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July 08, 2020 Feature

Electric Resource Planning in an Era of Burgeoning Renewables

By Mark Strain and Stephanie Green

Our nation is in the midst of a profound paradigm shift in the way the electric industry serves customers due to dramatic growth in renewable energy. The transformation of the energy sector has been swift. Until recently, it was thought that the United States would need imported natural gas to meet domestic electric demand.1 Further, some industry analysts were confident that renewables were at best decades away from cost competitiveness. These views are rapidly changing.

Also changing is the long-held notion that the intermittent nature of renewable generation precludes large-scale adoption of renewables in a utility’s resource mix. The thought was that “technologies like wind and solar only produce energy when the wind is blowing or the sun is shining.”2 But the intermittent nature of renewable generation is not the real impediment to its adoption. Instead, the impediment has been the inability to effectively utilize these resources absent a critical mass enabling of cost-effective energy storage development and deployment.3 Renewable generation, by itself, lacks the timing and flexible capability to serve as a dispatchable resource to follow changes in demand and historically might not reliably deliver needed supply. However, transformational new technologies, along with the increasing cost competitiveness of battery storage, paired with renewable resources have put the industry at the precipice of a new era.

This article will examine how the domestic electric industry is adapting to this new renewable resource–driven paradigm.

The Astounding Growth of Renewable Resources

According to the most recent long-term forecast from the U.S. Energy Information Administration (EIA), renewable generation, chiefly driven by growth in wind and solar, will surpass coal and nuclear sources of generation by 2021 and overtake natural gas generation in 2045.4 The EIA’s 2020 Annual Energy Outlook (AEO) projects that the share of renewable generation relative to other generation resources in the United States will rise from 19% in 2019 to 38% in 2050.5 The 2020 AEO projects wind and solar to account for 80% of the total renewable generation in the year 2050.6 The following charts from the AEO illustrate these changes in electric generation.7

Electricity Generation from Selected Fuels

Billion kilowatthours

Source: U.S. Energy Information Administration, Annual Energy Outlook 2020 with Projections to 2050, Electricity 62 (2020).

Source: U.S. Energy Information Administration, Annual Energy Outlook 2020 with Projections to 2050, Electricity 62 (2020).

This chart, "Electricity Generation from Selected Fuels," shows the historic and projected changes in the share of electric generation from 2010 through 2050 for natural gas, renewables, nuclear, and coal. Natural gas is expected to slightly decline from 37% in 2019 to 36% by 2050; renewables are projected to grow from 19% in 2019 to 38% by 2050; nuclear is projected to decline from 19% in 2019 to 12% by 2050; and coal is projected to decline from 24% in 2019 to 13% by 2050.

Annual Electricity Generating Capacity Additions and Retirements


Source: U.S. Energy Information Administration, Annual Energy Outlook 2020 with Projections to 2050, Electricity 71 (2020).

Source: U.S. Energy Information Administration, Annual Energy Outlook 2020 with Projections to 2050, Electricity 71 (2020).

This chart, "Annual Electricity Generating Capacity Additions and Retirements," shows the historic and projected electric generating capacity additions and retirements from 2005 to 2050. The capacity additions are slated to remain relatively constant overall for much of this period other than from 2020–2026, which is when most of the retirements are expected to occur. Those years will require corresponding additions to generating capacity to offset the retirements. Most of the retirements will be coal and, to a lesser extent, nuclear. Most of the additions will be about evenly divided between solar and oil and gas, except for the years from 2020 to 2025 and a couple of years in the early 2030s, when comparable wind-generation additions are projected.

The 2020 AEO predicts increasing growth in the renewable sector through 2050 on the same pace realized over this last decade due to declining capital costs along with higher renewable portfolio standards (RPS) in some states.8 According to the reference case, the United States will add 117 gigawatts (GW) of new wind and solar capacity between 2020 and 2023 due to production tax credits, higher RPS targets, and decreasing capital costs.9 Total renewable generation is predicted to exceed natural gas–fired generation by 2045.10

Renewable generation growth varies regionally but is expected to continue expanding in all U.S. regions under the current outlook scenarios. In particular, wind resources are predicted to grow through the West and Mid-Continent regions—though offshore wind continues to be built only off the Northeast coast—while solar-powered resources are projected to grow most in the southeastern United States (though, as discussed below, solar expansion has thus far been most prevalent in the Southwest and Hawaii).11

Other recent data points similarly demonstrate the prominent role renewables play in shaping the U.S. energy resource mix. For instance:

  • According to the EIA, in the first 6 months of 2019, renewable resources (including hydro) provided approximately 20% of the net electricity generated in the United States.12
  • The EIA reported that renewable sources provided 23% of U.S. electricity in April 2020, exceeding coal for the first time (20%).13
  • The Federal Energy Regulatory Commission’s (FERC) monthly Energy Infrastructure Update report shows that, as of November 2019, the installed nameplate capacity of renewable resources represented approximately 22% of the entire available installed capacity in the United States.14
  • The EIA projects that approximately 76% of capacity additions in 2020 will come from renewable resources.15
  • Per the EIA’s Short-Term Energy Outlook in March 2020,16
    • natural gas electricity generation projections remain steady, as the annual share in 2019 was 37%, and is forecasted to be 39% in 2020 and 37% in 2021;
    • renewable generation rises from 17% to 19% in 2020 and is projected to rise to 21% in 2021 as a result of added wind and solar generating capacity;
    • coal-fired generation falls from a 24% share in 2019 to 21% in 2020 and 2021; and
    • electric power sector demand for coal is anticipated to fall 16% in 2020.

Is Coal Dying?

