Advanced energy is now $200 billion in annual revenue in the United States. Solar power, wind power and natural gas are driving the 14 percent annual growth of advanced energy, according to a new Advanced Energy Economy (AEE) report, developed by Navigant Research. The following are other key findings.
In 2014, according to the report, wind power in the U.S. grew almost 400 percent, from $2.1 billion in 2013 to $8.2 billion in 2014. Solar PV in 2014 was reported at $22.5 billion in revenue. New natural gas turbines generated $6.4 billion in 2014 revenue. Almost all new generating capacity in the United States in 2014 was from solar, wind, and natural gas.
Greater than the combined investment in wind, solar, and new gas turbines, was investments in building efficiency, such as LED lighting, which can often pay for itself in months, and efficient HVAC which can pay for itself in a few short years. Advanced wall insulation and smart glass are also emerging to make buildings more efficient. In homes, smart appliance investments doubled in one year. Building efficiency is now a $60 billion U.S. business, with strong growth.
Information technology enables buildings and industrial operations to be more efficient and intelligent. With the internet of things (IoT), lighting, HVAC, and equipment are networked with sensors, actuators, switches, and controlled with energy management software. Big data, analytics, and remote management play a growing role in smart buildings. However, lack of standards make integration a challenge as does lack of consistent building codes.
Efficiency is resulting in more zero net energy buildings (ZNEB) and near-zero emission building (nZEB) retrofits. Two percent of all U.S. commercial buildings are owned by the federal government. A GSA task force has recommended that half of these be targeted for ZNEB in the future.
Energy security is a motivator for many governments, not just the United States, to promote ZNEB. For example, building efficiency would greatly alleviate Europe’s dependency on Russian natural gas.
Disruptive Change and Major Opportunities
Vehicles with electric motors are considered part of the advanced energy economy. Cheap gasoline caused hybrid vehicles to drop 19 percent in revenue in 2014, but plug-in electric vehicles grew 34 percent, with the United States being the world leader in adopting electric vehicles. More dramatic than the growth of electric vehicles is the fundamental ways that we travel. The AEE report states:
A generational shift in the United States is underway when it comes to car culture. While there are a number of contributing social and economic factors, over the last decade, the number of miles driven by the average American has been falling. At the same time, advanced mobility options, drive trains, and fuel sources have increased significantly. Growth in public transit options, car-sharing, and electric vehicles are all contributing to the transformation of personal mobility. Millennials in particular are seeking alternatives to car ownership while decreasing battery costs are making electric mobility products more affordable.
The AEE report is about advanced energy, not necessarily clean energy. Yes, energy efficiency reduces emissions as less energy must be generated, but the reported advanced energy also natural gas, biofuels, nuclear and hydropower. Natural gas is a fossil fuel whose extraction with fracking and other approaches can result in significant methane release. Ethanol and other biofuels often have significant lifecycle impacts on land, water, and emissions. Greenhouse gas emissions from the cement and other components of a nuclear power plant are large; terrorism and plant failure risks are documented; and nuclear waste management is an issue for thousands of years. Large-scale hydropower can result in methane emissions, damaged ecosystems, and loss of habitat.
Electric utilities, once the sole supplier of electricity, are being impacted by major customers meeting their needs with their own solar and other forms of distributed generation and distributed storage. Compounding the impact is building efficiency lowering needs for electricity. Helping utilities is off-peak charging of electric vehicles, often responding to pricing signals to charge at lower rates. Even in the face of distributed generation, utilities invested heavily in upgrading transmission infrastructure. See: Solar, Storage, and Smart Grid Transform Electric Utilities.
Uneven Global Growth
Globally for 2014, advanced energy grew 12 percent to $1.3 trillion in annual revenue. Renewable energy and building efficiency showed strong growth. Surprisingly, there was a 19 percent revenue drop in microgrids, 34 percent drop in electricity distribution, and a 29 percent drop in energy storage completed projects.
Globally, 1.5 billion tons of municipal solid waste (MSW) was generated in 2014. Increasingly, it is used for electricity, heat, and transportation fuel with incineration, biological and gasification technologies. Methane gas is also captured for combined heat and power and transportation fuel.
China is breaking all records in installing wind and solar power. The United States is showing strong innovative leadership in efficient buildings, smart grid, and smart cities using the internet of things (IoT), data analytics, and energy management. With financial innovation, upfront capital expenditure is less of a barrier, thanks to power purchase agreements, yieldcos, and other forms of financing.
The AEE report anticipates strong growth in renewable energy, intelligent transportation, and efficient buildings that are fueling economic growth and reduction of climate damaging emissions. The 58-page report, prepared for Advanced Energy Economy (AEE) by Navigant Research, is available for download: 2015 report