CleanTechLaw: Developments in Renewable Energy Law and Cleantech Policy

New Rules That Would Limit Solar PV on Oregon Farmland

2019-01-23T04:51:00.000-08:00

Restrictions on new solar arrays being built on high-value farmland are likely on the way in Oregon, but not before two dozen projects will be built in Marion County.

The Oregon Land Conservation and Development Commission is scheduled to enact new regulations at its Jan. 24 meeting that would effectively end most new solar farms in the Willamette Valley.

“We see a threat to high-value farmland so that’s what this rulemaking is all about,” said Roger Kaye, president of Friends of Marion County. “In my experience, solar arrays are another of these uses that are chewing up Oregon’s prime farmland.”

But proponents of the solar arrays on farmland said the new regulations could remove millions of acres of land from possible solar use, often land that is not productive for farming.

Regardless, there are 24 sites in Marion County already approved and if all are built, it would give the county 367 acres of solar arrays on a total of 31 farms out of 289,383 acres deemed high value.

Current rules allow farms to use 12 to 20 acres of land zoned Special Agriculture and Exclusive Farm Use for photovoltaic solar generation.

Marion County has the most acreage of soil classified as high-value farmland in the state so it has the most at stake.

“It’s going to be a lot bigger impact for us,” Marion County planning commissioner Joe Fennimore said. “We have a lot better soils in Marion County than Polk County.”

Solar farms in Oregon

In a solar farm, farmers lease a portion of their land to a solar company. That company sells the electricity to a power company, Portland General Electric in the case of most in Marion County.

Solar farmers can receive between $1,000 and $4,000 per acre depending on location, and most solar developers need at least 5 acres to make a viable solar array.

Oregon has allowed solar farms on farmland since 1973.

But it wasn't until October 2011 that development quickened. It was then the Oregon Land Conservation and Development Commission adopted more specific rules on solar arrays: 12 acres on high-value farmland, 20 acres on non-high-value farmland and 100 acres on farmland deemed not suitable for growing crops.

Counties were allowed to opt out of allowing solar farms, but most didn’t. Marion County approved its first applications for solar farms in 2015.

“We didn’t even know about it,” Marion County Commissioner Kevin Cameron said. “It got away from us. The legislature passed it. It allowed the planning commission to approve it.”

It wasn’t until the past few years when solar arrays were built on high-visibility farmland that many realized it was possible, but by then solar developers had made inroads with farmers all over the state and invested over $1 billion building them.

Marion County’s solar problem

The Marion County Commissioners decided in March 2018 to stop taking applications for solar farms.

After a contentious commission meeting where dozens of people on both sides of the issue expressed complaints, the commission placed what was termed a moratorium on future solar farms.

“We’ve taken the position that no more solar fields, no more solar things come to Marion County in EFU land,” Cameron said.

In April 2018, Yamhill County opted to no longer allow solar farms, a move Polk County had previously taken.

Marion County allowed applications to be taken another 30 days after the decision and by the deadline, 15 more sites were applied for.

Currently, five sites outside of Gervais, Silverton, Turner, Salem and Woodburn have been constructed for a total of 68 acres of solar panels in the county.

In total, 31 sites in the county have been approved for a total of 367 acres of solar panels with one 12-acre site still under review.

Of the 331,852 acres in Marion County zoned Special Agricultural or Exclusive Farm use, 289,363 acres are deemed high-value farm soil.

If all approved solar panels are constructed, less than 0.1 percent of the high-value farmland in Marion County would have solar panels.

Not far from Marion County’s offices on Cordon Road is a site where a solar farm has been approved.

“Once that construction starts, I’m sure we’ll start getting phone calls, too,” Fenimore said.

Marion County can’t find a resolution

When Marion County decided to stop taking applications, it was incorrectly termed a moratorium. That implied there would be an end date and the county would once again take applications.

“They basically took it out of the code,” Fennimore said.

The county gathered a group of stakeholders from various interests including the solar power industry and environmental groups to craft new recommendations to bring to the Marion County Commissioners by October.

“We couldn’t come to a consensus,” Fennimore said. “We stopped the meetings at that point.”

But it had become clear the state was going to address the issue.

“This is a general agreement in that if the state’s going to make rules, we should wait to come up with our own rules,” said Ben Williams of Friends of French Prairie, who was on the committee.

State commission to issue new rules

Over the past decade, solar arrays have become a huge economic driver in Oregon as $1.9 billion has been invested, according to Renewable Northwest.

As many as 140 proposed solar farms on EFU land have been submitted for approval in Oregon, but a small number have been constructed. In the Willamette Valley, 86 have been proposed and if those are all constructed, they would occupy 957 acres.

By comparison, about 56 projects in EFU land has been proposed in eastern, central and southern Oregon. If constructed, those would occupy about 17,000 acres.

The LCDC addressed solar arrays on high-value farm soil in 2018 and formed a committee to make recommendations.

The most recent draft of recommendations from the committee, dated January 10, would prohibit solar development on high-value farmland by not allowing development on land that has a history of irrigation.

The proposed language would still allow dual-use solar projects of up to 20 acres at locations such as sheep farms – like the one at Sheep Solar outside of Turner – or bee farms on the same land as a solar farm.

Proponents of solar power say the draft rules would undermine Oregon's energy projects and climate change will negatively affect agriculture in the state more than solar development.

"If the draft rule as proposed is adopted there will be significantly decreased opportunities to site solar in the Western Part of the state," said Amy Berg Pickett, the senior northwest zoning and outreach manager for Cypress Creek Renewables.

"The Oregon small businesses that support the solar industry will be negatively impacted. Citizens of Oregon in the Willamette Valley that prioritize the importance of balancing renewable energy infrastructure with the other goals of the state will have fewer opportunities to support clean, renewable energy. New and emerging energy professionals will find way fewer opportunities to work in Oregon."

According to Renewable Northwest, there are 1,459,588 acres of high-value farmland in the Willamette Valley and 954 acres are subject to applications for solar facilities.

Even if the state Land Conservation and Development Commission adopts the more restrictive regulations, approved sites – including the 24 in Marion County – can still build solar arrays if they do it within two years.

“I understand there’s some farmers who want this because they’ve got unproductive land and they can make some money on it, but there’s also farmers that would like to maybe put houses on their farm to make money on it,” Cameron said.

“You take it out of farm production one way or the other, and so that’s the thing with me.”

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All The Good News About Renewable Energy — From The US Department Of Energy

2019-01-17T14:00:00.000-08:00

File this one under W for With Friends Like These, Who Needs Enemies? President* Trump front-loaded his 2016 campaign with a pledge to revive the US coal industry, but during his tenure the growth prospects for coal power have flatlined. The latest outlook on electricity generation from Trump’s own Department of Energy serves up the bad news for coal with a side of good news about renewable energy and some so-so news for natural gas, too.

All The Good News About Renewable Energy, Especially Wind Power

The new update comes from the Energy Information Administration. The office was established in 1974 as part of the federal response to the oil crisis. EIA comes under the Department of Energy umbrella, though its Congressional mandate provides it with a semi-independent mandate to produce policy-neutral data, analysis, and forecasts.

