Renewables are expected to generate more electricity than coal in 2022 in the United States, according to analysts.
A massive financial plan
Renewable energy must grow rapidly if the country is to meet its climate goals. The Inflation Reduction Act, sought by the Biden administration, is suffering from supply chain constraints. However, Washington is targeting a 40% reduction in emissions by 2030, compared to 2005.
Washington decided to invest $369 billion in inflation reduction and clean energy. However, the effects of these measures cannot be immediate. Companies are also facing the effects of rising interest rates and the threat of recession.
Projections point to the need to double the rate of renewable installations from the record levels of 2020 and 2021. John Larsen, partner at Rhodium Group, says:
“Every year we don’t have capacity additions beyond the record, it’s lost ground. There’s a point where we’re not getting the results we projected because we missed the early years of the transition.”
However, wind and solar generation is up 18% through November for the same period compared to last year.
It even increases by 58%, compared to 2019. The U.S. government projects that wind, solar and hydro will produce 22% of America’s electricity by the end of this year. Coal and nuclear power are increasing by 20% and 19% respectively.
As a result, coal stocks are up 5.1% month-over-month in September 2022, or 80 million tons. This seasonal increase is traditional before winter. However, coal stocks are steadily declining and remain historically low.
The influence of the coal industry
Thus, for the period of September 2009, compared to September 2022, high-grade lignite goes from a stock of 5.8 million tons to 2.8 million tons. For intermediate grade bituminous coal, it drops from 98.2 million tons to 46.6 million tons. For low-grade sub-bituminous coal, inventories fall from 93.2 million tons to 30.7 million tons.
On the other hand, many experts believe that the Inflation Reduction Act will have beneficial effects on the development of renewable energy. However, many projects are waiting to be connected to the electrical grid. The total capacity of the U.S. electric system is now about 1150GW.
930GW of wind, solar and battery projects are waiting to be connected. The EIA estimates that gas will drop from 38% of electricity generation to 36% next year in the United States. This contrasting situation is the result of both less favourable weather conditions and growing renewable capacity.
As a result, renewable energy is expected to reach 24% of U.S. electricity generation by 2023. However, supply chain issues that slow coal removal must be considered. In fact, 13GW of coal withdrawal was delayed
For bituminous coal-fired power plants, they had 96 days of forecasted burn time in August versus 110 days in September 2022. The operation of coal-fired power plants results from unpredictable increases in electricity demand. In this case only, this source of CO2 emissions will have a limited impact.