Wind and Water Both Fell Short in 2023. US Planning Still Treats Renewable Output as an Average

In 2023, two of the oldest pillars of US renewable power had a bad year at the same time. Wind generation declined for the first time since the mid-1990s, even though 6.2 gigawatts of new turbines were added. Hydropower in the West fell to its lowest level since at least 2001. Neither event was a crisis. Both were reminders that renewable output is a weather variable, and that weather has years, not just days. The Energy Information Administration expects hydropower to recover by 6% in 2024.

US wind generation in 2023 totaled 425,235 gigawatthours, 2.1% less than the 434,297 GWh of 2022. Capacity, meanwhile, had grown from 47.0 GW in 2010 to 147.5 GW at the end of 2023. The fleet's average capacity factor fell to an eight-year low of 33.5%, from 35.9% in 2022. In practice, for a fleet of nearly 150 GW, it meant roughly 9,000 GWh of electricity that planners had reasonably expected and did not get. Western hydropower depends on snowpack, which accumulates in winter at high elevations and melts in spring and early summer.

For 2024, the EIA expects US hydropower to rise 6% to 250 billion kilowatthours in the power sector, with increases in nearly every region and notable gains in the Southeast and the Northwest. Low wind and low water in the same year are not necessarily linked by a single cause. Long-term contracts for wind power are typically priced on expected annual output, often expressed as a P50 estimate, the level that output is expected to exceed half the time.

A planning approach that treats renewable output as an average will tend to underestimate the need for backup energy in low years. Three practical changes would make US planning more robust to years like 2023. The third is to be honest about the role of gas as an energy reserve. If hydro rises 6% this year and wind capacity factors return to more typical levels, 2023 may look like a one-off.