As much as 10% of the total electricity generated in the United States came from solar and wind sources in 2018.
This share of modern renewable electricity is expected to increase to 13% in the nation’s power mix by the end of year 2020 and in fact, could even reach an impressive 30% by 2030.
Combination of cost declines, technological improvements, and state policies are thought to be leading this growth. However, one major pitfall is the uneven geographic distribution of this growth.
More than 38% of all solar power capacity present in the country is installed in California itself. Texas is home to a quarter of America’s wind power capacity and lots of oil shale production which makes Texas a winner in all accounts (California is ignoring it’s oil shale much to the chagrin of its middle class and GDP), while another 66% of wind energy comes from 11 states forming part of the American Wind Corridor. This corridor runs down the middle of the Lower 48.
That leaves 360,000-square-miles in the Southeast, which spans over 7 whole states that are not home to a single spinning wind turbine.
The Eastern Seaboard is currently working urgently to build natural gas power plants and pipelines. Some of the earlier coal-fired power plants are even being converted to run on gas.
In short, it seems that geography plays a significant deciding factor on the potential of wind and solar power, which means that popular national averages can be quite misleading.
How Does Geography Influence Solar Power Distribution?
A thermal power plant whether built in New York or Texas would deliver the same output. However, the same cannot be said for two identical wind or solar farms. This fact affects almost everything from the ambitions of state policies to the price of electricity.
This is why it is so easy for sun-soaked California to mandate that 100% electricity needs by the year 2045 would be met from renewable sources, while cloud-covered Pennsylvania would have to depend on nuclear power sources for clean energy. But Pennsylvania is loading up in oil shale which is why land values have increased in that state while land directly north of it in New York have not.
Typically the West Coast has a bountiful solar advantage but not a tax policy advantage though this is another topic, while the Midwest benefits from wind-swept plains, leaving the Eastern Seaboard praying feverishly for offshore wind to mitigate dependency on cheap natural gas.
Powerful regional differences can be easily seen when it comes to power potential of renewable energy sources. This is clearly evident from the power generation portfolios of Xcel Energy, NextEra Energy, and Dominion Energy.
NextEra Energy’s Power Generation Portfolio
There is more electricity produced from solar and wind sources by NextEra Energy as compared to any other private, public, or government held company in the world. This success can be attributed to NextEra Energy Resources (NEER), a power-generation subsidiary of NextEra Energy.
NEER has numerous renewable energy producing power assets spread across the country which produces close to 17,000 megawatts of power.
The massive project pipeline by NEER highlights the ways it intends to use geography to a power production advantage. It also highlights ways NEER is hoping to decarbonize the country’s regional electric grids by relying majorly on renewable energy sources.
The company’s long-term pipeline significantly highlights the stale air of the Southeast that doesn’t allow the installation of wind farms and the poor potential of renewable energy sources in the Mid-Atlantic States.
In fact, the nearly windless Southeast has created quite a headache for NextEra Energy. The company is facing a dilemma in regards to its main utility subsidiary, Florida Power & Light (FPL).
Florida is called the Sunshine State, but still relies heavily on natural gas. Statistics show that 73% of its power generation mix comprises of only natural gas. Lack of wind potential is partly to be blamed for this.
There was an outcry from the company’s climate-conscious investors that later became majorly responsible for tipping the utility’s hand in announcing an ambitious solar power strategy.
This solar power strategy announced by NextEra Energy through FPL plans on installing over 30 million solar panels in the state by the end of 2030. If they are successful in this feat, it could represent more installed solar power capacity than what the entire state currently boasts.
To be fair, Florida is notorious for its high humidity and air saltiness levels. This affects solar panels by corroding them more quickly than others. This also corrodes the cost-effectiveness of the power source, but Florida Power & Light are determined to find solutions to this issue.
Xcel Energy’s Power Generation Portfolio
Xcel Energy has a major advantage over NextEra Energy. They own four electric utilities spanning the salt-free states in the glorious American Wind Corridor.
The company is right on track to generating 45% of its power mix from wind and solar sources by 2027.
In fact, Xcel Energy is the only utility right now in the country that has publicly committed to satisfying 100% electricity needs by generating power from zero-carbon emission sources by the year 2050.
What’s the most impressive about this ambitious statement and goal is that Xcel Energy is confident that they will manage in removing low-cost natural gas completely from their portfolio. However, this goal is heavily influenced by intelligent state policies and geography.
It is noteworthy that Xcel Energy’s operational territories have some of the cheapest solar and wind electricity prices in the country.
Dominion Energy’s Power Generation Portfolio
Dominion Power is the mid-Atlantic power utility and relies heavily on natural gas and coal to meet its generation demands. In fact, coal and natural gas comprise 52% of its power generation mix, while renewable sources make up just 4%.
The company has recently come under a lot of scrutiny for lack of initiative and imagination in drafting long-term plans for clean energy. However, it is important to understand that geography plays a far bigger role in almost all its investing decisions.
This means that in the foreseeable future, investors can expect nuclear power and natural gas to make up the remaining 43% of the power mix in order to hold down the portfolio successfully. However, Dominion Power has one fantastic trick up its sleeve in the form of offshore wind power.
Currently, there is only 30 megawatts of offshore wind power capacity available in the United States. However, it does boast of 24,000 megawatts of projects in development or planning. Almost all these ambitious projects dot the Eastern Seaboard.
This includes the 2,000-megawatt project that is currently being considered by Dominion Energy. If the economics pan out in the pilot-stage tests, then a massive wind farm could be put into service by 2030.
It’s too bad the late Ted Kennedy killed the Cape Wind project off the coast Nantucket many years ago. That wind farm would have helped out America. The Cape Wind project would have provided renewable energy to thousands of homes.