美国可持续能源现状2023（英）--BloombergVIP专享VIP免费

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0©BloombergNEF L.P. 2023. Developed in partnership with the Business Council for Sustainable Energy.

1©BloombergNEF L.P. 2023. Developed in partnership with the Business Council for Sustainable Energy.

Table of Contents

1. Executive Summary

2. A look across the US energy sector

3. Policy

4. Finance

6. Deployment

3.2 Tax Credits and Stimulus

3.1 Infrastructure and Emissions

3.3 Vehicle Standards

4.1 Energy Transition Investment

4.2 Utility Investment

5. Economics 5.1 LCOEs

4.3 Corporate Sustainability

5.2 Environmental Markets

6.2 Natural Gas

6.1 Energy Efficiency

6.3 Solar and Wind

6.4 Storage

6.5 Hydrogen

7. Transportation 7.2 Fuel Prices and EV Sales

7.1 Gasoline

7.3 Renewable Natural Gas

2©BloombergNEF L.P. 2023. Developed in partnership with the Business Council for Sustainable Energy.

About the Factbook: 2023 updates

●The Factbook aims to augment existing sources of

information on US energy

●It focuses on renewables, efficiency, natural gas,

distributed power and storage, as well as sustainable

transportation

●It fills important data gaps in certain areas (e.g., clean energy

investment flows, contribution of distributed energy)

●It contains data through the end of 2022 wherever possible

●It employs BloombergNEF data in most cases, augmented by

the Energy Information Administration, the Environmental

Protection Agency, the Federal Energy Regulatory Commission,

The American Council for an Energy-Efficient Economy,

Lawrence Berkeley National Laboratory, and other sources

where necessary.

●It contains the very latest information on new energy

technology costs

●It has been graciously underwritten by the Business

Council for Sustainable Energy with the help of supporting

sponsors

●This is the Factbook’s 11th edition (first published in January

2013)

●This year’s report contains annual views of and commentary on

driving factors in the energy sector. It includes new data on

multiple sectors plus discussion around implications of the

Inflation Reduction Act, the landmark climate law Congress

passed in August 2022.

What is it? What’s new?

