- U.S. renewable energy, electric vehicle sales, and overall green investment set to hit records in 2023.
- Offshore wind has been hampered by high interest rates and supply chain delays.
- The U.S. industrial sector has quickly become the second largest polluter after the transportation sector.
High interest rates and shaky global supply chains haven't stopped the U.S. green energy transition from reaching new heights in 2023.
Record amounts of renewable energy, led by solar power, were put onto the power grid; customers bought nearly 1.5 million electric vehicles, up 50 percent from a year ago; and investments to eliminate fossil fuels from power, transportation and other sectors reached a record $303 billion. BloombergNEF analysis found.
Tom Rowlands-Rees, head of North America research at BloombergNEF, told reporters at a press conference that the U.S. is the second-largest investor in the energy transition in 2023, after China. The race to clean up the global economy is intensifying as other countries also post record investments. Japan has been a notable exception.
“We can't afford not to have a record year if we're to keep up with this rapid change,” Rowlands Rees said.
But the $1.8 trillion in global investment is still not enough to reduce greenhouse gas emissions to near zero by 2050, the goal countries have agreed to in order to curb the climate crisis. Funding needs to double to $4.8 trillion per year. Discovered by BloombergNEF He said in a separate report earlier this year.
There are three main lessons learned from the United States:
The sun was shining and the wind had died down, And Gus was still king.
BloombergNEF found that large-scale solar farms and rooftop panels were built at a record pace in 2023. Bulk imports of solar panels from Southeast Asia helped meet demand, in part because the Biden administration waived tariffs on those imports.
The opposite has been true for wind power: Companies are canceling or looking to renegotiate more than half of the new offshore wind capacity planned for 2023. Developers cited high interest rates and supply-chain delays. Those challenges remain this year, but East Coast states including New York and Massachusetts are still signing new deals.
Solar, wind and nuclear power, which produce no emissions, are set to make up a large share of energy. A record was set to generate 41% of the US's electricity in 2023. But natural gas remains the largest source of energy, breaking a record last year. Rowlands Rees said that falling gas prices will make natural gas the cheapest source of energy in 2023.
“That's why things like the Inflation Control Act tax credit are so important, because without it, wind and solar are on a roller coaster ride of economic competitiveness,” he said.
Industry has quickly become the biggest polluter
By 2023, the U.S. industrial sector, which refines oil and makes materials like cement, steel, chemicals and paper, will be a bigger polluter than the power sector for the first time, according to BloombergNEF.
Until 2016, the electricity sector was the largest source of emissions. In less than 20 years, emissions have fallen by 40%, mostly due to a switch from coal to natural gas. This means that the transport and industry sectors are now the biggest polluters. A lot of money has been put into the electrification of cars and transport, but not so much into the industry sector.
“We have a unique formula: You add electrification, digitalization and automation and you get sustainability,” Jeannie Salo, Schneider Electric's vice president of government relations, told reporters. “These are the fundamental things that will enable industrial decarbonization.”
Solar power and EV battery factory launches
The Inflation Control Act aimed to lure renewable energy manufacturing back to the U.S. through big tax cuts. Companies responded by launching 104 new projects totaling $123 billion in investment. EV batteries and solar power plants accounted for the majority of planned growth, with 34 projects announced in each category, according to a BloombergNEF tally.
Georgia and North Carolina are the top candidates for new factories, with North Carolina getting $15.4 billion alone from Toyota, which is building a battery manufacturing base there.
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