WASHINGTON, D.C., February 26, 2024 — As the comments period comes to a close on the U.S. Treasury Department’s proposed guidance on clean energy investment and production tax credits for green hydrogen projects, a new study conducted by global energy and natural resources research and consulting firm Wood Mackenzie and commissioned by the American Clean Power Association (ACP) shows the Administration’s guidelines requiring hourly matching starting in 2028 will limit the ability of the green hydrogen industry to get off the ground.

Green hydrogen, produced using renewable electricity, is critical to decarbonizing the U.S. economy. The Department of Energy estimates low-carbon hydrogen can eliminate 10 percent of economy-wide emissions by 2050. While Treasury’s 45V tax credits are intended to catalyze the still-nascent low-carbon hydrogen industry in the U.S., the new study released today finds the Administration’s proposed guidelines will stifle green hydrogen deployment by making it too expensive.

Wood Mackenzie’s analysis finds that ACP’s proposal, issued in June 2023, leads to significantly more green hydrogen deployment by 2032 and puts the industry closer to the pathway required to achieve a net-zero emissions economy. Wood Mackenzie also concluded that the annual matching regime for first movers in ACP’s proposal would not lead to additional emissions. In fact, the Treasury proposal is expected to result in higher hydrogen emissions impacts due to the greater adoption of blue hydrogen that results from the lack of green hydrogen deployment.

Even under ACP’s proposed rules, the report stresses that more support is needed to achieve net-zero emissions economy-wide, or low-carbon hydrogen production targets such as those envisioned in DOE’s National Clean Hydrogen Strategy and Roadmap. The fledgling sector faces challenging market conditions.

“Green hydrogen is an important part of the U.S. decarbonization journey, but electrolyzer technology needs time to scale. Regardless of what time-matching guidelines are imposed, the market conditions for green hydrogen are challenging. It’s clear from our analysis that hydrogen will require support well into the 2030s, and that a more stringent temporal matching regime will result in reduced green hydrogen deployment,” said Wood Mackenzie’s Head of Global Hydrogen Consulting Melany Vargas.

“Getting this guidance right will determine whether a U.S. green hydrogen industry moves forward in the next decade. Green hydrogen is essential to addressing the climate crisis without harming American manufacturing. This study demonstrates that the current Treasury proposal will not achieve the economic or environmental goals articulated by Congress or the Administration,” said ACP CEO Jason Grumet. “If Treasury takes a close look at this data and the numerous analyses from companies hoping to invest billions of dollars in green hydrogen facilities, we believe they will make the changes necessary to get this industry off the ground.”

Wood Mackenzie’s study can be found here: https://cleanpower.org/resources/45v-implications-on-green-hydrogen-industry

“The Biden Administration’s proposal attempts to launch a green hydrogen industry while guarding against any possibility of emissions increases during initial commercial deployment. Unfortunately, the Administration proposal contains a fatal – but fixable – flaw that must be addressed to realize the economic, environmental, and climate benefits of commercially scaling a domestic green hydrogen industry.

“While ACP embraces the basic structure of the Administration’s three-pillar approach, the rushed imposition of the most burdensome restrictions fails to acknowledge the market realities of new technology deployment. Specifically, imposing an hourly matching provision too early for first-wave green hydrogen projects will discourage a significant majority of clean power companies from investing in green hydrogen manufacturing and facilities. ACP is encouraged to see that the Treasury Department has specifically requested comment on the adequacy of the transition schedule. The proposed timeline is a fundamental obstacle to the commercialization of green hydrogen in the U.S.

“An ACP analysis concludes that offering additional flexibility in time-matching requirements will enable investment in a first wave of 20 to 40 commercial-scale facilities by 2032. While adequate to jumpstart the green hydrogen industry, this deployment represents only 3-5 percent of the Administration’s 50 MMT annual green hydrogen production goal and presents little risk of a material increase in emissions. However, the proposed rule jeopardizes the economic feasibility of these early projects, and with them, the future viability of the green hydrogen industry.

“The environmental risk that green hydrogen, a critical decarbonization solution, will remain on the sidelines for the next 30 years is vastly greater than the perceived risk associated with providing additional flexibility in the transition timeline. It is perplexing to see the Biden Administration propose a short-term strategy that could threaten net-zero ambitions and long-term energy security and economic goals.

