Consensus suggests projections for electricity use in the U.S. will continue to rise sharply over the coming decades. Renewable energy sources account for this growth, increasing from 885 BTW-hr to 3,076 BTW-hr by 2050, 3.5x today’s levels. Much of the anticipated increase will result from the rapid electrification of economic sectors historically dependent on fossil fuels, such as transportation (electric vehicles), building heating and cooling, and process industries, such as mining and metals.
This growing demand will be met primarily by renewable sources, according to the U.S. Energy Information Administration (EIA). Declining infrastructure costs and government subsidies such as those in the Inflation Reduction Act (IRA) will continue the steady improvement in the economics of renewable generation, notably wind and solar, cementing their position as the lowest-cost sources overall; the EIA also noted that renewable generation surpassed coal-fired and nuclear generation in the U.S. in 2022.
Solar will play the dominant role in the renewable power ecosystem, with solar installations growing from 75 GW to 695 GW by 2050, almost a 10x increase. The reasons behind solar’s ascendancy are manifold – besides being sustainable, it is a great job creator and highly versatile from a siting perspective, suitable for deployment on rooftops, brownfields, etc. For these reasons, the EIA sees solar generating capacity growing by as much as 1000% by 2050.
Solar grows up
Economics is a key reason for solar’s strong momentum. Solar’s Levelized Cost of Energy (LCOE) has de-creased 89% since 2009, from $347/MWh to $39/MWh. Analyses like the one reported by Lazard in 2023 put the LCOE of unsubsidized utility-scale solar as more competitive than all fossil fuels.
As a result, solar’s role in the overall energy ecosystem is poised for a significant transformation. For years, solar was seen as a niche contributor to meeting overall energy demand. However, solar is increasingly ex-pected to be more central in the electricity supply.
Size is one critical development impacting the overall solar market. A decade ago, most solar installations were relatively small, 10 MW or less, typically seen as ‘nice-to-have’ resources, not a central grid component. In the case of grid disturbances like transmission line faults, they could be temporarily disconnected from the grid without having a major impact on the overall power mix.
In contrast, today’s utility-scale solar installations are often hundreds of MWs, even multiple GWs, critical to the overall power supply. Grid codes, essentially ‘electrical codes of conduct’ for all generation sources, including renewables, were introduced in the early 2010s. Over the past decade, as solar farms grew in size and importance, these grid codes evolved rapidly, ensuring that renewable resources bear their share of responsibility for the management and stability of the grid.
While these codes vary by country, the underlying trend is similar. When initially introduced, solar plants were expected to disconnect safely from the grid in response to a grid disturbance such as a fault. Gradually, they were entrusted to contribute reactive power support, and increasingly, they are required to provide more complex, essential grid services, such as frequency control or even black-start capabilities. As with conventional generation, those new grid services should be remunerated and will represent additional revenue streams for operators. No one could have predicted this evolution 15 years ago!
A typical utility-scale solar plant has a lifetime of 25+ years. New solar plants must be flexible enough to adhere to future grid codes that aren’t even discussed today! The key is not to over-design an already capital-intensive project; instead, incorporate key flexibility features in hardware and digital components.
Power quality solutions such as static compensators (STATCOMs), static VAR compensators (SVCs), and Synchronous Condenser Systems can provide required reactive power support, especially during major grid disturbances like transmission line faults. New technologies like SVC Light® Enhanced can even provide inertia to stabilize grids during such events.
A range of digital technologies can enable additional revenue streams while minimizing a utility-scale solar plant’s operational costs and risks. Solar plants, especially those with integrated battery energy storage sys-tems (BESS), can access multiple energy market revenue streams on demand. Hybrid plants can produce a fixed amount of power over numerous hours despite variable solar insolation and participate in day-ahead or hour-ahead energy markets.
Digital technologies such as e-mesh™ SCADA allow the smooth operation of hybrid plants through precise coordination between solar power production and the charging/discharging of the BESS system. Technologies like Energy Trading and Risk Management (ETRM), SettlementTracker, and RECTracker enable developers to maximize the revenue of the solar plant by leveraging various energy streams and market financial instruments.
Room to grow
Hardware and digital technologies are available to support the transition of solar from a niche power supply to a critical building block of the future energy system.
Government programs like the Infrastructure Investment and Jobs Act and the IRA will ensure further acceleration of solar in the U.S. Presently, the main bottleneck for renewable integration in U.S. is the slow pace of permitting for interconnection agreements and the lack of inter-regional transmission planning. Government support is critical for eliminating these bottlenecks to transmit renewable energy from where it is generated to where it is needed.
By clearing the path for growth, demand will ensure that solar can thrive and play a key role in helping the country, states, and companies reach their sustainability targets in the coming decades.
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