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Generation Capacity Additions: Which Source Will Lead in 2016?

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Dec. 4 2020, Updated 10:53 a.m. ET

Capacity additions in 2015

New power generation capacity additions in 2015 were mainly contributed by wind, natural gas, and solar. This trend is expected to persist in 2016 as well. Among total capacity additions, wind accounted for 41%, gas accounted for 30% while solar made up 26% of total additions. Additions in solar were mainly developed through distributed solar photovoltaic capacities that pose serious competition to nonrenewable utility (XLU) companies.

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Wind

Capacity additions in wind have been quite volatile over the past few years due to uncertainty over tax credit policies. Still, wind added the highest capacity of nearly 13,000 megawatts in 2012, followed by ~1,000 megawatts in 2013. According to the EIA (US Energy Information Administration), Texas added the maximum wind capacity, or 42% of the total, followed by Oklahoma, Kansas, Iowa, and North Dakota. These are the central states of the country, where wind resources are the strongest.

Natural gas

New Jersey and Texas added the most natural gas capacity in 2015, collectively accounting for half of the total gas capacity additions nationally. However, natural gas (UNG) capacity additions were lower in 2015 than they had been in previous years.

Solar

California is the leader in distributed solar PV (TAN) installations, adding more than 1,000 megawatts of each utility-scale and distributed solar. The state accounted for more than 42% of solar capacity additions in 2015.

Nevada and North Carolina also saw substantial improvements in solar capacity additions in 2015 over the prior year. In Colorado, Xcel Energy (XEL) is planning to develop a 600-megawatt wind power plant worth $1 billion. Renewables giant NextEra Energy (NEE), meanwhile, plans to spend $3.5 billion on adding wind and solar capacities through 2019. Industry leaders like Southern Company (SO) and Duke Energy (DUK) are also increasing their renewables portfolios.

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