Renewable Energy Industry
According to the United States Energy Information Administration (EIA), up to the mid-1800s, wood was the main source of energy in the US. However, natural gas and fossil fuels such as petroleum and coal started to be the major sources in the late 1800s. Since then, the country’s energy consumption from sources such as solar, wind, biofuels, and geothermal among others has increased. In 2019, renewable energy provided approximately 11.4% of total U.S. energy consumption. Key players, a SWOT analysis, mergers and acquisitions, types, and current trends in the US renewable energy industry have been carefully selected from credible sources and provided below.
Key Players in the US Renewable Energy Industry
Since one of the goals of the research is to find opportunities in the US renewable energy industry, we compiled a list of top companies in the renewable energy industry by market capitalization. We relied on credible sources such as Motley Fool (a financial and investing advice company), Yahoo Finance (it provides financial news, data, and commentary including stock quotes), US News Money (it provides the latest business news and financial news), and The Balance (it provides expert advice on topics such as investing). A list of the major companies in the US renewable energy industry has been curated and presented below.
- NextEra Energy is one of the major energy companies in the US and is headquartered in Juno Beach, Florida. According to the company’s website, it is the largest utility company in the world focusing on wind and solar power.
- Energy Acuity stated that NextEra owns the Florida Power & Light Company and Gulf Power Company which serve approximately 5 million customer accounts and in Florida and more than 460,000 customers in eight counties respectively.
- NextEra had an annual revenue of $19.2 billion in 2019 and a market cap of $112.7 billion.
- Tesla is headquartered in Palo Alto, California, and it specializes in renewable energy as well as electric vehicles. In 2018, it was named as the largest manufacturer of electric vehicles after selling around 250,000 units or 12% of the market. To push its mission of accelerating the world’s transition to sustainable energy, Tesla also ventured into the renewable energy market and it also manufactures rooftop solar panels and battery storage units.
- The company generated approximately $1.53 billion in 2019 from its energy generation and storage segment. It also had a market cap of $42.5 billion.
The AES Corp.
- According to the company’s website, its mission is to improve lives by “accelerating a safer and greener energy future.” AES is headquartered in Arlington, Virginia, and it provides affordable energy to 14 countries around the globe via its “diverse portfolio of distribution businesses as well as thermal and renewable generation facilities.”
- AES had an annual revenue of approximately $10 billion in 2019 as well as a market cap of $10 billion.
- First Solar is headquartered in Tempe, Arizona, and it manufactures “thin-film solar modules that use cadmium telluride as a semiconductor instead of crystalline silicon.” According to Yahoo Finance, the company has invested heavily to stay ahead of its competitors in the market.
- First Solar had an annual revenue of $3.06 billion in 2019 which was a 36.5% increase from 2018. It also had a market cap of $6 billion during the same period.
- Headquartered in New York, TerraForm Power is one of the key players in the US renewable energy industry and is managed by Brookfield Asset Management. Effective July 31, 2020, the two companies completed a merger deal.
- According to D&B Hoovers, TerraForm Power had an annual revenue of $941.24 million in 2019. The company’s market cap was $3.6 billion during the same period.
- Enphase Energy focuses on manufacturing affordable and efficient inverters that convert DC power from solar panels into AC and is headquartered at Fremont, California.
- In 2019, Enphase had an annual revenue of $624 million which was a 97.47% increase when compared to 2018. It also had a market cap of $2.9 billion during the same period.
- Sunrun is located in San Francisco, California, and it provides both homeowners and businesses with multiple ways to acquire a solar system (MF). The company had an annual revenue of $859 million in 2019 which was a 12.97% increase when compared to 2018. It also had a market cap of $1.95 billion within the same period.
- SunPower is also a key player in the solar panels for utility-scale applications market for both residential and commercial applications. It is headquartered in Silicon Valley and has been in operation since 1985.
- In 2019, SunPower had an annual revenue of $1.86 billion and a market cap of $1.5 billion according to Motley Fool.
SWOT Analysis for the United States Renewable Energy Industry
Growing Demand from Most Market Segmentation
- According to Deloitte’s midyear 2020 Renewable Energy Industry Outlook, the United States renewable energy industry has been experiencing a steady increase in demand from most market segments because overall consumer sentiments have remained positive.
