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Released May 15, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Hundreds of U.S. power generation projects are scheduled to begin construction between January 2024 and December 2026, and the overwhelming majority of them are non-emitting renewable projects, such as solar, wind, and pumped storage hydropower. As such, developers appear not to be heeding the calls of utilities, reliability organizations and regional grid operators to add more dispatchable generation, such as gas-fired generation, in order to better balance resource portfolios that have become heavily oriented to renewables in recent years.
Industrial Info's Global Marketing Intelligence (GMI) platform is tracking 791 planned U.S. power generation projects with a medium or high probability of beginning construction according to their current project schedule. These projects have kickoff dates between January 2024 and December 2026. The total investment value (TIV) of these projects is $147 billion. Subscribers to Industrial Info's GMI Power Project Database can click here for a list of detailed project reports.
By fuel, these generation projects break down as follows:
On a project basis, solar generators account for 51% of all medium- and high-probability power projects, followed by gas (about 27%), wind (7%) and hydro (14%). Non-emitting power projects with a medium- or high-probability of starting construction according to their current construction schedule account for about 73% of all planned U.S. generation projects with a construction kickoff date between January 2024 and December 2026.
The enactment of the Inflation Reduction Act on 2022 (IRA) authorized hundreds of billions of dollars in loans and incentives to support the construction of non-emitting sources of electricity. Prior to enactment of that law, developers were highly focused on developing non-emitting generation; the law's incentives accelerated a trend that has been evident for years.
But more recently, electric reliability organizations, utilities and other market participants have called for rebalancing America's electric resource portfolios to include more dispatchable generation. In practice, this means natural gas-fired generation, though pumped storage hydropower could also be categorized as a dispatchable resource.
Last year, the state of Texas created a multibillion-dollar fund to support the construction, maintenance, modernization and operation of dispatchable generation. That law was passed in part because of Winter Storm Uri in February 2021, which devastated the state's electric and water infrastructure, typically because power plants were not adequately weatherized to operate in the below-average winter temperatures.
For more on that, see June 9, 2023, article - Texas Legislation Would Give $10 Billion Boost for New Dispatchable Generation.
Reliability organizations such as the North American Electric Reliability Corporation (NERC) (Atlanta, Georgia), grid operators like the Electric Resource Council of Texas (ERCOT) (Texas), and regional power organizations such as the Southwest Power Pool (SPP) (Little Rock, Arkansas) and the Midcontinent Independent System Operator (MISO) (Carmel, Indiana), have, at various times in recent years, warned that electric reliability could be at risk because of generation resource adequacy. Typically, these concerns have been issued before extreme heat or cold is predicted.
Last May, NERC issued its summer reliability assessment, which said that two-thirds of North America could be at risk of energy shortfalls during periods of extremely high electricity demand during the June-September 2023 period.
"While there are no high-risk areas in this year's assessment, the number of areas identified as being at elevated risk has increased," the reliability organization said. "The assessment finds that, while resources are adequate for normal summer peak demand, if summer temperatures spike, seven areas--the U.S. West, SPP and MISO, ERCOT, SERC Central, New England and Ontario--may face supply shortages during higher demand levels." For more on that, see May 19, 2023, article - NERC Warns of North American Energy Shortfall Risks This Summer.
Separately, in comments filed last summer, NERC and several electric grid operators, including PJM, SPP, ERCOT and MISO, criticized an early version of the Biden administration's proposed power plant emissions rules on electric reliability grounds. On August 8, 2023, the groups wrote to the U.S. Environmental Protection Agency (EPA) (Washington, D.C,.) that they were "concerned about the chilling impact of the proposed rules on investment required to retain and maintain existing units that are needed to provide key attributes and grid services before the compliance date required by the rule."
