Released July 23, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The drive for renewable energy in the U.S. and Canada seems to be firmly in place; however, this sector is still developing and can't provide a reliable source of baseload power at this time. What is the outlook for the power sector of the U.S. and Canada moving forward? Britt Burt, Industrial Info's vice president of research for the Power Industry, wrapped up IIR's three-day Mid-Year Market Outlook event.
At the start of the year, Industrial Info was tracking almost $151 billion active North American power projects that could potentially kick off this year. As the year has progressed, this has shifted down to about $100.2 billion in potential project starts, but Burt said the figure will more likely end up at about $62.8 billion.
The U.S. is in a cycle of coal-fired and nuclear retirements as new buildouts occur. Industrial Info has identified 194 gigawatts (GW) of power units that have retired in North America since 2011, mostly coal-fired plants, representing about 106 GW. Burt said, "I think that's going to continue with coal. Between now and 2025, we're tracking another 37 GW scheduled for retirement." From 2026 through 2030, another 21 GW of coal is expected to retire.
In regard to nuclear retirements, 2021 is expected to be record year in the U.S. About 7 GW of nuclear is expected to retire between now and the end of 2025.
Most of the baseload capacity lost has been replaced by natural gas, which experienced unprecedented buildouts a few years ago, although this has slowed recently, and the buildout now has shifted toward wind and solar. One of the hotspots for projects that have already kicked off this year is the Southwest market region, which includes Texas and Oklahoma, where wind and solar are major players.
Solar is outpacing everything else in regard to new-build projects. Burt said about 16 GW of solar power is expected to come online this year in North America and 18 GW in 2022. Drivers of solar include national, state and company goals to decarbonize, and federal tax incentives. Solar also provides a promising future for Power-to-X project opportunities.
Wind power is also strong. Burt said Industrial Info is tracking about $6 billion in North American wind projects under construction, with about $35 billion earmarked for kickoff this year and next. Most of this has been onshore capacity, but potential offshore projects are seeing some movement, especially with the Biden administration's goal to establish 30 GW of offshore wind by 2030. However, Burt pointed out that offshore wind projects often take several years to develop, "so we'll see how this plays out." Like solar, wind has the potential to supply Power-to-X projects and benefits from federal tax subsidies and decarbonization goals.
Coupled with renewable energy is battery energy storage systems to help provide more reliable power from intermittent sources such as wind and solar. Burt said this sector faces some challenges. Most of these projects are in the form of lithium-ion batteries, and several other sectors, including electric vehicles and electronics, will be competing for the metal. Texas and California lead in project development for this technology.
Natural gas has been responsible for supplying most of the new baseload power seen in the wake of coal retirements. Leading states for natural gas development include those in high-gas areas, such as Pennsylvania and Ohio. Hydrogen also could begin playing a role at these plants. Many of the major turbine suppliers have models that are capable of running on 100% hydrogen. Mitsubishi Power is the major equipment supplier to four power projects in the U.S. that will use initially use a mix of 30% hydrogen and 70% natural gas, transitioning to 100% hydrogen through 2045.
Nuclear power could see a resurgence in the form of small modular reactors (SMRs). Burt said, "I think nuclear has to play larger role in moving toward decarbonization. I don't see it happening in the form of the big, conventional nuclear projects ... But I think there's potential for small modular reactors."
"Timewise, I think the earliest any of those would kick off would be the 2024-2025 timeframe, maybe a little beyond that," he said.
Industrial Energy Producers (IEPs)
Also closely tracked by Industrial Info are IEP projects in other industries, the prime driver of which is natural gas-fired cogeneration units. Industrial Info is tracking about $4 billion of these cogen projects. Renewable sources also are playing an increasingly prominent role in this sector. Leading the pack by industry is Industrial Manufacturing, largely to provide power to energy-intensive data centers (often in the form of renewable power).
