A Renewables Revolution Is Toppling the Dominance of Fossil Fuels in U.S. PowerBy
Solar, wind power accounted for 68 percent of new capacity
Natural gas on pace to overtake coal as biggest power source
Renewable energy was the biggest source of new power added to U.S. electricity grids last year as falling prices and government incentives made wind and solar increasingly viable alternatives to fossil fuels.
Developers installed 16 gigawatts of clean energy in 2015, or 68 percent of all new capacity, Bloomberg New Energy Finance said in its Sustainable Energy in America Factbook released Thursday with the Business Council for Sustainable Energy. That was the second straight year that clean power eclipsed fossil fuels.
The biggest growth came from wind farms, with 8.5 gigawatts of new turbines installed as developers sought to take advantage of a federal tax credit that was due to expire at the end of 2016; Congress extended it in December.
“This is a long-term trend,” said Colleen Regan, a BNEF analyst who follows North American power markets. “System costs have really come down for renewables, which makes the case for installing them a lot stronger.”
Demand for energy, meanwhile, flatlined in the U.S. last year, holding steady even as the gross domestic product grew 2.4 percent, BNEF said. Since 2007, U.S. energy consumption has dropped 2.4 percent while GDP has grown by 10 percent.
U.S. clean-energy investments rose to $56 billion last year, up 7.5 percent from 2014. The majority, $30.2 billion, went to solar. Investors pumped $11.6 billion into wind energy and $11.1 billion into technology to improve grids, boost efficiency, develop storage systems and other ways to better manage power usage.
Power from natural gas-fired plants accounted for 25 percent of capacity added to grids last year. Nearly one third of all electricity in the U.S. is now generated by gas, putting it nearly on par with coal.
A record number of coal plants were shuttered in 2015, with 11 gigawatts of capacity coming off line by the end of October, and plants with another 3 gigawatts of capacity expected to close in November and December. Natural gas, meanwhile, continues to surge.
“It looks good for gas to be a larger share of electricity generation than coal in 2016,” Regan said.
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