Released January 24, 2022 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Rising electricity-generating capacity from renewable energy in the U.S. will result in less generation from power plants fed by fossil fuels over the next two years, according to the U.S. Energy Information Administration's (EIA) latest Short Term Energy Outlook (STEO). But between coal and natural gas, at least natural gas appears to have a sturdy future, according to Industrial Info's chief power expert.
"The share of U.S. electric power generation produced by natural gas averaged 37% in 2021, and we expect it will average 35% in 2022 and 34% in 2023," according to the STEO. "Our forecast for the natural gas share as a generation fuel declines primarily as a result of increased generation from new renewable energy generating capacity."
The report continues: "Coal's average generation share rose to 23% in 2021 as a result of higher natural gas prices, but we expect it to decline slightly over the next two years, averaging near 22% in 2022 and 2023."
The EIA said it expects natural gas prices will remain relatively high compared with past years, keeping coal consumption in the electric power sector above 2020 levels but below 2021 levels.
The decline in natural gas-fired generation "is especially pronounced in Texas, where a large amount of solar and wind capacity is scheduled to come online," according to the STEO, which added the forecasted decline in coal generation is largest in the Northeast and western regions.
Meanwhile, "we expect the share of generation from renewable sources will increase from 20% in 2021 to 23% in 2022 and to 24% in 2023. We expect most of the increase in renewables generation will come from new solar and wind capacity expansions in the electric power sector."
Growth in wind capacity will begin to moderate, but growth in solar capacity will remain strong, according to the EIA forecast.
In 2022, additions of utility-scale solar capacity will exceed wind additions for the first time, the EIA said, adding, "We expect that 21 GW of solar photovoltaic (PV) capacity will be added by the electric power sector in 2022. We forecast an additional 25 GW for 2023."
Wind capacity in the electric power sector is forecast to grow by 7 GW in 2022 and by an additional 4 GW in 2023. This growth marks a decline from the record of 17 GW added in 2021, the EIA said, which attributed the slowdown partly to the phasedown of the production tax credit (PTC) and supply-chain issues.
Industrial Info is tracking more than 1,100 renewable energy projects in the U.S., worth $168 billion, that are planned for completion in 2022 through 2023. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a list of detailed project reports.
Click on the image at right for a chart showing planned U.S. renewable power project completions for 2022-2023 by market region.
Britt Burt, Industrial Info's vice president of research for the Power Industry, commented, "No doubt we see the retirement of coal continuing to move forward. Since 2012 there has been over 107 gigawatts (GW) of coal-fired capacity retired. We are tracking an additional 37 gigawatts of coal-fired capacity scheduled for retirement."
He continued: "During that same time period of 2022 to 2030, Industrial Info is tracking over 200 gigawatts of solar and wind capacity scheduled for construction starts, with more to come."
"We are tracking natural-gas fired generation scheduled for retirement as well, but there is still over 64 gigawatts of natural gas-fired capacity that has the potential to start construction for the remainder of this decade," Burt added. "This has the potential to increase unless battery storage to support renewable energy is built in a rapid fashion. Another constraint to the buildout of renewable energy is the lack of transmission infrastructure to support it."
The EIA said preliminary data indicate that operators plan to add 5 GW of battery storage capacity in 2022 and 5 GW in 2023, annual increases of 84% in 2022 and 47% in 2023. Most planned battery storage additions will be paired with solar capacity. Industrial Info is tracking nearly $17.3 billion worth of capital U.S. battery storage system projects that are planned for completion in 2022 through 2023. Subscribers can click here for a list of detailed project reports.
Transmission Challenges
During Industrial Info's 2022 U.S. & Canada Market Outlook webinar last week, Burt said the U.S. power transmission system will need a massive investment to keep up with the energy transition and the move toward renewables-fueled electrification.
"Some say by 2035, there needs to be an investment of $360 billion to upgrade our transmission grid," Burt said. "While I'm not tracking that yet, I can tell you we are tracking a number of projects to support the renewable energy sector. We are seeing reconfigurations of the grid to support areas where we see coal plant retirements, and more renewable energy built...areas that are dependent on natural gas affect the grid as well."
However, "Much of the grid is 40 years old or older (and) most of the transformers are 25 years old or older," Burt continued. "Not only is there a need for expansion, but there is a need to modernize the grid. But if I look at the 188,000 miles of transmission lines that are in the U.S., only 13,000 miles of those have come on line since 2013. And we only have about 18,000 miles in the queue to be built between now and 2031. But to support the renewable energy that needs to be built, our grid needs to double, and we are a long way from that. I believe that will present a challenge to our plans to decarbonize by 2035 as well."
