In early April, a COVID-19 impact survey was completed by industry leaders ranging in sectors from Upstream Oil & Gas, Midstream, Renewable Energy, and others. The big questions to emerge from the study are how long will recover take, will the traditional energy markets bounce back, and what does this mean for the renewables sector. It is the last question that initiated a deeper dive from FPH as there is clear consensus among renewables respondents that the current crisis will accelerate the energy transition towards cleaner energy sources. It appears they are correct.
According to new data published by the US Energy Information Administration (EIA), April 2020 was the first month in history that renewables generated more electricity than coal on every day of the month. On March 24th, renewables began outpacing coal and has extended at least through May 15th – a 53 consecutive day run breaking the previous record of 9 continuous days. EIA forecasts renewable energy will likely top coal generation in United States in 2020 – a full year ahead of prior forecasts.
As unpredictable and unprecedented as the start of 2020 has been ten years ago many people probably didn’t foresee solar, wind, and hydropower toppling the then dominant coal-fired power generation. As incredible as it may seem now, coal represented more than 50% of power generation in 2008 for the months of January, February and March. That’s in stark contrast to coal’s market share fell this year where it fell below 20% each month during the first quarter. EIA estimates that this will continue through year-end dropping for the first time below both renewable and nuclear power.
Renewable energy will unquestionably be the fastest-growing source of electricity generation in 2020 in the United States. And with cleaner-burning natural gas power generation expected to remain steady at 38% of total supply, our transition to a greener climate is beginning to look much better. How’s that for a silver lining during these challenging times?