As the figures above demonstrate, strongly entwined with the growth of renewables is the decline of coal. Coal plant closures have been ongoing for the last decade due to low natural gas prices and increasing competition from renewables. The initial waves of closures primarily retired smaller or lesser-used units. Now the closure of significantly larger plants is underway.17

In 2015, approximately 5% of the U.S. coal fleet was retired, amounting to 15 GW of coal capacity.18 In 2018, almost 14 GW of coal capacity was retired.19 The EIA anticipated another 4 GW of coal retirements for 2019.20 In total, approximately 15% of the U.S. coal fleet was retired in 2017–2019.21 Another 10% of the coal fleet will be shuttered in 2019–2020.22 From the year 2010 through the first quarter of 2019, “U.S. power companies announced the retirement of more than 546 coal-fired power units, totaling about 102 GW of generating capacity.”23 EIA expects the retirement of another 5.8 GW of coal-fired capacity in 2020.24 According to the EIA, coal-fired generation decreased by 15% in 2019 and by 9% in 2020.25 As coal-fired generation is experiencing a dramatic decline in investment support over the last several years, companies are turning toward alternatives.26

For many of the larger remaining coal plants, closures can be attributed to the fact that the plants are becoming more expensive to operate. Any new carbon tax would accelerate the demise of coal. For the time being, some massive coal-powered plants will continue to operate because they have already installed environmental controls, reducing further regulatory threats; and due to their large economies of scale, they may remain cost-effective for some time under certain natural gas price points.27 Moreover, some utilities also may feel pressure to keep coal plants open to support local economies.

Clean Energy Targets and Economics Are Factors

Contributing to the decline of coal-fired generation is the fact that utilities are setting clean energy goals. For example, Duke Energy, whose regulated electric utilities serve approximately 7.7 million retail electric customers in six states in the Southeast and Midwest, announced its intention to achieve net-zero carbon emissions by 2050.28 The company also pledged to slash its carbon emissions in half by 2030. Duke also plans to retire seven coal-fired units by 2024, in addition to 49 coal units Duke has shuttered since 2010.

Until recently, Xcel Energy, with four subsidiary utilities providing service across eight western and midwestern states, burned coal to generate almost half of its power. At the end of 2018, it announced its goal to reach zero-carbon electricity by 2050 by shutting down coal units and relying on wind and nuclear.29 Discussing its plan to reduce carbon emissions by 80% by 2030 (compared to 2005 levels) in the eight states it serves, the company announced, “We are accelerating our carbon reduction goals because we’re encouraged by advances in technology, motivated by customers who are asking for it and committed to working with partners to make that happen.”30

Public Service Enterprise Group (PSEG), which owns New Jersey’s largest electric utility as well as a subsidiary that owns and operates power plants located primarily in the Mid-Atlantic and Northeast regions, made a carbon-free pledge in July 2019.31 The company announced that it “expects to cut its power fleet’s carbon emissions by 80% by 2046, from 2005 levels,” and further plans to “attain[] net-zero carbon emissions by 2050 assuming advances in technology and public policy.”32 In line with these goals, PSEG has no plans to build or acquire new fossil-fueled power plants. PSEG is retiring coal plants, investing heavily in offshore wind, and fighting to keep nuclear plants online.33

In addition, PacifiCorp recognized that 60% of its coal units are no longer economic. The announcement was simply an acknowledgement of the general trend of economic analyses revealing difficulties that coal generation has in competing with cheaper natural gas and renewable energy.34 Similarly, North Dakota’s 1,151-MW Coal Creek Station plant will close years ahead of schedule, a choice driven by economics.35

The prospects for coal stand in dire contrast to that of renewables. Globally, investment in new renewable energy is projected to total $2.6 trillion from 2010 through 2019.36 Global solar capacity increased by over 2,500% in that decade.37 Investment in renewables is projected to be almost triple the investment in fossil fuel plants in 2020–2025.38

Regional Developments Confirm Continued Renewable Growth and Expansion

New England’s Offshore Wind Industry

Northeast states are best suited to take advantage of offshore wind potential at this time. Substantial offshore wind development has been spurred by state-led initiatives. The formidable expansion of wind-powered energy resources along the Eastern Seaboard is poised to spur massive economic development and revitalization. By some estimates, the projects will enable a $70 billion market.39 As for the economic potential, Ørsted’s CEO noted that costs have been reduced by approximately 17% over the last several years.40

Currently, there is only one offshore wind farm producing energy, but the potential for offshore wind generation is staggering. The Department of Energy estimates that more than 2,000 GW of offshore wind capacity could be obtained (almost double the current national usage of electricity),41 and the over 22 GW of installed offshore wind projects in Europe further demonstrate the potential for significant development.42 There are ambitious state-driven goals for the future development of offshore wind across the Northeast.

Connecticut passed a law requiring the state to develop and obtain 2,000-MW of offshore wind capacity by 2030.43 The state’s 804-MW Park City Wind project is scheduled to commence operation in 2025, providing 14% of the state’s energy requirements. Moreover, the project signals progress towards Connecticut’s goal of being zero-carbon by 2040.

At the moment, the 30-MW Block Island Wind Farm located off the coast of Rhode Island, which commenced operations in 2016, is the nation’s only offshore wind farm in operation. The Revolution Wind project, located in federal waters 15 miles off the Rhode Island shoreline, is targeted to come online in 2023. The project will deliver approximately 700 MW of wind-powered generation, with 400 MW to be delivered to Rhode Island and 300 MW delivered to Connecticut.

In 2016, Massachusetts passed a comprehensive energy bill that contains provisions requiring electric distribution companies to purchase 1,600 MW of offshore wind power by 2027. Massachusetts has been working to establish the nation’s largest wind farm, the 800-MW Vineyard Wind project with 84 wind turbines.

Other states hope to take advantage of offshore wind opportunities. Maine is moving ahead with a demonstration project called Aqua Venus to power 9,000 homes with two 6-MW floating turbines. The State of New York passed a law to develop 9,000 MW of offshore wind by 2035. Ørsted and Eversource will construct the 880-MW Sunrise Wind project. Equinor will build the 816-MW Empire Wind project. And Ørsted has contracted with Long Island Power Authority for a 132-MW project called the South Fork Wind Farm.

New Jersey has also established aggressive wind power goals. Governor Phil Murphy has committed to developing 7,500 MW of offshore wind by 2035. This would mean offshore wind could supply half of the state’s electricity. New Jersey anticipates adding 1,100 MW toward that count as PSEG is working with Ørsted on a utility-scale wind farm called the Ocean Wind project, 15 miles off the coast of Atlantic City, which aims to be operational in 2024.

