[USA] California considers target of 3 GW of offshore wind by 2030

In a draft report released on May 6, 2022, by the California Energy Commission (CEC), CEC staff recommend building 3 GW of offshore wind by 2030 and between 10 GW and 15 GW by 2045.[1] Given that the offshore wind industry could see technology developments and subsequent cost declines, the draft report suggests the potential of up to 20 GW between 2045 and 2050. This amount is the largest long-term offshore wind goal, surpassing New York’s 9 GW target for 2035. The draft report stems from the 2021 Assembly Bill 525, which directed the CEC to establish offshore wind planning goals for 2030 and 2045. The legislation also required the agency to develop a strategic plan for offshore wind resources by mid-2023.

The CEC said that it is in the process of identifying suitable sea space in federal waters, which could change the outlined planning goals. The road map also noted that one point of uncertainty is the availability of federal tax credits in the future. Currently, offshore wind projects that start construction before 2025 can receive the 30% investment tax credit (ITC), but after 2025 Congress would need to extend the ITC. According to the draft report, the ITC could bring the cost of projects from the $60-$70 MWh range down to $40-$50 per MWh.

[1] https://efiling.energy.ca.gov/GetDocument.aspx?tn=242970&DocumentContentId=76566

[USA] DOE launches $2.5 billion fund to modernize and expand capacity of the grid

On May 10, 2022, the Department of Energy (DOE) issued a Request for Information (RFI) requesting public input on the structure of the $2.5 billion Transmission Facilitation Program (TFP).[1] The TFP was created by the Infrastructure Investment and Jobs Act (IIJA) to help build out critical transmission lines. The new program part of the DOE’s roughly $20 billion Building a Better Grid initiative, which was created under the IIJA. The IIJA allows the DOE to borrow $2.5 billion from the treasury to assist in the construction of transmission lines through loans from the DOE, DOE participation in public-private partnerships, and capacity contracts eligible projects in which DOE would serve as an “anchor customer.”

The first solicitation will be limited to applicants seeking capacity contracts for projects that will begin operation no later than December 31, 2027. Through the capacity contracts, the DOE will commit to purchasing up to 50% of the maximum capacity of the transmission line for up to 40 years. The goal is for the DOE to buy capacity until customer demand has increased enough to cover those costs. Then DOE will then remarket the capacity and thereby replenish the fund. The DOE plans to issue a second solicitation from its TFP in early 2023 that will incorporate loans and public-private partnerships in addition to capacity contracts.

[1] https://www.energy.gov/articles/biden-administration-launches-25-billion-fund-modernize-and-expand-capacity-americas-power

[USA] U.S. gas prices reach all-time high

On May 11, 2022, gasoline and diesel fuel prices in the U.S. reached an all-time high.[1] According to the American Automobile Association (AAA), the nationwide average price for regular gasoline was $4.40/gallon, a roughly $0.17 increase from the previous week. Diesel prices hit $5.55/gallon. The price increase comes just two months after the last record-breaking prices were recorded. A year ago, gasoline was $2.99/gallon and diesel was $3.13/gallon. According to the Energy Information Administration (EIA), increasing prices are likely due to decreasing gasoline inventories.[2] Total U.S. gasoline inventories decreased by 8.2 million barrels (3.5%) from March to April, partially due to increased driving. The EIA estimates that gasoline consumption increased to 8.7 million barrels/day in April, a 1% increase from March. Gasoline prices at the pump will likely face upward pressure as oil prices remain above $105/barrel.

[1] https://gasprices.aaa.com/

[2] https://www.eia.gov/outlooks/steo/marketreview/petproducts.php

[USA] FERC rejects MISO self-fund rule for merchant HVDC line upgrades

On April 29, 2022, the Federal Energy Regulatory Commission (FERC) voted 4-1 to reject the Midcontinent Independent System Operator’s (MISO) proposal to allow incumbent transmission owners in the region to pay for and profit on grid updates needed for merchant high-voltage direct current (HVDC) lines.[1] The proposal, filed in November 2021, centered around upgrades needed for merchant HVDC lines, which are paid for by entities using the line rather than utility customers. The proposal built on a similar FERC decision in 2019 that restored transmission owners’ option to self-fund network upgrades before interconnection customers are offered the chance to finance it. MISO argued that merchant HVDC line-related upgrades should be treated similarly to interconnection-related network upgrades because both types of projects require upgrades that would not be needed if not for the projects.

