U.S. Renewable Power Generation Capacity Changes
We look at renewable power generation capacity changes over time
The IRA will result in an estimated $370 billion of energy security and climate change programs with a goal of reducing emissions by 40% by 2030
Section 45 Production Tax Credit (PTC) and Section 48 Investment Tax Credit (ITC) are extended in the current and future altered forms until 2032, providing a commitment to allow accelerated development of renewable power generation capacity
We take a look at U.S. state by state renewable generation capacity changes over the prior 10-years and what was expected during the next 10 years prior to the passage of the IRA
United States - No United Effort
The graphic below shows the change in renewable generation capacity (wind, solar, hydro, biomass) by state for 2022 versus 2012.
There is a wide discrepancy between states as to what was done on the renewable build-out effort over the last decade.
12 states saw a change of 15% or more in the difference in renewable capacity over the last decade, while 21 states only moved the renewable capacity needle 5% or less.
We analyzed EIA 860-M datasets which include all planned power generation projects through 2031 to see the difference in renewable generation capacity as a percentage of total power generation capacity between now and then.
Notably, a few items stick out:
- The average difference in renewable capacity between 2012 and 2022 was 10.4%, whereas the 2031 vs 2022 difference before the IRA passage is only 4.6% - the second derivative of change was slowing prior to the new legislation
- The states that made the smallest changes to their power stack mix over the last decade appear to generally be the states with the lowest planned renewable capacity changes through 2031 prior to the IRA passage
- The renewable capacity changes over the next decade should see material improvements compared to the June 2022 EIA planned generation dataset as a result of the IRA
Although the IRA provides incentives for solar, wind and battery generation development, the U.S. may need a more targeted carrot-and-stick approach to get some states to move further and more rapidly on changing their power generation fuel source mix.