A new study released last Tuesday sees "unprecedented opportunities" for the development of 52,000 MW of new capacity over the next 15 years to meet the demand for renewable energy, which could potentially steal market share from natural gas.
State renewable portfolio standards (RPS) will drive the demand for the 52,000 MW of new renewable energy projects, which will require an estimated $53.4 billion in new investment, said Global Energy Decisions of Boulder, CO. It was assisted in the study by Palmer Bellevue and Bio Economic Research Associates.
A number of states have adopted RPS that require utilities to increase their output of renewable energy from sources like solar, wind and geothermal energy. States that are leading the nation in mandates to develop new renewable energy projects are California, Illinois, New York and Pennsylvania. A federal RPS requirement does not exist.
Wind is expected to be the predominant renewable source in future years, accounting for 40,000 of the 52,000 MW of anticipated new renewable energy capacity in 15 years, up from the current 6,700 MW of wind capacity, according to Global Energy.
"The economics of building new wind...is happening at a time when wind power in increasingly competitive with building new gas-fired power plants. This is triggering a new era in project finance that will drive as much as $53 billion in new investment," said Global Energy Chairman Ron McMahan.
The study noted that 25 utilities will produce 63% of the anticipated 52,000 MW of new capacity, and 75 utilities will generate 76% of the new renewable output. It says the top five energy utilities to be most impacted by state RPS will be:
"The RPS standards already in place will create a significant demand for renewable generation and the renewable generation sector is likely to outgrow its current status as a niche market," said study co-author Gerald Keenan of Palmer Bellevue.
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