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0©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.1©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.TableofContents1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas2©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.AbouttheFactbook:2023updates●TheFactbookaimstoaugmentexistingsourcesofinformationonUSenergy●Itfocusesonrenewables,efficiency,naturalgas,distributedpowerandstorage,aswellassustainabletransportation●Itfillsimportantdatagapsincertainareas(e.g.,cleanenergyinvestmentflows,contributionofdistributedenergy)●Itcontainsdatathroughtheendof2022whereverpossible●ItemploysBloombergNEFdatainmostcases,augmentedbytheEnergyInformationAdministration,theEnvironmentalProtectionAgency,theFederalEnergyRegulatoryCommission,TheAmericanCouncilforanEnergy-EfficientEconomy,LawrenceBerkeleyNationalLaboratory,andothersourceswherenecessary.●Itcontainstheverylatestinformationonnewenergytechnologycosts●IthasbeengraciouslyunderwrittenbytheBusinessCouncilforSustainableEnergywiththehelpofsupportingsponsors●ThisistheFactbook’s11thedition(firstpublishedinJanuary2013)●Thisyear’sreportcontainsannualviewsofandcommentaryondrivingfactorsintheenergysector.ItincludesnewdataonmultiplesectorsplusdiscussionaroundimplicationsoftheInflationReductionAct,thelandmarkclimatelawCongresspassedinAugust2022.Whatisit?What’snew?3©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.AbouttheFactbook:SponsorshipTheBusinessCouncilforSustainableEnergy(BCSE)isacoalitionofcompaniesandtradeassociationsfromtheenergyefficiency,naturalgasandrenewableenergysectors.Itincludesindependentelectricpowerproducers,investor-ownedutilities,publicpower,manufacturers,commercialendusersandserviceprovidersinenergyandenvironmentalmarkets.Foundedin1992,thecoalition’sdiversebusinessmembershipisunitedaroundthecontinuedrevitalizationoftheeconomyandthecreationofasecureandreliableenergyfutureinAmerica.TheSustainableEnergyinAmericaFactbookiscommissionedbytheBCSEandsupportedbythegenerouscontributionsofthefollowingsponsors:Adobe,AmericanCleanPowerAssociation,AmericanGasAssociation,CleanEnergyBuyersAssociation,CopperDevelopmentAssociation,Covanta,CRESForum,JohnsonControls,JPMorganChase,NationalGrid,NationalHydropowerAssociation,PolyisocyanurateInsulationManufacturersAssociation,SacramentoMunicipalUtilityDistrict,SchneiderElectric,Sempra,SolarEnergyIndustriesAssociation,TraneTechnologies,andWashingtonGas.4©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.TableofContents1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas5©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Executivesummary(1of7)Confrontedwithinflationarypressuresandanuncertaineconomicoutlook,theUSmadekeystridesdecarbonizingitsenergysectorin2022.InWashington,Congresspassedlegislationthatprovidedrecord-settingfundingfortheenergytransition,showingitisseriousaboutclimateleadership.Largelyinresponse,duringthelastthirdoftheyearaslewofsolar,batteryandothercleanenergyequipmentmakersannouncedplansfornewmanufacturingplantsonUSsoil.Herearesomeofthehigh-levelfindingsfromthisyear’sSustainableEnergyinAmericaFactbook:●TotalUStotalenergyconsumptionrose2.95%year-on-yearastheUSeconomycontinuedtoreboundfromtheworsteffectsoftheCovid-19pandemic.●Arecord-shattering$141billioninenergytransitionfinancingwasdeployedintheUSforcleanenergytechnologies,includingrenewables,electricvehiclesandothers.●32GWofnewrenewablepower-generatingcapacitywasaddedtotheUSgrid,downfrom37GWcommissionedin2021.Thiswasduetohighercosts,tradechallengesandotherissues.●However,renewablesbrokerecordsin2022,bymeeting13%oftotalUSenergydemandand23%ofelectricitydemand.●TheUSremainsthelargestenergystoragedemandmarketintheworldandcommissionedanestimated4.8GWofnon-hydropowerstoragecapacityin2022.●EVsalessurged50%tonearly982,000,or7.1%ofnewcarssold.Thiswasdespiterisingbatterycostsandsemiconductorshortages.●Buckingalong-termtrend,US“energyproductivity”stalledslightlyin2022asenergyconsumptionoutpacedeconomicgrowth,resultingina1%decline.Overadecade,however,USGDPhasgrown22.9%whileprimaryenergyconsumptionhasrisen6.7%.Theresult:a15.2%increaseinenergyproductivity.●Corporationssignedcontractstopurchasearecord19.9GWofzero-carbonpower,upfrom17.1GWin2021.Thenumberofcompaniessigningslidto49from67butdealswerebigger.●10newUScompaniesjoinedtheRE100,pledgingtooffsettheirpowerconsumptionwithcleanpoweratafuturedate,includingAppliedMaterials,EliLilly,LearCorporationandPfizer.●Energyspendingaccountedfor4.6%oftotalUSpersonalconsumptionexpendituresin2022,up0.63percentagepointsfrom2021asfuelcostswereupacrosstheboard,butstillhistoricallylow.6©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Executivesummary(2of7)●DemandforUSnaturalgasrose5.5%toreach95.8billioncubicfeetperday.ThejumpwasledbystrongerpowersectordemandandrisingLNGexports,plusmodestincreasesacrossindustrial,commercial,andresidentialsectors.●Naturalgasmet39%ofUSpowerdemandwitharecordestimatedoutputof1,694TWh,up6.5%fromtheyearprior.Despitehighergasprices,thefuelstillprovidedmorepower.●Coal’scontributiontopowergenerationslidto19.4%in2022,slightlyaboveitsrecentlowof19.1%hitin2020.●USCO2emissionstickedup1.0%,BloombergNEF(BNEF)estimates,butwerestill3%belowpre-Covidlevels.Transportremainedthetopemittingsectorat28%withpowernowtiedwithindustryfornexthighestat24%apiece.●2022wasthethirdmostcostlyclimatedisasteryearonrecord.Thecountryexperienced18climate-relateddisasterscausingatleast$1billionindamageapiecewithan$165billiontotal,causing3.4millionAmericanstoevacuate.●Inflationandhigherinterestratesboostedlevelizedcostsofelectricity(LCOE)formostpower-generatingtechnologiesin2022,butparticularlyforcoalandnaturalgasplantsbecauseoftheirmarginalfuelcosts.●CongresspassedthemostconsequentialsustainableenergylawinUShistory.TheInflationReductionAct(IRA)offersatleast$369billioninsupportforcleanenergydeploymentandclimateaction.Thelegislationsupportsmultiplesectorsandmostoftheirvaluechains.●Energyefficiencyspendingstabilizedin2021(thelastyearwithcompletedata).Utilityspendingonpowerandnaturalgasimprovementsrose1%year-on-yeartoreach$7.7billion.●Interestin“clean”UShydrogenisgrowing.About92MWofnewelectrolyzerswereshippedin2022,butthenumberisexpectedtobemuchmorethisyear.TheDepartmentofEnergyhasreleasedalong-term“roadmap”forrampinghydrogenproduction.●Post-IRApassage,EVandbatterymanufacturersracedtoidentifyinvestmentopportunities,withtheNorthAmericanbatterysupplychainreachingalmost$17billioninnewcommitmentsbytheendof2022.●MajoroilandgasfirmsareuppinginvestmentinRenewableNaturalGas(RNG)inanefforttodeliver“greenmolecules”.BPandShelleachmademovestoacquireRNGproducersin2022.ThesetrendsarediscussedatahighlevelbelowtheninfargreaterdepthgraphicallyintheFactbookitself.7©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Executivesummary(3of7)Theconstructionofnewrenewablesfacilitiesslowed,butrenewables’contributionstothegridbrokerecordsTheUSadded32GWofnewrenewablepower-generatingcapacitytothegridin2022.Thatwasdown5GWfromthe37GWinstalledin2021andmarkedthefirstyear-on-yearslideinnewbuildsince2018asdevelopersstruggledwithtangledsupplychainsandhighercosts.TheUSsolarmarketspecificallywaschallengedinthefirsthalfof2022aftertheCommerceDepartmentannounceditwasinvestigatingwhethertoimposehighertariffsonsolarequipmentfromfourSoutheastAsiannations.ByJune,PresidentBidenhadissuedanexecutiveordereffectivelypostponingtheimpositionofanysuchtariffsfortwoyears.Forwind,taxcredituncertainty,coupledwithsupplychainconstraints,interconnectiondelays,andhighinputcostsweretheyear’sprimarycomplications.WhiletheIRArevivesthetaxcreditmechanismfornewwindfarms,itwilltaketimeforthesupportofferedbythenewlawtotranslateintonewcapacityadditions.Newbiomass,geothermal,waste-to-energyandsmallhydrocapacitybuildremainedcomparativelysmallin2022.Inall,21MWofnewbiomassandwaste-to-energycapacitycameonlinein2022.However,forthefirsttime,theIRAprovidesamorelevelplayingfieldandlong-termsupportforthefullportfolioofrenewableenergytechnologieswhichcouldimpacttheinvestmentintheslowergrowingrenewableenergysectors.Evenwiththechallenges,sustainablesourcesmetarecordvolumeofUSenergydemandin2022.Thecontributionofrenewables,includingwind,solar,biomass,waste-to-energy,geothermalandhydro,roseatthefastestpaceamongmajorsectors.Renewablepowerjumpedto974TWhfrom864TWhin2021,a12.6%year-on-yearrise.Renewablesaccountedfor22.7%oftotalUSpowergenerationin2022–theirhighestlevelever.Thegrowthwasdrivenbysurgesinoutputfromwindandsolarandgrowthinhydroproduction.Renewablesandnaturalgashavegrownfromacombined43%oftotalpowergenerationto62%injustadecade.In2022,zero-carbonpower(renewablesgenerationplusnuclearpower)accountedforanall-timehighof40.6%ofalloutput.Meanwhile,coal-firedgenerationdippedto19.4%ofproduction,slightlyaboveitsrecentlowof19.1%in2020.Theprocessofsecuringallneededfederalpermitscanbeslowandlaboriousforenergyinfrastructureprojects.Onerecentstudyfoundthatthelargemajorityofinfrastructureprojectstakebetweentwoandsixyearssecureallsign-offs.Aquarterofsuchprojectstakelongerthansixyears,insomecasesmuchlonger.Aseparatestudyfoundthatrenewablepowerprojectstakeanaverageof2-3yearstocompleteNationalEnvironmentalProtectActreviewsspecificallywithasignificantnumberofsuchprojectstakingfour,fiveorevensixyearstoreachcompletion.8©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Executivesummary(4of7)USenergyproductivitydippedin2022,butthelong-termtrendisclearIn2022,theUSeconomyexpandedby1.9%whileprimaryenergyconsumptionroseatafasterclipof3%.Takentogether,US"energyproductivity"(theratioofUSGDPvs.totalUSenergyconsumption)dipped1%.WhilebothGDPandenergyconsumptionrose,theformerrosefasterthanthelatteryear-on-year.WithCovid-19fading,USprimaryenergyconsumptionreturnedtopre-pandemiclevels,roughlymatchingactivityin2019.Overthepast10years,USGDPhasgrown22.9%whileprimaryenergyconsumptionhasrisen6.7%.Theresult:a15.2%increaseinproductivity.AnotheryearofhighsforUSnaturalgasDemandforUSnaturalgasrose5.4%in2022fromtheyearpriortoreachanotherrecordof95.8billioncubicfeetperday(Bcf/d).Thejumpwasledbystrongerpowersectorconsumption,risingliquifiednaturalgas(LNG)exports,andmoredemandfromcommercialcustomers.Theindustrialandresidentialsectorsgrewmoremodestly.Ahotter-than-normalsummerandconstraintsoncoal-firedpowergenerationlifteduseofnaturalgasinpower.ConsumptionprovedresilienttohighernaturalgaspricesandtheUSbrokeseasonaldemandrecordsdespiteextendedperiodsinwhichnaturalgastradedabove$5permillionBTUatHenryHub.USexportsofnaturalgashaverisenbrisklyoverthepastdecadeandin2022LNGexportsposteda13.1%increasefromtheyearpriortorecordhighs.Commercialandresidentialdemandroseonthebackofthefrigidstarttowinter2022-23.ColderthannormalweatherinthesecondhalfofbothNovemberandDecember2022boostedoverallconsumption.TwodaysbeforeChristmas,thelower-48statessetasingledayrecordfornaturalgasdemand.EVsalessurged2022wasanotherlandmarkyearforelectricvehicles(EVs).SalesofEVsandfuelcellvehicleshitnearly982,000,up50%from2021.Despiteheadwindsincludingrisingbatterycostsandsemiconductorchipshortages,EVsalessurged.Teslaremainedthebiggestplayerinthemarket,accountingforhalfofnewsalesin2022,butFord,Stellantis,VW,Geely,BMWandGMalsopostedstrongnumbers.Teslaaccountedfor63%ofallEVsalesasrecentlyas2020.Batteryelectricvehicles(BEVs)madeup81%of2022sales,withplug-inhybridelectricvehicles(PHEVs)makinguptheremaining19%andfuelcellvehiclesaccountingforunder1%ofsales.9©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Executivesummary(5of7)HigherpricesforkeycleanenergycommoditiesPricesforkeycommoditiesthatunderpinthecleanpowersectorwerestubbornlyhighthroughmuchof2022,buteasedsomewhatbyyearend.PolysiliconpricestouchednewhighsinAugust2022duetotemporarysupplydisruptionsandstrongdemand.However,supplyroseandpricesfelltowardtheendof2022asexistingplantsreturnedtoservicesandnewfactorieswerecommissioned.Lithiumcarbonatepricesspikedin2022andatonepointthematerialtradedat14timesitsJanuary2021price.SpotpriceshavejumpedinthepastyearduetohighEVdemandfromChina.BySeptember2022,anLFPbatterycellcost$144/kWhgivenspotmarketpricesforlithiumcarbonate,BNEFestimated.Thiswasup9%fromNovember2021whenmanufacturerswerejuststartingtoseelargerawmaterialpriceincreases.WhilelithiumbenchmarksdescendedslightlyinDecember2022,theyremainatmuchhigherlevelsthanbeforethepandemic.Australia,ChileandChinaremainthetopnationsformininglithium.TheDemocraticRepublicofCongoremainsthetopproducerofcobalt.Bothareusedinlithium-ionbatteriesinelectricvehicles.ElevatednaturalgascostsForthesecondyearinarow,USnaturalgaspricesrosesignificantlyduetotightmarketconditionsthatincludedrisingdemandforgasathomeandabroad.TheaveragebenchmarkHenryHubwholesalenaturalgaspricefortheyearrose52%whileresidentialandcommercialpricesrose11%and19%,respectively.Industrialuserssawthebiggestyear-on-yearchange,withpricesjumping32%.Despitetherise,2022priceswerestillabouthalfofthoseseenin2005.Residentialpriceadjustmentstendtolagindexprices6-12months,dependingonutilitypractices.Industrialpricestendtobemostcorrelatedtowholesalemarkets.Ofnote,naturalgaspricesinthelastquarterof2022begantodecreasetobelow$5/MMBtubythelastweekofDecember2022.USemissionstickedup,butremainbelowpre-CovidlevelsUSeconomy-wideemissionsinchedup1.0%from2021,BNEFestimates.Thisreflectedthecontinuationofatrendbegunin2021whentheeconomyfirstbeganreboundingfromtheCovid-19pandemic.Despitetheuptick,2022USemissionswerestill3%belowpre-pandemic(i.e.2019)levels.Emissionsfromthetransport,power,industrialandagriculturalsectorsoftheUSeconomyallrosebutfinished2022below2019levels.Thissuggeststhatsomeemissionsreductionsmadein2020havepersisted,particularlyfortransportation,thetopemittingsector,andforthepowersectorthathasseensteadydecarbonizationforthelastdecadeduetocleangenerationandenergyefficiency.Asrecentlyas2016,thepowersectorwasthenumberonesourceofUSCO2emissions.In2022,emissionsfromthepowersectorwereessentiallylevelwiththosefromindustrialsources.10©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Executivesummary(6of7)Thethirdmostcostlyyearforclimate-relateddisastersTheimpactsofclimatechangecontinuetobefeltthroughouttheUSand2022wasthethirdmostcostlyclimatedisasteryearonrecord.Thecountryexperienced18climate-relateddisasterscausingatleast$1billionindamageapieceoverthe12months.Threetropicalcyclonesaccountedfor70%ofthe$165billiontotalcost.Anestimated3.4millionAmericanswereforcedatsomepointtoevacuatetheirhomesduring2022duetonaturaldisasters,accordingtotheCensusBureau.Inresponse,citizensandcommunitiesareinstallingagrowingnumberofresidentialback-uppowerstoragesystemsandmini-grids.EnergystoragedeploymentandmanufacturingTheUScommissionedanestimated4.8GWofutility-scalenon-hydropowerstoragetobringtotalcapacityto11.4GW.Pumpedstorageisthelargestenergystorageresourceat67%withbatteryandthermalstorageaccountingfortherest.Despitesupply-chainrelateddelaysinprojectdevelopment,theUSremainsthelargestdemandmarketforenergystorageintheworld.Energyshiftingisthedominantusecasefornewbatteriesaspairingrenewableswithstorageisbecomingacommoncost-effectiveoptiontodisplacefossilfuelprojects.Utilitiesacrossthenationarebeginningtociteenergy-storagetechnologiesintheirlong-termresourceplanningandassolutionstotheirpowersystemflexibilityneeds.TheUSalsomadeimportantstridestowardbecomingahubforbatterymanufacturingin2022.AftertheIRAintroduceda$45/kWhofcellandmoduleproductiontaxcredit,automakersandbatterymanufacturershaveracedtoidentifyinvestmentopportunities.Post-IRAcommitmentstotheNorthAmericanbatterysupplychainreachedalmost$17billionbytheendof2022.AnumberofdevelopershaveannouncedplanstobuildorexpandplantsinOhio,Michigan,Tennessee,NewYorkandotherstates.OffshorewindTheUSoffshorewindsectorcontinuedtomakeprogressin2022withincreasedfederalsupport,additionalstatetargetsandthefirsttwocommercial-scaleprojectsunderconstruction.However,risingequipmentcostscomplicatedsomedevelopers’plans.Critically,theIRAextendedtheInvestmentTaxCredit(ITC)foroffshorewinduntilatleast2032,allowingdeveloperstoreducetheirprojects’buildingcostspotentiallyby30%.TheBureauofOceanEnergyManagement(BOEM)heldthreeleaseauctionsin2022.Atthestatelevel,California,Louisiana,andNewJerseyalleithercreatedorexpandedoffshorewindtargets.11©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Executivesummary(7of7)ThemostimportantfederalenergytransitioninvestmentinUShistoryInasurpriseturnofeventsinAugust,CongresspassedtheIRA,themostconsequentiallaweverintendedtoaddressclimateissues.Thelawrepresentedamajorvictoryforvariouscleanenergysectors.TheIRAprovidesatleast$369billioninsupporttoenergytransitiontechnologies.Thelawprimarilyusestaxcreditstoachieveitsgoals,estimatedatleastat$271billion,overaten-yeartimehorizon.Itextendsorexpandscreditsforvirtuallyeveryenergytransitionsector,withatransitiontoatechnology-neutralapproachformanyafteryeartwo.Withineachmajorsector,itofferssupportfromthebottomtothetopofthevaluechain,fromendconsumersuptorawmaterialsproviders.ThelawstandstoputtheUSfarclosertotheBidenadministrationgoalofhalvingeconomy-wideCO2emissionsby2030(vs.2005).TheTreasuryDepartmentisintheprocessofwritingmanyoftherulesin2023onhowtheseandothertaxpoliciesareimplemented.Interestin“clean”hydrogengrowswithIRApassageToday,theUSconsumesapproximately10millionmetrictonsofconventionalhydrogenannuallyinindustriessuchasoilrefiningandammoniaproduction.Theseindustries,alongwithotherslikesteelproductionandenergystorage,couldshifttheUSfromcarbon-intensivehydrogenconsumptiontolow-carbonhydrogenconsumptioninthecomingyears.In2022,BNEFtracked92MWofhydrogen-producingprojectscommissioned.Amorediverseslateofplayersisnowpoisedtogetinvolvedinproduction.SolCaGasannouncedtheAngelesLinkprojectin2022,agreenhydrogenproductionpipelineservingtheLosAngelesregion–anticipatedtobethenation’slargest.In2023,CFIndustriesInc.isexpectedtocommissionanelectrolyzeratalargeammoniaproductionfacility.AirProductsandChemicalsInc.planstocommissionanelectrolyzerfocusedonroadtransport.FloridaPowerandLightseekstocommissionafacilitytogeneratepower.RNGisalsoattractingnewinterestandinvestment,stemmingfromnewincentivesforRNGproductionfromtheIRA.EnergyefficiencyspendingstabilizedafteraCovid-relateddropAfterasharpdropinefficiencyspendingfrom2019to2020duetothepandemic,efficiencyspendingstabilizedin2021(thelastyearforwhichthereiscompletedata).Spendingrose1%year-on-yearfrom2020to2021toreach$7.7billion,accordingtodatacompiledbytheAmericanCouncilforanEnergyEfficientEconomy(ACEEE).Spendingonefficiencyimprovementsrelatedtoelectricitystayedessentiallyflatat$6billionin2021whilespendingonimprovingtheefficiencyofnaturalgasdeliverygrewfrom$1.5billionto$1.7billion.Thetotalimpactofallratepayer-fundedelectricenergyefficiencyprogramsinplacein2021wasasavingsofabout290millionMWh–equivalenttoapproximately7.63%of2021electricityconsumption,accordingtoACEEE.12©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas13©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BureauofEconomicAnalysis,EIA,BloombergNEFNotes:Valuesfor2022areprojected,accountingforseasonality,basedonlatestmonthlyvaluesfromEIA(dataavailablethroughSeptember2022).2021GDPestimateisaprojectionfromeconomistscompiledatECFC<GO>ontheBloombergTerminal.USenergyoverview:EnergyproductivityUSGDPandprimaryenergyconsumptionUSenergyproductivity●In2022,theUSeconomyexpandedby1.9%whileprimaryenergyconsumptionroseatafasterclipof3%.Takentogether,US"energyproductivity"(theratioofUSGDPvs.totalUSenergyconsumption)dipped1%.WhilebothGDPandenergyconsumptionrose,theformerrosefasterthanthelatteryear-on-year.●WithCovid-19fading,USprimaryenergyconsumptionreturnedtopre-pandemiclevels,roughlymatchingactivityin2019.Overthepast10years,USGDPhasgrown22.9%whileprimaryenergyconsumptionhasrisen6.7%.Theresult:a15.2%increaseinproductivity.●Lookingevenfurtherback,thelong-termtrendremainsclear.From1990-2022,theUShasloggeda79%improvementinenergyproductivity.0.81.01.21.41.61.82.02.21990'952000'05'10'15'20'22Indexedto1990GDP(indexed)Primaryenergyconsumption(indexed)Covid0.080.100.120.140.160.180.200.221990'952000'05'10'15'20'22$trillionofGDP/quadrillionBTUofenergyEnergyproductivity14©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:EIA,EPA,BloombergNEFNotes:Valuesfor2021areprojected,accountingforseasonality,basedonlatestmonthlyvaluesfromEIA(dataavailablethroughSeptember2022)USenergyoverview:PrimaryenergyconsumptionbysectorUSprimaryenergyconsumptionUSend-useenergyconsumption●DemandforenergyroseacrosseachofthemajorsegmentsoftheUSeconomyin2022.Thisincludedenergyusedforpower,transportation,andindustry,aswellasenergyusedinhomesandbusinesses.TotalUSprimaryenergyconsumptionreturnedtopre-pandemiclevels.●Amongthesegmentsdepictedintheleft-handchart,powergrewatthefastestcliponavolumebasistoreachatotal38quadrillionBTU,up1.2quadrillionBTUfrom2021.Onapercentagebasis,theresidentialandcommercialsegmentsgrewfastestwithupticksof6%apieceyear-on-year.●WhileelectricvehiclesalessurgedintheUSin2022,energyusedintransportationremainsdominatedbyliquidfuels.Energyusedintransportationroseto27.7quadrillionBTUin2022butremainsbelowitspre-pandemicpeakof28.7quadrillionBTUin2019.Electricityaccountsforjust0.3%ofenergydemandfortransportation.●Amongend-usesegmentsasmeasuredonapercentage(right-handchart),demandlevelsremainedroughlythesamefrom2021to2022.Note:ElectricityisexcludedfromIndustrial,Residential,CommercialandTransportationsectorsandaggregatedin“Power”28%27%27%28%29%29%28%29%26%28%27%33%32%32%32%32%33%32%33%34%33%33%18%18%19%19%19%18%18%18%18%18%18%21%22%22%21%21%20%21%21%22%21%22%201220142016201820202022ResidentialCommercialIndustrialTransport051015202530354045200020052010201520202022QuadrillionBTUPowerTransportationIndustrialResidentialCommercialNote:Sectorendusesincludeelectricityuse15©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:AmericanCouncilforanEnergyEfficientEconomy(ACEEE)StateEnergyEfficiencyScorecard:2022ProgressReportUSenergyoverview:EnergyefficiencyUSstateswithEnergyEfficiencyResourceStandards(EERS)Utilityenergyefficiencyspending●EnergyEfficiencyresourcestandards(EERS)arestate-levelpoliciesthatrequireutilitiestoinvestinmeasuresthatimproveend-userefficiencytomeetenergy-savingsgoalssetbythegovernment.In2022,26statesandtheDistrictofColumbiahadEERSpolicies.●Afterasharpdropinefficiencyspendingfrom2019to2020duetothepandemic,efficiencyspendingstabilizedin2021(thelastyearforwhichthereiscompletedata).Spendingrose1%year-on-yearfrom2020to2021toreach$7.7billion,accordingtodatacompiledbytheAmericanCouncilforanEnergyEfficientEconomy(ACEEE).●Spendingonefficiencyimprovementsrelatedtoelectricityonlystayedessentiallyflatat$6billionin2021whilespendingonimprovingtheefficiencyofnaturalgasdeliverygrewfrom$1.5billionto$1.7billion.●Thetotalimpactofratepayer-fundedenergyefficiencyprogramswasasavingsofabout290millionMWhin2021–equivalenttoapproximately7.63%of2021electricityconsumption,accordingtoACEEE.05101520253035'95'00'05'10'15'20'22NumberOfStatesElectricandNaturalGasElectricOnly6.36.66.76.86.16.01.31.31.41.51.51.77.68.08.18.47.67.70246810201620172018201920202021NaturalgasElectricity+3%+1%$bn+4%-9%+1%16©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:EIA,BloombergNEFNotes:“CAGR”ontherighthandsidegraphiscompoundannualgrowthrate.Valuesfor2022areprojected,accountingforseasonality,basedonthelatestmonthlyvaluesfromEIA(dataavailablethroughSeptember2022).BTUstandsforBritishthermalunits.USenergyoverview:EnergyandelectricityconsumptionUSprimaryenergyconsumption,byfueltypeUSelectricitydemand●UStotalenergyconsumptionrose2.95%from2021to2022toanestimated100.7quadrillionBTUastheUSeconomycontinuedtorecoverfromtheworsteffectsoftheCovid-19pandemic.Contributionsfromnon-hydrorenewables(windandsolar,primarilybutalsobiomass,waste-to-energyandgeothermal)rose10.2%fromtheyearpriortoaccountfor13.2%oftotalUSenergydemand.●TheroleofnaturalgasinoverallUSenergyconsumptioncontinuedtogrow,rising5.5%year-on-year.NaturalgasnowaccountsforapproximatelyonethirdofallUSenergyconsumption.●Nuclear’scontributionremainedessentiallylevelin2022.Coalconsumptionslipped4.9%year-on-yearto10.03quadrillionBTU,lessthanhalfitsall-timepeakof22.8quadrillionBTUin2005.Petroleumusegrewby2.22%year-over-year.OilisrarelyusedinUSpowergenerationbutaccountsforthevastmajorityoftransportationfuel.●Totalretaildemandforelectricityposteditssecondstraightyearofgrowthafterdippingduringthepandemic.Itrose3.1%2021-2022.Electricitydemandhasrisenjust6%inthelastdecade(excludingcontributionsfromdistributed,small-scalefacilities).Thecompoundannualgrowthrate(CAGR)forelectricityhasbeengenerallyslidingsince1990astheUSeconomyhasusedpowermoreefficiently.0153045607590105'2000'05'10'15'20'22QuadrillionBTURenewables(includinghydro)NaturalgasNuclearPetroleumCoal-6%-4%-2%0%2%4%6%05001,0001,5002,0002,5003,0003,5004,0004,5002000'05'10'15'20'22TWhofdemandDemandAnnualgrowthrateCAGRsince1990Growthrate17©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:EIA,BloombergNEFNote:Valuesfor2022areprojected,accountingforseasonality,basedonlatestmonthlyvaluesfromEIA(dataavailablethroughOctober2022)USenergyoverview:ElectricitygenerationmixUSelectricitygeneration,byfueltypeUSelectricitygeneration,byfueltype●TotalUSpowergenerationrosebyanestimated3.4%year-on-yeartoanewall-timehighof4,298terawatthours(TWh)in2022.●NaturalgasremainedthelargestsourceofUSpowerandsetanotherrecordwith1,694TWhofproductionin2022,up6.5%fromtheyearprior.Overall,naturalgasaccountedfor39.4%of2022USpowergeneration.●Thecontributionofrenewables,includingwind,solar,biomass,waste-to-energy,geothermalandhydro,roseatthefastestpaceamongmajorsectors.Renewablepowerjumpedto974TWhfrom864TWhin2021,a12.6%year-on-yearrise.Renewableswere22.7%oftotalUSpowergenerationin2022.Thegrowthwasdrivenbysurgesinoutputfromwindandsolarandgrowthinhydroproduction.