The history of power production through the early part of the 21st century was very much a tale of nonrenewable energy resources. Power was produced primarily by coal, natural gas, and nuclear energy at large power plants at central locations and distributed to customers via the electrical grid.
But a revolution is underway in the world’s power markets.
The Rise of Renewables
The world’s energy mix has evolved substantially over the past 20 years. Since 1997, global cumulative installed solar photovoltaic (PV) and wind power have climbed from less than 8 GW to nearly 800 GW, according to the BP Statistical Review of World Energy. According to the International Energy Agency (IEA), renewables were responsible for almost 165 GW of new global power capacity in 2016—nearly two-thirds of the global total.
The U.S. has been a leader in this transition. According to the Federal Energy Regulatory Commission’s (FERC) “Energy Infrastructure Update” (EIU), renewable power sources accounted for half (49.9%) of the 24.6 gigawatts (GW) of new U.S. electrical generating capacity placed into service in 2017. Nearly all of the rest, 48.7%, was new natural gas capacity.
At the end of 2017, all renewables (including hydropower) accounted for more 20% of the nation’s installed generating capacity — up from 15.4% in 2021. Renewables accounted for 17.6% of total electrical generation in 2017, compared to 15.3% in 2016. The discrepancy between the 20% installed capacity and 17.6% of generation is attributable to the intermittency of renewable sources.
The Revolution Accelerates
But the first quarter of this year resulted in almost exclusively new renewable capacity. FERC’s most recent EIU showed that in the first three months of this year, renewables comprised nearly 95% of new power-generating capacity.