Green Energy in the US: Renewable investment, capacity growth and future outlook

Green Energy in the US: Renewable investment, capacity growth and future outlook

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Some key findings from this report...
• Electricity generation in the US is dominated by coal. During 2006, 48.9% of the total US electric power was generated at coal-fired plants.
• Renewable sources contributed approximately 9.5% to US total electric generation in 2006, generating 385.0bn kWh of electricity.
• Wind was the fastest growing source of power generation in the US during 2006.
• US electricity consumption is projected to increase by only 1.5% per year between 2005 and 2030 according to EIA. It forecasts that coal will continue to dominate power generation with a share of 57.0% in 2030 and that renewables will contribute only 9.0% in that year.
• The outlook for renewables in the US is dependent on the course of future federal and state legislations. Legislation that introduces an effective cap and trade system, by placing a price on carbon emission, could enhance the growth of renewable energy by making it more competitive with conventional sources.

Green Energy in the US
Renewable investment, capacity growth and future outlook
The future of power generation in the US is at an interesting cross-road. On the one hand, cheap generation technologies such as coal and natural gas fired plants are well positioned to dominate future power generation if the current legislative and regulatory environments persists. On the other hand, the increasing public and political concern about climate change has made it likely that legislative changes that usher in some form of price on carbon emission is imminent. In addition, the US is taking the lead in establishing RPS measures to encourage wider use of greener power. Green Energy in the US: Renewable investment, capacity growth and future outlook is a new report published by Business Insights that assesses the outlook for renewable energy in the US and analyzes each of the key renewable technologies. This new report examines the current market, assesses the key drivers and resistors and forecasts future potential growth areas. Assess the future prospects and investment potential for renewable technologies in the US with this new report.

This new report will enable you to...
• Benchmark the growth potential for each of the leading renewable energy technologies in the US using this report’s independent comparative assessment of the six leading technologies.
• Understand the drivers and resistors of the key renewable technologies in the US with the help of this report’s overview of the factors affecting technologies’ growth.
• Assess the competitive landscape for renewable technologies in the US with this report’s detailed analysis of the market structure including capacity and generation, global comparison, economic conditions and key players.
• Identify the leading players in US renewable energy technologies using the analysis of the key competitors contained in this report.

Key issues examined in this report...
• Climate change. There is a growing concern about the climate change issue in the US. Public opinion is expected to spur legislative change at both state and federal levels to encourage further use of renewable sources to generate power.
• Cap and trade mechanism. Legislation which ushers in an effective cap and trade system, by placing a price on carbon emission, could enhance the growth of renewable energy by making it more competitive with conventional sources such as coal and gas.
• Increasing corporate activism/Corporate Social Responsibility. Demand for renewable energy among large firms is growing rapidly. For example, Wal-Mart is intending to introduce a program to power its stores with solar power generated on-site.
• Federal and state legislation. The outlook for renewables in the US is dependent on the course of future federal and state legislations on climate change and to promote renewables.

Your questions answered...
• What are the top technologies in the renewable energy sector in the US?
• What are the emerging trends in the renewable energy industry in the US?
• What are the drivers and resistors of the renewable energy technologies in the US?
• What is the contribution of the different renewable energy technologies to the total electricity market in the US?
• What is the relative market positioning of different renewable technologies in the US in the global renewable energy industry?
• What are the economics of different renewable technologies in comparison with the conventional sources?
• Who are the key players in different renewable energy technologies?

Table of Contents
Green Energy in the US
Executive Summary xii
Market development xii
Wind power xiii
Solar power xiv
Hydropower xv
Geothermal power xvi
Biopower xvii
Ocean power xviii
Outlook xix
Abbreviations xx

Chapter 1 Market development 24
Summary 24
Overview of the US electricity infrastructure 25
Generation and installed capacity 25
Sectoral distribution of generation 27
Sales, revenue, and average retail price 27
Overview of renewable energy in the US 28
Background 28
Installed capacity and growth of renewables 29
Drivers of renewable energy 31
Production tax credit (PTC) 31
State level Renewable energy Portfolio Standards (RPS) 32
Growing public support for action on climate change 35
Increasing political will to address climate change 36
Increasing corporate activism 37
Increasing investments 37
Resistors of renewable energy 38
Failure to price carbon dioxide emissions 38
Licensing and permitting issues 38
Environmental issues 38
Discontinuity in PTC 39
Transmission issues 40
Comparative economics 40
Global comparison 41

