Credit Suisse says 85% Of New US Energy From Renewables till 2025

by Zachary Shahan

Credit Suisse on December 20 released a report with some bullish projections regarding renewable energy growth and generation in the United States

Here’s the short summary:

Our take: We see an opportunity for renewable energy to take an increasing share of total US power generation, coming in response to state Renewable Portfolio Standards (RPS) and propelled by more competitive costs against conventional generation.

We can see the growth in renewables being transformative against conventional expectations with renewables meeting the vast majority of future power demand growth, weighing on market clearing power prices in competitive power markets, appreciably slowing the rate of demand growth for natural gas from the power sector, and requiring significant investment in new renewables.

What percentage of future growth does Credit Suisse say might come from renewables? About 85%.

Renewables will meet most of US demand growth.

We estimate that ~85% of future demand growth for power through 2025 (including the impact of coal plant retirements) could be met by renewable generation with compliance to the existing 30 mandatory and 8 voluntary RPS programs.

From this we would see over 100 GW of new renewable capacity additions with wind and solar market share more than doubling from 2012 to 2025.

Other key points are that falling wind and solar costs make them competitive with natural gas, even ignoring externalities. As a result, Credit Suisse has cut its natural gas projections considerably.

“We estimate renewables slowing the rate of natural gas demand growth from power generation to <0.5 bcf/d through 2020 versus our prior estimate of 1.0-1.2 bcf/d even when taking into account planned coal plant shutdowns and assumed nuclear plant retirements.”

I think this report and the revisions implicitly highlight something very interesting that is going on in the energy industry. Renewable energy costs are primarily based on the cost of the technologies themselves, while fossil fuel costs are largely based on the fuel sources. As renewable energy grows, the technology costs come down. The opposite is true for fossil fuels. Forecasts should take this into account, but they routinely seem to underestimate renewable technology cost drops, and thus also underestimate renewable energy growth. Credit Suisse, Deutsche Bank, and others that are a bit better at these projections are quickly shifting their forecasts to catch up with the renewable energy revolution we’ve been seeing. This new report from Credit Suisse analysts is certainly one of the most positive I’ve seen.

The title of the first section says it all: “Renewables Are Economic and Disruptive to Conventional Markets.”

Credit Suisse analysts see Renewable Energy Standards (RES) as driving much of the coming growth, but they aren’t shy about saying (repeatedly) that renewables are also now cost competitive, and that technology improvements just keep advancing their prospects.

“We think old-line arguments against renewables – too expensive, too intermittent, too remote – will continue to fade, allowing a resource base that is underappreciated in the market but is positioned to have a broad impact on power and energy markets.”

The report projects that wind power, which is exceptionally cheap, will account for about 80% of the renewable energy growth, while solar will account for the other 20% or so. It sees a doubling of installed US wind power between 2012 and 2020, while it sees solar increasing 11 times over — starting from a much smaller installed capacity, of course. Together, solar and wind’s combined market share is projected to grow from ~4% to ~9%. By 2025, Credit Suisse projects that renewables will account for ~12% of US electricity generation.

Key drivers of the increasing competitiveness from wind and solar are a bit different in each of the industries. Wind farms have become a lot more effective at capturing energy from the wind and turning it into electricity.

“Wind utilization rates have increased by 15-20 percentage points, with new machines in the same wind resource yielding 50-55% utilization rates from 30-35% in 2007 due to improvements in turbine design, taller towers / bigger blades, and better wind modeling. Higher utilization has led to dramatic drops in levelized costs with many new projects clearing at ~$30/MWh (Exhibit 5-Exhibit 6), in effect ‘creating’ natural gas under 20 year PPAs at less than $3/MMBtu.”

In the case of solar, it’s a story that CleanTechnica readers should be very familiar with — the price of solar technology has fallen off a cliff.

“Solar capital costs have continued to bend the cost curve with utility scale PV today at ~$2000 per KW of capacity from $3250 in 2010, lowering levelized costs for utility scale solar to $65-80/MWh from well over $100/MWh and bringing solar to price parity with newbuild natural gas peakers.”

Efficiency improvements have also helped solar on this front.

Yes, solar costs came down due to massive oversupply of polysilicon, solar cells, and solar panels. However, as demand has come to match supply again, costs have remained down. In fact, most solar market research firms project that the costs will keep climbing down in the coming few to several years. Furthermore, many big efforts to bring down the soft costs of solar are also now in motion, as these are the costs that make US solar much more expensive than German solar and are now taking up a huge chunk of the solar price pie.

As we’ve written and read numerous times in the past year, all of this also means some hurt for utilities and fossil fuel generators. Renewables are expected to result in lower power prices than were previously projected, while fossil fuel plants will not be able to sell as much of their (more expensive) electricity to the grid, cutting into their profits.

