[USA] Federal judge blocks largest-ever U.S. offshore oil lease

On January 27, 2022, Judge Rudolph Contreras for the U.S. District Court for the District of Columbia blocked the Bureau of Ocean Management’s (BOEM) approval for Lease 257 in the Gulf of Mexico.[1] The lease sale was held in November 2021 and included 80.8 million acres on the outer continental shelf. It was the largest offshore lease sale in U.S. history. Initially, the Biden administration blocked the lease sale, which was approved under the Trump administration, as part of the president’s executive order pausing new oil and gas leasing on public lands and federal waters. However, in June 2021, the U.S. District Court for the Western District of Louisiana found that the Biden administration’s pause violated requirements under the Outer Continental Shelf Lands Act (OCSLA) to offer areas up for oil and gas development. BOEM then proceeded with the lease sale in the Gulf of Mexico.

In August 2021, Earthjustice filed a lawsuit on behalf of Healthy Gulf, Center for Biological Diversity, Sierra Club, and Friends of the Earth to prevent BOEM from authorizing development on the leases sold in 2021. The conservation groups claimed that the 2017 environmental analysis that the Biden administration used to hold the lease sale was faulty. They claim that BOEM failed to look at new information about the emissions impact of leasing when it reissued its record of decision for Lease 257. They also argued that leasing has negative impacts on threatened marine life. The judge ruled in the conservation groups’ favor, stating that BOEM’s failure to calculate potential emissions from foreign oil consumption had violated the National Environmental Policy Act.

[1] https://int.nyt.com/data/documenttools/78-memorandum-opinion-1-27/b0903c94e57b0cb5/full.pdf

[USA] Daimler, Next Era, and Blackrock announce plans to build a network of charging infrastructure for commercial vehicles across the U.S.

On January 31, 2022, Daimler Truck North America (DTNA), NextEra Energy Resources, and BlackRock Renewable Power announced that they have signed a Memorandum of Understanding (MOU) to lay the foundation for a proposed joint venture to build out a nationwide network to fuel medium- and heavy-duty electric and hydrogen fuel cell vehicles by the middle of the decade.[1] The joint venture is expected to start operations in 2022, with initial funding of $650 million divided equally among the three parties. The companies plan to build a network of charging sites on critical freight routes along the east and west coasts and in Texas by 2026 by leveraging existing infrastructure and amenities and adding complementary greenfield sites to meet customer demand. The first phase of the effort is set to begin construction in 2023. According to the press release, the initial focus will be on battery-electric vehicles, followed by hydrogen fuel cell vehicles. The sites will be available to light-duty vehicles as well.

[1] https://www.prnewswire.com/news-releases/daimler-truck-north-america-nextera-energy-resources-and-blackrock-renewable-power-announce-plans-to-accelerate-public-charging-infrastructure-for-commercial-vehicles-across-the-us-301471263.html

[Japan] JERA and West Holdings reach agreement to develop 1 GW of solar capacity in Japan

JERA, Japan’s largest thermal power producer, and West Holdings, a solar power engineering firm, announced on February 2, 2022, that they had reached an agreement to collaborate on solar power projects in Japan, with a target of 1 GW of generation capacity over the next five years.[1] According to JERA, the agreement includes a capital participation in West Holdings, though details are still being discussed. West Holdings will focus on developing solar projects at JERA’s former power plant locations in addition to new sites in Japan. The companies are expected to reach a final agreement by the end of March 2022.

If all the projects in the agreement are constructed, JERA said that it would be one of Japan’s largest solar power producers. Currently, JERA has 1,780 MW of renewable energy capacity, most of which is outside of Japan. The power producer has 800 MW of solar in India and a few small-scale ventures in Thailand, but no domestic projects. JERA aims to achieve net-zero greenhouse gas emissions by 2050 and increase its renewable power output to 5GW by 2025. West Holdings also aims to become carbon neutral by 2025 and to be involved in 2 GW of renewable energy generating capacity in Japan and overseas.

