First-of-its kind study details clean energy’s potential to unlock economic growth, achieve majority renewable electricity generation within the next decade
Washington D.C. December 16, 2020 – Clean energy resources – wind, solar, energy storage, hydropower, and other renewables – represent a once-in-a-generation opportunity to drive U.S. economic recovery and add hundreds of thousands of family-supporting jobs. According to a new, first-of-its-kind study released today by global natural resources research consultancy Wood Mackenzie and the American Clean Power Association (ACP), reaching a majority renewables grid will deploy over $1 trillion in capital investment into the American economy over the next decade, while supporting 980,000 direct jobs, stabilizing wholesale power prices, and reducing U.S. carbon emissions by over 60 percent. Targeted administrative actions and Legislative policies are essential for the U.S. to achieve these benefits within the next ten years.
“A majority renewables electric system for the U.S. is possible within a decade and will deliver much-needed investments in our economy and create a pathway toward steady, well-paying employment for workers across the country. This research shows that a collaborative promise of an American grid powered by wind, solar, hydropower, energy storage, and other renewables represents an economic powerhouse that will lead our country towards a more prosperous, healthier, and cleaner future,” said Amy Farrell, ACP Senior Vice President of Government and Public Affairs.
Earlier this year, the American wind, solar, hydropower, and energy storage industries united around a joint vision to generate over half of the country’s electricity within 10 years. Pan-renewable industry leaders agreed to actively collaborate to achieve this target. Today’s analysis from Wood Mackenzie details how renewable energy industries can collectively move towards building a more resilient, efficient, sustainable, and affordable American grid.
A recently released Clean Energy Road Map proposed by the American Wind Energy Association, which is merging into the American Clean Power Association in January, 2021, lays out how the U.S. federal government can rapidly accelerate this economic growth and renewable energy deployment through executive and legislative action starting in 2021. As Wood Mackenzie’s analysis makes clear, transmission infrastructure expansion and improvements are critical to enabling this transition to a cleaner American electric grid. Administrative actions to accelerate federal permitting and remove regulatory hurdles for transmission will help get affordable, clean power to where it is needed most by consumers, while also smoothly integrating offshore wind into the nation’s energy portfolio. Continued advances in renewable energy technology and the increased use of energy storage to meet consumer demand will also help improve system reliability and drive wholesale power prices lower. And considering the strong empirical track record of transmission more than paying for itself, this future is possible with limited impact on customer wallets.
This is a win-win opportunity. Striving for high renewable penetration not only serves clean energy goals, but also supports economic growth. With these actions and policies in place wind, solar, energy storage, and transmission will directly employ nearly 1 million Americans by the end of the decade, including over 800,000 Americans in construction and technician jobs, alongside 173,000 in factory, distribution, and development jobs. These high-quality jobs in the clean energy workforce pay an average of $60,000-$110,000/year. Significant investments in U.S. factories and domestic energy production will help achieve this progress and offer a new path to employment for displaced legacy energy industry workers as those industries begin to dial back.
Among the top-line results of the analysis, Wood Mackenzie finds:
1. Administrative actions alone can double renewable energy penetration within the next decade:
– A Presidential administration can accelerate transmission infrastructure expansion to unlock wind and solar resources.
– Under administrative actions alone, renewable energy can grow from 19 percent to 37 percent of U.S. electricity, due to transmission expansion, better access to federal lands and waters, and technology advancement.
– Additional legislative policies that require and/or incentivize clean energy, accelerate the retirement of the U.S. coal fleet, significantly increase energy storage capacity, and massively improve grid infrastructure make a 50 percent renewable electric sector achievable.
2. Transmission focused policies are critical to unlocking renewable potential:
– Upgrading existing transmission lines and building new lines will help alleviate congestion and provide low-cost power where it is needed most.
– Northeast transmission upgrades will help offshore wind deliver power to consumers.
– Significant investment in transmission infrastructure is foundational for a majority renewables future.
