Tag Archives: ira

Booming Investment In Renewables Is Set To Continue In 2023 And Beyond

At-a-Glance

Climate tech has come to the fore like never before with its potential to be a safe haven investment in a macroeconomic environment of uncertainty. For more, read Booming Investment In Renewables Is Set To Continue In 2023 And Beyond.

Key Takeaways

  • Clean energy investment significantly accelerated and is expected to surpass $1.4 trillion in 2022, says the World Economic Forum. 
  • Three-quarters of overall growth in energy investment is attributable to clean energy, which has been growing at an average annual rate of 12% since 2020.
  • Governments across Europe are doing their part to assist in the energy transition in a meaningful way, with the EU accelerating the speed at which permits are given to renewable energy projects.
  • Germany approved plans for each state to allocate a minimum amount of land for onshore wind farms and EU energy ministers backed laws with targets to get 40% of energy from renewable sources by 2030.
  • Deloitte’s Renewable Energy Outlook for 2023 report forecasts that the Inflation Reduction Act’s (IRA) extension of tax credits for renewable energy projects will lead to up to 550 gigawatts of additional clean energy by the end of the 2020s.
  • Private investment in renewables in the U.S. reached a record high of $10 billion in 2022, investment levels that Deloitte forecasts are expected to continue into 2023 as investors are attracted by transparent and predictable returns on mature technologies that are backed by the IRA’s 10-year tax credits.

Path to 100% Perspective

Recent investments in clean energy make it abundantly clear that the renewable revolution is here. Increasing and being consistent in these investments is necessary to realize a 100% renewable energy future. As energy leaders take stock post-COVID and restructure their models, now is a key moment to set clear frameworks for achieving net zero. For most, it’s not about starting from scratch, but understanding where and how to invest to drive future resilience.

US Renewable Power Set to Get More Than 20% Boost From New Climate Law

At-a-Glance: 

Accelerated by the Inflation Reduction Act, solar capacity will more than triple from 2021 to 2030 and battery storage will jump exponentially, predicts BNEF. For more, read US Renewable Power Set to Get More Than 20% Boost From New Climate Law.

Key Takeaways:

  • Enough solar power plants will be built from this year through 2030 to generate 364 gigawatts of electricity, BNEF estimates. That’s more than three times the capacity of all US solar plants in operation last year.
  • A gigawatt is roughly the output of a commercial nuclear reactor and, depending on the region, can power 750,000 homes. 
  • BNEF predicts147 gigawatts of new wind installations, many of them in coastal waters along New England, the Mid-Atlantic, and toward the end of the decade, California. 
  • The IRA also includes a new tax credit for large energy storage systems — typically, big packs of lithium-ion batteries — plugged into the power grid. BNEF forecasts 107 gigawatts of storage installations through 2030, up from just 5.7 gigawatts in use this year.

Path to 100% Perspective:

The passage of the IRA means there has never been a better time to make a long-term investment in U.S. decarbonization goals, but just investing in renewables is not enough. Solar and wind are variable, and will need a reliable backup to maintain the grid. As renewables become the new baseload, the need for flexible power generation and reliable storage solutions will be more important than ever.

In its Front-Loading Net Zero report released in 2020, Wärtsilä Energy outlined the benefits of investing now in predictable, low maintenance, renewable energy and storage technology.

“Flexibility creates the conditions where renewable energy is the most profitable way to power our grids: ensuring back-up power is available when there’s insufficient wind or solar,” according to the report. “Investing in renewable baseload is now viewed as buying ‘unlimited’ power up-front, as opposed to betting against fluctuating oil prices and narrowing environmental regulation.”

 

US wind, solar tripled over the past decade: analysis

At-a-Glance: 

The United States generated three times as much renewable electricity from the sun and wind last year in comparison to 2012, a new analysis has found. Seven states alone now produce enough electricity from these sources, as well as geothermal energy, to cover half of their consumption, according to an online energy dashboard. Read more in US wind, solar tripled over the past decade: analysis.

Key Takeaways:

  • Just five years earlier, none of the states mentioned— South Dakota, Iowa, North Dakota, Kansas, Wyoming, Oklahoma and New Mexico — had achieved this level of renewable energy progress.
  • Among the dashboard’s key findings was evidence that the U.S. produced enough wind energy to power 35 million typical homes in 2021 — or 2.7 times as much wind energy as in 2012. 
  • The U.S. also generated enough solar energy that year to power 15 million homes — or 15 times as much solar energy as in 2012, according to the dashboard. 
  • The dashboard found that the country now has nearly 4.7 gigawatts of battery storage, or 32 times as much as in 2012. This helps support the use of more renewable energy and keep the lights on during extreme weather events. 
  • California, Texas and Florida exhibited the most growth in solar power and battery storage from 2012 to 2021, while Texas, Oklahoma and Iowa ranked highest for wind power growth.

Path to 100% Perspective

The rise in renewables is a key step in the Path to 100%, and the numbers should continue to grow as the Inflation Reduction Act makes now a perfect time to invest in clean energy technology.

As mentioned in the article, the key to integrating renewable energy into the system is backup power– both thermal and storage. That’s because solar and wind are variable– you can’t always count on them to produce power at peak demand times.

A “Supercharge” Of Renewable Energy Development Is Taking Place Around Us

At-a-Glance: 

Incentives in The Inflation Reduction Act (IRA) will lower the cost of renewable energy in the U.S. dramatically over the next decade, according to analysis from the ICF Climate Center, a global consulting firm. They’ve deduced that the new US climate law will make clean energy projects easier to finance across the country, quickening the pace of the US energy transition.  For more read: A “Supercharge” Of Renewable Energy Development Is Taking Place Around Us.

Key Takeaways:

  • All of the technologies the authors of this report analyzed —  whether mature wind and solar or emerging battery, hydrogen, and carbon capture and sequestration (CCS) — would see double digit percentage declines. 
  • The IRA’s broad definition of energy storage for the ITC should help emerging alternatives to lithium ion batteries come to market, increasing the diversity of energy storage options, 
  • Hydrogen could see the biggest cost decline — a huge reduction anywhere from 52% to 67% — of any technology. Green hydrogen facilities that take advantage of the climate law’s tax credits could become cost-competitive with new natural-gas-powered facilities by 2030.
  • The authors assume within their projections that policymakers will address some sticky obstacles confronting clean energy projects, including “not in my backyard” (NIMBY) reactions and interconnection problems.

Path to 100% Perspective

A 100% renewable energy future in the United States is possible by 2050 if everyone works together, and the IRA definitely sets the stage for an influx of development. While increasing renewable energy sources, like wind and solar, the U.S. must also determine a plan to realistically phase out fossil fuel plants. Renewable sources can be intermittent, so battery technology will need to improve. Investing in technology like Wartsila’s flexible power plants, which can run on sustainable fuels like hydrogen, will also provide the dispatchability needed to ensure reliable power.