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    Electric Monthly Update With Data for July 2022

    September 26, 2022 - Thai News Service


      Highlights: July 2022

      - Texas (ERCOT) broke its all-time electric demand record for the 11th time this summer on July 20.

      - Wholesale electricity prices set new 12-month highs in New England (ISONE), Louisiana (into Entergy), and Texas (ERCOT).

      - Texas (ERCOT) saw a 13.1% increase in electricity generation compared to the previous July, as Texas experienced its hottest July on record.

      Average U.S. construction costs for generators continue to vary by technology

      Average U.S. construction costs continue to vary for the three leading technologies being added to the U.S. electrical grid. The annual capacity-weighted average construction costs for solar photovoltaic systems in the United States continued to decrease in 2020, according to the latest EIA data on newly constructed utility-scale electric generators. However, the average construction costs of wind turbines and natural gas-fired generators increased from 2019. Taken together, these three technologies accounted for over 95% of the total capacity added to the U.S. electric grid in 2020. The 2020 average costs represent the smallest gap in construction costs between these three technology types since 2013 when we began collecting construction cost data. It is, however, important to note that construction costs are only one component of future total generation costs and do not include future fuel, operation, and maintenance costs that will vary by generation technology.

      Total investment in new electric-generating capacity in 2020 increased by 40% from 2019 to approximately $46.3 billion dollars, and investment in wind, solar, and natural gas comprised about 98% of the total. The main component driving up total investment was a 33% increase in gross capacity additions in 2020 (32 gigawatts [GW]) relative to 2019 (24 GW), rather than increases in construction costs. The average costs for wind turbines increased in 2020 by 7.6% from 2019. Costs for natural gas generators also increased from 2019, by 3.5%. From 2013 to 2020, construction costs for solar fell 55%, costs for wind fell 21%, and costs for natural gas increased by 15%. However, the construction cost decreases for solar and wind over the last seven years may be leveling off or even trending upward as pandemic-related supply issues and some anecdotal data indicate higher construction costs after 2020.


      Average solar construction costs fell 7.9% to $1,655 per kilowatt (kW) in 2020. The decrease in the average cost of solar was primarily driven by a decrease in the construction cost for thin-film cadmium axis-based panels, which were at their lowest construction cost of $1,631 per kW in 2020, a 17% decrease in construction cost from the previous year. Capacity additions of thin-film cadmium axis-based panels were also highest in 2020 when compared with previous years, at 2.2 GW. Construction costs also fell by 7% for crystalline silicon fixed-tilt panels, although they still had the highest average cost in 2020 ($1,957 per kW) for all of the major solar technologies.

      In addition, construction costs for crystalline silicon axis-based tracking panels increased by 6% in 2020, settling at $1,587 per kW. This relatively small increase offset the potential for higher average construction costs for all solar technologies. Crystalline silicon axis-based tracking panels made up 60% of the solar capacity added in the United States in 2020, at 6.3 GW. In 2020, close to 90% of all photovoltaic modules were imported, and the rest were produced domestically.


      Total U.S. wind capacity additions were 54% higher in 2020 than in 2019. This increase may have been due in part to project developers attempting to meet the 2020 deadline (since extended) for the production tax credit. The average construction cost for onshore wind turbines increased from $1,391 per kW in 2019 to $1,498 per kW in 2020.

      Costs for wind farms greater than 200 megawatts (MW) in size, which accounted for the largest share of wind capacity additions in 2020 with 9 GW, increased by 11% to $1,393 per kW. Wind farms ranging from 100 MW to 200 MW were the only group to see a decrease in average construction costs in 2020. The average construction cost for this group of wind farms decreased by 5.2% from $1,615 per kW in 2019 to $1,531 per kW in 2020.

      Increases in construction costs where more pronounced at smaller capacity levels. In the 25 MW to 100 MW group, average construction costs increased by 46% to $2,260 per kW. Average construction costs for wind farms with 1 MW to 25 MW of capacity, meanwhile, increased to $5,059 per kW, compared with an average cost of $4,540 in 2019. The large increase stems from higher construction costs shared over a relatively small number of projects; less than 1% of wind capacity added in 2020 came from wind farms with 1-25 MW of capacity.

      Natural Gas

      Between wind, solar, and natural gas technologies, natural gas received the least U.S. investment in 2020, making up 13% of total investment across all energy sources with about $6.1 billion. By comparison, wind received approximately $22.1 billion in investment, and solar received approximately $17.2 billion. The majority of natural gas electric-generating capacity installed in 2020 came from combined-cycle facilities. Average combined-cycle construction costs increased by 22% in 2020 to $1,155 per kW, up from $948 per kW in 2019. Costs for building new combined-cycle plants are higher than in past, due in part to installing larger and more efficient gas turbines. Higher installation costs are more than offset by the lower operating costs resulting from greater efficiency of the new turbines.

      Principal Contributor:: Alex Mey


      (U.S. Energy Information Administration)


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