Energy Transition, Electric Power, Renewables
December 27, 2024
COMMODITIES 2025: US renewables growth to surge as fossil plant retirements tick up
HIGHLIGHTS
Solar additions to jump 60% in 2025
Coal, gas retirements below 10-year averages
This is part of the COMMODITIES 2025 series where our reporters bring you key themes that will drive commodities markets in 2025.
The US is poised to add a record-setting amount of solar-powered capacity in 2025, but planned retirements of coal- and gas-fired generation next year will remain below the 10-year average as the power industry continues to grapple with surging demand from data centers and manufacturers.
S&P Global Market Intelligence data shows that more than 63 GW of solar capacity is expected to come online in 2025, about 60% more than the nearly 39.6 GW of total new solar capacity forecast to have come online in 2024. Should all of this anticipated new capacity come online, the US would end 2025 with about 200 GW of net solar capacity, 46% more than 137.3 GW of total net solar capacity at the end of this year.
At the other end of the US energy transition, however, is a rate of coal- and gas-fired generation retirements that is anticipated to rebound from this year's glacial pace but still fall short of the annual average of retirements recorded from 2015-2024.
MISO, PJM lead ISOs on fossil retirements
About 6.4 GW of coal-fired capacity and 4.1 GW of gas-fired capacity have been announced or approved for retirement in 2025, according to Market Intelligence data compiled Dec. 12. Both figures are above the roughly 4 GW of coal generation and 3.2 GW of gas generation retired by power companies in 2024, but below the averages of 9.9 GW of coal capacity and 4.7 GW of gas capacity retired in the last 10 years, respectively.
Among independent system operators, the following coal-fired capacity retirements have been announced or approved for 2025:
- Midcontinent Independent System Operator: 2.7 GW
- Non-ISOs: 1.9 GW
- California Independent System Operator: 1.8 GW (plant located in Utah)
The following gas-fired capacity retirements have been announced or approved for 2025:
- PJM Interconnection: 2.5 GW
- Non-ISOs: 1 GW
- New York Independent System Operator: 367 MW
- MISO: 239 MW
- Southwest Power Pool: 32 MW
| 10 largest anticipated fossil-fired plant retirements for 2025 | |||||
| Plant | Primary Fuel | Total operating capacity (MW) | Location | ISO served | Planned retirement |
| Intermountain | Coal | 1,800 | Delta, UT | CAISO | Q3 |
| Elwood Energy | Gas | 1,728 | Elwood, IL | PJM | Q2 |
| J.H. Campbell | Coal | 1,405 | West Olive, MI | MISO | Q2 |
| Johnsonville CT | Gas | 1,000 | New Johnsonville, TN | Non-ISO | Q3 |
| Eddystone 3-4 | Gas | 760 | Eddystone, PA | PJM | Q2 |
| Sherburne County Plant (Sherco) | Coal | 680 | Becker, MN | MISO | Q4 |
| Centralia | Coal | 670 | Centralia, WA | Non-ISO | Q4 |
| South Oak Creek | Coal | 623 | Oak Creek, WI | MISO | Q2 |
| Stanton Energy Center | Coal | 453 | Orlando, FL | Non-ISO | Q4 |
| Craig (Yampa) | Coal | 427 | Craig, CO | Non-ISO | Q4 |
Should all this capacity come offline as planned, the US would end 2025 with 552 GW of net gas-fired capacity and 168.8 GW of net coal-fired capacity. That would amount to a 3.6% drop in coal-fired capacity over 2024 but a 0.6% increase in gas-fired capacity, which is reflected in the nearly 7.2 GW of announced or approved gas capacity additions for 2025 surpassing the planned gas retirements.