[1] https://www.jera.co.jp/english/information/20220202_845

[USA] AEP announces plans to build $100M transmission control center in Louisiana

On January 20, 2022, in conjunction with Louisianna Governor John Bel Edwards (D), American Electric Power (AEP), which manages the largest electricity transmission system in the U.S., announced plans to invest $100 million to develop a new Shreveport Transmission Control Center (STCC) in Caddo Parish, Louisiana.[1] The facility will be located in the Resilient Technology Park and will span 77,000 square feet on 30 acres. Construction is set to begin in the first quarter of 2022, with an operations date slated for mid-year 2023. Once complete, the STCC will control the operations of AEP’s transmission system in Southwest Power Pool and collaborate with the AEP Transmission Control Center in Corpus Christi, Texas, to control the operations of AEP’s transmission system in Electric Reliability Council of Texas (ERCOT). The facility will support both the hardware and software required to assess, monitor, and control AEP’s national transmission grid. The STCC will include a new substation, additional electric grid infrastructure, and state-of-the-art equipment. According to the press release, the project will create 20 direct new high-paying jobs and retain 20 existing jobs. In addition, the Louisiana Economic Development estimates the project will result in 63 indirect jobs. To secure the STCC project, Louisianna offered AEP an incentive package that included a $1 million performance-based award for infrastructure costs. AEP is also expected to utilize the state’s Quality Jobs program.

[1] https://gov.louisiana.gov/index.cfm/newsroom/detail/3540

[USA] WoodMac analysis suggests California's proposed NEM tariffs could cut state residential solar market in half by 2024

According to new analysis from Wood Mackenzie (WoodMac) released on January 25, 2022, the California Public Utilities Commission’s (CPUC) proposed net energy metering (NEM) tariffs could cut the state’s residential solar market in half by 2024.[1] The current NEM was adopted in 2016 and gives customers a credit at the retail rate for energy that they provide to the grid. A recent analysis by the commission suggested that the framework has a negative effect on non-participating customers, is not cost-effective, and harms low-income ratepayers. Subsequently, the CPUC released a proposal in December 2021 that would revise the current NEM framework and replace it with a net billing tariff based on the avoided cost values of behind-the-meter resources.[2]

Although the final changes to the NEM framework are in flux, WoodMac research analyst Bryan White said that the current proposal would more than double the payback period of solar projects, increasing from five to six years under current net metering to 14-15 years, depending on the utility. Woodmac assumes that the proposed decision, if approved, will begin impacting installation in July or August of this year. If that is the case, installers will likely spend the first six months of 2022 selling systems and submitting interconnection applications under the current rates. This could lead to record capacity additions before activity drops in the second half of the year.

[1] https://www.woodmac.com/press-releases/nem-3.0-pd-will-cut-california-solar-market-in-half-by-2024/

[2] https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M430/K903/430903088.PDF

[USA] Arizona Corporation Commission vote to reject 100% clean energy rules package

During a meeting on January 26, 2022, the Arizona Corporation Commission voted 3-2 to reject the adoption of a set of clean energy rules.[1] Included in the rules package was a proposal to require the state’s investor-owned utilities to provide all of their electricity from zero-carbon resources by 2070. In the interim, the package would have required utilities to cut their carbon emissions by 50% by 2032 relative to average emissions between 2016 and 2018. The package also included new demand-side resource standards and integrated resource planning reforms. In addition, the package would have expanded energy efficiency programs for Arizona Public Service (APS) and Tucson Electric Power (TEP). APS and private companies that do business in Arizona like Apple Inc., PayPal Holdings Inc., and Ikea have expressed support for the package.

Although the commission had previously voted in favor of the 100% clean power plan, the three Republican members ultimately voted against the package. Commission Chair Lea Marquez Peterson, R, cited cost concerns. Commissioner Jim O'Connor, R, also said state-level rules were not necessary as utilities have already made commitments to clean energy. Democrat commissioners Anna Tovar and Sandra Kennedy argued that the rules would cut customer bills and spur investments in clean energy.

[1] https://www.utilitydive.com/news/arizona-regulators-reject-100-clean-energy-rules-package-energy-efficienc/617823/

[USA] Virginia governor initiates withdrawal from RGGI

On January 15, 2022, the new Virginia governor, Glenn Youngkin (R), signed an executive order to initiate the state’s withdrawal from the Regional Greenhouse Gas Initiative (RGGI).[1] RGGI is a market-based program that sets limits for carbon emissions from power plants in 11 states[2]. Under RGGI, utilities sell carbon allowances during auctions, and the proceeds are given to participating states for clean energy, storm protection plans, or other climate-related programs. Virginia joined RGGI in 2020 through the Clean Energy and Community Flood Preparedness Act.