Transmission & Distribution (T&D)
Burt said growth is expected to continue in the T&D sector, especially as new renewable energy plants (often sited away from existing infrastructure) are constructed. Texas leads North America in this sector, with more than $4.4 billion in projects expected to kick off in 2021 and 2022.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
At the start of the year, Industrial Info was tracking almost $151 billion active North American power projects that could potentially kick off this year. As the year has progressed, this has shifted down to about $100.2 billion in potential project starts, but Burt said the figure will more likely end up at about $62.8 billion.
The U.S. is in a cycle of coal-fired and nuclear retirements as new buildouts occur. Industrial Info has identified 194 gigawatts (GW) of power units that have retired in North America since 2011, mostly coal-fired plants, representing about 106 GW. Burt said, "I think that's going to continue with coal. Between now and 2025, we're tracking another 37 GW scheduled for retirement." From 2026 through 2030, another 21 GW of coal is expected to retire.
In regard to nuclear retirements, 2021 is expected to be record year in the U.S. About 7 GW of nuclear is expected to retire between now and the end of 2025.
Most of the baseload capacity lost has been replaced by natural gas, which experienced unprecedented buildouts a few years ago, although this has slowed recently, and the buildout now has shifted toward wind and solar. One of the hotspots for projects that have already kicked off this year is the Southwest market region, which includes Texas and Oklahoma, where wind and solar are major players.
Solar is outpacing everything else in regard to new-build projects. Burt said about 16 GW of solar power is expected to come online this year in North America and 18 GW in 2022. Drivers of solar include national, state and company goals to decarbonize, and federal tax incentives. Solar also provides a promising future for Power-to-X project opportunities.
Wind power is also strong. Burt said Industrial Info is tracking about $6 billion in North American wind projects under construction, with about $35 billion earmarked for kickoff this year and next. Most of this has been onshore capacity, but potential offshore projects are seeing some movement, especially with the Biden administration's goal to establish 30 GW of offshore wind by 2030. However, Burt pointed out that offshore wind projects often take several years to develop, "so we'll see how this plays out." Like solar, wind has the potential to supply Power-to-X projects and benefits from federal tax subsidies and decarbonization goals.
Coupled with renewable energy is battery energy storage systems to help provide more reliable power from intermittent sources such as wind and solar. Burt said this sector faces some challenges. Most of these projects are in the form of lithium-ion batteries, and several other sectors, including electric vehicles and electronics, will be competing for the metal. Texas and California lead in project development for this technology.
Natural gas has been responsible for supplying most of the new baseload power seen in the wake of coal retirements. Leading states for natural gas development include those in high-gas areas, such as Pennsylvania and Ohio. Hydrogen also could begin playing a role at these plants. Many of the major turbine suppliers have models that are capable of running on 100% hydrogen. Mitsubishi Power is the major equipment supplier to four power projects in the U.S. that will use initially use a mix of 30% hydrogen and 70% natural gas, transitioning to 100% hydrogen through 2045.
Nuclear power could see a resurgence in the form of small modular reactors (SMRs). Burt said, "I think nuclear has to play larger role in moving toward decarbonization. I don't see it happening in the form of the big, conventional nuclear projects ... But I think there's potential for small modular reactors."
"Timewise, I think the earliest any of those would kick off would be the 2024-2025 timeframe, maybe a little beyond that," he said.
Industrial Energy Producers (IEPs)
Also closely tracked by Industrial Info are IEP projects in other industries, the prime driver of which is natural gas-fired cogeneration units. Industrial Info is tracking about $4 billion of these cogen projects. Renewable sources also are playing an increasingly prominent role in this sector. Leading the pack by industry is Industrial Manufacturing, largely to provide power to energy-intensive data centers (often in the form of renewable power).
Transmission & Distribution (T&D)
Burt said growth is expected to continue in the T&D sector, especially as new renewable energy plants (often sited away from existing infrastructure) are constructed. Texas leads North America in this sector, with more than $4.4 billion in projects expected to kick off in 2021 and 2022.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
