Update to Members on CEBA’s Support for Clean Firm Energy Additions
By Rich Powell
This has been an eventful year for the Clean Energy Buyers Association, and together we are playing a crucial role in advancing low-cost, reliable, carbon emissions-free global electricity systems. Market demand for clean energy remains strong: commercial and industrial customers, many of them CEBA members, in 2024 surpassed a landmark 100 gigawatts (GW) of clean energy procurement since 2014. Energy customers announced 21.7 GW in voluntary procurement deals last year alone, making 2024 the highest year to date, according to CEBA’s 2024 Deal Tracker. Yet it’s clear we will need even more carbon emissions-free electricity in the years ahead to meet rising demand and enable economic growth in the United States and around the globe.
A Wood Mackenzie report released this past January by CEBA found large companies are set to drive an unprecedented demand for at least 275 gigawatts (GW) of carbon emissions-free energy by 2035 from both new and existing electricity load. All of this means we’re at a moment of incredible opportunity. We need much more electricity to enable economic growth.
This demand growth is being driven by the industries and areas of economic expansion of the future: vehicle and building electrification, reshoring and onshoring of manufacturing, data centers, and clean energy manufacturing. With significant load growth forecasted to occur across the United States during the next five years, CEBA members are bringing innovative solutions to meet that electricity demand with clean and firm energy.
CEBA in March co-sponsored a U.S. National Power Demand Study, conducted by S&P Global Commodity Insights and commissioned by the American Clean Power Association, that found U.S. electricity demand is projected to surge 35-50% by 2040, driven by domestic manufacturing growth, data centers, and mass electrification. The study noted that all-of-the-above solutions such as solar and wind energy, energy storage, natural gas, and nuclear generation will play critical roles in meeting that increased demand, strengthening our grid reliability, and fueling economic opportunity across the country.
Globally, nuclear power can play an important role in supplying continuous energy to support successful and cost-competitive operations for energy users. CEBA in March signed a World Nuclear Association pledge supporting the goal of at least tripling global nuclear capacity by 2050.
Grid Strategies in December 2023 published a report on load growth across the United States that found from 2022 to 2023, grid planners nearly doubled the five-year load growth forecast. Princeton University’s Net-Zero America final report shows our generation needs to double or quadruple by 2050, and clean electricity is a linchpin for that growth. The report forecasts that low- or zero-carbon electricity would need to reach 70-85 percent by 2030 and hits 98-100 by 2050. The report notes that to ensure reliability, up to 1,000 GW of firm generating capacity through all years will be needed, with gas plants burning hydrogen blends, and when solar and wind expansion are constrained, natural gas plants with carbon capture and nuclear plants will need to expand to pick up the slack.
Regarding global scenarios, the Intergovernmental Panel on Climate Change has modeled that carbon emissions-free generation sources such as nuclear and fossil fuels with carbon capture — in concert with solar, wind, hydro, and geothermal resources — will constitute a significant portion of a carbon emissions-free energy system. A very broad suite of carbon emissions-free technologies will be needed to fully decarbonize a MUCH larger grid.
CEBA members are leading that transition. Of the 21.7 GW procured last year, solar energy comprised 73 percent of capacity, followed by wind at 11 percent, and battery storage increased to 7.7 percent of capacity contracted in the last year. Nuclear energy procurement accounted for 1.5 GW, constituting 6.7 percent of capacity announced, and a 115-megawatt geothermal transaction (0.5 percent of contracted capacity last year) also signaled energy customers’ increasing interest in clean, firm generation resources.
CEBA aims to create the largest collective of energy customers and partners to achieve our vision of customer-driven clean energy for all, and CEBA does not advise on inclusion or exclusion of technologies or strategies toward individual company solution sets. We continue to take a tech-neutral, tech-inclusive approach to our work, as we have always done, and our members have always had a very broad range of perspectives on which carbon emissions-free technologies make the most sense for their unique situations.
Permitting reform, as well as technologies to increase the efficiency of our existing transmission system, including reconductoring, will play crucial roles in meeting electricity demand growth. It’s also imperative to preserve the federal technology-neutral energy tax credits. As a February study for CEBA by NERA Economic Consulting noted, preserving the tax credits would put downward pressure on electricity price inflation, keeping electric bills lower for U.S. households and businesses.
CEBA will continue advocate for policies that will help our members achieve their procurement goals, and we will continue to help our members understand the pros and cons of various solutions and learn from one another. We look forward to seeing you this week, May 6-8, at CEBA Connect: Spring Summit, where we will continue our conversations around emerging trends and key updates as we forge ahead on the path toward solving the energy market’s greatest challenges.