- In 2019, renewable energy consumption by residential customers went up by 6% while the consumption by commercial customers went up by 5%. Moreover, corporate renewable energy contracts in the country set a record after corporations signed power purchase agreements (PPAs) worth 5.9 gigawatts (GW).
- Demand from corporate buyers and utilities in the wind energy segment alone also set a record in 2019 after they signed new wind power purchase agreements (PPAs) worth approximately 8,700 MW. Utilities signed around 5,000 MW of wind energy PPAs while corporate buyers signed 3,460 MW.
- The demand keeps growing in 2020. For instance, demand for wind energy from utilities and corporate buyers has continued in 2020 with corporate buyers and developers setting a new quarterly volume record by announcing PPAs worth 2,859 MW. Led by Evergy and AEP Energy, utilities also announced 1,719 MW worth of PPAs.
Growth in Investors' Interests
- As the US renewable industry continues to grow and experience a steady demand, interest from investors is growing. A Deloitte report published on the Wall Street Journal (WSJ) stated that many companies are working towards attaining their renewable energy goals driving demand up while other companies are investing in the industry. The article further said that some oil and gas companies have also started to venture into the renewable energy industry by increasing their investments in both wind and solar projects as well as companies.
- An article by Energy Live News stated that while Europe had the largest number of mergers and acquisitions in the renewable energy industry in 2018, the US received the most capital investment of $81.4 billion with $55.1 billion coming from domestic transactions.
- Another research by BloombergNEF revealed that while the overall U.S. investment in renewable energy declined by 6% to $42.8 billion in 2018, it was still way above average within the last five years and the third-highest total on record. Ernst & Young ranked the US as the second most attractive country for renewable energy investment in 2019. The World Economic Forum also revealed that renewable energy is now investors' preferred choice for new power plants.
Government Initiatives, Trade, and Tariff Policy Uncertainties
- With the Production Tax Credit (PTC) being extended for only one year and the Solar Investment Tax Credit (ITC) starting to decrease in 2020, there are so many uncertainties in the industry because the two government initiatives were among the major drivers behind the growth of the US renewable energy market.
- Solar developers were optimistic at the end of 2019 because the costs for imported panels had declined and were likely to offset the impact of existing tariffs. However, their hopes depend on whether new tariffs will be imposed or not.
- Additionally, the government increased tariffs on imports from China which include bifacial solar modules and could also increase the tariff amounts. If the government imposes new tariffs on top of existing ones, this will create upward pressure on costs which could potentially cripple new or continuing renewable energy projects among other risks. As a result, the uncertainties revolving around government initiatives, trade, and tariff policies are keeping the industry on the lookout for strategies that will soften or cushion the risks.
Untapped Renewable Energy Potential
- A recent report by Smart Energy International, the United States was ranked “10th with a renewable energy proportion of nearly three times less” than that of Germany which was the first on that list. Despite having large untapped renewable energy potential, the US government has not made any major investments in the industry.
- For instance, according to the U.S. Secretary of Energy, Rick Perry, “There is enormous untapped potential for geothermal energy in the United States.” Perry said this in a 2019 Department of Energy report that detailed how the country can benefit from the vast potential of geothermal energy.
- The Department of Energy also revealed that while geothermal energy is renewable, flexible, and reliable, the country has 60GW of untapped geothermal energy and called it 'America’s untapped energy giant'.
Increasing Demand for Electric Vehicles
- According to the World Economic Forum, more and more people are attempting to reduce their carbon footprints and as a result, the sale for electric vehicles is on the rise with over 4.5 million electric vehicles on the road.
- BloombergNef reported that global electric vehicle sales will increase to “10 million by 2025, 28 million by 2030, and will comprise over half of all passenger vehicle sales by 2040 or 56 million vehicles annually.”
- McKinsey also reported that although the global electric vehicle penetration rate is still at 2.2%, their adoption in the United States has been increasing over the years at a rate of 46% per annum and this creates an opportunity for the renewable energy industry.
- The US Department of Energy’s National Renewable Energy Laboratory (NREL) also indicated that electric vehicles could increase the country’s demand for electricity by 38% by 2050. This creates a huge opportunity for the renewable energy industry as the electric vehicle industry is one of the biggest buyers of renewable electricity in the world.
Instating Federal Level Policies
- A recent report published by Science Direct revealed that while the United States has several state-level policies on the generation and utilization of renewable energy, the country is yet to lay out dedicated federal policies.
