The 2020 Renewable Energy Outlook
Four major renewable energy themes emerged in 2019 that will continue to shape developments in the year ahead.
First, fixed-bottom and floating-platform offshore wind became real. We’re going to see nine megawatt-type floating-turbine platforms off France, which bodes well for 2020 and beyond, especially for the West Coast of the United States, which lacks the East Coast’s continental shelf.
Second, solar and wind costs continued to fall. Some solar cost reductions were due to the massive installments that came online in 2019 to take advantage of full 100% tax credits, which will start disappearing in 2020. In wind, costs decreased because turbines continued to grow and increasingly digitize.
Third, energy storage is developing. In 2018, 770-megawatt hours of storage were installed in the United States. In 2019, the Manatee project in Florida alone represented 900-megawatt hours of storage, not to mention the many announcements of projects in the 200-, 300-, and 400-megawatt range.
Fourth, it’s dawning on people that the existing electric grid is not reliable in many areas. The massive outages caused by the California wildfires are increasing the interest in nano and microgrids, which are combinations of solar, storage, and, sometimes, power generation that tie into the larger grid.
New concerns about carbon
Also important in 2020 will be the issue of carbon emission reduction, which is accelerating. A recent report from Morgan Stanley indicated that de-carbonizing the environment means the global economy must invest as much as $50 trillion by 2050.
Rising sea levels are also grabbing attention; one study in Nature stated that 600 million people could be affected globally.
Another study by the U.S. Army War College says that the armed forces are completely unprepared for what may happen in the next 20 years because of climate change. Developments like these will drive more conversations about replacing fossil-based fuels with renewable energy irrespective of what’s happening in Washington, D.C.
The key issue: transmission
While some big announcements in the storage space in 2020 – particularly in storage tied to solar – are coming down the pike, transmission will continue to be a big stumbling block to scaling renewable energy.
For example, the federal government has approved a 3,000-megawatt wind project in Wyoming. But it won’t get built unless the power can be transmitted to the intended market of California.
Similarly, in New York, Hydro-Quebec is working with developers to build the CHPE, or Central Hudson Power Exchange, which would deliver over 1,000 megawatts of power from new and existing dams in Canada to New York City. Hydro-Quebec is also working on delivering 1,200 megawatts to Massachusetts. But existing conventional and renewable generation suppliers are fighting the critical transmission needs of these projects because they’ll have a muting effect on prices in those markets.
Transmission issues will also impact how much wind capacity is built in the wind-rich Midwest. A few years ago, I asked the CEO of a not-for-profit electrical transmission organization whether he needed more storage or complementary resources, like greater flexible generation capacity, and his reply was simple: “Just give me more wires and poles. We can get a lot done if you just give me more transmission.”
That’s the constraint facing places like Texas. The 18,000-megawatt line that carries all the wind power from the Panhandle and West Texas down to the areas of demand is now fully loaded. This transmission line is at capacity, so it’s difficult to get into the interconnection queue and build out more wind in Texas.
Takeaways for 2020
Despite the short-term disruptions that will result from the decline of investment tax credits, renewable technology will continue to improve and reduce costs. This new technology promises a lot of potential for big leaps in efficiency. Considering the growing carbon dynamic, the stage is set for a massive shift of capital and resources into non-carbon energy. In the end, we’re still in the early stages of this enormous transformation.
About the Author
Peter Kelly-Detwiler is co-founder of NorthBridge Energy Partners and has more than 25 years of experience in the energy industry. Peter’s career has focused on the development of retail competitive markets, as well as new trends, technologies, regulatory and market developments, and sustainable solutions that create value in the energy space.
This article is adapted from the GLG Teleconference, Renewable Energy Outlook for 2020. If you would like access to this teleconference or would like to speak with Peter, or any of our more than 700,000 experts, contact us.
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