Table of Contents
Millions of American consumers have electrified their cars and appliances. Many cities do so with public services such as public transportation—but these activities still draw most of their charge from dirty power plants. The electricity sector has slowly been sprucing up its act and is now powered by around 20 per cent solar and wind and around 20 per cent nuclear.
But recent summers of climate disasters are a vivid reminder that the transition cannot come soon enough. Citizens have increasingly adopted solar panels to save money, while 30 states and more than a hundred cities have adopted clean electricity targets; still, uneven state progress does not match the pace needed to temper catastrophic warming across the planet.
According to the Sierra Club, 345 coal plants have retired in the last decade or will soon retire across the country . That still leaves 185 active coal plants operating countrywide — and disturbingly, about 250 new gas plants planned for construction over the next two decades. A clean electricity guideline could push coal to zero and slow the growth of natural gas by making it economically futile to keep coal plants up and running.
1.2 Renewable energy sources
Natural processes shape continuously massive amounts of energy that can be harnessed in many forms. Energy from combustible materials obtained from plants and animals, sunlight, wind, water, and hot springs are the everyday resources that can be converted into practical secondary sources to supply energy need for various applications.
Natural processes constantly replenish renewable energy sources at a rate that exceeds their use rate; thus, they are not depleted by consumption. The potential energy of water, the kinetic energy of wind, and the radiant energy of sunlight are examples of renewable sources. Given that conventional hydroelectric power is the leading clean energy source among all renewables but holds little promise on the future energy transition, we are just considering alternative RE sources for this article.
The share of wind and solar power is multiplying in all regions of the world. Biofuels are follow-ups of solar energy and the natural water cycle. Firewood, sugarcane, palm, maise, soybean, and many other plants are renewable biomass reproduced by natural water and carbon dioxide cycles. Such carbohydrate-rich herbs are used to produce ethanol, methanol, and other biofuels. Biodegradable waste can be transformed into biodiesel, which can be directly used in vehicles. Ethanol and biodiesel are potential alternatives to petroleum products in the transportation sector. The use of combustible waste is increasing in district heating, electric generation, and synthetic fuel production.
1.3 Drivers for a greener energy mix
Global carbon emissions must be cut in half in the next ten years to narrow warming to 1.5°C and avoid further catastrophic climate impacts. As the U.S. coalesces around 2035 as the target year for power sector decarbonisation, rapid progress must be made in order for this target to remain in reach. The country has already committed to reducing its economy-wide GHG emissions in 2030 by 50-52 per cent from 2005 status. Ambitious power sector decarbonisation enables economy-wide greening of the building, industrial, and transportation sectors, setting the nation on a 1.5°C road commensurate with international climate goals.
Plummeting solar, wind, and battery costs can spur a clean electricity future. Together with the U.S. Nationally Determined Contribution to the Paris Agreement, federal legislation, as well as President Joe Biden’s American Jobs Plan, they have catapulted ambitious renewable electricity standards into the national policy discourse.
The most significant short-term benefits are not even about climate change. Curtailing coal also slashes the country’s air pollution, like the ozone and particulates that harm people’s lungs and hearts. These gains would easily overshadow what the Environmental Protection Agency has accomplished under previous administrations because it would, indeed, close more coal-powered plants than President Obama’s mercury and air toxins rule. And then there are the lives saved, in line with research from Harvard University : By 2030, a renewable energy surge would save more than 9,000 lives because of the sudden cut in air pollution. Over the next three decades, that number grows to 317,500 lives saved.
From an economic point of view, the American energy transition would create five hundred thousand to a million new jobs over the course of this decade. The increase in construction and manufacturing in the renewable energy sector would more than offset job losses in extractive fossil industries, a study found . Cutting air pollution also turns into the equivalent of $1.7 trillion in benefits from diminished health care costs, lives saved, and economic productivity as reported by the climate think tank Energy Innovation.
