One of the biggest trends in energy today is the retirement of some coal-fired power plants in favor of renewable energy sources. According to the Energy Information Administration (EIA), nearly 90 gigawatts of coal power have been retired since 2011, and it projects another 65 gigawatts will retire between now and 2030. In its place, U.S. renewable energy is expected to provide 50% of the energy mix by 2030 — that’s up from just under 20% in 2020.1
Some of the funding to support this transition to renewable energy sources will come from the Infrastructure Investment and Jobs Act, recently passed by Congress. The infusion of this federal money will speed up infrastructure upgrades and help fund additional technology development. But the shift in energy trends is not being driven by the government. Already, nearly every auto manufacturer has introduced plans to mass-produce electric vehicles (EVs) in 2022. In 2021, battery-electric EVs and plug-in hybrids represented one in every 10 cars purchased — twice the numbers sold in 2020.2
To be sure, traditional forms of energy, including oil and gas, will continue to fuel our cars, homes and businesses. One industry analyst writing for Forbes sees oil production in the United States rising for the first time in three years. At the same time, he says, the solar sector — which increased by triple digits over the past five years — will continue to grow.3
When we think of financial safety nets, it’s often in terms of emergency funds and insurance benefits for loved ones. However, over a long retirement, it’s also important to consider inflation safety nets. In other words, over the next 10 years, how much do you expect your household energy bills to rise? It’s important for your retirement sources of income to keep up with the cost of inflation. Give us a call if you’d like to discuss ways your savings can keep pace with your expenses during retirement.
At the local level, state agencies, utility companies and other businesses are investing more money toward clean energy to meet decarbonization goals. The entire country is seeing a rapid deployment of renewable energy, storage and electric vehicles. One of the reasons diversifying energy sources is important is that the United States remains vulnerable to breakdowns in its power grid — be it through natural disasters or cyberattacks. While the likelihood of a mass-scale cyberattack on the U.S. power grid is low, recent estimates forecast that the economic impact of such an event could cost the United States anywhere from $243 billion to $1 trillion.4
As extreme weather events continue to ravage all regions of the country, utility companies are faced with the challenge of “hardening” their infrastructure as well as navigating federal and local agency funding resources in an effort to avoid passing on additional expenses to their customers. In fact, research from Ernst & Young LLP (EY) found that 86% of consumers (including almost 100% of millennials) are interested in generating their own electricity. One of the challenges of utility companies is to help accommodate this demand by finding ways to make it reliable and affordable while mitigating potential climate impacts.5
1,2 Teresa Hansen. EnergyTech. Jan. 4, 2022. “New Year’s Forecast: Top Five Energy Industry Trends for 2022.” https://www.energytech.com/home/article/21213191/new-years-forecast-top-five-energy-industry-trends-for-2022. Accessed Feb. 2, 2022.
3 Robert Rapier. Forbes. Jan. 16, 2022. “Energy Sector Predictions For 2022.” https://www.forbes.com/sites/rrapier/2022/01/16/energy-sector-predictions-for-2022/?sh=2ece3d513bec. Accessed Feb. 2, 2022.
4 Kavya Balaraman, Ethan Howland, Robert Walton and Iulia Gheorghiu. Utility Dive. Jan. 18, 2022. “2022 Outlook: Top US power sector trends to watch.” https://www.utilitydive.com/news/2022-outlook-top-us-power-sector-trends-to-watch/611691/. Accessed Feb. 2, 2022.
5 Karen Felton, Jaideep Malik and Jeffrey Miller. EY. Dec. 20, 2021. “Five utility trends to watch in 2022 as energy transition accelerates.” https://www.ey.com/en_us/power-utilities/five-utility-trends-to-watch-in-2022. Accessed Feb. 2, 2022.