Clean power installations set a Q3 record even as the sector faces headwinds
Energize Weekly, November 8, 2023
New clean power utility-scale installations set a record in the third quarter of 2023, bringing online 5.6 gigawatts (GW) of generation and storage capacity, even as the sector was coping with troubling trends.
The installations marked a 13 percent increase over the same quarter in 2022 making it the strongest third quarter ever recorded. Solar projects accounted for more than half the total.
Battery storage for the quarter surged 63 percent year-over-year with 2,142 megawatts (MW) installed in 30 projects, and solar installations were up 31 percent with 3,121 MW coming online at 56 projects.
“The amount of battery storage capacity under development has soared over the past two years,” according to the quarterly market report by the American Clean Power Association (ACPA), a trade group. “At the end of Q3, the battery storage pipeline has expanded by 50 percent year-over-year, and has grown by an average of 10 percent each quarter.”
There were 855 solar projects, with 84,646 MW, in the development pipeline at the end of the third quarter, down 1 percent from the second quarter, but up 8 percent year-over-year. Solar accounted for 60 percent of all the clean power projects in development.
The largest solar project to come online was the 265-MW Dunns Bridge Solar I project in Indiana, developed by NextEra Energy Resources and owned by the Northern Indiana Public Service Company.
NextEra’s 325-MW Desert Peak Energy Storage project, in Palm Springs, Calif., was the largest stand-alone battery storage project to come online this quarter.
The largest hybrid solar-storage project was Intersect Power’s Oberon I Solar and Storage project, in Riverside County, Calif., with 250 MW of solar and 125 MW of battery storage.
Even with the strong performance of storage and solar in the third quarter, a sharp drop in onshore wind installations and weak first and second quarters, still leave installations for the year down 6 percent compared with 2022.
Land-based wind installations dropped 77 percent year-over-year, with only two projects added to the grid, totaling 288 MW of capacity. It was the slowest quarter for installations since 2013.
In addition, an increasing number of project delays led to installations lagging projections for 2023.
An estimated 16.6 GW of projects scheduled for commercial operation in the third quarter were delayed, and only half are expected to come online by the end of the year. Overall, 56 GW of projects are experiencing delays.
Two-fifths of those projects have suffered multiple delays, in some cases as many as five times, with the average 14-month delay from expected start dates.
There was also a slowdown in the third quarter in power purchase agreements (PPAs), with 3,175 MW of PPAs announced, a 55 percent decline compared to the third quarter of 2022.
“The slowdown was driven by a drop in announcements from corporate and industrial buyers, continuing a year-long trend, while activity from utility buyers increased slightly in the third quarter,” the ACPA market report said.
At the end of the quarter, there were 760 projects, 8.6 GW, across 48 states in advanced development – projects not under construction but with PPAs, firm equipment orders or plans to be placed under utility ownership. Only Washington and Alaska did not have projects.
California was top, for the second quarter in a row, with 1,900 MW of solar and battery storage installations added to the grid in the third quarter.
Texas followed in second place with 949 MW of clean power commissioned for the third quarter. Arizona was third with 516 MW of clean power installed.
Cumulatively, operating clean power capacity in the U.S. reached 243 GW in the third quarter of 2023, enough to power 65 million American homes.
“Even as we face a number of near-term challenges, these record-breaking numbers tell us that the U.S. clean energy sector continues to grow on a healthy, long-term trajectory,” Jason Grumet, CEO of the ACPA, said in a statement.
