The energy transition took off in 2024, with a major caveat
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Renewable power, efficiency and natural gas made significant gains in the U.S. power sector last year, setting several records, a new report finds.
Why it matters: The annual "Sustainable Energy in America Factbook" tells a story in which renewables, energy efficiency and natural gas are poised to grow in importance in the coming years.
- It also identifies which sources struggled to gain traction last year, pointing to onshore and offshore wind, hydrogen projects and carbon capture and storage.
The big picture: There are clear signs that power demand is already surging, the report from the Business Council for Sustainable Energy and BloombergNEF states.
- That's due to a combination of electricity needs from AI-related data centers, industrial facilities and the electrification of homes and businesses.
By the numbers: Renewable energy sources rose at the fastest pace among all other power sources last year, to make up 24% of the U.S. power generation mix.
- Coal slid to its lowest share of power generation on record, at 14.7%.
- Solar and energy storage constituted two-thirds of the new capacity applying to connect to the electricity grid last year, the report found.
- Energy storage overall saw a significant increase — up 55% compared to the previous year, with an addition of 11.9 gigawatts.
- The report also notes a boost in power purchase agreements, in which companies pay to bring more renewable power onto the electricity grid.
A total of 183 deals for clean power were signed last year, about twice the total from 2023.
- Many of these were initiated by technology companies trying to manage their increasing data center energy footprint.
- One trend observed was a transition away from wind and solar, and toward nuclear plant investments.
Yes, but: While the U.S. deployed $338 billion in energy technology financing in 2024 — an increase of $35 billion from the previous year — the country still lags well behind China in its investment.
- China spent about 4.4% of its GDP on the energy transition, including renewables, whereas the U.S. spent just 1.3% of its GDP in 2024, the report states.
- China has the largest installed base of long-duration energy storage, whereas the U.S. is in fourth place globally.
Zoom out: "We are on the cusp of an American energy expansion," BCSE president Lisa Jacobson said in a statement.
- The report echoes similar analyses pointing to rapidly growing electricity demand in the U.S., and the likelihood that renewables plus natural gas, which is a fossil fuel, will be the biggest winners in supplying such power.
- It also includes a warning that slow approvals of bringing new power projects onto the grid could limit the expansion of energy generation in the U.S.
What we're watching: How significantly the Trump administration's actions to roll back clean energy and climate policies in favor of fossil fuels will alter the trajectory of renewable energy growth.
