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Delays Slow Clean Energy Installations by 55 Percent in Second Quarter

November 22, 2022

by Peter Maloney
APPA News
November 22, 2022

Clean energy installations dropped 55 percent in the second quarter compared with the same period in 2021, slowed in part by widespread delays, according to a new report from the trade group American Clean Power.

There were 3,188 megawatts (MW) of utility-scale clean energy capacity installed in the quarter, making it the lowest quarter for clean energy capacity additions since third quarter 2019, according to the Clean Power Quarterly Market Report.

The only technology that saw an increase was energy storage, which rose 13 percent. Solar installations were down 53 percent compared with first-quarter 2021. And onshore wind installations were 78 percent lower in the second quarter compared with the same time period last year, the report said.

“Many projects continue to face supply chain-related challenges,” the report’s authors said. “Availability of solar modules has significantly delayed schedules for projects following the Department of Commerce’s decision to investigate duty circumventions claims,” They added.

In March, the Department of Commerce launched an investigation into whether certain photovoltaic solar cells and modules imported from Southeast Asia are circumventing U.S. tariffs.

Solar power projects comprised 64 percent of delayed projects with land-based wind projects accounting for 23 percent of delayed capacity and storage 13 percent, the report found. And project delays continue to mount, the report said, noting that developers reported 19,286 MW of projects that experienced delays in the second quarter, including 8,116 MW that is now expected online this quarter. Multiple projects, totaling 827 MW, have had more than one delay in their expected online dates, according to the report.

The delays reported in the second quarter were compounded by previous slowdowns, the report found, noting that at the end of 2021, 10,993 MW of clean power capacity experienced delays, of which only 3,850 MW has since come online.

Additionally, in the first quarter of 2022, 7,370 MW of capacity was delayed, of which 551 MW has since come online. In all, since the end of 2021 more than 32,400 MW of capacity has been delayed and has not yet achieved commercial operation, the report found.

Of the 8,166 MW of clean energy capacity expected online in the second quarter but was delayed, 5,782 MW are now expected online by year end with the remaining 2,400 MW of capacity now expected online between 2023 and 2026 or to be delayed indefinitely, the report said.

Looking forward, the capacity of solar power in the clean energy pipeline slowed compared with the first half of 2021, but showed a 5 percent increase over the first quarter, the report found. Solar power projects now account for 57 percent of the pipeline of clean energy capacity in the pipeline, including 22,765 MW under construction and 50,938 MW in advanced development.

Development of land-based wind power, the largest source of operational clean power, has also slowed down, the report found. Between third-quarter 2021 and fourth-quarter 2021 wind capacity in the development pipeline decreased by 7 percent, and between the end of 2021 and first-quarter 2022 the land-based wind pipeline decreased 2 percent, and in the second quarter the wind project pipeline decreased by 1 percent.

Land based wind projects now account for 18 percent, or 23,185 MW, of the clean energy project pipeline with offshore wind projects accounting for an additional 14 percent, or 17,502 MW, of the pipeline.

Energy storage projects also slowed, decreasing by 1 percent in terms of megawatt capacity since the first quarter and down from an 18 percent increase between fourth-quarter 2021 and first-quarter 2022, the report found. At the end of the second quarter there were 14,499 MW (36,200 megawatt hours) of storage capacity in development, according to the report.

In terms of megawatts, 31 percent of battery storage capacity in the pipeline are standalone projects with the remaining 69 percent of projects paired with wind or solar resources, according to the report.

California leads in battery storage development with 5,773 MW, accounting for 41 percent of the total storage pipeline, the report found. Texas ranks second with 2,415 MW, and Nevada third with 1,473 MW.

California also ranked first in terms of overall clean energy development, bringing 825 MW of clean energy online in the second quarter, the report found. Texas was second, installing 618 MW, followed by Florida with 277 MW, and Georgia with 236 MW.

In terms of technology, 1,575 MW of new solar capacity was brought online in the second quarter, bringing 2022 solar installations to 4,558 MW, the report said. Five land-based wind projects came online in the second quarter with a total capacity of 620 MW. Total 2022 wind installations are now 3,485 MW. And battery storage had a record second quarter with 992 MW coming online, bringing year-to-date total to 1,751 MW.

TVA Pilot Program to Examine Installing Solar Projects at Closed Coal Ash Sites

November 16, 2022

by Paul Ciampoli
APPA News Director
November 16, 2022

The Tennessee Valley Authority (TVA) Board of Directors recently approved a pilot program to determine if closed coal ash sites are suitable for utility-scale solar projects.