In its decision to reject MISO’s proposed self-fund rule, FERC said that MISO failed to show how the expansion of the self-fund rule to merchant HCDV line upgrades wasn’t discriminatory. According to FERC, the upgrades are not identical because MISO would not offer all available funding options to merchant HVDC developers when they haven’t secured injection rights[2]. Commissioner James Danly (R) dissented, saying that the other commissioners’ decision “denies the transmission owners’ right to receive a return on and of the capital costs of network upgrades, necessary upgrades, and transmission owner system protection facilities.”

[1] https://elibrary.ferc.gov/eLibrary/filedownload?fileid=2b8979ce-11e6-cb9e-856b-8077d7500000

[2] Injection rights are rights to inject capacity at a specified point on the transmission system.

[USA] PG&E announces comprehensive hydrogen study and demonstration facility

On May 2, 2022, Pacific Gas and Electric Company (PG&E) announced that it is launching a comprehensive end-to-end hydrogen study and demonstration facility to examine the potential of zero-carbon hydrogen as a renewable energy source.[1] Called Hydrogen to Infinity, the study will blend hydrogen and natural gas in a standalone transmission pipeline system. The facility will allow PG&E and its partners (Northern California Power Agency (NCPA), Siemens Energy, the City of Lodi, GHD Inc., and the University of California at Riverside) to conduct a study of different levels of hydrogen blends in a natural gas pipeline that is independent from its current natural gas transmission system. The 130-acre facility in Lodi, California will also allow for a controlled and safe study of hydrogen injection, storage, and combustion of different hydrogen blends in several end-uses. NCPA’s Lodi Energy Center power plant, located near Hydrogen to Infinity, will accept a hydrogen-natural gas blend for electric generation in the Siemens Energy 5000F4 Gas Turbine.

The project will focus on several areas, including technical, operational, and safety needs; market development; energy resiliency and flexibility; commercial and government partnerships; unprecedented functional test environment for ongoing research; and training environment for new technology. The utility is considering this facility being the centerpiece for a potential Northern California Hydrogen Hub.

[1] https://www.pge.com/en_US/about-pge/media-newsroom/news-details.page?pageID=66b8ed99-3175-48da-95d6-1a1fde0a4f18&ts=1651764930381

[USA] Rivian secures $1.5 billion in incentives from Georgia

The Georgia Department of Economic Development (GDEcD), in partnership with the Joint Development Authorities (JDA) of several counties, announced on May 2, 2022, that an Economic Development Agreement has been signed with Rivian Automotives to move forward on the company’s electric vehicle (EV) assembly plant at the East Atlanta Megasite.[1] The $5 billion plant is expected to produce 400,000 trucks and SUVs a year. Under the agreement, Georgia will provide $1.5 billion in state and local incentives and tax credits. For example, the state will fund a $62 million training center and a roughly $27 million training program.

To meet the terms of the agreement, Rivian is required to create 7,500 jobs, which are expected to pay an average annual salary of $56,000. Rivian must also spend the bulk of its $5 billion direct investment by the end of 2028. As part of this investment, the EV manufacturer must make more than $300 million in payments in lieu of taxes over 25 years to the JDA of Jasper, Morgan, Newton & Walton Counties. These payments will start in 2023 with a payment of $1.5 million and escalate in steps over 25 years. If employment falls 20% below the promised level, Rivian must make all of its payments at once. The company plans to start construction in summer 2022 and open in late 2024.

[1] https://www.georgia.org/sites/default/files/2022-05/rivian_eda_signed_05.02.2022.pdf

https://www.georgia.org/sites/default/files/2022-05/rivian_incentives_-_executive_summary.pdf

[USA] Florida Governor vetoes bill to revise net metering laws

On April 27, 2022, Florida Governor Ron DeSantis (R) vetoed House Bill (HB) 741/Senate Bill (SB) 1024, which proposed revising existing laws for net metering and was passed by the state legislature in March 2022.[1] Net metering is a tool that gives rooftop solar owners a credit for excess energy that they produce and send back to the grid. HB 741 would have directed the Public Service Commission (PSC) to adopt a new program for rooftop solar owners by 2029 that would change net metering requirements and have solar owners pay the full cost of electric service instead of being "subsidized" by non-net metering customers. The bill would have also allowed utilities to recoup fees by petitioning the PSC to ensure “that the public utility covers the fixed costs of serving customers who engage in net metering.” Governor DeSantis cited the potential cost increases in his rejection. The governor wrote that Florida “should not contribute to the financial crunch that our citizens are experiencing,” referring to nationwide inflation.

