generation: solar, wind, & hydro (part 1)

series on the overview of renewables + clean generation sources

In my last post, I provided a framework for how to think about the energy space.

I mentioned that generation is one of the primary components of the energy space, and it is probably what people think of first when they think of energy.

As a refresher, generation is the creation of electricity from various energy sources. Non-renewable sources of energy generation include fossil fuels (coal, oil), natural gas, and nuclear energy. Renewable sources of energy include solar, wind, hydropower, geothermal, and biomass.

“Clean” energy refers to source with very low, or zero carbon emissions, including all of the renewable energy sources, plus nuclear. While nuclear isn’t renewable, it’s a carbon-free source that’s critical to meeting climate goals. I explore nuclear in more depth in part 3 here.

how we generate electricity today

Generation is the foundational layer of our entire energy stack. Below are the 6 sources of energy we explore in more depth in this series:

1. Solar

2. Wind

3. Hydropower

4. Geothermal

5. Biomass

6. Nuclear

For each generation source, I cover:

1. How it works

2. Key bottlenecks

3. Some companies in the space

4. A comparison of bottlenecks and upfront costs across all sources (at the end of part 2)

This post covers the first three, solar, wind, and hydropower.

solar

Solar energy works by harnessing the power of the sun. 2 forms of energy are generated: electricity and heat.

Solar panels are made from silicon or another semiconductor installed in a metal panel frame with glass casing. When a panel is exposed to photons, electrons in the silicon are excited and released, causing them to move freely. This produces an electric charge, specifically a PV (photovoltaic) charge. This current (DC) is captured by the wiring in solar panels which is then converted to AC (the form of electricity that powers most household appliances) by an inverter.¹

solar panels in Healdsburg that are powering a data center! more on this later.

Solar has existed in the US since around 1954 - the first silicon solar cell was developed by bell labs. It didn’t become accessible for residential use until the 2000s, however.² As of 2023, solar generates about 4% of US electricity.³

key bottlenecks to solar

• Interconnection delays + costs. Interconnection costs (also applies to wind, below) have risen dramatically, whether the projects get completed or not. Completed solar projects saw interconnection costs that made up 6-8% of total project costs. But withdrawn projects saw costs that made up of 30-37% of the total.⁴ This is a huge barrier facing developers.

• Grid infra limitations. The recent rapid growth in development has largely outpaced grid expansion, which causes congestion. As I mentioned in my last post, our grid was designed for centralized, fossil-fuel-based generation with steady loads. It struggles to accommodate distributed solar, especially rooftop installations.

• Variability / storage needed. Solar is only generated when the sun shines, meaning generation is not constant and sometimes, depending on weather events, is unpredictable. Thus, it often requires storage to be deployed in tandem. This is also a cause of the infra limitations mentioned above.

• Permitting, siting, & regulatory constraints. Large-scale solar projects require a lot of land in areas away from urban centers which may require new transmission lines. Both large amounts of land use and new transmission construction may face local opposition and NIMBYism.

companies building solar

• NextEra Energy is one of the largest renewables companies in the US and the largest solar developer by installed capacity.

• Invenergy is a major player in renewables broadly, including solar capacity.

• Sunrun is a company known for solar leasing and financing programs for residential solar installations

• Tesla offers solar panels

• Sunpower installs high-efficiency solar panels

wind

Wind energy generation works by harnessing the kinetic energy of the wind to turn the blades of a wind turbine. The rotating of the turbines spins a generator that produces electricity.

A generator converts mechanical energy into electrical energy by a rotating shaft that spins coils of wire within a magnetic field which induces an electric current in the wire coils.⁵

There are 3 types of wind energy:

1. onshore wind turbines are located on land and the most common type, located with consistently windy areas

2. offshore wind turbines are in the ocean, usually in shallow waters, can generate more wind power due to stronger and more consistent winds at sea

3. distributed wind turbines are for homes or businesses, not typically connected to the power grid, only for local use

Today, wind is the largest source of renewable energy in the US, accounting for more than 10% of total utility-scale electricity generation.⁶

key bottlenecks for wind

• Interconnection delays + costs. Same as solar.

• Grid infra limitations. Similar to solar, but the growth has been to a lesser degree.

• Variability / storage needed. Just like solar, wind is only generated when the wind is blowing. Generation is not constant and depends on weather events. This is also a cause of the infra limitations mentioned above.

• Permitting, siting, & regulatory constraints. Large-scale wind projects require land in windy areas, often away from urban centers which may require new transmission lines. Both large amounts of land use and new transmission construction may face local opposition and NIMBYism.

• Environmental Concerns. Offshore wind generation also often surfaces environmentalist concerns.

companies building wind

• NextEra Energy & Invenergy

• Enel Green Energy

• EDF Energy

• Orsted is a Danish company involved in many offshore wind projects.

hydro

Hydropower or hydroelectric power generates electricity by harnessing the power of moving water, usually through a dam. Dams first create a reservoir. When water flows through the dam, it spins a turbine inside, which drives a generator to produce electricity. Hydro systems have been around for a long time, and are considered mature and reliable sources of energy generation.

Hydro currently accounts for 27% of total U.S. utility-scale renewable electricity generation and 5.86% of total U.S. utility-scale electricity generation.⁷

bottlenecks for hydro

• Permitting, siting, & regulatory constraints. Hydro faces lengthy and complex licensing processes and regulatory hurdles, in part because of environmental concerns.

• Social & political opposition. Hydro often faces social & political opposition because of environmental impacts (see below).

• Supply chain & materials. Hydro requires special materials and components such as large castings for turbines.

• Skills gap. There’s a dearth of skilled labor that can build and maintain hydro plants.

• High upfront costs. Building new hydroelectric plants is very capital-intensive, ranking second most capital-intensive on this list, behind only nuclear.

• Environmental impacts. Hydro systems can have impacts on river ecosystems, fish populations, and local communities.

companies doing hydro

• The U.S. Army Corps of Engineers (USACE) Hydropower Program is the largest hydropower generator in the US, making it the largest renewable energy producer in the US

• Duke Energy is a large electric + natural gas company with significant hydro operation, as the second largest hyrdo operator in the US

• General Electric + Siemens are both suppliers of equipment for hydropower plants

• Hydro-Quebec and BC Hydro are major hydropower operators

In part 2, I cover geothermal, biomass, and nuclear, plus a side-by-side comparison of bottlenecks and upfront costs across all 6 sources. Read it here.

1. https://www.nationalgrid.com/stories/energy-explained/how-does-solar-power-work

2. gosolarpower.com](https://www.gosolarpower.com/the-history-of-solar-power-in-the-united-states/#:~:text=Solar%20in%20the%20Seventies,accessibility%2C%20especially%20for%20residential%20systems.

3. https://www.climatecentral.org/report/solar-and-wind-power-2024

4. https://emp.lbl.gov/news/grid-connection-barriers-new-build-power-plants-united-states

5. https://www.msichicago.org/science-at-home/hands-on-science/wind-turbine#:~:text=What's%20happening?,be%20created%20by%20the%20turbine

6. https://www.eia.gov/energyexplained/wind/electricity-generation-from-wind.php#:~:text=Wind%20electricity%20generation%20has%20increased,Data%20are%20preliminary.

7. https://www.energy.gov/eere/water/hydropower-basics#:~:text=Hydropower%20currently%20accounts%20for%2027,U.S.%20utility%2Dscale%20electricity%20generation.