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The Politics of Power Part Deux
The 2020 election has come and gone, giving the U.S. a slightly modified set of 'Red' and 'Blue' states. As we discussed in the first installment of this piece, The Politics of Power - Renewable Energy and the Fallacy of the Red/Blue Divide, the debates over renewable energy are mostly perception over reality.
Don't believe so? Keep reading.
The EIA Monthly Electric Generator Inventory report came out in late December. Included in that report is a list of all currently operating power plants in the U.S., in addition to an inventory of all planned power projects by size, location and power source. We dug into and analyzed the data on a 'Red/Blue' basis. The results suggest, just as our prior piece did, that the outrage from politicians, citizens and the oil & gas industry over who is driving the push for renewable energy in the U.S. is misplaced.
According to EIA data, the U.S. has 1,205 gigawatts (GW) of operating nameplate power generating capacity as of October 2020. Planned nameplate capacity additions through 2027 are 125 GW, or 10% of current operating capacity. Of the 125 GW of planned capacity, 68 GW (54%) is being constructed in Red states (defined as voting electoral college votes for a Republican president during 2020 election) and 57 GW (46%) in Blue states.
As it relates to renewables, here is the punchline: Red states are constructing 46 GW of renewable power projects (hydroelectric, solar, wind, battery storage) versus 37 GW of renewable power project being constructed or planned in Blue states. On a percentage basis, Red states are moving forward with MORE renewable power as a percent of total new power stack additions than Blue states, 68% versus 64%.
Everything is bigger in Texas and that is certainly true for power markets and planned new power plants. 21% of all under-construction and planned power projects (fossil fuel and renewable) in the U.S. are located in Texas. The next closest state is California at 7%. For context, the Texas power market is about 2.5x the size of the California market on a generation basis.
Texas - the state known for oil, pumpjacks and roughnecks - lays claim to 25% of all under-construction and planned renewable energy projects in the U.S. California takes second place at 10%.
Future additions of wind power projects are dominated by Red states. Red states are constructing or planning 26 GW of combined wind projects, 124% more than the 12 GW of wind generation being added in Blue states.
Solar additions to the power stack are pretty evenly balanced - 20 GW in Blue states versus 18 GW in Red states. 54% of new Red state solar generation and 26% of all U.S. planned solar will be sited in Texas.
Battery storage is a new but growing part of the U.S. 'generation' stack, with ties-ins to solar and wind to help manage intermittency. Nearly 8 GW of battery storage is contemplated, with 71% located in Blue states. California and Texas are leading the national charge (pun intended) on the battery storage front.
68% of planned and under-construction power projects in Red states are from renewable energy sources (other includes 600 MW of nuclear power in ID).
64% of planned and under-construction power projects in Blue states are from renewable energy sources (other includes 2,200 MW of nuclear power in GA).
19 states have 100% of planned power projects in the form of renewable energy. Just more than half of those states are Red states.
The reality is states decide their own power stacks, not the Federal government, so what party has the sitting President matters little to U.S. power markets. If you do the work and dig into , The Politics of Power seem to be more perception than reality. Red state or Blue state, renewables are here today and here to stay, with the majority of future planned generation additions over the next 5-6 years being solar, wind, hydro or battery storage. Mother nature - which drives wind and solar placement - and capitalism that drives returns, including the use of subsidies are color blind.