Zero-carbon energy will soon provide over half of the electricity consumed in the United States.
Crypto investors are familiar with the “Flippening,” which is a hypothetical future where the market valuation of ether overtakes that of bitcoin. As of late September 2022, the pair aren’t really close. Ether has a total market cap of $160 billion, whereas bitcoin has a total market cap of $361 billion, according to CoinMarketCap.
The ethereum blockchain does have more versatility than bitcoin, so the long-awaited Flippening in crypto could happen eventually. However, the Flippening in electricity markets will definitely happen within the next five years.
This event will be characterized by zero-carbon energy sources generating more electricity than fossil fuel sources for the first time ever. Recent and planned capacity additions of onshore wind and utility-scale solar suggest the switch will occur much sooner than many expect.
When Will Zero-Carbon Electricity Overtake Fossil Fuels?
The latest monthly data from the U.S. Energy Information Administration (EIA) show that renewable energy remains on an absolute tear. In the first half of 2022, the United States added 462% more electricity from renewable sources than fossil fuel sources. The trends continued in July 2022.
Through the first seven months of the year fossil fuel power sources generated only 58% of the nation’s electricity. The other 42% was derived from zero-carbon sources, including 24.3% from renewables and 17.9% from nuclear power.
That may seem relatively far away from the 50% threshold required for a Flippening, but consider the trajectory.
In 2007, the United States generated 27.9% of its electricity from zero-carbon sources. This was the year output from coal-fired power plants peaked at a staggering 48.6% of the total electricity mix.In 2019, the United States generated 37.7% of its electricity from zero-carbon sources.Through July 2021, the United States generated 40.2% of its electricity from zero-carbon sources.Through July 2022, the United States generated 42% of its electricity from zero-carbon sources. Coal-fired power plants fell to just 19.7% of the generation mix.
Whereas the first phase of the country’s renewables push leaned heavily on onshore wind power, the next phase will lean on utility-scale solar. The United States added 24,500 megawatts of installed utility-scale solar capacity from June 2020 to June 2022. The EIA expects 44,000 megawatts to be added across 2022 and 2023.
Although solar energy has the lowest utilization rate of major energy sources, it’s unique in that it produces peak annual electricity during peak summer consumption. That has already radically altered the regional grids in New England – not exactly known for ample sunshine – by reducing the need for fossil fuels during peak consumption hours. These are usually sourced from the most expensive marginal supply sources in New England’s deregulated market, which means even a little solar capacity can significantly reduce electricity costs.
Power generators and electric utilities must plan their portfolios years in advance. While that leaves them open to criticism about not moving quickly enough, it can also be used to model when the Flippening might occur.
The data suggests the United States could generate more electricity from zero-carbon sources as early as 2025. This assumes the accelerated retirement of coal-fired power plants continues, natural gas-fired power plants have maxed out their contributions to the grid, onshore wind farm construction reaches steady state, and utility-scale solar continues to dominate power capacity additions.
That’s exciting! What’s more, it’s possible that wind (onshore and offshore) and solar (utility-scale and small-scale) will combine to provide at least 40% of the country’s electricity in 2030. They could grab at over 50% of the generation mix by 2030 depending on the influence of the Inflation Reduction Act.
It’s easy to give in to the doom and gloom surrounding climate change action (or inaction), but the United States is on an encouraging trajectory given the size of its power grid. Whereas every other energy transition in the country’s history has taken 60 years or more to complete, renewable energy is on track to complete the Flippening in less than half that time.