Lower Colorado River Authority Picks Location in Texas for New Peaker Plant
March 19, 2023
by Paul Ciampoli
APPA News Director
March 19, 2023
The Lower Colorado River Authority announced on March 17 that its new peaker power plant will be built in Caldwell County, Texas.
The new plant, which will provide about 190 megawatts of dispatchable power to the Texas power grid, will be built on a 51-acre-site in the Maxwell area.
Preliminary work has begun, with construction expected to begin this summer. The plant is expected to be operational in 2025.
The new natural gas-fueled peaker plant will be able to ramp up and shut down in minutes when the need for power approaches or exceeds what is available from renewable and other thermal generation.
The plant will include 10 Wartsila reciprocating engines, with each engine able to provide about 19 megawatts of power.
Department of Energy Announces Availability of $750 Million for Clean Hydrogen Projects
March 19, 2023
by Paul Ciampoli
APPA News Director
March 19, 2023
The U.S. Department of Energy on March 15 announced the availability of $750 million for research, development, and demonstration efforts to reduce the cost of clean hydrogen.
The funding launches the first tranche of implementation of two provisions of the Bipartisan Infrastructure Law, which authorizes $1 billion for research, development, demonstration, and deployment activities to reduce the cost of clean hydrogen produced via electrolysis and $500 million for research, development, and demonstration of improved processes and technologies for manufacturing and recycling clean hydrogen systems and materials.
Clean hydrogen — which is produced with zero or next-to-zero carbon emissions — is set to play a key future role in reducing emissions from some of the most energy-intensive sectors of our economy, including industrial and chemical processes and heavy-duty transportation, DOE said.
Clean hydrogen can also support the expansion of variable renewable power by providing a means for long-duration energy storage and offers flexibility and multiple revenue streams for all types of clean power generation including renewables, advanced nuclear, and other technologies.
Managed by DOE’s Hydrogen and Fuel Cell Technologies Office, projects funded through this opportunity will address underlying technical barriers to cost reduction that can’t be overcome by scale alone.
Together with regional clean hydrogen hubs, tax incentives in the Inflation Reduction Act, and ongoing research, development, and demonstration in the DOE Hydrogen Program, these investments will help DOE achieve its Hydrogen Shot goal of being able to produce $1 per kilogram of clean hydrogen within a decade, it said.
DOE envisions granting multiple financial assistance awards in the form of cooperative agreements, with the period of performance being approximately two to five years. DOE encourages applicant teams that include stakeholders within academia, industry, and national laboratories across multiple technical disciplines. Teams are also encouraged to include representation from diverse entities such as minority-serving institutions, labor unions, tribal nations, community colleges, and other entities connected through Opportunity Zones.
The application process will include two phases: a Concept Paper phase and a Full Application phase. Concept papers are due on April 19, 2023, and full applications are due on July 19, 2023.
Click here for additional details about the funding opportunity.
Tennessee Governor, U.S. Lawmaker Visit TVA Nuclear Site
March 19, 2023
by Paul Ciampoli
APPA News Director
March 19, 2023
Tennessee Gov. Bill Lee and U.S. Rep. Chuck Fleischmann, R-Tenn., recently visited a Tennessee Valley Authority site that has been designated as the location for a TVA small modular reactor. Lee and Fleischmann were accompanied on the tour by Jeffrey Lyash, CEO of TVA.
TVA in 2022 entered a two-party agreement with GE Hitachi to support TVA’s planning and preliminary licensing for a potential deployment of a BWRX-300 small modular reactor at the Clinch River Nuclear site and provide additional information needed as TVA continues to analyze the viability of SMRs, subject to future TVA board approval.
At the site, Lee said that the location is “going to be the future of America’s energy production – or certainly a model for the way America produces clean, reliable, low-cost energy for Americans in the future.” He said that “Tennessee is very fortunate to have TVA as a leader in that field of development and production and generation of power.”
In a March 11 tweet, Fleischmann said that East Tennessee “is already a leader in nuclear power, and we will lead the next generation of small modular reactors.”
In his recent State of the State speech, Lee proposed $50 million in a Nuclear Fast Track fund “to recruit companies to our state that will specifically establish a nuclear development and manufacturing ecosystem built for the future of Tennessee.”
IRS Offers Guidance to Public Power Utilities Tied to Nuclear Tax Credit
March 16, 2023
by Paul Ciampoli
APPA News Director
March 16, 2023
The Internal Revenue Service recently released guidance on an advanced nuclear tax credit provision that public power project developers have been waiting for since changes to the provision were enacted in 2018.