Pending environmental reviews and regulatory approval, the $216 million pilot project would explore an innovative approach to repurpose a closed coal ash site at the Shawnee Fossil Plant to advance TVA’s clean energy efforts, TVA said.

TVA previously issued a request for proposals for conducting a Valley Decarbonization Study in calendar year 2023. The study is intended to model pathways to further reductions in emissions throughout the economy.

The Board recognized TVA’s fiscal year 2022 decarbonization initiatives guided by the agency’s strategic priorities and guiding principles:

NYPA’s Sylvia Louie Receives DOE Clean Energy Education and Empowerment Award

November 15, 2022

by Paul Ciampoli
APPA News Director
November 15, 2022

Sylvia Louie, a director of business development at the New York Power Authority (NYPA), is the recipient of a Department of Energy (DOE) 2022 Clean Energy Education and Empowerment (C3E) award.

The C3E Initiative aims to close the gender gap and increase the participation, leadership, and success of women in a diverse array of clean energy fields.

As part of the NYPA development team, Louie focuses on development of large-scale renewables, energy storage, and transmission projects. Along with a variety of projects, she supports opportunities for public–private collaborations to help achieve state energy goals. 

Louie joined NYPA in 2009 as a mechanical engineer, providing engineering design skills to the Energy Services & Technology group and supporting implementation of energy-saving initiatives for NYPA customers. In 2012, she joined the Clean Energy Technology group, focusing on development of clean energy technology projects.

In 2014, she entered the executive office as a Special Project Manager, helping NYPA leadership set strategic initiatives for a clean energy future. Prior to joining NYPA, she spent four years as a design engineer of HVAC systems for a small consulting engineering firm.

Each awardee receives a cash gift of $8,000 and national recognition of their efforts. 

Now in its 11th year, the C3E Initiative is led by DOE in collaboration with the MIT Energy Initiative, Stanford University’s Precourt Institute for Energy, and the Texas A&M Energy Institute.

Additional information about the awards including other winners is available here.

California PUC Issues Revised Proposal on Solar Net Metering Rates

November 14, 2022

by Peter Maloney
APPA News
November 14, 2022

The California Public Utilities Commission (CPUC) recently issued a proposal to revise the state’s Net Energy Metering (NEM) solar tariff to better reflect the value of solar power generation to the state’s grid.

The proposal would replace NEM payments to utility customers tied to the retail electric rate with payments linked to the avoided cost a utility would pay to buy the electricity elsewhere. The CPUC said the aim is to provide the largest incentives for solar exports during the late afternoon and early evening hours when the grid is the most stressed and prices are highest and minimize incentive payments during times when demand, and prices, are lowest, such as midday during a week day.

The proposed tariff would also provide extra electricity bill credits to residential customers who adopt solar or solar paired with battery storage in the next five years, which would be paid on top of the avoided cost bill credits. Customers would be able to lock in the extra bill credits for nine years.

The proposed tariffs would also provide low-income customers more access to solar power by providing a larger amount of extra bill credits to ensure the solar system payback is just as attractive as the payback for higher-income customers.

The proposal would cover 150 percent of a customer’s electricity usage to accommodate future electrification of appliances and vehicles, the CPUC said.

The proposal would have no impact on existing rooftop solar customers who would maintain current compensation rates.

“NEM has helped California make significant progress toward meeting its climate goals, but now that California has nearly 25 gigawatts (GW) of solar on our grid, needs have shifted,” the CPUC said in a statement. “It is now essential to address grid reliability shortfalls during ‘net peak’ hours in the early evening when the sun is down and we rely on fossil fuels to meet demand.”

In December 2021, the CPUC issued an initial proposal to reform its NEM tariffs and to encourage customers to combine energy storage with their solar systems. The proposal also included a grid participation charge of $8 for every kilowatt hour of rooftop solar power produced. The proposal met with heavy criticism from many stakeholders, and in January the commission postponed a vote on the proposal.

Like the December proposed revisions, the new proposal would use avoided costs to determine incentive levels, but the new proposal does not include the controversial participation charge.

Under the new proposal, the CPUC said “average residential customers of Pacific Gas and Electric, Southern California Edison, or San Diego Gas & Electric installing solar will save $100 a month on their electricity bill, and average residential customers installing solar paired with battery storage will save at least $136 a month.”

