As environmental and sustainability considerations continue to come into alignment with utility sector investment plans and operational outlooks, renewable energy spending remains a significant part of many utility capital expenditure programs in the coming years.
We believe a number of factors will provide the impetus for ongoing electric utility renewable energy development, including falling wind and solar costs and the growing role of battery storage, state policy and renewable portfolio standards, customer demand and environmental, social and governance considerations, amid a broader trend toward utility sector decarbonization.
Based on conclusions from our most recent review of company-forecast spending plans, renewable energy capital expenditures in our coverage group are projected to reach $13.45 billion in 2019, then decline slightly to $11.82 billion in 2020 and to $9.62 billion in 2021. By comparison, 2019 and 2020 results roughly track the forecast in our spring 2019 renewable energy capex analysis, while 2021 figures are substantially higher, owing to NextEra Energy Inc.'s capex forecast unveiled at its June investor and analyst day.
Numerous utilities, including American Electric Power Co. Inc., Duke Energy Corp., Xcel Energy Inc. and Public Service Enterprise Group Inc., have outlined ambitious emissions reduction goals in conjunction with substantial planned capital investments in low- and zero-carbon emission generating projects. According to the Edison Electric Institute, more than a third of the U.S. generation mix is derived from carbon-free sources, a figure that includes nuclear generation but is also impacted by the quadrupling of wind and solar resources since 2005.
Edison Electric Institute, more than a third of the U.S. generation mix is derived from carbon-free sources, a figure that includes nuclear generation but is also impacted by the quadrupling of wind and solar resources since 2005.
Other utilities with competitive generation segments such as NextEra, Avangrid Inc. and AEP are developing and acquiring projects under long-term power purchase agreements to hedge against volatile commodities markets while delivering a predictable earnings stream.