●Renewablesandnaturalgashavegrownfromacombined43%oftotalpowergenerationto62%injustadecade.In2022,zero-carbonpower(renewablesgenerationplusnuclearpower)accountedforanall-timehighof40.6%ofalloutput.●Coal-firedgenerationdeclined66TWh2021-22anddippedto19.4%ofallproduction.Thiswasslightlyabovecoal’srecentlowof19.1%ofgenerationin2020.37%39%39%33%30%30%27%23%19%22%19%19%19%19%19%20%20%19%19%19%19%18%31%28%28%33%34%32%35%38%40%38%39%12%13%13%14%15%18%17%18%20%21%23%201220142016201820202022Renewables(includinghydro)NaturalgasNuclearCoal1,5141,5811,5821,3521,2391,2061,1499657738988327697897977978068058078097907787721,2381,1381,1391,3481,3921,3101,4851,6011,6391,5911,69449552255055862871173676482586497405001,0001,5002,0002,5003,0003,5004,0004,500201220142016201820202022TWh18©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.PAMENYVAWVUTWAWYWIILIAKSMOMNNDNEAROKTXAZCACOIDMTNMNVORINMIOHFLGAKYNCSCLAALMSSDSource:EIA,BloombergNEFNotes:MISOistheMidwestregion;PJMistheMid-Atlanticregion;SPP(SouthwestPowerPool)coversthecentralsouthernUS;ErcotcoversmostofTexas.USenergyoverview:ElectricitygenerationmixbyUSpowermarket(TWh)CaliforniaPJMNewYorkSouthwestErcotSoutheastNewEnglandMISONorthwestSPP-200400600800201120162021-200400600800201120162021-200400600800201120162021-200400600800201120162021-200400600800201120162021-200400600800201120162021-200400600800201120162021-200400600800201120162021-200400600800201120162021-200400600800201120162021●ThepowergenerationmixvariesthroughouttheUSwithdifferentpower-generatingtechnologiescontributingvariousamountsindifferentmarkets.Thetop-linevolumeofgenerationalsovaries,withhigherdemandinsomeregions.Powercanalsobesoldbetweenregions,incentivizingareaswithlowerpricestogeneratemore.AbouttwothirdsofUSpowersalesareincompetitivewholesalemarkets,withthelargestmarketsbeingPJM,MISO,andErcot.●Majortrendsoverthelastdecadehaveincludedtheriseofnaturalgas-firedgenerationandthefallofcoal-firedgenerationintheSoutheastandPJM.For2021(thelastyearforwhichthereissufficientlycompleteregionaldata),coalgenerationreboundedinmostregions,rising16%comparedto2020.Renewablesusealsogrewacrossmostmarkets2020-21.In2022,coalusenodoubtfellinsomemarkets.19©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.0102030405060708020002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022GWStorageRenewables(includinghydro)NuclearOilGasCoalSource:EIA,BloombergNEFNote:AllvaluesareshowninACexceptsolar,whichisincludedasDCcapacity.“Allcapacityfiguresrepresentsummergeneratingcapacity.IncludesinstallationsorplannedinstallationsreportedtotheEIAthroughOctober2021,aswellasBloombergNEFprojections.USenergyoverview:ElectricgeneratingcapacitybuildbyfueltypeUSelectricgeneratingcapacitybuild,byfueltype●TheUScommissionedanestimated43GWofnewpower-generatingandpower-storagecapacityin2022.Renewablesaccountedforapproximatelythreequartersofthisat32GW.Still,thebuildoutofnewwind,solar,biomass,geothermal,wastetoenergy,andotherzero-carbontechnologiesothersslowedfromtherecordlevelachievedin2021.●Theadditionofnewnaturalgas-firedpowergeneratingcapacityslidslightlyto6.5GWcommissionedin2022from7.3GWtheyearprior.ThismarkedthelowestannualvolumeofnewgasaddedtotheUSgridinovertwodecades.●Therisingcontributionofvariablerenewablegenerationtothegridhascreatedgreaterdemandforenergystoragecapacity.In2022,theUSsetanewrecordforstoragebuildwith4.8GWadded,upfromthepriorrecordbuildof3.7GWin2021.20©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,EIANotes:AllvaluesareshowninACexceptsolar,whichisincludedasDCcapacity.Numbersincludeutility-scale(>1MW)projectsofalltypes,rooftopsolar,andsmall-andmedium-sizedwind.IncludesinstallationsorplannedinstallationsreportedtotheEIAthroughOctober2021,aswellasBloombergNEFprojections.USenergyoverview:Renewableenergycapacitybuildbytechnology●TheUSadded32GWofnewwindandsolarpower-generatingtothegridin2022.Thatwasdown5GWfromthe37GWinstalledin2021andmarkedthefirstyear-on-yearslideinnewbuildsince2018asdevelopersstruggledwithtangledsupplychainsandhighercosts.●Newsolarprojectscompletedin2022totaled21GW,downfrom24GWtheyearprior.TheUSsolarmarketwasupendedinthefirsthalfof2022aftertheCommerceDepartmentannounceditwasinvestigatingwhethertoimposehighertariffsonsolarequipmentfromfourSoutheastAsiannations.ByJune,PresidentBidenhadissuedanexecutiveordereffectivelypostponingtheimpositionofanysuchtariffsfortwoyears.●Windcapacityadditionsfor2022declinedto11GWfrom13GWtheyearprior.Taxcredituncertainty,coupledwithsupplychainconstraints,interconnectiondelays,andhighinputcostsweretheyear’smajorheadwinds.WhiletheInflationReductionActrevivesthefadingtaxcreditmechanismfornewwindfarms,itwilltaketimeforthesupportsofferedbythenewlawtotranslateintonewcapacityadditions.●Newbiomass,geothermal,andsmallhydrocapacitybuildremainedcomparativelysmallin2022.Inall,21MWofnewbiomassandwaste-to-energy(WTE)capacitycameonlinein2022.In2022,MiamiDadeandPascoCountiesinFloridapubliclyannouncedintentionstoexpandorbuildnewWTEcapacity.571415887810171311123677141110121924216101891316231918223637322010201220142016201820202022eGWGeothermalBiomass/WasteSolarWindHydro21©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,EIANotes:AllvaluesareshowninACexceptsolar,whichisincludedasDCcapacity.Hydropowercapacityandgenerationexcludepumpedstoragefacilities(unlikeinpastFactbooks).Totalsmaynotsumduetorounding.Valuesfor2021areprojected,accountingforseasonality,basedonlatestmonthlyvaluesfromEIA(dataavailablethroughOctober2021)USenergyoverview:CumulativerenewableenergyUScumulativerenewablecapacityUSrenewablegenerationbytechnology●TotalUSrenewableenergycapacity,excludingpumpedhydrofacilities,standsat385GW.Despitesnarledsupplychains,inflationarypressures,andtradepolicyworries,theinstalledfleetofwindandsolargrew13%year-on-year.TotalrenewableelectricitygenerationintheUSrose12%yearonyear,to974TWhor23%oftotalUSpowergeneration.●Amongrenewabletechnologies,windwasthelargestgeneratingsource.Thenearly149GWwindfleetproduced435TWhofelectricityin2022.Thatwasfollowedbyhydroelectricgenerationat261TWh,upfrom252TWhin2021.●Productionfromalltypesofsolargeneratingprojectshit207TWhin2022,makingitthethird-largestrenewablegeneratingsource.Rooftopsolaratopresidentialandcommercialbuildingnowrepresents35%ofallsolarinstalledcapacity.2603192762692592492683002932882852522619512014116818219122725427329633837843525365364728911514735424960565758616464636362585554544275134955225505586287117367648258649742010201220142016201820202022eTWhGeothermalBiomass,biogas,waste-to-energySolarDGSolarLargeWindHydro7979797979798080808080808040476162677584919810812513814924813202741526374931181391361461631711831992212392572793153523852010201220142016201820202022eGWGeothermalBiomass/WasteSolarWindHydro22©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,EIA,EPA.USenergyoverview:Greenhousegas(GHG)emissionsEconomy-wideandenergysectoremissionsEmissionsbysector●BNEFestimatesthatUSeconomy-wideemissionsinchedup1.0%in2022fromtheyearpriorwithemissionsrisingineverymajorsectoroftheeconomy.Toanextent,thisreflectedcontinuationofatrendbegunin2021whentheeconomyfirstbeganreboundingfromtheCovid-19pandemic.From2020-2021,USemissionsjumped5.8%.●Despitetheyear-on-yearuptick,2022USemissionswerestill3%belowpre-pandemic(i.e.2019)levels.Giventhateconomy-wideemissionshavetrendeddownsince2005,thiswasnotasignificantsurprise.Emissionsfromeachindividualsectorin2022remainedbelow2019levels.Theexceptionwasthebuildingssectorwith2022emissionsthatmatched2019.Thissuggeststhatsomeofemissionsreductionsmadein2020havepersisted,particularlyfortransportationwith2022emissions5%below2019levels.●PowerwentfrombeingthehighestemittingsectorintheUSeconomy,tosecondwhenitfellbehindtransportin2016.In2022,emissionsfromthepowersectorwereessentiallylevelwiththosefromindustrialsources.05001,0001,5002,0002,5001990'952000'05'10'15'20'22MMtCO2ePowerTransportIndustrialAgricultureBuildings4,0004,5005,0005,5006,0006,5007,0007,5008,0001990'952000'05'10'15'20'22MMtCO2eTotal(gross)GHGemissionsGHGemissionsfromenergysector23©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,EIA,BloombergTerminalNotes:WholesalepricesaretakenfromproxypowerhubsineachISO.Allpricesareinreal2022USD.Retailpowerpricesshownherearenotexactretailratesbutweightedaveragesacrossallrateclassesbystate,aspublishedbytheEIA.RetailpricesareupdatedthroughNovember2022.USenergyoverview:RetailandwholesalepowerpricesWholesalepowerpricesRetailpowerprices●Wholesalepowerpricescontinuedtorisein2022,reflectingthehigherpriceofnaturalgasaroundthecountry.Inmostwholesalemarketspriceswereattheirhighestlevel(inrealterms)since2014.●Withwholesalepowerpricesincreasingforthelasttwoyearsinsuccession,retailrateshavealsorisen,withtheaveragepricerisingby4.1%inthepastyearontopofinflation.Whilethisislessdramaticthantheswingsofthewholesalemarket,itisthebiggestyear-on-yearincreasesince2006,whenratesrose5.8%.●Thispicturedifferssubstantiallyatastatelevel.ElectricityconsumersinNorthDakota,Wyoming,SouthDakota,Nebraska,Michigan,Montana,WashingtonandOregonallbenefitedfromratechangesthatweresubstantiallybelowinflation,buckingthenationaltrend.ThesestatesaremostlyinregionswithhighlevelsofwindcapacityandexposuretoCanadiangasprices,whichweresubstantiallybelowUSbenchmarksin2022.0501001502002502010'15'20'22$/MWh(real-2022)PJMNewYorkNewEnglandIowaCaliforniaTexasFlorida0204060801001201401601802002010'15'20'22$/MWh(real-2022)PJMNewYorkNewEnglandMISOCaliforniaTexas24©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,governmentsources(EIAfortheUS)Notes:Pricesareaverages(andinmostcases,weightedaverages)acrossallregionswithinthecountry.JapanesedataarefortheC&Isegmentand2016figurescomefromadifferentsourcethanprecedingyears.USenergyoverview:AverageelectricityratesbycountryIndustrialpowerpricesResidentialpowerprices●TheUS–andNorthAmericaingeneral–offersindustrialcustomerssomeoftheleastexpensiveelectricityintheworld.AmongtheG-7nations,theUSofferedthelowestaverageindustrialpowerpriceof7.2centsperkilowatt-hourin2021(thelastyearforwhichthereiscompletedata).●ThepriceshouseholdspayforpowerintheUShasbeenrelativelystableoverthepastdecade,risingjust12.5%innominaltermsfrom2012through2021.●InGermany,powerpricessurgedin2021duetorisingnaturalgasprices,whichrosefurtherin2022aftertheoutbreakofthewarinUkraine.Japan’spowerpricesslidsomewhatin2021asthecountryreliedmoreondomesticrenewable,nuclearandcoalgenerationandlessonimportednaturalgas.0501001502002502009201020112012201320142015201620172018201920202021$/MWh(nominal)GermanyJapanIndiaChinaMexicoUSCanada0510152025303540452009201020112012201320142015201620172018201920202021cents/kWh(nominal)25©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,EIAShortTermEnergyOutlookUSenergyoverview:USnaturalgaspricing,wholesaleandbyenduseNaturalgaswholesalepricesatHenryHub,LANaturalgaspricestoendusers,USaverage●Forthesecondyearinarow,USnaturalgaspricesrosesignificantlyduetotightmarketconditionsthatincludedrisingdemandfornaturalgasathomeandabroad.●TheaveragebenchmarkHenryHubwholesalenaturalgaspricefortheyearwasrose11%fortheyearandwasup19%forresidentialandcommercialconsumers,respectively.Industrialuserssawthebiggestyear-on-yearchange,withpricesjumping32%.Despitetherise,2022priceswerestillabouthalfofthoseseenin2005.●Residentialpriceadjustmentstendtolagindexprices6-12months,dependingonutilitypractices,Industrialpricestendtobemostcorrelatedtowholesalemarkets.Ofnote,naturalgaspricesinthelastquarterof2022begantodecreasetobelow$5/MMBtubythelastweekofDecember2022.-51015202520002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022Real(1/2022)$/MMBtuResidentialPriceCommercialpriceIndustrialPrice-24681012141620002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022Real(1/2022)$/MMBtu)26©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BureauofEconomicAnalysis,BloombergNEFUSenergyoverview:EnergyasashareofpersonalconsumptionexpendituresTotalenergygoodsandservicesasshareoftotalconsumptionexpenditureComponentsoftotalconsumptionexpenditure,12-monthrollingavg.●Totalconsumerspending,includingallenergygoodsandservices,rosesignificantlyin2022asinflationarypressuresaffectedthebroaderUSeconomy.Butconsumersstilldevotedarelativelysmallershareoftheirtotalspendingtoenergycomparedtohistoricallevels,helpedbylow-costrenewables,energyefficiencymeasures,andrelativelyinexpensivenaturalgas.Energyspendingaccountedfor4.6%oftotalUSpersonalconsumptionexpendituresin2022,up0.63percentagepointsfrom2021.●The1.74%shareofhouseholdexpendituresthatwenttoelectricityandnaturalgasin2022wasonlyslightlyabove2021levelsof1.63%.Thiscontrastedwiththesteepjumpinmotorfuelspend.Transportation-relatedenergyconsumptionspendingrosefrom2.1%in2021to2.65%in2022.Sincethestartof2023,USnaturalgaspriceshavefallendramatically.0%2%4%6%8%1992199720022007201220172022Totalenergyexpenditures0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%1992199720022007201220172022ElectricityNaturalgasMotorfuel27©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:TheUSDepartmentofEnergy’s2022Energy&EmploymentReportUSenergyoverview:JobsinselectsegmentsoftheenergysectorJobsinselectenergysegments,2019-21Employmentbypower-generatingtechnology,2021●Thetotalnumberofworkersemployedintheenergysectorgrewby4%to7.8millionin2021(thelastyearforwhichthereiscompletedata),accordingtoanannualUSDepartmentofEnergyreport.