Among other issues, the notice (Code section 45J Advanced Nuclear Tax Credit) helps clarify the ability of public power utilities to make an election to transfer the credit to other project partners.
In general, under 45J if a facility is owned by a partnership, then the partnership — and not the partners — are treated as the taxpayer owning the facility. In effect, one decision – whether to transfer or not to transfer – would apply to all project partners.
This would be problematic for facilities jointly owned by a public power utility that wanted to transfer credits, and an investor-owned utility that did not.
The notice addresses this by stating that if an organization makes a valid election under Code section 761(a) then each member’s “undivided share in the facility will be treated for purposes of this notice as a separate facility owned by such member.” In other words, each entity could make its own election without forcing a decision on the other owners.
Additionally, the guidance could offer good news for public power utilities hoping to invest in joint projects and claim new direct pay tax credits.
Code section 6417 states that if a tax creditable facility is owned by a partnership, then the partnership, not the partners, must make any election for direct payment.
As with 45J the issue is that one decision – whether to elect for direct payment or not – would apply to all project partners. Guidance is still pending, but a similar decision – allowing joint project owners to opt out of partnership treatment — would clear the way for joint ownership of facilities without putting the ability to claim refundable direct payment tax credits at risk.
The notice could also offer clarity for joint action agencies. As with the other production tax credits, to qualify for the Advanced Nuclear Tax Credit, power must be sold to an unrelated person.
The issue can become muddled when a JAA is the owner of the facility, for example where the JAA is selling power to a utility that may be a part owner of the JAA or part of the JAA’s governance structure. The notice clarifies this issue by stating that for purposes of 45J electricity will be treated as sold to an unrelated person if the ultimate purchaser off the electricity is not related to the person that produces the electricity.
“Thus, the requirement of a sale to an unrelated person will be treated as satisfied if the producer sells the electricity to a related person for resale by the related person to a person that is not related to the producer,” the notice concludes.
APPA Highlights Need to Make Full Use of U.S. Hydropower Resources
March 15, 2023
by Paul Ciampoli
APPA News Director
March 15, 2023
Making full use of the nation’s hydropower resources is key to ensuring that the nation’s grid remains reliable and resilient and that utilities can meet emission reduction goals, the American Public Power Association recently said in a Statement for the Record submitted for a House hearing.
The Statement for the Record was submitted by APPA for a March 8 hearing, “Benefits and Access: The Necessity for Multiple Use of Water Resources,” held by the House Natural Resources Committee’s Subcommittee on Water, Wildlife, and Fisheries.
Hydropower is a source of emissions-free, baseload power, APPA pointed out. “Furthermore, hydroelectric generators can be started or stopped quickly, which makes them more responsive than most other energy sources for meeting demand for electricity at its “peak” or highest volume.”
Hydropower’s “black start” capability “makes it especially valuable in restoring power when there are widespread outages or disruptions on the system — this capability allows the generating units to cycle back on quickly if they have been tripped off in a power outage,” APPA said.
APPA also highlighted the benefits of the federal power marketing administrations — the Bonneville Power Administration, Western Area Power Administration, Southwestern Area Power Administration and Southeastern Power Administration.
In accordance with federal law, PMA rates are set at the levels needed to recover the costs of the initial federal investment, plus interest, in the hydropower and transmission facilities.
The PMAs annually review their rates to ensure full cost recovery. None of the costs are borne by taxpayers, APPA noted. Power rates also help to cover the costs of other activities authorized by these multipurpose projects, such as navigation, flood control, water supply, environmental programs, and recreation.
Northwest Public Power Association’s Scott Corwin Testifies at Hearing
Included among the panelists at the hearing was Scott Corwin, Executive Director, Northwest Public Power Association.
Corwin noted that although it makes up only 7% of energy capacity nationally, hydropower provides almost 60% of the capacity in the Northwest and almost 90% of the capacity used by Northwest Public Power Association members that have contracts with the federal power marketing administrations.
He said that non-federal hydropower is “subject to an often arduous and lengthy licensing and permitting process” involving multiple federal agencies and other interests. “The average time to license a project is seven years and costs three and a half million dollars in paperwork – not counting any environmental or safety or other upgrades.”
Corwin pointed out that it took less time to renew Energy Northwest’s license for its 1,200-megawatt nuclear plant than it did for an Energy Northwest 27-MW hydro project.
