Renewables Again Lead Capacity Additions in 2016 as Coal Production Continues to Fall

For the third straight year, renewable generation accounted for the majority of new utility-scale capacity additions in the U.S. during 2016, the Energy Information Administration (EIA) said on January 10.

The EIA estimated that the U.S. added 24 GW of new utility-scale generation in 2016, of which 63% was renewables, almost all of it wind and solar (Figure 1). Of the non-renewable additions, almost all was natural gas.

1. For the third straight year, the majority of new generating capacity in the U.S. came from wind and solar. Source: EIA

The Solar Electric Industries Association (SEIA), meanwhile, estimated in December that the U.S. would add 14.1 GW of solar photovoltaic (PV) generation during 2016, of which about 70% would be utility-scale. The SEIA predicted that solar PV would continue its exponential growth in 2016, with the U.S. installing 4.8 GW of utility-scale PV generation in the fourth quarter alone, an amount larger than what came online for all of 2015.

Hydroelectric generation continues to provide the largest share of U.S. renewable generation, the EIA noted, but is close to losing its spot to wind, which matched or exceeded hydro generation during several months this past fall (Figure 2). Hydro is also concentrated in the western U.S. and has been passed by wind generation in the Midwest and South.

2. Hydro continues to provide the majority of U.S. renewable generation but wind is running a strong second and has passed hydro in the Midwest and South. Source: EIA

The news for coal, however, was far less bright. The EIA said that U.S. coal production for 2016 is expected to fall to levels not seen since the late 1970s, continuing a trend that has now stretched over the past eight years. Nationwide, coal production fell 15% from 2015, with dramatic drops across all five major producing regions (Figure 3). Total production fell to 743 million short tons, the lowest level since 1978.

3. U.S. coal production fell dramatically across all five major producing regions in the U.S. during 2016. Source: EIA

Competition in the power sector from natural gas and renewables was the main driver in the decline, the EIA said, as natural gas prices averaged $2.40/MMBtu. For the year, gas is expected to provide 34% of U.S. electricity generation while coal's share falls to 30%. Coal exports also fell substantially, dropping 23% year-over-year, as European and Asian market demand slackened considerably.

-Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).

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