Renewables and natural gas: What’s ahead in 2021

Source: By Edward Klump, E&E News reporter • Posted: Tuesday, January 12, 2021

Renewable energy — led by a record expansion of solar — could account for nearly three-quarters of utility-scale electric generating capacity added nationally this year, the U.S. Energy Information Administration said yesterday.

EIA estimated that solar will represent 39% of capacity that begins operating commercially in 2021, while wind may constitute 31%. Natural gas may make up 16%, followed by batteries at 11% and nuclear at 3% — thanks to the ongoing Plant Vogtle expansion in Georgia.

In all, 39.7 gigawatts of utility-scale electricity capacity may be added in 2021. EIA said the U.S. has over 1,100 GW of installed resources.

The agency added, in a response to questions, that this may be the first year there are more utility-scale solar capacity additions than utility-scale wind additions. The numbers reinforce that renewables will continue to change the U.S. power mix, which has been losing coal-fueled capacity in recent years. When asked about federal incentives, an EIA spokesperson told E&E News via email that they “play a large role among several factors that drive wind and solar builds.”

“Developers and plant owners expect the addition of utility-scale solar capacity to set a new record by adding 15.4 GW of capacity to the grid in 2021,” EIA said in its report yesterday. “This new capacity will surpass last year’s nearly 12 GW increase, based on reported additions through October (6.0 GW) and scheduled additions for the last two months of 2020 (5.7 GW).”

EIA said over half of this year’s new utility-scale solar photovoltaic capacity is slated to come from Texas, Nevada, California and North Carolina. EIA indicated that another 4.1 GW of small-scale solar PV capacity may begin service by the end of this year.

In terms of utility-scale generation, EIA projected 12.2 GW of wind capacity coming online this year. That’s down from a potential 21 GW of wind that may have started up last year, including planned additions the last two months of 2020. Texas and Oklahoma are expected to lead wind capacity additions in 2021.

Ed Hirs, an energy fellow at the University of Houston and a co-founder of a renewable fuels company, said momentum has been “running” in the direction of renewable additions for years. But he noted that many of the 2021 generation additions are slated to come online late in the year. And the expansion of intermittent wind and solar capacities will mean that utilities and grid managers have to work to effectively integrate new renewables on the grid, Hirs said.

Natural gas-fueled capacity additions, meanwhile, for this year are pegged at about 6.6 GW by EIA.

“Combined-cycle generators account for 3.9 GW, and combustion-turbine generators account for 2.6 GW,” EIA said. “More than 70% of these planned additions are in Texas, Ohio, and Pennsylvania.”

On the storage front, EIA said utility-scale battery capacity may more than quadruple, as 4.3 GW of battery capacity additions are expected this year.

“The rapid growth of renewables, such as wind and solar, is a major driver in the expansion of battery capacity because battery storage systems are increasingly paired with renewables,” EIA said.

Emily Fisher, general counsel at the Edison Electric Institute, said EIA’s inventory of planned additions shows that a clean energy transformation led by EEI’s members is accelerating. The group represents U.S. investor-owned electric utility companies.

“Carbon emissions from the [U.S.] electric power sector are at their lowest level since 1987 — and these investments in clean energy will enable companies to continue to make significant carbon reductions,” Fisher said in a statement.

The Electric Reliability Council of Texas, the state’s main grid operator, said yesterday that its region continues to see significant growth in renewables. ERCOT has previously indicated that it has the tools to maintain a reliable grid.

“As of December 2020, more than half of all new projects in the ERCOT interconnection queue were for utility-scale solar facilities,” Leslie Sopko, a spokeswoman, said in a statement. “The grid operator is also seeing continued growth in wind resources and a major increase in battery storage resources. Based on the current information provided to us by generation developers, we anticipate this trend will continue for the next several years.”