Reports: US renewables installations dip, EU off track to meet clean energy addition goals

Skills bottlenecks, supply chain issues and policy uncertainty all present challenges meeting goals

The first report, from the trade association America Clean Power, is the organisation’s quarterly tracker for the renewable energy market in the US. It reveals a drop-off in installations, year-on-year and quarter-on-quarter, attributing this trend to supply chain challenges and repeated delaying and weakening of President Joe Biden’s multi-billion-dollar climate package.

According to the report, there was a 55% decline in solar and wind installations in the second quarter of 2022 compared to the second quarter of 2021, on a capacity basis. The report names the quarter as the worst for installations since pre-Covid-19.

The drop-off in onshore wind installations was steeper than for solar and offshore wind, the report reveals, noting a 78% year-on-year fall. It states that this sub-sector has been the hardest hit by supply chain issues and that installers still want more clarity on connecting to the power grid to time.

America Clean Power is attributing the decline in installations of all technologies to a mixture of “congressional inaction and uncertainty on long-term tax policy, tariff and trade restrictions, and transmission constraints”.

Regarding action by congress, Biden has been pushing to pass a climate legislation package since his election at the end of 2020, with the overarching aim of halving the US’s emissions this decade. The package includes billions of dollars of grant funding and tax support for sectors such as renewable energy generation, low-carbon heat, energy-efficient buildings and electric transport, but has repeatedly been thwarted by Republicans and by rebel Democrats with fossil fuel interests, with West Virginia Senator Joe Manchin framed as the leader of this faction.

Biden stated last week that congress is “not acting as it should” regarding the package. It has been blocked repeatedly despite negotiations which have resulted in the weakening of some clauses and the decrease of its overall funding commitment. Congress has also been watering down plans for international climate finance and stripping the Environmental Protection Agency of some of its powers to ask fossil fuel companies and other heavy emitters to cut their impact.

On tariffs and trade respectively, Biden stated last month that it would waive tariffs for two years on solar panels from four Southeast Asian countries in a drive to increase installations. This means many installers are waiting for the cut before acting.

The America Clean Power report did reveal some silver linings. It revealed a 13% year-on-year increase in energy storage installations, for example. It also states that clean energy value chains now support some 110,000 jobs across the US.

But, overall, the body is disappointed. It is also warning that supply chain disruption is likely to continue and that Manchin and other like-minded policymakers will likely continue to push for watering down climate regulation and legislation.

“We have been warning about the storm of policy and economic headwinds the clean power industry is facing, and this is a step in the wrong direction,” said America Clean Power’s chief executive Heather Zichal, adding that the early 2020s are “a time when we need to be rapidly scaling up development”.

EU picture

On the other side of the Atlantic, think-tank Ember has published a new analysis looking at the EU’s updated renewable energy deployment goals and assessing whether they are likely to be met and whether they are aligned with the Paris Agreement.

The bloc moved in May to increase several key renewable energy targets for 2030 in the face of the energy price crisis and in line with its plan to end Russian energy imports by 2027. While the move was broadly welcomed, it was pointed out that the EU was already off-track to delivering existing, less ambitious deployment goals.

Ember’s analysis concludes that the gap between targets and projected levels of installation is the widest in the wind sector. It states that only four of the EU 27 – namely Finland, Sweden, Lithuania and Croatia – are likely to deliver the required installations. Nations making particularly slow progress include Poland, France, Spain and the Netherlands.

It also points out that, while the targets proposed are significantly increased, they are still not aligned with the Paris Agreement’s 1.5C trajectory. Climate scientists have warned that warming beyond this point will leave far more of the global population far more exposed to the worst physical impacts of the climate crisis, with risks likely to cascade more rapidly.

Ember forecasts that the EU is likely to add 38GW of new renewable generation capacity annually between 2022 and 2026, based on the fact that it added 34GW in 2021. It claims that a 1.5C-aligned level of deployment would be 76GW annually by 2026.

Several factors are named by Ember as continuing challenges to installation. These include regulations that deter private investment; a lack of regular and predictable public funding; long permitting times; and slow progress in upgrading the grid.

As in the US, supply chain challenges are also noted. Ember has also heard evidence of a “critical skills shortage”, particularly in the solar space, and is urging the EU to set out a joined-up plan to overcome this issue. It notes that the upcoming revision of the Renewable Energy Directive could go further to help solve some of these challenges.

Ember’s climate data analyst Harriet Fox said: “Europe no longer lacks renewables ambition, but it is now facing an implementation gap. Higher targets have not yet translated into accelerated deployment on the ground. Europe needs to urgently buckle down on removing permitting barriers to unleash the full potential of renewables.”

WindEurope’s chief policy officer Pierre Tardieu added: “With tough winters ahead, speeding up the deployment of home-grown energy is not optional. It’s indispensable.”