US Wind To Exceed Hydropower In 2019 For First Time

January 16th, 2019 by Joshua S Hill

The latest energy and electricity forecasts from the US government has predicted that wind energy will outperform hydropower for the first time, providing a greater share of the country’s electricity mix in 2019.

The US Energy Information Administration (EIA) published its latest Short-Term Energy Outlook (STEO) on Tuesday, the first of its reports to include forecasts for 2020. Amidst forecasts covering the entirety of the US energy industry, EIA analysts noted that they expect wind energy’s annual share of electricity generation to exceed that of the hydropower sector, the first time this will ever have happened in the United States.

Specifically, the EIA expects wind energy capacity to increase from 96 gigawatts (GW) at the end of 2018 to 107 GW by the end of 2019, and 114 GW by the end of 2020. This would equate to predictions of 11 GW added in 2019 and 7 GW added in 2020.

Worth noting is the impact the United States’ Production Tax Credit (PTC) will have on the country’s wind energy industry in the coming years. Specifically, according to the EIA, “The build out of new wind capacity through 2020 is strongly affected by the phase-out of the federal Production Tax Credit (PTC) for wind, which began with projects under construction starting after 2016. Such projects take several years to complete, and the last tranche of projects eligible for the full $25 per megawatt-hour tax credit will start to enter service in significant numbers in 2019. Activity will taper off in later years as projects started in 2016 approach the limit of their safe harbor provisions and as the construction pipeline begins to shrink, reflecting reduced PTC pay-offs for projects beginning construction in 2017 and later.”

This seems to miss the point, somewhat, of what the PTC was intended to do, which was to support the wind energy industry as it began expanding, but not to subsidize the technology without end. In time, as the PTC wears off, and when combined with global technology cost reductions, wind energy will be able to stand on its own and compete without subsidies or government support with other technologies — something that is already being seen across the world.

The EIA also predicts a total of 5 GW of utility-scale solar PV will be brought online in 2019 and a further 6 GW in 2020. On top of that, the EIA expects a further 9 GW of small-scale solar PV to be installed during the two years combined, and that primarily in the residential sector.

Overall, the EIA’s figures showed that renewable energy generation provided 17% of total electricity generation in 2018, and expects that that figure will increase to 18% in 2019 and 20% in 2020. Hydropower accounted for 7% of total electricity generation and is expected to hang around that figure in 2019 and 2020.

Across the proverbial aisle, the EIA predicts that US coal production will fall 3% in 2019, down to 729 million short tons (MMst), before falling a further 7% in 2020, a ” result of coal’s relatively weak competiveness [sic] in the electric power sector compared with natural gas, as well as an assumption of lower demand for US coal exports.” Coal consumption was down 4% in 2018 despite a 4% increase in overall electricity generation, while the EIA expects coal consumption to fall by another 8% in 2019 and 7% in 2020.

Finally, total utility-scale electricity generation from natural gas-fired power plants is expected to increase from 35% in 2018 to 37% in 2020, while coal’s forecast share will fall from 28% in 2018 to 24% in 2020. Nuclear generation accounted for 19% in 2018 and will hold around the same through 2020.











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