That emphasis on neutrality certainly comes into play in the new EIA electricity generation update. It came out last Thursday, January 10 under the headline, “New electric generating capacity in 2019 will come from renewables and natural gas.”

Yikes!

Coal stakeholders might want to stop reading right there, or at least keep a box of Kleenex handy. For that matter, storm clouds are on the horizon for natural gas, too.

For 2019, EIA totals up 10.9 gigawatts in new wind capacity and 4.3 gigawatts of utility scale solar. Under a separate report, the office also notes that another 3.9 gigawatts of small-scale solar capacity are on the way this year. It’s also worth noting here that the Department of Energy still has high hopes for small scale, distributed wind power.

Even without considering small scale wind or solar power, the 2019 renewable energy outlook is double the expected additions from natural gas. Utility scale wind and solar came in at 15.2 gigawatts together for 2019, leaving natural gas far behind at just 7.5 gigawatts (most of that new gas capacity will be from the new generation of high efficiency combined-cycle plants).

What about coal?

Oh right, coal. What about it? EIA tracked zero — yes, zero — new coal power plant capacity additions scheduled for 2019.

That’s no surprise, considering the market conditions working against new coal power plants. A look back at the nation’s once-mighty whale oil industry is instructive in that regard.

Meanwhile, EIA taps a number of coal power plants for retirement in 2019, mainly at the end of the year.

One especially significant coal power plant retirement planned for this year is the 1970s-era Navajo Generating Station in Arizona. Efforts to keep that power plant afloat have fallen flat. Its 2.4 gigawatts of capacity will account for almost half of the 4.5 gigawatts in total coal retirements expected in 2019.

As EIA notes, that 4.5 gigawatts actually looks not-so-bad compared to 2018, which saw 13.7 gigawatts retired.

It is possible that the worst of the coal power plant retirements is over. EIA currently expects power-sector coal demand to remain flat all the way through to 2050.

Or not, as the case may be. Last November the Institute for Energy Economics and Financial Analysis ran the numbers, and those numbers indicate a continued drop in demand:

Another 23.1 GW of coal plant retirements have already been announced or received regulatory approval for 2019 to 2024, marking 71.9 GW of coal retired or scheduled to be retired between 2014 and 2024.

The analysis shows about 245.6 GW of current operating coal plant capacity in the U.S. and does not include more recent retirement announcements from Entergy Corp. and a city-owned coal plant in Michigan.

The IEA long term outlook may also be a bit on the rosy side, considering the growing number of US cities and businesses that are aggressively pursuing 100% renewable energy goals.

It’s not just coal

Coal is not the only victim of the renewables-fueled power sector transformation.

Last year, EIA noted that “almost all” power plant retirements in the preceding 10 years were fossil fuel plants. This year is shaping up to continue the trend:

Scheduled capacity retirements for 2019 primarily consist of coal (53%), natural gas (27%), and nuclear (18%), with a single hydroelectric plant in the state of Washington and other smaller renewable and petroleum capacity accounting for the remaining 2%.

Ouch! For 2019, EIA is tracking 2.2 gigawatts in natural gas retirements, mainly steam turbine plants that first began operating in the 1950s and 1960s.

That brings us to the defining thread in all this. Energy infrastructure is just like any other infrastructure. It gets old. Depending on the facility, at a certain point repairs and upgrades are simply not sufficient to keep up with other changes in the world.

Think of a coal power plant like a bridge that was built to handle 1950s-era traffic. It may still be structurally sound, but it can’t handle the volume and size of vehicles on the road today.

The nation’s fleet of centralized power plants has always existed on borrowed time. Fossil fuels and nuclear energy were the only utility scale options (aside from hydropower) as the 20th century drew to a close. Now renewable energy options are on the table — and they are increasingly more attractive as costs go down.

For a while there, cheap natural gas was the main force pushing coal off the power generation ledge, but low-cost renewable energy is beginning to threaten both coal and natural gas.

Renewables also provide investors and policy makers with a strong alternative to the high risks and high costs involved in nuclear energy.

US Energy Department Awakes The Renewable Energy Sleeping Giant

In the midst of all this, the Energy Department has been carrying on with something of a split personality. Energy Secretary Rick Perry regularly carries water for Trump’s pro-coal, anti-science policies, only to get smacked down by FERC (that’s the Federal Energy Regulatory Commission)

On the other hand, Secretary Perry has also been vigorously championing his agency’s renewable energy mission, so go figure.

To cite just one example, last January DOE bucked the White House messaging to encourage global investment in the US wind industry. Coincidentally or not, investor interest in the offshore US wind sector has taken off like a rocket during the Trump administration, highlighted by a series of record-setting offshore wind lease auctionsdominated by Royal Dutch Shell and other foreign investors.

That’s a significant development because the US has vast offshore wind resources yet to be tapped. So far, the lone exception is a single five-turbine array off the Rhode Island coast.

DOE also launched a new innovation hub last year, aimed at accelerating wind energy development. The agency tapped New York State — you know, that little state with big offshore wind power ambitions — to lead the effort.

The US has other waterborne renewable energy resources waiting in the wings. Last week the Energy Department launched another round of R&D support for wave power and other ocean energy harvesting devices, and it capped off 2018 with a strong pitch for floating solar panel arrays onto reservoirs and other engineered interior water bodies.

In other words, you ain’t seen nothing yet. Maybe EIA was a little too conservative with its long term outlook for coal demand. CleanTechnica is reaching out to the office for some additional insights on that score, so stay tuned.

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Will the Renewables Industry Seize the Opportunity of Opportunity Funds?

2019-01-15T04:04:00.000-08:00

A new tax incentive could mean big money. But questions remain about its equity implications and whether the industry will use it.

Clean energy advocates are working to raise awareness about a “giant money fire hose” made available to the industry starting this year.

The glut of cash, tied to a portion of the federal Tax Cuts and Jobs Act of 2017, stems from an incentive framework called Opportunity Zones. The sleeper provision offers tax benefits to equity investors that put money into over 8,700 designated “economically distressed” opportunity areas. It’s designed to encourage investment in low-income communities that haven’t seen equal attention from investors.

The incentive holds several tax benefits, but it’s basically a capital gains shield. Equity investors can defer taxes on gains put into an “Opportunity Fund,” the investment vehicles organized to invest in the zones, until December 2026. If investors hold their investments for five to seven years, they can increase their basis on the investment by 10 and 15 percent, respectively. If investors hold their investments for at least a decade, they also don’t have to pay out taxes on capital gains made from investments in those zones.

The law is purposely flexible and scalable, with no cap on the money that can be deployed and few restrictions on the sectors that can take advantage, according to the Economic Innovation Group (EIG), a research and advocacy organization that helped design the legislation that modeled the Opportunity Zone provision in the tax bill.

In testimony to Congress, EIG President and CEO John Lettieri said, “This incentive has the potential to unlock an entirely new category of investors and create an important new asset class of investments.”

