Released March 23, 2021 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Bernadette Johnson, vice president of strategic analytics for Enverus (Austin, Texas), added her voice to others, including Industrial Info, who foresee a greener U.S. electricity supply. Exactly how green the electricity supply will get, and what that means for gas-fired generation, remains the subject of debate among prognosticators. But there is no debate over the rising role of renewable generation in the U.S. power supply.
Speaking at the analytics firm's Evolve virtual conference in late February, Johnson explored two scenarios -- "Stated Policies" and "Sustainable Development" -- in projecting market share for the U.S. electric fuel market. The "Stated Policies" scenario assumes a continuation of existing U.S. energy policies; the COVID-19 pandemic is controlled this year; the health of the U.S. economy, measured in gross domestic product, returns to pre-pandemic health this year; and energy demand returns to pre-pandemic levels by 2023.
Her other scenario, "Sustainable Development," envisions a surge in near-term investment in clean energy for next 10 years. In this case, carbon dioxide (CO2) emissions peaked in 2019. This case is driven by more aggressive U.S. governmental and regulatory actions to decarbonize the electric generation business.
In contrast to his predecessor, President Joe Biden has set aggressive goals to decarbonize the electricity business. On the campaign trail, he vowed to eliminate CO2 emissions from the power sector by 2035 on his way to making the U.S. economy a net-zero emitter of CO2 by 2050. The federal regulatory agencies responsible for enacting those policies have not, as yet, publicly released detailed plans to achieve those goals. Still, there appears to be little doubt that the electric generation business will be decarbonized faster under Biden than it would have under former President Donald Trump.
Click on the image at right to see Enverus' two scenarios for the U.S. electric fuel market mix.
Under both of Johnson's scenarios, coal's share of the electric fuel market is projected to decline steadily over the coming decades. From a share of 24% in 2019, coal's share of the electric fuel market is estimated to fall to 15%, 11% and 6% in 2025, 2030 and 2040, respectively, in the "Stated Policies" case. Under the more stringent "Sustainable Development" scenario, coal's share of the electric fuel market falls to about 4% in 2025, 2% in 2030, and zero in 2040.
Natural gas fares better in both scenarios. In the "Stated Policies" case, gas actually gains market share through all three time periods. But in the "Sustainable Development" case, it rises in the near term before declining in 2030 and 2040.
Nuclear power declines modestly over the next two decades in both scenarios.
But the real winner in both cases in renewable power. It's just a matter of how far and how fast its share of the electric fuel market rises.
In the "Stated Policies" scenario, renewables' share of the electric fuel market rises from 18% in 2019 to 25% in 2030, 31% in 2030, and 43% in 2030. Even faster growth is forecast in the "Sustainable Development" case, where renewables' share of the electric fuel market rises to 32% in 2025, 47% in 2030, and 75% in 2040.
Taking a closer look at which types of renewable energy will grow fastest in the two scenarios, Johnson told attendees at the virtual conference that wind power will gain some market share in both scenarios in 2025 and 2030, but decline modestly in both cases in 2040. Solar photovoltaic (PV) is the big winner in both scenarios going forward: compared to its 12% share in 2019, PV will double or better its market share 2025, and more than triple it by 2040.
Click on the image at right to see a chart of Enverus' projection of future market share of different renewable fuels over the next two decades.
Johnson said this will unfold in different ways in different regions of the country:
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Speaking at the analytics firm's Evolve virtual conference in late February, Johnson explored two scenarios -- "Stated Policies" and "Sustainable Development" -- in projecting market share for the U.S. electric fuel market. The "Stated Policies" scenario assumes a continuation of existing U.S. energy policies; the COVID-19 pandemic is controlled this year; the health of the U.S. economy, measured in gross domestic product, returns to pre-pandemic health this year; and energy demand returns to pre-pandemic levels by 2023.
Her other scenario, "Sustainable Development," envisions a surge in near-term investment in clean energy for next 10 years. In this case, carbon dioxide (CO2) emissions peaked in 2019. This case is driven by more aggressive U.S. governmental and regulatory actions to decarbonize the electric generation business.