While CPUC decisions apply only to investor owned electric and natural gas utilities and not public power utilities, the commission’s effort has a broad impact on the state’s electric grid.

The CPUC said the revised proposal on NEM tariffs will be on its Dec. 15 voting meeting agenda.

U.S. Finalizes Offshore Wind Sites To Be Auctioned in Gulf Of Mexico

November 6, 2022

by Peter Maloney
APPA News
November 6, 2022

The U.S. Bureau of Ocean Energy Management (BOEM) has finalized two Wind Energy Areas (WEAs) in the Gulf of Mexico.

Later this year or early next year, BOEM intends to issue a proposed sale notice for the competition to lease the areas. The notice will include a 60-day public comment period.

The first WEA is approximately 24 nautical miles (27.6 miles) off the coast of Galveston, Texas. The area totals 508,265 acres.

The second WEA is approximately 56 (64.4 miles) off the coast of Lake Charles, La. The area totals 174,275 acres.

BOEM said it slightly reduced the size of the WEAs from the original draft versions to address concerns expressed by the Department of Defense and the U.S. Coast Guard regarding shipping, marine navigation, and military operations.

Last October, the Biden administration, to further its goal of deploying 30 gigawatts (GW) of offshore wind energy by 2030, outlined a path for the potential sale of up to seven new offshore leases for wind power projects by 2025.

In February 2022, the Department of the Interior (DOI) held the first competition for offshore wind leases, offering 488,000 acres in the New York Bight. The auction drew winning bids from six companies totaling approximately $4.37 billion, which the DOI said was the highest grossing competitive offshore energy lease sale in history, including oil and gas lease sales.

In May, a BOEM auction for two lease areas in the Carolina Long Bay drew competitive winning bids from two companies, Duke Energy and TotalEnergies, totaling approximately $315 million.

In August, the DOI released a request for interest for leasing potential offshore wind energy sites in the Gulf of Maine, a first step in preparation for holding a competitive bid for the site.

Virgin Islands Public Services Commission Approves Two Solar Companies Qualified Facilities

November 6, 2022

by Paul Ciampoli
APPA News Director
November 6, 2022

The Virgin Islands Public Services Commission (PSC) recently approved two solar power companies, Haugland VI and Leeward Energy, as qualified facilities (QF). 

Leeward Energy has developed over 20,000 megawatts (MW) of solar power and currently has 2,500 MW in operation and Haugland VI manages a number of local development projects, in addition to performing electrical, utility and civil work.

The recent QF designation is part of a multi-step process that will allow the energy companies to negotiate and enter into a power-purchase agreement with the Virgin Islands Water & Power Authority. 

Under the agreement, the selected company will maintain ownership and operation of the solar facility. Leeward Energy is in negotiations with the Authority to sell power at a fixed rate to the Authority. 

Haugland VI has not submitted a proposal to the Authority. One of the many benefits of a power-purchase agreement is it funnels renewable energy investment into the Virgin Islands, without the Authority having to shoulder the capital needed for the build out and operations, the utility noted.

The PSC’s approval will help further Governor Albert Bryan’s initiative to transition St. Croix to 100% solar energy, and aid in the long-term Vision 2040 economic strategy for the USVI. 

“Prioritization of solar and battery storage will be critical to lowering reliance on expensive and volatile fossil-fuel generation and will help insulate customers from spikes in commodity prices,” the utility said. 

While the Authority intends to roll out renewables throughout the USVI, deployment in St. Croix is particularly ideal given the larger and flatter land mass available. 

Irrespective of solar farm location however, a territory-wide rate structure ensures all customers will benefit equally from renewable generation, regardless of location, the Virgin Islands Water & Power Authority said.

Implementation Standards for NAESB Base Contract for Voluntary RECs are Approved

November 4, 2022

by Paul Ciampoli
APPA News Director
November 4, 2022

The North American Energy Standards Board’s (NAESB) Retail Markets Quadrant (RMQ) and Wholesale Electric Quadrant (WEQ) Executive Committees recently approved technical implementation standards for NAESB’s base contract for the sale and purchase of voluntary renewable energy certificates (RECs).

Elizabeth Mallett, Director, Wholesale Gas and Retail Markets Quadrants for NAESB, provided an update on the base contract and the implementation standards for Public Power Current on Nov. 3.

Mallett noted that the technical implementation standards are now posted for a thirty-day ratification period that began on October 19, 2022 and will close on November 18, 2022.  