3. Presidential Administrative and Legislative actions driving to 50 percent renewable energy by 2030 can be a major source of economic stimulus:
– 50 percent renewables by 2030 will catalyze nearly 1 million direct, quality, well-paying jobs in construction, installation, operations, manufacturing, and supply chain.
– Average wholesale prices will remain stable and declining through the decade.
– Grid stability and reliability are maintained through transmission, energy storage additions, and sufficient grid reserve margins.
– Total capital investment to reach 50 percent renewables tops $1 trillion by 2030, with at least a quarter of that investment occurring local to renewable projects.
“This comprehensive analysis demonstrates that transforming the U.S. power grid is technically and commercially feasible, with appropriate policy support. This activity would unlock a tremendous economic development opportunity for infrastructure investment and associated jobs. Wood Mackenzie utilized our North America Power Markets Long-Term Outlook (H1 2020) as the Base case and developed sensitivity scenarios to accelerate transmission infrastructure and achieve 50% renewable electricity nationwide. Federal and state policy initiatives are required to accelerate transmission development, increase adoption of energy storage technologies and continue the record-setting deployment of wind and solar technologies that have reached commercial maturity,” said Aaron Barr, Principal Consultant in Wood Mackenzie’s Energy Transition Practice.
The transition to a majority renewables electric grid will be led by significant growth in land-based wind, offshore wind, and solar capacity, alongside a corresponding increase in energy storage development. The job growth and investments associated with these new additions will far outweigh the losses as the nation phases out or retires legacy power technologies.
Unsurprisingly, this transition to a majority renewables future results in a significantly cleaner grid. During the decade, carbon emissions are estimated to decrease 60%, a level in line with the country’s economy-wide target under the Paris Agreement.
The job benefits from a 50 percent renewable energy future will be felt in states from coast to coast. For example, Indiana, Pennsylvania, California, Ohio, New Jersey, New York, and Virginia will each gain over 30,000 new jobs, with Illinois, Maryland, and North Carolina each adding over 20,000. Another 11 states will add at least 10,000 new jobs as part of the transition to a cleaner electric grid. These careers include those in new and expanded domestic manufacturing facilities to provide the local supply chains required for clean energy development.
Local benefits will not end at job creation and economic growth—these renewable projects will be major contributors to state and local tax revenues, as well as payments to landowners. Pushing towards a 50 percent renewable energy future is expected to deliver upwards of $64 billion over the decade in tax and landowner-lease payments.
The industry is working on building a 21st century economy fueled by 21st century power. As in every industry that has been disrupted in its history, the shift away from this country’s reliance on now outdated and uneconomical electricity sources will provide innovation, investments, and new opportunities that transition America towards a more prosperous, cleaner future. Needed infrastructure investments to reach that future will drive economic recovery, ultimately benefiting local communities, the environment, and consumers.
Media Briefing: ACP and Wood Mackenzie will hold a media briefing on Wednesday, December 16 from 11:30-12:30 ET to discuss the findings of the report and answer questions. To register and receive call-in details, please contact Sam Brock at email@example.com.
For ACP queries, please contact Sam Brock, Media Relations Manager for the American Clean Power Association, at firstname.lastname@example.org.
For Wood Mackenzie queries, please contact Laura Hindley, Wood Mackenzie’s Senior Global PR Manager, at email@example.com.
About ACP: American Clean Power is the voice of companies from across the clean power sector that are powering America’s future, providing cost-effective solutions to the climate crisis while creating jobs, spurring massive investment in the U.S. economy and driving high-tech innovation across the nation. We are uniting the power of America’s renewable energy industry to advance our shared goals and to transform the U.S. power grid to a low-cost, reliable, and renewable power system. Learn more about the benefits clean power brings to America at www.cleanpower.org and follow us on Twitter @USCleanPower and LinkedIn.
About Wood Mackenzie: Wood Mackenzie, a Verisk Analytics business, is a trusted source of commercial intelligence for the world’s natural resources sector. We empower clients to make better strategic decisions, providing objective analysis and advice on assets, companies and markets. For more information, visit: www.woodmac.com or follow us on Twitter @WoodMackenzie