Joe Biden has to win the 2020 presidential elections in the US for the country to have a chance for decarbonisation before 2050, but a success of the Democrat’s nominee would also bring some risks for the power sector, a new report says.
The potential Biden presidency would result in more than USD 2.2 trillion (EUR 1.86trn) of capital investments being made in renewable energy and energy storage assets through 2035, the year by which he wants the US to have eliminated carbon emissions from the power sector, according to the new research by Wood Mackenzie.
In this scenario, annual utility-scale solar demand will balloon to more than 100 GW, while battery storage capacity will exceed 400 GW. At the same time, Biden’s climate plan will bring the end of coal-fired generation.
Research director Dan Shreve explains, though, that Biden’s plan would have widespread consequences for the US power sector.
“The deployment of 1.5 TW of renewable generation in less than 15 years is a daunting task. Doing so at that scale and speed would shake up the hierarchy of the energy industry and turn the power market on its head,” Shreve comments.
The plan will require a rapid expansion of the US wind, solar and storage production segments because currently the country relies heavily on the imports of structural components and equipment for local assembly. WoodMac estimates that Biden’s plan will see US module demand surge to more than 100 GW per year, while the current local production capacity is 4.7 GW. Battery storage demand is to reach 600 GWh annually from about 46 GWh now.
Shreve went on to say that the “oil and gas sector must carefully hedge against a failure of the carbon capture, utilisation and storage market to reach commercialisation. Failure to engage now may result in surrendering market position to a burgeoning club of energy majors in a zero-carbon future,” he believes.