- S&P Global indicated that the Federal Energy Regulatory Commission (FERC) has “authority over electric utility wholesale sales and transmission rates in interstate commerce, the transportation and sale of natural gas in interstate commerce, and the licensing and inspection of private, municipal and state hydroelectric projects.” However, even though FERC has had little or no involvement in renewable energy other than hydroelectric projects, it can have significant indirect impacts on the industry.
- This fact makes federal policies important and if the renewable industry can be on the lookout for future policies, it stands to benefit or at least avoid being harmed because Federal policy “goes a long way aiding the analysis and formulation of the Nation’s renewable energy targets.”
- During President Trump’s campaign, he promised to save the nation’s coal industry as well as boost clean coal technology. An article by CNBC reported that the president’s efforts to “prop up the industry which include replacing the Obama-era Clean Power Plan with the new Affordable Clean Energy Rule” will give states more flexibility to continue keeping coal-fired power plants open.
- A 2020 report by the US Energy Information Administration (EIA) said that because the percentage of electricity supplied by coal is projected to drop to 19% in 2020, the renewable energy industry will overtake it for the first time with 20%. However, if the president fulfills his promise, then it poses a huge threat to the growth of the nation's renewable energy industry.
Recent Mergers and Acquisitions in the US Renewable Energy Industry
According to Energy Live News, the COVID-19 pandemic has caused a 25% decline in mergers and acquisition deals across the globe. However, Elisabeth McNeil from K&L Gates said that although industry experts are predicting that mergers and acquisition activities in the renewable energy industry will taper off in 2020, “the market has remained strong so far.” Some of the recent mergers acquisitions in the US renewable energy industry in 2020 have been curated and presented below.
MOTIVE Acquires DS Energy Solutions
- MOTIVE, one of the leading providers of design and construction services, acquired DS Energy on July 1, 2020. Although MOTIVE acquired DS Energy’s assets, employees, and customer contracts, DS Energy will continue to operate on its own but as a division of MOTIVE.
- With the acquisition deal completed, DS Energy has greater financial capital and is now able to expand its services outside California and grow in the country’s renewable energy industry. DS Energy’s vice president, Scott Mazzola, said: “As a part of the MOTIVE brand, we now have the capabilities to service our customers in a shorter and more effective timeline, while continuing to provide all aspects of the project in-house, ranging from design, engineering, construction, and installation.”
- An article by Distributed Energy also stated that “DS Energy Solutions' solar expertise coupled with MOTIVE's vast customer base, extensive network, and top of the line engineering, battery, generator, and construction services makes for the perfect partnership.”
Dominion Energy Acquires a Central Virginia Solar Project from Cypress Creek Renewables
- Dominion Energy announced on August 17, 2020, that it has acquired a 62.5-megawatt Madison Solar generating facility in Orange County, Virginia from Cypress Creek Renewables. However, the company did not disclose the amount it spent on acquiring the project.
- The solar generating facility will be owned by Dominion Energy’s contracted assets arm which has already received all applicable state and local permits, thus the facility is expected to begin its operations in the second quarter of 2022.
- According to PR News, Dominion Energy is planning to add “16,000 megawatts of solar generating capacity through company-owned projects and power purchase agreements signed with third-party developers in Virginia” as part of Virginia’s Clean Economy Act's requirement for zero-carbon electricity by 2045.
- Northrop Grumman Corporation is also expecting to not only get the electricity generated at Madison Solar with hopes that the facility will “provide enough renewable power to the grid to match 100% of its Virginia manufacturing and office operations” but also the renewable energy credits under long-term agreements.
- Robert Blue of Dominion Energy said, “If we can help our customers – both large and small – add more renewables and provide cleaner electricity, that's a win for our customers and the Commonwealth of Virginia.”
- ESG Today reported that in addition to the acquisition, Dominion is also turning its attention back to its state-regulated sustainability-focused utility operations as it agreed to sell “all of its Gas Transmission & Storage segment assets, valued at nearly $10 billion in July.”
Sunrun Acquires Vivint
- On July 6, 2020, key players in the US residential solar space, Sunrun and Vivint Solar, announced that Sunrun will acquire Vivint at an enterprise value of $3.2 billion.
