Renewables: Making Strides to Play Larger Role in Future Power Demand

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Researched by Industrial Info Resources (Sugar Land, Texas)--For 2009, there is currently 32,000 megawatts (MW) of renewable energy scheduled to begin construction in the United States. More than 9,000 MW of renewable energy sources are currently under construction in the U.S., and more than half of the capacity will be online before the end of January 2009. This includes projects to add new capacity from wind, hydroelectric, solar, landfill gas and other renewable energy sources.

No country has added the volume of new wind generation that the United States has added during the past two years. The demand drivers for growth in the wind industry remain strong; however, the credit crisis could cause a downturn in activity during 2009. On a positive note, Congress recently extended the Renewable Production Tax Credit through 2009. Added to this tax incentive is the fact that more than 30 states have enacted renewable portfolio standards that will drive investment in new renewable energy projects. Of course, the constant concerns over climate change, specifically global warming, have helped create a favorable environment for the development of new renewable energy projects. On the other hand, the development of new wind capacity has been somewhat constrained in some regions of the country because of inadequate transmission infrastructure.

Beyond 2008, an additional 133,000 MW of renewable energy has been proposed in the United States. This includes activity that is anticipated to kick off construction between 2009 and 2014. In this sector of the industry, considerable project fallout can be expected as time moves forward. Difficulty in securing financing, permitting hurdles and not-in-my-backyard actions are expected to lead to the delay or cancellation of a number of these projects. Importantly, many of these projects are also competing with one or more similar projects for a predetermined amount of capacity to be bought by a utility or other entity. Under this scenario, a limited amount of capacity is selected to move forward, while the projects not chosen are canceled or delayed until the next opportunity.

By far, wind leads all other renewable energy sources in terms of the amount of capacity scheduled for kickoff over the next six years, with 89,000 MW proposed. There is 24,000 MW of new hydroelectric power that is proposed to begin construction between 2009 and 2014. This includes expansions at existing stations and new hydroelectric power stations. Additionally, more than 7,000 MW of new solar capacity is proposed to start construction during this time.

For a detailed forecast and analysis of project spending in the renewables generation sector see Industrial Info's recently released 2009 Power Industry Outlook.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.