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Trusted Power and Renewables Intelligence woodmac.com American Wind Energy Association Renewable energy policy scenario analysis September 2020
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Trusted Power and Renewables Intelligence woodmac.com
American Wind Energy Association
Renewable energy policy scenario analysis
September 2020
1
woodmac.com
Wood Mackenzie offices Wood Mackenzie Power & Renewables offices
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positioned to support
consumers, producers and
financers of the new energy
economy.
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Media (GTM)
Leaders in renewables, EV demand
and grid-connected storage
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consultants globally, including 75
specifically to power and renewables
Located close to clients and industry
contacts
About Wood Mackenzie
We provide commercial insight and access to our experts leveraging our integrated proprietary metals, energy
and renewables research platform
2
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Contents
1. Executive Summary 3
2. Scenario 1 – Administrative Action 8
3. Scenario 2 – 50% Renewable Energy Target 22
4. Supply chain impact 33
Executive Summary1.
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AWEAAWEA – 50– 50% Renewable% Renewable by 2030by 2030 scenarioscenario analysis woodmac.com
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Executive summary
01Administrative action can enable doubling renewable energy penetration within the next decade•
•
Administrative action can accelerate transmission infrastructure expansion in order to unlock wind and solar
Under administrative actions, renewable energy can grow from ~19% to ~37% due to technology advancement,
transmission expansion, and better access to federal lands and waters
• Achieving 50%+ renewable energy will require additional legislative polices to require and/or incentivize clean
energy, accelerate the retirement of entire US coal fleet, significantly increase energy storage capacity, and
massively improve grid infrastructure
02
Transmission focused policies will be critical to unlocking renewable potential•
•
•
•
•
Transmission line upgrades needed to alleviate congestion in regions with high renewable penetration
Western wind and solar requires new transmission infrastructure to provide low-cost power to demand centers
Offshore wind requires significant transmission upgrades in Northeast to bring power to market
Transmission investment estimated to be over $70 Billion for prioritized lines
50% renewables (Scenario 2) requires administrative action outlined in Scenario 1 to unlock renewables
03
Administrative and legislative actions driving to 50% renewable energy by 2030 can be a major
source of economic stimulus• 50% renewables by 2030 will catalyze nearly 1 million direct, high-paying jobs in construction, installation,
operations, manufacturing and supply chain
•
•
•
Average wholesale prices will remain stable throughout this 10-year period
Grid reserve margins and reliability are retained by significant additions of grid storage
Total capital investment to reach 50% renewables approaches $1Trillion by 2030
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Wood Mackenzie has developed three scenarios to study the US renewable market evolution
Base Case Scenario 1 – Administrative action Scenario 2 – Nationwide renewable target
Description• This case was developed using Woodmac’s 2020 H1
Federal Carbon Case (2020 H1 FC).
• Federal government administrative action to
enable:
•
•
Transmission expansion
Renewable expansion in federal
land/waterAccelerated permitting and removal of
trade barriers•
•
•
Nationwide 50% Renewable Energy Standard
Administrative action included in Scenario 1:
•
•
Transmission expansion
Renewable expansion in federal land/water
Capacity
buildout
• Future capacity build was the same as Woodmac’s 2020
H1 FC Case
• Nuclear retirements were assumed as per NRC license
expiry dates in NYISO and PJM
• Wind and solar capacity on land leased by
Bureau of Land Management (BLM)
Acceleration of offshore wind installations•
• Transmission expansion:
•
•
•
Accelerate planned transmission projects
Provide access to new renewable build
Ease congestion and high price disparity
• Nationwide constraint
• No less than 50% renewable energy by 2030
•
•
•
Accelerated retirements of fossil plants
Retirement of all remaining coal capacity by 2030
Future capacity build was changed and system
rebalanced to reflect a reserve margin similar to the
Base Case.