●Whileenergy-sectoremploymenthasnotrecoveredentirelytopre-COVIDlevels,itdidoutpaceoverallUSemploymentin2021,whichgrew2.8%year-onyear.●Amongpower-generatingtechnologies,solarrepresentsthelargestshareoftotaljobs,accountingfornearly40%ofpower-sectoremployment.●Energyefficiency,oneofthehardesthitsectorsduringCovid-19,representedover2.1millionjobsin2021,up58,000fromtheyearpriorasefficiencyprogramsresumedinmanypartsofthecountry.-50,000100,000150,000200,000250,000300,000350,000400,000SolarWindNaturalGasCoalHydropowerNuclearOtherCHPBioenergyOilGeothermal0.001.002.003.00MotorVehiclesEnergyEfficiencyFuelsTransmission,Distribution,andStorageElectricPowerGeneration20212020201928©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas29©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:NationalOceanicandAtmosphericAdministration,BloombergNEF.Note:Portraysannualcountsofdrought,flooding,freeze,severestorm,tropicalcyclone,wildfireandwinterstormeventsintheUSwithlossesofmorethan$1billioneach.Policy:InfrastructureandresilienceUSbillion-dollarweatherandclimatedisastersQuarterlyresidentialenergystoragesystemsinstalledinCalifornia●TheUSin2022experienced18climatedisasterscausingatleast$1billionindamage.Threetropicalcyclonesmadeup70%ofthe$165billiondollarsindamage,making2022thethirdmostcostlyclimatedisasteryearafter2017and2005.Atotalof3.4millionAmericanswereforcedatsomepointtoevacuatetheirhomesduring2022duetonaturaldisasters,theCensusBureauhasestimated.●Motivatedbypolicyincentivesandconcernsaboutgridreliability,Californiautilitycustomersinstalledmorethan23,760residentialenergystoragesystemsQ1-Q32022(thelatestquarterforwhichthereiscompletedata).Thisnumberis25%greaterthanforthesimilarthreequartersof2021and61%higherthanin2020.●Microgrids,primarilycomprisedofbatteries,solar,andcombinedheatandpower(CHP)systems,aregrowinginCalifornia,TexasandFlorida.In2022,therewere101microgridsonline,with85MW/188MWhofcapacityinstalledintheUS.-1,0002,0003,0004,0005,0006,0007,0008,0009,000Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q1Q2Q320182019202020212022Systems05010015020025030035040005101520252010201120122013201420152016201720182019202020212022$(billions)EventsDroughtFloodingFreezeSevereStormTropicalCycloneWildfireWinterStormAllDisastersCost30©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:EIA,EPA,BloombergNEFPolicy:USprogresstowardemissionsgoalsUSeconomy-wideemissionsUSpoweremissions●TheBidenadministrationhaspledgedtheUStoaNationallyDeterminedContribution(NDC)ofcuttingemissionsto50-52%below2005levelsby2030,undertheframeworkoftheParisagreement.ThisfollowsonfromtheoriginalParispledgemadeundertheObamaadministrationofreaching26-28%below2005levelsby2025.BlooombergNEFestimatesthatUSemissionsfor2022were13.8%below2005levels,leavingtheUSabouthalfthewaytowarditsParistarget.●Whilethedowntickinemissionsin2020offeredasliverofhopethattheUScouldhonoritsoriginalParispledge,thesharpreboundin2021followedby2022’sincrementalyear-on-yearincreasehassetthecountrybackfromhittingitsgoals.●Poweristheonlysectorforwhichtheadministrationhasexplicitlysetanemissionsreductiontarget.NettingoutthepowergoalfromtheoverallUSemissionsgoaloffersanimplicitpathwaynon-powerUSemissionsmustfollowfortheUStohititsoveralltarget.FortheUStohavestayedontracktowardmeetingitsgoalsin2022,powersectoremissionsneededtofallby6%ormore.Instead,theydippedjust1.5%.Acrossallothersectors,emissionswouldhaveneededtoslide0.9%in2022tokeeptheUSoncourse.Instead,theyrose1.9%.01,0002,0003,0004,0005,0006,0007,0008,0002000200520102015202020252030MMtCO2e01,0002,0003,0004,0005,0006,0002000200520102015202020252030MMtCO2e2025target(Paris)2030targetImpliedemissionspathwaytohitclimatetargetsImpliedpathwaytohitBidenpowersectortargetPowersectoremissionsNon-powersectoremissionsImpliedpathwaytoeconomy-widegoalsifpowersectorisontrackwithitsgoals31©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.●January1:Manytaxprovisionstakeeffect●February18:Credittransferelectionsbecomepossible.EPAgreenhousegasreductionfundgrantsoffered.AdvancedEnergyProjectCreditawardbegins.EPAofferscleanheavy-dutyvehiclesgrantsforcities,states,tribes,andschools.Solarandwindenvironmentaljusticecapacitylimitationtakeseffect.●May13:InitialofferingofEPAgreenhousegasplanandimplementationgrants●August16:Cleanhydrogenguidanceexpected●January1:CleanvehicleChina/Russiabatterycomponentexclusion,cleanvehicletaxtransferprovisions,and45Ucleannucleartaxcreditstakeeffect●August16:Lifecycleemissionsmethodologyforalternativefuelsreleased.EPAissuesnewmethanereportingguidelines.●August22:Unspentstateenergyofficehomerebatefundsdistributedtostates●September30:EPAgreenhousegasreductionfundspenddeadline.Defenseproductionactspenddeadline●December31:Energystorageandmicrogridcontrollerconstructioninitiationdeadline●January1:Cleanfuelproductioncreditandcleanelectricityinvestmentandproductioncreditstakeeffect.Costrecoveryforfacilities/energyproperty/storagetakeseffect.Solarandgeothermalinitialconstructiondeadline.Banoncarbatteriesusingcriticalmineralsfromsanctionedcountries.Policy:InflationReductionActkeydetailsSource:EIA,EPA,JointCommitteeonTaxation,InflationReductionAct,BloombergNEF.Note:Left-handchartonlycapturestaxcreditsandincentives,notgrantprogramsorloans..CCUSiscarboncapture,utilizationandstorage.202320242025Transport,28%Industry,24%Power,24%Buildings,13%Agriculture,10%InflationReductionAct$260bnforenergytransitionBipartisanInfrastructureBill$80bnforenergytransitionU.S.emissionsPASSED,August2022PASSED,November2021CCUStaxcredit,$3.2bnNuclearcredits,$30bnBiofuelsincentives,$6bnCleanhydrogentaxcredit,$13bnResidentialefficiencyimprovements,$14bnResidentialenergyimprovements,$22bnCleanvehicles,$12bnCleanrefueling/recharging,$1.7bnWind,solarandstoragetaxcredits,$128bnManufacturingtaxcredits,$37bnGridenhancement,$28bnCCUSdemonstration&infrastructure,$11bnHydrogenhubsanddemonstration,$9.5bnElectrictransitprocurement,$7.5bnCharginginfrastructure,$7.5bnAdvancedreactorprogram,$3.2bnPluggingorphanedwells,$4.7bnNuclearcredits,$6bnEstimated2022-31energytransitionspendinInflationReductionAct,BipartisanInfrastructureLawInflationReductionActkeydates●CongressinAugust2022passedtheInflationReductionAct(IRA),themostconsequentialUSfederallaweverintendedtoaddressclimateissues.Thelawrepresentedamajorvictoryforvariouscleanenergysectors.●TheIRAwouldprovideatleast$369billioninsupporttoenergytransitiontechnologies.ThelawstandstoputtheUSfarclosertotheBidenadministrationgoalofhalvingeconomy-wideCO2emissionsby2030(vs.2005)andin2023and2024,theTreasuryDepartmentwillwritemanyoftherulesin2023onhowtheseandothertaxpoliciesaretobeimplemented.●WhiletheIRAisarguablythemostsignificant,itisnotthesolepieceofclimatelegislationtobepassedduringthe116thCongress.TheInfrastructureInvestmentandJobsAct(akaBipartisanInfrastructureBill)of2021andtheCHIPSandScienceActof2022bothcontainedsignificantsupportforclimate-relatedsectors.32©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,IRS.Note:2022salesare1Q-3Q.ConsidersIRSrequirements,includingmanufacturer’ssuggestedretailprice(MSRP)andNorthAmerican“finalassembly”rules.SomeTeslaModelYtrimsareclosetoMSRPcap,eligibilitywilldependonTesla'spricingstrategy.ChartbasedonIRSrulesfrombeforeMarch2023.Seeslide61forfull-year2022EVsales.Policy:FederalEVtaxcreditoverview●TransportationisthelargestsourceofUSgreenhousegasemissionsandin2022EVswerearecord7%ofUSpassengervehiclesales.●Thebiggestpolicychangetoaffecttheindustryin2022wasthepassageoftheInflationReductionAct,whichextendsandmodifiesthecleancartaxcredit.Thenewpolicy,whichisundergoingimplementation,allowsnewEVstoreceiveupto$7,500iftheymeetstrictsourcingrequirementsforbatterycomponentsandcriticalminerals,aswellashavefinalassemblyintheUS.AsoftheendofJanuary,thetwosourcingrequirementsweredelayeduntilMarchbytheTreasuryDepartment,whichisworkingtofinalizecriteria.Domesticautomakersaremostlikelytobenefitfromthedelay.OfEVssoldintheUSin2022,underathirdwouldnothavequalifiedforthefullcredithadthenewversionoftherulesbeeninplace.●Atthestatelevel,in2022,CaliforniafinalizeditsAdvancedCleanCarsIIpolicy,whichcallsfor100%zero-emissionvehiclesalesstartingin2035.NewYork,Massachusetts,WashingtonandOregonareamongthestatessettofollowtheGoldenState’snewpolicy.InCalifornia,about19%of2022passengercarsaleswereelectricvehicles.USpassengerEVsqualifyingfornewtaxcredits010020030040050060070080020152016201720182019202020212022ThousandRestofUSEVmarketOtherqualifyingmodelsChryslerPacificaPHEVChevroletBoltEUVJeepWranglerPHEVFordMustangMach-EBEVTeslaModel3BEVTeslaModelYBEVWouldqualifyfornewcleancartaxcreditsin2023Wouldnotqualifyfornewcleancartaxcreditsin202333©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas34©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,“EnergyTransitionInvestmentTrends,2022”.Note:BNEFhasupdatedandexpandeditscoverageofenergytransitioninvestmentandslightlymodifieditsmethodology.Formoreseehttps://www.bnef.com/flagships/clean-energy-investment.Finance:EnergytransitioninvestmentEnergytransitioninvestment,bycountryUSenergytransitioninvestment,bysector●BloombergNEFtracksinvestmentintothetechnologiesacceleratingthetrendtowarddecarbonizationoftheglobaleconomy.In2022,over$1trillionwenttowardsupportingtheglobalenergytransition.Chinaledtheway,accountingforjustoverhalfwith$546billionoffundsdeployed.●TheUSisthesecondlargestenergytransitioninvestor,withinvestmentrising11%year-on-yearto$141billion,largelyreflectingthegrowthinelectricvehiclessalesduringtheyear.Electrifiedtransport,acategorythatincludesrevenuesfromthesaleofEVsplusinvestmentincharginginfrastructure,was41%oftotalUSinvestmentin2022.Renewablesaccountedfor35%,downsomewhatfromtheyearprior.●BloombergNEFcountedanestimated$130millioninnewinvestmentinUShydrogenproducingprojectsfor2022.Separately,somehydrogenfirmsdidraisestart-upcapitalintheUS.020040060080010001200200620082010201220142016201820202022$billionS.KoreaBrazilSpainNetherlandsFranceU.K.JapanGermanyU.S.OtherChina020406080100120140160200620082010201220142016201820202022$billionHydrogenCCSSustainablematerialsEnergystorageNuclearElectrifiedheatElectrifiedtransportRenewableenergy35©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:EdisonElectricInstitute,AmericanGasAssociation,BloombergNEFNote:IOUmeansinvestor-ownedutility.GasexpenditurevaluesreflectfiguresreportedtotheAGAbycompaniesacrossthesupplychain,includingtransmissioncompanies,investor-ownedlocaldistributioncompanies,andmunicipalgasutilities.“General’”includesmiscellaneousexpendituressuchasconstructionofadministrativebuildings.Finance:USmidstreaminfrastructureinvestmentUSelectrictransmissioninvestmentbyIOUsandindependentdevelopersUSnaturalgasutilityconstructionexpenditures●Investor-ownedutilities(IOUs)andindependenttransmissiondevelopersspentarecord$27.1billiononelectrictransmissionin2021,accordingtotheEdisonElectricInstitute(EEI).Thiswasup8.4%from2020andup24%from2017.Basedoncompanyreports,investorpresentationsandasurvey,EEIestimatestransmissioninvestmentin2022likelyjumped17%to$31.7billion.Currentcapexplanssuggestinvestmentwillpeakin2023thenslow.However,future-yearbudgetsarenotyetfinalized,andthesenumbersmayberevisedupward.●Thetransmissionupswinghasbeendrivenbytheneedtoreplaceandupgradeagingpowerlines,resiliencyplanninginresponsetopotentialthreats(bothnaturalandman-made),theintegrationofrenewableresources,andcongestionreduction.●Midstreamgasutilityconstructionexpendituresincreasedby$5.6billionin2021fromtheprioryear,to$35.4billion,accordingtotheAmericanGasAssociation.WhiletotalUSnaturalgastransmissioninvestmentrose,therewasa39%fallininvestmentinproductionandstorage,from$614millionto$377million.20.721.922.223.725.027.131.733.032.605101520253035402016201720182019202020212022e2023e2024e$bn(nominal)05101520253035402009201120132015201720192021GeneralProductionandstorageUndergroundstorageTransmissionDistribution$bn(nominal)36©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,BloombergTerminal.Finance:Sustainabledebtraisedglobally/GreenfinancedefinitionsAnnualsustainabledebtissuanceSustainabledebtlabelsandcharacteristics●Globalsustainabledebtissuancehit$1.5trillionin2022–itsfirsteveryear-on-yeardrop.The15.5%declinewasduetopoormacroeconomicconditionsandabroaderpushbackagainstEnvironmental,SocialandGovernance(ESG)efforts.Concernsoverthequalityofcertainsustainableinvestmentsdentedactivity.IntheUS,thebacklashagainstESGinvestinghasgrownstrongerwithsomestatesevenforbiddingtheirpensionfundmanagerstotakeextra-financialmetricsintoaccountintheirinvestmentprocesses.