As global efforts to mitigate carbon emissions intensify, the momentum to accelerate the clean energy transition will continue to build over the year ahead. This blog explores clean energy trends in the United States and provides insights into what we expect in 2024.
FERC Takes Center Stage
On the regulatory side, the Federal Energy Regulatory Commission (FERC), an independent agency tasked with overseeing the interstate transmission of energy, will take center stage. FERC faces a pressing need to address the backlog of power generating and storage projects vying for grid interconnection. Against this backdrop, the Biden Administration’s commitment to enhancing the reliability and resiliency of the U.S. energy grid raises the significance of FERC’s role in shaping the clean energy landscape. As the industry continues to evolve, reforms are expected in key areas such as capacity markets, proposed gas pipelines, and liquefied natural gas export projects.
For the clean energy industry, these regulatory reforms aren’t just procedural adjustments. These changes can unlock new avenues for innovation, investment, and meaningful contributions to the nation’s energy security.
Increasing Demand for Renewables
Renewable energy is set to experience record investments and sustained momentum throughout 2024. Notably, transmission projects like TransWest Express, SunZia, and Grain Belt Express have recently achieved significant milestones, which shows the potential for a substantial expansion of the U.S. transmission system in the coming year. The Department of Energy’s Grid Deployment Office, armed with $26 billion in funding, will play a crucial role in advancing the U.S. transmission system. The Biden Administration’s ambitious goals, paralleled with corporate giants like Apple, Amazon, and Microsoft committing to powering 100% of their operations with renewable energy by 2025, underscore the increasing demand for clean and sustainable power sources.
Expansion of Energy Storage Policies
The energy storage sector saw remarkable growth in 2023 and, driven by the Inflation Reduction Act, is expected to sustain this trajectory this year. However, challenges in permitting and interconnection processes highlight the need for further review of policy developments.
The Treasury Department’s guidance on the standalone storage Investment Tax Credit (ITC) will be a critical factor shaping the industry’s trajectory. ITC is a financial incentive provided by the U.S. federal government to encourage the development and deployment of renewable energy and energy storage projects. For energy storage projects, there has been a growing emphasis to expand ITC, which would be crucial in recognizing the value of energy storage technologies for enhancing grid reliability, supporting renewable energy integration, and providing various grid services.
Growing Interest in DERs
The rise of distributed energy resources (DERs) and the growing interest in virtual power plants (VPPs) signal a notable shift in grid management. As DERs such as rooftop solar and energy storage gain prominence, the implementation of FERC’s Order 2222 will be a crucial regulatory development in 2024. Order 2222 encourages greater adoption of renewables by placing distributed energy on a more level playing field with legacy power plants. DERs are a much more efficient way to accelerate America’s transition to clean power, as they are easier and quicker to install than large, utility-scale renewable power plants.
At Amogy, we are committed to the integration of DERs and are poised to leverage these advancements for a more resilient and decentralized energy landscape.
Hydrogen Hubs Continue to Advance
In the hydrogen sector, uncertainties surrounding tax credits may momentarily slow project announcements and construction. The Department of Energy (DOE) is undergoing the rule making process around eligibility criteria and the specific projects that would qualify for tax incentives. The lack of finalized guidance on tax credits can lead to delays in decision-making by industry stakeholders, investors, and project developers.
The federal investment in hydrogen hubs also catalyzes advancements in ammonia energy technologies. Ammonia has garnered attention as an energy-dense solution with applications in both transportation and power generation. Hydrogen hubs can play a pivotal role in fostering innovation and collaboration specifically geared towards optimizing ammonia-related technologies. These hubs could foster research and development focusing on efficient ammonia production, storage, and utilization.
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2024 is positioned to be an important year for the energy industry. Even beyond the aspects highlighted above, we anticipate a pivotal year for permitting reform implementation, prioritization of renewable energy development, advanced nuclear energy deployment, and the sustained expansion of electric vehicles (EVs) and their associated grids.
Furthermore, as Amogy continues to advance our technology, we recognize the opportunity for U.S. policy to foster the growth of ammonia-related technologies to help shape a resilient energy future. Next month, we will delve deeper into the ways in which U.S. policies can bolster the ammonia industry.
