9 Trends In Power Sector To Watch Out For In The US In 2024

It should not come as a surprise when we say that the U.S. clean energy shift is most likely to speed up in 2024, buoyed due to the recent policy as well as other actions; however, transmission as well as financing are some of its challenges. The following happens to be a snapshot of some of the major developments as well as trends that are expected across nine major areas when it comes to the energy transition this year.

FERC: Transmission planning highest on the agenda at shorthanded agency

The Federal Energy Regulatory Commission started the year having just three commissioners, leaving the agency at risk when it comes to losing its quorum if any one of its members goes on to leave unexpectedly.

Transmission planning as well as cost allocation reform happen to be perhaps the top item when it comes to the FERC’s agenda. The agency in 2023 went on to issue a final rule, thereby revamping its grid interconnection needs in a step aimed at easing the huge backlog of generating as well as storage projects looking to connect to the grid. Late in 2023, Chairman of the FERC, Willie Phillips, said he plans to advance as soon as possible one of the transmission planning rules that happened to be proposed in 2022.

Former FERC chairman Neil Chatterjee said that there will be a lot of pressure when it comes to the commission to get a rule out pretty swiftly in 2024.

In the face of sharp and surging extreme weather, FERC will most likely continue to concentrate on grid reliability as well as resilience, which is a priority for Phillips, who happened to work at the North American Electric Reliability Corp., which goes on to oversee grid reliability.

Apparently, the agency is also likely to tackle proposed gas pipelines as well as liquefied natural gas export projects and may as well initiate a push to reform the capacity markets, as per the observers. The agency happens to be facing pressure to respond when it comes to reliability concerns that are related to an Environmental Protection Agency proposal so as to limit greenhouse gas emissions coming from fossil-fueled power plants.

Transmission: Is 2024 going to mark the beginning of a buildout?

Numerous major transmission projects, TransWest Express, SunZia, as well as Grain Belt Express, for instance, went on to make growth in 2023, thereby throwing light on the fact that 2024 may be the beginning of a prominent buildout of the U.S. transmission system.

At the same time, including Grain Belt, there happen to be 36 ready-to-go high-voltage transmission projects throughout the United States that could very well interconnect around 187 GW of renewable energy capacity, as per a recent September report rolled out by consulting firm Grid Strategies.

Some of those projects could very well benefit from the Department of Energy’s Grid Deployment Office, which was launched in 2022 and has around $26 billion in funding that’s available to enhance the transmission system as well as bolster grid resilience and reliability. As part of that endeavor, in late October 2023, DOE said it was going to be entering into talks in order to spend almost $1.3 billion due to a revolving loan fund for capacity purchase on three transmission projects throughout six states. DOE anticipates the capacity purchases will go on to facilitate financing for the projects.

Renewable energy: Record investments as well as decarbonization objectives will keep the momentum

All across 2024, renewable energy demand will continue to surge as states, along with the federal government as well as major corporations, go on to pursue emissions dips so as to meet decarbonization objectives.

The Biden administration has apparently gone on to set a goal for the U.S. in order to achieve a 50% to 52% decrease in economy-wide greenhouse gas emissions from 2005 levels by 2030, while companies such as Apple, Amazon, as well as Microsoft say they happen to be on track to powering 100% of their functions with renewable sources of energy by 2025.

The chief commercial officer of DSD Renewables, Eric Pollock, said that customer interest among solar continues to surge, though corporate customers who are looking to meet decarbonization objectives are going via evaluation phases as they work out the logistics when it comes to this.

He adds that they have a bit of compression ahead of them and asks how they actually meet those objectives with, for instance, seven years left until the 2030 deadline. The conversations are indeed becoming a tad more holistic.

The demand for renewable energy happens to get bolstered due to tax incentives that are included in the Inflation Reduction Act, especially when those incentives get teamed with domestic content adders and bonus tax credits that are designed to accelerate the usage of U.S.-made steel and iron, as well as other products.

Energy storage: consistent progress, permitting issues, as well as a focus on longer durations

2023 happened to be a bumper year for the energy storage sector, with the U.S. installing a record 7,322 MWh of storage within Q3, thereby bringing overall deployments in the first three quarters to 13,518 MWh, thereby already overtaking 11,976 MWh rolled out in all of 2022.

Experts anticipate that growth will continue this year as well because of the continuing tailwinds from the Inflation Reduction Act. Although the installations are anticipated to rise in large markets such as California and Texas, the market is anticipated to progress in states such as Arizona, New York, Nevada, and Florida, which are growingly turning to energy storage so as to make sure grid reliability, said the vice president of research & analytics, American Clean Power Association, John Hensley.