Governor Youngkin cited the program’s effects on energy prices as a motivator for the action. According to the executive order, which was signed on his first day in office, utilities are allowed to pass on the costs of purchasing allowances to their customers, leading to higher bills for ratepayers. The new executive order directs the Department of Environmental Quality and the secretary of natural and historic resources to deliver a report within 30 days that evaluates the costs and benefits of participation in RGGI. The executive order also calls for the development of a proposed emergency regulation to repeal RGGI-related rules set by the Air Pollution Control Board. According to the order, Virginia will notify the nonprofit corporation that runs RGGI of the state’s actions and Governor Youngkin’s intention to withdraw from RGGI through legislative or regulatory action.

[1] https://www.governor.virginia.gov/media/governorvirginiagov/governor-of-virginia/pdf/74---eo/74---eo/EO-9--RGGI.pdf

[2] Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia.

[USA] Great River Energy announces agreement with Apex Clean Energy for 400 MW wind project in North Dakota

On January 18, 2022, Great River Energy, an electric transmission and generation cooperative in Minnesota, announced that it has reached an agreement to receive energy from Apex Clean Energy’s 400 MW wind energy project in Mclean County, North Dakota.[1] The Discovery Wind project is expected to reach commercial operations in 2025 and will be the largest project in North Dakota. Electricity from the project will be delivered via a 436-mile high-voltage direct-current (HVDC) transmission system. According to the press release, the project will fulfill a large portion of Great River Energy’s renewable energy needs and deliver wind energy west of the Twin Cities. In 2020, the cooperative announced plans to phase out the remaining coal in its portfolio and more than double its renewable energy.

The cooperative is converting the coal-based Spiritwood Station power plant located near Jamestown, North Dakota, to be fueled mostly with natural gas and developing a 1 MW, multiday, grid-scale battery in Cambridge, Minnesota. Great River Energy is also currently in the process of selling its 1,100-MW Coal Creek Station power plant and the 436-mile HVDC transmission system, both located in Mclean County, to Rainbow Energy Center and Nexus Line, respectively. The transaction will be finalized upon approval from Great River Energy’s member-owner cooperatives. The cooperative is on track to reduce its carbon dioxide emissions by more than 80% by 2025, achieving Minnesota’s emissions target decades ahead of schedule.

[1] https://greatriverenergy.com/great-river-energy-to-sign-agreement-with-apex-clean-energy-for-400-megawatt-discovery-wind/

[USA] NREL report: significant energy storage deployment can balance load and reduce emissions

According to a National Renewable Energy Laboratory (NREL) report released in January 2022, significant deployment of energy storage can balance load, meet demand, and help electricity grids run more efficiently.[1] The report, titled Grid Operational Impacts of Widespread Storage Deployment, is the sixth in the Storage Futures Study series, which uses advanced modeling to explore how energy storage will influence the electricity grid. It builds upon a previous report in the series in which the NREL added new capabilities to its Regional Energy Deployment System (ReEDS) model to build least-cost scenarios for a range of cost and performance assumptions. The scenarios from that report showed that storage capacity could exceed 125 GW by the end of 2050, even in the most conservative estimates. This is more than five times the current storage capacity of 24 GW.

The newly released report assessed the hourly operations of high storage power systems with storage capacities ranging from 213 GW to 932 GW. NREL researchers found that by 2050 sufficient storage deployment would allow the grid to operate with no unserved energy and low reserve violations. In addition, the study found that storage is heavily aligned with the availability of solar, which has a predictable cycle that works well with storage. Although energy storage technology has a low annual capacity factor due to its need to charge, researchers found that it has a high utilization—more than 75%--during the top 10 net load hours, when demand is highest. Lastly, the report found that storage’s ability to meet peak demand when solar generation is low can displace generation from thermal sources. Storage could prevent start-ups of those generators and reduce carbon emissions and other air pollutants.

[1] https://www.nrel.gov/docs/fy22osti/80688.pdf

[USA] Virginia regulators approve Dominion’s grid transformation plan

On January 7, 2022, the Virginia State Corporation Commission (SCC) approved the second phase of Dominion Energy Virginia’s plan for electric distribution grid transformation projects.[1] The proposed projects focus on grid reliability and are designed to accommodate the expected increase in distributed energy resources (DER) caused by policy developments like the Virginia Clean Economy Act of 2020 and Federal Energy Regulatory Commission (FERC) Order 2222. The plan’s second phase includes $666.5 million in capital spending for 2022 and 2023.

