The U.S. advanced energy industry generated $238 billion in revenues in 2018, up $25 billion or 11% over 2017, according to a new report from Advanced Energy Economy (AEE).
The top three growth sectors are advanced transportation, building efficiency and advanced fuel production the report found, accelerating by $7.9 billion, $7.8 billion and $5.4 billion, respectively. Advanced electricity generation also grew 8% in 2018, reaching $59.6 billion in revenues.
The sector's 11% billion growth in 2018 was almost four times the growth of the U.S. economy last year, and the industry as a whole is worth $1.2 trillion globally.
Newer, cleaner resources like solar and wind are rapidly becoming more economic compared to traditional sources like coal, and that competition is driving a full industry of advanced energy technologies, according to the AEE report.
"Advanced" defines "an entire marketplace that is replacing legacy infrastructure and products and services with energy that is clean, secure and affordable," AEE CEO Nat Kreamer told Utility Dive.
"The driver of growth is fundamental technology competitiveness," said Kreamer, pointing to Indiana where Northern Indiana Public Service Co. found that replacing current coal assets with new clean energy resources would save customers more than $4 billion over the next 30 years.
"We're replacing commodity with technology and that technology is deflationary and it's getting more compelling all the time and more and more places all across the United States," he said.
For growth to continue, particularly in the energy markets, wholesale electricity markets need to continue incentivizing that deployment, said Kreamer. Wind and energy storage dominated revenue growth in the U.S. electricity sector last year, increasing 23% and 18%, respectively, according to AEE.
The Federal Energy Regulatory Commission is currently deliberating changes to wholesale power market rules that would incorporate state-level subsidies for some clean energy sources, such as nuclear, renewables and storage.
"I think there's a tremendous opportunity right now to work on the rules for wholesale markets to adopt more renewable generation, more storage and more efficiency," said Kreamer. "There's a tension with legacy fossil interests ... trying to change the rules such that, you know, maybe it'll thwart the adoption of storage versus keeping a legacy fossil plant running."
"But now that semi conductor software and battery technology ... can replace commodities like coal and gas at the wholesale market level, you basically see those interests try to use the wholesale market to defend their incumbency," he said.
Two other main growth areas are building energy efficiency and transportation electrification.
"Efficiency gets built into a product somebody buys for another reason often," said Kreamer, and its benefits are tangible on both a residential and commercial basis.
A variable speed heating, ventilation and air conditioning unit will adjust temperatures at a more comfortable temperature for the consumer. Combined with the convenience of smart controlling devices and cost savings, it's an easy box to check, particularly as property managers look to reduce operating expenses and technologies make those energy savings more tangible, he said.
Transportation electrification is being driven by low battery prices that make it 78% cheaper to fuel an electric vehicle than a gasoline-powered vehicle. But the future of EV growth is even more promising, said Kreamer, predicting that in the next two to three years, EVs will have all the advantages of a gasoline vehicle — speed, horsepower, torque, price and storage space — and the only issue remaining will be range anxiety.
"I think we're just at this inflection point," said Kreamer. "We're seeing globally tremendous investment in fast charging. … We're going to see a dramatic transition in the automotive fleet and frankly that's going to have a crushing effect on gasoline."
Overall, "the ecosystem of technologies and companies present a reliable, credible, and incredibly cost effective alternative to fossil," he said. "The technology has changed and in many instances reached maturity, often becoming tremendously more cost competitive across the entire value chain."