2021 Sustainable Energy in America Factbook

The ninth edition of the Sustainable Energy in America Factbook, published by BloombergNEF (BNEF) and the Business Council for Sustainable Energy (BCSE), is available to download at www.bcse.org/factbook. The Factbook provides updates on industry information and trends for the U.S. energy economy, with an in-depth look at the energy efficiency, natural gas, and renewable energy sectors, as well as emerging areas such as digitalization, micro-grids, offshore wind, hydrogen, and renewable natural gas.

This event was hosted in coordination with the Senate Renewable Energy & Energy Efficiency Caucus.

HIGHLIGHTS

Lisa Jacobson, President, Business Council for Sustainable Energy (BCSE)

• The 2021 Sustainable Energy in America Factbook covers long-term sustainable energy trends and examines how COVID-19 has impacted clean energy technology, markets, and policy.
• While energy efficiency, renewable energy, and natural gas continued to experience growth in the past year, a partnership is needed between policymakers and the private sector to accelerate the transition to clean energy.

Melina Bartels, Power Associate, BloombergNEF

• Energy productivity rose in 2020 as GDP shrunk and energy usage dramatically declined. Higher energy productivity (the quantity of energy needed to produce one unit of output) shows how economic growth and energy consumption are becoming increasingly decoupled. An expanding economy may not correlate with expanding energy consumption, indicating more efficient use of energy.
• Fossil fuel use (coal, petroleum, and natural gas) and nuclear energy sharply dropped in 2020. The level of decline greatly varied among energy sources, reflecting collective consumption changes from the impacts of COVID-19.
  • Electricity was the least affected sector, with demand falling by four percent.
  • Although electricity demand plummeted in the commercial and industrial sectors, unprecedented work-from-home conditions led to steep rises in residential electricity demand.
  • The market share of natural gas rose by three percent, continuing to displace coal in the power system. Coal captured less than 20 percent of the market share and fell by 22 percent (in absolute terawatt hour terms).
  • Transport-related energy usage took the largest hit, dropping by 14 percent.
• Renewable energy captured 20 percent of the market, increasing their generation by 11 percent (in absolute terawatt hour terms). Renewable capacity of 33.8 gigawatts (GW) was built, and clean energy installations were 50 percent higher than in 2016.
  • Both wind and solar broke records last year: 17.1 GW of wind energy capacity from wind turbines was installed, and onshore utility projects proceeded with construction largely unchecked.
• While renewable energy installations boomed, gas power plant installations held relatively steady. And, despite mandated and announced federal and state ambitions to decarbonize the power sector, 38 GW of gas-fired power plants were filed to come online in the next five years. Most current filings are located in the Appalachian, Midwest, and Atlantic regions. Based on historical trends, 30 to 40 percent of filed power plants will likely be built.
• There are a few ways that gas can fit into decarbonization and one way is by blending natural gas fuels with hydrogen (to reduce carbon emissions). While the United States is lagging behind in hydrogen policy and in implementing hydrogen in other components of its energy economy, the United States does have the largest pipeline of hydrogen-burning power plants in the world.
  • 6.4 GW, or 20 percent of the total pipeline of gas plants, will burn some combination of hydrogen. However, a hydrogen-burning power plant cannot use hydrogen as the majority of its fuel [hydrogen burns hotter than methane and is more reactive. Researchers are designing power turbines that could run solely on hydrogen]. For instance, the Long Ridge Energy Generation Project in Ohio will burn 20 percent hydrogen and 80 percent gas when it comes online in 2021.
  • Mitsubishi announced the largest hydrogen deal in 2020, investing $3 billion in green hydrogen projects [green hydrogen is produced by electrolyzing water and has a near-zero carbon footprint when renewable energy is used to power the system].
• U.S. greenhouse gas emissions fell by nine percent in 2020, mostly because of deeply depressed transportation and power sector emissions due to COVID-19. Nevertheless, the transportation sector still remained the largest source of emissions.
• Power emissions were down by 40 percent from 2005 levels. The current rate of decline may not outpace historical rates, as future emissions will likely be harder to mitigate than those in the past.