An EIG analysis estimated $6.1 trillion in unrealized capital gains was floating around in 2017. That’s such a huge lump of money that even if just a portion of it went to Opportunity Zones, EIG said it would already be the largest economic development initiative in the U.S. And, according to several experts watching the space, there’s big potential for the clean energy industry to take advantage.

“Industry folks should be jumping all over this,” said Jon Bonanno, chief experience officer at the nonprofit California Clean Energy Fund. “It’s a giant money fire hose, and we want to point it at the things we want.”

So far, much of the attention for Opportunity Zones has focused on the real estate industry. But because renewables projects are also long-term, place-based investments, advocates say clean energy is a natural fit. Wind and solar also don’t have the same gentrification and displacement implications tied to real estate development in low-income communities, one of the biggest concerns about the program.

The potential financial benefits are so great that Bonanno characterized it as a “watershed moment” for the clean energy industry.

“This is really an incredible mechanism,” said Bonanno. “It creates such compelling returns that we will see these assets going mainstream because of it.”

“Almost as simple as looking at a map”

According to those working on Opportunity Zones, if a developer locates a project in one of the thousands of zones located throughout the U.S. and U.S. territories, it can be eligible for funds from a certified fund. That money would come into the project timeline at the same time equity usually does.

“For developers, it should actually be fairly straightforward and almost as simple as looking at a map,” said Cody Evans, a graduate student at Stanford University, who has been researching Opportunity Zones with professor Dr. Rebecca Lester. “From the developer’s perspective, it wouldn’t necessarily look any different than any source of funding; it would just likely come at a lower cost of capital.”

Evans added that developers also have to pass two tests to qualify property for the incentive. Projects have to add “substantial improvement,” increasing the basis of the property compared to the pre-investment value. Projects also have to derive 50 percent of gross income from active business in the zone.

For wind and solar developments, those qualifications should be pretty easy to meet. But so far, Evans said, “there’s a lot more runway for the industry to wake up to this tool and take advantage of it.”

Gregory Rosen, founder and principal at High Noon Advisors, said any opportunity that lowers the average weighted cost of capital for renewables deserves some attention. But he said recruiting investors will likely fall on the industry.

“Part of it is up to the industry to be proactive in educating folks,” said Rosen. “The jury is still out on how many [Qualified Opportunity Zone] investors there are that are interested in investing in solar.”

According to a list compiled by accounting and consulting firm Novogradac & Company, out of 49 funds that have registered to join the firm’s Opportunity Zone Listing, only three mention solar as an investment focus. After a call for letters of inquiry from fund managers working on Opportunity Zone projects, the Rockefeller Foundation — working with the Kresge Foundation — said only one of the 141 responses it received had a clean energy focus, and even that had a real estate bent, describing its aim as “energy efficient property development.”

Bonanno called the lack of attention for renewables “abysmal.”

“The renewable energy business needs to get their act together and focus on this,” he said.

Despite the delay, those watching the funding expect 2019 to be a “boom year,” said Abraham Reshtick, a business and tax attorney at Mintz. That’s in part because investing this year allows investors to realize the most benefits with the timeline of the incentive. The incentive can also be paired with the soon-declining federal Investment Tax Credit and Production Tax Credit benefits.

At the same time, Reshtick added, “There needs to be the right opportunities.”

“It’s the next few months that will give us the best indication as to whether this is an attractive enough program,” he said.

“Our collective responsibility”

Even as advocates urge the renewables industry to leverage the funding, though, they also caution that regulations for Opportunity Zones are yet to be finalized.

The IRS released an initial batch of proposed guidance in October, offering some clarity on the particulars of the law. But the agency canceled a January 10 public hearing on those regulations due to the ongoing government shutdown. It’s anyone’s guess when that meeting will actually happen. Investors are also awaiting additional guidance.

In the meantime, it’s difficult for funds to fully organize. Though those working on the funding, like Rockefeller and Kresge, have seen a surge of activity — Rockefeller said the responses they received are a “testament to the enormous market interest” — adoption will be halting until there’s more clarity.

Before the rules are finalized, stakeholders are also hoping for some changes. Currently, Evans said, the rules make it difficult for multi-asset funds to participate in the program. He said allowing that participation would encourage more investment and allow diversification of risk across a portfolio.

And an “insane oversight,” according to Bonanno, is the lack of a community impact requirement tied to the funding. Though the program is structured to increase investments in low-income census tracts, the law doesn’t say the project necessarily has to benefit the community in any measurable way.

“You could just be a banker and you could invest in a solar project — you stick the solar project in an Opportunity Zone. They don’t see a penny, they don’t get any of the work, and honestly, it’s not necessarily helping those communities,” said Rosen at High Noon Advisors. “It’s our collective responsibility to take these opportunities and proactively have them benefit communities.”

This is especially a concern in Opportunity Zones already experiencing displacement of low-income residents and communities of color. Though EIG notes that under 4 percent of the selected census tracts have seen high socioeconomic change between 2000 and 2016, some communities are skeptical.

A study that looks at the potential for gentrification stemming from the Opportunity Zone program, conducted by a national coalition of real estate developers and investors called LOCUS, in partnership with George Washington University, highlighted downtown Oakland, downtown Portland, downtown Newark, and Seattle’s downtown and International District as the most vulnerable for “accelerated gentrification” without policies in place to stop it.

Past research has also suggested that place-based tax incentives don’t equate to improvements for communities.

But staunching the negative impacts of the law may be left to states and cities. California, for instance, still has a state-level capital gains tax in place and could require certain community impact requirements in order to grant an exemption.

How implementation shakes out will be especially important in states and metropolitan areas where gentrification is already an issue. In the LOCUS ranking of vulnerable areas, 13 of the top 50 vulnerable locations are in California and 13 are in New York. Many of the most vulnerable Opportunity Zone locations are also in states with significant renewables development, including California, New York, New Jersey and Massachusetts.

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Spain’s Renewables Industry Applauds New Payment Scheme

2019-01-14T03:58:00.000-08:00

Renewable energy investors could finally get the policy certainty they have been begging for—if the proposal passes.

Spain’s renewables industry is celebrating proposed legislation that could provide plant owners with guaranteed income for up to 12 years.

The regulatory framework would give renewable energy plant owners the option to stick with their current level of remuneration until the end of 2031, or switch to a formula based on the weighted average cost of capital that will be reviewed after six years.

Both options are seen as a vast improvement on the current system. Under a statutory review this year, the system would have seen a so-called "reasonable return" remuneration scheme falling about 42 percent in value, from a nominal 7.39 percent today to around 4.3 percent from 2020.

Spain’s former administration introduced the reasonable return concept in lieu of feed-in tariffs after it scrapped a generous FIT scheme in 2013. In theory, the concept allows for a fixed return on investment over the lifetime of a plant.

But it has been widely criticized by developers and investors. Detractors have noted that the investment levels for plants are based on theoretical rather than actual figures. Furthermore, the 7.39 percent is a pretax amount, which equates to a roughly 5 percent return after tax.

Plant owners have also struggled to achieve 7.39 percent in practice because of government accounting tricks.

