Green Energy in the US: Renewable investment, capacity growth and future outlook

Report Description:

S electrical production capacity and generation has had historically an energy mix consisting primarily of fossil fuels including gas, coal and oil, backed up with a volume of nuclear and hydro power. With the new presidency have come new decisions. The US department of energy announced massive investment  the renewable industry including $60bn in clean energy investments, which will include $11bn in a smart grid system, $2bn in developing the next generation of energy storage batteries. An announced move away from corn-based ethanol fuel and $1.8bn investment in the next generation of biofuels will stimulate the vehicular fuel industry, towards a cleaner, more efficient system. The new administration has announced intention to develop available offshore renewable energy source located on the continental shelf area. The area has vast potential and scientists estimate that 900GW of wind power may be achieved.

Although still primarily a conventional thermal based country, through incentivized support in renewable energy, a new energy market is beginning to evolve. Recent addition has been made to the energy mix by way of renewable energy technologies which include power from the wind - wind turbines, and power from the sun - solar cells, and geothermal – relying on the heat that can be found at varying degrees of depth into the Earth’s surface. In the last decade newly installed renewable energy technologies are starting to gain a notable share of the market. This report documents the growth of this new market, showing its current status and projecting where it is likely to grow to in the foreseeable future. This document gathers the statistical data on the different types of energy generation, combines and contrasts them against each other to show the clear leaders, drivers to change and future growth.

Scope of this report

• Analysis of energy type volumes, capacity installed and generation output across the US.
• Market projections to 2020, including an evaluation of energy type and national growth potential.
• Overview of trends impacting on and shaping innovation in the energy market.
• New renewable energy technology analysis including innovation, capacity investment.
• Insight relating to the most innovative product launches and potential areas of opportunity for manufacturers.
• Examination of the key technology introductions and innovations
• Identification of the key trends shaping the market, as well as an evaluation of emerging trends that will drive innovation moving forward.

Reasons to purchase this report

• Achieve a quick and comprehensive understanding of how US market trends and legislation are influencing the development of the renewable energy market.
• Realize up to date competitive intelligence through a comprehensive review of the US market renewable energy market between 1990 and 2008.
• Assess the emerging trends in renewable energy technology – wind, solar, geothermal, hydroelectric, biomass, tidal, wave - capacity and generation.
• Identify which key trends will offer the greatest growth potential and learn which trends are likely to remain niche over the next 10 years.
• Compare how manufacturers are positioning new product developments to gain market share and achieve the highest sales potential.
• Quantify value and volume growth potential in major regional markets and in energy generation technology type.
• Identify winning product positioning developed from an assessment of current and emerging trends

Key market issues addressed

Environmental regulations: Imminent environmental targets set to control Carbon dioxide emissions in the US using a cap and trade mechanism are creating a path for lower carbon emitting power generation technologies. Recent capacity investment has focused on wind turbines, gas and solar photovoltaic installations.
Renewable Electricity market incentives: The US is has in place state level Renewable energy Production Standards and the Production Tax Credit which promote the development of renewable energy projects across the country, and are responsible for robust incentivized growth.
Energy efficiency:- The current electrical infrastructure experiences substantial energy loss from generation to transmission to load delivery. A more efficient system is required, a network that can take advantage of the intermittent supply nature of wind and solar – and balance these with the more constant and reliable conventional thermal generation, geothermal, hydroelectric and nuclear power. Recent US policy has awarded investment into an intelligent grid system. The US has also announced energy efficiency measures to include appliances, vehicles and power plants.
Energy security:- Oil, coal and gas supply and pricing structures are volatile and uncontrollable, due to the majority imported from non-US countries. This volatility is likely to increase as reserves of the natural resources decline.
Centralized network to distributed:- the changeover to renewable technologies is a changeover to a distributed energy system, as renewable energy technologies take advantage of natural resources such as wind, solar or thermal energy which are more concentrated in specific geographical locations.

