Carbon-free generation spending tops fossil fuels at US utilities for the first time
In 2024, investments in carbon-free power generation by U.S. utilities surpassed spending on fossil fuels. The total investment in carbon-free generation reached $14.5 billion, slightly exceeding the $13.9 billion allocated for fossil fuel expenditures.
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Key facts, context, and what it means.
Key takeaways
U.S. utilities invested $14.5 billion in carbon-free power generation in 2024.
Spending on carbon-free generation surpassed fossil fuel investments for the first time.
The investment in fossil fuels was $13.9 billion in comparison.
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US utilities collectively spent $14.5 billion on carbon-free power generation in 2024, edging past $13.9 billion directed toward fossil-fueled generation. That crossover, reported July 8 by RMI using data from its Utility Transition Hub, is the first time on record that carbon-free investment has surpassed fossil investment among the major regulated utilities that file FERC Form 1.
The figure covers all major regulated utilities required to submit annual financial and operating data to the Federal Energy Regulatory Commission. RMI's team, led by Jon Rea, Katie Ebinger, and Joe Daniel, updated the Hub's Finances tab through full-year 2024 reporting, making the dataset the most current comprehensive look at where US utility capital is flowing.
Where utility capital is actually going
Distribution infrastructure still commands the largest slice of total grid asset value, at roughly 40% in aggregate. Transmission is now the second-largest category, having grown its share from 17% of total grid assets in 2010 to 27% in 2024. That rise has pushed generation below 25% of total grid asset value, a notable structural shift for teams responsible for long-range capital planning or interconnection analysis.
Within generation, RMI breaks investment into renewables, hydro, nuclear, other fossil (primarily natural gas), and steam (primarily coal). The 2024 data shows carbon-free sources, taken together, have crossed a threshold that reflects two converging trends: sustained wind and solar build-out and a relative slowdown in new fossil generation capital spending.
The profit margin gap between generation types
The financial picture inside generation categories is equally significant for procurement and finance teams evaluating resource additions. In 2024, non-hydro renewables posted the highest profit margin of any generation type, with earnings representing 58% of utility revenue from that category, according to RMI's analysis. Hydro came in at 20%, nuclear at 18%, natural gas at 14%, and coal at 10%.
The driver is straightforward: fuel-based resources like coal and gas allocate a large portion of revenue to fuel procurement, on which regulated utilities do not earn a return. Wind and solar carry no fuel cost, so earnings as a share of revenue are structurally higher. For a procurement director evaluating long-term power purchase agreements or integrated resource plans, that margin differential is a concrete input, not just a policy argument.
Transmission's rising share changes planning priorities
The transmission asset share story carries operational weight beyond the headline numbers. Ten points of asset value shifting from generation to wires over roughly 14 years means rate bases, depreciation schedules, and capital allocation discussions at utilities increasingly revolve around poles, lines, and substations rather than generation plant. For operations and grid interconnection teams, that concentration of asset value in transmission amplifies the consequences of project delays or cost overruns on that side of the ledger.
RMI's Utility Transition Hub has tracked US energy transition data since 2021, covering emissions, plant additions and retirements, customer and community impacts, and state and federal policy variables alongside the investment data released this week. The finances tab data draws directly from FERC Form 1 filings, covering all major regulated utilities. The full dataset is publicly accessible and filterable by utility type at the Utility Transition Hub portal.
What this means for your team
- Review your integrated resource plan assumptions: the profit margin advantage of non-hydro renewables (58% vs. 14% for gas) is now a documented, FERC-filed figure that can anchor internal business cases.
- Audit transmission capital exposure: with transmission now representing 27% of total regulated utility asset value, interconnection timelines and transmission upgrade costs deserve a larger weight in project risk models.
- Track FERC Form 1 filings as a leading indicator: the annual data now covers through 2024 and offers a filterable view by utility type, giving procurement and planning teams a benchmarking tool against peer utilities.
- Flag the fossil-vs.-carbon-free crossover for vendor and supplier strategy: the 2024 inflection point signals that future capital programs at regulated utilities are more likely to favor clean generation additions, affecting demand for related equipment, services, and grid integration capabilities.
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