Introduction

As the conflict in Ukraine magnifies the role of renewables in the pursuit of energy security, the pipeline of planned U.S. power projects, at current levels, shows the U.S. is looking to expand its utility-scale renewables portfolio by 140%. Non-renewables, however, maintain an overwhelming share of overall U.S. capacity based on an extrapolation of S&P Global Market Intelligence's operating and planned capacity data.

The U.S. portfolio of utility-scale renewables — notably wind and solar — is growing rapidly, with an upside potential of 140% based on current operating and planned capacity. Although, with a share of overall capacity potentially reaching 33% under current conditions, the pace is arguably not fast enough in the context of heightened energy security concerns.

And while the deteriorating geopolitical picture has renewed a sense of urgency to develop renewables, it has also impacted the logistics to make that happen.

Combining operating and currently planned capacity across all fuels shows the share of renewables in the U.S. capacity mix potentially rising to more than 33% by the mid-2020s, up from 18.4% across the portfolio currently in operation. Furthermore, isolating plants in development shows renewables account for 68% of the overall U.S. capacity in the pipeline, even topping 90% across ten states. With 2025 being the most distant known online year for projects in various stages of development, our analysis also incorporates scheduled retirements of non-renewables plants from 2022 through 2025.

As of this writing, only one state, Iowa, operates a generating fleet with more than 50% capacity from renewables; an additional nine states make the majority-renewables cut once we incorporate planned capacity, with New Mexico leading the pack. With renewables accounting for nearly 89% of New Mexico's planned capacity, the percentage of renewables in the Desert Southwest state's portfolio is poised to rise from less than 47% to potentially more than 72%. For additional perspective, renewables in 2020 generated about 27% of the energy output in New Mexico. The state has a targeted renewable portfolio standard, or RPS, of 80% renewable energy by 2040.

With a 37 percentage-point jump, Montana, set to join the 50%-plus renewables club, displays the largest potential increase from current operations to the state's targeted renewables capacity based on the current pipeline. Renewables accounted for less than 19% of the Treasure State's capacity as of this writing. Also known as Big Sky Country, Montana benefits from abundant sun and wind and plenteous open spaces. Looking to capitalize on this environment, Montana has more than 5 GW of planned utility-scale wind and solar capacity in the works. Montana had already met its RPS when the state legislature repealed it in 2021; enacted in 2005, the RPS required Montana utilities to procure at least 15% of their supply from renewables by 2015.

Based on our analysis, Utah is to experience the largest drop in the list of states ranked by share of renewables in overall capacity, falling from the 19th spot to number 33. Though also featuring vast swaths of open land and robust wind and solar resources — Utah solar plants averaged the highest state-level solar capacity factor in 2020 — Utah operates less than 2 GW of renewables, roughly 20% of the state's overall capacity. The state currently has 11.7 GW of additional capacity in the pipeline, of which only about 19% are renewables. Including announced plant retirements in the equation, these dynamics keep the share of renewables in the Beehive State's overall capacity virtually flat. Utah has a voluntary RPS of 20% renewables by 2025. The state produced a little over 10% of its electricity via renewables in 2020.

Aside from their contributions to achieving net-zero emissions, renewables may play a critical role in hedging against the vicissitudes of global energy markets. Russia's invasion of Ukraine has renewed a sense of urgency to develop renewable energy across many Western markets, although geopolitics around the conflict may hamper efforts in that direction. China, for example, has close ties with Russia and a relatively neutral stance on the conflict in Ukraine but is a major supplier of key photovoltaic technology components and is the world's largest producer of solar panels. U.S. Secretary of State Antony Blinken on May 26, said the U.S. sees China as the "most serious long-term challenge" to the international order, highlighting the tense nature of U.S.-China relations and the two country's differences on a wide array of issues, any number of which have the potential to exacerbate supply chain issues for solar components.

Difficulties in sourcing materials for photovoltaic technology, combined with looming blackouts and brownouts, could lead to decisions dictated by the immediacy of the situation, such as delaying planned retirements of coal, gas and nuclear plants. Ameren Corp., for instance, had plans to shut down its Missouri-based coal-powered Rush Island power plant in the fall of this year. Ameren is now reconsidering the timeline. In California, meanwhile, Pacific Gas and Electric Co. said it remains open to applying for federal funding to extend the life of its San Luis Obispo County, 2.2 GW nuclear Diablo Canyon power plant. Aside from shoring up electric reliability, a May 18 S&P Global Commodity Insights analysis suggests California could reduce CO2 emissions by 10% by keeping Diablo Canyon online.

On June 6, U.S. President Joe Biden invoked the Korean War-era Defense Production Act, or DPA, to bolster domestic clean energy production capabilities. The DPA notably seeks to boost U.S. production of photovoltaic modules, building insulation and heat pumps. The DPA lifts certain import tariffs on solar panels and cells originating from Cambodia, Malaysia, Thailand and Vietnam — 85% of U.S. solar panel imports came from these four Southeast Asia nations in first-quarter 2022 — providing U.S. solar panel manufacturers with a 24-month bridge to scale up operations. In 2017, former U.S. President Donald Trump imposed tariffs on all solar panels imported into the U.S. Tariffs on solar modules produced in China remain in place.

^{Regulatory Research Associates is a group within S&P Global Commodity Insights.}

^{This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.}