Developments in the Southeast

Renewables development in the Southeast is focused on solar resources. Florida Power & Light (FPL) announced a 409-MW solar-plus-storage project, the Manatee Energy Storage Center, making it the largest battery system planned in the country.44 The facility, which consists of a mega-battery installation adjacent to a large solar plant, aims to be operating by late 2021. The company anticipates that the project will enable the utility to accelerate the retirement of two 1970s-era natural gas–fired plants. FPL also announced plans to install approximately 30 million solar panels, upwards of 10 GW of capacity, by 2030.

In New Orleans, Entergy has begun construction on a 20-MW solar plant designed to withstand hurricane conditions and has also piloted a rooftop solar program.45 Entergy Arkansas obtained approval from the Arkansas Public Service Commission for its 100-MW utility-scale solar project combined with 10 MW of battery storage.

North Carolina has become a leader in utility-scale solar, ranking second in the nation for installed solar, with over 6,000 MW installed to date.46

Developments in the Midwest

The rich wind resources of the Great Plains continue to provide significant prospects for renewables development in the Midwest. As of June 30, 2019, the Midcontinent Independent System Operator (MISO) Regional Transmission Organization (RTO) had 20,452 MW of registered wind capacity (out of approximately 175 GW),47 while the Southwest Power Pool (SPP) reported in early 2020 that approximately 25% of its 90 MW of installed generation capacity, and over 27% of its 2019 energy production, was wind based.48

In Berkshire Hathaway’s 2020 letter to investors, Warren Buffet reported, “In 2021, we expect [Berkshire Hathaway Energy’s] operation to generate about 25.2 million [MWh] in Iowa from wind turbines that it both owns and operates . . . to attain[] wind self-sufficiency in the state of Iowa.”49 Recently, wind surpassed coal as the largest source of electricity in Iowa and Kansas.50 Iowa now generates more than 10 GW of wind energy, which accounts for approximately 40% of the state’s electricity.51

Developments in the West

The majority of electricity needs in Washington State have long been served by a renewable resource—hydroelectric power.52 The state recently passed a clean energy bill, joining New Mexico, California, and Hawaii in establishing a 100% clean energy goal. On May 7, 2019, Governor Jay Inslee signed the bill committing the state to achieve its clean energy goal by 2045.53

According to the California Energy Commission, renewable sources supplied 34% of the state’s electricity needs in 2018.54 California has adopted clean energy standards, aiming to achieve a 60% renewable energy goal by 2030 and an electric sector target of 100% clean energy by 2045.55 With respect to solar, California set a record last summer for “the most solar power ever flowing on the state’s main electric grid, and the most solar power ever taken offline because it wasn’t needed.”56

Solar power is by far the fastest-growing source of renewable energy in Hawaii.57 Hawaii has been called an incubator of renewable projects.58 Hawaii’s renewable energy goal, adopted in 2015, requires the state to transition to 100% renewable energy sources by 2045. The Hawaii Public Utility Commission is currently in Phase II of a project to implement performance-based regulatory mechanisms to achieve the state-mandated goals.59

Southwest Developments

Arizona’s largest utility, Arizona Public Service (APS), has committed to achieving its 100% clean energy goal by 2050.60 In 2019, APS announced plans to add battery storage to its fleet of solar power plants, build new solar-plus-storage plants, and use storage to deliver renewable energy during peak energy usage.61 APS plans to build 850 MW of new battery storage and at least another 100 MW of solar generation by 2025. APS is also partnering with First Solar to build a first-of-its-kind solar-plus-storage project that will be one of the largest in the country when completed in 2021. The project consists of a 65-MW solar unit and a 50-MW battery, which will provide APS with firm power during the five-hour peak between 3 p.m. and 8 p.m.62

El Paso Electric recently entered contracts for 200 MW of solar capacity combined with 100 MW of battery storage in Texas and New Mexico.63

Southwestern Public Service Company (SPS) obtained approval in 2018 from regulators in New Mexico and Texas to construct and operate two wind farms: a 478-MW wind farm located in Hale County, Texas, and a 522-MW wind farm located in Roosevelt County, New Mexico.64

Southwestern Electric Power Company (SWEPCO) is working to obtain regulatory approval to acquire, along with its sister company Public Service of Oklahoma (PSO), three wind facilities in north central Oklahoma. SWEPCO will own 54.5% of the 1,485-MW project.65 The Oklahoma Corporation Commission approved a settlement permitting PSO to move forward with its plan to add 675 MW of wind-supplied energy to its energy mix to serve customers.66 SWEPCO has sought approval for its interest in these wind facilities from utility regulators in Arkansas, Louisiana, and Texas. The Arkansas Public Service Commission has issued its approval of the acquisition. The Louisiana Public Service Commission has also approved the acquisition but has not yet issued its written order. While SWEPCO continues to seek the approval of the Public Utility Commission of Texas, SWEPCO has announced that the Arkansas and Louisiana approvals will allow the company to go forward with the acquisition of its full share of the three facilities.67

ERCOT Region Developments

The significant expansion of renewable energy within the Electric Reliability Council of Texas (ERCOT) highlights the evolving renewable paradigm. For July 2019, ERCOT reported that wind generation met 22% of ERCOT’s electrical needs, exceeding coal for the first time (21% of total electricity).68 The development of wind resources in Texas is not surprising as the state includes geographical locations well suited for wind generation. Texas accounted for over 25% of U.S. wind electricity generation in each of the past three years.69 As the most famous of the Talking Heads characterized the Texas wind renaissance: “Over the past two decades, it’s found one on its western range, where gale-force winds sweep the plains.”70

State policy has played a vital role in the expansion of renewable resources. In the 1990s, Texas state regulators adopted generation interconnection policies that were seen as supportive in interconnecting new generators to the transmission grid. Further, at the Texas Legislature’s direction, the Public Utility Commission of Texas (PUCT) collaborated with ERCOT to establish the Competitive Renewable Energy Zone (CREZ) transmission projects in West Texas. Completed in 2013, the $7 billion CREZ transmission projects added 2,400 miles of high-voltage transmission lines71 to support the transmission of more than 18.5 GW of wind and gas-generated electricity across Texas.72 The CREZ lines help enable Texas to provide three times as much wind power as any other state.73