- Sunrun will acquire Vivint in an all-stock transaction where Vivint’s common stock will be exchanged for 0.55 shares of Sunrun’s stock. Greentech Media revealed that after the acquisition, the combined company will have a market capitalization of $4.5 billion and a market capitalization plus debt of $9.2 billion. The deal is expected to be concluded by 2020s fourth quarter.
- After the news of the acquisition became public, Sunrun’s shares went up by 20% reaching an all-time high of $26 while Vivints went up by around 38%.
- The acquisition brings together Sunrun and Vivint who have “overlapping business models and similar visions for a distributed energy future.” Sunrun’s CEO, Lynn Jurich, said: “We have big ambitions for what we can accomplish together. At a larger scale, with more customers and a lower cost structure, Sunrun will be a meaningful contributor to a fully renewable and electrified energy system.”
- According to a report by Wood Mckenzie, Sunrun was already the top home solar installer in the country with approximately 500, 000 customers and after finalizing the deal, it will become the “third-largest owner of US solar capacity across all market segments.” The New York Times also reported that the acquisition will increase Sunrun’s market share from around 9% to approximately 15%.
The Peck Company Holdings Acquires Sunworks Inc.
- Sunworks is set to acquire Sunworks through an all-stock transaction for approximately $14.1 million. As reported by Solar Power World, Sunworks stakeholders will receive around 36.54% or 3,079,207 shares of Peck common stock after the deal is completed during the fourth quarter of 2020.
- After the merger, the combined company’s board will consist of 4 members of the Peck Board of Directors and 3 members who will be appointed by Sunworks Board of Directors. Additionally, Jeff Peck will continue as Chairman of the Board and Chief Executive Officer of the combined company.
- Sunworks CEO said, “By joining with Peck, our vision for spreading clean solar energy throughout the U.S. is amplified and expanded. Peck has demonstrated the ability to grow revenue and maintain profitability, and we believe that the combination of our teams, customers, projects, and partners will materially accelerate revenue growth and earnings.”
Types of Renewable Energy Sources
Renewable energy which is also referred to as clean energy sometimes is obtained from natural sources or processes that are endless or constantly renewed. According to the United States Energy Information Administration (EIA), the main types of renewable energy sources are solar, wind, hydropower, biomass, and geothermal. These types have been comprehensively discussed below.
- Over the years, humans have been using sun rays to do things such as drying meat, fruits, and grains and for warmth but as time passed, they came up with new technological innovations to “collect solar energy for heat and to convert it into electricity.” According to the National Energy Renewable Laboratory (NREL), “More energy from the sun falls on the earth in one hour than is used by everyone in the world in one year.”
- Some of the technologies used to collect solar energy include; solar photovoltaic technology, passive solar technology, solar water heating, solar process heat, and concentrating solar power. Nevertheless, NREL further stated that the most used technologies in homes and businesses are “solar photovoltaics for electricity, passive solar design for space heating and cooling, and solar water heating.”
- In the solar photovoltaic technology, solar or photovoltaic (PV) cells are made from materials such as silicon, cadmium telluride, and copper indium gallium diselenide among others that convert sunlight into electricity directly. The electricity is then used to power homes and businesses.
- In passive solar technology, buildings have “south-facing windows to collect heat from the sun and stores that heat in materials throughout the building known as thermal mass.” The building materials then release the heat in periods when the sun is not present. On the other hand, in the solar water heating technology, systems heat water in homes and businesses using thermal energy collected from the sun.
- The use of solar-powered electricity in the US in 2019 increased by 23% from 2018 breaking major records as it accounted for around 40% of all new generating capacity.
- Solar energy technologies are beneficial in that they do not produce air pollutants and when used on buildings they have minimal effects on the environment. However, solar energy has certain limitations. In addition to the amount of sunlight reaching earth not being constant because of factors such as seasons, time of day and location, the amount of sunlight reaching a square foot of the earth's surface is relatively small, thus large surface areas are needed to collect a useful amount of energy.
- Just like how people have been using the sun over the years, so have they made use of wind. What has changed throughout the years is that from old-fashioned windmills that were mainly used to pump water across the US, people are now using huge turbines to generate electricity.