“ACP member companies’ overarching goal is the rapid deployment of wind, solar, and battery storage technologies. In its present form, the Administration’s rule will inhibit clean energy deployment. Fortunately, the rule can be fixed. We are optimistic that the Administration will make the necessary changes.”

Image: U.S. Annual and Cumulative Clean Power Capacity Growth. Source: Clean Power Quarterly Market Report | Q3 2023

WASHINGTON DC, November 1 – The American Clean Power Association (ACP) today released the Clean Power Quarterly Market Report | Q3 2023, showing that the industry brought online 5,551 megawatts (MW) of utility-scale clean power capacity in the third quarter of 2023, enough to power 813,000 American homes. Third quarter installations increased 13% over the same period in 2022 and set a record for the strongest third quarter to date. Across the country, clean energy developers began commercial operations at 88 projects across 24 states.

The U.S. now has over 243 gigawatts (GW) of operating clean power, providing over 16% of U.S. electricity, enough electricity to power the equivalent of nearly 65 million homes.

“The demand for American clean energy is undeniable,” said ACP CEO Jason Grumet. “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.”

Grid-scale battery storage is being installed rapidly, having already exceeded total 2022 installations in just nine months. The industry connected 2,142 MW / 6,227 MWh of storage in the third quarter, bringing year-to-date installations to 4,374 MW / 13,444 MWh. Solar installed 3,121 MW in the quarter, outpacing the rate of installations in 2022 but slightly behind 2021 volumes. Just 288 MW of land-based wind capacity were commissioned in the third quarter, a 77% decline year-over-year. Year-to-date installations of solar, wind, and storage fell 6% as a slow first quarter and a sharp decrease in third quarter wind capacity additions contributed to the decline in year-to-date installation volumes.

Clean Power Pipeline: Projects Under Construction or in Advanced Development

While the full impacts of the Inflation Reduction Act (IRA) are yet to be determined, the IRA’s effect on the clean energy industry is evidenced by the growth in utility-scale project development pipeline. As of the end of Q3 2023, the project pipeline increased 10% year-over-year to 145,545 MW. There are currently 59,568 MW under construction and 85,977 MW in advanced development. The battery storage pipeline is strongest, having grown by an impressive 50% year-over-year, while the solar pipeline increased 8%.

Clean Power Procurement

Although quarterly installation levels surpassed 2022 levels in Q2 and Q3 of this year, power purchase agreement (PPA) announcements remain tepid amidst market headwinds. In the third quarter, 3.1 GW of PPAs were announced, a 55% drop from the same period in 2022.

Key Highlights | Q3 2023

• Installations: Developers began commercial operations at 88 projects across 24 states in Q3. The industry installed 5,551 MW of utility-scale clean energy in Q3, representing enough power for 813,000 American homes.
• Pipeline: Solar continues to dominate the project pipeline, accounting for 58% of clean power capacity currently under development. Battery storage and land-based wind each represent 15% of the pipeline, with offshore wind making up 12%.
• Sector Snapshot: Overall, solar led the quarter with 3,121 MW of installations, with battery and land-based wind following at 2,142 MW and 288 MW, respectively.
• Delays: Since the end of 2021, over 56 GW of clean power capacity has been delayed. This includes 16,639 MW of projects that were expected to come online during the first three quarters of 2023.
  • Accounting for 67% of all delays, solar projects appear to be most impacted.
  • On average, projects are delayed by 14 months.
• Power Purchase Agreements: Through Q3 of 2023, solar comprised 59% of all PPA announcements while land-based wind represented 32%.
  • Compared to Q3 of 2022, solar PPA announcements for this quarter decreased by 59%, wind by 21%, and battery storage by 55%.
• Progress to Date: Across the U.S., cumulative operating clean power capacity now stands at over 243 GW, accounting for 16% of total electricity generation.
  • California, a leader in clean energy, accounted for 1,900 MW (34% of clean power commissioned in Q3), while Texas and Arizona took the second and third spots, with 949 MW and 516 MW respectively.
  • Cumulatively in 2023, California leads the nation with 3,031 MW installed, followed by Texas, which added 2,381 MW to the grid and Florida, which added 1,578 MW.

A scaled-down version of the report is available to the public, with ACP membership granting access to the full Clean Power Quarterly Market Report | Q3 2023.