Wind power has been the fastest-growing source of electricity in Texas and has quickly enabled the state to surpass its renewable targets. The Texas Legislature established a goal in 1999 to achieve 10 GW of renewable power by 2025.74 The state has long surpassed that goal with total renewable generation topping 25 GW by 2018.75 Since 2018, developers have added 3 GW of wind-generating capacity in ERCOT, and another 7 GW is planned to be in operation before the end of 2020—an increase of nearly 50% from the 2017 wind capacity level in ERCOT.76 Recent projections anticipate wind will supply 20% of ERCOT’s total generation in 2019 and 24% in 2020.77 Further, wind matched coal’s share of ERCOT’s generation in 2019 and is projected to exceed it in 2020 (87 TWh of wind generation versus 84 TWh from coal).78

Texas renewable generation other than wind is also growing. Installed utility-scale solar capacity in ERCOT is approximately 2.3 GW, but there is a large volume of new solar projects in the interconnection queue, including more than 100 interconnection requests by renewable developers.79 ERCOT’s August 2019 interconnection report listed 62.4 GW of planned solar projects and 36 GW of wind projects (among 112 GW of study requests).80

Reliability Issues Related to Wind Energy

Given the significant development of the renewable sector, reliability issues are of prominent concern.81 For example, almost 25% of capacity in ERCOT—25 GW— is wind generation, more than California, Oklahoma and Iowa combined.82 At the same time, ERCOT has seen a lack of investment in dispatchable fossil generation, due in part, some suggest, to the fact that the wholesale market structure in ERCOT does not include capacity charges (only energy).83 While coal plants are shutting down, wind resources cannot fully displace the base-load and load-following roles of fossil units.

This complication was most evident last summer (2019) when severe heat stressed the ERCOT grid. Austin had over 50 days of high temperatures in excess of 100 degrees. Much of the state’s wind capacity is in West Texas. But during summer afternoons—when demand is highest—the wind output in West Texas is lowest. For example, on September 6, 2019, when many areas of Texas felt temperatures in excess of 100 degrees, the output of ERCOT’s 24-GW wind fleet plunged to less than 1.2 GW. ERCOT issued alerts for voluntary load reductions on at least 12 occasions.84 On several days in August, reserve margins in ERCOT were so low that ERCOT called an Energy Emergency Alert, causing wholesale prices to spike up to the $9,000/MWh cap—a 250-fold increase over average wholesale prices in 2018.85

This highlights the limitations of reliance on renewable resources. They are intermittent and cannot yet reliably displace either base-load resources or load-following resources. And reliability is the foremost concern of the grid. Flexible resources are necessary to manage the dynamic variations in utility load. The intermittent nature of renewable resources has thus far precluded them from contributing to the load-following role. To date, RTOs and utilities with load-balancing responsibility have generally limited the use of intermittent resource capacity in reserve margin calculations to the historic performance of such resources during peak usage periods.86 In that sense, renewable resources may be seen to resemble unscheduled energy “puts” from Qualifying Facilities. Energy from the resource shows up on the grid only when it shows up, and only in the constantly varying amount that it shows up (and then disappears), and the load-balancing entity must constantly manage the dynamic changes.

But with developing advancements in storage technology, that is changing. We are moving into a new era when renewables, paired with storage capacity, could be treated as closer-to-firm resources, capable of load-following dispatch.

Energy Storage and Harnessing the Potential of Emerging Technologies

There is a debate between those who believe that a 100% renewable supply is achievable and those who believe that there will be always be a need filled by nuclear and natural gas generation.87 The debate is premised on the fact that wind and solar resources are intermittent. Simply put, “They don’t adjust to the grid; the grid adjusts to them.”88 As noted above, a grid with a large amount of renewables requires a significant degree of flexibility. There must be a means to adjust and balance the fluctuations that occur with wind and solar. The assumption made by some is that nonrenewable resources will always be required to provide the needed flexibility to manage dynamic load. Time will tell whether robust energy storage solutions can cost-effectively create flexibility and dispatchability for renewable resources.

Energy storage technologies are valuable because they allow for the storage of electricity during periods of decreased demand (when prices tend to be lower), and then deliver that electricity when demand is increased (generally when prices are also higher).89 The various types of energy storage range from pumped-storage hydropower, different types of batteries, compressed air storage, flywheels, and even gravity storage.90 However, deployment of these technologies has been limited by cost, geography, and the technologies themselves.

Increasing cost competitiveness has meant that battery storage has become the critical component to the industry-wide transformation taking place.91 “Batteries are on the cusp of transforming the Texas power grid by making intermittent power sources such as wind and solar into a supply as dependable as natural gas.”92 Investment in renewables remains attractive because costs have declined considerably, and the emerging combination of battery and storage technologies has raised the prospect of renewables becoming reliable and dispatchable. Importantly, as the cost of renewables has been declining, so have battery storage costs. Given rapid development over the last several years, recent projections suggest an overall decline in capital costs, with cost reductions by 2025 of 10 to 52%.93

As illustrated in the chart below, the EIA expects significant growth of battery storage capacity over the next three years.94

U.S. Utility-Scale Battery Storage Power Capacity (March 2019)

Megawatts (MW)

Source: U.S. Energy Information Administration, Annual Electric Generator Report and the Preliminary MonthlyElectric Generator Inventory.

Source: U.S. Energy Information Administration, Annual Electric Generator Report and the Preliminary MonthlyElectric Generator Inventory.

This chart, "U.S. Utility-Scale Battery Storage Power Capacity (March 2019)," shows the historic and projected growth of battery storage total operating capacity and annual capacity additions from 2003 through 20023. Operating capacity is expected to rise from what was less than 500 megawatts as recently as 2015 to 2,500 megawatts by 2023. Annual capacity additions in 2020 and 2021 alone are projected to double current storage capacity.

The substantial growth in utility-scale battery installations can be attributed to both supportive state-level energy storage initiatives, as well as federal regulatory encouragement. In a landmark 2018 decision, FERC’s Order No. 841 directs RTOs and Independent System Operators (ISOs) to revise their tariffs to enable utility-scale battery systems to participate in their wholesale energy, capacity, and ancillary services markets.95 There is also growing recognition that pairing utility-scale battery storage with intermittent renewable resources, such as wind and solar, has become increasingly competitive compared with traditional generation options.