Key findings from this report

In terms of new capacity installed during 2008, the US was the largest market with 8,346.0MW, followed by China (6,300.0MW), then India (1,800.0MW), then Germany (1,665.0MW), then Spain (1,609.0 MW), and Italy (1,010.0 MW).
Out of the 5,568MW of global capacity which was installed during 2008, Spain grid-connect PV market accounted for 45.1%, Germany accounted for 26.9% and US accounted for 6.1%.
Hydropower accounts for approximately 5.8% of world electricity supply. In 2008, the total world’s hydroelectricity consumption was 3,170.9TWH. The US ranked fourth with a consumption of 250.6TWH in 2008.
the US is the world leader in geothermal energy and, at the end of 2008, had cumulative installed capacity of 3,040.3MW.
In 2008, the total generation of electricity in the US was 4,110bn KWH. Generation of electricity in the US is dominated by coal. During 2008, 48.5% of the total US electric power was generated at coal-fired plants. Natural gas-fired plants contributed 21.3% to the total US electricity generation followed by nuclear plants with 19.6%.

Key questions answered by this report

• What are the drivers shaping and influencing new capacity installed in the energy industry?
• How will renewable energy technologies capacity share perform to 2020?  What are the opportunities?
• What are the forecast market growth rates 2008-2030?  Which markets will see the highest value growth and which the highest volume growth?
• Which states and regions offer the greatest opportunity for growth?
• Which renewable energy technology types will be the winners and which the losers in terms of volume growth to 2030?
• Which energy types are likely to find favor with manufacturers moving forward?
• Which emerging technologies are gaining in popularity and why?

Table of Contents

• Green Energy in the US

Executive summary xii

• Market development xii
• The Obama effect xiii
• Wind power xiv
• Solar power xv
• Hydropower xvi
• Geothermal power xvii
• Biomass xviii
• Ocean power xix
• Future outlook xx

Chapter 1 Market development 22

• Summary 22
• Overview of US electricity infrastructure 23
• Generation and installed capacity 23
• Sectoral distribution of generation 25
• Sales, revenue, and average retail price 25
• Overview of renewable energy in the US 26
• Background 26
• Installed capacity and growth of renewables 27
• Drivers of renewable energy 29
• American Recovery and Reinvestment Act of 2009 29
• The production tax credit (PTC) 30
• State level Renewable energy Portfolio Standards (RPS) 31
• Growing public support for action on climate change 32
• Increasing investments 33
• Resistors of renewable energy 33
• Failure to price CO2 emissions 33
• Licensing and permitting issues 34
• Environmental issues 34
• Discontinuity in PTC 35
• Transmission issues 36
• Comparative economics 36
• Global comparison 38

Chapter 2 The Obama effect 42

• Summary 42
• Overview 42
• New energy policy 42
• Energy security 44
• Crude oil and petroleum imports 45
• Natural gas imports 45
• Coal 46
• Biofuel’s new direction away from corn-based ethanol 47
• The Outer Continental Shelf Project 49
• The Outer Continental Shelf 49
• Resource potential 50
• The effect of the new policy 52
• Energy efficiency 52
• US market impact 53
• Growth in green energy 55
• Total energy 55
• Electricity 56
• Obama’s winners and losers 58

Chapter 3 Wind power 62

• Summary 62
• Overview 63
• Current scenario 63
• Installed capacity and generation 64
• Global comparison 65
• State level analysis 66
• Key players 68
• The economics of wind power 69
• Drivers of wind power 70
• Continuity in PTC 70
• Strong public and political support 71
• Increasing economic competitiveness of wind power 72
• Resistors of wind power 73
• Lack of continuity in the PTC 73
• Environmental issues 74
• Transmission constraints and costs 75
• Wind power potential and outlook 76
• Wind power potential 76
• Outlook for wind power 77

Chapter 4 Solar power 80

• Summary 80
• Overview 81
• Current scenario 82
• Installed capacity and generation 82
• Global comparison 83
• State level analysis 84
• Key players 85
• Economics 87
• Drivers of solar power 88
• The Federal Investment Tax Credit 88
• ARRA impact on the solar industry 89
• The California Solar Initiative 89
• Increasing corporate interest in solar power 90
• Increased venture capital funding in solar power 90
• State level RPS targets 91
• Resistors of solar power 91
• Shortage of silicon 91
• High cost 92
• Solar power potential and outlook 92
• Solar power potential 92
• Outlook for solar power 93

