The winter months will show whether state legislators and utilities have learned the lesson from last February’s Texas storm in ensuring grid reliability, while Democrats are scrambling to salvage President Joe Biden’s proposed Build Back Better Act. Grid reliability, states’ clean energy goals, and further federal action to advance renewable energy will be the key themes in the U.S. electricity sector in 2022.
The Biden Administration announced last year ambitious goals to promote green energy, including decarbonizing the electricity grid by 2035. But issues with grid access, flexibility, and reliability need to be addressed by states and the federal government sooner rather than later to avoid another deadly storm like the one in Texas in February 2021.
Despite newly introduced regulations to avoid power failures, the Texas grid remains vulnerable to blackouts in case of a repeat of the February Freeze, a report by the North American Electric Reliability Corp warned at the end of last year.
According to the 2021-2022 Winter Reliability Assessment report, Texas risks a 37-percent reserve margin deficit in case of a harsh winter, NERC said.
A cold spell this winter could test the Texas grid and whether the state legislators have managed—through legislation—to help the Lone Star State avoid a repeat of last February’s disaster.
The coming months will also be a test for President Biden’s green energy policies, considering that his Build Back Better Act is now stalled in Congress.
The outlook of U.S. renewable markets and economic growth became even more uncertain just before Christmas, when Democratic Senator Joe Manchin of West Virginia, a crucial vote in a divided Senate, said he would not support President Biden’s bill. Democrats are now trying to salvage the bill and may be forced to drop some policy priorities if they want Senator Manchin’s decisive vote and the bill to pass.
Related: The Lone Star State May Host The World’s Next Big Hydrogen Hub The Biden Administration believes a carbon-free electricity grid by 2035 is an achievable goal. Many analysts believe it is not.
The stalled Build Back Better legislation will impact the future renewable energy installations in the United States.
The U.S. solar industry is set to be torn between huge opportunities and major stumbling blocks in the coming months and years, and it will likely see a wild “solar coaster” ride in the next few years, Wood Mackenzie said in the middle of December.
Supply chain setbacks and constraints could delay many projects and put gigawatts of capacity additions at risk, Michelle Davis, Principal Analyst, Solar, at WoodMac, says. But on the other hand, if Congress passes the Build Back Better Act, the U.S. solar industry will receive a shot in the arm with the multiple clean energy incentives set in the legislation, including an extension of the investment tax credit (ITC), Davis added.
Due to the opposing bullish and bearish dynamics, near-term U.S. solar capacity is set for the largest fluctuations since 2016, when the ITC almost expired, WoodMac’s analyst noted.
The U.S. Department of Energy insisted in its Solar Futures Study in early December that by 2035, solar energy has the potential to power 40 percent of the nation’s electricity, drive deep decarbonization of the grid, and employ as much as 1.5 million people—without raising electricity prices.
However, the study also shows that by 2035 the United States “would need to quadruple its yearly solar capacity additions and provide 1,000 GW of power to a renewable-dominant grid.”
Electric vehicles also received major policy support in 2021, and major automakers are now racing to build battery plants across the U.S. in a sign that the car manufacturing industry has started to embrace the EV future. It now needs to turn American consumers into fans of electric vehicles, which will take time.
In 2021, more states adopted clean energy and/or net-zero emissions targets, and others are expected to join the list this year and in the coming years. North Carolina, Oregon, and Illinois adopted legislation in 2021 to reach carbon neutrality by 2050, or by 2040 in Oregon’s case.
Clean energy targets set by states are “going to be more difficult to achieve” without federal action, Warren Leon, Executive Director of the Clean Energy States Alliance (CESA), told E&E News.
Overall, the year is set to be a crucial test for the Biden Administration’s clean policy goals.
By Tsvetana Paraskova for Oilprice.com
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