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2021 Energy Predictions: U.S. Clean Energy Standard, Tripling Energy Storage, State Shift From Gas, Electricity Transition, Billions In Climate Investment

Silvio Marcacci's picture
Communications Director, Energy Innovation: Policy and Technology LLC

Silvio is Energy Innovation’s Communications Director, leading media relations and strategy. He has more than 15 years of communications experience, and has been a bylined columnist at top media...

  • Member since 2012
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  • Jan 21, 2021

2020 was among the most unexpected years in American history but despite a global pandemic, a renewed civil rights movement, and the most tumultuous election in memory one trend held steady: clean energy’s unstoppable rise.

From coal’s complete collapse, to plummeting clean tech prices and booming renewable energy installations, not to mention every Democratic presidential candidate running on ambitious climate action, decarbonization proved it is the path forward to a strong economy and safe climate future.

But how will 2021 shake out? Five leading policy experts shared their predictions for the year ahead, envisioning an even faster acceleration to a clean energy economy than ever before. From unprecedented federal climate policy to surging energy storage installations and a shift away from gas toward sustainable investment and just transitions, the next 12 months could mark the turning point away from fossil fuels.

A federal clean energy standard and “breakout year” for building electrification

Leah Stokes, Assistant Professor, University of California-Santa Barbara

The Georgia runoff election result—where two Democratic Senators were elected, shifting the United States Senate to Democratic control—means that the outlook for federal action on climate is even brighter in 2021. We have the best opportunity in more than a decade to act on the climate crisis.

This year, I think we will finally see Congress pass a Clean Electricity Standard (CES), after three decades of effort. Over the past several years, numerous CES bills, including some bipartisan ones, have been introduced in Congress. President Joe Biden campaigned on a bold climate platform, which included a pledge of 100% clean power by 2035—a specific target he repeated again and again on the campaign trail. This is a tried and true approach: Already, more than one in three Americans live in a state or city that is targeting 100% clean power. Congress has a clear mandate to act on a CES as soon as possible this year. 

Election 2020 Joe Biden

In addition, I think we will see serious progress on building electrification in 2021. Many Americans now understand that cooking on gas stoves is a health risk. This year, more Americans will want to electrify their homes, and we could see Congress pass incentives to help them do it and help bring down the cost of heat pumps through deployment. Just as solar panels and electric vehicles are now commonplace consumer goods, the same will be true for induction stoves. It’s going to be a breakout year for building electrification.

Energy storage installations will triple compared to 2020

Kelly Speakes-Backman, CEO, Energy Storage Association

Energy storage deployments in the U.S. shattered records in 2020, even with the unprecedented challenges posed by COVID-19 and the economy. The U.S. Energy Storage Association expects continued innovation and growth in the storage industry in 2021 and beyond. In 2020, we announced our 2030 Vision, which lays out our expectation of 100 gigawatts (GW) of new energy storage across all technologies to be added to the grid by 2030. This storage capacity will support the buildout of higher shares of wind and solar power, introduce more flexibility and resilience to the grid, and support the expansion of distributed energy resources and electric vehicles. 

 We are just beginning to see the industry grow at a rapid pace, with expectations of at least 3.6 GW of battery storage to be installed in 2021 (compared to an estimated 1.275 GW installed in 2020). This accelerated growth is the direct result of the continual decline in battery costs, the shifts within the regulatory system, and the overall understanding of the value-driven benefits that energy storage produces. Storage can maintain grid stability, serve as a transmission or distribution asset, and can provide reliability and energy management services for consumers.

Quarterly U.S. energy storage deployments 2013-2020

To realize this accelerated growth over the next decade and the 200,000 jobs that will come with them will take continued regulatory reforms and supportive policies at the state, regional, and federal levels. Energy storage has been a bipartisan issue in an otherwise polarized era, and we are confident that the policies of the Biden-Harris Administration will continue to support our industry’s progress in areas of domestic manufacturing, deployments, and safe, reliable operations. The public demands a predictable and reliable energy grid, and energy storage is an increasingly critical component as we shift to cleaner and more sustainable energy sources.

States will plan for a transition away from gas

Sherri Billimoria, Senior Associate, Rocky Mountain Institute

To avoid runaway climate change, gas usage – especially in buildings – must substantially decrease. Achieving a future with limited or no gas use requires planning today; if utilities keep investing in new gas projects in a “business as usual” way, they risk burdening customers with billions of dollars of obsolete infrastructure.

In 2020, several states took steps to re-examine the long-term future of the gas distribution system—California, Colorado, Massachusetts, and New York all opened proceedings focused on gas planning in light of state climate targets. States also responded to local government action: California’s proceeding follows dozens of cities passing policies to limit gas appliances in new buildings, and Massachusetts needs to address town petitions requesting authority to phase out gas appliances. In 2021, we will see more states follow their lead and begin envisioning a new regulatory system to ensure affordability, safety, and reliability while moving away from fossil fuels.