Once ratified by the NAESB membership, the technical implementation will be available for industry use and will be included in the upcoming publications of the WEQ and RMQ Business Practice Standards, she said.

“Together, these standards, along with the NAESB REC Base Contract, which was ratified by NAESB membership in November of 2021, seek to provide additional efficiencies to the REC transacting process within the voluntary market thorough the establishment of standard terminology and terms and conditions for contract negotiations,” Mallett said.

The NAESB Base Contract for Sale and Purchase of Voluntary RECs also provides an attestation exhibit allowing parties to evidence transfer of REC ownership, including uniform descriptions of the origins and creation of a REC.

The NAESB REC contract was spurred by a recommendation from Tennessee Valley Authority that NAESB consider a REC contract for distributed ledger technology, or blockchain technology.

Background

In August 2021, the WEQ and RMQ Business Practices Subcommittees voted to unanimously approve a recommendation containing the NAESB Base Contract for Sale and Purchase of Voluntary RECs and a NAESB REC Base Contract Frequently Asked Questions (FAQ) document.  

The recommendation was developed over a total of 25 joint meetings between the RMQ Business Practices Subcommittee and the WEQ Business Practices Subcommittee. 

Per the NAESB standards development process, once the recommendation was voted out of the subcommittee it was posted for a thirty-day formal industry comment period (August 3, 2021 through September 2, 2021). 

During that time, parties were given the opportunity to comment on the document, Mallet noted.  NAESB received comments from Cheniere proposing minor edits to the NAESB Base Contract for Sale and Purchase of Voluntary RECS and the NAESB REC Base Contract FAQ for consistency and clarification. 

On September 7, 2021, the WEQ and RMQ Executive Committee held a joint meeting to discuss the Cheniere comments and developed late comments that incorporated the proposed changes into the recommendation. 

The WEQ and RMQ Executive Committees held meetings in October 2021 to review the recommendation, along with the comments received. Both the RMQ and WEQ Executive Committees approved the recommendation as modified by the Cheniere comments. 

After gaining the approval of both of the Executive Committees, the Contract and FAQ Document were ratified by NAESB membership and are now available for purchase.

On the heels of the completion of the NAESB Base Contract for Sale and Purchase of Voluntary Renewable Energy Certificates and the NAESB REC Base Contract FAQ document, the WEQ and RMQ Business Practices Subcommittee moved on to development of the technical implementation to support the NAESB REC Base Contract. 

Mallett noted that the technical implementation allows for the electronic use of the contract, including on blockchain technologies. 

After a total of 16 meetings, the joint subcommittees voted out a recommendation on July 2, 2022 that included:

The recommendation was posted for a thirty-day formal comment period that concluded on August 8, 2022. 

Comments were filed in support of the recommendation from the NAESB WEQ Standards Review Subcommittee and Cheniere, who also proposed minor edits for clarity and consistency, Mallett said.

The WEQ and RMQ BPS reviewed the comments and develop a set of late comments that incorporated the proposed edits from the Cheniere comments.

The WEQ and RMQ Executive Committees met on October 18, 2022 and October 19, 2022 and approved the recommendation. The recommendation is now posted for a thirty-day ratification period by the NAESB membership.

Once ratified, the standards will be available for industry use and included in the next NAESB publications for the Retail Markets Quadrant and Wholesale Electric Quadrant. 

NAESB members have access to the documents by way of their membership. Nonmembers that want to purchase the standards may fill out the NAESB Materials Order Form on the NAESB website.

SB Energy Inks 942-MW PPA with Google to Power Data Center

November 2, 2022

by Paul Ciampoli
APPA News Director
November 2, 2022

Google has agreed to purchase approximately seventy-five percent of the renewable energy produced by four solar projects under development in Texas under an agreement announced on Nov. 1 with SB Energy. The power purchase agreement totals 942 megawatts.

The Orion 1-3 and Eiffel solar projects, which are expected to be operational by mid-2024, will total 1.2 gigawatts (GW) of capacity.

The capacity will support the energy needs of Google’s data center in Midlothian, Texas and cloud region in Dallas. The agreement is Google’s largest combined clean energy transaction in Texas to date.

SB Energy currently owns and operates 1.7 GW of solar capacity and will have started construction on an additional 1.3 GW by early next year.