Carbon price
• RGGI floor prices were the same as Woodmac’s 2020 H1
NFC Case
• Virginia was not assumed to be part of the RGGI program
for this analysis
• A modest federal carbon price was assumed starting in
2028 across the NERC footprint
• Same as Base Case • Same as Base Case
Fuel price• Future fuel prices were assumed the same as
Woodmac’s 2020 H1 FC Case
• Future fuel prices were assumed the same
as Woodmac’s 2020 H1 FC Case
• Future fuel prices were assumed the same as
Woodmac’s 2020 H1 FC Case
Electricity
Demand• Future electricity demand was assumed the same as
Woodmac’s 2020 H1 FC Case
• Future electricity demand was assumed the
same as Woodmac’s 2020 H1 FC Case
• Future electricity demand was assumed the same as
Woodmac’s 2020 H1 FC Case
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Massive renewable energy expansion was analyzed alongside significant fossil fuel retirements
Both scenarios make progress towards a greener grid and a significant overhaul is required to reach 100% clean
Scenario capacity changes – 2020-2030 cumulative GW change US renewable energy and clean energy penetration, US % of generation
70
65Gas additions
59
59
Utility Solar
Onshore Wind
Coal retirements
32
53Offshore Wind
Energy Storage
Gas retirements
213
298
114
218
48
188
-50
-52
-109
-232
Distributed Solar
Scenario 1 Scenario 2
Retirement of all coal plants in
scenario 2 to meet 50% target
Onshore wind and
solar dominate newinstallations in both
scenarios
Massive energy
storage build needed inscenario 2 to maintain
system reliability
Offshore wind one of few
options to meet renewable
targets near coasts
0
2020
10
20
30
40
50
60
70
80
90
100
2025 2030 2035
Sc1: 37% Renewable
%
Sc2: 50% Renewable
Sc1: 55% Clean
Sc2: 67% Clean
Sc2
Target
Nuclear
impact
Scenario 1 CleanScenario 1 Renewable
Scenario 2 Renewable Scenario 2 Clean
Bridging the gap between
“majority Clean” and100% in 5 years will be a
significant challenge
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Note: Capital cost includes cost of construction and installation only
Job estimates created using NREL JEDI Tools
Source: Wood Mackenzie
Capital spend required to reach 50% renewables within the next decade to exceed $1Trillion
Nearly 1 million new jobs created by 2030 related directly to construction, manufacturing and maintenance
Total capital spend – US Billions, 2020-2030 Direct job creation – thousands of full time jobs, annual in 2030
157
104
187
70
89
39
135
Scenario 1
Offshore wind
151
171
253
262
Transmission
Scenario 2
691
1,083
157
Onshore Wind
Energy Storage
Distributed Solar
Utility Solar
Supply chain and
manufacturing
Construction and
installation
Operations and
Maintenance
641
400
67
177
99
164
+60.4%
+164.1%
+65.3%
Scenario 1 Scenario 2
Direct jobs created:
Full time jobs in 2030
Scenario 1: 565,000
Scenario 2: 980,000
Scenario 1 – Administrative Action
Bold actions by the presidential administration can unlock renewable energy
2.
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Note: Renewable energy includes wind, solar, hydro, landfill gas, geothermal, biomass, municipal solid waste
and pumped storage
Administrative action can enable doubling renewable energy penetration by adding transmission and
leveraging renewable resources on federal lands and waterDirect action by the federal administration can accelerate renewable energy expansion
Renewable energy penetration, by region – Scenario 1, % The federal government can use administrative authority to expand renewable
energy buildout, to achieve ~37% renewable energy nationally within the next
decade.
Prioritized actions:
• Transmission expansion – Improve planning and cost allocation for new
transmission lines, increase interregional coordination for more cost-effective
lines across seams, upgrade existing lines to increase capacity, and establish
corridors to allow for federal siting of interstate lines
• Permitting - Expediting environmental review timelines for renewable energy
projects by adopting reasonable reforms to NEPA, accelerating permitting of
renewables on public lands and waters, and creating fast-tracked “general
permits” for low-risk renewable projects for wildlife permits.
• Federal land for renewables build – Set a federal target for BLM and BOEM
to authorize leases and grant permits for renewables on public lands and
waters, respectively.
• Federal procurement - Commit the federal government to purchase
renewable energy for 30% of its electricity supply by 2025.
• Increase competitiveness - Reform wholesale markets to allow renewables
to fairly compete, remove undue trade barriers for renewable energy products,
and support electrification of other sectors to increase demand for renewables.
202223 25
28
37
0
2020
10
20
30
40
50
60
70
80
2022 2024 2026 2028 2030
NYISO
33
%
35
2629 31 US Total
ERCOT
New England
PJM
MISO
SPP
WECC
SERC
FCC
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Avg. hourly system load and net load (GWa**)
Energy Demand Balance: Demand growth from EV’s offset by distributed generation
Distributed generation resources and energy efficiency measures effectively reduce net demand
* “Effective wholesale demand” is net of Energy Efficiency (EE), Electric Vehicles (EV), and Distributed Generation (DG); “Ne t load” is effective wholesale demand available to be
served by non-renewable sources i.e. thermal resources
** GWa = Annual GWh / number of hours in a year
Electrical Vehicles and Distributed Generation (GWa**)
450
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
500
550
600
DG and EV
EE
Gross: 1.50% CAGR
Total system demand
Total net of energy efficiency
