Monday, December 11, 2017

State of Massachusetts Awards $20 Million for Energy Storage Projects

by Ben Grayson
The State of Massachusetts recently awarded $20 million worth of grants to 26 energy storage demonstration projects. The awards are an extension of the state’s June announcement that called for a 200 megawatt-hour energy storage target for the state’s three electric distribution companies to achieve by 2020. According to the Massachusetts Clean Energy Center, the projects will add 85 megawatt-hours of storage capacity to the state’s 7 megawatt-hours of storage currently installed.

Tuesday, November 28, 2017

16 Projects Awarded PPAs in Mexico's Third Power Auction

With an average price of $20.57 per MW of clean energy (MWh + clean energy certificate), the Mexican independent system operator (CENACE) announced the official results of the third long-term power auction. The average price of energy and clean energy certificates in this auction is almost 40% lower than the average of $33.47 obtained in the 2016 second long-term power auction.

Wednesday, November 8, 2017

GOP Tax Plan Hurts US Wind Development Forecasts

by Ben Grayson

Under current IRS rules, wind developers can claim the full amount of the federal production tax credit (PTC) through 2020 if they either started physical work of a significant nature or spent at least five percent of total project costs before the end of 2016. The date of beginning construction is irrelevant as long as construction is complete by 2020. As a result, a popular way to capture the credit is to have purchased turbines before the end of 2016. Developers can either begin construction immediately or warehouse the equipment.

Friday, November 3, 2017

October 31 ITC Section 201 Remedies Decision

On October 31, the International Trade Commission (ITC) released its recommended  remedies following its September finding of “serious injury” to domestic solar cell and module manufactures by foreign imports. The Commission made three recommendations, all of which were less burdensome on importers than what Suniva and Solar World Americas were seeking in their original Section 201 petition.

Friday, October 27, 2017

FERC Finds That New York Waited Too Long to Deny the Millennium Pipeline's Water Quality Certificate

On September 15, 2017 the Federal Energy Regulatory Commission (FERC) held that the New York State Department of Environmental Conservation (NYSDEC) waived its authority to deny (or issue) a water quality certification under Section 401 of the Clean Water Act for the approximate 7.8-mile long Millennium Pipeline project in Orange County, New York. 

Monday, October 9, 2017

Suniva, SolarWorld Tariff Case Turns to Remedies

Following the International Trade Commission’s (ITC) September 22 decision that foreign manufacturing of solar cells and panels have contributed to “serious injury” among US cell and panel manufacturers, the focus of the solar industry has now turned to the potential remedies that the ITC will recommend to the President in its November 13 report. Under Section 201 of the Trade Act of 1974 (codified in 19 U.S.C. § 2253), the ITC will recommend an imposition of tariffs, quotas or other trade remedies. Last week, the ITC Commissioners began hearing petitions over potential remedies. Suniva and SolarWorld, the two companies behind the Section 201 petition to the ITC, have proposed a $0.32c/W tariff be included in the price of solar panels from abroad. While SolarWorld is also seeking relief through quotas, some attention should be paid to the tariff remedy of $0.32c/W that Suniva and SolarWorld are seeking.

Wednesday, September 27, 2017

Southland Charges Up Battery Storage Financings

The largest non-recourse financing of energy storage assets anywhere in the world is the US$2.3 billion financing of the AES Southland project in the USA that closed in June 2017. The project included a 100 MW, utility-scale battery energy storage system located in California, a 10 MW utility-scale battery energy storage system in Arizona and two combined-cycle gas-fired power projects with a combined capacity of 1,284 MW in California. The 100 MW battery will provide capacity to the local utility, Southern California Edison, under a 20-year power purchase agreement (PPA).

Monday, September 25, 2017

In Domestic Solar Manufacturing Decision, ITC Rules in Favor of Suniva, SolarWorld

Following its Chapter 11 bankruptcy filing in April, US-based solar cell and panel manufacturer Suniva petitioned the U.S. International Trade Commission (ITC) that low-cost solar cells and panelsare causing "serious injury" to US manufacturers under the 1974 Trade Act. Under Section 201 of the 1974 Trade Act, the President can implement tariffs or quotas on imported goods from anywhere around the world if it is proven that the imports cause "serious injury" to a domestic industry. SolarWorld AG, a bankrupt solar panel manufacturer from Germany with US operations, joined Suniva in its argument. On Friday, the ITC unanimously accepted Suniva and SolarWorld's argument, ruling that cheap foreign imports are in fact causing "serious injury" to U.S. solar cell and panel manufacturers. Following a remedies hearing in a few weeks, the ITC will formally deliver its recommendations to the President by November 13 and the President will have until January 12 to decide whether to impose tariffs and import quotas on solar cells and panels from abroad.  