Here’s a snippet regarding the power prices:

“Using our bottom-up power market models, the risks we see to power markets are rooted in a slower market recovery as more (and bottom of the stack) generation is added leading to a fundamental step down in power prices $1-2/MWh or ~5% relative to a scenario without significant renewables growth, as the overall supply curve is ‘pushed to the right’ with lower cost renewables added.”

And here’s one regarding the threat to fossil fuel generators:

“While generation output will be lower, the operating costs are broadly fixed meaning that coal and natural gas plants will produce less revenues without a change in cost structure, leading to some minor degradation in EPS.”

The entire report is very interesting, with many details that are surely useful to investors and industry insiders. But the overall trend is clear as a sunny day: the future is renewables.

This article, Credit Suisse Projects ~85% Of US Energy Growth Coming From Renewables Through 2025, is syndicated from Clean Technica and is posted here with permission.

About the Author

Zachary ShahanZachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to and click on the relevant buttons.

Renewable Energy Provided 99% Of All New Electricity Capacity In October

by Guest Contributor The SUN DAY Campaign.



Image Credit: Solar panel, wind turbine & globe via Shutterstock

Washington, D.C. – According to the latest “Energy Infrastructure Update” report from the Federal Energy Regulatory Commission’s Office of Energy Projects, solar, biomass, and wind “units” provided 694 MW of new electrical generating capacity last month or 99.3% of all new generation placed in-service (the balance of 5 MW was provided by oil.) Twelve new solar units accounted for 504 MW or 72.1% of all new electrical generating capacity in October 2013 followed by four biomass units (124 MW – 17.7%) and two wind units (66 MW – 9.4%).

For the first ten months of 2013, renewable energy sources (i.e., biomass, geothermal, hydropower, solar, wind) have accounted for nearly a third (32.8%) of all new electrical generating capacity. That is more than that provided thus far this year by coal (1,543 MW – 12.5%), oil (36 MW – 0.3%), and nuclear power (0 MW – 0.0%) combined. Solar alone comprises 20.5% of new generating capacity (2,528 MW) thus far this year – more than doubling its 2012 total (1,257 MW). However, natural gas has dominated 2013 thus far with 6,625 MW of new capacity (53.7%).

For the first ten months of 2013, compared to the same period in 2012, new capacity from all sources has declined by 27.5% (from 17,008 MW to 12,327 MW).

Renewable sources now account for nearly 16% of total installed U.S. operating generating capacity: water – 8.30%, wind – 5.21%, biomass – 1.32%, solar – 0.59%, and geothermal steam – 0.33%.* This is more than nuclear (9.22%) and oil (4.06%) combined.

A second new federal study, the latest issue of “Electric Power Monthly” by the U.S. Energy Information Administration (with data through September 30, 2013), notes that renewable energy sources accounted for 12.95% net electrical generation for the first three-quarters of 2013 (hydropower – 6.90%, wind – 4.03%, wood + biomass – 1.40%, geothermal – 0.41%, solar – 0.21%). This represents an increase of 5.22% compared to the same period in 2012 with non-hydro renewables combined growing by 15.9% (solar – 91.9%, wind – 21.7%, geothermal – 1.2%, wood + biomass – 0.4%). By comparison electrical generation from all sources (i.e., including fossil fuels and nuclear power) dipped by 0.8%.

“As the threats posed by climate change grow increasingly more dire, renewable energy sources have clearly become a viable alternative to fossil fuels as well as nuclear power,” said Ken Bossong, Executive Director of the SUN DAY Campaign. “Accordingly, efforts by some at the state and national levels to roll back support for these sources are clearly misguided.”

The Federal Energy Regulatory Commission released its most recent 5-page “Energy Infrastructure Update,” with data through October 31, 2013, on November 20, 2013. See the tables titled “New Generation In-Service (New Build and Expansion)” and “Total Installed Operating Generating Capacity” at

The U.S. Energy Information Administration released its most recent “Electric Power Monthly” with data through September 30, 2013 on November 20, 2013; see: The relevant charts are Tables 1.1, 1.1.A, ES1.A, and ES1.B.

* Note that generating capacity is not the same as actual generation. As stated, actual net electrical generation from renewable energy sources in the United States now totals nearly 13%.
The SUN DAY Campaign is a non-profit research and educational organization founded in 1993 to promote sustainable energy technologies as cost-effective alternatives to nuclear power and fossil fuels.

Image Credit: Solar panel, wind turbine & globe via Shutterstock

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This article, Renewable Energy Provided 99% Of All New Electricity Capacity In October, is syndicated from Clean Technica and is posted here with permission.

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