But an even bigger bugbear is a clause allowing the government to review the level of reasonable return, in line with Spain’s national bond rate, every three years. This effectively meant investors had no long-term visibility of plant revenues.

This uncertainty spooked investors and has caused wind and solar installation rates to crater in Spain since 2013. More recently, intrepid solar developers have simply opted to ignore the regulatory risk attached to government bids and have built merchant plants instead.

However, the lack of investment in recent years means that Spain now faces an uphill struggle to meet its European renewable energy targets.

The Spanish renewable energy business association APPA estimates the country will need to invest €100 billion ($115 billion) to achieve its climate change goals.

The two proposals

The new law proposal shows Spain’s current left-wing government, which came to power last year, is keen to emphasize its commitment to renewables. Nonetheless, one feature of the draft legislation has puzzled observers.

The proposal gives plant owners the choice between a 7.39 percent remuneration rate for 12 years or an apparently vastly inferior scheme based on the weighted average cost of capital (WACC), which offers a return of around 7.09 percent and will be reviewed in six years.

Risk-happy investors might want to take a punt on the WACC being higher in 2026, but in practice the first option seems a no-brainer.

Hence it is unclear why Spain’s Ministry for Ecological Transition has even bothered with the WACC alternative, said Daniel Pérez Rodríguez, chief legal officer at Holaluz, a renewable energy retailer.

The secret appears to be in small print related to Spain’s liability from compensation claims

stemming from the 2013 law. Spain faces a deluge of legal actions from renewable plant owners that lost out when FIT payments were stopped.

Under the proposed law, asset owners choosing to take the 7.39 percent option will have to accept a cap on any existing claims that effectively limits the state’s liability to within the amount it would pay under the new remuneration scheme anyway.

“If you have an ongoing legal process then there’s no advantage in pursuing it if you take this up,” said Jose María González Moya, managing director of APPA. “The government is saying: ‘Take your arbitration cases away, and I’ll give you 12 years at 7.39.’”

But will the law pass?

With most renewable asset owners expected to favor the higher-return, longer-term option, the question now is how soon the law might be passed.

This is not easy to predict given the balance of power between the ruling Spanish Socialist Workers' Party (Partido Socialista Obrero Español or PSOE) and the opposition People's Party (Partido Popular or PP).

The PSOE is governing with the slimmest representation of any ruling party in the history of Spain, and the PP, which crafted the 2013 regulatory framework, controls the senate.

Since the PSOE took control in June 2018, the PP has diligently stood in the way of practically all of the PSOE’s proposals. Given growing cross-party support for clean energy, though, it is expected to abstain from a vote on the renewables law.

Even so, experts believe it could be at least six months to a year before the legislation is passed. And things could take even longer if the PP and its allies find a way of forcing early elections. Renewable investors are praying that won’t happen.

Richard Heap, editor-in-chief at the analyst group A Word About Wind, which tracks wind sector investments, said: “It’s undoubtedly good for investors to have long-term visibility. [Trade body] WindEurope has spent years calling for governments to provide clarity to 2030.”

Renewable energy investors are cautiously optimistic that they'll finally get it.

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US Government Shutdown Slows Progress on Offshore Wind Projects

2019-01-13T03:54:00.000-08:00

The closure of the Bureau of Ocean Energy Management delays Vineyard Wind meetings.

Vineyard Wind has emerged as the first U.S. offshore wind project to face delays caused by the ongoing federal shutdown.

Avangrid Renewables and Copenhagen Infrastructure Partners were due to start building the 800-megawatt wind farm off of Massachusetts this year, but they have already seen postponements to two public meetings relating to the project’s draft environmental impact statement.

The meetings were scheduled for Jan. 8 and 9 with the Bureau of Ocean Energy Management, an agency within the Department of the Interior. Further public meetings with BOEM on Jan. 15 and 16 seem likely to be pushed back as the partial shutdown continues.

“As far as I’m aware, there’s no clarity on when they will be held,” said Richard Heap, editor-in-chief at the wind industry information service A Word About Wind.

BOEM’s press team was not available to comment because of the shutdown. An out-of-office message confirmed staff are not allowed to work until the federal budget issue had been resolved.

On Jan. 7, Vineyard Wind issued a statement encouraging members of the public to submit comments online to BOEM. “BOEM continues to accept online comments during the shutdown,” Vineyard Wind said.

It is still unclear what impact these delays will have on project timelines.

The company has said the project will require more than 25 federal, state and local permits and authorizations, with BOEM acting as the lead federal agency and the Energy Facilities Siting Board being the main point of liaison for state affairs.

BOEM’s role in the permitting process could imply substantial delays to project timelines if the shutdown drags on, since every day adds to the amount of work that the federal agency will have to catch up on.

“Any delay will depend on the length of the shutdown and the backlog created,” said Chris LeWand, global clean energy practice co-leader at FTI Consulting.

Impact on future leasing?

For now, Vineyard Wind seems to be the U.S. offshore wind project most significantly affected by the shutdown because of its reliance on BOEM permits as it gets ready for construction.

In general, said LeWand: “Offshore wind development projects are at the early stages of development, with likely construction start dates several years out. Any delays need to be put in this context.”

He also noted that the Department of Energy and the Federal Energy Regulatory Commission already had funding for 2019, so their programs were unlikely to be affected by the shutdown.

More widely, though, the current halt in federal work could have an impact on future offshore wind leasing plans by creating delays in the planning process.

Last April, for example, BOEM announced it was conducting a high-level assessment of all U.S. Atlantic offshore waters for potential future wind lease locations. It is not known whether this lease area assessment work is on hold during the shutdown.

Fossil fuel permits advance

Elsewhere, media outlets have noted that while renewable planning work is on hold, federal teams are still engaged in fossil fuel projects. Bloomberg reports the Interior Department was still issuing drilling permits for oil companies wanting to operate in the Gulf of Mexico.

“The Trump administration is working overtime to make sure the shutdown doesn’t halt oil drilling too — in ways critics say may flout federal law,” according to Bloomberg.

And Reuters reported that the Alaska Bureau of Land Management, another part of the Interior Department, was still moving forward with meetings related to the expansion of oil development in Alaska’s National Petroleum Reserve.

“A BLM spokesman in Washington said the public hearings over permits to drill in the National Petroleum Reserve in Alaska were exempt from the shutdown,” Reuters reports.

Offshore wind delays, meanwhile, come after BOEM hosted a record-breaking auction for the sector just one month ago.

“It’s tempting to see the shutdown as a short-term hissy fit by a petulant president, but the fact is that it has delayed some meetings,” said Heap. “Offshore wind farms are long-term projects, and developers will always factor in some delays into their permitting. However, these kinds of procedural delays can have knock-on effects later in the development process.”

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Spain Sets 2020-25 Remuneration Rates for Renewables, Island Power

2019-01-11T04:18:00.000-08:00

The Spanish Wind Energy Association (AEE) yesterday welcomed the Ministry for the Ecological Transition’s (MITECO) draft bill determining the rates of remuneration for renewable power, intended to guarantee reasonable profitability.

