Commodities 2024: Massive renewables additions expected to put coal in back seat

The US is projected to add 40.6 GW of renewable capacity in 2024, with wind and solar surpassing coal-fired generation for the first time, as recently announced guidance on domestic manufacturing is expected to help strengthen the clean energy build out.

Coal-fired generation will have the sharpest drop due to renewable energy growth, low natural gas prices and continued coal plant retirements. The US Energy Information Administration forecasts coal-fired power plants will generate less in 2024 -- 599 billion kwh -- than the combined generation from solar and wind -- 688 billion kWh -- for the first time on record.

The advanced development pipeline totaled 85.977 GW of capacity across 48 states by the end of Q3, according to American Clean Power Association. Texas leads 9.617 GW in advanced development, while California and New York follow closely behind with 9,096 MW and 8,115 MW, respectively. Alaska and Washington are the only states with no clean power projects in advanced development.

Onshore vs. offshore wind

S&P Global expects a combined 40.6 GW of capacity additions in 2024 from wind, solar and battery, with onshore wind making up 5.9 GW of added capacity next year and offshore wind expected to add 800 MW, said Shayne Willette, S&P Global Commodity Insights senior research analyst.

However, onshore wind capacity addition is expected to decline year on year, from 8.6 GW in 2023 to 5.9 GW in 2024, Willette said.

"This contraction is likely the result of a confluence of several factors," Willette said. "We're seeing increased competition from solar, constrained transmission capacity in traditional wind hubs, and long project development lead times."

The woes resulting from supply chain constraints and high interest rates for offshore wind are expected to continue into 2024, he added, but Vineyard I off the coast of Massachusetts is expected to go online in 2024, accounting for the entirety of the 800 MW expected to come online in 2024.

Regional overview

Onshore wind additions are concentrated in several regions, with the Midcontinent Independent System Operator and the Electric Reliability Council of Texas leading the way, according to S&P Global.

"We expect MISO to lead the way with installations of 1.75 GW of onshore wind in 2024, followed by ERCOT at 1.3 GW," Willett said.

The bulk of the remaining 2.9 GW come from the following regions:

• 950 MW: Northwest Power Pool
• 670 MW: Southwest Power Pool
• 500 MW: Rockies
• 450 MW: New York ISO

Capacity leaders

Texas led the US in wind capacity with 40.556 GW by the end of third quarter 2023, followed by Iowa with 13 GW and Oklahoma with 12.5 GW, according to the ACP's quarterly report.

ERCOT, which manages about 90% of the state's electric load, expects to reach nearly 39.6 GW of wind capacity in 2024, a nearly 4% increase year on year, according to its latest Capacity Changes by Fuel Type Chart.

About half of the top 10 states for wind capacity are in the Southwest Power Pool's footprint, according to ACP data. SPP oversees the electric grid and wholesale power market for companies in 15 states in the central US.

SPP has 1.5 GW of wind capacity on schedule to come online in 2024 with interconnection agreements executed, followed by 4.7 GW in 2025, according to its generation interconnection request report.

Meanwhile, CAISO's interconnection queue includes 625 MW of wind with expected 2024 online dates, and nearly 275 M of that have executed interconnection agreements.

Domestic manufacturing

The US Treasury Department issued guidance Dec. 14 on the Advanced Manufacturing Production Tax Credit.

The move directly supports new and expanded domestic manufacturing of clean energy component, ACP Chief Advocacy Officer JC Sandberg said in a Dec. 14 statement.

"By creating and expanding supply chains to make clean energy technologies here at home, we will strengthen America's energy security, create good-paying American jobs, and boost the nation's economy," Sandberg said.

The US clean energy sector has announced 112 new or expanded US-based utility-scale solar, wind and energy storage manufacturing facilities in the last 16 months - equivalent to a US facility being announced every four days, he said, adding these facilities will create more than 41,000 new American jobs across the country.