Outlook 2024: US solar surge continues as planned fossil retirements slow

The US is expected to add more than 67 GW of renewable generation in 2024 as policy and economics drive an energy transition that has grid operators keyed in on clearing clogged interconnection queues.

More than 56 GW of solar generation alone is projected to come online in 2024, continuing to spur a trend of renewables domination buoyed by state regulation and federal incentives, according to an analysis of S&P Global Market Intelligence data.

Nearly 11 GW of wind generation is expected to come online in 2024, while planned energy storage additions will ramp up to 21 GW, the analysis showed.

Natural gas generation has been touted by many in the utilities industry as a "bridge fuel" for the energy transition, but the analysis shows a net gain of only 394 MW of natural gas capacity in 2024, with expected retirements only modestly outpaced by 4,028 MW of planned additions.

The 1,114-MW unit 4 at the Vogtle Nuclear Plant in Georgia is the only new nuclear capacity addition in 2024. It follows the addition of Vogtle unit 3 in July 2023, almost 17 years after project partners led by Southern Co. subsidiary Georgia Power Co. launched the expansion effort.

Overall, the analysis shows more than 93 GW of planned capacity additions in 2024.

"This year, for the first time in American history, we expect energy from wind and solar in the US to outpace coal generation," US Energy Secretary Jennifer Granholm said recently at the CERAWeek by S&P Global conference in Houston. "And by 2030, our modelers expect our electric grid will run on 80% clean energy on the path to get to 100% clean electricity by 2035."

Nearly 5 GW of fossil-fired capacity is expected to retire in 2024, less than half of last year's total, with 3,634 MW of gas and 1,035 MW of coal-fired resources expected to shut down. While US utilities have revamped resource plans to add natural gas capacity to serve surging retail load, the market for coal continues to decline with little relief in sight.

Steve Piper, director of energy research for S&P Global Commodity Insights, said he does not expect the nation's energy mix to change in the near future based on activity in recent years.

"Before Inflation Reduction Act incentives were baked in, it was still something like 95% green energy and batteries [in interconnection queues]," Piper said in a March 13 interview. "You can't get much higher than 95%, but it is probably going to be anyway."

The challenges and opportunities presented by the energy transition are evident in the PJM Interconnection LLC, the nation's largest grid operator that serves 13 mid-Atlantic states and the District of Columbia.

A rapid surge in renewables, an uptick in fossil generation retirements and unprecedented electricity demand has prompted PJM to warn about "increasing reliability risks" through the end of this decade.

In its annual regional transmission expansion plan released March 7, PJM said solar "has overtaken natural gas" in its new services requests. Solar made up about 40% of the generation in PJM's interconnection queue as of the end of 2023.

The queue also has 54 GW of planned storage projects, a significant increase from 2022, and about 22 GW of wind capacity seeking interconnection to the grid. PJM said it received deactivation notifications for 31 units representing about 5.8 GW in 2023.

"The case for baseload has been seriously undermined," Piper said. "I mean there's too much renewables on the grid right now and there is only more and more coming."

"The folks who would build a combined-cycle plant would have to literally [build] H-Series turbines sitting on top of a Marcellus well," Piper said. "And the projects that we're tracking that are like that today still don't look that great. They run a lot, but they're not earning enough."

Solar is king

Of the 56 GW of solar capacity expected to come online in 2024, about 9 GW is expected in PJM.

In a more-detailed look at capacity additions and retirements by independent system operators (ISOs), the analysis shows about 10 GW of planned additions in PJM in 2024 and just 80 MW of retirements, the latter all from wind generation.

The Electric Reliability Council of Texas Inc. has more than 27 GW of new resources slated to come online in 2024, including more than 16 GW of planned solar capacity. Almost 8 GW of energy storage, more than 2 GW of wind resources and 790 MW of natural gas generation make up the bulk of the remaining planned capacity additions.

The California ISO is forecast to add more than 12 GW of capacity, including nearly 5 GW of solar and about 7 GW of energy storage.

In the Midcontinent ISO, more than 12 GW of capacity is set to enter service, while 1,368 MW of fossil fuel generation will retire.

MISO still seems "a little out over their skis to us" when it comes to how much generation is retiring in the region versus how much new capacity is coming in, Piper said.

"There has been some sort of management of that by kind of deferring some retirements and stuff like that, but they still look short to us and it feels like they need to bring more stuff through their queues," Piper said.

The ISO New England region is projected to add just over 2 GW of capacity, offset by 1,692 MW of natural gas retirements.

The New York ISO region is expected to add 2,044 MW of capacity in 2024.

About 2 GW of renewable capacity additions are expected in the regional grid operated by the Southwest Power Pool, with 788 MW of natural gas expected online.

The analysis shows about 25 GW of capacity additions and 2 GW of retirements are forecast outside of an ISO or RTO, areas that include much of the Southeast and the West outside of California. This planned capacity is highlighted by more than 14 GW of solar projects, followed by more than 4 GW of energy storage, 2 GW of wind and 2 GW of gas.