Energy resources that are distributed: All eyes happen to be on virtual power plants

Distributed energy resources such as rooftop solar, battery storage, as well as electric vehicles have gone on to expand on the U.S. grid in the years that have gone by, but looking to this year, some experts happen to see a clear focus when it comes to virtual power plants.

VPPs, which are essentially aggregations when it comes to distributed energy resources and can function on the grid, such as makeshift power plants, happen to be at a potential inflection point, said a September report coming from the U.S. Department of Energy. The agency anticipates that tripling VPP capacity to between 80 GW & 160 GW by this decade-end could go on to lead to power system savings of $10 billion every year.

Nuclear: Enabling the roll-out of advanced reactors

In 2024, many significant trends are most likely to come up in the US nuclear energy industry when it comes to project deployment, licensing, as well as investment, as per executive director, Judi Greenwald from the Nuclear Innovation Alliance.

TerraPower is most likely to give a construction permit application to the NRC when it comes to its Natrium fast reactor in Kemmerer, Wyoming, and X-energy is anticipated to submit a construction permit application for its Xe-100 gas-cooled reactor at the Dow Chemical facility in Seadrift, Texas. Regulatory reviews are also anticipated to advance for GE-Hitachi Nuclear Energy’s BWRX-300 SMR as well as other reactors.

Furthermore, in 2024, the NRC may as well go on to issue the proposed Part 53 rule for public comment, which happens to be a major overhaul of its regulations intended to make it seamless to license new reactors, said Edwin Lyman, the Union of Concerned Scientists Director of Nuclear Power Safety.

Apparently, in 2024, the Union of Concerned Scientists anticipates to see more utilities pursue subsequent license renewals from 60 to 80 years for the existing reactors and power upgrades that would help them obtain tax credits when it comes to new sources of clean energy that are made available under the IRA, said Lyman.

Hydrogen: uncertainty over tax credits could very well stall projects in 2024

The hydrogen industry can be in for a comparatively quiet 2024, at least when it comes to terms of project announcements as well as construction.

With the final tax credit guidance still not clear, uncertainty on which projects are going to qualify for the incentive goes on to delay decisions on which hydrogen projects are built, opined president and CEO of the Fuel Cell and Hydrogen Energy Association, Frank Wolak. Litigation can go on to further drag out the debate when it comes to guidance if leading hydrogen firms end up suing the Treasury Department due to its decision, said Wolak.

Meanwhile, the guidance stands to further delay the projects if one of the needs proposed in the draft goes on to take effect, Wolak said. The proposal from Treasury to require hydrogen producers to make use of new renewable energy or fuel resources would go on to mean that hydrogen projects will have to wait three to four years for such new resources in order to come online. Between this rule as well as the delay of the guidance itself, Wolak opined that it was likely that many projects that were slated for 2024, 2025, or even 2026 may get postponed or even cancelled completely.

2024 is also expected to bring in more detail around what the DOE’s hydrogen hubs that are selected will ultimately look like, remarked the interim executive director of the Green Hydrogen Coalition, Nick Connell. DOE is most likely to finalize the negotiation with hubs soon.

Cybersecurity: more partnerships and the execution of new initiatives

Hackers are most likely to keep up a relentless stream when it comes to cyberattacks on the U.S. electric sector this year, which means new approaches, collaboration, and funding will have to be implemented so as to keep the grid safe, according to experts.

From a policy point of view, the Biden administration has gone on to take numerous steps so as to address cybersecurity challenges in 2023, said experts. They do not anticipate any substantial shifts when it comes to policy or regulation federally, said the head of public policy and government affairs at Dragos, Katherine Ledesma.

Electrification: load growth and interconnection delays are anticipated as more vehicles and buildings go electric

Electric vehicles, along with buildings, added to utility loads in 2023, and experts opine that the trend is going to continue in 2024 as well, even as the grid may go on to struggle with growing power demands.

Load growth caused by EV adoption first began to show up in the U.S. in a pretty localized way, with individual feeders getting stressed due to a few new vehicles in a neighborhood, remarked RMI principal for carbon-free buildings, Mike Henchen. They are now starting to witness the first ways that building electrification happens to have an impact. And in a similar way, he thinks it is very local.

They have gone on to see a lot of interest when it comes to all-electric new construction, specifically driven due to building codes as well as local policies around the nation, said Henchen, but there can be some friction due to the fact that the utility may or may not have the readily available capacity so as to interconnect all electric neighborhoods.

Notably, efficiency can also play a prominent role in limiting the electricity demand on buildings, and in 2023, the U.S. went on to make significant strides when it came to appliance efficiency as well as industrial decarbonization, said the executive director of the American Council for an Energy-Efficient Economy, Steve Nadel.