- Wind turbines are mounted on towers at 100 feet (30 meters) or more above ground in order to utilize faster and less turbulent wind. Turbines then catch wind energy using their propeller-like blades. “When the wind blows, a pocket of low-pressure air forms on the downwind side of the blade. The low-pressure air pocket then pulls the blade toward it, causing the rotor to turn. This is called lift. The force of the lift is actually much stronger than the wind's force against the front side of the blade, which is called drag. The combination of lift and drag causes the rotor to spin like a propeller, and the turning shaft spins a generator to make electricity.”
- As of 2018, wind energy accounted for approximately 6% of the US generation with states such as California, Texas, Oklahoma, Kansas, and Iowa being the top wind-powered states.
- Hydropower is one of the oldest sources of energy in the United States. In the past, before steam power and electricity became available in the US, people used hydropower to operate grain and lumber mills.
- Hydroelectric power relies on water and as a result, most hydropower plants are located near water bodies. In the plants, “water flows through a pipe or penstock then pushes against and turns blades in a turbine to spin a generator to produce electricity.”
- Changes in seasons and rain patterns can hugely impact hydroelectric power production because hydropower relies on water “typically fast-moving water in a large river or rapidly descending water from a high point,” to generate electricity.
- According to EIA, hydropower was the largest source of renewable energy in the United States as it accounted for around 6.6% of the country’s “utility-scale electricity generation and 38% of total utility-scale renewable electricity generation.”
- In cases where hydroelectric plants are not carefully managed, they can cause environmental damages because plants divert and reduce natural flows.
- The Natural Resources Defense Council (NRDC) defines biomass as an “organic material that comes from plants and animals, and includes crops, waste wood, and trees.” While people have been burning wood for centuries to cook or keep warm, it is still the largest biomass source for energy to date.
- Bioenergy technologies include biofuels such as biodiesel and ethanol that are created when biomass is converted into liquid fuels to meet transportation needs, biopower to convert biomass fuels into electricity and heat, and bioproducts which involves converting biomass into chemicals that make products such as plastics among others.
- According to NRDC, while biomass is often referred to as a clean renewable energy source, recent studies indicate that it produces higher levels of carbon emissions than fossil fuels.
- As of 2017, biomass fuels accounted for 5% of total primary energy use in the US and out of this percentage around “47% was from biofuels (mainly ethanol), 44% was from wood and wood-derived biomass, and 10% was from the biomass in municipal waste.”
- Geothermal energy refers to heat within the earth. Scientists found out that the “temperature of the earth's inner core is about 10,800 degrees Fahrenheit (°F), which is as hot as the surface of the sun.”
- Several technologies have been developed to take advantage of geothermal energy for applications such as electricity production when “hot water and steam from reservoirs are used to drive generators and produce electricity”
Current Trends for the Market Segments in the Renewable Energy Industry
Solar Energy Market
The US solar energy capacity is enough to power approximately 13.5 million homes and it is expected to double in five years. Some of the current trends behind this growth include the decrease in battery prices, an increase in demand for solar with battery storage, and the decline in federal solar tax credit.
Trend #1: Declining Prices for Batteries and Solar Photovoltaic Modules
- Solar energy is an intermittent source and thus energy storage is needed to continue supplying power when weather conditions change or when the sun sets. Thus, solar batteries are important.
- While solar batteries have been expensive for a long period making it difficult for the renewable solar energy industry to take off, the price has been steadily decreasing in recent years. For instance, the price of lithium-ion batteries has declined by 76% between 2012 and 2019. Moreover, from the first half of 2018 to December 2019, the cost of lithium-ion batteries went down by 35% according to Earth911.
- A Bloomberg New Energy Finance report also reported that the price of lithium-ion batteries has been going down over the past decade. While the percentage decline from the BloombergNEF report slightly differs from the percentages provided by Earth911, Forbes reported that the report might be underestimating things as BNEF predicted that the industry will get to $100/kWh by 2023.
- On the other hand, solar photovoltaic modules in the US have also been decreasing over the past few years. The module prices decreased from $0.63 per watt in 2016 to $0.22 per watt in 2019.
- As a result of the decline in solar batteries and photovoltaic modules costs in the country, consumers such as homeowners who rely on solar systems with battery storage during grid outages will be more attracted to the solar energy industry.
- Xiaojing Sun, a senior analyst at Wood Mackenzie (a global energy, chemicals, renewables, metals and mining research, and consultancy group), stated that because of the fall in battery prices, the 2020s might be the “decade where solar-plus-storage first becomes a competitive baseload resource.”