●Althoughgreenloanssawa26%increasein2022,allotherdebttypesdecreasedwithsocialbondsseeingthelargestdrop(39%).EMEA(Europe,MiddleEast,Africa)makeupabout45%oftotalannualsustainabledebtissuance,thebiggestregionalcontributor.ThencomesAPAC(AsiaPacific)at26%,AMER(Americas)at21%,andfinallySNAT(Supernationals)at8%.●Meanwhile,regulatorsgloballybuiltframeworkstodefinewhatconstitutesasustainableinvestment,bolsterdisclosureandintegrateclimateintocorporateandfinancialstrategies,suggestingtheturbulencein2022maybeanaberrationratherthanthenewnormal.68.490.1150.9253.1321.5615.0834.51,763.51,490.102004006008001,0001,2001,4001,6001,800201420152016201720182019202020212022Issuance($billion)Sustainability-linkedbondSustainabilitybondGreenloanSustainability-linkedloanSocialbondGreenbond37©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEFNote:ChartsshowoffsitePPAsonly.Microsoft,notdepictedintheright-handchart,usesadifferentmethodologyfromBNEFtodiscloseitsPPAactivity.Finance:CorporateprocurementofcleanenergyintheUSsurgestonewrecord●Corporatepowerpurchaseagreement(PPA)volumesintheUSreachedarecord19.9GWin2022,easilysurpassingthepreviousrecordof17.1GWin2021.Companiesannounced112individualPPAs,downfrom118thepreviousyearbutmuchgreaterinaveragesize(178MWcomparedwith145MW).TheoverallnumberofdifferentcompaniessigningPPAsintheUStotaled49,downnoticeablyfrom67in2021.●VirtualPPAsreachedarecord17GWin2022,crushingthepreviousrecordof12GWin2021andmakingup85%ofactivityintheUS.Underthisstructure,theprojectsellspowerdirectlyintothewholesalemarketandcapturesthespotpriceatthetime.Thebuyerinturngetsownershipofthecertificatesfromtheprojectandpaysafixedprice.ThevirtualPPAisbecomingmorepopularbothduetothesimplicityofsigningthem–amajorpositivefornewentrantstocorporateprocurement–butalsoduetoincreasingvolatilityintheUSpowermarket.ExtremepowerpricespikeslikethoseseeninFebruary2021inTexasandinDecember2022acrosstheUShavepushedbuyerstohedgetheirexposuretothisvolatility.●Amazon’sactivityintheUS(8.3GW)ismorethanallofthecorporatePPAactivityinEuropein2022(8.1GW).Thecompanysigneddealsin16differentUSstatesin2022.OthermajorbuyersintheUSin2022includedMeta(2.3GW),Google(1.2GW),Ford(0.7GW)andMcDonald’s(0.5GW).Technologycompaniesareexpectedtoneedtosignmoredealsinthecomingyearstokeeppacingwithrisingelectricityconsumption.Renewablecapacitycontractedbycorporations,bysectorLargestcorporateofftakers,20221.42.41.52.64.35.92.43.63.61.04.38.611.413.516.20.20.10.61.53.42.23.58.514.513.717.119.902040608010004812162020111213141516171819202122Annual(GW)WindSolarOtherCumulativeCumulative(GW)7.11.51.20.70.50.50.50.40.31.30.80.3AmazonMetaGoogleFordMotorMcDonald'sStellantisGeneralMotorsIneosComcastBASFGWSolarWind38©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEFNote:ChartsshowoffsitePPAsonlyFinance:Corporatesustainabilitytargets●56newcompaniesjoinedtheRE100in2022,pledgingtofullyoffsettheirelectricityconsumptionwithcleanpoweratafuturedate.Thiswasdownfrom67newcompaniesthatjoinedin2021,suggestingtheRE100’smomentumisslowingascompaniesprioritizeothersustainabilitytargets,likenet-zerogoals.Just10ofthenewjoinersin2022werefromtheUS,comparedwith42acrossAsiaPacific.NewUSmembersincludedAppliedMaterials,EliLilly,LearCorporationandPfizer.Over100companiesintheUShavenowjoinedtheRE100–morethananyothermarket.Thesecompaniescollectivelyconsumed165TWhofelectricityannually,basedontheirlatestdisclosures.●Therearenow397RE100membersgloballyacross25markets.Thesecompaniescollectivelyoffset41%(438TWh)oftheirelectricitydemandwithrenewablesasof2021,ledbycertificatepurchases(123TWh)andoffsitewind(51TWh).●Intotal,the397RE100memberswillneedtopurchaseanadditional290TWhofcleanelectricityin2030tomeetandmaintaintheirRE100goals.Meetingthisentirelythroughoffsitesolarandwinddealswouldcatalyzeanestimated99GWofsolarandwindbuildglobally.Anestimated132TWhoftheabovedemandisexpectedtocomefromtheAmericasregion–mostofthisfromtheUS.ThissuggeststhatcorporatedemandfromRE100memberswillcatalyzesignificantcleanenergybuildintheUSinthecomingyears.CleanelectricitysupplyanddemandforRE100membersUSRE100membersin2022236010213817421225029001002003004005006007002021222324252627282930TWhRenewableshortfallOnsitegenerationCertificatepurchasesSolar(contracted)Wind(contracted)ElectricitydemandRenewableelectricitydemand39©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,PItchBook.Finance:VentureCapital/PrivateEquityInvestmentTop10statesforclimate-techVC/PEinvestmentUSclimate-techVC/PEinvestmentsector●For2022,USventurecapitalandprivateequityinvestmenttotaled$21.5billionwith422differentdealscompleted–aslightdipfrom2021.Thetop10statesreceived$18.23billionor85%ofallfunding.Nolessthan38%ofallfundingwenttoentitiesinCaliforniaalone($8.27billion)withtransportationfirmsreceivingthehighestshareat2.57billion.●Nationwide,energyandtransportsectorswerethetwomostfundedareasforclimate-techVC/PEs.Theymadeup67%ofalltheinvestmentsin2022.●TheUScontinuestobethelargestmarketforVC/PEinvestmentinnewcompanies.Chinawasthesecondbiggest,attracting$14.6billionin2022.1.51.51.62.45.39.20246810BuildingsIndustryClimateandcarbonAgricultureTransportEnergyFunding($billions)Sector0246810VADCTXMICOORNYWAMACAFunding($billions)StateorterritoryEnergyTransportAgricultureClimateandcarbon40©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas41©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Economics:Commoditycostsforwind/solar/batteries/otherequipmentPricesforkeycommoditiesthatunderpinthecleanpowersectorwerestubbornlyhighthroughmuchof2022,buteasedsomewhatbyyearend.●Shippingcostsreturnedtopre-pandemiclevelsfromhighsreachedinDecember2021.Easingcongestionhelped,particularlyattheportsofLosAngelesandLongBeachwheremanypan-PacificshipmentsofsolarpanelsandbatteriesarrivefromAsia.Steelpricesalsodeclinedoverthecourseoftheyear,easingcostsassociatedwithwindturbinesandrackingequipmentusedwithsolarmodules.●PolysiliconpricestouchednewhighsinAugust2022duetotemporarysupplydisruptionsandstrongdemand.However,supplyroseandpricesfelltowardtheendof2022asexistingplantsreturnedtoservicesandnewfactorieswerecommissioned.●Lithiumcarbonatepricesspikedin2022andatonepointthematerialtradedat14timesitsJanuary2021price.SpotpriceshavejumpedinthepastyearduetohighEVdemandfromChina.BySeptember2022,anLFPbatterycellcost$144/kWhgivenspotmarketpricesforlithiumcarbonate,BNEFestimated.Thiswasup9%fromNovember2021whenmanufacturerswerejuststartingtoseelargerawmaterielpriceincreases.WhilelithiumbenchmarksdescendedslightlyinDecember2022,theyremainatmuchhigherlevelsthanbeforethepandemic.PricemovementssinceJanuary2020Source:2H2022USCleanEnergyMarketOutlook,BloombergNEF,BloombergTerminal.Note:Datarebasedto1onearliestavailabledateinJanuary2020.SteelreflectsNorthAmericacosts,whilealuminumandcopperareChinaprices–moredetailsaswellasBloombergTerminaltickersavailableintheExcelattachedtothereport.02468101214Jan2020Jan2021Jan2022Wind(steel)Steel02468101214Jan2020Jan2021Jan2022SolarindicesAluminiumPolysiliconCopperStandard(Chinese)solarmodules02468101214Jan2020Jan2021Jan2022BatteryindicesLiCO3LiOHCobaltpricesNickel02468101214Jan2020Jan2021Jan2022ShippingcostsShanghai-LAfrieght42©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF.BNEFstartedcollectingcountry-levelLCOEinputsin2014,priorto2014onlyglobalLCOEareavailableseeLCOEreport.LCOEdisplayedbyfinancingdate.Economics:USlevelizedcostsofelectricity,2014-22●Higherfuelprices,elevatedmaterialpricesandhigherdebtcostspushedupthelevelizedcostsofelectricity(LCOE)forcoal,gas,solarandwindtechnologiesoverthecourseof2022.Fromthefirsthalftothesecondhalfof2022alone,combined-cyclegasturbine(CCGT)LCOEsrose23%whilecoalincreasedby9%.Bothreflectedhighercommoditiescosts.●HigherinterestratesservedtoraiseLCOEsforwindandsolaraswell,buttoalesserdegree.Bothtechnologieshavebenefitedfromnothavingassociatedmarginaloperatingfuelcosts.Wind'sLCOEeffectivelystayedflatfrom1Hto2H.However,solar'sjumpedbyabout16%.0204060801001201401601H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H201420152016201720182019202020212022$/MWh(2021real)PVfixed-axisOnshorewindCCGTCoal43©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF.Note:TheLCOErangerepresentsarangeofcostsandcapacityfactors.Batterystoragesystems(co-locatedandstand-alone)presentedherehavefour-hourstorage.Inthecaseofsolar-andwind-plus-batterysystems,therangeisacombinationofcapacityfactorsandsizeofthebatteryrelativetothepowergeneratingasset(25%to100%oftotalinstalledcapacity).OCGTsareopencyclegasturbines.AllLCOEcalculationsareunsubsidized.Categorizationoftechnologiesisbasedontheirprimaryusecase.Economics:USlevelizedcostsofelectricity(unsubsidizedfornewbuild,2H2022)●TheUSlevelizedcostsofenergy(LCOE)formostpower-generatingtechnologiesrosein2022withcostsassociatedwithfossilfuelprojectsseeingthehighestincrease.ThiswasattributabletosoaringcommoditiespricesafterRussia’sinvasionofUkraine.●Despiteclimbingcosts,new-buildrenewablesremaincheaperthannewgas-firedplantsforbulkgenerationinmanyareasoftheUS,withtheexceptionofoffshorewind.Onshore-windandtrackingPVprojectshaveLCOEsof$36-72/MWhand$37-59/MWh,respectively,withoutaccountingfortaxcredits.Combined-cyclegasturbines(CCGTs)representthecheapestsourceofdispatchablepoweronanunsubsidizedbasis,withanLCOEof$54-$107/MWh.●Thelevelizedcostofpairedonshorewind-plus-battery(four-hour)systemsrangesfrom$53-147/MWh,whilesolar-plus-battery(four-hour)isat$65-209/MWh.PVprojectswithouttrackingincreasedcomparedtolastyearwithLCOEsof$44-66/MWh.44©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas45©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.ALAKAZARCACOCTDEFLGAHIIDILINIAKSKYLAMEMDMAMIMNMSMOMTNENVNHNJNMNYNCNDOHOKORPARISCSDTNTXUTVTVAWAWVWIWYALAKAZARCACOCTDEFLGAHIIDILINIAKSKYLAMEMDMAMIMNMSMOMTNENVNHNJNMNYNCNDOHOKORPARISCSDTNTXUTVTVAWAWVWIWYSource:EERE,ACEEE,BloombergNEF.Note:ThemapsrepresentEEREanalysisofenergysavingsimpactsfromstatecodeadoptions.AnycodeforwhichtheEnergyIndexisnotmorethan1%higherthanthatofanIECCorStandard90.1editionisconsideredequivalenttothatcodeedition.FormoreontheEEREmethodologyseelink.Deployment:Statewideenergycodeadoption●Buildingenergycodessetminimumstandardsforbothnewbuildingsandrenovations.TheInternationalEnergyConservationCode(IECC)setsstandardsforbothresidentialandcommercialbuildings.TheAmericanSocietyofHeating,RefrigeratingandAir-ConditioningEngineers(ASHRAE)Standard90.1isanalternativestandardtoIECCprovisionsforcommercialbuildings(andisanalternativepathwaytomeetIECC).Buildingenergycodescanbemandatedatastatelevel,butinsomestateslocalgovernmentscanandoftendosetmorestringentrequirements.●ThemostrecenteditionsofIECCandStandard90.1areconsiderablymoreambitiousthantheirpredecessors.AnalysisbytheDOEestimatesthatthe2021IECCleadstoefficiencygainsof9.4%overthe2018edition.Similarly,themostrecent90.1edition,releasedinOctober2019,is5%moreenergyefficientthanthe2016versionand12%moreefficientthanthe2013version.●Stateenergycodeadoptionisoftenamulti-yearprocessforindividualstatesand2022showcasedsteadyprogressincertainjurisdictions.State-wideenergycodeupdatestookeffectin2022(orearly2023)forthefollowingstates:California,Connecticut,Hawaii,RhodeIsland,Montana,NewHampshire,NewJersey,NorthDakota,andPennsylvania.InColorado,legislationwassignedintolawthatwouldgenerallyrequirealljurisdictionsinthestatetoadoptandenforcethe2021IECCorequivalentbeginningJuly1,2023whentheyadoptormodifyotherbuildingcodes.ResidentialCommercialCode90.1-201990.1-201690.1-201390.1-201090.1-200790.1-2004Nocode/Homerule46©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEFDeployment:Digitalizationtechsboostefficiency,trackemissions●BloombergNEFtracked210newactivitiesstartedandpartnershipsformedbyutilities,oil,gasandotherenergycompaniestointegratedigitaltechnologiesintotheiroperationsin2021,thelastyearforwhichthereiscompletedata.●CompaniesareoftenemployingInternetofThings(IoT)sensorsandsoftwaretooptimizeassetsandtrackemissions.Inthesecondhalfof2021,analyticssoftwareaccountedforthelargestshareofdigitalactivityinboththeoilandgasandpowersectors,at50%and36%respectively.Thisincludestechnologiessuchasartificialintelligence(AI)anddigitaltwins.Forpower,asignificantshareofpartnershipsalsofocusedonIoTconnectivity.BloombergNEFhastracked679suchactivitieslaunchedandpartnershipsestablishedsince2017.●Thousandsofstartupsarebuildingsoftware,sensors,chips,anddronesforindustrialdigitalization.In2021,IoTandAIchipcompanieswerethebiggestfundraisers,raising$6.79billionand$4.95billionrespectively,almosttripletheamountof2020.0204060801001201H2H1H2H1H2H1H2H1H2H20172018201920202021NumberofactivitiesPowerOilandgasSix-monthrollingaverageProjectsandpartnershipsundertakenbylargeenergyfirmstointegratedigitalizationinoperations47©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:CAISO,ISO-NE,MISO,NYISO,PJM,SPP,ERCOT,BerkeleyLab,BloombergNEF.Note:BESSisbatteryenergystoragesystems.Deployment:WaittimesforpowerprojectsseekinggridaccessAveragetimeactiveprojectsinUSgridinterconnectionqueueshavebeenwaitingforapproval●Itisestimatedthatwellover1,000GWofpotentialpowerprojectstodayareawaitingaccesstosomesegmentofthenation’spowergrid.Delaysvarybyindependentsystemoperator(ISO).PJMandCAISOhavethelongestwaittimes,averagingthreeormoreyears,comparedtootherISOs.MISOandISO-NEhavetheshortestwaittimeforapprovalordenialoflessthantwoyears.Thebottleneckshaverestrainedrenewableenergydeployment,particularlyinPJMwherefossilfuelstendtopredominate.Renewablesmakeupthemajorityofcapacityonholdintheinterconnectionqueueduetotheincreaseofapplicationsinthepastdecade.