'Unrelentingly challenging' market headwinds stalls US clean energy build: ACP
The US installed 28.5GW of utility battery storage, solar, and wind capacity last year – flat compared to deployment in 2020 – as multiple market “headwinds” continued to imped the industry’s ability to deliver sustained growth necessary to keep the country on track to achieve a carbon-free electric grid by 2035, according to the American Clean Power Association (ACP).
“Roughly 10GW of clean power capacity originally expected online in 2021 were delayed because of various policy headwinds,” said Heather Zichal, CEO of the national trade group, citing “unrelenting challenges” linked to Covid-19 pandemic and global supply chain issues, as well as to inflation, long interconnection queues, and abiding uncertainty over federal tax credits.
ACP found that maintaining last year’s project volume would provide only 35% of what is needed to eliminate carbon from the power system by 2050, one of several key climate goals set by President Joe Biden to enable the US to achieve net-zero, which is consistent with the Paris Agreement.
According to updated numbers in Annual Market Report 2021 released today (Tuesday) by ACP, project developers installed 13.46GW of onshore wind capacity, 12.43GW of PV, and 2.69GW of battery storage. Those clean energy technologies accounted for 81% of all new power capacity installations.
There was 201.35GW of utility clean power installed at the end of 2021 with 67% wind, 30% solar PV, and 2% battery storage. Cumulative investment was $408bn, according to the report.
Onshore wind installations were the second highest for a calendar year after 16.9GW in 2020. The report contends that new capacity would have set a record exceeding 18GW had not more than 5GW of projects been delayed for multiple reasons including logistics and transportation constraints, inflation causing higher commodity prices, and supply chain bottlenecks.
Solar installations surged 20% year-on-year, despite more than 6GW of projects being delayed due to supply chain constraints. Solar imports into the U.S. fell 18% due to regulatory barriers which are expected to obstruct future industry growth.
Particularly damaging to the industry was the Department of Commerce’s inquiry into whether some Chinese-branded solar panels and cells entering the US from Cambodia, Malaysia, Thailand, and Vietnam are using cheap components made in China to cut costs and dodge existing US duties in place since 2012 on panels imported directly from the Asian superpower, according to Zichal.
The challenges to existing trade precedent and potential for new US tariffs on Chinese-branded solar panels from those countries are “already taking a toll as we see projects canceled and delayed,” she said.
The report underscored the need for US investment in transmission infrastructure, with merchant developers and utilities building only 386 miles of lines in 2021. Transmission is critical to maintaining a reliable electric grid and to integrating renewable energy resources more efficiently
Recent transmission additions are “simply not adequate to enable the clean energy transition, as clean energy projects continue to scale up,” said the report, noting that transmission projects in development could deliver an additional 5,000 miles of lines by 2025.
Richard Kessler | https://www.rechargenews.com/