[1] https://www.flgov.com/wp-content/uploads/2022/04/4.27.22-Veto-Transmittal-Letter.pdf

[Japan] Major train company in Japan announces switch to 100% renewable energy

As reported in Associated Press (AP) on April 27, 2022, Tokyu Railways’ network of seven train lines and one tram service was switched to renewable energy sources starting April 1, 2022.[1] Green energy is being used at all of its stations, including for vending machines, camera screens, and lighting. Tokyu employs 3,855 people and connects Tokyo with Yokohama. The company operates more than 64 miles of railway tracks serving 2.2 million people per day. It is the first railroad operator in Japan to have reached 100% clean energy. The company says the carbon dioxide reduction is equal to the annual average emissions of 56,000 households. According to AP, the train operator paid an undisclosed amount to Tokyo Electric Power Co. (TEPCO) for certification of its use of renewables. The renewable sources used for Tokyu’s operations include hydropower, geothermal, wind, and solar according to TEPCO. Tokyu Assistant Manager Yoshimasa Kitano said, “We don't see this as reaching our goal but just a start.”

[1] https://apnews.com/article/technology-science-business-yokohama-japan-e16b51384eed8be69c10cc11d0810a4e

[USA] Biden administration reverses Trump-era plan for the National Petroleum Reserve-Alaska

On April 25, 2022, the Department of the Interior announced that it has signed a new management plan for the National Petroleum Reserve-Alaska (NPR-A), a 23 million-acre area on Alaska’s North Slope.[1] The Bureau of Land Management (BLM) says that the plan “balances protection of special areas and wildlife habitat with responsible resource development.” The BLM had announced in January 2022 that it would review the integrated activity plan (IAP) for the area. The final decision reverses a Trump-era plan that had opened 82% of the NPR-A’s land to oil and gas leasing. The new plan reinstates the previous management plan, which was put into place by the Obama administration in 2013. The new IAP protects about half of the reserves lands, including caribou and avian habitats, from oil and gas leasing. It also includes new requirements for potential oil and gas drilling, such as revised operating standards to protect endangered species. The BLM has held a yearly oil auction in the NPR-A since 2010, with the exception of 2020 when oil and gas prices were low due to the pandemic.

[1] https://www.blm.gov/press-release/following-january-announcement-bureau-land-management-issues-record-decision-national

[USA] New York approves transmission contracts for Clean Path NY and Champlain Hudson Power Express projects

New York Governor Kathy Hochul (D) announced on April 14, 2022, that the New York Public Service Commission (PSC) approved contracts with Clean Path New York for its Clean Path NY (CPNY) project and H.Q. Energy Services for its Champlain Hudson Power Express (CHPE) project to deliver solar, wind, and hydroelectric power from upstate New York and Canada to New York City.[1] CPNY is scheduled to come online in 2027 and will connect resources in the upstate and western regions of the state to NYC. CHPE is expected to come online in 2025 and will deliver power from Canada. State officials said that by 2030, the two projects will reduce NYC’s need for fossil fuel generation by 50%. Governor Hochul said the approval of the contracts is "a major step forward” in achieving the state’s goal of producing 70% of its electricity from renewable resources by 2030. The projects are also expected to deliver up to $5.8 billion in overall societal benefits and $8.2 billion in economic development across the state.

