As utilities enable work-from-home economy, renewable energy provides reliable power May 26, 2020By John MillerVP and ESG Senior Research Analyst, Calvert Research and ManagementWashington - Utilities - electric, gas and water - have stepped up to provide continuous essential services throughout the COVID-19 public health and economic crisis. Powering this capability has been a remarkable flow of reliable renewable energy output. Highlighted by a historic run for the entire month of April 2020, where US renewable generation outproduced coal-fired generation every day,1 absolute and relative performance of renewable generation globally can be viewed as a glimpse into the power supply balance of the future.In the short term, COVID-19 has reshaped the production of (supply) and demand (load) for electricity as commercial and industrial loads decline and residential load ticks higher. In addition to these unique pressures, winter 2019-2020 temperatures in the northern hemisphere were historically warm - cutting heating demand,2 while spring is traditionally a lower-demand "shoulder season." In this volatile mix, renewable generation has outperformed. With low or zero variable operating costs, renewable resources are often the lowest cost providers of electricity in wholesale power markets. In the US, supportive hydrology and wind speeds allowed these resources to continue output uninterrupted. With these tail winds, beginning on March 25, and extending through every day in April, combined renewable generation (wind + solar + hydro) outproduced coal-fired generation in a historic multiweek run. This run has produced more days of renewable outperformance against coal than all days (38) recorded in 2019.3 While US renewable resources outproduced coal, in Europe, coal-fired resources were simply shut off en masse. Both the UK and Portugal reported multiweek stretches with zero coal-fired generation.4 It is important to note that this trend is not limited simply to postindustrial economies, with Chinese state statistics indicating Q1 2020 coal-fired electricity fell by nearly 9% year over year, while wind output increased more than 18%.5 Similarly, the penetration rate of renewable energy, or its percentage of total online production, has reached new highs. In the US, the Southwest Power Pool (SPP), which manages power flows in 14 central states, reported a new wind penetration peak at 71.3%.6 Record penetration rates achieved without degradation to system reliability are critical in discrediting the argument that current electrical infrastructure is incapable of reliably handling a larger renewable buildout.7 Bottom line: Rising summer temperatures and a gradual recovery in economic activity are likely to stimulate more coal-fired generation through the remainder of 2020. This should not discount the success of renewable resources in providing reliable service through the COVID-19 public health and economic crisis. In this context, Calvert strategies will continue to invest in renewable energy technologies, developers and utilities leading their integration.