Tuesday, June 20, 2017

Historic Month for Renewables

March 2017 proved to be a historic month for renewable energy.  According to the Energy Information Administration (EIA), March was the first time that monthly electricity generation from wind and solar accounted for over 10 percent of the total electricity generation in the United States.  This news comes after developers added 22.2 gigawatts of wind and solar to the grid in 2016, according to Bloomberg New Energy Finance

The EIA included utility-scale wind and solar projects as well as small-scale solar PV systems in its analysis.  Of the total 10 percent, wind accounted for 8 percent, whereas solar accounted for 2 percent.  According to the EIA, Texas has the largest total amount of wind and solar generation (the vast majority of which comes from wind).  Iowa has the largest percentage with 37 percent of its total electricity generation in 2016 coming from renewables (the vast majority of which also comes from wind). 

While the total percentage of electricity generation coming from wind and solar will dip back below 10 percent in the coming months due to seasonal variations, the percentage will likely continue to increase in the coming years as developers add new systems to states with developed markets and begin entering states with underdeveloped markets. 

The EIA article can be found here and the Electric Power Monthly report issued by the EIA can be found here.  

Monday, June 5, 2017

NYSERDA and New York Power Authority Issue RFPs for New York State Renewable Energy Projects

by Robert Eberhardt, in New York

On June 2, 2017, the New York Energy Research and Development Authority (NYSERDA) and the New York Power Authority (NYPA) each issued requests for proposals (RFPs) for New York State renewable energy projects. 

The NYSERDA RFP is to purchase renewable energy credits (RECs) from renewable energy projects under contracts of up to 20 years. The RFP can be found here.

The NYPA RFP is to purchase a combination of energy, capacity and RECs from renewable energy projects under contracts of up to 20 years. The RFP can be found here. (Note that registration is required.)

Project owners have until Thursday, July 13 at 5 pm to submit initial applications to NYSERDA. Before submitting an initial application to NYSERDA, bidders must submit a request to NYGATS to confirm project eligibility before 5 pm on Wednesday June 28, 2017. 

Project owners have until September 1 at 4 pm to submit proposals to NYPA.

Wednesday, May 24, 2017

PJM Capacity Auction Results Are Out

by Robert Eberhardt

Yesterday PJM Interconnection announced the results of the annual base residual auction for capacity for the period of June 1, 2020 through May 31, 2021. For most of the PJM region, capacity prices cleared at lower prices that those set in last year's auction for June 1, 2019 through May 31, 2020. PJM's report on the auction results can be found here.

PJM coordinates the wholesale electricity markets in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. 

Tuesday, May 23, 2017

The Potential Trade Impacts of Suniva's Bankruptcy

Suniva, formerly one of the largest US manufacturers of high-efficiency solar cells and panels, has potentially triggered an international solar trade dispute. On April 17, 2017, Suniva filed for Chapter 11 bankruptcy protection, two weeks after laying off 190 employees without notice and closing its module plant in Michigan. In its bankruptcy filing, Suniva attributed its inability to compete in the domestic market to the mass influx of cheap solar panels from Asian manufacturers and signaled it would further seek relief under the 1974 Trade Act.  

Friday, May 12, 2017

Mexico Announces Bidding Rules for Third Renewable Energy Projects Auction

The Mexican government announced a new round of auctions that will take place later this year for renewable energy projects. The new round will differ from the first two rounds by allowing offtakers beyond Mexico's Federal Electricity Commission (CFE) to participate.  The first auction's average price was $41.80 per MWh and the second auction's average price was $33 per MWh. Many are expecting prices for the third auction to be in a similar $30-$40 per MWh range. 

Following the second round of auctions that ended in September 2016, the Mexican government hopes that this new round will help the country move closer to its aim of having 35% of electricity production coming from renewables by 2024 and 50% coming from renewables by 2050. All types of clean energy technologies may bid in the auction to provide capacity, clean energy certificates (CELs) and contracted power.

The auction will be managed by the National Energy Control System (CENACE). In addition to overseeing the auction, CENACE will administer the various contracts that result from the auction, as it continues to serve as a clearinghouse for Mexico's new wholesale power market.

The initial version of the bidding rules are published on CENACE's website. Bids submitted to CFE will be published on July 31, 2017 and bids submitted to other offtakers will be published on August 14, 2017.  Decisions will be made by November 22, 2017 so that all projects can plan to achieve COD before January 1, 2020.

More information and sources for this post can be found on CENACE's website as well as here (subscription required) and here.

Friday, April 28, 2017

Stories from the NewsWire: Solar and Wind Curtailments

Oversupply and the duck curve are of increasing concern as renewables make up more of the energy mix. In this article from the April 2017 Newswire, Keith Martin, partner in Chadbourne's project finance group, discusses solar and wind curtailments resulting from heavy solar penetration in California and the effects that these curtailments are having on the negotiation of power purchase agreements. 

Whether curtailment payments are excused in power purchase agreements can vary depending on the cause of the curtailments. If the curtailments are due to system operating problems, the offtaker usually does not have to pay. While economic causes of curtailments generally do not excuse payment by offtakers, a new trend is emerging in regions of the United States with higher curtailment risks.  In these regions, such as California, offtaker payments are being excused up to a certain capped monetary value or number of hours before the offtaker's payment obligations begin. Including such terms in power purchase agreements will likely continue as more renewables are added to the grid and lenders, generators and offtakers adjust to this new reality. The full article can be found here.

Tuesday, April 25, 2017

The Effect of FERC's Quorum Issue on Natural Gas Projects

Based on campaign pronouncements, the Trump administration was widely expected to be a proponent of oil and gas infrastructure projects.  This has turned out to be the case for oil pipeline projects such as the Keystone and Dakota Access pipelines. However, an unexpected turn of events has stalled gas pipeline and liquefied natural gas (LNG) projects.  

The Federal Energy Regulatory Commission (FERC or Commission) has final approval authority over interstate natural gas pipelines and LNG export terminals. To give final approval, FERC requires a quorum, which consists of at least three of the five commissioners being present. Since February 3rd, when demoted Chairman Norman Bay resigned, FERC's Commission consists of only two commissioners, thus lacking a quorum and the ability to approve gas pipeline and LNG projects. Until FERC regains a quorum with a third commissioner, many natural gas infrastructure projects will be stalled. Rumors continue to circulate with respect to names of potential appointees and the Senate Energy and Natural Resources Committee has indicated that it is poised for quick action. Nevertheless, the White House has yet to nominate a commissioner, leaving the natural gas industry in limbo.