Chapter 2 Wind power 44
Summary 44
Overview 45
Current scenario 45
Installed capacity and generation 46
Global comparison 47
State level analysis 48
Key players 50
Economics 51
Drivers of wind power 53
Continuity in PTC 53
Strong public and political support 53
Increasing economic competitiveness of wind power 53
Resistors of wind power 55
Lack of continuity in the PTC 55
Environmental issues 56
Transmission constraints and costs 56
Constraints in the supply of turbines 57
Wind power potential and outlook 58
Wind Power Potential 58
Outlook for wind power 59

Chapter 3 Solar power 62
Summary 62
Overview 63
Current scenario 64
Installed capacity and generation 64
Global comparison 65
State level analysis 66
Key players 68
Economics 69
Drivers of solar power 71
The Federal Investment Tax Credit 71
The “President’s Solar America Initiative” 72
California Solar Initiative 72
Increasing corporate interest in solar power 73
Increased VC funding in solar power 73
State level RPS Targets 73
Resistors of solar power 74
Shortage of silicon 74
High cost 74
Solar power potential and outlook 75
Solar power potential 75
Outlook for solar power 76

Chapter 4 Hydropower 80
Summary 80
Overview 81
Current scenario 81
Installed capacity and generation 81
Global comparison 84
State level analysis 85
Key players 87
Economics 88
Drivers of hydropower 89
Licensing reforms 89
Inclusion of incremental hydropower under PTC 89
The DOE Hydropower Program 90
Resistors of hydropower 91
Licensing issues due to environmental concerns 91
Capital intensive but lacking incentives 92
Hydropower potential and outlook 92
Hydropower potential 92
Outlook for hydropower 93

Chapter 5 Geothermal power 96
Summary 96
Overview 97
Current scenario 97
Installed capacity and generation 97
Global comparison 99
State level analysis 99
Key players 101
Economics 102
Drivers of geothermal power 103
Introduction of PTC for geothermal 103
DOE’s Geothermal Technologies Program 104
Geothermal Resource Exploration and Development Program 104
Increased environmental concerns 105
Resistors of geothermal power 105
Short time horizon for PTC 105
Leasing issues 105
Cost constraints and transmission issues 106
Scant research funding 107
Geothermal power potential and outlook 108
Geothermal power potential 108
Outlook for geothermal power 111

Chapter 6 Biopower 114
Summary 114
Overview 115
Current scenario 115
Installed capacity and generation 115
Global comparison 117
Key players 117
Economics 118
Drivers of biopower 120
Attractive economics of co-firing 120
Environmentally friendly power generaton 120
Employment generation 121
DOE biopower program 121
Resistors of biopower 122
Lack of subsidies or any strong incentive program 122
Cost constraints 122
Constraints in the supply of raw material 122
Biopower potential and outlook 123
Biopower potential 123
Outlook for biopower 124

Chapter 7 Ocean power 128
Summary 128
Overview 129
Current scenario 129
Global comparison 131
Key players 131
Economics 132
Drivers of ocean power 133
Energy Policy Act of 2005 133
State and city government initiatives 134
Private investments 134
Resistors of ocean power 135
Lack of federal support 135
Siting and leasing issues 135
Cost constraints 135
Ocean power potential and outlook 136
Ocean power potential 136
Outlook for ocean power 137

Chapter 8 Future outlook 140
Summary 140
Outlook for the US electricity sector 141
Outlook for renewables 144
EIA outlook 145
Alternative scenarios 149
Abbreviations 151
Index 153