2 POLICY TRENDS
2.1 The American energy transition
Scaling up RE to achieve 80 per cent green energy by 2030 is feasible. To achieve such a clean case by 2030, a steady increase is needed in U.S. renewable energy installations due to the electrification of the building, transportation, and industry sectors. The combined demand rise requires electricity generation to increase approximately 2 per cent per year, consistent with the 2.6 per cent average historical growth in the electric sector during 1975–2005 when emissions in industry peaked.
It is reported that between 2021 and 2030, 950 GW of new solar and wind generation capacity must be built. In addition, 23 GW per year of battery storage capacity needs to be built. For comparison, the extent of today’s U.S. power sector is roughly 1,000 GW. Although intricate, a renewable energy buildout of this magnitude is feasible with the right supporting policies in place.
Historical and planned U.S. generation deployments also hint that annual deployments of 120 GW (95 GW renewables and 25GW of storage) are possible. In 2020, the nation deployed 31 GW of wind and solar capacity—in the same period, China built 120GW of solar and wind capacity. Interconnection queues as of 2019 included 650 GW of solar, wind, standalone and hybrid battery storage, more than half of the thousand gigawatts required in the 80 per cent clean case.
Storage, solar generation, and onshore wind generally have faster construction paces compared with natural gas plants, and they do not require a pipeline connection or other labour-intensive infrastructure. To reach this level of renewable energy
adoption, significant governmental assistance is needed. New renewable resources can be built cost-effectively here and there, as indicated by the spreading of utility-scale renewables nationwide. The top ten states for installed utility-scale solar represent at least four distinct regions: New England, the Southeast, the West, and the Southwest. More than 75 per cent of states have one or more utility-scale solar projects. Once considered a slow starter for utility-scale renewable projects, the Midwest accounted for the largest chunk of solar added to queues in 2018 (26 per cent).
2.2 The Clean Energy Standard
One policy could challenge a century of fossil fuel dominance: a clean electricity standard could be the biggest change in American energy policy since the lights went on. For clean energy to overtake natural gas and coal—which still dominate 60 per cent of the U.S. power sector—it would require some extent of scientific breakthroughs and technological leaps. But fundamentally, it would take a clean electricity standard to challenge a century of fossil-fuel dominance in record-breaking time.
The fate of a federal clean electricity framework is still very much undecided. The Senate latterly passed a bipartisan infrastructure bill that stripped out the Democrat administration’s most ambitious climate proposals. Every Representative will now need to agree on the standard if they want to push it through the process known as budget reconciliation. This sweeping, underappreciated policy could be the “centrepiece” of climate policy under President Joe Biden and is critical to getting the U.S. halfway to its pledge under the Paris climate agreement.
The clean electricity standard, as currently sketched, consists of a payment program that disburses to utilities cleaning up their act and fines them for missing deadlines. Nothing but this approach could effectively double the volume of wind and solar on the market, moving the nation toward roughly 80 per cent renewable sources of electricity by 2030 and within reach of 100 per cent clean electricity by 2035 .
The “multiplier effect” of a clean electricity standard, climate experts say, is the way to tackle the climate crisis via the electricity sector. Two tangible ways Americans contribute to climate change is in their transportation and electricity usage. One might cut its carbon footprint by making its home more efficient, installing a solar panel, and even buying an electric car, but coal and natural gas are still the status quo. This reality menaces the impact of well-meaning actions: A coal-fired power plant may be charging your Tesla or powering your office’s air conditioning.
In other words, to seriously cut pollution, the country needs to multitask. The sources of electricity will be modernising in what could be a virtuous cycle: Electricity becomes a bigger share of U.S. energy use, and renewable electricity becomes a bigger share of electricity as a whole. By cleaning up the power sector, we can see a dramatic impact on carbon emissions. And when this is combined with other policies to electrify building heating and cooling and to electrify transportation, it has a multiplier effect throughout the whole economy.
3 CURRENT SITUATION BY SECTOR
3.1 Utility-scale solar
Following the rapid cost decline of PV systems, utility-scale PV deployment has been accelerating. But the market is still young and whether the utility-scale projects ultimately turn out to be profitable, particularly at low PPA prices, depends on how well they perform over time. The rapid ascendency of utility-scale solar in the U.S. over the last few years has resulted in a diverse fleet of operating projects that exhibit significant variation in empirical AC capacity factors. Looking ahead, the analysis of available data suggests that there is still room for utility-scale PV project capacity factors to progress further.
