4 Clean Energy Trends That Will Define 2022

Last year was full of promising clean energy progress and, in parallel, stark reminders of why that progress is so critical.

Renewable energy saw record growth in 2021 – and that trend is expected to continue. To supplement all of that new capacity, 2021 was also a top year in U.S. grid storage installations. And in transportation, electric vehicle (EV) registrations went up by 94% from 2020 to 2021, as of last October.

However, 2021 also showed us that the consequence of inaction has never been greater. From droughts to hurricanes, heat waves, wildfires and cold snaps, 2021 spotlighted the direct impact climate change is having on our lives, and thus, a glimpse of our future.

Last year alone, we saw 18 climate disaster events in the US with losses exceeding $1 billion each, resulting in over 500 lives lost. And from 2015 to 2020, the number of annual blackouts doubled in the US. Simply put, our power grids were not designed to withstand the persistent and severe impacts of climate change. So how do we create a system that is?

I see 2022 as the year when we will make tangible strides to address this question – to build upon the momentum from 2021 and put a foundation in place that sets us on a path towards a 100% decarbonized and reliable electric grid in the US. Here are four major trends in North America that will drive clean energy growth and the rise of an electrified economy in the coming year.

1. Clean electrification of our energy sector will be driven by consumer demand and affordability.

While gas and coal cannot – and will not – become obsolete overnight, a full phase-out of fossil fuels is more in reach than ever before. As the climate crisis intensifies, companies and other large energy consumers are under greater pressure to reduce their environmental impact, stay accountable to public commitments and disclose climate-related business risks to stakeholders.

Additionally, the environmental and financial benefits of clean electricity are clearly aligned. Renewable energy plants are less expensive to build and operate, faster to market, and more profitable. Increasing the penetration of clean energy into the market will help stabilize and lower electricity prices for consumers. At Enel, we’re planning to invest $8.3 billion in North American renewable energy – and the storage technologies needed to bolster it – over the next three years to add more than 6 GW of new renewable capacity and around 1.4 GW of utility-scale energy storage.

I expect for private and public sectors to get more aggressive in their decarbonization efforts in 2022 and begin to move their operational energy consumption away from combustion fuels and towards clean electricity to reduce emissions, cut costs, improve efficiency and take advantage of price stability.

That spells good news for the environment, energy consumers and clean electricity producers.

2. Rising demand for renewable purchasing will lead to more flexible PPA structures and greater accessibility.

For corporate energy consumers, those affordable energy prices will also impact deal structures. On the renewables side of our business, we’re seeing an uptick in demand for shorter, more flexible power purchase agreements (PPAs).

As we grow our renewable capacity at record pace and clean energy prices continue to fall, shorter contracts are becoming more attractive to buyers of all sizes – not just the enterprises that could previously afford large, long-term deals.

In 2022, expect to see the aggregation model of renewable energy purchasing become much more prevalent, allowing several companies to collectively purchase clean power at scale. This means clean, affordable electricity will be more accessible to small to mid-size organizations, expanding the opportunity to decarbonize and electrify business operations.

3. Investments in grid modernization and flexible energy resources will turn energy consumers into producers – i.e. “prosumers.”

The inevitable rise of the “prosumer” signals a significant shift in consumer relationships with electricity. The days of our current system – a one-way flow of power from generating plants to homes, businesses and factories – are numbered.

As we modernize our outdated distribution network, it will be built to pull power from clean energy plants and their supporting storage technologies, supplemented by power generated or stored by a number of decentralized consumer sources.

Distributed energy resources (DERs) like rooftop solar panels, on-site battery storage, demand response, and grid-connected electric vehicle chargers will help balance supply and demand. And even more, these DERs will democratize access to production, opening up opportunities for energy consumers to actively participate in – and reap the benefits of – our new electricity system.

This year, I expect to see more energy consumers convert to prosumers, both residential and commercial, driven by the growing need for climate resiliency and the chance to reduce energy spend.

4. Grid-connected EV smart charging will accelerate EV adoption.

Electric vehicles (EVs) will also play a major role in decarbonization efforts this year, as we look to drastically reduce emissions in the transportation sector.

Over the next two years, we’ll be more than tripling the number of Enel charging ports in North America, and by 2025, EVs are projected to make up 20-30% of car sales in the US, according to BNEF.

Government policies and a growing number of commitments from automakers, including Ford, GM and Mercedes Benz, are driving this forecast. But compelling US consumers to purchase EVs remains a challenge. One buyer incentive will come from advancements in charging infrastructure and solutions that help drivers save money.

Grid-connected smart EV charging has received a lot of attention lately for its inclusion in the federal infrastructure bill and ability to help utilities balance the grid. And the benefits to consumers are also gaining ground, which I expect will have a hand in accelerating EV adoption in the coming year.

Smart charging automatically identifies less expensive charging windows aligned with a chosen departure time, so EV drivers can plug in after work without getting caught in an expensive, peak demand period at the end of the day. This is a nice perk for drivers’ energy bills, but can also serve as an added income source since more utilities are offering rebates to consumers who participate in smart charging programs.

As we enter what we’re calling “The Decade of Electrification,” I can’t help but be inspired by what’s to come. Enel North America is investing in a brighter future and this year will be one of great progress for clean energy and electrifying our economy.