Due to recent policy developments and rising costs of fossil fuels, especially natural gas, 62% of U.S. electricity will come from renewables by 2040, according to research firm S&P’s Q2 2022 briefing.
Analysts at Standard & Poor’s said a few days ago that although natural gas prices are rising rapidly, coal-fired power generation will gain some short-term benefits, but by 2030, the majority of new power generation in the United States will come from wind power.
Steve Piper, director of energy research at S&P, pointed out that the battery energy storage market, while growing, is not yet in a rapid development stage. It remains to be seen which emerging generation sources will benefit the most from the recently passed Inflation Reduction Act.
Piper said the Reducing Inflation Act could have enormous potential to drive clean energy deployment, and the U.S. is already on track to dramatically accelerate the energy transition.
Piper said the Reducing Inflation Act could have enormous potential to drive clean energy deployment, and the U.S. is already on track to dramatically accelerate the energy transition.
It is projected that by 2023, 45% of the electricity in the United States will come from renewable energy sources, and 62% by 2040. According to the company’s forecast last year, 46% of the U.S.’s electricity will come from renewable energy by 2040.
“We’re going to explore why these numbers are conservative, and there are a number of reasons,” Piper said.
Piper said that the company’s original forecast did not take into account the newly passed Inflation Reduction Act, so its forecast is mainly influenced by two factors: increasing state-level clean energy targets and rising natural gas prices , thus increasing the demand for clean energy.
But wind and photovoltaics aren’t the only renewables benefiting from rising gas costs, and coal-fired power generation is also set to pick up slightly, at least in the short term.
Piper said, “This will keep coal-fired power generation growing in the short term, but in the longer term, as the next wave of decommissioning begins, coal-fired power generation will decline. We forecast growing renewable power generation. It will essentially replace coal and natural gas power generation by 2030.”
He noted that while the installed capacity of battery energy storage is also growing, it is not at the same rate as wind and photovoltaics. According to the company’s forecast, the United States will deploy an additional 33GW of battery storage projects by 2040. Although plans to deploy 38GW of energy storage projects have been announced, Katherine Nelson, senior energy research analyst at S&P, believes that these energy storage projects are not all deployed and operational.
However, Nelson noted that the Inflation Reduction Act, which creates investment tax credits for independently deploying energy storage projects, could change that. That could further accelerate the deployment of all forms of green energy, Piper said, as the provisions could continue to provide tax credits for wind and photovoltaic systems until the U.S. achieves its goal of reducing carbon emissions by more than 75 percent.
Piper said new tax credits for carbon capture, green hydrogen, geothermal power facilities and nuclear power plants could also incentivize these industries. He said it will take some time to measure exactly what impact these resources will have on the deployment of clean energy.
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Post time: Aug-26-2022