The Four Major Changes Coming in Clean Energy in 2023
Updated: Feb 6
Every year we expect to see changes made to advance clean energy, but what should we expect heading into 2023?
Based on our sources, there are four major sectors that will see advancements and growth.
From electric vehicles, to legislature, to wind farms, renewable energy should see continue to see that year over year growth that it has seen over the last decade.
Offshore Wind Farms
There are currently two offshore wind farms that are operating today. One of them is located in Rhode Island and the other in Virginia. Together they produce about 42 megawatts of energy, which can power anywhere from 400-1000 homes yearly. In the grand scheme of things, that's a fairly small area that they're being used to power. While we literally have to start somewhere, these two wind farms are just scratching the surface.
By the end of 2023, it is expected that there be a new generation of large-scale, offshore wind farms in both Massachusetts and New York. In total, there are 18 projects in the United States's offshore pipeline that have reached the permitting phase, this time combining for closer to 5,400 megawatts of power. There should be more to come of these projects in the following years.
The challenges surrounding this come in the form of inflation and costs. Equipment and labor costs are nearing an all time high. Commonwealth Wind, the developer of a 1,232-megawatt project located off the coast of Massachusetts has began attempting to renegotiate contracts with state governments to help cover these higher costs. So far, they aren't seeing much of a budge.
Chelsea Jean-Michel, an analyst for BloombergNEF, spoke on the challenges and hopefulness of 2023:
"Perhaps a good way to categorize the current state of the U.S. offshore wind market is that it is in its pre-teen years... While construction for early-stage projects is underway, seabed lease auction activity has been soaring, and more project approvals are imminent, the country still has only seven turbines spinning off its coasts. Prospects for the sector are high, but rising costs have hit some projects and there may be further growing pains as the U.S. scales up its domestic supply chain and realizes its first big projects.”
All in all, this push will help offshore and coastal locations generate green power.
Electric vehicles have faced many challenges through the years, but this year is looking up.
Last year 576,408 electric vehicles were sold in the first three quarters. However, they faced many issues due to the challenges of obtaining parts.
It is expected that over 1 million electric vehicles will be sold this year, according to analysts for Cox Automotive. They said:
The battery-electric vehicle market continues to outpace the overall market in sales, and a new milestone is on the horizon: 1 million EVs sold in the U.S. in 2023.
This should be easily obtainable, between the ability for automakers to get the parts needed to produce vehicles efficiently and the desire for the new models that are coming out this year. Across all EV manufacturers, it's being estimated that about 30 or so new models are going to debut.
In 2022, the Ford F-150 Lightning pickup performed exceptionally well in the market, so much so that supply couldn't meet demand. A competitor in Ram has noticed this, and is stepping up to the plate with an electric version of its 1500. This however, won't be on the road until 2024.
The EV market becoming truck heavy is actually a wonderful, unforeseen advancement. Trucks are the more power hungry vehicles as compared to sedans, so the rapid growth in that market is a plus.
The "M States" Set to Make Changes
This grouping of power is known to push major clean energy and climate change legislation. We can expect substantial action right away. Democrats have taken over in the governor's office and will work eagerly with Democratic majorities to move their agendas. The legislative leaders will also continue to push for actions that they couldn't get passed under Republican leadership.
The narrow majorities in Democratic legislature in Minnesota and Michigan have the potential to slow down major clean energy and climate change legislation. It will take these chambers some time to figure out what they will be able to get passed.
In Massachusetts and Maryland, we can expect to see quick advances in clean energy and climate change legislation. In Minnesota and Michigan it might take some time, but things are hopeful.
Challenges of the Inflation Reduction Act (IRA)
The Inflation Reduction Act barley passed at the end of 2022 after making it through a long period of time where it looked like it would never pass. The new question is: will the new law live up to its promises?
The Inflation Reduction Act puts $370 billion in incentives and tax credits in place for renewable energy and electric vehicles. This act also includes money and policies to encourage companies to produce clean energy components throughout the United States.
However, for that money to be spent, federal agencies need to take additional actions to allow the spending, and rules need to be finalized. It is going to be a challenge as Republicans have gained a narrow majority in the house to go along with the Democrats' control of the executive branch and the Senate.
Executive vice president of policy and programs for the American Council on Renewable Energy, Jose Zayas, made remarks saying:
Congress has an important role to play in guiding the swift and effective implementation of the IRA. The Treasury Department is still issuing guidance related to key provisions, which will have crucial implications for developers and homeowners seeking to take advantage of a suite of new clean energy tax credits. Congress must use its oversight authority to ensure prompt completion of guidance from Treasury.
Here at GridSwitch, we're planning for our biggest year yet. This year will begin our implementation of our first microgrids in the Pittsburgh and surrounding area, as well as the unveiling of some projects in West Virginia that we're extremely excited about. In the coming weeks, we'll have announcements about these projects.
Courtesy of our partnership with GridKor, we'll also begin the process of building out EV semi-truck infrastructure. This includes beginning the plans on nationwide stations and onboarding new electric trucks to their fleets.
Beyond that, we'll be exploring a few opportunities oversees to help build out Eastern energy infrastructure and any inquiries that come our way in regards to building out microgrids.
If you're a company that does $1 million or more per year in energy costs, let's get in touch and discuss how GridSwitch can take you off of the main grid, cut your energy costs, boost your energy efficiency, and increase your energy reliability.