As the American energy sector continues its march away from traditional power generating means like coal toward solar and wind it’s important to see how both the energy generation industry will affect the environment and how fast it will move in the next few years. The energy project director of the Bipartisan Policy Center, Sasha Mackler, has said that “the trends in the power sector really demonstrate that this is the part of our economy that is furthest along in the energy transition.”
This can be mostly attributable to the fact that solar and wind power generation have become very competitive compared to fossil fuel power generation. In other parts of the world hydrogen power, which has been more expensive, is becoming a competitie alternative in Europe, but not in the United States at this time.
Macker said “The federal government could make that transition happen more quickly if it had a unifying, coherent policy framework for the power sector.” What that would mean is that a President with a coordinated policy and incentivizes the industry could move the sector much faster than an open market or the current administration’s design.
Expectation for the next few years for global study does indicate a slight coal demand increase as supply is still growing. While coal is disappearing from the American landscape, even though President Trump pledged to save the industry in 2016, coal operators have been closing down on their own accord because the economics of the sector have not been positive for some time. The report shows that the slight increase in coal is because of a drop in natural gas, as it will be shifting back and forth between supported and opposed as a renewable energy source in American energy policy.
At this point the United States allocation of coal toward power generation is expected to go from 21% in 2020 to 5% by 2030, with the ability to hit that in 2026 if certain policies and ideas are put in motion. To offset that wind and solar generation would go from 11% today to 30% in 2030.
ClearView Energy Partners managing director Christine Tezak has said that the transition is “clearly moving forward on a regional basis,” as no federal direction has been given to move resources or regulation around to new renewable sources for generation. A new federal policy could speed this up, but more tariffs and trade blocking measures will slow down the transition.