Berkeley Lab’s 2020 new information of utility-scale solar data and trends provides an overview of key trends in the U.S. market. You can find the highlights of this update below:
- More than 4.5 GWAC of ground-mounted solar projects >5 MWAC) achieved commercial operations in 2019, bringing aggregate capacity to 29 GWAC. Projects are spread across all ten regions though more heavily concentrated in the sunniest regions.
- The median installed cost of power plants that came online in 2019 fell to $1.4/WAC ($1.2/WDC), down 20 per cent from 2018 and down by more than 70 per cent from 2010.
- Average capacity factors spread from 17 per cent in the least-sunny regions to 30 per cent where it is sunniest. Single-axis tracking adds around five percentage points to the capacity factor in the zones with the strongest solar resource.
- Nationwide average levelised power purchase agreement (PPA) prices declined to $24/MWh in 2019, down 17 per cent from 2018 and more than 80 per cent since 2010. Thirty-nine projects (totalling 4.2 GWAC) in our PPA price sample include battery storage (totalling 9.5 GWh and 2.3 GWAC). In the “lower 48” states, several PV+battery PPAs have been inked in the mid-$20/MWh range (levelised in 2019 dollars).
- Not including the 30% investment tax credit, the median LCOE from utility-scale PV has dropped by 85 per cent since 2010, to $40/MWh in 2019.
- At the end of 2019, there were nearly 370 GW of solar in interconnection queues from all 7 ISOs and 30 additional utilities across the country. As good as a third of this proposed solar capacity is paired with battery storage.
3.2 Rooftop solar
Solar markets in the United States have some peculiarities. First, U.S. PV prices are now one of the highest globally due to relatively high soft costs. Second, PV price research has significantly benefited from abundant rich PV data collected under numerous incentive and interconnection programs. System-level data are available for roughly 80% of all PV systems installed in the United States.
The U.S. residential solar PV market has seen substantial growth over the last decade thanks to declining installation costs, new business models, and various incentives at the local, state, and federal levels. Much of this growth, however, has largely been concentrated among wealthier and higher-educated households. While recent analyses suggest that adoption rates among middle-class homes are catching up, adoption rates among low to moderate-income families are lagging.
Historic PV price reductions in the United States are primarily attributable to declines in the costs of system hardware such as modules and inverters, which now account for well below half of the total cost of an installed rooftop system. Non-hardware costs, or “soft” costs, have also fallen— though not as quickly. In the United States, the world’s second-largest PV market, soft costs have stagnated and even slightly increased in recent years.
The U.S. rooftop solar photovoltaic installation industry grew from a few dozen firms to a few thousand firms over the course of two decades. PV installation is now one of the fastest-growing industries in the country, employing about 87,000 people in 2018 . This emerging industry has played a critical role in transforming the electric grid, installing more than 11 GW of cumulative PV capacity by the end of 2018.
In the United States, rooftop solar photovoltaic systems generally require a permit from a local building, electrical, or other permitting authority. Local permitting requirements may ensure safe PV system installation and operation given local contexts. At the same time, local PV permitting processes can pose challenges to PV deployment.
Onerous local permit requirements can increase the amount of customer and PV system installer time required to navigate the permitting process. Further, variations in local permitting processes can force installers to invest time and effort to learn the nuances of numerous local policies. These permitting burdens may affect customer experiences, translate to higher system prices, and ultimately result in lower PV adoption rates. With that being said, it is remarkable that prices for installed residential solar systems in the U.S. in 2018 were less than half of those in 2000.
3.3 Offshore wind
The Biden-Harris Administration has recently jumpstarted offshore wind energy projects to create low-carbon energy and good-paying, union jobs . In his first week in office, the President issued an Executive Order that calls on to build new American infrastructure and clean energy economy. In particular, it committed to expanding opportunities for the offshore wind industry.
