Solar, Wind, Hydro Investment Expected to Rise in Coming Years

solar

During a standing-room-only session on “What’s Next for Large-Scale Renewables in North America,” experts laid out their visions for the solar, wind and hydro markets for the coming years. Not only is there is a rush to build projects right now, but all three technologies are expected to grow in the next five years, despite expiring tax credits, shortages in materials and tough permitting hurdles.

Solar is Booming

Solar development is booming said Julie Ungerleider Senior Vice President of Engineering at Coronal Group during the conference session. She explained that more than 12.6 GW of solar capacity is operating and 24.5 GW are under construction. Top states for solar development are Arizona, California, Florida, North Carolina and Nevada. The reason for the boom is the looming expiration of the solar Investment Tax Credit (ITC), set to drop to 10 percent at the end of 2016 for commercial projects.

The rush to build projects before the end of 2016 is causing a shortage of materials for developers as well, which Ungerleider said means that unless a project is almost “fully baked” right now, it probably won’t be built before the end of 2016.

Ungerleider said that even if the ITC is not extended she doesn’t expect to see a major impact on solar development. Technology costs have come down sharply in the past four years and contractors have become much more efficient in construction of solar.  Ungerleider said it used to take months to install a few MWs. “Now you can install 1 MW in a week,” she said.

Wind Investment Growing

Aaron Anderson a renewables engineer with Burns & McDonnell who performs due diligence on wind projects, said that the number of transactions in the wind energy market have steadily increased since 2002. In terms of dollars, Anderson said that more than $170 billion has been invested about 1,000 wind projects over the past two years, which means each wind project has an average transaction cost of almost $170 million. Today there are 70 GW of installed wind capacity online in U.S. with another 13 GW under construction. This represents an almost 800 percent increase in wind projects in 10 years.

Anderson said that he thinks investment in wind will continue because there is enough operating capacity that needs to be maintained, tweaked, bought and sold that investor will leave “no stone unturned” in the wind industry.

Project Upgrades Dominate Hydro Sector

Rocio Uria-Martinez with the Oak Ridge National Laboratory presented on the status of what she called “good old hydro.” With 4 GW of planned hydropower projects, mostly in project upgrades, the hydro sector is not installing new projects at rates as fast as wind and solar but work within the sector to remove policy barriers and shorten permitting times could open the doors for further development. Today there are 80 GW of installed hydro capacity in the U.S. with about half of that in just three states: California, Washington and Oregon. Every state in the nation, however, has at least some hydro, except for Delaware and Mississippi, according to Uria-Martinez.

For those 4 GW of new hydro, the median project size is less than 10 MW and adding generating capacity to non-powered dams dominate the pipeline.

Recent legislation could help the hydro sector as well. Just a week ago, said Uria-Martinez, the U.S. house of representatives approved a bill aimed at shortening the time it takes to permit larger hydro projects. Part of it included a provision that would allow existing environment impact studies to be used for a new project if they have already been conducted in that region.

The grid today needs flexible resources to account for the variable resources — like wind and solar — that are increasing grid instability. Uria-Martinez sees hydro as a key resource to help ease those pains. “We need to keep investing in older hydropower plants to keep them flexible enough to meet the challenges of the 21st century grid,” she said.

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Jennifer Runyon
Jennifer Runyon has been studying and reporting about the world's transition to clean energy since 2007. As editor of the world's largest renewable energy publication, Renewable Energy World, she observed, interviewed experts about, and reported on major clean energy milestones including Germany's explosive growth of solar PV, the formation and development of the U.S. onshore wind industry, the U.K. offshore wind boom, China's solar manufacturing dominance, the rise of energy storage, the changing landscape for utilities and grid operators and much, much, more. You can reach her at Jennifer.Runyon@ClarionEvents.com Today, in addition to managing content on Renewable Energy World and POWERGRID International, she also serves as the conference advisory committee chair for DISTRIBUTECH, a globally recognized conference and expo for the transmission and distribution industry. In her role, she works in close cooperation with a large team of committed industry executives to shape the educational content for the event. She also helps assemble the renewable energy content for POWERGEN and helped launch the first Grid-Scale Storage Summit, a co-located event at HYDROVISION International. She has traveled to Germany to see onshore and offshore wind installations; Iceland to see geothermal energy in action; and France to see cutting-edge smart grids. In the U.S. she has visited and reported about bioenergy power plants in Florida, both large-scale and small-scale hydropower; and multiple wind farms, solar PV, and CSP installations. Formerly, she was the managing editor of Innovate Forum, an online publication that focused on innovation in manufacturing. Prior to that she was the managing editor at Desktop Engineering magazine. In 2008, she won an "Eddy Award" for her editing work on an article about solar trees in Vienna. In 2010, RenewableEnergyWorld.com was awarded an American Business Media Neal Award for its eNewsletters, which were created under her direction. She holds a Master's Degree in English Education from Boston University and a BA in English from the University of Virginia.

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