FirmlyThis week renewable energies have come under the spotlight. Some conservatives have tried to pin the Texas blackouts , while industry analysts and environmentalists point out problems with during the snow storm as an argument for more and not less renewable energy.
With the tip of the finger, the market offers its own answers. The US added a record amount of wind and solar energy last yearThis has crippled the economy, according to figures released Thursday by BloombergNEF and the Business Council for Sustainable Energy.
The installations of wind and solar energy increased by 61% compared to the previous year, and in 2020 33.6 gigawatts were fed into the grid. That’s enough energy to supply around 11 million households with electricity for a year, and almost 50% more than the previous record in 2016.
Renewables “had a pretty amazing year,” Ethan Zindler, America director at BloombergNEF, told reporters. “The sheer magnitude of the accomplishment is quite remarkable.”
The increase in clean performance associated with aZindler noted that the U.S. is temporarily on track to meet the goals it committed to under the 2016 Paris Agreement on Climate Change.
At the same time, developers continue to build natural gas plants, albeit at a much lower rate. Filings for approval show that natural gas facilities worth 38 gigawatts, or slightly more than the total amount of renewable energy added in 2020, could be operational in the next five years.
However, given historical trends, it is likely that “many will be canceled and removed before they are turned on,” according to BloombergNEF.
Hurry to secure low prices
Part of the increase in renewable energies can be explained by the long construction cycles for energy projects. The record number of developers started clean power projects in 2019 to claim a solar tax credit that was due to expire in 2020. Congress has since extended the credit to 2022.
Another key factor is falling prices for large renewable energy systems, which, according to a Lazard analysis last year, are the cheapest source of new electricity even without subsidies. Companies are snapping up this cheap electricity, and companies’ electricity purchase agreements also hit a record high in 2020.
There is great interest in clean electricity. According to Abigail Hopper, CEO of the Solar Energy Industries Association, around two-thirds of the companies that signed up for solar energy last year are small businesses.
“This normalization is really important,” she said. “Customers want it, shareholders want it, employees want it. These factors will continue to drive this market.”
Grid becomes “low carbon”
According to BloombergNEF, renewables accounted for 20% of US electricity last year, with nuclear power accounting for another 20%. Coal dropped to 19% of electricity generation. Natural gas made up the largest share at 41%.
While natural gas is less polluting than coal, it is a fossil fuel that drives global warming and contributes to other pollutants. The rise in natural gas levels over the past decade challenges the Biden government’s stated goal of getting electricity from carbon-free sources by 2035, BloombergNEF’s Zindler said.
“It is clear that up to this point gas has played a crucial role in taking coal offline and decarbonising it,” he said. “But when you look at the next 10 to 15 years, there are questions about what role gas can continue to play in the system.”
A decline in jobs
Despite the surge in the country’s clean energy capacity, the industry has seen significant layoffs. The sector cut around 450,000 jobs last year, mainly in the areas of energy efficiency and grid and storage. It was the first recorded job loss in the renewable energy sector.
After the economy largely stalled in 2020, large energy projects, utilities, and some manufacturing facilities were quickly deemed essential, and many were hiring. However, energy efficiency projects, which could include weathering a building or upgrading its heating and cooling system, came back more slowly.
“The sectors hardest hit have been residential real estate companies and especially energy efficiency. They are still bearing the brunt,” said Lisa Jacobson, president of the Business Council for Sustainable Energy.
A coalition of clean energy companies is calling on the Biden government to prioritize the clean energy sector in their stimulus plans.