Charles Hernick, Vice President, Policy and Advocacy, Citizens for Responsible Energy Solutions (CRES) Forum

• Governments globally included decarbonization in their pandemic stimulus packages. The Energy Act of 2020 passed Congress in a bipartisan fashion and represented substantial updates to U.S. energy policy.
• Many technologies are needed to drive emissions down to the net-zero goals the country is aiming for. The U.S. federal government made a solid first step last year by putting down $34 billion in direct authorizations for R&D spending and making tax credits more available. With a strong price signal from the federal government, my hope is that we will see continued growth in this sector for years to come.

Ben Evans, Vice President, Public Affairs, Alliance to Save Energy

• While new generation technologies are important, using energy as efficiently as we can is the cheapest and fastest way to decarbonize and meet some of our goals.
• Energy efficiency is the largest employer in the clean energy economy. The pandemic caused severe job losses, as we started 2020 with 2.4 million jobs and ended the year with 300,000 fewer. Energy efficiency jobs span multiple sectors—construction, manufacturing, or in buildings and homes.

Bryn Baker, Director, Policy Innovation, Renewable Energy Buyers Alliance (REBA)

• 285 global companies have committed to 100 percent renewable energy consumption, helping to accelerate and drive impact in the market. Corporates are starting to focus on next-generation carbon technologies and the broader suite of zero-carbon solutions, such as coupling solar with storage.
• Corporate buyers publicly transacted for 11.9 GW of offsite wind and solar energy compared to the previous year’s 14.1 GW. REBA independently tracked 10.6 GW, a subset of the factbook's data, in publicly announced offsite deals by corporates. This was a 13 percent increase over the previous year’s 9.4 GW and represented a quarter of electric capacity added to the grid.
• Market structures are enabling corporate action: 80 percent of all 2020 deals occurred in organized wholesale markets, meaning regions with a regional transmission organization that is independently operating a competitive wholesale electricity market. The bulk of procurement is enabled by market structures that allow for customers to choose renewable power.

Allison Hull, Director of Federal Government Affairs, Sempra Energy

• Global energy transition investments hit $500 billion in 2020, a nine percent increase over 2019. The United States accounted for $85 billion of those investments, an 11 percent decrease compared to 2019.
• The country spends 58 percent of its energy transition capital on renewable energy. Renewable technologies saw $12 billion less in investment, a 20 percent decrease from 2019. Solar and wind accounted for 99 percent of all renewable energy investment.
• Investment in emerging technologies, such as green hydrogen, is growing. The United States now invests $100 million per year in hydrogen, the vast majority of which is tied to fuel cell vehicles. As green hydrogen projects come online over the next few years, the future potential of gas infrastructure will be unlocked with zero-carbon molecules and electrons delivering resilient and sustainable energy systems. Surplus renewable electricity can be leveraged to produce green hydrogen, which can then be injected into the natural gas grid for storage and use.
• Hydrogen blending can help provide cleaner fuel. SoCalGas is planning multiple hydrogen blending projects like H2 Hydrogen Home, a demonstration project showing the role hydrogen could play in attaining carbon neutrality.

 

Q&A Session

 

2020 ended with significant policy actions. What was impactful from your industry’s perspective, and what types of federal policy action are you supporting in 2021?