●Asthenumberofutility-scalebatteryenergystoragesystemsunderdevelopmenthassurgedsotoohasthevolumeofbatterycapacitythathasappliedforinterconnectiononpowergrids.Theprocessofsecuringallneededfederalpermitscanbeslowandlaboriousforenergyinfrastructureprojects.Onerecentstudyfoundthatthelargemajorityofinfrastructureprojectstakesbetweentwoandsixyearssecureallsign-offs.Aquarterofsuchprojectstakelongerthansixyears,insomecasesmuchlonger.Aseparatestudyfoundthatrenewablepowerprojectstakeanaverageof2-3yearstocompleteNationalEnvironmentalProtectionActreviewsspecificallywithasignificantnumberofsuchprojectstakingfour,fiveorevensixyearstoreachcompletion.012345678PJMCAISOAllSPPERCOTNYISOISO-NEMISOYrsAllTechnologiesSolarWindBESS-2040608010012014016018020020002005201020152020GWSolarWindBESSOthersTotalyearlygenerationcapacitythatappliedforinterconnectiontoUSISOpowergrids48©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:ACEEE,AGA.Note:TheACEEEScorecardpointstocaveatsintheenergyefficiencysavingsdatareportedbystates.ACEEEusesastandardfactorof0.825toconvertgrosssavingstonetsavingsforthosestatesthatreportingrossratherthannetterms.TheACEEEcurrentlyreportselectricandnaturalgassavingsseparatelyintheirreportbutahandfulofstateshavebeenconsideringsavingsinafuel-neutralbasis,whichisappropriatewhenelectrificationbringsnetpositiveeffectonemissions,ACEEEmayadjustmethodologyifpracticebecomescommonplace.Deployment:IncrementalannualenergyefficiencyachievementsbyutilitiesSavings(%ofretailsales)22.923.024.425.426.125.427.327.126.926.626.06.86.58.010.910.310.010.611.512.013.213.30.00%0.10%0.20%0.30%0.40%0.50%0.60%0.70%0.80%-5.010.015.020.025.030.035.040.020112012201320142015201620172018201920202021Utilitysavings(TWh)ElectricNaturalGas●Theyearsleadingupto2011sawagrowingnumberofstatesintroducingEnergyEfficiencyResourceStandards(EERS)mandatingutilitiestoinvestinenergysavingsamongtheircustomer-base.Therewasacorrespondingincreaseininvestmentinutilityenergyefficiencyprograms.●Since2011,thenumberofstatesandjurisdictionswithEERSpoliciesinplacehasleveledoffat27.In2021(thelastyearforwhichthereiscompletedata),utilityelectricenergyefficiencysavingsslippedto26TWhofenergyand0.68%ofretailsales.2021utilitygasenergyefficiencysavingsinchedupby0.1TWhtototal13.3TWhbutdroppedto0.45%ofretailsales.●TheACEEE,whichcollectsthisdata,attributesthedifferencetoadjustmentsinitsqualifyingcriteriaforutilityenergyefficiencysavings,ratherthanadecreaseinenergyefficiencyactivity.49©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,EIA,DOE.Note:December2022valuesareforecasts.Deployment:USnaturalgasdemandbyenduse●DemandforUSnaturalgasrose5.4%in2022fromtheyearpriortoreach95.8billioncubicfeetperday(Bcf/d).Thejumpwasledbystrongerpowersectorconsumption,risingliquifiednaturalgas(LNG)exports,andmoredemandfromcommercialcustomers.Theindustrialandresidentialsectorssawmoremodestgrowth.●Ahotter-than-normalsummerandconstraintsoncoal-firedpowergenerationlifteduseofnaturalgasinpower.ConsumptionprovedresilienttohighernaturalgaspricesandtheUSbrokeseasonaldemandrecordsdespiteextendedperiodsinwhichnaturalgaspricestradedabove$5permillionBTUatHenryHub.USexportsofnaturalgashaverisenbrisklyoverthepastdecadeandin2022LNGexportsposteda13.1%increasefromtheyearprior.TherampinactivityattheCalcasieuPassLNGexportfacilityinLouisianahelpedoffsetlowerdemandaftertheFreeportLNGexporthubinTexasshutdowninJune2022.WithallmajorUSLNGterminalsexpectedbackonlinein2023,theUSispoisedtosetanotherrecordforLNGexports.●In2021(thelastyearwithcompletedata),totalretailpropanesalestotaled9.54billiongallons,a1.12%increasefrom2020,withtheresidentialandcommercialsectorsrepresenting76%ofallfuelsold.6.3millionhouseholdsrelyonpropanetomeettheirprimaryspaceheatingneeds.Commercialandresidentialdemandroseonthebackofthefrigidstarttowinter2022-23.ColderthannormalweatherinthesecondhalfofbothNovemberandDecember2022boostedoverallconsumption.TwodaysbeforeChristmas,thelower-48statessetasingledayrecordfornaturalgasdemandandnaturalgasstorageplayedaroleinmitigatingstormimpacts.19.119.820.320.920.621.121.723.023.022.322.723.28.67.99.09.58.88.58.69.69.68.79.09.612.911.413.413.912.711.912.113.713.712.812.913.520.724.922.422.226.227.325.328.930.831.830.832.91.72.84.86.49.510.81.41.71.82.02.93.84.24.65.15.45.95.762.765.666.968.671.172.873.682.687.187.490.995.8020406080100120201120122013201420152016201720182019202020212022IndustrialCommercialResidentialPowerLNGexportsMexicoexportsBcf/d50©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.FederalUSoffshorewindleasesbyowner●TheUSoffshorewindsectorhasbeengainingmomentumwithfederalsupport,morestatetargetsandthefirsttwocommercial-scaleprojectscontinuingconstruction.●TheInflationReductionAct(IRA)extendedtheInvestmentTaxCredituntilatleast2032,allowingdeveloperstosave30%onoffshorewindcapex.TheIRAintroduceddomesticmanufacturingcreditsforfloatingandbottom-fixedoffshorewindfoundationsaswellasa10%creditforoffshorewindvessels.Thelegislationalsoallocatestransmissionplanningfunds,removesaTrump-eramoratoriumonleasingofftheCarolinasandenablesleaseauctionsinterritories.●TheBureauofOceanEnergyManagement(BOEM)heldthreeleaseauctionsin2022,themostevertodate.TheNewYorkBightauctioninFebruarybrokerecordswiththehighestoffshorewindseabedleasepricesintheUStodate.TheCarolinasauctionfollowedinMay,alongwithCaliforniainDecember.●TheCaliforniaauctionwasthefirstintheUStoleasesitesrequiringfloatingfoundations.ThiscameaftertheBidenadministrationannouncedatargettoinstall15GWoffloatingoffshorewindby2035andreducethecostsoffloatingwindby70%to$45/MWhoverthesameperiod.●Californiasetpreliminaryoffshorewindtargetsof2-5GWby2030and25GWby2045inAugust.Louisianaalsosetanoffshorewindgoalof5GWby2035andNewJerseyexpandeditstargetto11GWby2040lastyear.●Inflationandsupplychainconstraintshavebeenhittingoffshorewind.DeveloperAvangridclaimeditsCommonwealthWindprojectinMassachusettswasnolongereconomicallyviable,unsuccessfullyaskingtorenegotiateitspowercontractswiththestate.Deployment:Offshorewind,seabedleasesandtargetsdrivegrowthSource:BloombergNEF,BureauofOceanEnergyManagement.Note:CIP=CopenhagenInfrastructurePartners.PSEGannounceditwillsellits25%stakeinOceanWindIoffNewJerseytoOrsted,settoclosein1H2023.AtlanticShores(Shell+EDF)AvangridAvangrid+CIPCIPDominionEnergyDukeEnergyEquinorEquinor+BPInvenergyOceanWinds(EDPR+Engie)OceanWinds(EDPR+Engie)+ShellOrstedOrsted+EversourceOrsted+PSEGRWERWE+NationalGridTotalEnergiesUSWindAtlanticOceanPacificOceanCAVANCPANJMDDEsolarimports51©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,Sinoimex.Deployment:SolarimportsUSimportsofPVmodules,bymonthandoriginUSimportsofPVmodulesbyorigin,JanuarytoNovember2022●USsolarinstallershadasomewhatunsettlingyearin2022duepartlytopolicydecisionsfromWashington.InApril2022,theUSCommerceDepartmentbeganinvestigatingwhetherPVmodulesimportedfromCambodia,Malaysia,ThailandandVietnamcontainedcomponentsmadeinChinaandwouldthereforepotentiallysubjecttohigherimporttariffs.ThemovechilledtheUSsolarmarket,whichhasreliedheavilyonequipmentassembledinthosefoursoutheastAsiannationsinrecentyears.However,inJune2022theWhiteHouseeffectivelysuspendedimpositionofsuchtariffsforatleasttwoyears.Importsthensurged.TheCommerceDepartmentalsocontinuedwithitsinvestigationandinDecember2022issuedapreliminaryruling,withfinaldeterminationexpectedinMay.●USsolarinstallersfacedothertrade-relatedchallengesin2022.Atonepoint,upto1GWofmodulesenteringtheUSwerebeingheldupinUSportsbyofficialsasimportersworkedtoprovidedocumentationdemonstratingthattheirproductscontainednomaterialsfromXinjiang,China.TheUyghurForcedLaborPreventionAct(UFLPA)bansimportsofsuchmaterialsfromthatprovince.ietnam34.3%Malaysia17.4%Thailand14.2%Southorea13.2%Cambodia7.6%Singapore3.8%Others9.5%,99m4864404415814223194354175695546176435718399341207117201,0002,0003,0004,00005001,0001,5002,000Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22$millionSEAsiaMainlandChinaSouthKoreaMexicoCanadaOthersTotalMWMW52©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:EIA,FERC,BloombergNEF.Note:“Other”includesprojectswherethetechnologyisunknown,whichisfrequentlylithium-ionbatteries.Confirmedcapacityreferstoprojectsthathavesecuredfinancing.Deployment:UScumulativeenergystorage●In2022,theUScommissionedanestimated4.8GWinnon-hydropowerstoragecapacitytobringtotalcapacityto11.4GW.Despitesupply-chainchallengesdelayingsomeprojectpipelines,theUScontinuestobethelargestenergystoragemarketintheworld.ThepassageofthelandmarkInflationReductionActinAugust2022willspuradditionalstoragedeploymentsinthefuture.Thebillincludesdirectbenefitstostationarystoragedeploymentsthroughastandaloneinvestmenttaxcredit(ITC)andindirectbenefitsenergystoragethroughadditionalincentivesforwindandsolarandthroughbatteryproductiontaxcredits.●Duemainlytogrowingdeploymentoflarge-scalelithium-ionbatteriesonthegrid,pumpedhydro’sshareoftotalenergystorageintheUSdroppedto67%in2022from78%theyearprior.Still,rawmaterialpricesforlithium-ionbatterieshaveriseninthepastyearandthiscouldpromptarenaissanceforpumpedhydrostorageprojects,whichqualifyforsupportundertheIRA.●Energyshiftingisthedominantusecasefornewbatteriesaspairingrenewableswithstorageisbecomingacommoncost-effectiveoptiontodisplacefossilfuelprojects.Utilitiesacrossthenationarebeginningtociteenergy-storagetechnologiesintheirlong-termresourceplanningandassolutionstotheirpowersystemflexibilityneeds.CommissionedUSenergystoragecapacityNon-hydrocommissionedenergystorage421732142793774221,1233,6824,77401,0002,0003,0004,0005,000201420152016201720182019202020212022MW05101520253035'10'11'12'13'14'15'16'17'18'19'20'21'22GWPumpedhydroOther53©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF.Note:Manufacturingcapacityisbasedonnameplatecapacityandincludesmanufacturingformultiplesegmentssuchaselectricvehicles,stationarystorageandothers.Deployment:Currentandplannedmanufacturingcapacity●TheUSInflationReductionAct(IRA)introduceda$45/kWhcellandmoduleproductiontaxcreditwhichwillsignificantlyboostbatterymanufacturinginthecomingdecade.SincetheIRA’spassage,automakersandbatterymanufacturershavebeenracingtoidentifyinvestmentopportunitiesinthegrowingUSEVmarket,withpost-IRAcommitmentstotheNorthAmericanbatterysupplychainreachingalmost$17billionbytheendof2022.●Asoftheendof2022,theUShad108GWhoflithium-ionbatterymanufacturingcapacitycommissioned.Capacityadditionsalmostdoubledcomparedto2021with45GWhbeingadded.Notableplantopeningsincluded:–UltiumCells,GM’sjointventurewithLGEnergySolution,commissioneda35GWhbatteryplantinWarren,Ohio.ThejointventurehasconfirmedtwoadditionalplantsinSpringHill,TennesseeandinLansing,MichiganthatwillsupplybatteriesforGM’selectricvehicles(EVs),startingin2023and2024,respectively.–iM3NY’splantinEndicott,NewYorkstartedproductionwithplanstoexpandto38GWhinthefuture.TheirbatteriesarecateredtoEVsandenergystorage,amongothersectors.●TheUSisexpectedtoreach178GWhofbatterymanufacturingcapacitybytheendof2023.GrowthwillbeledbycompaniesincludingUltiumCells,LGEnergySolutionandSKOn.USlithium-ionbatterymanufacturingcapacity05010015020020102011201220132014201520162017201820192020202120222023Cumulativecapacity(GWh/year)54©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Deployment:ManufacturingprojectsannouncedsinceIRApassageNorthAmerica’sbatterycellmanufacturinglandscapeSource:BloombergNEF.Note:Bubblesizecorrespondstotalcapacitycommissioned,underconstructionandannounced.55©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF.Note(Leftchart):IIJA=InfrastructureInvestmentandJobsAct,IRA=InflationReductionAct.Note(Rightchart):ThismodelingusesprojectlevelassumptionsavailableinBloombergNEF’sH2val.Greenhydrogencalculationassumesproductiontaxcreditof$3/kgtakenoverequalproductionineachyear.Bluehydrogencalculationsassumeprojectschoose45Qcredit.Deployment:Publicspendingonhydrogenpoisedtolowercosts●TheUSbecametheworldleaderinsupply-sidesubsidiesforhydrogenproductionwithpassageoftheInflationreductionAct(IRA)inAugust2022.CombinedwithsupportfromtheInfrastructureInvestmentandJobsAct(IIJA),theUSgovernmentisnowpoisedspendover$20billiononhydrogenactivitiesthrough2030.●Thispublicfunding,accompaniedbysimilarsupportfromgovernmentsabroad,shouldhelprenewablehydrogenscale.Thisshoulddrivedramaticcostdeclinesthrough2030forelectrolyzers,theequipmentusedtomakehydrogen.Asaresult,levelizedcostsfortheproductionofthefuelshouldfallto$1-2/kgbytheendofthedecade,BloombergNEFprojects.