WASHINGTON, August 7, 2023 – Today, the American Clean Power Association (ACP) released data showing that unprecedented federal support has led to the announcement of private investments totaling $271 billion in domestic clean energy projects and manufacturing facilities over the past 12 months. This exceeds the combined clean energy investments made over the previous eight years.

The latest Clean Energy Investing in America report details the extent of the clean energy renaissance spreading across the country since federal clean energy incentives were signed into law last August. Once completed, these investments and projects will strengthen our energy independence, improve air quality, and support one million American clean energy jobs. 

“Investment in clean energy production and manufacturing is surging. New jobs and revenue are bringing opportunity and optimism to rural communities across the country. America’s manufacturing centers are competing to meet new clean energy demand with a new domestic wind, solar or storage manufacturing facility announced every four days,” said ACP CEO Jason Grumet. “ACP member companies are powering the U.S. economy with clean, reliable, and affordable American energy. The United States has the technology, human capital, and financial capacity to achieve clean energy dominance. The only question is whether government policy will allow us to build the clean energy infrastructure in time to seize this opportunity.” 

Highlights from the report include public announcements from the past year of: 

• 184,850 megawatts (MW) of new utility-scale clean energy capacity 
• $4.5 billion in consumer savings 
• 29,780 new manufacturing jobs  
• Over $22 billion in manufacturing investment 
• 83 new or expanded utility-scale clean energy manufacturing facilities – equivalent to a manufacturing facility being announced every four days 

Manufacturing facilities for utility-scale clean energy components have been announced in districts across the country, and multiple states have announced five or more facilities, including Georgia (7), Tennessee (6), South Carolina (6), Texas (5), and Colorado (5). 

The report also unveils a significant uptick in the manufacturing capacity of clean power components, thanks to the 83 announced facilities. Should currently announced manufacturing facilities reach operation, ACP estimates a nearly ninefold increase in solar module production and a more than fifteenfold increase in grid-scale battery storage, along with significant increases in production output for solar cells, polysilicon, ingots and wafers, blades, towers, and nacelles. 

The Path Ahead 

This data reveals that the industry is planning to build clean energy faster than ever before. However, supply chain issues, inflation and opposition driven by misinformation are all hindering renewable energy development and must be addressed in order to reach the full potential of the incentives provided. 

Additionally, Congress still needs to pass permitting reforms to unlock the full potential of existing energy laws. If it continues to take five to 10 years to permit a clean energy facility, these investments will be stymied. 

While some improvements were made in the recent debt limit deal, there is plenty of room for more commonsense reforms that make the process more efficient while safeguarding environmental protection. It is also imperative that Congress find common ground on transmission policy to ensure that cheap, abundant clean energy can find its way to consumers. 

Read ACP’s new Clean Energy Investing in America report here.  

WASHINGTON DC, August 3, 2023 – The American Clean Power Association (ACP) released the Clean Power Quarterly Market Report | Q2 2023 today, showing that the industry installed 5,218 megawatts (MW) of utility-scale solar, wind, and storage capacity in the second quarter – representing enough clean generation to power nearly 1 million American homes and making Q2 2023 the second-highest second quarter for clean power installations. The report also finds a significant 13% increase in clean power projects under construction or in advanced development compared to the same time last year.

“Clean power installations returned to growth, with the clean energy industry logging its second-best second quarter as America forges ahead toward a clean power future,” said John Hensley, VP of Research and Analytics. “Despite persistent headwinds from regulatory, trade, and supply chain pressures, clean power project additions rebounded as developers managed through delays and worked to keep projects on schedule. To help maintain this momentum, especially as the clean power pipeline grows, we continue to urge policy makers to find bipartisan solutions to address the supply chain and federal permitting challenges obstructing America’s full job-creating clean energy potential.” 

Throughout the second quarter of 2023, clean energy developers commissioned 105 clean power projects across 38 states. Solar accounted for over 50% of clean power capacity installed, with storage accounting for nearly 30%. The increase in battery storage installations from the second quarter of 2022 was notable – the segment experienced 32% growth.  

Clean Power Pipeline: Projects Under Construction or in Advanced Development 

Though it is still too early to observe the effects of last year’s unprecedented federal incentives on clean power installations, their preliminary influence can be observed partially via the new-build pipeline which encompasses 145,592 MW of clean power potential, representing both projects currently under construction and those in advanced development stages.  