Presently, two of the largest operating utility-scale battery storage sites in the United States provide 40 MW of power capacity each: the Golden Valley Electric Association’s battery energy storage system in Alaska and the Vista Energy storage system in California.96 Another 16 states have operating battery storage facilities with an installed power capacity of at least 20 MW.97 As of March 2019, states reported 899 MW of installed and operating battery storage.98 Of that total, California, Illinois, and Texas account for just under half of that reported capacity. The two largest projects on the horizon will account for 725 MW of the 1,623 MW total planned battery storage capacity projected to come online by 2023. The first, discussed above, is the 409-MW Manatee Energy Storage Center in Florida. The other is the Helix Ravenswood facility, a 316-MW battery storage project in Queens, New York. Additionally, as discussed above, APS has announced plans for 850 MW of storage by 2025. And Southern California Edison just announced a storage project to procure 770 MW of battery storage resources, aimed at bolstering grid reliability.99 “For context, 770 megawatts is more energy storage than was installed in the entire United States last year. It’s enough batteries to meet about 3.5% of all the mid-afternoon electricity demand on California’s main power grid so far this week.”100 A steep rise in large-scale battery installations is also in store for Texas.101 According to ERCOT, battery storage capacity will surge more than six-fold to 584 MW when planned projects are completed in 2021.102

Renewable Storage Projects Create Flexible Capability

We may be at a turning point as energy storage appears to be a promising means to enable renewable resources to perform a load-following role. A 2018 analysis asserted, “Providing wind energy as a continuous baseload resource is not technically feasible, but meeting a limited capacity window with wind-plus-storage is possible depending on wind resources and capacity requirements.”103 But even where there is great potential for a storage-plus solution, it is not without risk. “Potential extended periods of low wind speeds mean that there is no 100 percent uptime guarantee for wind energy, even when meeting short capacity windows. With proper risk management, however, the uptime of wind-plus-storage could approach the availability of conventional fossil-fuel generators.”104

The issue becomes cost and identifying the threshold at which storage becomes cheap enough to sufficiently enable renewable energy sources to manage the grid. Part of that question is determining how to achieve flexible capability through storage solutions that can manage the wide fluctuations in wind and solar output while performing a load-following dispatch role.

One interesting development in this discussion comes from a recent MIT study105 that brings 20 years of renewable generation into line with historical energy-demand profiles—to ascertain the level of storage cost at which renewables can cost-effectively meet 100% of demand.106 The study aimed “to estimate the costs of using wind and solar energy with storage to reliably supply various output profiles.”107 It determined that accomplishing a 100% renewable-supplied electric system would require, based on the current cost of materials and manufacturing of battery-based energy storage systems, a 90% reduction of costs, or roughly a $20/kWh storage capacity cost. The study posited that if 5% of demand could be met another way (i.e., by resources other than wind or solar), the target reduction of costs for energy storage would approach $150/kWh. This would permit the consideration and use of more expensive energy storage options to attain a workable renewables-dominated resource mix. The study also found that a combination of wind and solar created the least-cost energy generation because they can work in tandem with storage.

Recent projects highlight recognition of the battery-plus-solar synergy. For example, Kauai Island Utility Cooperative is working with Tesla on a large-scale project to complement the 200-acre, 100-MW solar farm that makes up the world’s largest currently operating solar-plus-storage complex.108 Similarly, APS will rely on 150 MW of solar-fueled battery storage to meet part of customer demand when energy usage peaks.109

In recent years, resource development and deployment have clearly favored renewable solar and wind resources. And the development and declining cost of storage technologies increasingly make those resources viable options to serve a central role in reliably meeting electric demand.

But . . . COVID-19

The U.S. economy and its business sectors are experiencing an unprecedented set of circumstances associated with the global pandemic caused by the spread of COVID-19. Tightened demand, distracted and otherwise engaged regulators, and vulnerable supply chains have serious implications for the energy sector, leaving growth forecasts, as well as renewable deployment prospects, uncertain.110 The pandemic is causing a global economic downturn, reduced investment, and suppressed electric demand. For the energy sector, the pandemic has been called “an immediate and dramatic business concern” for the entire industry.111

It is possible that some of the trends in the growth of renewable resources discussed above could be altered or delayed by the economic impacts of the current crisis.112 The pandemic is already creating delays for the solar sector that may prove harmful and costly.113 Supply chain disruptions can result in downstream effects on maintaining eligibility for tax incentives by those unable to meet target project-delivery deadlines.114 The Trump administration, however, has indicated that it plans to extend the safe harbor provisions of the production tax credit and investment tax credit from four to five years to alleviate the interruptions faced by developers due to COVID-19.115 The nation’s wind energy industry would be among the most deeply affected during this period of uncertainty considering the dependency of construction on global supply chains and obtaining tax incentive benefits.116 Similarly, there could be a negative impact on battery demand, another facet of the industry experiencing supply chain interruptions. Being newer, the energy storage industry is considered more vulnerable to the disruptive economic impacts of the COVID-19 crisis.117

The scope of impacts remains to be seen, but it is clear that “[t]he upward trajectory of clean energy, not to mention hundreds of thousands of jobs, depends in part on big providers maintaining their financial health through a global emergency.”118 Moreover, the staggering reduction in oil demand precipitated by the lockdowns associated with the spread of COVID-19 along with recent dramatic reductions of oil and gas prices have signaled significant short-term negative impacts for the momentum of renewable energy projects.119 However, there are reasons analysts may remain positive regarding long-term prospects for renewable energy: (1) it will tend to remain cost competitive as oil prices eventually rebound, (2) the diversification of energy portfolios will provide a hedge against price volatility of oil and gas, and (3) difficulties faced by nonrenewable projects to obtain approvals remain unabated due to concerns that investments may become stranded.120 Some analysts expect major oil companies to remain committed to their respective decarbonization and renewable energy initiatives.121 Notwithstanding the long-term prospects, the uncertain nature of current circumstances makes it especially difficult to project the timing and path for the development of renewable resources in the short term. inf


1. E.g., Grant Smith & Bill Walker, Is 100% Renewable Energy for the US possible? Yes, Utility Dive (Jan. 30, 2019),

2. See, e.g., Robert Fares, Renewable Energy Intermittency Explained: Challenges, Solutions, and Opportunities, Sci. Am. (Mar. 11, 2015),

