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North America power & renewables long-term outlook H1 2019: Who's the greenest? Accelerated state plans for renewables pressure prices

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02 August 2019

North America power & renewables long-term outlook H1 2019: Who's the greenest? Accelerated state plans for renewables pressure prices

Report summary

Although power demand growth has been constrained, as the step-change of energy efficiency gains begin to moderate, signs of an increasing demand recovery are continuing to emerge. Still, pressure from increasing renewable integration, constrained natural gas prices, and additional negative burdens are beginning to test the reliability of select markets. Despite some of these integration challenges, green states are now challenging the industry to meet very deep decarbonization goals.

Table of contents

  • North American power demand finished 2018 as the strongest year for growth in a decade. This is largely attributed to a number of things such as strong economic growth, a wave of new energy intensive projects beginning operation and more extreme weather. However, demand this year has been more contained as most markets are now trending negative YOY due to much milder weather.
  • Future demand trends remain heavily leveraged to new energies like energy efficiency, distributed generation and electric vehicles which are expected to account for a fifth of electric demand in 2040. As step function efficiency gains begin to moderate, early signs of an expected demand recovery are now emerging.
  • Still, the days of 1% p.a. plus growth are not likely to return on a countrywide basis. At least until new end use electrification starts to take off.
  • Natural gas market shows resilience in the face of associated gas although price forecast projects lower overall vs H2 2018 in the long term
  • This outlook continues to assume a federal carbon price in the US starting 2028. This will also serve as a backstop floor price for all states under regional programs in the future.
  • More regions and states are looking to price carbon or increase carbon targets in the absence of federal legislation including New Jersey into RGGI. All Canadian provinces are subject to a carbon price starting 2019 based on provincial policies or federal backstop prices.
    • (Renewables include utility scale and distributed solar + onshore and offshore wind)
    • While utility scale solar and wind are expected to dominate renewable generation, emerging technologies are set to radically increase their market share. Residential and commercial solar is expected to account for 30% of all solar generation in 2040, doubling from today's level. Offshore wind accounts for 20% of wind generation by 2040, up from negligible levels today.
  • Utility scale solar
  • Residential Solar
  • Non-Residential Solar
  • Onshore Wind
  • Offshore Wind
    • 150 GW of battery storage capacity by 2040, from negligible levels.
    • Technology LCOEs (levelized cost of energy):Cost of mature solar and wind technologies now below gas technologies across geographies in NA; expected to stay that way despite phase down of subsidies.
    • 2019 has already begun to deliver hints as to which regions may be at risk to reliability and resiliency events in the near to mid-term. In ERCOT and California intra-day price volatility is pointing to need for more reserves sooner rather than later. While in MISO and PJM, baseload generation failed to see significant prices this winter, despite renewables only able to contribute little to peak hours.
    • Renewable build out continues to supress prices. Northeastern markets are at more risk to lower pricing as mandates look to leverage off shore wind development. Combined wind and solar development will constrain prices in many markets.

Tables and charts

This report includes 3 images and tables including:

  • Figure 1: H1 2019 vs H2 2018 forecast henry hub price
  • Figure 3: Battery Cost Forecast
  • Figure 2: LCOE ($/MWh) forecast for various technologies

What's included

This report contains:

  • Document

    North America power & renewables long-term outlook H1 2019: Who's the greenest? Accelerated state plans for renewables pressure prices

    PDF 35.77 MB

  • Document

    NAPRS_LTO_Base_Case_Prices_Sparks_IHR_Darks_Real_7_31_2019.xlsx

    XLSX 14.07 MB

  • Document

    NAPRS_LTO_Base Case_Coal_Retirements_7_31_2019.xlsx

    XLSX 153.33 KB

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    NAPRS_LTO_Base Case_Delivered_Fuel_Prices_Nominal_7_31_2019.xlsx

    XLSX 565.05 KB

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    NAPRS_LTO_Base Case_Delivered_Fuel_Prices_Real_7_31_2019.xlsx

    XLSX 572.66 KB

  • Document

    NAPRS_LTO_Base Case_Emission_Prices_Nominal_7_31_2019.xlsx

    XLSX 51.53 KB

  • Document

    NAPRS_LTO_Base Case_Emission_Prices_Real_7_31_2019.xlsx

    XLSX 52.35 KB

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    NAPRS_LTO_Base Case_Emissions_7_31_2019.xlsx

    XLSX 172.13 KB

  • Document

    NAPRS_LTO_Base Case_Load_Forecast_7_31_2019.xlsx

    XLSX 3.10 MB

  • Document

    NAPRS_LTO_Base Case_Macroeconomics_7_31_2019.xlsx

    XLSX 128.54 KB

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    NAPRS_LTO_Base Case_Supply_Demand_Energy_7_31_2019.xlsx

    XLSX 2.02 MB

  • Document

    NAPRS_LTO_Base_Case_Prices_Sparks_IHR_Darks_Nominal_7_31_2019.xlsx

    XLSX 12.39 MB

  • Document

    NAPRS_Base_Case_Capacity_Prices_7_31_2019.xlsx

    XLSX 314.05 KB

  • Document

    NAPRS_LTO_Base_Case_State_RPS_Targets_7_31_2019.xlsx

    XLSX 3.02 MB

  • Document

    NAPRS_LTO_Renewable_Energy_Credit_Prices_7_31_2019.xlsx

    XLSX 916.14 KB

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