Compared to the same time last year, projects in the solar pipeline increased 16%, with solar now accounting for 59% of America’s entire clean power project pipeline. The battery storage project pipeline grew an astonishing 45%, now composing 15% of all clean power projects currently under development. Meanwhile, the wind power pipeline increased 8% quarter-over-quarter, showing its first positive change since the third quarter of 2021. 

Project Delays 

Project delays continue to mount with developers reporting 12 GW of new delays in the second quarter. By the end of the second quarter of 2023, accumulated project delays totaled 55 GW. On average these projects have been delayed 13 months as component procurement challenges, trade frictions, higher costs, regulatory delays, and other challenges have held up projects. Despite these delays, more than half of that capacity is expected to be online by the end of the year.  

 Key Highlights | Q2 2023 

• Installations: The industry installed 5,218 MW of clean power in Q2 2023 – representing enough electricity to power nearly 928,000 American homes and making Q2 2023 the second-highest second quarter to date after Q2 2021. 
• Pipeline: Now encompassing 145,592 MW of clean power, the development pipeline grew by 13% compared with the second quarter of 2022, and grew by 43% compared with the second quarter of 2021. 
  • Of the sectors, the battery storage pipeline showed the most significant increase with a 45% growth. 
• Sector Snapshot: Solar led the quarter (2,740 MW), followed by battery storage (1,510 MW) and wind (968 MW).  
• Delays: 35 GW of clean power expected online prior to Q3 2023 have been delayed. 
  • More than half of this power is still expected to come online by the end of this year. 
• Power Purchase Agreements: PPA announcements have decreased by 57% compared with the Q2 2022. 
  • Corporate announcements fell by 63%, while utility announcements rose by 49% 
• Progress to Date: Cumulatively, operating clean power capacity in the U.S. is now more than 237 GW, accounting for 15.1% of electricity generated. 
  • Texas, the clean power hub, leads with 26,353 MW (18% of total operating U.S. clean power). California follows with 15,918 MW (11%), and New York ranks third with 9,085 MW (6%). 
  • Leading 2023 clean power installations is Florida (1,497 MW), followed by Texas (1,428 MW) and California (1,129 MW). 

Download the Clean Power Quarterly Market Report | Q2 2023. 

The Inflation Reduction Act provides significant incentives to make green hydrogen cost competitive with more carbon-intensive forms of hydrogen production. There is active debate over the appropriate structure of the hydrogen tax incentives in the early years for this new industry.

After significant internal deliberation and engagement with external stakeholders and members, ACP is proposing an implementation roadmap that will create a viable green hydrogen industry while accelerating clean power deployment and reducing emissions. The new proposal includes recommendations on several emissions safeguards advanced by environmental leaders.

ACP proposes the government limit green hydrogen production incentives to companies demonstrating they are relying on new, additional sources of clean electricity to power hydrogen production. Green hydrogen facilities must also ensure that there is a degree of alignment in time between when clean energy is generated and the time when a green hydrogen facility is operated. To ensure these environmental safeguards, ACP proposes that companies must embrace rigorous constraints on where and when clean energy credits can be produced. These constraints will ensure the emissions integrity of the increased power demand on the grid from green hydrogen production. The strict timing requirements under our proposal, which align with the EU’s green hydrogen standards, will take effect after a limited phase-in period. Under ACP’s approach, “firstmover” projects that start construction before the end of 2028 receive greater flexibility on the timing of when clean energy credits can be produced. This early flexibility will ensure the green hydrogen industry reaches commercial viability and can support decarbonization.

“ACP’s aim is to strike a balance that inspires a new clean domestic industry while ensuring near- and long-term climate benefits. It is essential that public funds are used to develop and deploy technology that supports climate goals. But, if government requirements are too burdensome at the outset, we will never build a green hydrogen industry. The stakes are high to get this right,” said Jason Grumet, CEO of ACP.

“Green hydrogen is key to reaching America’s net zero goals by aggressively reducing emissions from difficult to decarbonize sectors. I am proud that ACP has reconciled divergent viewpoints amongst its members and developed a compromise policy framework that supports both early market deployment and a rigorous standard for green hydrogen production over time,” said ACP Chair-Elect Susan Nickey, Executive Vice President & Chief Client Officer of HASI.