AEE said it is happy with the methodology used to calculate the remuneration rates for regulated activities of the electricity system in Spain, using the yield of the 10-year government bond as a base and increasing it with an appropriate differential.

MITECO presented a week ago the draft bill that sets the financial remuneration rate for the period 2020-2025 for renewable energy, cogeneration and waste-to-energy facilities, and for the transport, distribution and production of electricity on Spanish islands. For clean energy the level allows profitability of 7.09%, while for the distribution of electricity in non-peninsular territories that rate is 5.58%.

The draft bill also proposes that the remuneration rate currently in force for clean energy facilities hit by Royal Decree-Law 9/2013 will remain fixed by 2031. This is expected to prevent further litigation by investors whose projects were affected by the sudden cut to renewable energy subsidies announced back in 2013. MITECO said five out of the seven arbitration awards issued to date have been partially condemnatory and there are 35 more open international arbitration proceedings against Spain.

In the current regulatory period, the remuneration rate for renewable energy capacity, cogeneration and waste-to-energy is 7.503%, but for projects prior to Royal Decree-Law 9/2013 it stands at 7.389%.

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New Guidelines for Financing Solar Installations in NJ — but Few Details Yet

2019-01-10T04:15:00.000-08:00

Cautious optimism about the state’s proposal to overhaul program that has been faulted for costing ratepayers too much in subsidies

The state is giving the solar sector more time to figure out how to overhaul the current system of financing the installation of solar arrays on homes and businesses, a program widely criticized as too costly.

Despite ranking as one of the most successful solar programs in the nation — more than 100,000 solar arrays have been installed in New Jersey — it has long been faulted as too expensive to utility ratepayers who subsidize it. The sector employs more than 7,000 people in the state, with an investment topping $10 billion.

Worried that rising costs of solar would hinder development of other clean-energy technologies, Gov. Phil Murphy signed a bill last spring to scrap the current system for financing solar and place a cap on future expenses to ratepayers. Over the past decade, those costs have exceeded $2.8 billion and continue to rise.

Curbing costs

Reining in those costs without disrupting the state’s most robust renewable energy program, however, is proving difficult. State officials are hoping to redesign the program in three phases.

In a straw proposal, or draft plan, issued by the New Jersey Board of Public Utilities over the holidays, the state gave the industry general principles and guidelines on how it will shut down the existing program, transition to an interim system, and eventually move to an entirely new way of promoting solar energy.

The proposal leaves many key details of the process unanswered, but generally won endorsement from representatives of the state’s thriving solar sector. New Jersey ranks fifth in the nation for the number of solar installations, according to one recent ranking.

The law left it up to the BPU to hammer out when the existing program will end and how the new system will work. Those details have yet to be determined, but the proposal issued last month establishes a framework that gives state officials and industry stakeholders more time to come up with a new interim program and successor program.

That proposal will likely end the existing program in the first or second quarter of 2020, according to industry officials. “There’s more runway to develop a new program,’’ said Dave Gahl, a senior director at the Solar Energy Industries Association, a national trade group, adding the transition will take place over a longer period.

Trying to ‘ensure business continuity’

“It’s a terrific foundation,’’ agreed Scott Weiner, an attorney who represent clean-energy companies, “but there’s a lot of work ahead of us. The immediate issue is how to structure the transition to ensure business continuity.’’

One key issue determined by the BPU is defining when the existing program will end. According to the straw proposal, the current financing system, dubbed SRECs (solar renewable energy certificates), would end when 5.1 percent of the kilowatt hours sold in the state is generated by solar arrays.

For projects already in the pipeline, that deadline could be reached in the first half of 2020. After that any new projects in the pipeline that are not yet operating would need to be funded by yet-to-be-determined incentives in either an interim transition program or a successor program.

That poses a potential critical problem. If developers do not know where they will get new financial incentives to build solar systems, banks will not provide the financing for new installations, developers say. And that could lead to layoffs within the industry.

“We need to know what the metrics of the transition program will be,’’ said Fred DeSanti, executive director of the New Jersey Solar Energy Coalition. He and others support creating a system modeled after the existing SREC program. The certificates are sold by owners of solar systems to electricity suppliers, based on the power they produce, and the costs are passed on to utility customers.

‘…a slow-moving train wreck’

“The cleanest and easiest form is to continue an SREC incentive structure,’’ agreed Thomas Lynch, executive vice president of KDC Solar LLC. “The challenge is in the details.’’

Whatever the details are, the next program has to be roughly equivalent in value to the existing program, according to Gahl.

More problematic, others say, is the board’s intention to comply with a cost cap embedded in the new clean-energy law. The cap requires the state to achieve 50 percent renewable energy by 2030 while not increasing energy costs to consumers by more than 7 percent initially and eventually by 9 percent.

Once the state shutters the SREC program, some fear there will be no room left to develop new incentives for the sector to build new solar, according to Jeff Tittel, director of the New Jersey Sierra Club. “It’s a slow-moving train wreck,’’ he said.

Others said, because there is still so much uncertainty about both the transition and successor programs, some new programs likely will be hard to get off the ground, such as a pilot community solar effort to bring renewable energy to urban areas.

“Without knowing they will be getting SRECs and what the new value of incentives will be, I don’t see anyone doing any Community Solar,’’ said Michael Flett, who runs an exchange that trades SRECs.

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2018 Was A “Fulcrum Year” For Renewable Energy In The US

2019-01-09T04:06:00.000-08:00

Donald Trump can huff and puff until he is blue in the face about the wonders of burning coal to make electricity, but experts in the field of renewable energy tell Inside Climate News that 2018 was a “fulcrum year” for energy generation in the United States. The old paradigm that has been in place for 100 years was ushered out and replaced with a new paradigm that will prevail into the foreseeable future.

“2018 has been a turning point, as some utilities are beginning to make decisions based on the market of the future rather than that of the past,” says Howard Learner, president and executive director of the Environmental Law & Policy Center. The Midwestern states are ground zero for the transition to renewable energy. “In the Midwest in particular, renewable energy is a win-win for utilities and the ratepayers at this point,” says Travis Miller, director of utilities research at Morningstar.

Xcel Energy, based in Minnesota, has 3.6 million customers in 9 states. It began the transition by announcing a plan to transition to 100% zero emissions energy by 2050 — the first utility company in the US to make that a corporate goal. Economics has a lot to do with that decision. Wind power in the Midwest is abundant and inexpensive but solar farms are also springing up across America’s heartland.

But there is something other than the bottom line at work here. Ben Fowke, Ecel’s CEO, said at a news conference back in December, “We knew we could step up and do more, at little or no extra cost.” His remarks were spurred in part by the latest IPCC 6 climate reportand the recent climate assessment published by the US government in November.

Consumers Energy, with 1.8 million customers in Michigan, announced a plan in June to transition to more solar power over the next 20 years. Until now, it has relied on coal-fired generating stations for most of its electricity. “Our vision considers people, the planet and the prosperity of our state and the communities we serve,” Patti Poppe, its CEO said at the time of the announcement.