While these states took an important first step and acknowledged the status quo will need to change, the most challenging work lies ahead. In 2021, regulators will begin reimagining the gas system and gas regulation to serve the needs of a decarbonized world. These proceedings could result in state legislatures revising the utility’s obligation to provide gas service to any customer who wants it.

Pathways for gas utilities in a carbon-free future

Gas transition issues will also crop up outside of specific “future of gas” proceedings. Last year, for instance, Rochester Gas & Electric agreed to stop expanding their gas business as part of rate case negotiations. Even though rate cases happen at the individual utility level, they provide an important venue to limit gas system expansion, and we might expect to see more rate cases limiting further expansion of the gas system. These early signals indicate a big shift in approach to gas regulation in 2021.

Getting serious about just transitions in the electricity system

Emily Grubert, Assistant Professor, Georgia Institute of Technology

Addressing climate change requires rapid decarbonization. The electricity system will be key, particularly adding modern renewable resources like wind, solar, and geothermal to generate clean power. In 2021, we’ll get specific about what rapid decarbonization and expansion of the U.S. electricity system is going to look like.

Electricity system decarbonization requires closing fossil fuel-fired power plants and opening zero-carbon power plants, which means we face simultaneous and extremely rapid de-industrialization and industrialization. We’re extremely lucky that modern renewables can now provide historically low-cost electricity, and expanding the industry will bring new jobs.

The Steel Winds wind energy project

But enabling a just transition requires acknowledging the negative effects of both de-industrialization and industrialization and attempting to mitigate them: job losses, land use change, and new pollution sources, for example. Just like net- zero emissions doesn’t mean no emissions, net benefits don’t imply zero harm, even if the sacrifices are willingly made.

In 2021, I expect more specific, place-based discussion of what it actually means to close down fossil fuel infrastructure and open zero-carbon infrastructure. What social and governance infrastructures do we need to establish now in anticipation of people losing their jobs in geographically concentrated ways? What kinds of things do we care about, and optimize for, when greenhouse gases don’t dominate anticipated impacts?

Public Utility Commissions should be challenging requests to build assets that will be stranded under the Biden targets of a decarbonized electricity sector by 2035, and net-zero greenhouse gases economy-wide by 2050, like Duke’s proposals for new gas in North Carolina. As we realize that everyone will be affected by climate change, we can expect a broader realization that a just transition probably requires universal programs that promote material well-being for everyone, like universal health care and a living wage.

A new era of inclusive climate investment and consumer-driven decarbonization

Nicole Sitaraman, Vice President of Strategic Engagement, Sustainable Capital Advisors

2021 will mark a new era of accelerated funding for climate resilience infrastructure that directly benefits environmental justice communities, and expands the role consumers play in expediting decarbonization.

At Sustainable Capital Advisors, we have devoted years of research and innovation to catalyze inclusive impact investing, and 2021 will be a seminal year of collaborative financial partnerships to create the scale of capital required to implement and accelerate a profitable and inclusive climate resilient future.

In 2020, then-Presidential candidate Joe Biden and Vice-Presidential candidate Kamala Harris, pledged $2 trillion in sustainable infrastructure investment, promising that environmental justice communities would receive 40% of the benefits of funding. Several corporations and foundations also issued public statements pledging further support for environmental and racial justice efforts. 

These investment promises will start to be fulfilled in 2021 – an indispensable step to facilitating a competitive, inclusive, and durable clean energy economy. Community-based organizations, government agencies, and the private sector will establish partnerships that ensure equitable capital deployment for impactful sustainable infrastructure businesses serving all.

RE-Green27 Date: 05-19-06 Photographer: Susan Biddle /TWP Neg#180552 Arlington, VA Installation of s

This trend will also amplify discourse on thinking locally to achieve big results, with greater emphasis on how leveraging aggregated consumer-based resources can yield large-scale economic and climate impacts. For example, a recent study by Vibrant Clean Energy found that deploying at least 247 gigawatts of local rooftop and community solar on the energy grid is the most cost-effective way to transition to a clean energy system. New opportunities will emerge for everyday consumers to become clean energy investors, and people of all income levels will increasingly show their environmental stewardship through where they choose to spend and invest their money, demonstrating true power in numbers.

Original post.

Matt Chester's picture
Matt Chester on Jan 21, 2021

To realize this accelerated growth over the next decade and the 200,000 jobs that will come with them will take continued regulatory reforms and supportive policies at the state, regional, and federal levels

Wow-- that's a lot of job creation by investing in battery technology. You don't want to support an industry just to create jobs, but as a side benefit that's hard to ignore at a time when the economy is still recovering, we're still looking at automation putting certain jobs out to the curb, etc. 

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