J.Pollock Blog

US utility renewable energy capex remains on upswing; 2022 forecast nears $17B RRA

Wednesday, January 19, 2022 9:03 AM ET
By  Jason Lehmann
Market Intelligence

Numerous factors remain in place to drive continued, robust renewable energy development in the United States, including aggressive state-level clean energy mandates via renewable portfolio standards; booming corporate interest; and a clean energy transition commitment at the federal level backed by the continued availability of production and investment tax credits and support for renewable energy development on federal lands and waters.Based on conclusions from our most recent review of company spending plans made available through investor presentations, SEC filings and other sources, projected renewable energy investments for Regulatory Research Associates’ sample of publicly-traded electric, multi- and gas utilities approximates $13.9 billion in 2021, increasing 20% to nearly $16.7 billion in 2022. These conclusions flow from our most recent Utility Capital Expenditures Update report dated Dec. 1, 2021.

S&P Global Market Intelligence’s 2022 Electric, Natural Gas and Water Utilities Outlook estimates 2021 renewable energy additions at 23 GW of solar and 21.5 GW of wind, with an additional 44 GW of solar and 27 GW of wind planned to be installed in 2022. Coincident with the anticipated surge in solar energy production, energy storage installations are expected to increase nearly six fold in 2022 over 2020 levels as pairings of storage with solar gain momentum.

Within RRA’s Financial Focus coverage universe of electric, gas and multi-utilities, renewable energy capital expenditures are estimated to account for approximately 12% of 2021-2023 spending within these subsectors, therefore, comprising a significant component of utility EPS growth objectives.

The addition of renewable assets to a utility’s generation mix, and rate base, represent an attractive, incremental earnings stream and, with no fuel costs, a hedge against potential commodity price volatility. Utilities with competitive generation segments continue to develop and acquire projects under long-term power purchase agreements, or PPAs, to hedge against volatile commodities markets while delivering predictable earnings growth.

Though current 2023-2025 investment projections suggest a decline in renewable energy capex, we believe the aforementioned current industry trends will contribute to sustained levels of clean energy investment, as companies’ plans for future projects solidify and new opportunities arise. Environmental, social and governance considerations will continue to influence companies’ investment plans and operational outlooks, as utilities continue to reshape their generating fleets in tandem with broad emissions reduction and clean energy goals that will necessitate further clean energy and other capital investments.

Company perspectives

Avangrid Inc.

Avangrid’s 2021-2023 renewables capex totals $4.92 billion, or 42% of the company’s total planned capex over the three-year period, as it seeks to expand its considerable portfolio of solar and on- and offshore wind projects through its Avangrid Renewables LLC subsidiary. In May 2021, the company secured approval for the 800-MW Vineyard Offshore Wind Project, a partnership between Denmark-headquartered infrastructure investor Copenhagen Infrastructure Partners K/S. Construction of the project off the coast of Massachusetts started in September 2021 and is expected to reach commercial operations in 2023.

Avangrid management hopes to expand the company’s renewable energy build-out via the acquisition of New Mexico-based PNM Resources Inc., where the state has adopted an aggressive set of RPS targets requiring that renewable energy comprise the following percentages of the utilities’ total retail sales in the following years: 40% by 2025; 50% by 2030; 80% by 2040; and 100% by 2045. The New Mexico Public Regulation Commission in December 2021 rejected the companies’ proposed merger. PNM has appealed the Dec. 8 order, and both companies have amended the end date included in their merger agreement from Jan. 20, 2022, to April 20, 2023, to accommodate the appeal.

Duke Energy Corp.

One of the largest U.S. owners of operating renewable energy capacity, Duke Energy’s $3.83 billion renewables capex comprises 11% of planned capital investments between 2021 and 2023. Commercial renewables and “clean” generation projects at its expansive regulated utility network are expected to account for approximately 20% of Duke’s $59 billion five-year capital plan.

Looking ahead, Duke aims to add 16 GW of wind and solar energy to its portfolio by 2025 and 47 GW by 2050.


The third quarter of 2021 solar capacity additions totaled approximately 2.4 GW – 46% above year-ago levels – bringing to a total of 55.5 GW of U.S. solar power capacity, excluding distributed generation. Through Sept. 30, 2021, the U.S. solar development pipeline stood at nearly 126.9 GW, 14% of which, or 18 GW, was under construction. NextEra Energy Inc. held the largest development pipeline at approximately 11 GW, followed by private developer Invenergy LLC.


The third quarter of 2021 wind capacity additions ebbed somewhat year-over-year with roughly 2.2 GW added to U.S. electric grids during the period, with Texas accounting for more than half of such installations. Wind developers connected 8.6 GW to U.S. grids in the first three quarters of 2021, outpacing the 6.5 GWthrough the 2021 third quarter. S&P Global Market Intelligence data as of mid-November 2021 indicates the U.S. wind power development pipeline of 61.7 GW through 2025, with approximately a fifth, or 12,854 MW, under construction. Berkshire Hathaway Energy‘s 503-MW TB Flats I & II Wind Project in Wyoming was the largest project brought online during the quarter.

Refer to the linked report and associated data tables for additional insight into infrastructure investments over the next several years within the U.S. utility industry, including intelligence distilled from the aggregation of multiple individual company forecasts.

Note: This report is designed to identify capital expenditure trends in the U.S. utility sector using a range of sources of information, including corporate investor presentations, annual reports and other sources. While S&P Global Market Intelligence takes all due care to ensure the data represented is accurate and represents our best interpretation of industry trends, the varying nature of the available sources of information in terms of depth, quality, availability and timeliness means this report should only be used as outlined. Though underlying data is included in this report, those seeking actual company-specific capital expenditure information should use data filed with the U.S. Securities and Exchange Commission.

Regulatory Research Associates is a group within S&P Global Market Intelligence.

For a complete, searchable listing of RRA’s in-depth research and analysis, please go to the S&P Global Market Intelligence Energy Research Library.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.