Effective wholesale demand*
• Baseline demand grows at a moderate rate but is reduced by expected
energy efficiency measures
• Net load reduces due to renewable generation, but offset by EV growth
-10
0
4
-2
-8
-6
-4
2
6
8
2020 2022 2024 2026 2028 2030
Southeast
Northeast
West
PJM Interconnection
Midcontinent
Southwest Power Pool
ERCOT
Electrical Vehicle
Electric vehicles
Distributed solar
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Source: Wood Mackenzie
Renewable energy installations to consume nearly all new construction and erode share of fossil plants
Significant growth in offshore wind and battery storage from nascent technologies to integral parts of US power grid
Total cumulative capacity by technology, Scenario 1, GW Growth rates of technologies – 2020-30, Scenario 1
500
400
0
300
200
100
1,500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
2020 2025 2030
GW
Renewable
50%
Capacity
Solar UtilityOther Non-renewable
Pump Storage
Hydro
Other renewable
Wind Offshore
Battery Storage
Wind Onshore
Coal
Gas
NuclearDistributed solar
450
15
200
20
50
95
100
100 1050
0
-10
150
500
-5 50
250
90855 10
Nuclear
Other Pump Storage
Other
Wind Offshore
Battery Storage
Solar Utility
Wind Onshore
Coal
10-year Compound Annual Growth Rate, %
Distributed solar
Cu
mu
lative
in
sta
llatio
ns b
y 2
03
0,
GW
Gas
Hydro
Renewable
Non-renewableSize: 2020 cumulative GW
Retirements
expected
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Note: Other renewables include landfill gas, biomass, municipal solid waste and geothermal
Renewable energy contributions driven by expansion of onshore wind, solar and offshore wind
Significant expected coal retirements in PJM and MISO expected to be largely replaced by wind and solar
Renewable penetration by technology – Scenario 1 Distribution of installations and retirements, Scenario 1, GW (2020-2030)
9.3
16.3
7.1
6.2
11.0
0
2020
5
10
15
20
25
30
35
40
2.2
% U
S t
ota
l g
en
era
tio
n
2025e 2030e
2.7
100800-40 -20 20 40 60 120
GW
90.7
26.4
FRCC (Florida)
New England
19.6
NYISO
Midcontinent ISO
22.3
32.3
21.4
36.2
10.6
Net capacity additions:9.8
WECC (West)
PJM Interconnection
ERCOT (Texas)
SERC (Southeast)
Southwest Power Pool
Offshore windGas Retirements
Onshore WindGas Additions
Utility Solar
Coal RetirementsOther Renewable Wind Offshore Wind OnshoreSolar Utility Hydro
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Note: Costs include the identified interzonal transmission projects, in addition to
transmission upgrades required within zones to accommodate additional capacity
Source: Wood Mackenzie
Electric transmission infrastructure expansion is key to achieving higher renewable energy goals
Transmission expansion represents over 70 new or upgraded lines, representing over 10,000 miles and $70B in capital
Identified transmission improvements in Scenario 1, including Base Case Prioritized transmission projects
Wyoming renewables
Transwest Express and Gateway West/South
to transport wind to market in California
Midwestern wind
Grainbelt express to move Midwest wind to
Chicago and Midwest population centers
Southwestern renewables
Sunzia transmission project to link New
Mexico and Arizona renewable energy to
demand centers
West Texas renewables
Upgrades to relieve congestion between
ERCOT West, North and South
New England Offshore Wind
Clean Energy Connect to help distribute new
offshore wind between Massachusetts and
New York
2.9
17.0
Interzonal
Transmission
Upgrades
3.7
12.3
18.6
54.4 GW
10,000+ miles of
interzonal transmission
USD $70B cost estimate
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Source: Wood Mackenzie
Significant reduction in emissions driven by renewable energy displacing aging fossil plants
25%+ drop in carbon emissions from electricity generation puts the US on track for CPP targets
US Carbon emissions from power generation, Scenario 1 - mm metric tonnes Fossil fuel plant retirement outlook – GW per year, Scenario 1
0
500
1,000
1,500
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
-26.3%
vs 2020
Northeast Texas West Southeast Midwest
25
10
15
20
0
5
15
5
1
22
2020
4
16
6
15
2022
2
11
1
3
6
4
9
2028
11
1
5
4
16
5
2024
1110
2
4
4
11
7
2026
12
1
1
12 5 12
1
5
18
6
2030
16
20
16
Other fossil CoalGas
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Source: Wood Mackenzie
Administrative action through BOEM can open leases and streamline permitting for offshore wind
Additional BOEM leases could deliver up to $2B to the US treasury, based on recent significant escalation in auction prices
Potential offshore wind expansion, Scenario 1, GW Historical BOEM auction winning price and future forecast (’000 $/km )2
5.0
1.0
0.0
0.5
4.5
3.5
2.0
4.0
1.5
2.5
3.0
0.0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
4.8
4.3
3.8
4.0
0.0 0.0
1.2
5.0
4.24.4Incremental
Capacity
Scenario 1
California ISO ISO New England
PJM MidAtlanticNY ISO
SERC East
PJM South
Base Forecast
320
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
40
200
240
80
220
300
260
280
120
20
160
60
100
140
340
180
RI/MA
NY Bight
MD
MA
NJ
NJ
CA
Year
Win
nin
g a
uctio
n p
rice
Carolinas
MA
MA
RI/MA
MA
VA
NY
NC
MA
Maine
No. of Bidders (3)
ForecastPast
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Source: Wood Mackenzie
BLM land is prime for renewables, but require lease mechanism, transmission and streamlined permitting
Environmental permitting may present the biggest hurdle for renewable development on federal land
Filed permits on BLM land and estimated capacity Bureau of Land Management Capacity additions, Scenario 1, GW
11
0
7
1
6
4
2
5
13
3
8
9
10
12
202620252021
12.1
2023 2024