3. Id.

4. U.S. Energy Info. Admin., Annual Energy Outlook 2020 with Projections to 2050, 67–68 (Jan. 29, 2020) [hereinafter AEO 2020],

5. Id.

6. Id. The last decade has seen a decline in the prominence of hydroelectric power relative to other renewable generation. Until recently, hydroelectric power was the largest source for renewable generation. As of 2019, wind is the largest source of renewable generation. See U.S. Energy Info. Admin., Hydropower Explained (updated Mar. 30, 2020),; U.S. Energy Info. Admin., Renewable Energy Explained (updated June 27, 2019),​explained/renewable-sources; see also U.S. Energy Info. Admin., Electricity Explained (updated Mar. 20, 2020),

7. AEO 2020, at 62, 71,

8. Id.

9. Id.

10. Id.

11. Id.

12. U.S. Energy Info. Admin., Electric Power Monthly with Data for June 2019 (Aug. 2019),; see also U.S. Energy Info. Admin., Electric Power Monthly with Data for February 2020 (Apr. 2020),

13. U.S. Energy Info. Admin., Today in Energy: U.S. Electricity Generation from Renewables Surpassed Coal in April (June 26, 2019),

14. Fed. Energy Regulatory Comm’n, Office of Energy Projects Energy Infrastructure Update (Nov. 2019),

15. U.S. Energy Info. Admin., Today in Energy: New Electricity Generation Will Come Primarily from Wind and Solar (Jan. 14, 2020) [hereinafter EIA New Electricity Generation],

16. U.S. Energy Info. Admin., Short-Term Energy Outlook (Mar. 2020) [hereinafter EIA STEO],

17. Benjamin Storrow, And Now the Really Big Coal Plants Begin to Close, Sci. Am. (Aug. 16, 2019), https://www.scientific​

18. Id.

19. U.S. Energy Info. Admin., More U.S. Coal-Fired Power Plants Are Decommissioning as Retirements Continue (July 26, 2019) [hereinafter EIA Coal-Fired Power Plants], (becoming the second-highest annual total for U.S. coal retirements in EIA’s data set).

20. U.S. Energy Info. Admin., Today in Energy: U.S. Coal Consumption in 2018 Expected to Be the Lowest in 39 Years (Dec. 4, 2018),

21. Matt Egan, The Market Has Spoken: Coal Is Dying, (Sept. 20, 2019), (citing coal research by S&P Global Platts Analytics).

22. Id.

23. EIA Coal-Fired Power Plants, supra note 19 (becoming the second-highest annual total for U.S. coal retirements in EIA’s data set).

24. EIA New Electricity Generation, supra note 15.

25. U.S. Energy Info. Admin., Today in Energy: Natural Gas and Wind Forecast to Be Fastest Growing Sources of U.S. Electricity Generation (Sept. 17, 2019) [hereinafter EIA Fastest Growing Sources],; U.S. Energy Info. Admin., Short-Term Energy Outlook (Sept. 2019),

26. John Loeffler, Report Finds Coal Power Investment Plummeting 75% Since 2015, Interesting Eng’g (May 17, 2019),; see also KPMG Global Energy Inst., 2019 Renewable Energy Finance Seminar Recap: Utilities Are Also Going Before Their Regulators with Plans to Close Fossil Fuel Plants and Pursue More Renewables, as Solar and Wind Are the Lowest-Cost New Resources (2019).

27. Storrow, supra note 17.

28. Press Release, Duke Energy, Duke Energy Aims to Achieve Net-Zero Carbon Emissions by 2050 (Sept. 17, 2019),

29. Press Release, Xcel Energy, Xcel Energy Aims for Zero-Carbon Electricity by 2050 (Dec. 4, 2018),

30. Id.

31. Press Release, PSEG, PSEG Plans to Reduce Carbon Emissions 80% by 2046 with a Vision of Net-Zero by 2050 (July 25, 2019),

32. Id.

33. Id.

34. Lulia Gheorghiu, Brief: PacifiCorp Shows 60% of Its Coal Units Are Uneconomic, Utility Dive (Dec. 5, 2018),

35. Jeffrey Tomich, Midwest Coal Giant Announces Plant Closure, Energywire E&E News (May 8, 2020),

36. Will Mathis, Clean Energy Investment Is Set to Hit $2.6 Trillion This Decade, (Sept. 5, 2019),

37. Id.

38. Id.

39. Bob Woods, U.S. Has Only One Offshore Wind Farm but a $70 Billion Market Is on the Way, (Dec. 13, 2019),; Stephanie A. McClellan, Supply Chain Contracting Forecast for U.S. Offshore Wind Power (White Paper, Mar. 2019),

40. Woods, supra note 39.

41. Id.; see also Dep’t of Energy, National Offshore Wind Strategy (Sept. 8, 2016),

42. By the end of 2019, Europe had a total installed offshore wind capacity of 22,072 MW from over 5,000 grid-connected wind turbines across 12 countries. See Offshore Wind in Europe: Key Trends and Statistics, Wind Europe (2020),

43. Andrew Coffman Smith, Conn. House Passes Legislation to Procure 2,000 MW of New Offshore Wind by 2030, (May 14, 2019),

44. Press Release, Florida Power & Light, FPL Announces Plan to Build the World’s Largest Solar-Powered Battery and Drive Accelerated Retirement of Fossil Fuel Generation (Mar. 28, 2019),

45. Press Release, Entergy, Harnessing the Power of the Sun (Apr. 28, 2020),; Press Release, Entergy, Entergy News Orleans Puts Commercial Rooftop Solar Generation on the Grid (Feb. 6, 2019),

46. North Carolina Solar, Solar Energy Inustries Association (2019),

47. MISO, Planning Year 2020–2021 Wind & Solar Capacity Credit (Dec. 13, 2019),

48. Sw. Power Pool, Integration 2019 Annual Report (Apr. 27, 2020),

49. Annual Letter to Shareholders from Warren E. Buffett, Chairman of the Board, Berkshire Hathaway, to Shareholders 9 (Feb. 22, 2020) (copy on file with author).

