incremental changes in long-established industry sectors. Disruptive technologies have two important characteristics. First, they typically present different performance attributes—such as providing a carbon-free source of electricity—that, at least at the outset, are not valued by a majority of customers. Second, the performance attributes (e.g., costs) for disruptive technologies that customers do value can improve at such a rapid rate that the new technology can overtake established markets. Figure 6.1 shows how the performance of a disruptive technology that was once lagging that of an earlier established technology can improve at a faster rate. However, such performance improvements are speculative and are not preordained. In the case of renewable electricity technologies, on a conventional cost-of-energy basis traditional sources of electricity generation initially outperform non-hydropower renewables. The attraction of technologies that use renewable resources, together with government incentives, has been responsible for much of their market presence. However, owing to improvements in renewable technologies and cost increases for fossil fuels and nuclear power, renewables are gaining the ability to match the cost performance of traditional generating sources both in the wholesale power market and on the customer side of the meter.

This chapter explores the logistical and market barriers to commercial-scale deployment of renewable electricity. Although individual renewable energy technologies have unique developmental and economic characteristics, there are, common, non-technical challenges as well, including (1) constraints on capacity for larger-scale manufacturing and installation and limitations on the availability of trained employees for manufacturing, installation, and maintenance; (2) integration of intermittent resources into the existing electricity infrastructure and market; (3) market requirements such as capacity for competing in price and performance with conventional lower-cost coal, nuclear, and natural-gas-fired power plants; and (4) risk and related issues, including business risk, cost issues, and unpredictability of and inconsistency in regulatory policies.

Because of the robust regulatory and business activities related to wind and solar energy industries, many examples discussed in this chapter come from these sources. However, they are used to indicate deployment issues associated to some degree with other renewable sources of electricity.



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