Northern Indiana Public Service Company said last year it plans to close all of its coal-fired facilities within 10 years. It currently gets 65% of its power from burning coal. It says building new renewable energy resources simply costs less than keeping those coal fired plants open any longer.

Utility companies used to base their future plans on an expectation of rising energy demand. They could justify building new fossil fuel plants because the cost would be offset by selling more electricity. That is no longer the case as the demand for electricity has remained flat for several years. Not only is coal no longer competitive economically but natural gas has a history of fluctuating significantly in price.

“Utilities have to look at every investment as a multi-decade investment,” says Travis Miller of Morningstar. “We’ve seen enough commodity market volatility in the last two decades and enough environmental policy making in the last two decades that utilities are very hesitant to invest in very large legacy fossil fuel plants.”

Utility companies do not operated in a vacuum. They talk to each other and know what each other is planning. When companies like Xcel, Consumers, and NIPSCO decide to incorporate more renewable energy in their portfolios, it influences the thinking of other utility company executives — and public utilities commission members.

2018 was a fulcrum year for renewables because when people look back and try to determine when the shift to renewables in the US began in earnest, they will pick it as the year when a sea change occurred in the utility industry. Change never seems to happen. Then one day you look around and realize it is already here. The turn by utilities away from fossil fuels has begun and nothing will stop the transition until it is complete.

Washington D.C. Moves Forward With Goal of 100 Percent Renewable Energy by 2032

2019-01-08T04:04:00.000-08:00

Lawmakers in Washington D.C. ended 2018 on a sustainable note; the City Council of the District of Columbia voted in favor of passing the Clean Energy Omnibus Amendment Act of 2018, which will implement a goal of 100 percent renewable energy by 2032.

According to a press release put out by Mary Cheh, the council member responsible for the legislation, the new plan is the “most ambitious renewable energy policy in the country.”

In addition to the ambitious renewable target, the bill also aims for a 10 percent solar energy carve-out by 2041, and commands zero-emissions public transportation by 2045.

Councilmember Cheh explained in a statement, “The ‘Clean Energy DC Omnibus Act’ is a historic piece of legislation that puts the District at the nation’s forefront in reducing greenhouse gas emissions. The fight to reduce the impacts of climate change is the most important environmental issue of our time.”

The sentiment was echoed by Councilmember Kenyan McDuffie, who chaired the Committee on Business and Economic Development, who oversaw the bill once it was introduced by Councilmember Cheh.

“I am proud that the District of Columbia is leading the nation on environmental justice and will have 100 percent renewable energy by 2032,” he said in a statement. “I want to thank Councilmember Cheh and her committee, as well as the community of advocates, for their work on this legislation which set aggressive benchmarks for energy efficiency, balanced with increased benefits for low-income residents, investments in workforce development, and stringent CBE requirements.”

Other goals laid out in the bill include new building emissions standards — which will be implemented by the Department of Energy and the Environment in order to ensure that both government-owned and privately owned buildings are energy efficient as well as an initiative to fund local sustainability initiations. As the statement explains, “To fund the Green Finance Authority, commonly known as the District’s Green Bank, and strengthen the funding available for low-incoming energy assistance, this bill will increase the Sustainable Energy Trust Fund fee for electricity and natural gas consumption. It does so in a way that will result in less than a $1 increase to residents’ average monthly electric bills and about a $2.10 increase to residents’ average monthly gas bills. 20 percent of the generated funds will be used by Department of Energy and the Environment to provide relief to low-income residents struggling to pay energy bills.”

In concluding her statement about the bill, Councilmember Cheh reminded people that action is required in order to make the plans set out in the bill a reality.

“The District has set a goal to achieve 50 percent greenhouse gas reductions by 2032, and the introduced version of the ‘Clean Energy DC Act’ would have brought us within .6 percent of that goal. However, a number of compromises have pushed us further from that target. This legislations may create the strongest clean energy and climate protection law in the country, but we cannot rest on our laurels,” she said.

“We must press forward in 2019 to find ways to further strengthen the law and enhance our existing protections for the environment. This is the Council’s responsibility to District residents and future generations yet to come.”

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NY Governor Wants Zero-Carbon Electricity by 2040

2018-12-31T11:16:00.000-08:00

A “politically easy” move or an ambitious target?

New York Governor Andrew Cuomo announced Monday that he will push for New York to transition to 100 percent clean electricity by 2040, in a statement outlining his agenda for early 2019.

The announcement places New York in a small but growing group of states, including neighboring New Jersey, as well as California, Hawaii and most recently Washington, that have announced goals or legally committed to 100 percent clean energy.

Cuomo’s target comes after the state Public Service Commission approved an ambitious target of 3 gigawatts of energy storage by 2030 and the third stage of the state’s Clean Energy Standard, which aims for 50 percent renewables in the electricity mix by 2030. That standard gives New York a decade to close the gap between 50 percent renewables and 100 percent carbon-free with “clean” sources.

Last year, nearly one-third of New York’s in-state generation came from renewable sources, according to the Energy Information Administration, while one-third of electricity came from nuclear plants. Natural gas currently leads the state’s electricity generation, with about 35 percent of the mix in 2015, according to data from the New York State Energy Research and Development Authority. New York ranks tenth in solar installations.

The announcement from Cuomo — which is currently a goal, not a legal target — is “politically easy” because it pushes consequences out past 2030, said Wade Schauer, research director at Wood Mackenzie Power & Renewables.

Though Cuomo’s agenda said the target will make New York “the most progressive state in the nation in moving to renewables,” Schauer said the New York target is "vastly less aggressive" than California’s suite of policies, which include a legally binding target of 60 percent renewable by 2030 and 100 percent carbon-free by 2045 target.

California does not include existing large hydro plants in its renewables count; New York includes large hydroelectric power in its baseline, although new impoundments do not count toward the 50 percent goal. Other imported renewables put in operation after January 1, 2015 are also eligible.

“In California, only Tier 1 renewables count towards the 2030 target,” said Schauer in an email. “Add in SB 1090 [requiring California to replace the Diablo Canyon nuclear facility with carbon free sources] and large hydro, and California has to be almost 85 percent carbon-free by 2030, assuming they can hit that.”

WoodMac assumes New York will build a few gas-fired plants in the next five to 10 years, and Schauer said this target means they’ll have only about two decades to recoup investment. If the governor gets his way with a target, those projects could be shelved altogether.

Accommodating natural-gas independent power producers has been and will continue to be a big challenge in New York, said Jigar Shah, co-founder and president at Generate Capital.

The picture is more positive for energy storage, which will need to play a greater role on a 100 percent clean grid. Schauer said the announcement also bodes well for the state’s nuclear plants, which would likely count toward the carbon-free target.

Cuomo framed the target as a “Green New Deal” and part of a “declaration of independence from Washington.” But the idea of a Green New Deal looks to be gaining ground in Washington as well, with support from incoming members of Congress like New York’s Alexandria Ocasio-Cortez.