The following gas-fired capacity additions have been announced or approved for 2025:
- Non-ISOs: 2.8 GW
- MISO: 1.7 GW
- CAISO: 840 MW (plant located in Utah)
- PJM: 742 MW
- SPP: 609 MW
- Electric Reliability Council of Texas: 434 MW
- NYISO: 3 MW
| 10 largest anticipated fossil-fired plant additions for 2025 | |||||
| Plant | Primary Fuel | Total operating capacity (MW) | Location | ISO served | Planned in-service |
| Intermountain CC | Gas | 840 | Delta, UT | CAISO | Q3 |
| St. Joseph Energy Center | Gas | 736 | New Carlisle, IN | PJM | Q2 |
| Magnolia Power Generating Station | Gas | 730 | Plaquemine, LA | MISO | Q2 |
| Barry CC | Gas | 726 | Axis, AL | Non-ISO | Q4 |
| Johnsonville CT | Gas | 550 | New Johnsonville, TN | Non-ISO | Q3 |
| Caledonia Power Facility | Gas | 500 | Caledonia, MS | Non-ISO | NA |
| Pioneer Generating Station | Gas | 470 | Williston, ND | SPP | Q2, Q3 |
| A.B. Brown CT | Gas | 460 | Evansville, IN | MISO | Q2 |
| Coyote Clean Power Project | Gas | 300 | Hesperus, CO | Non-ISO | NA |
| Broadwing Clean Energy Complex | Gas | 280 | Decatur, IL | MISO | NA |
| Note: NA means the specific quarter for plant in-service cannot be determined. |
Eric Smith, Tulane Energy Institute associate director, said increased demand brought on by data centers and electric vehicle factories will keep more fossil fuel-fired plants online longer.
"There are no new coal plants under consideration, but there certainly are competing uses for the installed infrastructure that connects those plants to their fuel source as well as to the grid," Smith said. "So, new demand for electricity in the form of EVs and AI [artificial intelligence] should maintain pressure on the older coal plants. As for gas plants, the opposite is in the cards. If we believe the consensus forecasts for chronic shortfalls of load following power capacity, it makes sense that retirements of existing load following natural gas capacity would be delayed."
Gürcan Gülen, senior fellow at the United States Association for Energy Economics, added: "The big news nowadays is the energy needs of data/AI centers. This alone would delay retirements."
Renewable surge
On the renewable side, the US is poised to see broad-based gains in capacity across resource types other than solar.
Wind-powered capacity is anticipated to rise by 15.7 GW in 2025, 73% more than the 9.1 GW expected to have come online this year, according to Market Intelligence data. Market Intelligence, however, cautions that some of the large solar and wind power plants showing in its data as coming online in 2025 could take longer to complete and may end up having their in-service dates being pushed into the following year.
Energy storage capacity additions in the US are expected to triple, jumping from 14.5 GW in 2024 to nearly 44 GW coming online in 2025, according to Market Intelligence data.
Clean energy advocates said the surge in energy storage capacity will have a significant impact on renewable energy growth in 2025.
"That will be a tremendous benefit since energy storage supports the use of more renewable energy and keeps the lights on during extreme weather and times of grid stress," said Johanna Neumann, senior director of nonprofit Environment America Research & Policy Center's Campaign for 100% Renewable Energy. "As adoption of wind, solar and complementary technologies like energy storage has grown, the technology has continued to improve, the industry has become more efficient and costs have come down, driving even greater adoption."
Among ISOs, ERCOT is expected to lead the way in solar capacity (20.7 GW) and energy storage (17.6 GW) additions for 2025, according to Market Intelligence data. MISO is expected to add the second-most solar capacity at 8.7 GW, and CAISO is anticipated to add the second-most energy storage capacity at 12 GW. Southwest Power Pool is anticipated to have the most wind capacity additions at 5 GW, and ERCOT is expected to be the runner-up with 3.2 GW.
This will likely hearten clean energy proponents who fear that the energy transition could be harmed by the incoming Trump administration, which is expected to pursue an undoing of parts of the 2022 Inflation Reduction Act that pumped billions of dollars of investments into boosting renewable energy.
"Growth in renewables across the various RTO/ISOs should continue due to public policy mandates as well as negative and zero offer curves for renewables," said Campbell Faulkner, senior vice president at OTC Global Holdings, an interdealer commodity broker. "Overall, the trends continue to favor ERCOT as the leader for additional renewables build largely as an outgrowth of the interconnection queue process which enables capacity additions without a years-long planning wait."