●ThehydrogenproductiontaxcreditasofferedunderIRAwillprovide$3(indexedtoinflation)foreverykilogramofhydrogenproducedinaproject’sfirst10years.Thecostofrenewablehydrogen,producedthroughelectrolysispoweredbyrenewables,couldstarttocompetewithconventionalhydrogenbymid-decade,BloombergNEFestimates.By2030,thetaxcreditcouldcompletelycoverthecostofproductionforhydrogenproducedintheUS.ProjectedfederalgovernmentsupportforhydrogenProjectedeffectof$3/kgtaxcreditonhydrogencosts-101234520232024202520262027202820292030$/kg-H2(real2023)GreenH2(Pre-subsidy)GreenH2(Post-subsidy)BlueH2(Pre-subsidy)BlueH2(Post-subsidy)GrayH204812162020232024202520262027202820292030Cumulativespend($billions)IIJAIRA56©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,Marklines,USDepartmentofEnergy.Deployment:Theroleofheatinindustrialprocesses0%25%50%75%100%0%25%50%75%100%CoalOilGasElectricityHeatRenewables0%25%50%75%100%0%25%50%75%100%0%25%50%75%100%0%25%50%75%100%0%25%50%75%100%IronandsteelChemicalsFoodandtobaccoCementAluminumPulpandpaper•Industrialprocessesaccountfor29%ofglobalenergyuseandaroundonefifthofallgreenhousegasemissions.Themajorityofindustrialenergyconsumptionisusedtoproduceprocessheat.•Sixsectorshavesignificantdemandforprocessheat:Ironandsteel,cement,chemicals,aluminumandnon-ferrousmetals,foodandtobacco,andpulpandpaper.Someindustriesusesignificantamountsofrenewableenergyforheat.Foodandtobacco,andpulpandpaper,forexample,usearelativelyhighproportionofrenewableheatsourcessuchasbiomassandbiogasthankstothereadyavailabilityoforganicwasteattheirsites.•Otherindustriesusemostlyfossilfuels.Chemicals,cementandironandsteeluseahigherproportionoffossilfuels.Theseindustrieshavehighheatrequirementsandusefossilfuelsasfeedstocksaswell.Shareofenergysupplyforindustrialprocessheat,201857©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,USDepartmentofEnergy.Note(rightchart):DataisestimatedbasedonpubliclyavailableinformationasofSeptember1st,2022.Deployment:Withnewfunding,hydrogenproductionexpectedtorise●InOctober,theUSDepartmentofEnergyreleasedadraftCleanHydrogenStrategyandRoadmap,whichincludedprojecteddemandestimatesfromsectorsby2050.Today,theUSconsumesapproximately10millionmetrictonsofconventionalhydrogenannuallyinindustriessuchasoilrefiningandammoniaproduction.Theseindustries,alongwithotherslikesteelproductionandenergystorage,willshifttheUSfromcarbon-intensivehydrogenconsumptiontolow-carbonhydrogenconsumptioninthecomingyears.BloombergNEF’s2030outlookseesUSlow-carbonhydrogenproductionfromelectrolysisreaching2millionmetrictonsperyearbythedecade’send,usingover20gigawattsofelectrolysiscapacity.●Today’slow-carbonhydrogenmarketisquitesmallbycomparison.BloombergNEFtracked92MWofhydrogen-producingprojectscommissioned2022.PlugPowerInc.addedthemostcapacity,primarilytomeetthecompany’sowninternaldemandforhydrogen.●Amorediverseslateofplayersisnowpoisedtogetinvolved.In2023,CFIndustriesisexpectedtocommissionanelectrolyzeratalargeammoniaproductionfacility.AirProductsplanstocommissionanelectrolyzerfocusedonroadtransport.FloridaPowerandLightseekstocommissionafacilitytogeneratepower.SoCalGasannouncedtheAngelesLinkprojectin2022,agreenhydrogenpipelineservingtheLosAngelesregion–anticipatedtobethenation’slargest.ProjecteddemandunderDOECleanHydrogenStrategyandRoadmap2022electrolyzershipmentsbycompany2030204020500102030405060203020402050Mt-H2/yearOthersectorsBlendingwithnaturalgasEnergystorageSteelBiofuelsTrucksAmmoniaRefiningandpetrochemicalsCurrentUShydrogenproduction58©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF.Deployment:CCUSUSdeploymentpipeline●UScarboncapture,utilizationandstorage(CCUS)capacityispoisedformajorgrowthoverthenextdecade,basedonrecentannouncementsandthankstotheexpandedbenefitspotentiallytobeofferedundertheInflationReductionAct(IRA).●Shoulddevelopersfollowthroughontheirplans,USCCUScapacitywilljump292%from2020levelsby2025.Bytheendofthisdecade,USCCUSwouldbemuchmorediversewithmultiplesourcespotentiallycontributingtoemissionscuts.Storageassociatedwithpowergeneration,naturalgasprocessing,ethanolproduction,andchemicalproductionplantsareallpoisedtorise.Shoulddevelopersfollowthroughwiththeirplans,thosefoursourceswillmakeup87%ofallthecapturecapacityby2025.●TheUSremainsaleaderinCCUSdeploymentduetopolicyframeworks,governmentfundingandincentives.MostimportantamongtheseisthetaxcreditforstoringorusingCO2knownas“45Q”.TheIRAboostedthepotentialvalueof45Qprojectoperatorsto$85/tCO2forpoint-sourcecaptureand$180fordirectaircapture.UShistoricalandannouncedcapturecapacitybysource0204060801001201401602000200520102015202020252030MtCO2/yrOther/inevaluationOilrefiningCementproductionDACFertilizerproductionChemicalproductionEthanolproductionNaturalgasprocessingPowergenerationAmmonia/HydrogenHistoricalAnnounced59©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.1.ExecutiveSummary2.AlookacrosstheUSenergysector3.Policy4.Finance6.Deployment3.2TaxCreditsandStimulus3.1InfrastructureandEmissions3.3VehicleStandards4.1EnergyTransitionInvestment4.2UtilityInvestment5.Economics5.1LCOEs4.3CorporateSustainability5.2EnvironmentalMarkets6.2NaturalGas6.1EnergyEfficiency6.3SolarandWind6.4Storage6.5Hydrogen7.Transportation7.2FuelPricesandEVSales7.1Gasoline7.3RenewableNaturalGas60©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.7.58.08.59.09.510.0MillionbarrelsSource:BloombergNEF,USEnergyInformationAdministration,AmericanAutomobileAssociation;Note:Gasolinedemanddataisthefour-weekrollingaverageforgasolinesupplieddatafromtheEnergyInformationAdministration.2021and2022valuesareadjustedtoalignwiththeEIA’smonthlydata.Wholesalegasolinepricesarethedailynationalaveragegasolineprice.USgasolinedemandUSwholesalegasolinepricesTransportation:Gasolinedemandandprices●USgasolinedemandnearlyreturnedtopre-pandemiclevelsduringthefirsttwomonthsof2022,closinganearly1millionbarrelperdaygaptothepre-Covid2015-2019seasonalaverage.However,Russia’sinvasionofUkrainecausedcrudepricestosurge.This,compoundedbyaseverelackofglobalrefiningcapacity,sentretailpricesatthepumptoover$5pergalloninJuly,theirhighestlevelonrecord.●Inresponse,gasolineconsumptionsubsided.Thefour-weekmovingaverageofmotorgasolineproductsupplied,themostwidelyusedindicatorfordemand,sunktoitslowestseasonallevelsince1997inJuly2022.Pricesfellgraduallythroughthesecondhalfoftheyearbutdemandstilllagsbothseasonalaveragesand2021levels.●Inall,nearly200millionfewerbarrelsofgasolinewereconsumedin2022comparedtothe2015-2019average.Thisreflectedhigherpricesbutalsostructuralshiftsincommuterbehaviorandtheimprovedfuelefficiencyofvehicles.012345$pergallon61©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEF,Marklines,USDepartmentofEnergy.VehiclefuelpricesandEVsales●Intermsofunitssoldandpercentageoftotalcarssold,2022wasanotherlandmarkyearforvehiclesemployingnewtechnologies.SalesofEVsandfuelcellvehicleshitnearly982,000units,up50%fromthe656,000unitssoldin2021.Evenwiththemanyturbulentheadwindsagainstgrowth–includingthecostofbatterycomponentsrising,semiconductorchipshortages,andthegeneralslowscale-upbymanyautomakers–EVsendedonstrongfootingat7.1%ofallUSsales.●TeslastillisthemostdominantautomakerintheUSEVmarket.Ford,Stellantis,VW,Geely,BMWandGMalsohadstrongsalesin2022.Teslaaccountedfor63%ofallEVsalesasrecentlyas2020.●Batteryelectricvehiclesmadeup81%of2022sales,withplug-inhybridelectricvehiclesmakinguptheremaining19%andFCVsaccountingforwelllessthan1%ofsales.●ElectricityhasbeenthemostcompetitivefuelfortransportationintheUSforoveradecade,pricedwellbelowgasoline.FollowingRussia’sinvasionofUkraine,gasolinepricesspikedwiththeUSseeinganaverageof$4.04pergallonfor2022.Electricitypriceswereanaverageof$1.44in2022.Gasolinepricesweremorethan2.5timeshigherthanelectricity.●Asthegapbetweengasolineandelectricitypriceswidenedonaper-gallonequivalentbasis,EVsbecamemoreappealing.Atthesametime,higherbatterycostsputmanufacturersunderpressuretoraiseEVprices.However,withpassageoftheInflationReductionAct,whichcapsthepriceatwhichEVsqualifyfortaxcredits,manufacturersarelookingtolowerstickerprices.0123456201120122013201420152016201720182019202020212022$/gasolinegallonequivalent(GGE)GasolineDieselCompressednaturalgasElectricityUSelectricvehiclesales02004006008001,0001,200201720182019202020212022ThousandOtherToyotaHyundaiKiaGMBMWGeelyGroupVWStellantisFordTeslaAveragevehiclefuelprices62©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BNEF,ArgonneNationalLabs,RNGCoalition,Companyannouncements,CaliforniaAirResourcesBoard,ICFTransportation:RenewablenaturalgasproductionandvehicledemandRNGproductioncapacity,bysourceUSnaturalgasvehicledemand,bysource70.897.0106.6020406080100120202020212022BillioncubicfeetperyearFoodWasteWastewaterFarmsLandfills●Renewablenaturalgas(RNG)productioncapacityandconsumptionhavebothgrownswiftlyoffalowbaseoverthepastdecadethanksinparttotherequirementsofthefederalRenewableFuelStandard(RFS)andCalifornia’LowCarbonFuelStandard(LCFS).From2015to2022,RNG’sshareoftotalnaturalgasusedinUStransportationgrewfrom10%to48%,BloombergNEFestimates.●Todate,thevastmajorityofRNGbyvolumehasbeenproducedatlandfillsites.Onthedemandside,nearlyallhasbeenusedintransportation.Bothofthesedynamicsaresettoshiftinthecomingyearsasmorenon-landfill/anaerobicdigestionprojectsaredevelopedandlargenaturalgascustomerschoosetobuyRNG.TherateatwhichtheUSisbuildingnewRNGproductioncapacityhasslowedsomewhat.Afterpostingyear-on-yeargrowthratesofover30%for2019-2020and2020-2021,capacitygrew10%in2022from2021.●WhileRNGrepresentednearlyhalfofgasconsumedinnaturalgas-poweredvehiclesin2022,itaccountedfornearlyallnaturalgasusedbysuchvehiclesinCalifornia.However,CaliforniaLCFScreditpricesslumpedtoanaverageof$120permetrictonin2022from$187in2021.Thereareapproximately175,000naturalgas-poweredvehiclesonUSroadstodaycomparedtonearly290milliontotalcarsandtrucks.●37stateshaveactedtopromotetheuseofRNGforthermalheatingpurposesintheresidentialorcommercialsectors,upfrom26in2020.0%10%20%30%40%50%60%70%80%90%100%201420152016201720182019202020212022RenewableFossilShareofvehiclefuel63©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.Source:BloombergNEFTheRNGvaluechain●Traditionally,biogas(thefeedstockforRNG)wasusedforelectricgenerationonsiteorsoldintothepowermarket.However,thankstopoliciesthatincentivizeitsuseasatransportationfuel,energyincumbentsaredevelopingstrategicpartnershipsandacquiringcompaniestoconvertbiogasintoRNGwhichiscompatiblewithpipelinenaturalgas.●OilandgascompanieswithdecadesofexperienceinproductionandtransportationofenergyproductsseeRNGasanextensionoftheircorebusinessandanopportunitytomakecleanenergyinvestmentsorselfgeneratecreditsforcompliancewithtransportationpolicies.●In2022,BPannouncedtheacquisitionofthelargestRNGcompanyintheUS,ArchaeaEnergy,for$4.1billion.Thedealwasequivalentto54%ofBP’stotallow-carbonenergyinvestmentfrom2015to2021andrepresented25%ofitsplannedcapexspendfor2022.Monthslater,ShellannounceditplannedtoacquirethelargestEuropeanRNGproducer,NatureEnergyfor$2billion.●Insimilarfashion,naturalgaspipelinecompaniesareinvestingmoreinRNGtodemonstratehowpipelineinfrastructurecanplayaroleinthetransitiontousingmorelow-carbonfuels.KinderMorgan,thelargestgaspipelinedistributorinNorthAmericahassaiditplanstoinvest$1.1billioninRNGby2024,boostingproductionfrom1.8billioncubicfeet(Bcf)in2022to7Bcfby2024.ProcessCompaniesInvolvedWasteCollectionRNGProductionTransportElectricityHeat64©BloombergNEFL.P.2023.DevelopedinpartnershipwiththeBusinessCouncilforSustainableEnergy.TheBloombergNEF("BloombergNEF"),service/informationisderivedfromselectedpublicsources.BloombergFinanceL.P.anditsaffiliates,inprovidingtheservice/information,believethattheinformationitusescomesfromreliablesources,butdonotguaranteetheaccuracyorcompletenessofthisinformation,whichissubjecttochangewithoutnotice,andnothinginthisdocumentshallbeconstruedassuchaguarantee.Thestatementsinthisservice/documentreflectthecurrentjudgmentoftheauthorsoftherelevantarticlesorfeatures,anddonotnecessarilyreflecttheopinionofBloombergFinanceL.P.,BloombergL.P.oranyoftheiraffiliates(“Bloomberg”).Bloombergdisclaimsanyliabilityarisingfromuseofthisdocument,itscontentsand/orthisservice.NothinghereinshallconstituteorbeconstruedasanofferingoffinancialinstrumentsorasinvestmentadviceorrecommendationsbyBloombergofaninvestmentorotherstrategy(e.g.,whetherornotto“buy”,“sell”,or“hold”aninvestment).Theinformationavailablethroughthisserviceisnotbasedonconsiderationofasubscriber’sindividualcircumstancesandshouldnotbeconsideredasinformationsufficientuponwhichtobaseaninvestmentdecision.Youshoulddetermineonyourownwhetheryouagreewiththecontent.Thisserviceshouldnotbeconstruedastaxoraccountingadviceorasaservicedesignedtofacilitateanysubscriber’scompliancewithitstax,accountingorotherlegalobligations.Employeesinvolvedinthisservicemayholdpositionsinthecompaniesmentionedintheservices/inform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