U.S. Tops 200 GW of Renewables, but Deployment Slows
Credit to Author: Darrell Proctor| Date: Tue, 15 Feb 2022 13:32:14 +0000
A report from a trade group representing the U.S. renewable energy industry says the nation now has more than 200 GW of operating utility-scale generation capacity, but the pace of growth has slowed as projects have been delayed due to regulatory and equipment supply issues, among other factors.
The “Clean Power Quarterly 2021 Q4 Market Report,” released Feb. 15 by the American Clean Power Association (ACP), said clean energy installations declined by 3% in 2021, after a record year for installations in 2020. More than 11.4 GW of new projects that were scheduled to come online last year were pushed to this year, or to 2023, “due to trade policies and lack of regulatory certainly impacting the availability of solar panels coming into the country,” the ACP said in a news release. The group policy uncertainty impacted the wind sector, “including the expiration of tax credits for wind projects.”
Heather Zichal, CEO of ACP, said, “Surpassing over 200 gigawatts of clean energy is a significant milestone for the United States and shows that we can achieve even more with strong public policy support for the industry. Although the U.S. has reached this incredible achievement, more needs to be done, at a faster pace, to reach the climate goals and targets our country needs to achieve. We urge Congress to take action to create a clean energy future that will help create more good-paying American jobs and combat the climate crisis.”
The group said its research shows the pace of installations for renewable energy projects must have a major increase to reach the Biden administration’s goal of a carbon-free power generation sector by 2035. The ACP report said 27.7 GW of wind, solar, and energy storage was installed last year, the second-largest annual total on record, but noted “it is only 45% of what’s required to stay on track for an emissions-free power sector.”
2021 New Capacity Additions
The 27,723 MW of new utility-scale renewable energy installed last year according to ACP includes 10,520 MW in the fourth quarter (Q4) of 2021. ACP said last year’s installations represent $39 billion in investment. Wind power capacity installations for 2021 totaled 12,747 MW, with 5,409 MW brought online in Q4. The solar sector overall installed 12,364 MW for the year, including 3,937 MW added in the last three months of 2021.
Battery storage installations totaled 2,599 MW in 2021, more than double the just more than 1,000 MW installed in 2020. ACP said 1,173 MW of battery storage projects were brought online in Q4, the first quarter ever to pass 1 gigawatt of new installations.
The report says more than 1,000 clean energy projects are currently under development across the U.S., accounting for 120,171 MW of new generation capacity. The group said that figure includes 37,802 MW under construction and 82,369 MW in advanced development.
The top five states for new installation additions in 2021 include Texas (7,352 MW), California (2,697 MW), Oklahoma (1,543 MW), Florida (1,382 MW), and New Mexico (1,374 MW). The top five states for project development—ranked by the percent of the nation’s total projects under construction or advanced development—are Texas (17%), California (11%), New York (7%), Indiana (5%), and Virginia (5%).
Issues Impacting Installations
The ACP report noted the issues impacting renewable energy deployment, which are some of the same problems faced by other industries in the U.S. and worldwide. That includes sourcing of equipment.
“Supply chain issues are having a significant impact on deployment rates around the world, and especially here in the U.S.,” said Philipp Klemm, CEO of Ideematec, a solar power equipment manufacturer. Klemm told POWER that reductions in Chinese solar module exports to North America “are adding additional strain on our customers’ project economics. While the entire industry was affected, the residential and commercial sectors offer higher margins and are able to compensate for some of the resulting price increases more easily. Large utility-scale projects operate on slimmer profit levels, and include higher risk profiles for all participants.”
Utilities developing renewable energy have in many cases been driven by consumer demand for clean energy, and their own efforts to decarbonize their operations and the power grid. They’ve also adopted new technologies designed to make the grid more secure and resilient, which could support additional renewable energy.
Ty Roberts, a vice president in the Networked Solutions division at Itron, a company that provides technology solutions for utilities, recently told POWER, “Renewable energy adoption will create new opportunities to safeguard the grid. As electrical utilities begin to make renewable energy a larger part of their overall energy mix/portfolio, they will begin to embed generation and storage capabilities closer to where the energy load is being managed to improve resiliency. By ‘sectionalizing’ the grid in this way, they will be better able to address and isolate critical issues on a localized level (i.e. cyberattacks, outages, etc.), allowing the broader network to continue operating. This, too, will drive increased adoption of distributed intelligence to enable real-time low-voltage grid management capabilities.”
PPAs and Market Trends
The business sector has helped drive renewable energy development, as corporations set their own carbon-neutral targets. The ACP report says “2021 was a record year for clean energy procurement, with 28 GW of power purchase agreements (PPAs) signed in 2021,” noting that figure “exceeds the electricity demand of the entire U.S. federal government.” The group said corporate buyers of clean energy “surpassed utilities in clean energy procurement for the first time, announcing deals totaling over 14 GW in 2021.” It said utilities signed contracts for more than 10 GW of wind, solar, and battery storage.
The group said 1,871 MW of PPAs were signed by corporate customers during Q4, led by Pfizer with an announced 310 MW of offtake. Other leaders were Meta Platforms (Facebook) with 285 MW, and PepsiCo with 72.5 MW.
The report says utilities made up 35% of the announced PPA capacity during Q4, with 19 utilities signing contracts representing total capacity of 1,994 MW. The leading utilities in Q4 PPA announcements were Public Service Co. of Colorado (350 MW), a subsidiary of Xcel Energy; Entergy Louisiana (250 MW); and Consumers Energy (225 MW). Solar power generation capacity accounted for more than 70% of the new PPA announcements.
The group said project economics have been impacted due to supply chain constraints, commodity price increases, expiring tax credits, and trade barriers, with the report noting solar PPA prices increased 5.7% and wind prices increased 6.1%. “According to market data year-over-year, the average overall PPA price increased by 15.7%,” the report says, while adding that overall, “Clean energy technology has improved dramatically over the past decade with solar costs down 90% since 2009 and wind costs down 70%.”
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).
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