• Evans: The permanent extension of a commercial buildings tax incentive and the introduction of the Smart Building Acceleration Act (S.2335, H.R.2044) were particularly impactful. The extension will put some certainty into the market and improve uptake of that tax incentive, and the Smart Building Accelerator will act as a demonstration program around smart buildings. Federal policy action can support energy efficiency improvements to public buildings, the cost savings of which could fund resilience and improved air quality. While Congress worked on tax incentives for commercial buildings last year, we also need better tax incentives for homeowners to make energy-efficient improvements. We build one million new houses in the United States every year; if we are not building those the right way, we are contributing a lot of carbon emissions and a lot of wasted energy consumption for decades to come. Small businesses have been hit hard by the pandemic; energy efficiency measures can unlock incremental savings for those businesses to help improve their bottom lines.
• Hull: We are focused on what might be possible in the new Congress, such as electric vehicle funding and an infrastructure bill. There is increasing recognition of the need for expanded transmission to bring renewables from remote areas to load centers.
• Baker: We need to invest in technologies to drive decarbonization and support power transmission. A well-designed clean energy standard can address accounting challenges and leverage competitive procurement. The 2020 omnibus included an important provision that directed the U.S. Energy Information Administration to help harmonize and collect emissions data from all load-serving entities (e.g., utilities). Making that data available can help customers better manage and understand their carbon footprint.
• Hernick: A standalone energy storage tax credit can help ensure that energy storage is available at scale from hydropower and batteries without any reliability problems. Carbon capture, utilization, and storage infrastructure at scale can help bolster carbon management.

How did your industry adapt during COVID-19? What are the current business conditions, and how are you planning for the year ahead?

• Hull: This year involved a lot of adaptations to safety measures, especially during the California wildfire season. We developed a virtual emergency operations center allowing for various levels of response, and we had to conduct public safety power shutoffs (PSPs) in various communities for safety reasons.
• Baker: When the lockdown started, we surveyed our members and found that less than a quarter of the buyer community said they would pause on their goals. This meant that despite experiencing supply chain shortages and project delays, the vast majority of buyers remained committed to renewable energy. On the utility and equipment manufacturer side across our sectors, many had to figure out the right safety protocols. However, they were not as hampered as market segments dealing with residential renewable energy installations.

Clean energy is a fast-moving job creator in the United States. Even with COVID-19 impacts on employment, especially in residential energy efficiency, there are over three million clean energy workers in the United States. Can you share your perspectives on this?

• Hernick: We experienced enormous job losses during the beginning of the COVID-19 shutdown, but we have started to come back a bit since then. While we are nowhere close to the initial 2.4 million jobs, but, with the right policies in place, we could be poised for a huge rebound of energy efficiency programs and getting folks back to work. There is great potential to expand the strong diversity of efficiency jobs spread across the country.
• Evans: The pandemic underscored the need for a more stringent focus on supply chains and where we are obtaining our solar panels, wind turbine parts, and core elements of the energy future. The national dialogue should focus on how to insource more of these manufacturing jobs through strategic investment and revisions to regulations.

Congress is now quickly moving to consider a broad infrastructure bill that might also include a focus on economic recovery post COVID-19. Are there policies being discussed as part of this package that can secure bipartisan support? If so, please share your thoughts on which ones have the most likelihood of being enacted.

• Hull: There is opportunity and bipartisan support to invest in building a more resilient power grid. With automakers like General Motors committing to an all-electric future, the federal government needs to support electric vehicles and their associated infrastructure.
• Baker: The conversation around grid hardening and modernization has historically been sensitive to ensuring the costs are justified, but the conversation is unifying around resilience due to the increasing onset of extreme weather events. An infrastructure package could include smart policies regarding power transmission, which is key to unlocking a low-cost, accelerated decarbonization transition. Expanding organized wholesale markets could be supported in an infrastructure package, especially considering that the vast majority of voluntary procurement has happened in these markets. Organized wholesale markets provide a platform for transactions to occur and provide additional benefits, like accelerating clean energy, driving down customer costs, and helping integrate a variety of clean energy technologies.
• Hernick: In order to transition to clean energy, we need to build a lot of big infrastructure—offshore, onshore, and in transmission. We would benefit from Congress proposing a durable, single-coordinated process to streamline environmental review processes and expedite project permits. Title 41 of Fixing America’s Surface Transmission Act (H.R.22) provides a good model showing that you can safeguard the environment and local communities, expedite permitting at the federal level, and conduct environmental reviews for large multi-state infrastructure projects.
• Evans: There are lots of efficiencies to be gained from grid modernization. Regarding infrastructure, we can reduce long-term operating costs for local and state governments by improving efficiency. For instance, we can make energy efficiency improvements to water and wastewater treatment facilities, which use huge amounts of energy. Street lighting is often the single largest energy cost for municipalities, so we also need to do more to transition street lights to energy-efficient LEDs. Policy can support innovative solutions with strong bipartisan support, such as improving port and airport infrastructure. We can leverage federal seed money for private investment, which would be paid back through energy cost savings over time.

