Alternative energy
The growing demand for renewable energy to meet state and utility goals is driving the rapid expansion in the U.S. wind power market. The sector emerged as the top provider of new power generation capacity in 2019, adding about 9.1 gigawatts of large-scale projects.
States and utilities across the U.S. are expanding electric vehicle (EV) charging infrastructure to overcome barriers to transportation electrification. The demand for fast charging in states with zero-emission vehicle goals, such as California, New York, and New Jersey, have heightened the need for reliable access to a wider network of stations.
Recently, state regulators have stepped up efforts to value distributed energy resources (DERs) more accurately while looking for ways to better reflect the costs they impose on the grid. Among recent actions, New York adopted a mechanism to move the market towards more cost-reflective rates, while California decided to include avoided transmission costs in the valuation, and Connecticut unveiled a study on quantifying the benefits of these resources.
The offshore wind industry continues to progress in the U.S. with East Coast states proceeding with new solicitations to procure capacity to meet their ambitious goals. New York and New Jersey are seeking to add nearly five gigawatts alongside offshore port infrastructure. Massachusetts is considering a bundled solicitation for generation and transmission in its next round of procurement. The industry’s growth has prompted federal regulators to examine whether existing frameworks in regional transmission organizations can accommodate offshore wind integration.
The debate over ratepayer subsidies for struggling nuclear power plants has resurfaced, following a racketeering investigation related to a controversial Ohio law, which created a $1 billion bailout for FirstEnergy Corp. last year. The economic troubles of the embroiled industry come to the fore even as states such as New Jersey and Illinois evaluate plans to opt out of the regional capacity market in response to reforms that expanded the minimum offer price rule to subsidized resources.
Policy support for electric vehicles (EVs) continues to grow across U.S. states as transportation electrification is a primary component of regulators’ strategies to meet clean energy and emissions reduction targets. Recent initiatives range from California’s electric truck mandate to Nevada’s vehicle emission standards to New Jersey’s EV ecosystem proposal.
As states continue to reexamine net metering programs in the evolving distributed solar landscape, the industry faces a new challenge: a petition asking federal regulators to exercise jurisdiction over these state-administered programs that compensate behind-the-meter generation for grid-exported energy.
In a move commended by offshore wind advocates, federal regulators released a much-awaited environmental analysis of the $2.8 billion Vineyard Wind project, which would be the first U.S. large-scale offshore wind project, and other facilities planned along the East Coast. The review is a step forward in the project’s permitting process and critical for the future offshore wind industry as it braces for challenges from the effects of the COVID-19 pandemic and prolonged permitting timelines.
A handful of U.S. states have taken steps to provide relief for the solar industry that has been facing uncertainties in light of the COVID-19 pandemic. Measures to address the ensuing challenges range from expanding incentive programs, extending project deadlines, and expediting new projects.
In just the last three months, almost a dozen states have advanced measures to ramp up support for electric vehicles (EVs), reflecting the important role of transportation electrification in achieving clean energy goals. However, transportation electrification, similar to other clean energy sectors, faces uncertainty due to the COVID-19 pandemic and the rollback of federal fuel economy standards.
Offshore wind energy, which is key to realize the clean energy transition in several East Coast states, is faced with tough challenges as the COVID-19 pandemic disrupts the global supply chain, affecting project timelines. Delays have the potential to threaten power purchase contracts and federal tax credits that are crucial for project economics.
Utility-scale solar is growing at a remarkable pace driven by declining costs, state clean energy commitments, retirement of fossil-fueled generation, and utility decarbonization goals. The industry is poised to add about 13.5 gigawatts of new projects this year, outpacing the previous annual record of 8 GW set in 2016, according to the U.S. Energy Information Administration.