A new report, “U.S. Energy Challenges for 2020,” from the research firm Frost & Sullivan finds that U.S. energy consumption will increase by 7.3 percent over 2010 levels during this 10-year period.


Undoubtedly, very high energy demands challenge the United States because the country consumes 26 percent of the world’s energy. Today, the United States imports nearly 30 percent of its energy, and a minimal reduction in imports is expected through 2020. While trying to address the issue of energy dependence on foreign supply in light of forecasted growth in energy consumption, the United States is on an aggressive path toward a sustainable future. Renewable energy, greater efficiency in consumption, and more intelligent transmission and distribution of power will be the main focuses for overcoming energy challenges.


To meet these growing demands, the energy market has witnessed strong growth in renewable technologies, which has been supported by a concentration on domestic energy production and sustainability. According to the report, solar photovoltaic and wind power are the fastest growing renewable technologies and will represent more than 40 percent of electricity generation in 2020.


According to the Department of Energy, 223 gigawatts of new generating capacity will be needed between 2010 and 2035. Local transmission infrastructure is in the process of being upgraded to withstand increasing loads, weather events and new forms of generation, and it is an important requirement to deploy large renewable-energy projects that also meet the necessary capacity. Additionally, the transmission line shortage is threatening to slow the growth of wind energy and large utility-scale solar projects and could prevent some states from meeting renewable-energy mandates. High capital costs further challenge renewable technologies’ growth, highlighting the industry’s need for government financial incentives.


“Increased energy consumption over the forecast period of 2010 to 2020 is driven by increases in population and economic growth,” said Georgina Benedetti, Frost & Sullivan senior industry analyst. “The population in the United States is projected to increase by 7.5 percent from 2011 levels, reaching 324 million by 2020 while U.S. gross domestic production per capita is projected to increase 17.1 percent by 2020.”


Section 1603 of the American Recovery and Reinvestment Act of 2009 was one of the main drivers for solar installations during 2010 and 2011, but the market has taken a recent hit with Congress’ refusal to extend Section 1603 of the Treasury Program. Similarly, expiration of the loan guarantee, production tax credit and investment tax credit programs are imminent. These items fueled a 33 percent increase in wind energy in 2011 from 2010 levels. Today, the market is vulnerable to a halt in production if these incentives expire.


To combat challenges, the energy industry has focused on the acceleration of renewable-energy deployment and use of energy efficiency to displace imports and improve the balance between supply and demand. Supporting this movement is the technology trend of focusing research and development on more zero-emission technologies, such as wind power, geothermal energy, solar and biomass.