[1] https://www.governor.ny.gov/news/governor-hochul-announces-approval-contracts-deliver-clean-renewable-electricity-new-york-city

[USA] OPG and TVA to partner on new nuclear technology development

Ontario Power Generation (OPG) and the Tennessee Valley Authority (TVA) announced on April 19, 2022, that they will collaborate to build small modular reactors (SMRs) at their Darlington and Clinch River sites, respectively.[1] The agreement allows the companies to coordinate their explorations into the design, licensing, construction, and operation of SMRs. The collaboration will not include exchanges of funding, but the agreement will be mutually beneficial by reducing the financial risks of innovating new technology while taking advantage of the company’s experience, the press release said. OPG and TVA are both government-owned utilities with fleets that include nuclear and hydroelectric. Both utilities are also actively exploring SMR technologies. OPG plans to deploy an SMR at its Darlington nuclear facility, the only location in Canada licensed for new nuclear with all environmental assessments completed. TVA holds the only Nuclear Regulatory Commission Early Site Permit in the U.S. for SMR deployment at its Clinch River site in Oak Ridge, Tennessee.

[1] https://www.tva.com/newsroom/press-releases/opg-tva-partner-on-new-nuclear-technology-development

[World] Amazon on path to reach 100% renewable energy five years ahead of schedule

On April 20, 2022, Amazon announced that it has secured 37 new renewable energy projects totaling 3.5 GW of capacity, expanding the company’s renewable energy portfolio by nearly 30%.[1] The projects put the company on a path to reach 100% renewable energy by 2025, five years ahead of the original target of 2030. The projects are located across the U.S., Spain, France, Australia, Canada, India, Japan, and the United Arab Emirates. The projects include three wind farms, 26 solar farms, and eight rooftop solar installations. Twenty-three of these projects will be located in the U.S., spread out across 13 states. This includes a 500 MW solar farm in Texas, Amazon’s largest renewable energy project (by capacity) announced to date. The new projects also include a 300 MW solar project paired with 150 MW of battery storage in Arizona and a 150 MW solar project paired with 75 MW of battery storage in California. Amazon now has a total of 310 renewable energy projects, which, once operational, are expected to produce 42,000 gigawatt hours (GWh) of renewable energy annually.

[1] https://press.aboutamazon.com/news-releases/news-release-details/amazon-extends-position-worlds-largest-corporate-buyer-renewable

[USA] Cleco to retrofit large Louisiana power plant with CCS

Louisiana Governor John Bel Edwards (D) and the President and CEO of Cleco Corporate Holdings announced on April 11, 2022, that Cleco will invest $900 million to reduce carbon emissions at the largest of its nine electric generation units in Louisiana, Madison-3 at Brame Energy Center in Lena, LA.[1] Currently, the plant is fueled 70% by petroleum coke and 30% by Illinois Basin coal. Cleco Power, which serves 291,000 customers in Louisiana, will retrofit the Madison-3 plant with carbon capture technology to remove 95% or more of the plant’s carbon emissions. Named the “Diamond Vault,” the project plans to store the captured carbon in deep geological formations beneath the power plant. The company estimates that the project will create 30 to 40 direct new jobs and an average of 1,100 construction jobs over a three-year period.

Cleco will receive a $9 million congressional appropriation to help cover the cost of a front-end engineering and design (FEED) study. Cleco plans to raise capital for the project through tax credits, Department of Energy grants, and private equity investment. Construction is projected to begin by the end of 2025, and commercial operation is expected to begin no later than 2028.

[1] https://www.opportunitylouisiana.com/led-news/news-releases/news/2022/04/11/gov.-edwards-cleco-announce-$900-million-emissions-reduction-project-at-central-louisiana-power-facility

[USA] Government agencies warn of new malware with implications for critical infrastructure

On April 13, 2022, the Department of Energy (DOE), the Cybersecurity and Infrastructure Security Agency (CISA), the National Security Agency (NSA), and the Federal Bureau of Investigation (FBI) released a joint Cybersecurity Advisory (CSA) warning of a newly discovered malware targeting the systems that control electricity and natural gas infrastructure.[1] The CSA said the new malware has a modular architecture and is able to conduct highly automated attacks against critical infrastructure. The CSA warns that it could enable lower-skilled cyber actors to emulate higher-skilled capabilities. The malware has a wide range of uses, including initial infiltration, reconnaissance, uploading malicious configuration or code to the targeted device, backing up or restoring device contents, and modifying device parameters.