The Order recognises that a thriving offshore wind industry will drive new jobs and economic opportunities in the Gulf of Mexico, the Atlantic Coast, and Pacific waters. The sector will also bring forth new supply chains that reach America’s heartland, as illustrated by the ten thousand tons of domestic steelworkers in Alabama and West Virginia are supplying to a Texas shipyard where an emblematic wind turbine installation vessel is being built .
The Interior Department’s Bureau of Ocean Energy Management (BOEM) announced a new priority wind energy area in the New York Bight—a district of shallow waters between the New Jersey coast and Long Island—which a recent study shows can support up to 25,000 jobs from up to 2030, as well as other 7,000 jobs in communities backed by this development. The study indicates the lease area also has the potential to support up to 4,000 operations and maintenance positions annually and nearly 2,000 community jobs in the years following. This new wind energy hotspot is adjacent to the greater metropolitan Tri-State area— the largest metropolitan population hub in the U.S., home to more than 20 million people and their energy needs.
The Departments of Interior (DOI), Energy (DOE), and Commerce (DOC) are conjointly announcing a shared goal to deploy 30 GW of offshore wind in the U.S. by 2030 while promoting ocean co-use and protecting biodiversity. Meeting this target will trigger an extra $12 billion per year in capital investment on both U.S. coasts, create tens of thousands of sturdy jobs, with more than 44,000 workers hired by 2030 and approximately 33,000 additional jobs in communities supported by the activity. It will generate enough power to meet the demand of more than 10 million homes for a year while avoiding 78 million metric tons of carbon dioxide emissions.
3.4 Onshore wind
Cumulative installed onshore wind capacity exceeded 100 gigawatts by the end of 2019, according to the U.S. Energy Information Administration’s (EIA) Preliminary Monthly Electric Generator Inventory . More than half of that amount has been installed in the last ten years, whilst the oldest wind turbines still operating in the States came online as early as 1975.
In 2020, record growth was driven by a surge of installations in the People’s Republic of China and the U.S. – the world’s two largest wind power markets – who together introduced nearly 75 per cent of the new installations in 2020 and account for over half of the world’s total wind power capacity. The rapid development of wind power in the country in recent years has been made possible by government advocacy for the development of the industry. For instance, when building a new wind farm, the state allocates a so-called tax credit to the company.
The cost of energy produced by wind farms is still relatively high in North America. However, with the increase in the size of wind farms and technological leaps, we can expect a decrease in the cost of energy to 2-3 cents/kW, preeminently in areas with a relatively high average annual wind speed.
The Texas Panhandle area, the northernmost region in the U.S. State of Texas, has abundant wind power. The Texas State Legislature introduced the concept of a Competitive Renewable Energy Zone (CREZ) in 2005 to construct necessary transmission capacity to connect areas with abundant wind resources to more highly populated parts of the State. The Panhandle Renewable Energy Zone (PREZ) is one of the five zones with the highest wind capacity factor.
After the initiation of the CREZ project, the Electric Reliability Council of Texas (ERCOT) received many requests to build wind farms in the area. The number of wind projects with a signed interconnection agreement had reached 6 GW by October 2014, which exceeded the “Initial Build” capacity of 2.4 GW. The installed wind power capacity in the Panhandle reached 3997MW, with another 4022MW expected to come online by 2022.
Many wind farms are there. However, it suffers from a severe problem of exporting the wind power generated to load centres far from the Panhandle. In recent research efforts, an attempt is made to illustrate how the smart grid architecture and its underpinning technologies could remove the export limit imposed on the wind farms in Panhandle so that they can export the wind power generated at the full capacity without causing problems to the grid . Yet, further studies with high-fidelity models and details are needed to understand the situation entirely.
Geothermal energy is one of the world’s largest natural energy resources, but the problem is how to extract it economically. The highest-temperature geothermal resources—which are among the most economically usable—tend to occur at the margins of Earth’s tectonic plates, including along the “ring of fire” around the Pacific Ocean and along Africa’s Rift Valley. However, geothermal energy can be found practically anywhere. Globally, within a 3-km depth, there are approximately 3.3 million quads of heat.
