The Four Forces of the Energy Evolution

Investment in renewables has been accelerating quickly due to a host of reasons that have been or will be addressed in this series including, but not limited to, investor sentiment and associated access to capital, policy incentives and tax equity structures, and declining costs and increasing efficiencies of renewable technologies. The four forces of the energy evolution, to which this blog series refers, has largely created a crowded space for investors. It is imperative to understand and monitor the current project development landscape continuously to ensure that all risks and opportunities are being considered in any renewable project investment. Enverus Power & Renewables offers the most comprehensive Project Tracking capabilities thanks to the size and scale of projects covered through the most comprehensive monitoring of sources in the market.
 
So, what does the project development landscape look like at the time of writing? First, let’s start by looking at the mix of projects by First Power Date (Figure 1). This clearly demonstrates the changing power generation project mix and how it has changed over time. To summarize the major trends, new coal capacity additions have been declining over time as they gave way to the superior economics of power generation from natural gas, which dominated the generation mix additions in the late 2000s and early 2010s. Since then, the major new renewable technologies (wind and solar), have continued to gain market share of capacity additions. Capacity additions from these technologies are roughly two-thirds of all sources as we begin this decade. Based on all proposed, planned, and under construction projects moving forward, this overwhelming dominance in capacity additions for wind and solar are slated to continue. Additionally, the mix of new capacity additions is expected to get more solar heavy as the technology continues to experience further cost declines and efficiency gains.