50. Andy Balaskovitz, Wind Is Not the Leading Power Source in Kansas, Iowa, Midwest Energy News (Apr. 20, 2020),

51. Tim Webber, Wind Blows by Coal to Become Iowa’s Largest Source of Electricity, Des Moines Register (Apr. 16, 2020),

52. U.S. Energy Info. Admin., State Energy Profiles: Washington Net Electricity Generation by Source (Dec. 19, 2019),

53. See Wash. State Legislature, Bill Information: SB5116, (last visited May 19, 2020). By contrast, Oregon failed to pass the highly touted House Bill 2020 Cap and Trade Proposal that followed the state’s 2016 Clean Electricity and Coal Transition Act. Just recently, Oregon Governor Brown signed a 14-page executive order to reduce GHG emissions. See KATU Staff, Lawmakers Respond: Governor Signs Executive Order to Reduce Oregon’s Carbon Emissions, (Mar. 10, 2020),; Exec. Order No. 20-04, Directing State Agencies to Take Actions to Reduce and Regulate Greenhouse Gas Emissions (Mar. 10, 2020),

54. Cal. Energy Comm’n, Tracking Progress Renewable Energy, Dec. 2019,

55. Id.

56. Sammy Roth, California Has Too Much Solar Power. That Might Be a Good Thing for Ratepayers, L.A. Times (June 5, 2019) (discussing whether an overbuild of solar could be beneficial or problematic and recognizing growing need for energy storage solutions).

57. Haw. State Energy Office, Hawaii Facts and Figures (July 2019), (experiencing unprecedented growth in solar).

58. Noelle Swan & Nathan Eagle, Hawaii Wants to Lead the Renewable Revolution, Sci. Am. (Sept. 21, 2019),

59. In re Pub. Utils. Comm’n, HPUC No. 2018-0088 (May 23, 2019) (Decision & Order No. 36326),; In re Pub. Utils. Comm’n, HPUC No. 2018-0088 (June 26, 2019) (Convening Phase II & Establishing a Procedural Schedule Order No. 36388) (providing timeline for proposals and comments and anticipating final order in December 2020).

60. Robert Walton, Arizona Public Service Sets 100% Clean Energy Target, but Doesn’t Rule Out Carbon Capture for Gas Plants, Utility Dive (Jan. 23, 2020),

61. Press Release, APS, APS Customers Get Solar After Sunset with Major Clean Energy Projects (Feb. 21, 2019),

62. Gavin Bade, APS to Install 50 MW, 135 MWh Solar Shifting Battery, Utility Dive (Feb. 12, 2018), https://www.utility​

63. Press Release, El Paso Elec. Co., El Paso Electric Plants to Add First Ever Utility-Scale Battery Storage, Hundreds of MWs of Solar Energy by 2023 (Dec. 19, 2019),

64. In re Sw. Pub. Serv. Co.’s Application Requesting: (1) Issuance of a Certificate of Pub. Convenience & Necessity Authorizing Construction & Operation of Wind Generation and Associated Facilities, and Related Ratemaking Principles Including an Allowance for Funds Used During Construction for the Wind Generation & Associated Facilities; and (2) Approval of a Purchased Power Agreement to Obtain Wind-Generated Energy, N.M. Pub. Util. Comm’n, Case No. 17-00044-UT (Mar. 21, 2018) (final order adopting certification of stipulation with modification); Application of Sw. Pub. Serv. Co. for Approval of Transactions with ESI Energy, LLC and Invenergy Wind Dev. N. Am. LLC, to Amend a Certificate of Convenience & Necessity for Wind Generation Projects & Associated Facilities in Hale Cty., Tex., & Roosevelt Cty., N.M., & for Related Approvals, PUCT No. 46936 (May 25, 2018) (final order).

65. Press Release, Sw. Elec. Power Co., SWEPCO, Other Louisiana Parties Reach Agreement in Wind Power Proposal (Mar. 16, 2020),​Release.aspx?releaseID=5463 ; Press Release, Sw. Elec. Power Co., SWEPCO, Other Arkansas Parties Reach Agreement in Wind Power Proposal (Jan. 24, 2020),

66. Press Release, Public Serv. of Okla., OCC Approves PSO Wind Plan Settlement (Feb. 20, 2020),

67. In re Application of Sw. Elec. Power Co. for Approval to Acquire Wind Generating Facilities Pursuant to the Ark. Clean Energy Dev. Act, No. 19-025-U (Ark. Pub. Serv. Comm’n May 5, 2020) (Order No. 7). Sw. Elec. Power Co, Application for Certification and Approval of the Acquisition of Certain Renewable Resources, No. U-35324 (La. Pub. Serv. Comm’n, opened Jul. 24, 2019),

68. Aparajita Dutta Zacks, Wind Power to Surpass Coal in Texas: 3 Utilities to Gain, Yahoo Fin. News (Sept. 20, 2019),

69. Id.; see also Warren Lasher, ERCOT, The Competitive Renewable Energy Zones Process (Aug. 11, 2014),

70. David Byrne, Can We All Be Like Texas, Reasons to Be Cheerful Blog (Apr. 27, 2020),

71. Ramanan Krishnamoorti, Texas Power Generation: Did Coal Get Blown Away by Wind?, Forbes (Jan. 13, 2020),

72. Zacks, supra note 68.

73. Id.

74. See 16 Tex. Admin. Code § 25.173 (Goals for Renewable Energy).

75. See Office of Energy Efficiency & Renewable Energy, U.S. Dep’t of Energy, 2017 Renewable Energy Data Book (Jan. 2019), Texas met its mandated renewable goal in 2009. See U.S. Energy Info. Admin., Texas State Profile and Energy Estimates (last updated Mar. 2020),

76. Robert Walton, Brief: Texas Wind Poised to Outstrip Coal Generation with 87 TWh in 2020, Report Projects, Utility Dive (Sept. 23, 2019),

77. Id.

78. Id; see also EIA Fastest Growing Sources, supra note 25; U.S. Energy Info. Admin., Short-Term Energy Outlook (Sept. 2019),

79. ERCOT, Fact Sheet (May 5, 2020), Generator Interconnection Status Reports for ERCOT can be located and accessed through its site at Resource Adequacy, ERCOT, (last visited May 21, 2020).