0.6
2027 2028 2029 2030
0.7 0.81.2
2.2
5.55.2
6.3
7.3
2022
Onshore Wind Solar
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
0 50,000 100,000 150,000 200,000 250,000 300,000
California
Po
ten
tia
l M
W r
en
ew
ab
le g
en
era
tio
n
Total Acres
NevadaWyoming
Arizona
WyomingOregon
Idaho
Nevada
New Mexico
Arizona
Utah
California
Solar Wind Size = Number of permits filed
Over 180 unique renewable
energy projects filed with BLM
Cumulative potential capacity
• Wind: 22.5GW
• Solar: 19 GW
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0
2021
5
10
15
20
25
30
35
40
45
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
NYISO Zone K
SPP Kansas West
US Average
SPP SouthwesternPS
SPP North Hub
PJM Western Hub
Note: Historic data from Lawrence Berkley National Labs
Source: WoodMac, LBNL
Power price trends: Wholesale power prices stabilize due to renewable energy injection
Retail rates exposed to added costs of transmission, distribution and capacity prices. Federal programs to absorb these
costs, including tax credits or direct infrastructure spending can help to mitigate increase to retail customers
Average power prices – wholesale hub price (real 2020 $/MWh) Expected impact on retail prices, real 2020 ¢/kWh, US average
High wind penetrations in SPP
keep prices low
High energy prices in New York
are reduced by injection of
offshore wind
PJM renewable penetration is
below US average ~16% by
2030, resulting in rising prices 13
5
14
3
0
4
10
2
7
1
6
11
8
9
12
Retail rates have not fallen
at same pace as wholesale
The gap has widened
2010 ’16
RECs and out-of-market
renewable PPAs impact cost
’12
Distribution costs rise due to
grid resiliency initiatives,
but could be held in check by
DG solar paired with BTM storage
’14 ’20 ’22 ’24 ’28 ’30’26
Wholesale energy rates stabilizing, on average
’18
Capacity prices rise
due to retirements
Transmission expansion costs
could pass to rate base
¢/kWh
Retail: -6.7%
Wholesale:
-60.9%
Economic development opportunity
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Note: Capital includes construction of power plants and transmission, but does not include induced affects or other benefits to local economies
Source: Wood Mackenzie, NREL JEDI tools
Total capital investment within the US from renewable energy and transmission expansion
Renewable build-out will deploy $690Billion capital over 10 years, with ~25% spent local to the installation region
Total capital investment, USD Billions – Scenario 1 Estimated local region capital investment – Scenario 1
0
60
10
20
30
40
50
70
80
90
100
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
5956
59
66 64
83
96
52
43
76
36
Transmission
Utility Solar
Offshore Wind
Energy Storage
Onshore Wind
Distributed Solar
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
10
20
2
4
6
8
12
14
16
18
22
24
26
NortheastWest
Texas
Midwest
Southeast2020-2030 total:
$690 Billion Capital 2020-2030 total:
$180 Billion Capital
Spent Locally to the
region of installation
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Highest spend expected in California and New York to meet state renewable targets, while Florida leads the southeast
Total investment wind and solar – Cumulative capital investment, 2020-2030, Scenario 1 Capital investment, by region and technology
$75 Billion
Total capital investment across all wind and solar distributed across the country
Energy
StorageOffshore Transmission
Wind
43.9%15.0%
6.5%
68.7%
187 157 104 70 39
38.8%
11.9%
23.3%
10.5%
9.8%
3.0%
$135B
31.6%
46.4%
Onshore
Wind
Distributed
Solar
8.4%
6.1%
28.5%
Utility
Solar
4.2%
22.4%
21.1%
WestTexas
MidwestSoutheast
Northeast
Nationwide
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Source: Wood Mackenzie, NREL JEDI tools
Nationwide direct jobs impact from renewable energy increases
Renewable growth has potential to add hundreds of thousands of new jobs related to construction, O&M and supply chain
Construction/technician jobs – Annual jobs in construction and maintenance Supply chain jobs – Annual jobs in factories, distribution and development
0
100
400
450
200
300
50
550
150
250
350
500
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
295274
234
436
163
Th
ou
sa
nd
jo
bs
249 259
311
341
395
502
Transmission
Utility Utility Solar O&M
Energy Storage Construction
Distributed Solar ConstructionEnergy Storage O&M
Onshore wind construction
Utility Utility Solar Construction
Onshore wind O&M
Offshore wind O&M
Offshore wind Construction
100
25
0
50
75
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Th
ou
sa
nd
jo
bs
46
36
27
33
24
4548
59
4954
68
Transmission supply chain
Energy Storage Supply chain Offshore wind Supply Chain
Solar Supply Chain
Onshore wind supply chain
2020-2030 total:
Jobs increased by 339,000
Technician wages = $70-110k/year
2020-2030 total:
Jobs increased by 41,000
Factory wages = $60-70k/year
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Distributed solar presents the highest potential for job growth in Scenario 1, due to widespread adoption
2030 jobs, wind and solar – Direct job creation, 2030 annual, Scenario 1 Total direct jobs, 2030, region and technology
Total job growth is highly focused locally to installation centers
28%
9%
55%
98
5%
150
12%
17%
39%
26%
30%
59%
30%
29% 26%
220 thousand
Utility
Solar
9%
2%
Distributed
SolarOnshore
Wind
Offshore
Wind
2%
65
7%
17%
Southeast
Texas Northeast
Midwest
WestTotal 2030 jobs0 50,000
Scenario 2 – 50% Renewable Energy Target
Setting a nationwide 50% renewable energy goal presents many challenges and opportunities
Scenario 1 administrative action and transmission expansion incorporated in Scenario 2
3.
