US Utility Announces Massive Renewables Plans

• AES says it will add 25 GW to 30 GW of new solar, wind and energy storage capacity to its portfolio by 2027
• It will take the share of renewables to 79% of its total installed capacity at the end of 2027
• The group plans to fully exit coal power by 2025-end but stay with natural gas

US utility The AES Corporation plans to triple its renewable energy capacity with the addition of 25 GW to 30 GW of new solar, wind and energy storage capacity by 2027 and fully exit coal by 2025-end, as part of its long-term strategy for growth, confidence for which comes from its 61 GW global renewables pipeline.

This pipeline is divided as 51 GW in the US and 10 GW internationally.

Renewable energy capacity in operation for AES at the end of 2022 was 15 GW or 46% of the group's 32 GW total installed capacity. Coal and gas accounted for 33% and 21% share respectively.

By 2027, coal's contribution is aimed to become 0% while gas will remain the same and that of renewables will increase to 79% out of 57 GW to 62 GW total power generation capacity it aims to report.

AES has 11.3 GW renewables capacity under current backlog and additional renewables capacity of 14 GW to 19 GW. By 2027, it targets to reach 40 GW to 45 GW in operations and in backlog, according to the company's investor presentation for 2023 Investor Day.

As part of its strategy, it plans to grow in carbon-free energy in select markets with 85% of its equity investments in renewables space to be in the US, while it will also remain internationally focused on multinational corporate customers in Chile, Brazil and Mexico.

Green hydrogen is also on its mind as the group is working on the 'largest' such project in the US with Air Products to be powered by 1.4 GW solar and wind energy to generate 200 MT/day from 2027 onward (see North America PV News Snippets).

Management attributes upsides created by the Inflation Reduction Act (IRA) for this strategical vision for the group.

"Through 2027, we expect to nearly triple our renewables capacity by adding 25 to 30 GW of solar, wind and energy storage to our portfolio, while simultaneously delivering annual rate base growth of 10% at our US utilities. Our diversified portfolio will support and enable this growth as we advance our transformation by fully exiting coal by year-end 2025," said AES President and CEO Andrés Gluski.