80. Resource Adequacy, supra note 79.

81. See Bernard Weinstein, The Straining Texas Power Grid Needs Some Pricing Help from Regulators, Trib Talk (Sept. 23, 2019),

82. Press Release, Dep’t of Energy, Department of Energy Releases Annual Wind Market Reports, Finding Robust Wind Power Installations and Falling Prices (Aug. 23, 2019),

83. See Weinstein, supra note 81.

84. Id.

85. Id.

86. For example, in ERCOT, the capacity credit for wind facilities in the Coastal wind region is 63% of the nameplate capacity of the facility, the capacity credit for wind facilities in the Panhandle wind region is 29%, the capacity credit for wind facilities in other wind regions is 16%, and the capacity credit for solar facilities is 76% of nameplate capacity of the facility. Estimate of Installed Generation Capacity in ERCOT, PUCT Project No. 39870 (Feb. 4, 2020).

87. David Roberts, Getting to 100% Renewables Requires Cheap Energy Storage. But How Cheap?, (Sept. 20, 2019),; Smith & Walker, supra note 1; Emma Foehringer Merchant, 2018: The Year of 100% Clean Energy, GreenTech Media (Dec. 24, 2018), (discussing factions of debate over feasibility of 100-percent renewable generation).

88. Roberts, supra note 87.

89. U.S. Energy Info. Admin., Today in Energy: EIA Expands Data on Capacity and Usage of Power Plants, Electricity Storage Systems (Feb, 28, 2020),; see also See Nat’l Renewable Energy Lab., Analysis Insights: Energy Storage Possibilities for Expanding Electric Grid Flexibility (Feb. 2016),

90. Envtl. & Energy Study Inst., Fact Sheet: Energy Storage (Feb. 2019),

91. See, e.g., Victoria Knauf, How Dispatchable Wind Is Becoming a Reality in the US, GreenTech Media (Nov. 6, 2018), (predicting that energy storage will emerge at scale in three to five years, driven by policy and regulation from states).

92. L.M. Sixel, How Will Batteries Plug into Texas’ Power Grid, Houston Chronicle (Jan. 14, 2020), https://www.houston​

93. Wesley Cole & A. Will Frazer, Nat’l Renewable Energy Lab., Cost Projections for Utility-Scale Battery Storage (June 2019),

94. U.S. Energy Info. Admin., Today in Energy: U.S. Utility-Scale Battery Storage Power Capacity to Grow Substantially by 2023 (July 10, 2019) [hereinafter EIA Battery Storage],

95. Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators, 162 FERC ¶ 61,127 (2018) (Order No. 841). An appeal of this order is pending before the D.C. Circuit of Appeals. See generally Nat’l Ass’n of Regulatory Util. Comm’rs v. FERC, Nos. 19-1142, 19-1147.

96. EIA Battery Storage, supra note 94.

97. Id.

98. Id.

99. Kayva Balaraman, SCE Procures 770 MW of Battery Storage to Bolster California’s Grid as Gas Plants Approach Retirement, Utility Dive (May 5, 2020),

100. Sammy Roth, Boiling Point: Giant Batteries Are Changing Everything for Clean Energy, LA Times, May 14, 2020,

101. L.M. Sixel, Battery Storage on Verge of Changing Texas Power Grid, Houston Chronicle (Dec. 19, 2019), Texas-power-grid-14918327.php.

102. Bloomberg News Editors, World’s Biggest Battery to Boost Solar in Texas, Renewable Energy World (Feb. 15, 2019), (identifying projects). Because ERCOT’s power market is exempt from federal jurisdiction, it is not affected by FERC’s Order 841, which aims to remove barriers to the participation of energy storage in wholesale power markets. Peter Maloney, As Grid Operators File FERC Order 841 Plans, Storage Floodgates Open Slowly, Utility Dive (Dec. 11, 2018),

103. Knauf, supra note 91.

104. Roberts, supra note 87.

105. See generally Micah Ziegler et al., Storage Requirements and Costs of Shaping Renewable Energy Toward Grid Decarbonization, 3 Joule 2867–69 (Nov. 2019).

106. Natalie Filatoff, New US Study Finds Renewable Energy Storage Costs Need to Drop 90%, PV Mag. (Aug. 12, 2019),

107. Id.

108. Swan & Eagle, supra note 58.

109. Press Release, APS, APS Customers Get Solar After Sunset with Major Clean Energy Projects (Feb. 21, 2019),

110. See Kavya Balaraman, ‘An Immediate and Dramatic Business Concern:’ How COVID-19 Is Disrupting the Energy Sector, Utility Dive (Mar. 17, 2020),

111. Id.

112. EIA delayed the release of its Short-Term Energy Outlook (STEO) to reflect the highly fluid current situation. See, e.g., EIA STEO, supra note 16:

EIA significantly revised its short-term outlooks for global oil supply, demand, and prices compared with the February STEO. These updates largely resulted from updated data and assumptions about the effects of the 2019 novel coronavirus disease (COVID-19) on global oil demand and assumptions regarding OPEC’s crude oil production following its March 6 meeting.

BloombergNEF has recently downgraded its forecast for solar and battery markets in 2020, and Europe’s wind industry expects disruption. Michael Holder, Coronavirus: Falling Power Demand Is Impacting Clean Energy, (Mar. 26, 2020),

113. Balaraman, supra note 110.

114. Id.

115. David Iaconangelo, Pandemic: Trump Admin Throws Tax Lifeline to Renewables, Energywire E&E News (May 8, 2020),

116. David Iaconangelo, Wind Energy: “A Crisis Unlike Anything the Market Has Ever Seen, Energywire E&E News (Mar. 25, 2020),

117. Balaraman, supra note 110.

118. David Ferris, No Disaster—Yet—for Big U.S. Solar Companies, Energywire E&E News (May 8, 2020),

119. Josh Owens, Is The Oil Price Crash Good for Renewable Energy?, (Mar. 16, 2020), (discussing whether the view that low oil prices negatively affected the renewable energy sector holds in current crisis).

120. Id.; John Parnell, Could the Oil Price Collapse Drive More Investment into Renewables?, (Mar. 13, 2020),

121. Parnell, supra note 120.

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By Mark Strain and Stephanie Green

Mark Strain is a partner and Stephanie Green is an associate with Duggins Wren Mann & Romero, LLP, in Austin, Texas. Their practice focuses on the representation of clients before FERC, state utility commissions, and the courts.