Trend #2: Decreasing Federal Solar Tax Credit
- The solar Investment Tax Credit (ITC) incentive by the federal government has been helping in the reduction of costs for going solar. The credit was at 30% in 2019 and since it was not extended, it is supposed to phase out each year from 2020. This means that it will reduce to 26% in 2020, 22% in 2021, and continue declining indefinitely to 10% for commercial and utility solar projects and zero for residential.
- According to Greentech Media, although the solar Investment Tax Credit (ICT) has reduced to 26% in 2020 creating a downward price pressure, significant changes to system costs are not expected because companies in the industry have been preparing for the decline.
- Experts and senior executives from NREL, Texas Solar Power Association, CD Arevon, Cypress Creek Renewables, and Duke Energy among other key players in the industry met in April 2020 to discuss how to remain profitable after the loss of the Investment Tax Credit. Speaking about the event, Diana Dropol of PV Operations Dallas said, “It’s more important than ever for industry players to work together in tackling the challenge of cost reduction in operations and maintenance (O&M). We’re convinced the outcome of this event will be a stronger, more competitive solar sector.”
- The vice president of public policy at Sunrun, Alex McDonough, also said: “I’m not sure anyone would say we can plan around congressional action. The prudent thing to do is to prepare for a phase-down and advocate for an extension.”
Wind Energy Market
According to the American Wind Energy Association (AWEA), apart from wind energy being the largest provider of renewable energy in the US in 2019 after supplying over 7% of the country’s electricity, it was also America’s top choice for new power. AWEA’s report further revealed that wind energy supports “120,000 American jobs, 530 domestic factories, and $1.6 billion a year in revenue for states and communities that host wind farms.” Current trends in the wind energy industry have been curated and provided below.
Trend #1: Increased Demand from Utilities and Corporate Buyers
- In 2019, demand for wind energy from corporate buyers and utilities set a record after signing new wind power purchase agreements (PPAs) worth approximately 8,700 MW. Utilities signed around 5,000 MW wind energy PPAs while corporate buyers signed 3,460 MW.
- According to AWEA, wind energy costs have declined by around 70% over the past decade making it the most budget-friendly source of electricity in the US.
- As a result, corporate buyers have started relying on wind energy to power their operations with Walmart and AT&T being the top corporate wind buyers in 2019. Baker Hughes, McDonald's, and Estee Lauder were also among the 14 companies that bought wind energy for the first time in 2019.
- This demand for wind energy from utilities and corporate buyers has continued in 2020 with corporate buyers and developers setting a new quarterly volume record by announcing PPAs worth 2,859 MW. Led by Evergy and AEP Energy, utilities also announced 1,719 MW worth of PPAs.
- According to the Stanford Social Innovation Review, most corporations are turning to renewable energy to not only be more profitable but also attract more loyal customers especially since consumers such as Millennials view the purchase of renewable energy as a way to express personal values.
- AWEA’s CEO, Tom Kiernan, also said: “Iconic U.S. companies are joining utilities in turning to wind energy to help drive their business goals and corporate social responsibility commitments forward.”
Trend #2: US Offshore Wind Build Momentum
- Offshore wind energy, the use of wind farms constructed in bodies of water to generate electricity, experienced significant growth in the United States in 2019.
- In its report, AWEA mentioned that many states especially those up and down the East Coast are planning to harness offshore wind. While developers are planning to bring 9 GW of offshore wind online by 2026, states up and down the East Coast are aiming to develop approximately 25 GW of offshore capacity by 2035.
- The US offshore progress extended to 2020. Within the first three months of the year, notable advances for offshore wind had already been seen. Virginia passed a law to develop 5,200 MW of offshore wind by 2034 while “Massachusetts utilities signed contracts for the 804 MW Mayflower Wind project and Maryland opened its second round of offshore wind applications.”
- These activities prove the continued demand for offshore wind in the country. According to a Wood Mackenzie research, US offshore wind is expected to increase from almost zero in 2020 to 25 gigawatts by 2029.
- The former Interior Secretary, Ryan Zinke, said: “Market excitement is moving towards offshore wind. I haven't seen this kind of enthusiasm from an industry since the Bakken shale boom.”
- AWEA’s CEO, Tom Kiernan, also said: “Offshore wind is key to the future of clean energy development in the U.S. and will add to a thriving wind power industry that already represents the largest source of renewable energy in the country.”