Survey results released this week suggest 81 percent of registered voter respondents “strongly” or “somewhat” support the plan, which includes 100 percent renewable energy by 2030. One caveat: Most respondents also hadn’t heard of the Green New Deal.

Back In New York, environmental groups such as NY Renews, a coalition of more than 150 organizations pushing for climate action, called for the governor to go further.

“Electricity generation represents approximately 20 percent of our state’s emissions profile and New York needs more comprehensive action to face up to the urgency of the climate crisis,” read a statement from the group.

Environmental group 350.org joined NY Renews in calling for the governor to push forward the Climate and Communities Protection Act, which has passed the state’s assembly three times and includes a 100 percent by 2050 renewables goal.

Betámia Coronel, a national organizer with 350.org, said she welcomes Cuomo’s support for climate action, but she also cautioned against “empty rhetoric and lip service.” Coronel said concrete action to stop fossil fuel projects will indicate the governor’s seriousness about the goal.

The Solar Energy Industries Association trade group lauded the governor’s “historic” move and noted several ways New York can get closer to the goal.

“Specific examples include doubling down on solar and committing to obtaining 6 gigawatts of solar by 2023, establishing strong policies in the ongoing Value of Distributed Energy Resources case and bringing more large-scale solar to New York," said Sean Gallagher, SEIA’s vice president of state affairs, in a statement. “This plan can bring massive economic and environmental benefits to communities throughout the state, spurring many new, well-paying jobs and cleaner air.”

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Year-End Reflections and Predictions From a Solar Veteran

2018-12-30T11:06:00.000-08:00

Vote Solar’s Adam Browning offers up his picks for the most important trends of 2018.

In 2002, when solar was $9 a watt, I co-founded an advocacy organization to bring solar into the mainstream. Solar’s made a lot of progress since then, and 2018 feels like a crucial year in many ways, with some key successes and pivotal developments.

Here’s my list of the most important stories in solar in 2018, and predictions for 2019.

1. 100% is the new black

Hawaii did it first, but California’s SB 100, committing the world’s fifth-largest economy to 60 percent renewable energy by 2030 and 100 percent carbon-free by 2045, is the biggest and most important climate action taken to date in the U.S.

It’s big because California is big, and important because it sets the bar higher for what’s possible. Since then, Xcel Energy, a major utility serving 3.3 million customers, announced its own decision to go 100 percent carbon-free by 2050, New York Governor Cuomo pledged to work with lawmakers to pass 100 percent carbon-free legislation in 2019, and New Jersey Governor Phil Murphy is backing a target of 100 percent clean energy by 2050. Washington, D.C. (the city, not the federal government) also just passed its own bill to go 100 percent carbon-free, topping the list of 101 cities that have already committed to that goal.

2. There are votes in solar

While politicians have long given a nod to pro-renewables sentiment, in 2018 this phenomenon reached a new level of precision and power.

The League of Conservation Voters counted 1,400 candidates on the November ballot that committed to a 100 percent clean energy platform, including eight winning governors. That’s amazing and is already having an impact. Xcel, which voluntarily committed to 100 percent clean energy in December, operates in eight states. Five of those states have new governors signed onto 100 percent clean energy. Elections matter.

3. Old coal and new nukes did not have a good year

Coal usage has fallen to its lowest since 1979, retiring about 14 gigawatts this year. And what happened in South Carolina drove another nail in the coffin of the nuclear industry’s future prospects.

For those who didn’t follow the Post and Courier’s excellent coverage of the demise of the VC Summer nuclear plant: After the $9 billion project was abandoned while only 40 percent finished, and ratepayers were paying $27/month for a boondoggle that may never produce a single kilowatt-hour of electricity, the South Carolina House voted 107-1 to fire the regulators who approved construction-work-in-progress payments, and the regulators, in turn, threatened to claw back money from utilities.

I can’t think of a commission in the country where there are three votes to sign up for that ride. To have a future going forward, nukes will have to get radically cheaper and try a business model that isn’t political suicide for policymakers. And it’s not just me who thinks so. An executive of Exelon, the largest owner of nuclear assets in the U.S., said he doesn’t think new nuclear, including small modular reactors, will be built in the U.S. due to high costs and performance of renewables and storage. This is definitely a turning point and reinforces my belief that the future of carbon-free energy is renewables.

4. Peak peaker?

Solar-plus-storage is emerging as a gas killer. Lithium-ion battery prices have improved 85 percent in the past eight years, per Bloomberg New Energy Finance.

Over the past several years utilities have signed solar-plus-storage deals at increasingly competitive terms. What’s new and different this year is that solar-plus-storage bids are winning all-source RFPs (such as this 50-megawatt battery deal with Arizona Public Service) — and the trust of regulators to rely on these clean solutions as replacements for gas peakers.

Calpine tried to make an end-run around the California Public Utilities Commission to get reliability-must-run status for some of its peakers. The CPUC was not amused, and now we have approval for the world’s largest batteries replacing three gas plants. Notably, both NextEra CEO Jim Robo and AES CEO Andres Gluski have said they don't expect to build a peaker past 2020. Why not start the stopping now and save us the future stranded assets?

5. New dawn for new utility regulatory and business models

Distributed energy resources have the potential to more efficiently deliver services and reduce costs for everyone. But as long as regulated utilities’ revenues are linked to deploying more capital, there’s a structural barrier to success that needs to be addressed.

The growth of community-choice aggregation in California is one model for more local control. Hawaii, which just passed a crucially important law introducing performance-based regulation to the state, offers another model. The premise is to pay for — and therefore incentivize — results, not capital deployment. Rhode Island and Vermont have initiated exploratory dockets, but having an actual example of how this can work in Hawaii will be enormously helpful for replication.

6. Solar on new home construction

The California Energy Commission has a mandate to include cost-effective energy saving measures in building codes. Their last revision to Title 24, which underwent years of public input and scrutiny, found that requiring solar as a part of new housing construction is a clear net economic benefit to owners.

Starting in 2020, new homes built in California will come with solar. Because installations on new construction are cheaper than retrofits, our calculations show that energy savings will exceed marginal increases in mortgage payments upwards of $60 a month for an average home. Scaling this nationally would add 203 gigawatts of solar and cut CO2 emissions by 9 percent by 2045, and polls well with 63 percent support.

Time to start building like we plan to stay on this planet for a while.

Predictions for 2019

Here's what I see happening over the next year to accelerate these trends.

1. Multiple new states will pass major new renewable portfolio standards

Maryland, New Mexico, Nevada and New York top the list, with many more contenders in play. Other states will lift major new renewable goals through integrated resource plans or equivalents.

2. The Green New Deal resets the conversation

Kudos to the new generation of activists who have really forced the climate crisis on the next Congress’ agenda and are doing a masterful job framing the conversation around the benefits to people’s lives, not wonky acronyms or clunky policy pathways (as the saying goes, there are only two problems with carbon tax messaging: carbon and tax).

At the same time, let’s be clear: This is welcome mojo, but the states are where the deal will actually get done.