Silicon Valley Power Signs PPA for Wind Power from Sempra Project in Mexico

October 28, 2022

by Peter Maloney
APPA News
October 28, 2022

California’s Silicon Valley Power (SVP) recently entered into a 20-year power purchase agreement (PPA) for the long-term supply of renewable energy from a proposed, cross-border 300-megawatt (MW) wind project Sempra Infrastructure is developing in Mexico.

Under the contract, Sempra would provide electric power to the City of Santa Clara, Calif., from the Cimarrón wind project it plans to build in Baja California where Sempra has an existing cross-border high voltage transmission line that connects to the East County substation in San Diego County.

Silicon Valley Power provides power to nearly 55,000 customers in Santa Clara and is the only full service, vertically integrated public power utility in Silicon Valley that owns generation, transmission and distribution assets.

When completed, the Cimarrón wind farm will have about 60 wind turbines and is expected to reduce greenhouse gas emissions by nearly 210,000 metric tons of carbon dioxide equivalent per year.

Completion of the wind project is subject to securing all necessary commercial agreements and permits, including reaching a final investment decision, Sempra said.

Renewable Incentives in Inflation Reduction Act Will Meet Headwinds of Higher PPA Prices: Report

October 28, 2022

by Peter Maloney
APPA News
October 28, 2022

The Inflation Reduction Act (IRA) will spur renewable development, but projects still face the headwinds of rising power purchase agreement (PPA) prices, according to a new report on the PPA market.

In the third quarter, North American P25 solar and wind PPA prices soared 9.6 percent to $45.93 per megawatt hour (MWh), pushing them to a level where they are now 34 percent higher than they were at the same time last year, according to a report from LevelTen Energy, an operator of one of the largest PPA marketplaces.

LevelTen’s P25 Price Index represents an average of the 25th percentile PPA price in seven North American wholesale electric power markets. The data is based on prices developers are offering for PPA contracts, not transacted PPA prices. 

PPA prices began rising in 2020, when the COVID-19 pandemic exacerbated supply chain challenges. Since then, other factors – including economics, regulations, and permitting challenges – have created an imbalance between PPA supply and demand and led to an increase in development costs, keeping prices high, LevelTen said in the report.

The IRA, which was signed into law in August, extends a variety of energy tax credits and makes them available for projects owned and operated by tax-exempt entities, including public power.

“The IRA will undoubtedly spur significant investment in renewables — as much as 94 gigawatts (GW) of additional wind and solar by 2035,” Martin Anderson, head of research, USA, at Aurora Energy Research, said in a statement.  “While many in the industry expect the influx of low marginal cost generation to significantly depress power and PPA prices, Aurora’s analysis indicates a more muted market response because of supply bottlenecks, rising electricity and natural gas demand, pricing dynamics related to thermal generation, and basis risk.”

“As the hard work of implementing the IRA begins, everyone wants to know when it will lower PPA prices,” Gia Clark, senior director, developer services at LevelTen Energy, said in a statement. “But it’s too soon to say if and when that will happen, for three reasons.”

First, the IRA does not remove immediate, major roadblocks including interconnection queue congestion and supply chain challenges that are stalling buildout, Clark said. Second, development input costs, such as labor, capital, commodities, continue to rise. And, third, demand continues to grow from corporations and utilities, increasing competition for already limited renewable capacity, Clark said.

Prices for both solar and wind projects rose “significantly,” according to the LevelTen report. More specifically, solar P25 PPA prices rose 7.5 percent to $42.21/MWh, while wind P25 PPA prices rose 11.4 percent to $49.66/MWh.

Solar supply chain challenges are one factor driving up solar PPA prices, LevelTen said, noting that polysilicon prices are at a ten-year high because of high demand and low supply, driven in part by a U.S. ban on polysilicon from Xinjiang Province, China, where production has been tied to forced labor. In June, the Biden administration began enforcing the Uyghur Forced Labor Prevention Act, leading to more than 3 GW of solar panels being held at the border.

Higher wind PPA prices are being fueled by “inflation, permitting issues, and transmission constraints” in regions like the Midcontinent ISO and the Southwest Power Pool, Jason Tundermann, chief operating officer at LevelTen Energy, said in a statement.

In July, MISO approved 18 new high-voltage transmission lines that will enable the addition of 53 GW of renewable energy capacity to the grid. Those lines will improve the region’s grid resilience, but they are expected to take between six to eight years before they are in service, “meaning that additional renewable capacity may remain limited until then,” Tundermann said.