For the first time ever, power capacity from clean energy sources comprised 40.6% of the US electricity mix in 2022 — with nuclear being regarded as a zero-carbon energy source.
1. Electricity generation
The US has made significant progress in recent years in expanding its use of clean energy sources for electricity generation. According to the new energy market and policy trends report entitled 2023 Sustainable Energy in America Factbook, clean energy sources include the typical renewables such as solar, wind, geothermal and hydropower, but also nuclear, which is regarded as a zero-carbon energy source since it doesn’t emit greenhouse gases.
The US economy is primed for clean, sustainable growth that will reduce emissions and increase employment opportunities while ensuring that we have the sustainable energy we need to continue growing the economy.Lisa Jacobsen, President of the Business Council for Sustainable Energy (BSCE)
2. Energy sources
In 2022, zero-carbon power accounted for an all-time high of almost 41% of all output, meaning that the contribution of renewables rose at the fastest pace among major sectors, the report highlights. Moreover, renewable power saw an increase of 12.6% year-on-year rise while natural gas remained the biggest source of electricity in the country, contributing a record-breaking 39.4% of the total, up from 6.5% the year before.
Coal-fired generation, a major source of greenhouse gas emissions, fell to 19.4% and nuclear generation contributed 18%. Indeed, on March 28, the US Energy Information Administration announced that electricity generated from renewables surpassed coal for the first time in 2022.
This booming growth [electricity powered by renewables] is driven largely by economics.Gregory Wetstone, President and CEO of the American Council on Renewable Energy
“Over the past decade, the levelized cost of wind energy declined by 70%, while the levelized cost of solar power has declined by an even more impressive 90%. Renewable energy is now the most affordable source of new electricity in much of the country,” said Gregory Wetstone.
The BSCE report attributes the 22.7% growth of renewables in the US, in 2022, to the surge in output from wind and solar as well as growth in hydro production. However, factors like higher costs and supply chain issues meant less wind and solar energy generating capacity was added to the US grid: 32 GW in 2022 versus 37GW in 2021.
The report notes, however, that electricity consumers in North Dakota, Wyoming, South Dakota, Nebraska, Michigan, Montana, Washington and Oregon all benefited from rate changes that were substantially below inflation, bucking the national trend. These states are mostly in regions with high levels of wind capacity and exposure to Canadian gas prices, which were substantially below US benchmarks in 2022.
3. EV boom
Increasing fuel prices in the US encouraged Americans to invest in electric vehicles (EVs). According to the report, sales of EVs and fuel cell vehicles (FCVs) rose by 50% to around 982,000 units, representing 7.1% of all vehicle sales in the US in 2022.
“Battery electric vehicles made up 81% of 2022 sales, with plug-in hybrid electric vehicles making up the remaining 19% and FCVs accounting for well less than 1% of sales,” the report’s authors say.
One of the key factors encouraging people to make ownership of EVs was the recently passed Inflation Reduction Act (IRA), the report says. The price at which EVs qualify for tax credits has been capped under this bill, helping manufacturers keep prices down even as battery costs have increased.
4. Record investment
The energy transition is a rapidly growing sector, and there are many investment opportunities available. According to the BSCE report, more than $1 trillion was invested privately into the global energy transition in 2022, which “shattered records”.
The US attracted $141 billion in energy transition financing clean energy technologies, including renewables, electric vehicles and others — an 11% increase compared to 2021. More precisely, over 40% ($57.3 billion) of this investment went into electrified transport, and $49.5 million was channeled to the renewable energy sector. At least $369 billions of government funds are also due to be invested through the IRA.
“The record levels of private-sector investment in both the US and around the world in 2022 point to the durability of the energy transition, even when faced with inflationary and supply chain pressures. Corporate demand, coupled with a historic public sector injection of capital into US infrastructure, is sure to exponentially expand the reach of the clean energy transition,” the report says.