Energy Market Intelligence

According to the EPA, burning fossil fuels for electricity production makes up about a quarter of total U.S. greenhouse gas emissions. Approximately, 62% of our electricity comes from burning fossil fuels, producing large quantities of carbon dioxide, resulting in heat being trapped in our atmosphere. Renewable energy sources are the best alternative to reducing the negative externalities associated with deriving most of our electric power from non-renewable sources.

The demand for renewables has increased in the past year despite the pandemic. Renewables were the only energy source for which demand increased in 2020 reaching its highest levels to date. Wind energy has become the single most-consumed source of renewable energy on an annual basis accounting for roughly 26% of U.S. renewable energy consumption in 2020. Last year U.S. wind energy consumption grew 14% from 2019. The electricity generated by wind-powered turbines was nearly entirely consumed in the electric power sector, contributing to almost half the renewable energy used in the electric power sector at 43%. Hydropower was also almost entirely consumed by the power electric grid. On the other hand, solar energy accounted for about 11% of U.S. renewable energy consumption in 2020. Most of the solar energy was consumed at a residential and commercial level. Overall, 2020 U.S. solar consumption increased 22% from 2019. According to a report released by Solar Energy Industries Association and Wood Mackenzie, solar installations grew 43% year over year, reaching a record 19.2 gigawatts of new capacity.

Looking more closely at wind energy in the United States, according to the IEA, onshore additions are expected to decline this year due to many projects eligible for full tax credits that were commissioned in 2020, reducing the project outlook for 2021 and 2022. Approval of the new proposal for a longer-term tax credit extension would most likely boost growth beyond 2023. Thus, long-term expansion of wind power and infrastructure is expected.

President Biden’s effort to tackle climate change with the goal to set the US economy to net-zero by 2050 and cut emissions by half by 2030 has increased interest in renewable energy such as wind power.  Simply put wind energy, once called windmills is a form of solar energy,  where wind turbines turn wind into electricity using the force from the rotor blades and collected to power the grid.  Compared to its popular counterpart Solar panels, less CO2 is released into the atmosphere, less energy is consumed, and one wind turbine can generate the same amount of electricity per kWh as about 48,704 solar panels.  The $2.8 billion offshore wind project known as Vineyard Wind is the nation's first utility-scale offshore wind energy project and will be a big step to achieve Biden’s target.  According to the EIA, 42 states in 2020 with utility-scale wind power projects generated a total of about 338 billion kilowatt-hours (kWh). The five states with the most electricity generation from wind in 2020 were Texas, Iowa, Oklahoma, Kansas, and Illinois. These states combined produced about 58% of total U.S. wind electricity generation in 2020. However, compared to the share of total U.S. utility-scale electricity generation. wind turbines accounted for only 8.4%.

The Vineyard wind project will be over 15 miles off the coast of Massachusetts and is expected to power 400,000 homes and businesses and reduce carbon emissions by about 1.6 million tons per year.  The project will provide power to Massachusetts in 2023 and construction will begin this year.  Many political leaders such as U.S. Senator Elizabeth Warren, Congressman Bill Keating, and State Representative Patricia Haddad praised the project, and Governor Charlie Baker stated  "Massachusetts should be proud that this decision launches the nation’s first commercial-scale offshore wind project here on the Commonwealth’s shores. "  Although the project will create thousands of jobs in addition to the big push to clean energy and less reliance on fossil fuels, the New England fishing industry sees the project as being rushed and a disruption to their livelihood.  A major challenge to this renewable source is offshore cabling which can have an environmental impact on marine life and impact on the fishing industry. The Responsible Offshore Development Alliance (RODA), an organization that supports fishing interests feels silenced and is concerned with safe passages of fishing vessels and protection of the marine.  Annie Hawkins, executive director of the RODA, said "there hasn’t been enough opportunity for people in the fishing industry and the public to become informed and weigh in on the proposal."  There are advantages and disadvantages to even renewable energy resources and no matter which side you are on the renewable energy industry is growing and reliance on development on fossil fuels is scaling back.  The interest in PPA or power purchase agreement in renewables has also grown due to the decreased prices as a result of improved technology. 

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