In the announcement, the government agencies urged critical infrastructure companies, particularly those in the energy sector, to implement the CSA’s detection and mitigation recommendations. These recommendations include enforcing multifactor authentication for remote access and having a cyber incident response plan. The government announcement credited Dragos, Mandiant, Microsoft, Palo Alto Networks, and Schneider Electric SE with helping to discover and analyze the malware. Cybersecurity firms Dragos and Mandiant have also published their own respective reports on the malware.

[1] https://www.cisa.gov/uscert/ncas/alerts/aa22-103a

[USA] Biden invokes Defense Production Act to boost domestic battery manufacturing

On March 31, 2022, President Biden invoked the Defense Production Act (DPA) to spur domestic mining and processing of minerals used to make batteries for electric vehicles (EVs) and energy storage facilities.[1] The DPA is a Cold War-era law that gives the president significant emergency authority to bolster domestic industries.[2] The move is part of a two-part path designed to address rising energy costs caused by the Russian invasion of Ukraine; in addition to using the DPA, Biden ordered the release of up to 1 million barrels a day for six months from the Strategic Petroleum Reserve. According to the White House press release, the DPA will support lithium, nickel, cobalt, graphite, and manganese production and processing. The Department of Defense will “implement this authority using strong environmental, labor, community, and tribal consultation standards.” The White House statement also noted that the administration is considering using the DPA to address other parts of the energy sector.

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/31/fact-sheet-president-bidens-plan-to-respond-to-putins-price-hike-at-the-pump/?utm_campaign=Press%2FMedia%20Outreach&utm_medium=email&_hsmi=208653202&_hsenc=p2ANqtz-_Q0ffmJOHAWL-D7Z5LZ4VFTUukayztJICXlTevL7e6II-icdY2-T-kjPVquu2pH3CCyJyxMsJ53deXsGO8Xs6ApKqCHkLboVha6umJvzJ2zQZfxe0&utm_content=208653202&utm_source=hs_email

[2] President Biden has previously invoked the DPA to respond to the COVID-19 pandemic. For example, Biden used the DPA to bolster vaccine supply.

[USA] SEIA survey: solar companies greatly impacted by Commerce tariff investigation

According to preliminary survey results released by the Solar Energy Industries Association (SEIA) on April 5, 2022, three-quarters of surveyed solar companies say that panel deliveries have been canceled or delayed since the Department of Commerce announced on March 28, 2022, that it was initiating a circumvention case against imports of solar goods from four Southeast Asian countries.[1] The Commerce investigation was prompted by a February 2022 petition from California-based solar panel assembler Auxin Solar. In the petition, Auxin Solar claims that manufacturers in Cambodia, Malaysia, Thailand, and Vietnam use parts made in China that otherwise would be subject to a tariff. The investigation may take up to a year, and suppliers have indicated that they may stop shipments from those countries until a final ruling is issued as the ruling could result in retroactive import duties.

The SEIA survey compiled responses from more than 200 solar companies, which ranged from manufacturers to utility-scale installers. Half of the respondents said that 80% or more of their 2022 project pipeline is at risk of delay or cancellation. In addition, two-thirds of survey respondents said that at least half of their workforce is at risk of being laid off, while another third said their entire workforce is at risk. SEIA is now calling for the Department of Commerce to issue a negative preliminary decision on the case.

[1] https://www.seia.org/news/survey-solar-deployment-hammered-meritless-trade-case-us-climate-goals-jeopardy

[USA] PG&E announces expansion of Enhanced Powerline Safety Settings technology following successful wildfire prevention in 2021 pilot

On April 5, 2022, Pacific Gas and Electric Company (PG&E), which serves over 5 million households in the northern two-thirds of California, announced that it will broaden the use of its Enhanced Powerline Safety Settings (EPSS) technology to all distribution powerlines in high fire-threat areas in 2022.[1] Launched as a pilot in July 2021, EPSS automatically shuts off power within one-tenth of a second if a potential threat to the electric system, such as a fallen tree branch, is detected. According to the press release, as of the end of 2021, the system successfully reduced reportable ignitions by 80% on affiliated circuits in High Fire-Threat Districts (HFTDs) compared to the previous three-year average across more than 11,500 HFTD miles of distribution lines.