Wind Power Opponents Finding Fertile Ground in Oklahoma

Recent actions by federal regulators, state lawmakers, military installations, oil and gas interests and environmentalists may be making the Oklahoma regulatory terrain increasingly difficult for wind developers to navigate.

In April of this year Gov. Mary Fallin signed two bills that ended the last large tax credit for wind generation and tightened the requirements for registering private-use airfields near wind turbines. Under the signed legislation, wind farms that started producing energy after July 1, 2017 could not claim the state's zero emission tax credit program, originally set to expire in January 2021. The program, which pushed claims from $3.7 million in 2010 to $113 million in 2014, helped Oklahoma become the fourth-largest in the country by wind capacity, with more than 6,600 megawatts. Last year, about 25% of the state's electricity came from wind generation.

Wednesday, September 20, 2017

Brazil Holds Auction to Cancel Renewable Energy Contracts

On August 28, 2017, Brazil conducted something relatively unheard of -- its first ever "cancellation auction".  Wind, hydro and solar developers were given the opportunity to cancel future power contracts for a price, instead of having their performance bonds called. In total 557.4 MW were canceled; 307.7 MW were associated with 16 wind farms and 249.7 MW were associated with 9 solar parks. No hydroelectric contracts were canceled. Early reports show that there are more than 8,000 MW in renewable energy under development in Brazil.  The total number of megawatts canceled were fewer than many market observers had expected. 

Monday, September 11, 2017

Learn More: Round 2 Results of Contracts for Difference

Contracts for Difference: round 2 results

As predicted, the biggest winner of Contracts for Difference (CfD) in the second allocation round (AR2) was offshore wind. AR2 will bring over 3.1 GWs of offshore wind at strike prices that were up to 50 percent lower than those awarded in the first auction in 2015. Read more about the second allocation round results here.

Thursday, September 7, 2017

Hawaii’s Utilities Moving Forward on State’s Ambitious RPS Goals

by Todd Alexander, in New York and Jacob Yaniero, in Washington, DC

Hawaii’s big utilities now have a plan for meeting the most ambitious renewable portfolio standards (RPS) in the country. The Hawaii Public Utilities Commission accepted a plan last month submitted by Hawaiian Electric, Maui Electric and Hawaii Electric Light (collectively, the Hawaiian Electric Companies) that will add significant renewable capacity to a grid that is already one of the nation’s leaders.

Wednesday, September 6, 2017

Power Ledger Concludes Token Offering

by Jason Lewis, in New York

Power Ledger, a company based in Perth, Australia, has now concluded its sale of tokens for a peer-to-peer platform that will enable renewable energy trading among businesses and households. The company initially offered its “POWR” tokens on Sunday, August 27. As of August 30, more than ninety million tokens had been sold, which represented more than 90 percent of the amount it initially offered.  An additional offering is planned for September 2017.

Tuesday, August 15, 2017

Chile's Renewable Goals

by Ignacio Alfaro and Jacob Yaniero

The Chilean renewable energy market continues its ascent towards its goal of having 70% of the country’s generation mix coming from renewable energy sources by the year 2050. While this goal is not legally binding, it sends a strong message to the energy industry regarding the importance of renewables. Later this year, Chile will hold presidential elections and all of the candidates appear to support the 70% goal, both from an environmental perspective and an economic one.

Thursday, August 10, 2017

Massachusetts Sets Energy Storage Target

by Todd Alexander, Shellka Arora and Nadim Damluji

Massachusetts is the third state to issue a 2020 energy storage target for its utilities: 200 MWh. This comes on the heels of California releasing a target for its utilities to procure a combined total of 1.325 GW of energy storage by January 1, 2020 and Oregon targeting its utilities to procure a minimum of 5 MWh per utility by January 1, 2020.

Friday, August 4, 2017

More Capacity Comes with Significant Changes for Solar Developers in North Carolina

North Carolina, the nation’s second-leading state for solar, passed a law last week that could fundamentally change how developers operate in the State. Session Law 2017-192 titled Competitive Energy Solutions for NC passed with bipartisan support and was signed into law by Governor Roy Cooper last Thursday. While the Law has garnered attention for its 18-month moratorium on wind permits, solar developers should focus instead on the many other changes that will come from the Law. Three of the most significant changes are discussed below.