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Note: Renewable energy includes wind, solar, hydro, landfill gas, geothermal, biomass, municipal solid waste
and pumped storage
Growing to 50% renewable energy will require retiring all coal plants and significant renewable build
50% renewable goal is attainable with additional congressional policy anchored on strong administrative action
Renewable energy penetration, by region – Scenario 2, % Reaching 50% renewable energy requires widespread fossil retirements
All coal plants must be retired nationwide by 2030 to reach 50% target
New gas plants are put on hold, other than advanced-stage projects
Imposing a 50% nationwide renewable target will have diverse regional affects:
• PJM (Mid-Atlantic) – will require over 50GW of coal retirements
• Fossil fuels replaced with over 120GW of wind and solar
• Over 60GW of energy storage capacity required to maintain reliability
• MISO (Midwest) – Nearly 60GW of coal plants retirements required
• Renewable energy capacity additions of over 100MW, 30GW of storage
• WECC (West) – Western region renewable penetration to grow to nearly 80%
• Nations’ highest levels of renewable penetration only expected to grow with
fossil retirements and additional renewable
• Southeast – FERC (Florida) and Southeast (SERC) remain at the bottom of
renewable energy penetration, despite over 70GW of solar capacity addition
• Over 50GW of coal retired, but significant amount of Nuclear remains
2022 24 26
0
2020
10
20
30
40
50
60
70
80
90
2022 2024 2026 2028 2030
New England
41
MISO
33
WECC
FCC
50
SPP
ERCOT
US Total
30
%
28
45
PJM37
SERC
NYISO
25
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Meeting 50% renewable goal requires coal plant retirements and significant renewable build out
Phase-out of coal is critical to reaching majority renewables, in addition to significant growth in battery storage for reliabil ity
Total cumulative capacity by technology, Scenario 2, GW Growth rates of technologies – 2020-30, Scenario 2
0
1,000
300
100
200
600
400
700
500
800
900
1,100
1,200
1,300
1,400
1,500
1,600
2020 2025
GW
2030
Renewable
63%
Capacity
Coal
Other Non-renewable
Wind Offshore
Other renewable
Battery Storage
Pump Storage
Solar Utility
Wind Onshore
Hydro
Gas
Nuclear
350
100
0
200
50
-80-100 -20
200
-60
250
300
12080
450
500
100-40
150
Wind Onshore
Other
Other
Gas
Coal Pump Storage
Nuclear
Cu
mu
lative
in
sta
llatio
ns b
y 2
03
0,
GW
Wind OffshoreHydro
Battery Storage
10-year Compound Annual Growth Rate, %
Solar Utility
Renewable
Non-renewableSize: 2020 cumulative GW
Retirements
expected
26
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Note: Other renewables include landfill gas, biomass, municipal solid waste and geothermal
Renewable energy contributions driven by expansion of onshore wind, solar and offshore wind
Significant expected coal retirements in PJM and MISO expected to be largely replaced by wind and solar
Renewable penetration by technology – Scenario 2 Distribution of installations and retirements, Scenario 2, GW (2020-2030)
7.1 6.1
9.3
24.0
14.7
0
5
10
15
20
25
30
35
40
45
50
55
50.2%
4.2
% U
S t
ota
l g
en
era
tio
n
2.2
2020 2025e 2030e
-80 -60 -40 -20 40200 6080 100 120 140
GW
91.5
Southwest Power Pool
Net capacity additions:9.8
NYISO
WECC (West)
FRCC (Florida)
Midcontinent ISO 61.3
PJM Interconnection
ERCOT (Texas)
SERC (Southeast)
New England
79.0
42.3
14.8
9.7
21.1
20.8
Coal Retirements Onshore Wind
Gas Retirements
Gas Additions
Offshore wind Utility SolarSolar UtilityOther Renewable Wind Offshore HydroWind Onshore
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Significant reduction in emissions driven by renewable energy displacing aging fossil plants
Over 60%+ drop in carbon emissions due to widespread coal retirements and renewable energy build
US Carbon emissions from power generation, Scenario 2 - mm metric tonnes Fossil fuel plant retirement outlook – GW per year, Scenario 2
0
500
1,000
1,500
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
-60.3%
vs 2020
Northeast West MidwestSoutheastTexas
45
30
10
25
0
50
5
35
40
15
20
2022 2030
17
1
5
24
5
28
31
4
1
12
2020 2028
5
111
3
6
34
2
419
11
125
1
5
21
5
16
24
2
4
4
30
24
2026
6
2024
23
1
27
40
29 29
46
Other fossil Gas Coal
28
woodmac.com
0
2021
5
10
15
20
25
30
35
40
45
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
SPP Kansas West
NYISO Zone K
SPP SouthwesternPS
SPP North Hub
US Average
PJM Western Hub