Subscribers can click here for a list of capital U.S. transmission and distribution projects that are planned for completion in 2022 through 2023.
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.
"The share of U.S. electric power generation produced by natural gas averaged 37% in 2021, and we expect it will average 35% in 2022 and 34% in 2023," according to the STEO. "Our forecast for the natural gas share as a generation fuel declines primarily as a result of increased generation from new renewable energy generating capacity."
The report continues: "Coal's average generation share rose to 23% in 2021 as a result of higher natural gas prices, but we expect it to decline slightly over the next two years, averaging near 22% in 2022 and 2023."
The EIA said it expects natural gas prices will remain relatively high compared with past years, keeping coal consumption in the electric power sector above 2020 levels but below 2021 levels.
The decline in natural gas-fired generation "is especially pronounced in Texas, where a large amount of solar and wind capacity is scheduled to come online," according to the STEO, which added the forecasted decline in coal generation is largest in the Northeast and western regions.
Meanwhile, "we expect the share of generation from renewable sources will increase from 20% in 2021 to 23% in 2022 and to 24% in 2023. We expect most of the increase in renewables generation will come from new solar and wind capacity expansions in the electric power sector."
Growth in wind capacity will begin to moderate, but growth in solar capacity will remain strong, according to the EIA forecast.
In 2022, additions of utility-scale solar capacity will exceed wind additions for the first time, the EIA said, adding, "We expect that 21 GW of solar photovoltaic (PV) capacity will be added by the electric power sector in 2022. We forecast an additional 25 GW for 2023."
Wind capacity in the electric power sector is forecast to grow by 7 GW in 2022 and by an additional 4 GW in 2023. This growth marks a decline from the record of 17 GW added in 2021, the EIA said, which attributed the slowdown partly to the phasedown of the production tax credit (PTC) and supply-chain issues.
Industrial Info is tracking more than 1,100 renewable energy projects in the U.S., worth $168 billion, that are planned for completion in 2022 through 2023. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a list of detailed project reports.
Britt Burt, Industrial Info's vice president of research for the Power Industry, commented, "No doubt we see the retirement of coal continuing to move forward. Since 2012 there has been over 107 gigawatts (GW) of coal-fired capacity retired. We are tracking an additional 37 gigawatts of coal-fired capacity scheduled for retirement."
He continued: "During that same time period of 2022 to 2030, Industrial Info is tracking over 200 gigawatts of solar and wind capacity scheduled for construction starts, with more to come."
"We are tracking natural-gas fired generation scheduled for retirement as well, but there is still over 64 gigawatts of natural gas-fired capacity that has the potential to start construction for the remainder of this decade," Burt added. "This has the potential to increase unless battery storage to support renewable energy is built in a rapid fashion. Another constraint to the buildout of renewable energy is the lack of transmission infrastructure to support it."
The EIA said preliminary data indicate that operators plan to add 5 GW of battery storage capacity in 2022 and 5 GW in 2023, annual increases of 84% in 2022 and 47% in 2023. Most planned battery storage additions will be paired with solar capacity. Industrial Info is tracking nearly $17.3 billion worth of capital U.S. battery storage system projects that are planned for completion in 2022 through 2023. Subscribers can click here for a list of detailed project reports.
Transmission Challenges
During Industrial Info's 2022 U.S. & Canada Market Outlook webinar last week, Burt said the U.S. power transmission system will need a massive investment to keep up with the energy transition and the move toward renewables-fueled electrification.
"Some say by 2035, there needs to be an investment of $360 billion to upgrade our transmission grid," Burt said. "While I'm not tracking that yet, I can tell you we are tracking a number of projects to support the renewable energy sector. We are seeing reconfigurations of the grid to support areas where we see coal plant retirements, and more renewable energy built...areas that are dependent on natural gas affect the grid as well."
However, "Much of the grid is 40 years old or older (and) most of the transformers are 25 years old or older," Burt continued. "Not only is there a need for expansion, but there is a need to modernize the grid. But if I look at the 188,000 miles of transmission lines that are in the U.S., only 13,000 miles of those have come on line since 2013. And we only have about 18,000 miles in the queue to be built between now and 2031. But to support the renewable energy that needs to be built, our grid needs to double, and we are a long way from that. I believe that will present a challenge to our plans to decarbonize by 2035 as well."
Subscribers can click here for a list of capital U.S. transmission and distribution projects that are planned for completion in 2022 through 2023.
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.