For the U.S., conventional geothermal energy currently makes up 0.4% of net electricity generation. The majority of this is located in the Imperial Valley and Mayacamas Mountains of California, as well as in Western Nevada. With respect to power generation, geothermal energy has four conventional pathways: dry steam plants, flash plants, binary cycle plants, and combined cycle plants. This form of clean power generation is also called hydrothermal electricity generation.
Production of geothermal energy requires three variables: high temperature, water saturation, and permeability to allow fluid flow. However, to the best of scientific knowledge, these three variables co-occur only in specific locations. However, through enhanced geothermal systems, researchers are hoping to expand the number of potential locations by experimenting with increasing the permeability and saturation conditions at some sites and artificially creating a new method of fractures in the hot rock.
Among all methods of geothermal resource development and utilisation, power generation is undoubtedly the most efficient and effective based on the attributes of geothermal energy. According to research, under ideal circumstances, the utilisation rate of modern geothermal power generation (GPG) is approximately 90%, much higher than the 30% rate for direct utilisation. Therefore, a country’s level of geothermal resource development and utilisation is often measured by the scale of its GPG.
The development of GPG around the world is hugely uneven. The scales and proportions of GPG in the United States are relatively large. However, in other regions, GPG is barely present. The “Ring of Fire” countries, represented by the United States, lead in GPG, and the top five countries for installed power generation capacity are located in this area.
The characteristics of the geothermal fields directly determine the development technologies needed, which, in turn, determine the development costs. The National Renewable Energy Laboratory (NREL) of the United States conducted an analysis and calculated statistics on the temperature of geothermal resources and power plant costs . Those figures show that a higher temperature results in lower prices. The data from other countries may differ, but the overall trend is the same. The costs of flash plants are much lower than those of binary plants because binary technology is not yet mature, leading to higher production costs.
High-temperature geothermal resources in the United States are also closely linked with the local energy demand. California and Nevada are blessed with nearly two-thirds of the country’s proved geothermal resources, many of which are high-temperature steam fields. California’s energy consumption is extremely high; for example, its electricity consumption accounts for 6.8% of the national total. Utilising GPG to meet the local electricity demand makes sense. However, in addition to their geothermal resources, California and Nevada are rich in wind and solar energy. The competition from these two substitute resources has caused the growth rate of GPG to decelerate.
Although the installed capacity in the United States is substantial, many power plants are currently out of service because of insufficient steam caused by early negligence of reinjection. In addition, the exploitation of geothermal resources will, to some extent, make natural landscapes disappear and hot springs degenerate. Therefore, the side effects of the extraction process must be considered.
Enhanced Geothermal System may be the next technological leap in the field . EGS can be described as a “man-made reservoir” induced where there is hot rock but poor natural permeability or fluid saturation. In an EGS, fluid is forced into the subsurface under carefully controlled conditions, which cause pre-existing fractures to re-open, creating permeability.
The DOE projections show that with the use of EGS, there may be over 100 GW of geothermal electric capacity in the continental U.S., which would account for nearly 10% of current electricity capacity and be 40 times the current installed geothermal capacity.
In the United States, influential stakeholders, including policymakers and national-level industry groups, envision bioenergy unfolding as one important green resource pathway towards achieving a low carbon energy system. The U.S. biofuels market is dominated by conventional starch-based ethanol. Corn grain accounts for more than 90% of the total feedstock for corn ethanol.
According to the recent estimates from the Energy Information Administration (EIA) state energy data system, the ten states (IL, IN, IA, MI, MN, NE, ND, OH, SD, WI) in the U.S. Midwest accounted for 84.2% of U.S. fuel ethanol production in 2016.168 out of the 214 U.S. ethanol plants are located in these states. In the Northeast United States, developing a bio-economy based on perennial crops (e.g., switchgrass or short-rotation woody cultures) grown on marginal land is seen by many as vital for enacting this development.
