Being able to speak intelligently about the latest trends in the industry is an important part of making a positive impact in your position. If you are looking to land a new job in the energy industry or perhaps to impress a new client, here are some must-know trends occurring in energy today that are worth talking about.
1. A Fast-Changing Fuel Mix
Over the past five years, US energy generation sourced from non-hydro renewables (such as wind and solar) has nearly doubled. It jumped from around 5 percent in 2012 to almost 10 percent in 2017. In that time, coal-based energy has declined sharply, with about 50 gigawatts of coal-fired generation capacity retired since 2012. Similarly, natural gas’s share of generation in the US has surpassed coal on an annual basis for the first time in 2016. Last year, natural gas was about even with coal at roughly 31 percent, largely due to low natural gas prices. These changes are having an important impact in how consumers are getting their energy, and how energy markets are doing business as well.
2. Declining Wholesale Power Prices
Those low natural gas prices are driving a steady decline in wholesale power prices over the past several years, which has gone a long way to offset rising costs in customer bills. While demand for energy is at an all-time high and continuing to grow, wholesale power prices have fallen across the US. New England ISO saw a decline of about 56 percent, with New York ISO at 50 percent, and New York PJM markets at 47 percent since 2014. These massive savings have gone a long way to offset the cost of record-breaking utility capital expenditures in recent years for upgrading, modernizing, and decarbonizing the grid. That means declining power prices have likely made the increase in customer bills far less noticeable than it otherwise would have been. That’s good news for energy markets that are seeing a growing need to invest in upgrades and modernizations needed to rehabilitate an aging infrastructure.
3. More Clean and Distributed Energy on the Horizon
Despite current federal policy initiatives, the electric power industry is expected to continue on its trajectory toward cleaner energy sources. For almost all new builds, planned generation capacity for the next five years is either renewable or natural gas-fired. This is because wind, solar, and natural gas are often the lowest cost resources, and both experience and research have shown they are what utility customers want the most across the country. Distributed energy resource (DER) penetration is also set to have a big impact on the market. Whether it’s distributed generation, energy storage, microgrids, energy efficiency, electric vehicles, smart appliances, or demand response, residential and commercial electricity customers are increasingly interested in these products and services as a way to manage their energy use, save money, reduce their carbon footprint, and boost reliability and resilience. It’s another important shift for the energy industry, but one that will make large-scale improvements for customers and for businesses ready to make the shift as well.
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