Chapter 5 Hydropower 96

• Summary 96
• Overview 97
• Current scenario 97
• Installed capacity and generation 97
• Global comparison 100
• State level analysis 101
• Key players 102
• Economics 103
• Drivers of hydropower 104
• Licensing reforms 104
• Inclusion of incremental hydropower under PTC 104
• The DOE Hydropower Program 105
• Resistors of hydropower 106
• Licensing issues due to environmental concerns 106
• Newly realized environmental concerns 107
• Capital intensive but lacking incentives 107
• Hydropower potential and outlook 108
• Hydropower potential 108
• Outlook for hydropower 109

Chapter 6 Geothermal power 112

• Summary 112
• Overview 113
• Current scenario 113
• Installed capacity and generation 113
• Global comparison 115
• State level analysis 115
• Key players 117
• Economics 118
• Drivers of geothermal power 119
• Introduction of PTC for geothermal 119
• Other financial merits for geothermal 120
• DOE’s Geothermal Technologies Program 120
• Increased environmental concerns 121
• Resistors of geothermal power 121
• Short time horizon for PTC 121
• Leasing issues 122
• Cost constraints and transmission issues 122
• Limited research funding 123
• Geothermal power potential and outlook 124
• Geothermal power potential 124
• Outlook for geothermal power 129

Chapter 7 Biomass 132

• Summary 132
• Overview 133
• Current scenario 133
• Installed capacity and generation 133
• Global comparison 135
• Key players 135
• Economics 136
• Drivers of biomass 138
• Attractive economics of co-firing 138
• Environmentally friendly power generation 138
• Employment generation 139
• DOE biomass program 139
• PTC extension and ITC inclusion 140
• Resistors of biomass 140
• Cost constraints 140
• Constraints in the supply of raw material 141
• Biomass potential and outlook 141
• Biomass potential 141
• Outlook for biomass 143

Chapter 8 Ocean power 146

• Summary 146
• Overview 147
• Current scenario 147
• Global comparison 149
• Key players 150
• Economics 151
• Drivers of ocean power 152
• Energy Improvement and Extension Act of 2008 152
• State and city government initiatives 152
• Private investments 153
• Resistors of ocean power 153
• Lack of federal support 153
• Siting and leasing issues 154
• Cost constraints 154
• Ocean power potential and outlook 155
• Ocean power potential 155
• Outlook for ocean power 156

Chapter 9 Future outlook 158

• Summary 158
• Outlook for the US electricity sector 159
• Outlook for renewables 162
• The American Clean Energy and Security Act 165
• EIA outlook 166
• Alternative scenarios 169
• Abbreviations 171
• Index 173