The SCC approved many of the proposed projects subject to certain requirements such as cost caps. In particular, the SCC approved the Advanced Metering Infrastructure (AMI) proposal, which will deploy 1.1 million smart meters and associated infrastructure. Deploying the AMI plan will cost $198.3 million. The commission previously rejected the proposal due to the plan’s high cost and speculative nature. The commission’s approval was partly due to a new proposal for system-wide implementation of time-varying rates and an active experimental time-of-use rate, which requires AMI. In addition to the AMI proposal, the SCC approved investments in security, customer education, and telecommunications. The commission also directed Dominion to take certain specific actions in implementing the approved projects and filing its next petition, including performing a robust cost-benefit analysis and incorporating a more thorough projection of DER penetrations and anticipated reliability impacts.

[1] https://www.scc.virginia.gov/newsreleases/release/SCC-Approves-DEV-Grid-Transformation-Plan

[USA] EIA report: solar will make up half of new utility-scale energy capacity in 2022

According to a new report from the Energy Information Administration (EIA), 46.1 GW of new utility-scale electric generating capacity will be added to the power grid in 2022.[1] Nearly half of the planned capacity additions will be solar energy, with 21% coming from natural gas and 17% from wind. Developers and power plant owners report the planned additions to the EIA in its annual and monthly surveys. For solar, the EIA expects utility-scale solar to grow by 21.5 GW in 2022, surpassing the roughly 15.5 GW of solar added in 2021. Most planned solar additions in 2022 will be in Texas with 6.1 GW of new capacity (28% of the national total), followed by California with 4 GW of new capacity. In terms of natural gas, the EIA expects 9.6 GW of new natural gas-fired capacity to come online in 2022. Combined-cycle plants account for 8.1 GW of planned additions (over 84%), while combustion-turbine plants account for 1.4 GW. 88% of the planned natural gas capacity is located in Ohio, Florida, Michigan, and Illinois.

A record-high 17.1 GW of wind capacity came online in 2021, and an additional 7.6 GW of wind capacity is expected to come online in 2022. 51% of the new capacity is located in Texas. The 999 MW Traverse Wind Energy Center in Oklahoma, the largest wind project expected to come online this year, is scheduled to begin operations in April 2022. Utility-scale battery storage capacity is expected to grow by 5.1 GW in 2022 due to several factors, including declining costs, deployment with renewable energy, and added value through regional transmission organization (RTO) markets. In addition, 5% of planned electric capacity additions in 2022 will come from two new reactors at the Vogtle nuclear power plant in Georgia.

[1] https://www.eia.gov/todayinenergy/detail.php?id=50818

[USA] DOE announces new Building a Better Grid initiative

On January 12, 2022, the Department of Energy launched the Building a Better Grid initiative to catalyze the nationwide development of new and upgraded high-capacity transmission lines, as enabled by the Bipartisan Infrastructure Law.[1] According to the DOE, the initiative will make the power grid more reliable and resilient to climate change and is crucial for achieving President Biden’s goal of 100% clean electricity by 2035 and a zero-emissions economy by 2050. The program will also increase access to affordable clean energy and create more jobs in the transmission industry, which employs over one million workers across the U.S.

Rebuilding and improving aging roads, bridges, and electric grid is a fundamental goal of the Bipartisan Infrastructure Law. The law seeks to address the vulnerability of the nation’s grid transmission lines and power transformers, over 70% of which are over 25 years old. Additionally, the law will help meet the increased interconnection queue waiting times for the many clean energy generation and storage projects expected to be added to the grid. As outlined in the DOE’s January 11 Notice of Intent, the initiative will support the development of nationally significant transmission projects and grid upgrades by:

• Early engagement and collaboration with states, tribal nations, and stakeholders to accelerate transmission deployment

• Enhancing transmission planning to identify areas of greatest need and conducting longer-term national-scale transmission planning analysis

• Deploying more than $20 billion in federal financing tools, which includes the Bipartisan Infrastructure Law’s new programs and existing funding like the $3 billion Western Area Power Administration Transmission Infrastructure Program

• Facilitating an efficient transmission permitting process by coordinating with federal agencies to streamline permitting, using public-private partnerships, and designating transmission corridors.

• Performing transmission-related research and development to continue developing and reducing the costs of technologies that enable efficiency.