Average power prices – wholesale hub price (real 2020 $/MWh)
Source; WoodMac
Power price trends: Wholesale power prices stabilize due to renewable energy injection
Further injection of renewables reduces wholesale power prices due to zero variable-cost generation
High wind penetrations in SPP
keep prices low
High energy prices in New York
are reduced by injection of
offshore wind
Added renewables in PJM lead to
stabilizing energy prices after 2027
Note: Historic data from Lawrence Berkley National Labs
Source: WoodMac, LBNL
Expected impact on retail prices, real 2020 ¢/kWh, US average
8
13
6
4
0
3
1
2
12
7
5
14
9
10
11
’24’16 ’26
Retail rates have not fallen
at same pace as wholesale
The gap has widened
’20 ’22
RECs and out-of-market
renewable PPAs impact cost
Transmission expansion costs
could pass to rate base
Distribution costs rise due to
grid resiliency initiatives,
but could be held in check by
DG solar paired with BTM storage
’12
Capacity prices rise
due to retirements
’28’14 ’30
¢/kWh
2010 ’18
Wholesale energy rates stabilizing, on average
Wholesale:
-60.9%
Retail: -6.7%
Economic development opportunity
30
woodmac.com
Note: Capital includes construction of power plants and transmission, but does not include induced affects or other benefits to local economies
Source: Wood Mackenzie, NREL JEDI tools
Total capital investment by technology
Renewable build-out will deploy over $1Trillion in capital over 10 years, with ~25% spent local to the installation region
Total capital investment, USD Billions – Scenario 2 Estimated local capital investment, USD Billions – Scenario 2
0
100
150
50
200
140
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
105
36
6469
51
72
113 110
134
187Transmission
Energy Storage
Onshore Wind
Offshore Wind
Utility Solar
Distributed Solar
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
5
20
10
30
15
25
40
35
45
MidwestWest
Texas
Northeast
Southeast2020-2030 total:
$1.08 T Capital2020-2030 total:
$253 Billion Capital
Spent Locally
31
woodmac.com
Scenario 2 shows further investment in onshore wind, utility solar and offshore wind, while regional focus remains consistent
Total investment wind and solar – Cumulative capital investment, 2020-2030, Scenario 2 Capital investment, by region and technology
$75 Billion
Total capital investment across all wind and solar distributed across the country
21.2%
157
4.2%
8.4%
21.1%
22.4%
5.7%
262 171 89
Energy
Storage
Transmission
151
12.2%
26.6%
1.9%
59.3%
Onshore
Wind
8.8%
19.7%
Offshore Dist
Wind
43.9%
8.4%
$253B
26.5%
36.6%
Utility
Solar
67.2%
5.9%
Solar
Southeast
MidwestNortheastTexas
West Nationwide
32
woodmac.com
Source: Wood Mackenzie, NREL JEDI tools
Nationwide jobs increase by 791,000 from renewable energy increases – Scenario 2
Reaching 50% renewable energy will foster a new industry of technicians, manufacturers and maintenance
Construction/technician jobs – Annual jobs in construction and maintenance Supply chain jobs – Annual jobs in factories, distribution and development
400
150
0
300
200
500
50
600
350
100
550
250
850
450
650
700
750
800
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
456
163
262293
261
494
808
629
321
604
Th
ou
sa
nd
jo
bs
405
Transmission Utility Utility Solar Construction
Energy Storage O&M
Energy Storage Construction
Utility Utility Solar O&M
Onshore wind O&M
Onshore wind construction
Offshore wind O&M
Offshore wind ConstructionDistributed Solar Construction
175
0
25
50
75
100
125
150
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Th
ou
sa
nd
jo
bs
43
27
47
28
50
9488
74
106 109
173
Offshore wind Supply Chain
Solar Supply Chain
Transmission supply chain
Energy Storage Supply chain
Onshore wind supply chain
2020-2030 total:
Jobs increased by 645,000
Technician wages = $70-110k/year
2020-2030 total:
Jobs increased by 146,000
Factory wages = $60-70k/year
33
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Reaching 50% renewables requires significant addition of onshore wind leading to a surge in job creation
2030 jobs, wind and solar – Direct job creation, 2030 annual, Scenario 2 Total direct jobs, 2030, region and technology
Scenario 2 acceleration of onshore wind and solar further reinforces job growth in midwest
9%
27%
140 220
Utility
Solar
12%
11%
17%
281 thousand
5%
1%
68%
20%
27%33%
27%
26%
39%
Onshore
Wind
184
Distributed
Solar
4%
57%
Offshore
Wind
12%
Texas Northeast
Southeast West
MidwestTotal 2030 jobs0 50,000
Supply chain impact4.
