changing the type of power plant, but also ensuring that the energy capacity is equivalent to or even greater than before in order to meet national needs. To support this step, the federal government must improve the electricity distribution system to make it more efficient and equitable. In addition, electric utilities in the US—such as investor-owned utilities like Duke Energy or Pacific Gas and Electric (PG&E)—have a strategic vision, including: (1) providing electricity services that are oriented towards customer and shareholder satisfaction; (2) making electricity a means of improving the quality of life of the community; (3) optimizing electricity as a driver of economic growth; and (4) managing environmentally conscious businesses. However, the distribution of electrification in the US still faces challenges, especially in rural and remote areas, although economic centers such as the East Coast and West Coast are relatively better off. In addition to distribution issues, the electricity system also faces reliability disruptions. Data from the U.S. Energy Information Administration (EIA) data recorded a System Average Interruption Duration Index (SAIDI) of 12.72 hours per customer in 2020 and 9 hours in 2021, as well as a System Average Interruption Frequency Index (SAIFI) of 9.25 interruptions per customer in 2020 and 6.7 interruptions per customer in 2021. Research by Reyseliani and Purwanto (2021) estimates that by 2050, 100% renewable energy use in the electricity sector can be achieved, with solar power contributing up to 70% of electricity production. The use of solar power is also estimated to reduce carbon dioxide emissions by 215 million tons. Thus, solar power MICHAEL KURNIAWAN 2 Study Case plays a strategic role not only in national electricity generation but also in supporting economic growth, as emphasized by Fareed and Pata (2022), who found that renewable energy drives economic growth based on consumption data in ten countries from 1970 to 2019. METHOD This study was conducted in four main stages: (1) problem identification and initial hypothesis formulation, (2) data collection, (3) data analysis, and (4) conclusion and recommendation drawing. The method used was quantitative, processing numerical data through tables and diagrams related to Net Zero Energy. The problem identification stage included: (1) the existence of areas in the US that are not yet fully electrified or often experience power outages; (2) the existence of consumers who experience power cuts due to their inability to pay; and (3) the federal government's commitment to making the US a Net Zero Energy region based on renewable energy. This led to the initial hypothesis that household consumers could transform into independent electricity producers through the installation of solar power plants, while also selling surplus electricity to power companies. The supporting data collected included the power generation capacity of various sources and the number of electricity customers based on user categories. The analysis was conducted using three approaches: (1) a comparison table of fossil fuel and renewable energy generation capacities; (2) a graph of SPP capacity trends over time; and (3) a comparison of household electricity consumer trends as targets for independent SPP installation. The results of the analysis are expected to show the priority of the household sector as a driving force for energy transition. The final stage consists of drawing conclusions and strategic recommendations for further research. An overview of the research flow is shown in Figure 1. MICHAEL KURNIAWAN 3 Study Case Figure 1. Research Flow Diagram RESULTS AND DISCUSSION Based on Table 1, there has been an increase in the capacity of renewable energy power plants in the United States from 2018 to 2020. However, this increase went hand in hand with an increase in the capacity of fossil fuel power plants (petroleum, coal, and gas). This fact shows that electricity demand in the US continues to increase every year. Thus, even though renewable energy capacity has increased, the increase has not been able to keep pace with the surge in electricity demand, so that the capacity of fossil fuel power plants has continued to rise. A comparison of the proportion of capacity each year is presented in the following table. MICHAEL KURNIAWAN 4 Study Case Table 1. Power Plant Capacity by Energy Source Type Furthermore, Table 2 shows that the proportion of fossil fuel and renewable energy power plants has remained relatively stable from year to year. This means that the contribution of renewable energy to the national electricity supply is still limited, even though its capacity has increased. Table 2. Proportion of Power Plant Capacity by Energy Source Type One potential renewable energy source for widespread commercialization is solar power plants (SPPs). The development of SPP capacity can be observed in Figure 2. Figure 2. Trends in Solar Power Plant Capacity in the US The data shows that SPP capacity has fluctuated. The largest increase occurred in 2012, with the highest achievement in 2013, but then declined sharply in 2014 before increasing again, albeit not significantly. In fact, geographically, many regions in the US MICHAEL KURNIAWAN 5 Study Case have very adequate sunlight exposure. This is in line with the research by Djoni Hartono et al. (2020), which states that investment in solar power plants is relatively cheaper than other types of renewable energy. In the simulation, the construction of a 1 GW solar power plant requires an investment of $15.555 billion, which is lower than a coal-fired power plant, which costs around $19.790 billion. The advantage of solar power lies in its flexibility of use. Solar panels can be applied in both the industrial and residential sectors. A comparison of the number of residential electricity customers and total customers is shown in Figure 3. Figure 3. Graph of the Number of Household Customers and Total Electricity Customers The graph shows that household consumers have a dominant share in the electricity customer structure in the US. This confirms that households have great potential as a target for SER implementation. The proportion of electricity customers in 2020 is presented in Figure 4. MICHAEL KURNIAWAN 6 Study Case Figure 4. Proportion of Electricity Customers in the US in 2020 The data in Figure 4 shows that around 92% of electricity customers come from the household sector. Thus, if the installation of solar power plants is focused on this group, its contribution to meeting national electricity needs will be significant. These results are in line with the research by Mick James (2021), which found that the use of solar and hydro energy in Texas, US, was able to supply electricity to 962 households with a total daily production of 3,273 kWh. The surplus energy generated reached 4,263,957 kWh per year, which could then be resold. A similar study by Martha Maulidia (2019) also emphasizes that distributed energy systems (as opposed to mega-projects) have several advantages, including: environmental friendliness, lower investment costs, more equitable energy distribution, better system reliability, lower risk of damage, and promotion of local community empowerment. In addition, research by Hakan Aracoglu and Mustafa Gullu (2022) shows that a 1% increase in the use of renewable energy can reduce global temperatures by 0.031%. Conversely, a 1% increase in the use of fossil fuels actually increases rainfall by 0.175%. Thus, renewable energy not only plays a role in meeting energy needs and reducing carbon emissions, but also contributes to climate stability and the effectiveness of solar panels. MICHAEL KURNIAWAN 7 Study Case CONCLUSION AND RECOMMENDATIONS Conclusion The United States is committed to achieving Net Zero Emissions by 2050. Based on the results of this study, it can be concluded that: 1. Dependence on fossil fuel power plants remains high. 2. The trend of solar power plant development in the US shows fluctuations and still needs to be further encouraged. 3. Approximately 92% of electricity customers come from the household sector, which has great potential as a basis for solar power plant development. Thus, the use of solar power in households can be an important breakthrough in supporting the Net Zero Emission target. This is in line with the findings of Sambodo et al. (2022), which emphasize that all parties must play an active role in supporting the clean energy transition. Recommendations This research is still preliminary and can be used as a basis for further studies on the implementation of solar power systems in households in the US. Further research should use a systemic approach by modeling the transition of household consumers into energy producers, while considering the geographical and socio-economic characteristics of various regions in the United States. MICHAEL KURNIAWAN 8 Study Case REFERENCE MICHAEL KURNIAWAN 9 Study Case MICHAEL KURNIAWAN 10