“Without change to these unpredictable timelines and costs there is very serious risk of abandonment of projects,” he said.
“We support the legislative proposals that would improve the hydropower permitting process and we also support creating a level playing field in tax policy for existing hydropower to receive the treatment similar to other renewable generation,” Corwin said.
“The bottom line is we need hydropower because it is efficient, clean, reliable and relatively low cost and, most importantly, because it’s flexible – it can be adjusted quickly to changes in demand,” he said.
Corwin also said that hydropower plays a critical role in the Western Interconnection for grid resilience. Though it’s only 10% of the total generation for the California Independent System Operator, hydropower provides up to 60% of CAISO’s spinning reserves, he noted.
“Hydropower was there when needed during last summer’s heat waves in the Northwest and in California,” Corwin said, noting that the four lower Snake River dams provided more than 1,000 MW of energy production and reserve capacity while maintaining flows for juvenile fish migration.
A study conducted for the Public Power Council showed that losing the generation from those four dams would “increase the risk of shortage events in the Western grid, which is already concerned about resource adequacy and increased risk of rolling blackouts, and would cost energy consumers about $790 million per year in added costs,” he said.
Coldwater Board of Public Utilities to Buy Capacity from Peaking Plant
March 14, 2023
by Paul Ciampoli
APPA News Director
March 14, 2023
The Coldwater, Mich., City Council recently approved a power sales contract and supplemental agreement under which the Coldwater Board of Public Utilities will purchase up to seven and a half megawatts of capacity from a peaking plant.
Coldwater is looking to install a 7.5-MW diesel generator behind-the-meter at one of its distribution substations, Andrew Cameron, Engineering Manager at Coldwater Board of Public Utilities, told Public Power Current.
The goal of the project is twofold – first, for resource adequacy with MISO and the state, and the other is increased reliability for the utility’s customers, Cameron noted.
The generator is black start capable and would be able to backfeed a substation that serves roughly half of the residential customers of Coldwater.
The unit is schedule to be in service the summer of 2024 and the utility has entered into a related agreement with American Municipal Power.
Coldwater is a member of the Michigan South Central Power Agency along with three other member communities. Coldwater is also a member of AMP, a joint action agency that has 133 members across multiple states.
U.S. Natural Gas Consumption Reached Annual Record in 2022
March 14, 2023
by Paul Ciampoli
APPA News Director
March 14, 2023
In 2022, U.S. natural gas consumption averaged a record 88.5 billion cubic feet per day, the highest annual natural gas consumption, according to records beginning in 1949, the Energy Information Administration reported on March 14.
U.S. natural gas consumption last year increased 5% (4.5 Bcf/d) from 2021, the second-fastest year-over-year growth since 2013. Natural gas consumption in the United States set monthly records in 9 of 12 months in 2022, EIA said.
Natural gas consumption peaks twice a year in the United States, driven by the residential and commercial sectors during the winter and electric power sector during the summer. In winter, the most natural gas is consumed in January or February when demand for space heating peaks. In summer, the most natural gas is consumed typically in July or August to meet air-conditioning demand.
Newly retired coal-fired generating plants, relatively high coal prices, and lower-than-average coal stocks limited the electric power sector’s coal consumption last year, which led to increased natural gas consumption for electricity generation.
Compared with 2021, natural gas consumption increased in all sectors, but the electric power sector consumed more natural gas than any other U.S. end-use sector, accounting for 38% of U.S. natural gas consumption.
Natural gas consumption peaked in January and in July in 2022. In January 2022, the residential and commercial sectors, combined, consumed 9% more natural gas than in January 2021, and the electric power sector consumed 10% more year over year. Natural gas consumed for electric power reached a new record in January 2022, pushing overall natural gas consumption to a monthly record high.
Last summer was the third warmest on record in the U.S. Lower 48 states, leading to strong demand for air conditioning and resulting in new daily records for electricity generation in July. As a result, more natural gas was consumed in the electric power sector, pushing consumption in July to be the highest for the summer.
The year ended with another monthly record for natural gas consumption. In December, in much of the Lower 48 states, below-normal temperatures in the mid to late part of the month led to increased natural gas demand, both directly and indirectly, from natural gas-fired plants to generate electricity for space heating, EIA noted.
Department of Energy, TVA Enter MOU on Hydropower Technology Development
March 14, 2023
by Paul Ciampoli
APPA News Director
March 14, 2023
The U.S. Department of Energy and the Tennessee Valley Authority on March 14 announced a memorandum of understanding to enhance collaboration on hydropower technology development.