- In its 2020 renewable energy industry outlook, Deloitte stated that after a “spate of state and federal policy initiatives sparked the US offshore wind industry in 2018–2019, several new offshore projects were announced and development appears poised to take off.”
According to IBISWorld, with approximately 993 businesses in operation, the US hydroelectric power industry has a market size of $14 billion. MarketWatch also reported that since the US has large untapped hydro potential reserves, the market size is expected to grow over 2% and exceed 1,300 GW by 2024. While there is abundant research on the current trends in the US hydropower industry, most of the reports were hidden behind a paywall, thus we could not access them. However, we were able to find several credible sources covering the global trends in the hydropower industry and leveraged the information to curate and present the trends below. We also researched and included how the global trends are impacting the US hydropower industry.
Trend #1: Small Hydropower Facilities
- According to the International Hydropower Association, small hydroelectric power facilities are important in mini-grid and rural electrification strategies.
- IBISWorld also stated that the US hydropower market is likely to experience solid growth in the demand for green electricity between 2020 and 2025 and therefore, the industry will be forced to increase the number of hydropower facilities to meet the growth. According to IBISWorld, small hydroelectric power facilities are projected to be “popular among industry operators attempting to stimulate large-scale growth despite limited opportunities.”
- In late 2018, California passed Senate Bill (SB) 100 intending to provide 100% carbon-free electricity across the state by 2045. In the plan, small hydropower facilities will help meet 50% of the target by 2026 and 60% by 2030. Hydro Review also reported that in December 2019, a permit to study the development of a new small hydro project in the US was issued.
Trend #2: Hydropower Dams Rehabilitation and Safety
- According to Hydro Review, concerns about seismic issues around dams continue to grow, making rehabilitation of dams to extend the lifespan of their existing storage as well as increasing safety is a future trend.
- Hydro Review further stated that the importance of keeping dams safe will never alleviate and since the infrastructure in place is aging, the industry is rehabilitating both dams and power plants’ equipment. The Water Power Magazine also stated while maintaining and safety upgrading of dams is a long-term process, it must be the top priority of dam owners.
- Plans to upgrade the B.F. Sisk Dam for seismic safety were recently announced by the United States Bureau of Reclamation and the California Department of Water Resources. Additionally, on the Pacific Northwest of the US, the Grant County Public Utility District named Nicholson Construction as the “general contractor for remedial foundation drain work on its Priest Rapids and Wanapum dams. Nicholson will recondition foundation drains on both dams, which may be experiencing reduced flows or blocking by unknown materials or foreign objects, including calcium carbonate deposits.”
While there is abundant research on the current trends in the US biomass market, most of the reports were hidden behind a paywall, thus we could not access them. We then decided to expand our research and find credible sources covering the global trends in the biomass industry and leverage the information to select current trends in the market and then analyze how the global trends are impacting the US biomass industry. Unfortunately, this strategy was not fruitful as most of the global reports were also hidden behind a paywall. Therefore, we decided to include the outlook of the US biomass market in the report.
The United States Biomass Market Outlook
- According to an IBISWorld report, with around 122 businesses in operation, the United States biomass power industry had a market size of $908 million in 2019. The report further said that the industry grew slowly from 2014 through 2019 at a rate of 0.8%.
- Statista also reported that approximately 5.13 quadrillion British thermal units of energy generated from biomass were consumed in the US in 2018. Additionally, the US consumption of biomass energy is expected to reach 5.54 quadrillion British thermal units by 2050.
- Statista accredited the growth of the US biomass industry to the popularity biofuels gained after the price of gasoline prices went up. In 2018, the production of biofuels in the country increased to 38.1 million metric tons of oil equivalent from around 3 million metric tons in 2000. MarketWatch also indicated that the adoption of biomass in fuel cell technology is one of the trends in the global biomass industry.
- IBISWorld stated that trends such as federal renewable energy tax credits, majority of the states enacting renewable portfolio standards (RPSs), and increased campaigning for green technology are behind the growth of the US biomass industry.
- However, despite IBISWorld predicting the US biomass industry will continue to grow over the next 5 years because of the increasing demand for renewable energy, awareness about biomass power emissions or cancellation has also been increasing and this could curtail or restrict the industry’s growth.