Trump does not like wind and solar power, but the market absolutely loves wind and solar power. The EIA predicts wind, solar, hydro, and energy storage will be 78% of new electrical generation capacity in 2020. We will see 5.57 GW of coal retired and no new coal plants!
While natural gas is adding 9.3 GW of new capacity, 3.74 GW are being retired. Thus, the net amount of natural gas for 2020 is 5.56 GW. As renewables and energy storage become more affordable, we will see natural gas continue to lose market share.
Wind will be #1 in 2020 with a total of 18.5 GW of capacity coming online. It is worth mentioning these newer turbines have higher capacity factors than previous turbines. Additionally, wind power is reaching into newer markets as turbines have been designed to fit a variety of wind speeds.
Solar will grow to 13.58 GW in 2020. The red state of Texas will add 22% of utility-scale solar. Texas has a great chance to lead the nation in renewable energy. Wind in the desert plains of West Texas is very consistent at night. Conversely, wind along the coast of Texas is most consistent in the afternoon and evening. Then, of course, solar power only produces during the day. This wide variety of sources really helps, since much less energy storage will be required.
So while there may be a political fight over renewables and fossil fuels, the market clearly is choosing cheaper renewable energy. Environmentalists should never become complacent; however, this news should give us hope and provide the determination we need to accelerate the decarbonization effort.
US renewable energy subsidies are being phased out, but price declines should roughly keep up with the loss of subsidies. Further political action on climate change would be ideal, but let’s not forget there is more than one way to achieve a goal. Share this news with friends depressed about climate change, and ask them to get involved in the growing sustainability movement. Continued early adoption of EVs is crucial to the decarbonization effort because it will drastically lower the cost of energy storage.
With more affordable energy storage, wind and solar can start to replace existing fossil fuel plants. Right now, renewable energy is primarily replacing fossil fuel plants that have reached the end of their life. In the 2020s, we will see coal and natural gas assets stranded, because wind + solar + energy storage will drop below the marginal cost of fossil fuels.
Solar and wind continue to decline in price. The world record for solar has been set in Portugal at 1.476 cents per kilowatt-hour. The US will certainly begin to see costs that low and lower. Renewable energy has become unstoppable economically. The topic of renewables may still be partisan, but several big donors understand the massive value of affordable energy.
The fossil fuel lobby is weakening and dozens of important industries have plans to access cheaper renewable energy. Previously, Texas was mentioned for having the chance to lead in renewable energy. For a moment, think about all the businesses that will be looking to take advantage of cheap energy prices. Future wind and solar prices will be 1-2 cents per kilowatt-hour and that is a massive competitive advantage.