In contrast to his predecessor, President Joe Biden has set aggressive goals to decarbonize the electricity business. On the campaign trail, he vowed to eliminate CO2 emissions from the power sector by 2035 on his way to making the U.S. economy a net-zero emitter of CO2 by 2050. The federal regulatory agencies responsible for enacting those policies have not, as yet, publicly released detailed plans to achieve those goals. Still, there appears to be little doubt that the electric generation business will be decarbonized faster under Biden than it would have under former President Donald Trump.
Under both of Johnson's scenarios, coal's share of the electric fuel market is projected to decline steadily over the coming decades. From a share of 24% in 2019, coal's share of the electric fuel market is estimated to fall to 15%, 11% and 6% in 2025, 2030 and 2040, respectively, in the "Stated Policies" case. Under the more stringent "Sustainable Development" scenario, coal's share of the electric fuel market falls to about 4% in 2025, 2% in 2030, and zero in 2040.
Natural gas fares better in both scenarios. In the "Stated Policies" case, gas actually gains market share through all three time periods. But in the "Sustainable Development" case, it rises in the near term before declining in 2030 and 2040.
Nuclear power declines modestly over the next two decades in both scenarios.
But the real winner in both cases in renewable power. It's just a matter of how far and how fast its share of the electric fuel market rises.
In the "Stated Policies" scenario, renewables' share of the electric fuel market rises from 18% in 2019 to 25% in 2030, 31% in 2030, and 43% in 2030. Even faster growth is forecast in the "Sustainable Development" case, where renewables' share of the electric fuel market rises to 32% in 2025, 47% in 2030, and 75% in 2040.
Taking a closer look at which types of renewable energy will grow fastest in the two scenarios, Johnson told attendees at the virtual conference that wind power will gain some market share in both scenarios in 2025 and 2030, but decline modestly in both cases in 2040. Solar photovoltaic (PV) is the big winner in both scenarios going forward: compared to its 12% share in 2019, PV will double or better its market share 2025, and more than triple it by 2040.
Johnson said this will unfold in different ways in different regions of the country:
- In the Texas market served by the Electric Reliability Council of Texas (ERCOT) (Austin, Texas), new renewable resources continue to soar. The state is expected to add approximately 1,800 megawatts (MW) of wind generation this year, bringing its nameplate wind generation capacity to just more than 27,000 MW. Solar generation will almost double in nameplate capacity: about 3,000 MW of new solar is expected to come online this year, joining the roughly 3,500 MW of existing capacity. The new renewable generation is expected to boost reserve margins to 15.5% this year and 27% next year, up from last year's 12.6%.
- The Midcontinent Independent System Operator (MISO) (Carmel, Indiana) market, which serves an estimated 42 million people in 15 Midwestern states and one Canadian province, plans to add as much as 2,000 MW of new wind generation this year. That will join the estimated 20,000 MW of wind generation already operating in that market. Johnson added that solar generation also is growing fast in the region, and may reach a total of 10,000 MW by the end of 2021.
- The Southwest Power Pool (SPP) (Little Rock, Arkansas) is expected to add between 3,000 and 5,000 MW of new wind generation this year to the estimated 28,000 MW of wind generation already operating in that market.
- There is no organized transmission market for the Western states, but Johnson said that battery energy storage and new solar generation will be the "big story" in 2021 and 2022 for the California Independent System Operator (Caiso) (Folsom, California). Johnson said she expects Caiso will add between 1,500 and 2,000 MW of battery energy storage this year alone. In terms of new generation, she projected the Golden State will add between 1,000 and 1,500 MW of new solar generation to its existing fleet of 11,000 MW. Wind generation is expected to grow nearly 10% this year, or about 500 MW, to its existing fleet of 5,500 MW in generation capacity. Due to last August's blackouts, the state has paused plans to retire gas-fired generation.
- Generation fuel types vary broadly worldwide, even within the U.S. regional transmission organizations (RTO) and independent system operators (ISO).
- Battery energy storage capacity has just recently started to ramp up aggressively, which will impact the CAISO and ERCOT market this year.
- Wind generation capacity has expanded significantly in the U.S. in the last 10 years, but solar now is now expected to take over in terms of percentage growth.
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