List of Figures
Figure 1.1: Net generation shares by energy source, 2006 25
Figure 1.2: US electric power industry, net summer capacity, 2005 26
Figure 1.3: Net generation shares by sector, 2006 27
Figure 1.4: Crude oil spot prices, 1982-2006 29
Figure 1.5: Net generation by energy source, 2006 30
Figure 1.6: CAGR (2001-2005) of various energy sources in the US 31
Figure 1.7: RPS map as of April, 2007 34
Figure 1.8: Media coverage about climate change 35
Figure 1.9: Global comparison in terms of installed capacity, 2005 41
Figure 2.10: Cumulative installed capacity (MW) 46
Figure 2.11: Top 5 countries by cumulative installed capacity (MW), December 2006 47
Figure 2.12: Top 5 countries by new installed capacity (MW), December 2006 48
Figure 2.13: Leading states by cumulative capacity as of December 2006 48
Figure 2.14: Cumulative installed capacity (MW) of states, December 2006 49
Figure 2.15: Turbine manufacturer market shares in the US (2005) 51
Figure 2.16: Average cost/kWh of wind-generated electricity 52
Figure 2.17: Impact of PTC on wind power capacity additions 55
Figure 2.18: Wind resource map for the US 58
Figure 3.19: Cumulative installed capacity (MW) 64
Figure 3.20: Top 3 countries by cumulative installed solar capacity (MW) 65
Figure 3.21: Key markets by new installed solar capacity (MW), December 2006 66
Figure 3.22: US PV market 2005 67
Figure 3.23: Solar set-asides of states 68
Figure 3.24: Solar PV manufacturers’ market shares in US (2004) 69
Figure 3.25: Technology cost reduction goals for residential PV systems 71
Figure 3.26: Solar resource map for the US 76
Figure 3.27: Forecasts for installed capacity and costs 77
Figure 4.28: Cumulative installed capacity (MW) 82
Figure 4.29: Net generation (bn kWh) 83
Figure 4.30: Total average electric power from hydroelectric plants 83
Figure 4.31: Top 5 countries by hydroelectric consumption, 2005 84
Figure 4.32: Leading states by cumulative capacity as of December 2005 85
Figure 4.33: State ranking and percentage of total electric power generation in the US 86
Figure 4.34: Ownership of hydroelectric plants in the US 87
Figure 4.35: DOE Hydropower Program 90
Figure 4.36: Feasible project hydropower potential 93
Figure 4.37: Generation, hydropower vs. other renewables, 1990-2030 94
Figure 5.38: Cumulative installed capacity (MW) 98
Figure 5.39: Top 5 countries by cumulative installed capacity (MW), December 2005 99
Figure 5.40: Leading states by cumulative capacity 2006 100
Figure 5.41: Geothermal existing plant locations 101
Figure 5.42: Geothermal resource map for the US 108
Figure 5.43: Geothermal potential by 2025 109
Figure 5.44: Estimated earth temperature at 6 .5 km depth 110
Figure 6.45: Cumulative installed capacity (MW) and Net generation (kWh) 116
Figure 6.46: Biopower generation market shares in the US (2005) 117
Figure 6.47: Cost of electricity: biomass gasification combined-cycle 119
Figure 6.48: Biopower capacity projections, 2000-2020 123
Figure 6.49: Biomass resources US 124
Figure 6.50: Nonhydroelectric renewable electricity generation by energy source, 2004-2030 125
Figure 7.51: Ocean energy resource map for the US 137
Figure 8.52: Electricity sales by sector, 1980-2030 141
Figure 8.53: Net Generation by Energy Source, 2005-2030 142
Figure 8.54: Electricity generation capacity additions by fuel type, 2006-2030 143
Figure 8.55: Outlook to 2030, Reference case scenario 146
Figure 8.56: Generation, Hydropower vs. other renewables, 1990-2030 147

List of Tables
Table 1.1: Cost parameters of electricity sources 40
Table 2.2: Largest wind farms operating in the US, as of December, 2006 50
Table 2. 3: Top 10 states for wind energy potential in the US 59
Table 3. 4: Federal tax credits in the US 71
Table 4.5: Largest hydroelectricity dams in the US 86
Table 4.6: Costs parameters of hydro technologies 88
Table 4.7: Costs parameters of hydro technologies 88
Table 5.8: Largest geothermal projects operating in the US 100
Table 5. 9: Cost parameters of a geothermal power plant 102
Table 5. 10: Top 10 states for geothermal energy potential in the US 111
Table 5. 11: Developing projects by state, as of November 2006 112
Table 7. 12: Projects in progress for wave energy as of June, 2006 130
Table 7. 13: Projects in progress for tidal energy as of June, 2006 130
Table 7. 14: Capital cost of wave energy power plants 133
Table 8. 15: Renewable energy generation, GWh, Reference Case 148