The utility intends to expand the program to 25,500 HFTD miles of distribution lines within the company’s service area and in select adjacent areas. According to the company, unlike Public Safety Power Shutoffs (PSPSs), which are a last resort when severe weather conditions are forecast, EPSS is effective any time when dry fuels make powerline faults more likely to start a fire. The EPSS will be paired with a more surgical approach to reducing the frequency and duration of outages and the number of customers impacted. PG&E also said it intends to increase the resources available to customers affected by any shutoffs.

[1] https://www.pge.com/en_US/about-pge/media-newsroom/news-details.page?pageID=d8b31ca1-2f94-4d86-ba5b-f62d87b063fc&ts=1649362205969

[USA] SPP reaches 90% renewables for the first time

Southwest Power Pool (SPP), a grid operator that covers 14 states in the central U.S., announced on March 29, 2022, that it had relied on renewables for 90.2% of the energy needed to meet electricity demand for the first time.[1] The record was set at 2:42 a.m. Central time on March 29, 2022, and beat the previous record of 87.5% set on May 8, 2021. This marks the first time a regional transmission organization (RTO) has served more than 90% of its load with renewables. 88.5% was served by wind alone, beating the previous wind penetration record set on May 8, 2021, of 84%. In a statement, SPP Senior Vice President of Operations Bruce Rew said, “In a decade’s time, our region has gone from thinking of 25% renewable-penetration levels as nearly unreachable to a point where we regularly exceed 75% without reliability concerns. We’re able to manage wind generation more effectively than other, smaller systems can because we’ve got a huge pool of resources to draw from.”

The grid operator also set new wind and renewable production records. At 9:25 p.m. Central time on March 28, 2022, the SPP footprint produced 23,802 MW of renewable energy, beating the previous record of 21,820 MW set on February 15, 2022. And at 10:34 p.m. the same day, wind production reached a record 22,915 MW, surpassing the previous record of 21,820 MW from February 15, 2022.

[1] https://www.spp.org/newsroom/press-releases/spp-sets-regional-records-for-renewable-energy-production/

[USA] Biden’s proposed budget for FY 2023 includes $44.9 billion for clean energy

On March 28, 2022, President Joe Biden unveiled his proposed $5.8 trillion budget for fiscal year (FY) 2023, which includes $3.3 billion for clean energy growth.[1] Biden’s proposed budget includes increasing the Department of Energy’s (DOE) budget by 7.1% to $48.2 billion, up from $45 billion in FY 2022. The increase partly reflects spending required by the 2021 Infrastructure Investment and Jobs Act (IIJA) and includes $200 million for a new Solar Manufacturing Accelerator program to help spur domestic solar equipment production. The proposal also proposes $502 million to weatherize and retrofit low-income homes. This includes $100 million for a new Low Income Home Energy Assistance Program (LIHEAP) Advantage pilot to electrify low-income homes and $260 million to support energy efficiency improvements to Department of Agriculture (USDA)-assisted multifamily homes. In addition, Biden’s proposed budget would provide $150 million to electrify Tribal homes and transition colleges and universities to renewable energy. It also includes $80 million for a new Grid Deployment Office to retrofit the grid.

[1] https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf

[USA] DTE and Lyft partner to incentivize EV adoption

On March 29, 2022, Detroit-based DTE Energy announced a partnership with Lyft, a rideshare provider, to incentivize Lyft’s drivers in its footprint to purchase or lease an electric vehicle (EV).[1] Through DTE’s Charging Forward program, Lyft’s drivers who adopt EVs will receive up to $5,000.  The utility is providing $2,000 as a rebate for Lyft drivers that purchase or lease an EV. The remainder of the incentive will be split into four quarterly payments of $750 if the driver completes 200 rides per quarter.

The partnership with Lyft is the latest piece of the Charging Forward program, which began by offering charger rebates to customers and is now expanding into ride-hailing. DTE invests more than $1 billion annually to improve electric reliability on the grid and increase capacity for growing EV adoption. According to the press release, DTE’s partnership with Lyft aims to close the gap of equitable access to EVs. The program is currently open, and eligible drivers must apply by September 30, 2022.  

[1] https://www.newlook.dteenergy.com/wps/wcm/connect/dte-web/home/service-request/residential/electric/pev/pev-res-charge-frwd