Dedicated energy crops, including perennial grasses and woody crops, have been identified as promising alternatives for conventional biomass (e.g., corn and soybean) to produce biofuels in the U.S. The revised Renewable Fuel Standard (RFS2) mandate under the Energy Independence and Security Act (EISA) requires that 16 billion gallons of cellulosic biofuels will be used for transportation fuel by 2022 .
Ethanol produced from corn starch still dominates the U.S. biofuel market, and commercial ethanol plant capacity reached 15.5 billion gallons per year in 2017. The U.S. Environmental Protection Agency (EPA) capped the annual conventional biofuel (e.g., corn ethanol) production at 15 billion gallons in 2015 and promoted the utilisation of advanced and cellulosic biofuels. Cellulosic biofuel can reduce 60% of the greenhouse gas (GHG) emissions, including direct and indirect emissions, compared to the 2005 baseline of petroleum products. Furthermore, GHG emissions of cellulosic biofuels are also lower than the emissions of conventional biofuels.
Under EISA, the EPA mandates that obligated parties, such as gasoline and diesel producers, must demonstrate that they have met an annual Renewable Volume Obligation (RVO) for each renewable fuel category (conventional biofuel, advanced biofuel, cellulosic biofuel, and biomass-based diesel). To track compliance, biofuel producers generate a credit known as a Renewable Identification Number (RIN) when each gallon of approved biofuel is produced. When the biofuel is purchased and blended into gasoline, these RINs can be sold to obligated parties to comply with the RFS2 mandate. RINs can either be obtained by production from obligated parties themselves or by purchasing from other parties.
4 WHAT IS NEXT?
This article points to the balance needed to expand renewable energy sources in the United States to gain flexibility in energy sourcing on the one hand while carefully considering future locations and technology to avoid regional impacts to land and environmental resources.
The current and future administrations are expected to turn political rhetoric into political action regarding their own resource use and energy management. Central to this will be decarbonising the American electricity sector through renewable power sources as part of the much-touted green energy transition.
Solar photovoltaic prices have fallen significantly over the past twenty years. These price reductions have relied primarily on falling system hardware costs. Future reductions in rooftop PV prices—needed to ensure that enough PV will be deployed to meet national clean energy objectives—will require cutbacks in non-hardware or “soft” costs. Likewise, a paradigm shift is needed in how large-scale solar facilities are located and built—one that merges engineering and biological solutions, protecting solar infrastructure while also ensuring flow connectivity.
Wind energy development in the United States has been increasing rapidly since the turn of the century. The nation’s growth has been significant, but development has been uneven across individual states. This is because wind energy is driven primarily by state-level factors—wind energy resource potential is one growth driver. However, it does not sufficiently explain the differences in installed capacity. The capacity factor can be increased over time using enlarged rotors on taller towers from a technical perspective. Market incentives are necessary to sustain near-term industry growth, but subsidies can probably be eliminated in the longer term. In addition, with continued R&D, offshore wind energy has great potential to allow the U.S. to expand its electrical energy supply significantly.
In addition to conventional geothermal energy, the field is preparing for a novel technology that is expected to be less location-specific and more commercially viable: Enhanced Geothermal System (EGS). The vow to tap into sub-surface heat from virtually anywhere is the Holy Grail of geothermal technology. EGS techniques require advanced engineering that, once developed, could have enormous ramifications for the U.S. energy industry, much like the Shale Revolution of the 2010s. There may exist a high degree of overlap in technical aspects between the geothermal and O&G sectors. With stimulus from an administration dead set on decarbonisation, geothermal may bring good prospects to the gloomy U.S. oil and gas sector.
Divergent options in bioenergy production schemes and their associated sociotechnical imaginaries raise essential questions not only about how crops should be grown, harvested, processed, and used in the U.S. but also about which rural development model will provide the greatest economic, social, and environmental benefits and for whom. Between 2016-2020, bioenergy development and infrastructure in the U.S. remained nascent—although momentum has continued to rise as interest in perennial grass bioenergy crops as tools for improving water quality and conservation efforts grow. This momentum provides an opportunity for the kickoff of a mutually agreeable hybridised bioenergy niche in the country.
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