The grid managers continued: "As the penetration of renewable resources continues to increase, the grid will need to rely even more on generation capable of providing critical reliability attributes. With continued and potentially accelerated retirements of dispatchable generation, supply of these reliability attributes will dwindle to concerning levels." The groups added they were concerned "about a scenario in which ... needed technologies are not widely commercialized in time to balance out large amounts of retirements." For more on this, see August 11, 2023, article - Electricity Groups, Grid Operators and Unions Criticize EPA's Draft Rules on Greenhouse Gas Emissions.
ERCOT, the Texas grid operator, has issued voluntary emergency power conservation measures on several occasions in recent years. Typically, these calls came during the summer. The grid operator has cited extremely strong customer demand growth, hotter-than-normal temperatures, unplanned outages at power plants and delays in bringing on new generation as the reasons for the voluntary power alerts. For more on that, see May 11, 2023, article - Texans May Face 'Extreme' Power Conditions this Summer.
"It seems that the reliability organizations have been alerting the Power industry to the continued risks of an unbalanced power portfolio that is too heavily reliant on non-dispatchable generation like wind or solar," commented Britt Burt, Industrial Info's vice president of research for the Electric Power industry.
"Resource plans are the responsibility of utilities, overseen by state utility regulators," he continued. "Just as you can't turn around a huge cruise ship in a bath tub, neither can utilities abandon long-planned resource portfolios overnight."
"Utilities that have said they may need to delay the scheduled retirement of coal-fired generators for reliability purposes have been savaged by environmentalists," Burt said. "Those that announce plans to build new gas-fired generation also are criticized as contributing to global warming. No one wants the lights to go out. Too often, decisions are made in a crisis. To prevent a reliability crisis, we believe more new gas-fired generation needs to be built as soon as possible."
Burt pointed out that several utilities have revised their integrated resource plans (IRPs) to build more gas generation. Georgia regulators approved a plan from Georgia Power Company (Atlanta, Georgia) to construct up to 1,400 megawatts (MW) of new gas-fired generation as well as contract with a Florida power plant for up to 230 MW more in capacity and energy. For more on that, see April 24, 2024, article - Georgia Power Gets OK for New Resources to Meet Demand.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Industrial Info's Global Marketing Intelligence (GMI) platform is tracking 791 planned U.S. power generation projects with a medium or high probability of beginning construction according to their current project schedule. These projects have kickoff dates between January 2024 and December 2026. The total investment value (TIV) of these projects is $147 billion. Subscribers to Industrial Info's GMI Power Project Database can click here for a list of detailed project reports.
By fuel, these generation projects break down as follows:
- Solar: 379 projects valued at $83.8 billion
- Gas: 198 projects worth slightly more than $27 billion
- Wind: 53 projects with TIV of $24.5 billion, and
- Hydro, including pumped storage: 108 projects valued at about $9.8 billion
On a project basis, solar generators account for 51% of all medium- and high-probability power projects, followed by gas (about 27%), wind (7%) and hydro (14%). Non-emitting power projects with a medium- or high-probability of starting construction according to their current construction schedule account for about 73% of all planned U.S. generation projects with a construction kickoff date between January 2024 and December 2026.
The enactment of the Inflation Reduction Act on 2022 (IRA) authorized hundreds of billions of dollars in loans and incentives to support the construction of non-emitting sources of electricity. Prior to enactment of that law, developers were highly focused on developing non-emitting generation; the law's incentives accelerated a trend that has been evident for years.
But more recently, electric reliability organizations, utilities and other market participants have called for rebalancing America's electric resource portfolios to include more dispatchable generation. In practice, this means natural gas-fired generation, though pumped storage hydropower could also be categorized as a dispatchable resource.
Last year, the state of Texas created a multibillion-dollar fund to support the construction, maintenance, modernization and operation of dispatchable generation. That law was passed in part because of Winter Storm Uri in February 2021, which devastated the state's electric and water infrastructure, typically because power plants were not adequately weatherized to operate in the below-average winter temperatures.