Friday, July 28, 2017

Federal Court in New York Upholds the ZEC Program

The U.S. District Court for the Southern District of New York dismissed all challenges brought against New York’s nuclear generation subsidies and upheld New York’s Zero Emissions Credits (ZECs) program established for Exelon’s three upstate nuclear facilities (R.E. Ginna, FitzPatrick and Nine Mile Point). Exelon stands to gain some $7.6 billion in subsidies over several years.

The court said that the ZECs “do not directly adjust, alter or affect the wholesale rate” of electricity. The court further said that there is no “principled basis to hold that the ZEC program is preempted even though its sibling REC program is not.”

New York’s nuclear generators comprise 31% of New York’s electricity generation mix and collectively avoid the emission of over 15 million tons of carbon dioxide per year.

Monday, July 24, 2017

States Push To Keep Nuclear Plants Alive In The United States

Nuclear reactors provide close to 20 percent of domestic electricity generation, and approximately 60 percent of carbon-free generation, in the United States. Closure of six nuclear reactors since 2013 and the likelihood of closure of several other reactors in the coming years has brought to the forefront a range of short- and long-term challenges nuclear power is facing in an ever evolving energy sector. The nuclear power industry has found it difficult to compete with low-cost natural gas power plants in restructured electricity markets.

Tuesday, July 11, 2017

Massachusetts Issues RFP for Offshore Wind

by Jacob Yaniero, in Washington

Following the success of the Block Island Wind Farm, states have started adopting policies to encourage development of offshore wind facilities in the United States. One such state, Massachusetts, is moving forward on offshore wind with the assistance of investor-owned utilities Unitil, National Grid and Eversource.  In coordination with the Massachusetts Department of Energy Resources (DOER), the joint group issued an RFP last week for 400-800 MW of offshore wind generation off the coast of Massachusetts.    

Wednesday, July 5, 2017

Solar Developer loses PURPA challenge to State renewable program

by Bob Shapiro, in Washington

A federal appellate court rejected a challenge by a solar developer to a Connecticut competitive solicitation for renewable power that would permit winning bidders to receive wholesale power contracts to sell the power to the state's utilities. The developer claimed that the state violated federal law because it did not limit the eligible bidders to qualifying facilities under the federal Public Utility Regulatory Policies Act, or PURPA. The court found that the state action was not inconsistent with federal law and that it was not an undue burden on interstate commerce.

As a general matter,  another federal law, the Federal Power Act  gives the federal regulatory agency known as FERC the exclusive authority over wholesale electric rates in interstate commerce. 

There are exceptions. State are given limited authority over wholesale rates of “qualifying facilities” under PURPA that use renewable energy and that are not above a maximum size. A key issue in this case was whether the state had the authority to direct its regulated utilities to sign wholesale contracts that resulted from the bidding for projects that did not qualify under PURPA.

The issue became more significant as a result of the recent US Supreme Court decision of Hughes v. Talen. In that case the state required the state's utilities to sign contracts  with winning bidders who would construct gas-fired power plants and sell the output into the competitive regional market known as the PJM market. The state required the winning bidder to participate in the PJM auction for its sales of capacity, and to clear the auction and net the auction payments against the contract prices under the contract. The Supreme Court found that this state action interfered with FERC's exclusive rights over wholesale rates, since the PJM auction was approved by FERC.

The federal appellate court here, in dismissing the solar developer challenge, distinguished the Connecticut solicitation from the case in Hughes v. Talen. The court found, that, unlike Hughes v. Talen, the contracts here were bilateral contracts that did not require participation in the wholesale market auction. It also found that the Connecticut law authorized but did not compel the state's utilities to accept specific bids, unlike the state commission action reviewed in Hughes v. Talen.

This decision is likely to be cited by litigants in current federal court proceedings challenging the state of New York and Illinois' recent creation of zero-emission credits (or ZECs) to support the prices of operating nuclear plants that are competing in the wholesale power markets.

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.

Thursday, April 20, 2017

Oklahoma Ends Eligibility for State Wind PTC

Oklahoma Governor Mary Fallin signed legislation that ends the eligibility of new wind projects for the state’s production tax credit.  On April 17, 2017, the Governor signed House Bill 2298, which limits the eligibility of the tax credit to wind projects that are placed in to service no later than July 1, 2017.

The tax credit had been scheduled to expire on January 1, 2021. The credit is worth one-half of one cent per kilowatt hour of production. Plants currently in operation will continue to be eligible for the tax credit.