35
woodmac.com
Onshore wind supply chain is fully globalized, but will require local investment to meet goals
Scenario 1 is unlikely to attract new factories due to record 2020 that has relied upon imports from global supply chain.
50% renewable target (Scenario 2) will likely require significant investment in US factories to meet aggressive growthOnshore wind annual installation outlook, GW New record wind years of 2020 and 2021 set up US for success
• New installations of ~15GW expected in 2020 due to expiring PTC
• Few significant project delays, despite impact of COVID on global supply chain
• Existing US wind manufacturing is focused on large components:
• Blades – 7 Midwest US blade facilities are augmented with imports
• Towers – Large components and logistics cost provide US advantage
• Nacelle assembly – US factories provide assembly for nearly all nacelles
• 2 nd tier of supply chain draws from a broad US supply base
• Concrete, rolled steel, cables and bolts have solid US supply base
• Scenario 1 volumes can likely be obtained without additional factories
• Next-generation turbines may require expansion of blade and nacelle
factories
• Scenario 1 volumes unlikely to attract sub-component suppliers
• 50% renewable target creates significant demand for onshore wind
• Peak installs grow to nearly 3X previous record values
• Additional manufacturing capacity may be re-opened or invested in:
• Blade facilities – expansion or re-opening of retired plants
• Mothballed plants may re-open – Gearbox, nacelle, tower and blade
facilities that closed during the last PTC downturn may find new life
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
30
10
20
5
15
35
25
40
45
50
GW
Prior record:
2012: 12GW
WoodMac Forecast (PTC expiration)
Scenario 1
Scenario 2
36
woodmac.com
Source: Wood Mackenzie
US wind supply chain has demonstrated resilience and flexibility during coronavirus pandemic
Lack of local content requirements and global supply diversification enabling record installs in the United States
US blade imports by country of origin, 2020 (metric tons) US gearbox imports by country of origin, 2020 (metric tons)
6,000
7,000
1,500
0
4,000
1,000
2,000
3,000
5,000
8,000
4,500
500
2,500
3,500
5,500
6,500
7,500
JAN FEB MAR APR MAY JUN JUL
+57.3%
0
1,000
6,500
2,000
3,000
7,000
5,000
4,000
6,000
2,500
5,500
500
1,500
3,500
4,500
FEBJAN MAR APR MAY JUN JUL
+89.7%
-43.3%
China TurkeyIndia Spain Italy Belgium China SpainIndia Brazil
China COVID
infection rate
>1,000 per day
in late January
India enters
COVID lockdown
on March 25th
Lockdown hits
Indian supply chain
37
woodmac.com
Source: Wood Mackenzie
US offshore installs will create USD 36B wind turbine supply chain opportunity, warranting new local
investments
• The turbine supply chain plays a critical
role in lowering offshore wind’s LCOE.