For more on that, see June 9, 2023, article - Texas Legislation Would Give $10 Billion Boost for New Dispatchable Generation.
Reliability organizations such as the North American Electric Reliability Corporation (NERC) (Atlanta, Georgia), grid operators like the Electric Resource Council of Texas (ERCOT) (Texas), and regional power organizations such as the Southwest Power Pool (SPP) (Little Rock, Arkansas) and the Midcontinent Independent System Operator (MISO) (Carmel, Indiana), have, at various times in recent years, warned that electric reliability could be at risk because of generation resource adequacy. Typically, these concerns have been issued before extreme heat or cold is predicted.
Last May, NERC issued its summer reliability assessment, which said that two-thirds of North America could be at risk of energy shortfalls during periods of extremely high electricity demand during the June-September 2023 period.
"While there are no high-risk areas in this year's assessment, the number of areas identified as being at elevated risk has increased," the reliability organization said. "The assessment finds that, while resources are adequate for normal summer peak demand, if summer temperatures spike, seven areas--the U.S. West, SPP and MISO, ERCOT, SERC Central, New England and Ontario--may face supply shortages during higher demand levels." For more on that, see May 19, 2023, article - NERC Warns of North American Energy Shortfall Risks This Summer.
Separately, in comments filed last summer, NERC and several electric grid operators, including PJM, SPP, ERCOT and MISO, criticized an early version of the Biden administration's proposed power plant emissions rules on electric reliability grounds. On August 8, 2023, the groups wrote to the U.S. Environmental Protection Agency (EPA) (Washington, D.C,.) that they were "concerned about the chilling impact of the proposed rules on investment required to retain and maintain existing units that are needed to provide key attributes and grid services before the compliance date required by the rule."
The grid managers continued: "As the penetration of renewable resources continues to increase, the grid will need to rely even more on generation capable of providing critical reliability attributes. With continued and potentially accelerated retirements of dispatchable generation, supply of these reliability attributes will dwindle to concerning levels." The groups added they were concerned "about a scenario in which ... needed technologies are not widely commercialized in time to balance out large amounts of retirements." For more on this, see August 11, 2023, article - Electricity Groups, Grid Operators and Unions Criticize EPA's Draft Rules on Greenhouse Gas Emissions.
ERCOT, the Texas grid operator, has issued voluntary emergency power conservation measures on several occasions in recent years. Typically, these calls came during the summer. The grid operator has cited extremely strong customer demand growth, hotter-than-normal temperatures, unplanned outages at power plants and delays in bringing on new generation as the reasons for the voluntary power alerts. For more on that, see May 11, 2023, article - Texans May Face 'Extreme' Power Conditions this Summer.
"It seems that the reliability organizations have been alerting the Power industry to the continued risks of an unbalanced power portfolio that is too heavily reliant on non-dispatchable generation like wind or solar," commented Britt Burt, Industrial Info's vice president of research for the Electric Power industry.
"Resource plans are the responsibility of utilities, overseen by state utility regulators," he continued. "Just as you can't turn around a huge cruise ship in a bath tub, neither can utilities abandon long-planned resource portfolios overnight."
"Utilities that have said they may need to delay the scheduled retirement of coal-fired generators for reliability purposes have been savaged by environmentalists," Burt said. "Those that announce plans to build new gas-fired generation also are criticized as contributing to global warming. No one wants the lights to go out. Too often, decisions are made in a crisis. To prevent a reliability crisis, we believe more new gas-fired generation needs to be built as soon as possible."
Burt pointed out that several utilities have revised their integrated resource plans (IRPs) to build more gas generation. Georgia regulators approved a plan from Georgia Power Company (Atlanta, Georgia) to construct up to 1,400 megawatts (MW) of new gas-fired generation as well as contract with a Florida power plant for up to 230 MW more in capacity and energy. For more on that, see April 24, 2024, article - Georgia Power Gets OK for New Resources to Meet Demand.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
