US renewable energy will overtake coal and nuclear by year’s end

Renewables are on track to generate more power than coal in the US this year. But the question is whether they can grow fast enough to meet the country’s climate goals.

Supply chain constraints and trade disputes have slowed wind and solar installations, raising questions about US ability to meet emissions cuts required by the Inflation Reduction Act. Biden administration banks on landmark climate law that reduces emissions by 40% above 2005 levels by 2030.

Many analysts think the US will eventually shrug off the slowdown thanks to the Inflation Reduction Act’s $369 billion in investments in clean energy. But it may take some time for the impact of the law to be felt. Tax guidelines need to be finalized before developers start earmarking money for new facilities and businesses now face headwinds in the form of higher interest rates and the looming threat of a recession.

The Inflation Reduction Act’s emission reductions hinge on the country’s ability to at least double its renewable installation rate from the record levels seen in 2020 and 2021, said John Larsen, a partner at the Rhodium Group.

“Every year we don’t add capacity beyond the record it’s lost ground,” he said. “It will be much more difficult to fix over time. There is a point where we don’t get the results we expected because we skipped the first years of the transition”.

For now, US renewable production is on the rise. Wind and solar generation increased 18% through Nov. 19. 20 over the same period last year and grew 58% over 2019, according to the US Energy Information Administration. The government’s energy tracker predicts that wind, solar and hydro will generate 22 percent of US electricity by the end of this year. That’s more than coal at 20 percent and nuclear at 19 percent.

Renewable energy generation also surpassed coal in 2020, although that year saw a decline in power generation across the board due to economic shutdowns associated with the Covid-19 pandemic.

The growth of wind and solar energy must continue at a breakneck pace to meet US climate goals. Princeton University researchers estimate that the country needs to install about 50 gigawatts of wind and solar energy annually between 2022 and 2024, or about double the 25 GW the United States installed each year in 2020 and 2021.

During the first nine months of this year, the United States installed 11 GW of wind and solar energy (Climate thread, Nov. 3).

Steve Cicala, an economics professor at Tufts University who studies energy markets, said he was optimistic that the Inflation Reduction Act would eventually spark a boom in renewables. The law provides economic certainty for developers by providing incentives over 10 years. This is an improvement over the past, where recurring subsidies had to be extended by Congress every two years.

However, there are limits to the law’s impacts, he said. Transmission lines must be stretched to facilitate this growth. Grid operators face a backlog of projects attempting to connect to the electricity system. Lawrence Berkeley National Laboratory estimates that around 930 GW of wind, solar and battery projects are waiting to connect to the grid. By comparison, the total capacity of the US energy system today is about 1,150 GW.

“The important thing is that it continues to grow and we get more installed capacity and production from renewable sources,” said Cicala. “The important reason is that it will mean less generation from fossil resources.”

The EIA believes gas will drop from 38% of US power generation this year to 36% next year, while coal will drop from 20% to 19%. The drop is due to a mix of a weaker economy, a cooler summer and the growth of renewable energy, which is expected to grow to 24% of US power generation in 2023.

However, supply chain concerns have also prompted utilities to delay coal recalls, pending the construction of new solar and wind farms. IHS Markit estimates that 13 GW of planned coal recalls have been delayed, most by a couple of years. EIA forecasts over 8 GW of coal recalls for 2023.

The question for the climate is how well those coal-fired plants actually work. If they are used sparingly to meet increases in electricity demand, their impact on emissions will be limited, Larsen said.

“But of course, if coal-fired plants work harder, [it] It’s obviously bad news for the climate because coal is still the biggest source of emissions in the energy sector,” he said.

Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2022. E&E News provides essential news for energy and environment professionals.

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