[1] https://www.energy.gov/articles/doe-launches-new-initiative-president-bidens-bipartisan-infrastructure-law-modernize

[USA] Federal judge halts construction on Dixie Meadows geothermal plant in Nevada

On January 4, 2022, Judge Robert Jones of the U.S. District Court for the District of Nevada issued a preliminary injunction blocking construction on the Dixie Meadows Geothermal Utilization Project for 90 days.[1] The order came two days before the developer, Ormat Technologies, planned to begin construction on the project. The Dixie Meadows geothermal project includes the development of up to two 30 MWe geothermal power plants, the drilling of up to 18 production and injection well sites and eight core hole sites, and the construction of pipelines for geothermal fluids and other associated structures. The project will be located in northern Nevada. The Bureau of Land Management (BLM) approved the project in November 2021.[2] Prior to the approval, Ormat completed an environmental assessment in 2017 and worked with the BLM and other partner agencies to create an Aquatic Resource Monitoring and Mitigation Plan. According to the BLM, the Dixie Meadows project will help the state meet its renewable energy portfolio requirement of 25% total capacity.

The federal judge’s order is part of a lawsuit filed on December 15, 2021, by the Center for Biological Diversity and the Fallon Paiute-Shoshone Tribe. The plaintiffs cited concerns about the environmental impact of the project. The lawsuit alleges that the BLM illegally approved the Dixie Meadows project without the necessary environmental analysis. The lawsuit argues that the geothermal project could affect religious practices that depend on nearby springs and could harm the vulnerable Dixie Valley toad. For its part, Ormat’s lawyer said the company could lose $7 million in revenue if the project’s first phase is delayed. Judge Jones, however, said that the imminent risk to the area outweighed the potential financial consequences of a short-term delay for the developer. In addition, he noted that without a more in-depth National Environmental Policy Act analysis, the federal government might not have all the information necessary for its mitigation plan for the project. The 90-day restraining order will give the tribe and environmental challengers the opportunity to appeal the decision to the 9th US Circuit Court of Appeals.

[1] https://subscriber.politicopro.com/article/eenews/2022/01/05/judge-pauses-major-geothermal-project-cites-nepa-284812

[2] https://www.blm.gov/press-release/bureau-land-management-approves-dixie-meadows-geothermal-project

[USA] DOE announces loan guarantee of up to $1.04 billion for Nebraska pyrolysis facility

On December 23, 2021, the Department of Energy’s (DOE) Loan Programs Office (LPO) announced that it would guarantee a loan of up to $1.04 billion to Monolith Nebraska LLC to scale up the production of hydrogen at its Olive Creek facility in Hallam, Nebraska.[1] According to the LPO, the expansion will create approximately 1,000 jobs during construction and 75 “high-paying, highly skilled, clean energy jobs” for facility operations. The LPO said that the company must meet certain conditions before a final loan is issued, though it did not specify what these conditions will be. The announcement is the office’s first conditional commitment to be offered to a non-nuclear project since 2016. According to the DOE, it is likely to be the first of many such awards in 2022.

The Monolith Olive Creek project is the first-ever commercial-scale project to use methane pyrolysis technology, which produces carbon black and hydrogen from natural gas. Monolith aims to reduce the amount of greenhouse gases emitted during carbon black and hydrogen production by up to 80% compared to traditional methods. Carbon black is a type of soot that is widely used to reinforce and improve the performance of tires and other rubber products. It is also used in the production of plastics, dyes, and inks. Tire producers like Michelin and Goodyear are pledging to cut their own emissions footprints by sourcing their carbon black from Monolith.[2] The hydrogen produced at the Olive Creek facility will be used for cleanly made ammonia fertilizer and sold to agricultural buyers.

[1] https://www.energy.gov/lpo/articles/open-business-lpo-issues-new-conditional-commitment-loan-guarantee

[2] https://monolith-corp.com/news/monolith-receives-conditional-approval-for-a-one-billion-dollar-us-department-of-energy-loan

[Japan] JAEA and Mitsubishi Heavy Industries to cooperate in Wyoming fast-reactor project

According to an article released by the daily Yomiuri on January 1, 2022, the Japan Atomic Energy Agency (JAEA) and Mitsubishi Heavy Industries are set to cooperate in a U.S. project to build a next-generation fast reactor in Wyoming.[1] The companies will sign a memorandum of understanding as early as January with Terrapower, an advanced nuclear power startup founded by Bill Gates, and the U.S. Department of Energy (DOE). Terrapower is set to start operating the nuclear reactor in 2028. The U.S. government will provide funding to cover half of the project’s estimated cost of $4 billion. The fast reactor will have an output capacity of 345,000 kW and will use sodium as a coolant.

