American Clean Power’s (ACP) Clear Energy Quarterly Market Report Q2 2022 exhibits the speed of fresh vitality deployment slowed considerably within the second quarter as coverage headwinds, financial components dealing with the trade and commerce points have impacted undertaking improvement and elevated the backlog of recent undertaking delays.
Throughout the second quarter, the trade noticed a 55% decline in undertaking installations from the identical interval in 2021, with 3,188 MW of utility-scale clear energy capability put in.
This makes the second quarter the bottom quarter for clear vitality capability additions because the third quarter of 2019.
“We’ve got been warning in regards to the storm of coverage and financial headwinds the clear energy trade is dealing with, and it is a step within the improper course,” says ACP CEO Heather Zichal. “Congressional inaction and uncertainty on long-term tax coverage, tariff and commerce restrictions, and transmission constraints all influence the demand for clear vitality at a time once we have to be quickly scaling up improvement. Our member firms are able to make the funding choices vital for constructing America’s clear vitality financial system, however the present enterprise and coverage setting is slowing the speed of deployment.”
Further market headwinds impacting the speed of improvement embody commodity costs, COVID pandemic-related delays, provide chain points and elevated working prices.
Power storage was the one expertise to expertise progress, with a 13% enhance in installations. Photo voltaic installations have been down 53% in comparison with the identical quarter in 2021. Concerningly, onshore wind installations have been 78% decrease when in comparison with the identical time interval final yr.
Challenge builders introduced 60 new tasks on-line to the grid within the second quarter, representing $4.3 billion in capital investments. The trade put in 3,188 MW of recent capability from 41 photo voltaic tasks, 14 storage tasks and 5 wind tasks throughout 27 states. Complete installations for the yr at the moment are 9,795 MW, in comparison with greater than 13,000 MW of tasks introduced on-line within the first half of 2021.
The entire working clear energy capability within the nation is now over 211 GW – sufficient to energy 58 million properties in America. Damaged down by expertise, working clear energy capability is made up of 139,143 MW of land-based wind; 65,749 MW of photo voltaic; 42 MW of offshore wind; and 6,471 MW/16,792 MWh of battery storage capability.
The myriad challenges dealing with the trade proceed to influence undertaking improvement. Whereas the trade at present has a document quantity of potential clear energy capability being developed, the speed of progress is slowing. The undertaking runway grew by simply 4% within the first quarter and three% within the second quarter – a lot slower than the 12% common quarterly progress skilled all through 2021.
Throughout the second quarter, the trade began building on 3,964 MW of tasks, whereas 7,000 MW entered superior improvement. There are 1,155 tasks within the pipeline with a complete capability of 128,889 MW. This contains 40,656 MW beneath building and 88,233 MW in superior improvement.
For the reason that finish of 2021 greater than 32.4 GW of fresh energy tasks have been delayed and haven’t but achieved business operation. That’s sufficient vitality to energy 6.5 million properties and help 110,000 jobs, and it represents $45 million in funding – a lot of which flows to native communities.
Photo voltaic tasks are probably the most liable to delays, with practically 21 GW of photo voltaic tasks at present delayed – a lot of which is a direct results of misguided commerce actions. Photo voltaic accounts for 64% of all tasks delayed. Wind makes up 17% of whole delays within the first quarter of 2022, and battery storage makes up 21% of delays.
This was compounded by undertaking delays from the primary quarter, which included greater than 7 GW of delayed tasks. An extra 8 GW of fresh vitality slated to return on-line within the second quarter was additionally delayed.
Regardless of regulatory headwinds, photo voltaic continues to be the main expertise within the pipeline, accounting for 57% of all clear energy capability in improvement. Land-based wind accounts for 18% of the pipeline, offshore wind represents 14%, and storage accounts for the remaining 11%.
The second quarter additionally noticed a decline from the prior quarter when it comes to tasks beginning building or coming into superior levels of improvement – a key indicator for added challenges all through the rest of the yr.
The prospects for these tasks shifting from improvement to constructed deployment are unclear with out motion from Congress.
Texas leads all states in improvement exercise with 23,665 MW underway, representing 18% of the full undertaking improvement pipeline. Different main states for undertaking improvement embody California (13,710 MW), New York (10,809 MW), Indiana (7,099 MW) and Virginia (6,456 MW).
The biggest tasks to return on-line within the second quarter embody the 260 MW DeCordova Power Storage undertaking in Granbury, Texas. Owned by Vistra Corp., the ability consists of over 3,000 lithium-ion battery modules.
RWE’s Hickory Park Photo voltaic + Storage was the biggest hybrid undertaking to return on-line this quarter. Situated in Georgia, the undertaking contains 196 MW of photo voltaic capability and 40 MW/80 MWh of battery storage capability.
The 201 MW Golden Hills Wind undertaking, owned and developed by Avangrid, was the biggest wind undertaking to return on-line. The Oregon undertaking makes use of Vestas and GE Renewables wind generators.
A vibrant spot within the report is the rise of fresh energy procurement. Procurement exercise picked up in the course of the quarter as firms introduced 8,502 MW of recent energy buy agreements (PPAs) – a 35% enhance from the earlier quarter, and a 27% enhance from the second quarter of 2021.
Photo voltaic stays the dominant expertise of selection for brand new PPAs, accounting for 71% of all PPA bulletins within the second quarter, and 78% of PPA bulletins for the yr.
Business and Industrial (C&I) consumers accounted for five,654 MW of recent PPAs this quarter, a notable 71% enhance from the earlier quarter. The highest company purchasers within the second quarter have been Amazon (3,200 MW), Microsoft (615 MW) and Verizon (525 MW).
There was a decline in PPA bulletins from utilities, with 1,095 MW of contracted capability introduced. Regardless of the drop in utility PPA bulletins, it continues to be a vendor’s marketplace for renewable vitality. Demand continues to develop as utilities search to decarbonize their electrical energy combine, whereas increasingly companies search to attain their sustainability targets.
The highest utility PPAs introduced this quarter embody CenterPoint Power (335 MW), South Carolina Public Service Authority (205 MW) and CMS Power (150 MW).
Learn the complete report here.