Joint efforts will focus on evaluating and demonstrating different approaches for operating hydropower plants to meet the electricity grid’s changing needs. The DOE entered the MOU through its Water Power Technologies Office.
Under the MOU, WPTO and its national laboratory partners will focus on quantifying the value hydropower and pumped storage facilities provide to the electricity grid and applying advanced modeling to predict the effects of climate change on TVA’s hydropower systems. They will also work to understand how fleetwide data can inform plant-level decisions, such as when to conduct maintenance activities.
TVA will focus on techniques and technologies that allow its hydropower system to adapt to the changing needs of the Tennessee Valley and the broader electricity industry. This may involve demonstrations of more mature technologies anticipated for near-term, utility-scale deployment.
TVA’s hydroelectric system comprises 29 power-generating dams throughout the Tennessee River system and a pumped storage plant near Chattanooga, Tennessee. TVA’s generation portfolio is 11% hydropower.
Over the next six months, WPTO and TVA will develop an action plan that outlines their joint efforts.
Constellation Energy Begins Producing Clean Hydrogen at New York Nuclear Plant
March 14, 2023
by Peter Maloney
APPA News
March 13, 2023
Maryland-based Constellation Energy has begun production of clean hydrogen at one of its nuclear power plants in New York State.
The 1-megawatt demonstration project at Constellation’s Nine Mile Point nuclear plant in Oswego, uses 1.25 megawatts of zero-carbon energy per hour to produce 560 kilograms of hydrogen per day, more than enough to meet the plant’s operational hydrogen use.
Constellation said it hopes the Hydrogen Generation System at Nine Mile Point will help set the stage for possible large-scale deployments at other clean energy centers in Constellation’s fleet that would couple clean hydrogen production with storage and other on-site uses.
Last year, the Department of Energy approved the construction and installation of an electrolyzer at Nine Mile Point with an award of $5.8 million. The project uses a Proton Exchange Membrane electrolyzer manufactured by Nel Hydrogen.
As part of its broader decarbonization strategy, Constellation said it is working with public and private entities to develop regional hydrogen production and distribution hubs and has committed to invest $900 million through 2025 for commercial clean hydrogen production using nuclear energy, including participation in the Midwest Alliance for Clean Hydrogen, the Northeast Clean Hydrogen Hub, and the Mid-Atlantic Hydrogen Hub.
EIA Reports Wind, Solar and Storage are Dominating U.S. Capacity Additions
March 11, 2023
by Peter Maloney
APPA News
March 11, 2023
So far in 2023, wind, solar, and battery storage account for 82 percent of the new, utility-scale generating capacity developers plan to bring online in the United States, according to preliminary data from the Energy Information Administration.
As of January 2023, 73.5 gigawatts of utility-scale solar capacity was operating in the United States, about 6 percent of the country’s total capacity, according to the EIA’s Preliminary Monthly Electric Generator Inventory.
The EIA now projects that just over half of the new U.S. generating capacity in 2023 will be solar power. If all of the planned capacity comes online as expected, it would be the most U.S. solar capacity added in a single year and the first year that more than half of U.S. capacity additions are solar, the EIA said.
Utility-scale solar capacity started ramping up in the United States in 2010 as the cost of solar panels dropped substantially and state and federal policies introduced tax incentives, the EIA noted.
Similar to solar power, tax incentives, lower turbine construction costs, and new renewable energy targets helped fuel the growth of U.S. wind capacity. Wind capacity was “negligible” prior to 2000, but as of January 2023, 141.3 GW of wind capacity was operating in the United States, about 12 percent of total U.S. capacity, the EIA said, adding that in 2023 developers plan to add another 7.1 GW of wind capacity.
The majority of U.S. wind capacity is located in the windy central part of the country, which has wide swaths of open land that can accommodate large wind farms, the EIA said. The agency also noted that offshore wind farms offer significant potential for future wind capacity growth.
To offset the intermittency of wind and solar power resources, developers are increasingly pairing them with battery energy storage systems. In 2023, developers plan to add 8.6 GW of battery storage capacity, which would double total U.S. battery power capacity, the EIA said.
Although significant renewable capacity has been added in the past decade, differences in the amount of electricity that different types of power plants can produce mean that wind and solar made up about 17 percent of the country’s utility-scale capacity in 2021 but produced only 12 percent of the country’s electricity, the EIA said.