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Home / PowerFacts Blog / Markets Help Promote Affordable, Reliable Power Sources as Renewable Energy Overtakes Coal as Second Largest Source of American Electricity

August 3, 2021

Markets Help Promote Affordable, Reliable Power Sources as Renewable Energy Overtakes Coal as Second Largest Source of American Electricity

By EPSA

In 2020, renewable generation sources (wind, solar, geothermal, and biomass) passed a key milestone, overtaking coal as the second-largest generation source in the U.S. According to statistics from the U.S. Energy Information Administration (EIA), renewables generated a combined 834 billion kilowatt hours (kWh) of energy, or 21 percent of the total electricity produced in 2020.  

This shift shows how competitive electricity markets are continuing to decrease dependence on older, less efficient facilities, while increasing reliance on natural gas and cost-competitive renewables. Additionally, data from the Renewable Energy Buyers Alliance show that 80% of corporate renewable power purchase agreements occur in competitive markets. The statistics from 2020 are further evidence that markets are key drivers in successfully reducing emissions while keeping consumer prices low. As renewable resources become increasingly cost-competitive, competitive market forces, paired with the efficiency and geographic scale of regional transmission organizations, will provide the best foundation to accelerate the growth of low-carbon energy sources through private investment instead of costly subsidies or bailouts to existing power plants. 

EPSA member companies are an essential part of this energy transition. Our members own and operate more than 6,000 MW of renewable power generation in competitive wholesale markets and continue to invest in new generation and storage technologies help ensure   reliability. Extreme weather events can put the reliability of intermittent renewables like solar and wind energy to the test, and poll after poll shows that reliability is a top priority for American consumers. The competitive power markets in which EPSA members operate balance the emissions reductions of renewables with the reliability provided by traditional energy sources like natural gas.  

Natural gas remains the top source of power in the U.S. with 1,617 billion kWh, or 40 percent of total electricity produced, and the EIA’s data shows that it will remain a key part of the American energy mix for years to come due to its reliability and cost effectiveness throughout the energy value chain. 

As the energy transition progresses, competitive power markets will continue to play an important role in providing reliable, on-demand generation to bolster intermittent renewable resources. Market signals indicate that, over time, natural gas and renewables will continue to replace coal, helping to reduce emissions while ensuring reliable power for American consumers.  

Competitive power markets benefit all Americans by providing reliable, low-cost electricity from efficient generation facilities. EPSA members are driving the transition in power generation with many companies closing coal-fired facilities and investing in renewable power sources and battery storage.  

Vistra’s Moss Landing battery storage project in Monterey County, California. Credit: Vistra Corp. 

Some recent examples include:  

  • LS Power becoming the first utility-scale private developer of solar generation.  
  • Vistra Energy operating a 300 MW lithium-ion battery storage facility.  
  • Tenaska and Capital Dynamics partnering to develop nine battery storage projects. 

EPSA member companies are committed to investing in renewable power development and emerging technologies that facilitate the transition to a cleaner electric grid. These companies do so based on the signals and opportunities made available by competitive power markets.  

As the power sector continues to transition, it is essential that competitive markets continue to provide reliable, affordable power with lower emissions for consumers. This will enable EPSA member companies to build on the progress they have made in providing dependable, clean, innovative and more affordable power for millions of Americans.

Filed Under: PowerFacts Blog Tagged With: affordable, clean energy, EIA, electricity, emissions, energy policy, EPSA, power markets, renewables

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