• US states are working to lure developers
and turbine OEMs with GW scale
contracts/leases
o New York, New Jersey, Maryland,
Virginia and Rhode Island are all
competing for a pivotal role in the
offshore wind supply chain
o Turbine OEMs, in conjunction with
component suppliers, will set up
facilities in Northeastern states
• Consolidation among turbine OEMs and
+19GW of forecasts in the next decade
will make it easier for component suppliers
to make investment decisions
• Turbines and components for the first set
of projects to be commissioned until 2022-
23 will be imported from Europe. However,
Wood Mackenzie anticipates local
investments beyond this period
3
0
1
2
4
5
6
7
8
Blades Towers Generators Balance
of nacelle
Converters Gearboxes Bearings
and shaft
Bed plate
1.8
7.36.9
1.0
5.0
2.4
1.72.1
USD Billion
Market potential
Likelihood of
localization
Higher Lower
US Offshore turbine supply chain’s cumulative addressable market potential 2020-2028e
Note: The annual addressable market value includes the average turbine pricing projections inclusive of the O&M contracts for turbines and components
38
woodmac.com
Source: Wood Mackenzie PV Pulse
Without incentives to spur domestic manufacturing, solar supply chain will continue to be import-focused
US 2nd tier supply chain will benefit from solar growth, including distributors, electrical and hardware component suppliers
Solar supply chain global supply capacity vs demand Global solar supply chain utilization rates, %
0
2005 2010 2015 2020 2025 2030
150
50
300
100
200
250
GW
Incremental
37.5GW/year
50
2010
55
60
65
70
75
80
85
90
95
100
2015 2020 2025
Ingot/Wafer Silicon cell ModuleGlobal module supply capacity Scenario 1 Incremental
Global module installations Scenario 2 incremental
Recent investments will
lead to lasting
overcapacity and
underutilization of Asian
solar manufacturing
39
woodmac.com
Lithium ion battery supply chain well-positioned to serve significant growth in US utility storage
Significant manufacturing capacity is allocated to electric vehicles, some flexibility to re-tune supply chain for energy storage
Global lithium ion battery manufacturing capacity vs Scenario 2 annual Key considerations for energy storage supply chain
Energy storage demand will pull capacity from Electric vehicles
• Significant investments ongoing to serve robust EV growth
• Mining and materials investment is expected to accelerate for key components
• Supply chain is relatively flexible to shift gears between EV and utility storage
• Many factories that are planned can accommodate both end uses
US demand for energy storage will be higher than domestic supply capacity
• Manufacturing incentives can help to foster a domestic supply chain
• Significant capacity exists from China and other Asian markets
• Battery supply chain mirrors the solar PV supply chain in many ways
9028
61 56 83
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
2029
646
267
2030
470
2020 2021 2022 2024 2025
834
1,292
271
1,260
2023 2026 2027 2028
968
126
1,098
1,196
1,326
1,3071,345
192 182
399
GWh Capacity
ChinaScenario 2 US Other APAC Europe
Wood Mackenzie™, a Verisk business, is a trusted intelligence provider, empowering decision -makers with unique insight
on the world’s natural resources. We are a leading research and consultancy business for the global energy, power and
renewables, subsurface, chemicals, and metals and mining industries. For more information visit: woodmac.com
WOOD MACKENZIE is a trademark of Wood Mackenzie Limited and is the subject of trademark registrations and/or
applications in the European Community, the USA and other countries around the world.
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Americas
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Website
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Europe
Americas
Asia Pacific
Website
+44 131 243 4400
+1 713 470 1600
+65 6518 0800contactus@woodmac .com
www .woodmac.com
Wood Mackenzie™, a Verisk business, is a trusted intelligence provider, empowering decision-makers with unique insight
on the world’s natural resources. We are a leading research and consultancy business for the global energy, power and
renewables, subsurface, chemicals, and metals and mining industries. For more information visit: woodmac.com
WOOD MACKENZIE is a trademark of Wood Mackenzie Limited and is the subject of trademark registrations and/or
applications in the European Community, the USA and other countries around the world.
Direct Wind, Solar, Storage Jobs in 2020 Direct Wind, Solar, Storage Jobs in 2030 Change in Jobs, 2020-2030
Alabama 235 9,015 8,780
Arizona 4,387 21,827 17,440
Arkansas 171 8,132 7,961
California 28,997 92,756 63,758
Colorado 5,033 9,977 4,943
Connecticut 1,935 10,483 8,548
Delaware 338 2,007 1,669
District of Columbia 405 1,323 918
Florida 8,064 27,796 19,732
Georgia 2,529 7,141 4,612
Idaho 664 12,700 12,036
Illinois 7,123 31,511 24,388
Indiana 1,261 32,024 30,762
Iowa 11,948 7,954 -3,994
Kansas 4,602 13,687 9,085
Kentucky 18 512 494
Louisiana 246 3,240 2,994
Maine 637 2,549 1,912
Maryland 2,530 32,141 29,611
Massachusetts 3,425 19,274 15,849
Michigan 2,000 15,224 13,224
Minnesota 2,672 15,028 12,356
Mississippi 370 2,910 2,540
Missouri 2,213 12,973 10,760
Montana 593 2,611 2,018
Nebraska 2,550 14,184 11,634
Nevada 2,882 12,747 9,865
New Hampshire 439 1,952 1,513
New Jersey 3,234 40,619 37,386
New Mexico 1,858 13,676 11,817
New York 5,733 42,575 36,841
North Carolina 4,908 25,962 21,054
North Dakota 3,358 4,454 1,096
Ohio 1,452 39,959 38,508
Oklahoma 4,453 10,664 6,211
Oregon 2,322 9,471 7,149
Pennsylvania 2,005 32,116 30,111
Rhode Island 596 5,127 4,531
South Carolina 1,571 8,107 6,536
South Dakota 2,944 1,441 -1,502
Tennessee 262 12,658 12,396
Texas 44,850 62,486 17,636
Utah 1,806 10,070 8,263
Vermont 352 1,672 1,320
Virginia 1,716 45,514 43,798
Washington 1,252 4,842 3,590
West Virginia 457 8,853 8,396
Wisconsin 309 7,486 7,176
Wyoming 299 13,733 13,434
Other 4398 155,838 151,440
TOTAL 188,402 981,000 792,598
Source: Wood Mackenzie
