US renewable energy industry sees ‘unnecessary obstacles’ ahead

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Renewable energy is growing too slowly to meet the Biden administration’s zero-carbon grid goal, and trade groups are bracing for a year of roadblocks, according to a new US industry report.

The annual market report released this morning by the American Clean Power Association (ACP) takes stock of how the solar, wind and energy storage industries have performed in 2021 — and how that picture could change this year.

There are disturbing implications for the Biden administration’s climate goals. In the past year, the aggregate growth rate for renewable energy and storage has not changed compared to 2020. The current installation volume is just over a third of what will be needed to achieve a zero-carbon grid by 2035, wrote the ACP, the largest US trade group for wind, solar and storage.

In the three industries, growth in 2021 was very uneven. For example, while solar and battery storage had a record year, onshore wind assets slumped, falling 22 percent.

A total of around 28.5 gigawatts of renewable electricity and energy storage were connected to the grid, enough for around 6.6 million households. But much of the expected capacity — about 10 GW — was delayed by a confluence of issues ranging from price increases for commodities and shipping to allegations of labor abuse in Chinese supply chains, according to the report.

This year, those problems could worsen, with “worrying implications for our ability to deliver growth,” it said.

Amid inflation, supply chain problems and the threat of solar equipment being confiscated by customs officials, the report said the Department of Commerce has launched a review that could lead to new tariffs on solar panels and cells from four Southeast Asian countries — a process that is “calling for already taking its toll” as utilities delay projects due to panel shortages.

“At a time when all [megawatt] clean energy is critical to protecting Americans’ wallets, spurring economic growth and meeting the country’s climate goals, these unnecessary impediments are slowing progress,” the trade group wrote.

The group’s alert, which mirrors that of solar-specific trade groups, came a day after 19 bipartisan governors sent one Letter to President Joe Biden and Secretary of Commerce Gina Raimondo, asking them to complete the investigation as soon as possible. The governors also asked for an economic analysis of how the tariffs would hurt businesses, workers and families.

Until Commerce comes to a conclusion in the solar tariff inquiry, “uncertainty will stifle investment and innovation,” the governors wrote.

The petitioner who brought the case to Commerce – California-based module maker Auxin Solar Inc. – has repeatedly denied trade groups’ characterizations of the investigation, saying it would fight Chinese companies’ evasion of US tariffs and do little to stop the halting progress towards climate goals (energy wireApril 29).

Concerns about transmission become ‘serious’

One trend emerging from the ACP analysis is the increasing reliance of renewable energy on corporate commitments to purchase clean energy.

For the first time, the group says, companies have agreed to invest in more gigawatts of renewable energy than utilities via power purchase agreements. The 13 gigawatts of renewable PPAs was a record for a single year.

These deals have been completed even as wind and solar PPA prices have risen across power markets.

The cost of a wind turbine rose 9 percent year-over-year, in part because manufacturers faced a five-fold increase in transportation costs and a four-fold increase in steel prices. However, longer rotor blades, taller towers and improved location strategies caused the levelized cost of electricity to continue to fall last year.

Global solar panel prices remained “relatively stable and flat” in 2021, with the exception of bifacial panels that can generate electricity from the bottom. Spot prices rose more than 6 percent in a year, the ACP said, citing data from BloombergNEF.

Link backlogs and obstacles to new transmission lines, meanwhile, are “becoming serious concerns,” the ACP report warned.

About 386 miles of transmissions were built in the US in 2021, far fewer than the 1,800 miles that were the annual average over a decade.

“This pace needs to be accelerated immediately to integrate only those projects that are in development now, notwithstanding any projects proposed in the future,” ACP said.

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