The U.S. government and Terrapower are seeking partners in Japan because commercial-scale development of a fast reactor has not taken place for many years in the U.S. JAEA, which is affiliated with the Japanese government, operates the Monju prototype fast-breeder reactor in Tsuruga, Fukui Prefecture, and the Joyo experimental fast reactor in Oarai, Ibaraki Prefecture. The Monju plant is now in the decommissioning and dismantling process.  JAEA and Mitsubishi are expected to provide reactor-design technologies and reactor-operation data. According to the Japan Times, safety tests might be conducted at a JAEA facility.[2] Japan’s industry and science ministries will support preparations for the safety tests.

[1] https://www.reuters.com/markets/commodities/japan-help-build-bill-gates-high-tech-nuclear-reactor-wyoming-yomiuri-2022-01-01/

[2] https://www.japantimes.co.jp/news/2022/01/05/business/corporate-business/japan-us-next-generation-fast-reactor/

[USA] Massachusetts and Maryland announce large procurements of offshore wind

On December 17, 2021, Massachusetts announced the selection of two offshore wind projects, Mayflower Wind and Vineyard Wind, totaling 1,600 MW of new capacity.[1] The selected projects, in combination with two previous projects, bring the total amount of offshore wind procured by the state to approximately 3,200 MW. The announcement brings Massachusetts closed to its goal of procuring 5,600 MW of offshore wind by 2027. Vineyard Wind and Mayflower Wind are both joint ventures of Copenhagen Infrastructure Partners and Avangrid Renewables. Vineyard Wind received a 1,200 MW contract, in addition to its previous 800 MW contract. Separately, Mayflower, received a 400 MW contract, in addition to its 800 MW project in the state. The developers already had approval from the U.S. Bureau of Ocean Management (BOEM) to build out their lease areas. The full capacity of Mayflower Wind’s lease is 2,000 MW, though only 1,200 MW is currently contracted.

On the same day as Massachusett’s announcement, the Maryland Public Service Commission (PSC) awarded offtake agreements to U.S. Wind and Skipjack Offshore energy for a combined 1,654.5 MW, bringing the state’s total to 2,022 MW.[2] Maryland’s 2019 Clean Energy Jobs Act expanded capacity for offshore wind in its Renewable Energy Portfolio to at least 1,200 MW. Maryland regulators awarded offshore renewable energy credits for 808.5 MW to US Wind's Momentum Wind development at a levelized price of $54.17/MWh for 20 years. Skipjack Wind, owned by Ørsted Offshore North America, was awarded 846 MW of credits at $71.61/MWh for 20 years. Both projects are subject to review under BOEM. They are expected to be operational before the end of 2026. Notably, the PSC has closed the next anticipated application periods for offshore wind solicitations because the latest approved bids will not leave room for additional projects.

[1] https://www.mass.gov/news/baker-polito-administration-announces-historic-selection-of-offshore-wind-projects-to-bring-clean-affordable-power-to-the-commonwealth

[2] https://www.psc.state.md.us/wp-content/uploads/Order-No.-90011-Case-No.-9666-Order-Granting-Offshore-Wind-Renewable-Energy-Credits.pdf

[USA] EPA finalizes ambitious GHG emissions standards for passenger cars and light trucks

On December 20, 2021, the Environmental Protection Agency (EPA) finalized its greenhouse gas (GHG) emissions standards for passenger cars and light trucks for Model Years (MY) 2023 through 2026.[1] According to the EPA, the standards are the most ambitious vehicle GHG emissions standards ever established for the light-duty vehicle sector in the U.S. The EPA’s final standards for 2025 and 2026 are more ambitious than those proposed in the initial rulemaking stage in August of 2021.

The final standards will unlock $190 billion in net benefits, including reduced impacts of climate change, improved public health from lower pollution, and cost savings for vehicle owners through improved fuel efficiency. The EPA projects that as the GHG standards get stronger over four years, sales of electric vehicles and plug-in hybrid vehicles will grow from about 7% market share in MY 2023 to about 17% in MY 2026. The standards will also result in avoiding more than 3 billion tons of GHG emissions, equivalent to more than half the total of U.S. CO2 emissions in 2019. Though the standards are ambitious, the EPA said that they provide adequate time for manufacturers to comply at reasonable costs. The final standards also put the light-duty vehicle GHG program on track to launch the next phase of standards for MY 2027 and beyond. The EPA is planning to initiate a separate rulemaking to set standards for MY 2027 and later in compliance with Biden’s “Executive Order on Strengthening American Leadership in Clean Cars and Trucks.”

