Renewable Energy Update: Key Trends and Developments

Here are six recent and notable developments in the renewable energy industry in Virginia, across the country, and around the globe.

IRA Guidance and Credits Spark Energy Sector Investment

As the Inflation Reduction Act turns two, more guidance and credits have unlocked investment in the clean energy sector. According to business group E2, 41 major clean energy projects and $12.6 billion in private investment have been announced so far in 2024. The final tax credit transferability guidance issued by the IRS in April is driving clean energy tax credit transactions, which will likely exceed $9 billion by year end according to a report from Crux Climate. The IRA is also expected to be a long-term stimulus to the energy sector once the technology-neutral 48E and 45Y credits begin replacing existing production and investment credits at the end of this year.

EPA Awards $4.3 Billion in Climate Grants

The IRA’s $5 billion in Climate Pollution Reduction Grants continue to be disbursed, with 47 out of 50 states using the first phase of the money to create climate action plans. On July 22, the Environmental Protection Agency announced the second phase and awarded the remaining $4.3 billion to 25 selected applications for state and local projects to reduce greenhouse gas emissions.

Virginia will receive almost $100 million to reduce methane emissions across the state’s landfills and coal mines and fund food rescue and composting programs at agencies, colleges, and universities. The Mid-Atlantic region will receive over $420 million to fund carbon sequestration efforts on natural lands such as coastal wetlands, peatlands, forests, and urban parks.    

SMRs and Governor Youngkin’s “All of the Above” Energy Strategy in Virginia

Governor Youngkin has described the race to establish small modular nuclear reactors (SMRs) as “Virginia’s version of the moonshot.” This ambitious goal is driven by a position that building wind farms and solar facilities will not be enough to meet the growing energy demands, driven by data centers. To support this initiative, new legislation was passed in the last General Assembly session to encourage SMR development. The law allows Dominion Energy to petition the State Corporation Commission at any time for the approval of a rate adjustment clause for the recovery of SMR project development costs for up to one SMR facility, with a potential monthly rider capped at $1.40. The bill has an expiration date of December 31, 2029. 

GreeneHurlocker’s Jared Burden recently argued that while SMRs should be considered as part of the solution to meet Virginia’s energy challenges, their potential shouldn’t be overestimated given their lack of track record. According to Burden, “​​Virginia’s energy future doesn’t hinge on an either/or choice between SMRs and solar—or any other energy source—but rather on a comprehensive approach that leverages the strengths of various sources.” 

Public EV Charging Coming to A Location Near You

A recent Bloomberg Green analysis of Department of Energy data found that there are nearly 9,000 public, fast-charging sites for electric vehicles in the United States. At the current pace, fast-charging EV stations could outnumber gas stations by 2032. 

Two things are driving the rapid increase according to Bloomberg–the National Electric Vehicle Infrastructure Formula program and the value proposition for businesses. Several large companies in the gas, retail, restaurant, hospitality, and even financial sectors are investing in EV charging stations at their locations to drive business.   

Amazon Meets Energy Goal 7 Years Early

In July, Amazon announced it met its goal to match the company’s global electricity consumption with renewable energy in 2023, seven years before its 2030 deadline. According to the company’s annual sustainability report, the goal was met by investing billions into 500 solar and wind projects across 27 countries. This included 1.7 GW of offshore wind capacity in Europe, over 80 renewable energy projects across the Asia Pacific region, and relying on utility-scale green projects in the US. 

Global Renewable Energy Capacity Rises Rapidly

New data from the International Renewable Energy Agency reports that 86% of new power plants built in 2023 were clean energy. Last year’s building push means that clean energy now makes up around 43% of global electricity capacity. 

According to data and insights firm Wood Mackenzie, renewable energy capacity will continue to increase with new wind and solar installations averaging 560 GW annually over the next ten years. Wood Mackenzie expects solar and wind capacity to triple worldwide to 8 TW by 2033. 

These recent developments underscore the dynamic nature of the renewable energy sector and the multifaceted efforts required to transition to a sustainable energy future. From regulatory changes and financial incentives to state-level programs and market trends, the landscape is evolving rapidly, offering both challenges and opportunities for stakeholders in the renewable energy space. If you have any questions or require assistance, please contact GreeneHurlocker.