BNEF Factbook Sees American Trend Towards Sustainability Continue

Bloomberg New Energy Finance has released its third annual “Sustainable Energy in America Factbook,” which shows that the United States saw continued growth throughout the renewable energy, natural gas, and energy efficiency sectors throughout 2014. Additionally, US deployment of sustainable energy increased over the year, as prices fell and investment in clean energy increased.

“For the last three years, the Sustainable Energy in America Factbook has documented the revolution transforming how the US produces, delivers, and consumes energy,” wrote this year’s authors, concluding that in 2014, “that revolution continued, and the long-term implications of these changes are coming into sharp focus.”

The Factbook is compiled by Bloomberg and commissioned by the Business Council for Sustainable Energy in an effort to “offer simple, accurate benchmarks on the status and contributions of new sustainable energy technologies.”

Ethan Zindler and Michel De Capua, both from BNEF, sat down to discuss this year’s Factbook:

BNEF & BCSE – Sustainable Energy in America: Factbook Interview from Bloomberg New Energy Finance on Vimeo.

The key facts from this year’s Factbook cover energy generation, energy productivity, and total US investment:

• Natural gas and renewable energy generated more than 40% of U.S. electricity in 2014 and are the source of 93% of new power capacity built in the country since 2000.
• The energy productivity of the U.S. economy increased 11% from 2007 to 2014, as GDP grew 8% and total energy use fell 2.4%.
• Total U.S. investment in clean energy topped $51.8 billion in 2014, the second highest level in the world.

“The 2015 Factbook clearly shows that America is on the path to a more sustainable energy sector,” said Lisa Jacobson, President of the Business Council for Sustainable Energy.

“Our energy productivity is rising along with economic growth, while energy-intensive industries are onshoring production to the United States to take advantage of low energy costs. All of this is happening as investment in clean energy continues to grow and as new natural gas infrastructure continues to come online. These are strong positive signs for America’s economy and environment.”

Bloomberg New Energy Finance also produced the following infographic based on information provided within the Factbook:

The full Factbook is available free here, however, as always there are some interesting highlights worth drawing out for further discussion.

Possibly the most interesting and relevant conclusion from the Factbook as a whole was how “the Factbook evidence brings into focus one unmistakable theme: the broader US ecosystem is clearly preparing for a future in which sustainable sources of energy play a much larger role.”

This has been seen over and over again by the number of investments being made into clean energy throughout the United States — not to mention globally by US-based companies. I took a look back over 2014’s investment stories that I covered, and the mammoth size of the piece is representative of the number of investments which peppered the industry throughout the year. From small-scale acquisitions like Google’s acquisition of smart thermostat company Nest in January, to $55 billion worth of investments in the third quarter of 2014 alone (according to BNEF figures).

BNEF cite several 2014 developments that act as evidence for their “unmistakable theme.”

First, and foremost, was the fact that new and critical policies were introduced that, according to BNEF, “hinge on the promise of sustainable energy technologies.” Of these policies, BNEF highlight the new power sector regulation and bilateral climate pact with China, however there were several other policies as well, including New York State’s plan to overhaul its regulation of the energy industry to better accommodate more flexible and cleaner sources of energy.

Another piece of evidence for 2014’s preparation was the number of industries with significant energy-related costs exposure migrating to the US as a base of operations.

Major new infrastructure projects also advanced to accommodate the growing number of clean energy projects, including major expansions of natural gas pipelines and deployments of smart grid technologies. And thankfully, “more capital flowed to financial vehicles specifically aimed at sustainable development.” BNEF includes in this list yieldcos and green bonds, both of which they hope “should pave the way toward raising huge sums of capital needed for the sustainable energy future to come to fruition.”

“Against the backdrop of a surging economy and crumbling oil prices, major trends around decarbonization and improving energy productivity continued in the United States,” said Michel Di Capua, head of Americas research for Bloomberg New Energy Finance. “Low-carbon energy technologies stand to benefit from key policies proposed in 2014, including the U.S. Environmental Protection Agency’s (EPA’s) proposed regulation for the power sector and an innovative new vision for the electricity market in New York State.”

The Factbook also highlighted the increase in renewable energy and energy efficiency, as measured across several metrics:

• Renewables represent 205 gigawatts (GW) of installed capacity across the country — specifically, wind and solar more than tripled since 2008, while hydropower remains the largest renewable energy source, sitting at a whopping 79 GW.
• Wind and solar reaching grid parity in multiple regions — wind developers secured power purchase agreements with utilities below the levelized cost of electricity for fossil-fired power, while utility-scale solar scored power purchase agreements at some of the lowest prices ever recorded.
• The Pacific and New England regions made the greatest strides in energy efficiency, while the Southeast and Southwest regions have the greatest opportunity to increase efficiency.