[1] https://www.epa.gov/newsreleases/epa-finalizes-greenhouse-gas-standards-passenger-vehicles-paving-way-zero-emissions

[USA] PSE announces new target of 63% clean energy by the end of 2025

On December 20, 2021, Puget Sound Energy (PSE), a utility based in Washington, announced a new goal of reaching 63% clean electricity by the end of 2025 and net-zero carbon by 2045.[1] In October 2021, PSE filed its draft plan to achieve those goals with the Washington Utilities and Transportation Commission (UTC). On December 17, 2021, the utility filed its final Clean Energy Implementation plan (CEIP), which further defines a course of action for clean electricity programs and investments for the next four years. The plans align with the state’s Clean Energy Transformation Act (CETA).

The updated plan projects that the utility will have 63% clean energy by the end of 2025, up from 59% in the October draft plan and 34% in 2020. The plan proposes removing coal as a source of electricity by the end of 2025. It also aims to ramp up utility-scale renewables like wind and solar generation and calls for nearly doubling the installation of distributed energy resources (DERs). The plan also creates more ways for customers to save energy and reduce costs through energy efficiency improvements. In addition, it introduces new programs and incentives to reduce or shift energy use during peak times. The PSE’s implementation plan is under review by the UTC, which will conduct a public comment period and review process before making a decision.

[1] https://www.pse.com/press-release/details/Puget-Sound-Energy-raises-target-for-expanding-clean-energy-goals

[USA] Pennsylvania regulators release draft rules to cut methane emissions from existing oil and gas wells

On December 10, 2021, the Pennsylvania Department of Environmental Protection (DEP) released draft final rules to cut methane emissions from existing oil and gas wells. Pennsylvania is the second-largest gas-producing state after Texas.[1] The DEP first released the draft rules for new wells in 2019 and has collected comments over the past two years. The newly released draft applies to existing oil and gas wells and associated facilities. It includes an exception for oil and gas wells that produce less than 15 barrels of crude a day. The draft requires operators to conduct leak searches four times a year and upgrade existing equipment to reduce pollution from controllers, pumps, compressors, and tanks. According to the DEP, the final rules are expected to reduce emissions of volatile organic compounds by nearly 12,000 tons per year and methane emissions by about 214,000 tons per year, compared to about 75,000 tons in the previous draft. The draft was released in advance of the DEP’s Air Quality Technical Advisory Committee meeting. It still has to be reviewed by several state boards and could be in place by mid-2022.

[1]https://files.dep.state.pa.us/Air/AirQuality/AQPortalFiles/Advisory%20Committees/Air%20Quality%20Technical%20Advisory%20Committee/2021/12-9-21/post_OG_CTG_FRN_ANNEX_A__DRAFT_AQTAC.pdf

[USA] CPUC releases proposed rules for solar net metering

On December 13, 2021, the California Public Utilities Commission (CPUC) issued a proposed decision to revise the current net energy metering (NEM) framework and replace it with a net billing tariff.[1] In 2016, the CPUC adopted the current NEM, which gives customers a credit at the retail rate for energy that they provide to the grid. However, the proposed decision determined that the current NEM "negatively impacts non-participating customers; is not cost-effective; and disproportionately harms low-income ratepayers." According to the agency, the new proposed decision would adopt more accurate price signals that will promote the higher installation of customer-sited storage, helping the state decrease its dependency on fossil fuels during the early evening hours when solar output is low but demand is high. Under the net billing tariff proposed by the CPUC, new solar owners will be compensated for their excess electricity sent to the grid using an avoided cost calculator, which is lower than the current incentives.

The CPUC also proposed creating a Market Transition Credit of up to $5.25 per kW for residential solar plus storage and solar-only systems. The credit would continue at this level for four years, after which it would begin to decline by 25% a year. The proposal would also put in place a monthly residential Grid Participation Charge of $8 per kW of installed solar. The proposed decision would also create an Equity Fund with up to $600 million to improve low-income customer access to distributed clean energy programs with strong consumer protections. The proposed decision is now open to public comments, and the proposal is on the CPUC’s agenda for January 27, 2021.

[1] https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M430/K903/430903088.PDF