of wind, solar, and energy storage assets in Clearway's portfolio
of Solar Projects
constructed from 2019 onwards will have bifacial panels, which convert sunlight on both sides
Million Metric Tons
of CO2 avoided in 2020
The Path to Drawdown: Solar, Wind, and District Heating
To fight climate change and remain below 1.5ºC of pre-industrial global temperature, the world needs to transition from using fossil fuels as an energy source and instead use 100% emissions-free sources.
One of the largest sources of clean energy is the sun. Photovoltaic solar panels (or PV solar panels -- those you see on rooftops) have emerged as the predominant way of converting sunlight into electricity.
The industry has grown fast: solar panels are now the cheapest source of electricity in most places on earth as of 2020.
Solar produces about 2% of global electricity today. According to Project Drawdown, to be on a path to remain under 1.5ºC of warming, rooftop and utility scale solar must be generating a combined ~40% of the world’s electricity by 2050.
To get there, the PV solar industry will need to continue to massively scale over the next few decades:
- 720 TWh of solar electricity generated in 2019
- 28,200 TWh needed by 2050
- CAGR of 12.56% from 2019 - 2050
Another analysis from the IEA predicts that, to reach a 100% clean electricity grid by 2050, annual solar panel manufacturing capacity will need to grow from 134 GWs in 2020 to 630 GWs in 2030 (p. 74).
Onshore wind turbines accounted for 4.36% of global electricity generation in 2020.
Global wind capacity has increased steadily, growing about 20% per year for the past decade, with an 11% capacity growth in 2019-2020. Owing to this expansion and advances in turbine design, the cost of electricity generation from onshore wind continues to fall, even in less breezy areas.
According to Project Drawdown, to be on a path to remain under 1.5C° of warming, onshore wind will need to be generating 28.85% of global electricity by 2050.
Getting there would require the onshore wind industry to continue to scale over the next few decades
- 1,150 TWh of onshore wind electricity generated in 2018
- 19,460 TWh needed by 2050
- CAGR of 9.38% from 2019 - 2050
The IEA forecasts (p. 74) that, to reach a 100% clean electricity grid by 2050, annual onshore wind capacity additions will have to increase from 109 GWs in 2020 to 310 GWs in 2030.
Importance of Yieldcos in Financing Renewable Energy
Yieldcos play an important role in financing renewable energy developers. Developers of utility-scale renewable energy take on significant risks and uncertainties when building new solar or wind plants. Yieldcos were established to protect investors in renewable energy stocks from these uncertainties and to give developers a steady source of capital for future projects.
Yieldcos are publicly traded corporate entities that own, operate and manage a portfolio of energy assets. Their assets generate long-term, low-risk cash flows, which are then distributed to investors as dividends. Sustained investor interest in yieldcos could continue to channel capital into renewable energy developers, making them competitive against high-carbon alternatives.
Headquartered in Princeton, NJ, Clearway Energy, Inc. (stock ticker: CWEN) owns and operates a diverse portfolio of utility scale solar, distributed solar, wind turbines, natural gas and thermal generation assets. Their renewable energy generation totals to ~4.2 GW.
CWEN's Role in Drawdown
In 2020, Clearway Energy’s wind and solar assets combined have a generation capacity of 4.22 GW. That’s 1.74% of estimated global capacity of 243 GW (p. 74). According to the IEA, this global capacity must increase to 940 GW by the year 2030 to achieve net-zero.
To maintain its market share, Clearway’s capacity will have to rise to 16.32 GW by 2030. This would require a CAGR of 14.5%, almost double the CAGR of 7.4% that Clearway achieved between 2017-2020. They therefore would need to ramp up their capacity acquisition and growth this decade.
CWEN: What We Like
As one of the largest owners of renewable energy portfolios in the US, Clearway Energy has has shown its commitment to cut emissions
- 90% of electricity (p. 7) that they generate will be carbon-free by 2034
- 100% of of the 10 GW (p. 7) pipeline by Clearway Energy’s sponsor, Clearway Group, will consist of zero-emissions renewables
26.62% increase in avoided CO2 emissions between 2019 and 2020 -- from 6.95 million to 8.8 million metric tons, the difference of which is equivalent to taking more than 400,000 passenger vehicles off the road for 1 year.