In February, the United States formally re-entered the Paris Agreement. How will that impact market signals for your sector? Will the anticipated announcement of a new U.S. nationally determined contribution (NDC) that outlines 2030 and 2050 greenhouse gas emission reduction targets have an impact?

• Evans: Our community supported rejoining the Paris Agreement, and we are eager to participate in the process of developing the U.S. NDC. We cannot meet our emission reduction goals without making significant gains in energy efficiency. The U.S. Energy Information Administration estimates that energy efficiency will account for 40 to 45 percent of the carbon emission reductions needed to meet the Paris Agreement’s goals.
• Baker: The business community as a whole was very supportive of rejoining the Paris Agreement and ensuring that there is a global coordinated effort. The bulk of our corporate members’ carbon footprints are in their global supply chains, and they have set ambitious emission reduction targets for their own operations. Without this global framework, companies are not going to be successful in reaching their own emission reductions.

Can you share how you see trends evolving on the demand and policy action aspects of Renewable Natural Gas (RNG)?

• Hull: Companies are moving in the direction of making ambitious climate commitments. For instance, SoCalGas has already committed to five percent of delivered gas to be renewable gas by 2022 and 20 percent by 2030. Congress and the federal government can support research and development efforts to help us get to the next level on hydrogen and RNG technologies.

How have cost reductions in clean energy technologies changed U.S. deployment trends? What is the impact of dramatic changes in cost reductions and more technologies becoming cost-competitive? Does that change the conversation and offer more opportunity for bipartisanship?

• Hernick: Due to market pressures and growing investment, it is almost always going to be cheaper for new generation to be solar, wind, or natural gas. Prices are coming down at a tremendous rate. The Energy Act of 2020 is proof that this area is ripe for conversation and compromise between Democrats and Republicans. Discrete federal roles can complement state policies and empower the marketplace to act. Consumers and companies want clean energy: if we can match supply with that unprecedented demand, we will be in a very good place.

What are your final takeaways from the 2021 Sustainable Energy in America Factbook?

• Jacobson: Two driving forces that impressed me were the falling costs of these technologies, as well as the growing customer demand for clean, affordable, and reliable energy. With a strong foundation and commercially available technologies, we can get closer to decarbonization.
• Bartels: Market reform is key to a clean energy future. We need to expand the infrastructure system to support hydrogen storage and transportation. Compared to other nations, the United States is unprepared in this area.
• Hernick: Not all renewable energy sources are treated equally: for instance, there is huge untapped potential in hydropower generating capacity. There are 88,000 dams in this country, but only three percent of them produce power.
• Evans: Equity and environmental justice need to be addressed in this transition. Higher-income households spend three to four percent of their incomes on energy bills while many lower-income households spend 15 to 20 percent. Federal investment needs to go to underserved communities, whether it be by reducing the energy burden on working poor communities or supporting workforce training through initiatives like the Blue Collar to Green Collar Jobs Development Act (H.R.1315).
• Baker: Significant disruptions and challenges are requiring us to reexamine how we build a clean, affordable, and reliable grid. How we plan, build, and operate our grid needs to adapt to the changing circumstances of the 21st century. A huge segment of the business community wants to see more bipartisan, durable, market-enhancing policies to set us on the decarbonization trajectory.
• Hull: We need to create a future where infrastructure works in tandem to decarbonize our country’s markets, homes, and transportation, all while addressing economic justice by providing resilient, sustainable, and affordable energy to people.

Highlights compiled by Celine Yang