List of Figures

• Figure 1.1: US net generation share by energy source (Thousand MWh), 2008 23
• Figure 1.2: US electrical total net summer capacity (GW), 2007 24
• Figure 1.3: US net energy generation shares by sector (Thousand MWh), 2008 25
• Figure 1.4: Crude oil spot prices ($ per barrel), 1986-2009 27
• Figure 1.5: US net generation by energy source (Thousand KWh), 2008 28
• Figure 1.6: US electrical generation growth by type (%), 2003-2007 29
• Figure 2.7: US primary energy consumption by source and sector (Quadrillion Btu), 2007 46
• Figure 2.8: The Continental Shelf 49
• Figure 2.9: US renewable energy regional planning areas on the Outer Continental Shelf 50
• Figure 2.10: Total US energy (Quadrillion Btu), 2008 56
• Figure 3.11: US cumulative installed wind capacity (MW), 2008 64
• Figure 3.12: Top 10 countries by cumulative installed wind capacity (MW), 2008 65
• Figure 3.13: Top 10 countries by new installed capacity (MW), 2008 66
• Figure 3.14: Leading US states by cumulative wind capacity (MW), 2008 66
• Figure 3.15: Average cost/KWh of wind-generated electricity (US cents), 1980-2020 70
• Figure 3.16: Impact of PTC on wind power capacity additions (MW), 2009 74
• Figure 3.17: Wind resource map for the US 76
• Figure 4.18: US cumulative installed solar PV capacity (MW), 2008 82
• Figure 4.19: Top 5 countries by cumulative installed solar capacity (MW), 2008 83
• Figure 4.20: Key markets by new installed solar capacity (%), 2008 84
• Figure 4.21: US solar PV market (MW), 2008 85
• Figure 4.22: Solar PV manufacturers’ market shares in US (%), 2008 86
• Figure 4.23: Technology cost reduction goals for residential PV systems ($/Wp), 2008 88
• Figure 4.24: Solar resource map for the US 93
• Figure 4.25: Forecasts for installed capacity and costs 94
• Figure 5.26: US cumulative installed hydropower capacity (GW), 2007 98
• Figure 5.27: US power generation from hydroelectric power (TWh), 2007 99
• Figure 5.28: US total average electric power from hydroelectric plants (%) 99
• Figure 5.29: Top 5 countries by hydroelectric power consumption (TWh), 2008 100
• Figure 5.30: Leading US states by cumulative capacity (Thousand MWh), 2009 101
• Figure 5.31: Ownership of hydroelectric plants in the US (MW), 2006 102
• Figure 5.32: US DOE Hydropower Program 105
• Figure 5.33: Feasible project US hydropower potential (MW) 109
• Figure 5.34: US generation, hydropower vs. other renewables (TWh), 1990-2030 110
• Figure 6.35: US cumulative installed summer capacity (MW), 2008 114
• Figure 6.36: Top 5 countries by cumulative installed capacity (MW), 2009 115
• Figure 6.37: Leading US states by cumulative capacity (MW), 2008 116
• Figure 6.38: US geothermal existing plant locations 117
• Figure 6.39: Geothermal resource map for the US 124
• Figure 6.40: US Geothermal potential capacity by 2025 (MW) 126
• Figure 6.41: Estimated earth temperature at 6.5 km depth in the US 127
• Figure 7.42: US cumulative installed capacity (MW) and Net generation (Thousand KWh), 2007 134
• Figure 7.43: US biomass net electricity generation (Thousand KWh), 2007 135
• Figure 7.44: Biomass gasification combined-cycle electricity costs (cents/ KWh), 2000-2020 137
• Figure 7.45: US biomass capacity projections, 2000-2020 142
• Figure 7.46: Biomass resources in the US 143
• Figure 8.47: Ocean energy resource map for the US 156
• Figure 9.48: US electricity sales by sector (bn KWh), 1980-2030 159
• Figure 9.49: US net generation by energy source (%), 2008-2030 161
• Figure 9.50: US reference case scenario capacity outlook to 2030 (GW) 167
• Figure 9.51: US reference case scenario outlook to 2030 (bn KWh) 169

List of Tables

• Table 1.1: US state Renewable energy Portfolio Standards (RPS) 31
• Table 1.2: Comparison of capital cost estimates ($/KW), 2003 and 2007 37
• Table 1.3: Levelized cost of generation by type ($/MWh), California 2007 38
• Table 1.4: Global comparison of cumulative installed renewable and alternative energy capacity, 2009 39
• Table 2.5: Non renewable resources depletion, 2009 44
• Table 2.6: Largest US state annual wind power increases (MW), 2008 57
• Table 2.7: Largest US state cumulative wind power (MW), 2008 58
• Table 3.8: Largest wind farms operating in the US (MW), 2008 67
• Table 3.9: Turbine manufacturer share in the US by capacity (MW), 2008 68
• Table 3.10: Top 20 US states for wind energy potential in the US (billion KWh) 77
• Table 5.11: Largest hydroelectricity dams in the US (MW), 2008 101
• Table 5.12: Costs parameters of hydro technologies 103
• Table 5.13: Site development costs of hydro technologies 103
• Table 6.14: Largest geothermal projects operating in the US 116
• Table 6.15: Cost parameters of a geothermal power plant (Cost $/KW), 2008 118
• Table 6.16: Top 10 states for geothermal energy potential in the US 128