American power industry in transition: 16 trends to look for in 2022
- Jan 13, 2022 9:52 pm GMT
This item is part of the Special Issue - 2022-01 - Power Industry 2022 Trends & Predictions, click here for more
Driven by favorable regulations, tax credits, lower technology costs, and corporate goals, the U.S. power grid has undergone unprecedented change over the past several years. As a result, wind, solar, and natural gas have dominated power generation investment. With this backdrop, solving the intermittency problem created by adding more and more variable wind and solar resources may be the most important hurdle necessary to achieve future carbon reduction goals.
In 2021, the electric industry began to rebound from the pandemic. Based on the most current reporting, over the 12 months ending in October 2021, electricity production was running about 2.2% ahead of the previous 12-month period. Solar (up 28.9%) and wind (up 13.4%) continued to grow, while at the same time, driven by higher prices (up 93.7%), natural gas power declined by 4.4%. With natural gas, hydro, and nuclear output down, coal made a significant surge upward. In 2020, for the first time in over one hundred and thirty years, electricity production by renewable energy surpassed coal in America. But in 2021, driven by higher natural gas prices and the need for dispatchable energy during high load periods, coal’s share of nationwide electricity production rebounded significantly – increasing by about 18% year-on-year. But even with the bounce back, continued coal plant closures and reduced use at operating plants are expected to dampen coal’s share of the electricity fuel mix into the future.
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