3. Federal government headwinds

The Trump administration’s 30 percent tariffs on solar panels resulted in the cancellation of about $8 billion in solar projects in 2018, eliminating about 9,000 jobs. And while efforts at both the DOE and FERC to blow up competitive energy markets and provide billions in subsidies to out-of-market coal and nukes on unsupported reliability grounds haven’t yet come to fruition, the new FERC Commissioner Bernard McNamee’s history of radical antipathy toward renewables is really concerning.

The fight over whether the U.S. energy markets will go full oligarchy will heat up in 2019.

4. Building electrification

The real savings come from not having to build fossil infrastructure in the first place, and the push to electrify everything will boost renewable generation further. With solar on the roof, induction cooking and heat pumps, we’re going to see new communities increasingly pass on gas.

5. Footholds for equity and access

California’s 100 percent clean law would not have happened without the leadership of environmental justice activists, full stop. Energy justice and community-based organizations all across the country are on the frontline of the fight to make the clean energy economy work for everyone.

This year, the NAACP partnered with justice, industry and advocacy organizations (including Vote Solar) for the Solar Equity Initiative to bring jobs and bill savings where they’re need most. Groups like GRID Alternatives, Power52 and others have done great work expanding job training and opportunities to disadvantaged communities. Policymakers from New Jersey to Illinois to California are increasing focused on developing programs that ensure equity and access in energy.

The industry is catching on to that leadership: SEIA has made a commitment to diversity in the solar industry, and The Solar Foundation is now publishing important benchmarking studies to track its progress. This country has a long way to go, but I’m excited about the possibilities and believe 2019 will be a pivotal year in this transformation.

6. Heartland heats up

NIPSCO, a municipal utility in Indiana, made headlines when it announced that after crunching the numbers, shutting down all its coal plants and replacing them with largely renewables would save ratepayers $4 billion over 20 years. Math combined with a real consideration of ratepayer interests can be a powerful thing.

There’s been a lot of groundwork and progress in the region — the Illinois Future Energy Jobs Act; PURPA progress and Consumers Energy's integrated resource plan with plans for 6 gigawatts of solar in Michigan; and Minnesota’s renewable portfolio standard and community solar program. With a bevy of new governors committed to renewable progress, I predict it will be one of the hottest regions for new solar growth.

That’s my take on the highlights — your mileage may vary. What’s indisputable is that it’s an exciting time to be alive as we aim to transform one of the largest and most politically entrenched industries. Best to you all in the new year, and may solar shine in 2019.

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2018: The Year of 100% Clean Energy

2018-12-26T13:33:00.000-08:00

Policymakers and corporate leaders ignored the academic debate over 100% renewables, and went ahead with policies anyway.

Last year, tense debate over the feasibility of 100 percent renewables entirely consumed the energy industry. Stanford professor Dr. Mark Jacobson stood on one side, arguing 100 percent renewables is already technically possible by 2050, while Dr. Christopher Clack led critiques picking apart that modeling. The controversy even spurred a lawsuit.

In 2018 those conversations didn’t entirely dissolve, but they were overshadowed by action.

Two states, California and New Jersey, joined Hawaii in committing to 100 percent clean energy (Hawaii’s goal is actually 100 percent renewables). In December, the number of cities committed to 100 percent clean or renewable energy surpassed 100. And recent progress for the “Green New Deal” in Congress has federal policymakers also mulling a 100 percent renewable future.

Deal or no deal

Supporters of the Green New Deal call for a select committee to develop a mobilization plan to tackle climate change and aid the transition to a just economy.

As the Washington Post recently reported, the phrase itself has been used many times in recent history. But it's gained momentum in its latest form due to protests from groups like the Sunrise Movement and through endorsements by incoming progressive lawmakers like Alexandria Ocasio-Cortez.

This week, Democratic leaders indicated they would move ahead in creating a select committee on climate change, but it will not consider the Green New Deal as its “sole focus,” according to chosen chair, Rep. Kathy Castor of Florida.

Despite the defeat of a more aggressive agenda, attention at the federal level has spurred hope for many 100 percent renewables and environmental advocates.

U.S. actions at the latest climate talks in Poland, however, did not.

The Trump administration continues to say it will leave the Paris climate agreement — which, based on the pact, it cannot legally do until 2020 — and promote fossil fuels on the sidelines of climate talks. Meanwhile, U.S. corporations, states and other subnational players are continuing to assert their support of the Paris agreement. But that sideline diplomacy didn’t entirely fill the vacuum left by U.S. leadership at official negotiations.

Though countries came away from the Poland meeting with a set of rules to meet the Paris agreement, they still aren't close to achieving what's needed to avoid disastrous climate change. And they couldn’t even agree on whether they should fully endorse the findings of the IPCC’s dire report.

One hundred for 100 percent

Many localities have announced 100 percent clean energy or renewables goals in 2018. Some were more ambitious than others, but the sheer volume suggests momentum for more commitments is building.

California’s passage of SB100 was arguably the most high-profile 100 percent commitment of the year. Lawmakers in the state passed a bill setting a 100 percent clean energy by 2045 mandate, which leaves the door open to technologies aside from wind and solar.

In New Jersey, Governor Phil Murphy signed an executive order calling for 100 percent clean energy by 2050. It specifically cited the development of offshore wind, community solar and energy storage.

More recently, New York Governor Andrew Cuomo raised 100 percent zero-carbon energy by 2040 as a priority for his administration in 2019. Other newly-elected governors, in states like Illinois and Connecticut, ran on platforms of reaching 100 percent renewables in coming decades.

Two of the country’s jurisdictions where statehood is hotly debated, Puerto Rico and Washington, D.C., also recently made moves toward 100 renewables. In November, Puerto Rico Governor Ricardo Rosselló proposed a target of 100 percent renewables by 2050. The territory’s legislature is considering a similar goal.

In D.C., the city council passed an ambitious target of 100 percent renewables by 2032, although much of that will be met with renewable energy credits.

Over 100 cities joined D.C. in moving toward 100 percent renewables or clean energy this year. And commitments came from across the country, in regions with varied renewable energy and power markets.

Minneapolis pledged to reach 100 percent renewables by 2030 and Cincinnati targeted 100 percent renewables by 2035. Both Denver and Berkeley set targets more ambitious than those proposed or already approved by their states, 100 percent by 2030 and by 2035, respectively.

Corporations joined as well, with Xcel Energy announcing a goal of 100 percent carbon-free electricity by 2050 (a target that will have to come sooner if Colorados Governor-elect Jared Polis gets his way). Visa adopted a fast goal of 100 percent renewable by 2019, and Sony expanded its 100 percent renewables goal to North America and China operations.

Overall, it was a record year for corporate and industrial offtakers procuring wind and solar.

Source

Solar Required on New Commercial Buildings in Watertown, Massachusetts

2018-12-24T04:26:00.000-08:00

Watertown, Massachusetts now requires solar power with all new commercial construction and retrofits of structures greater than 10,000 sq feet – as well all structures that include ten or more residential units.

Solar power as a required part of new construction is starting to catch hold. Last year, we saw South Miami mandate 2.75 kW of solar for every 1000 square feet on new homes. Prior to that it’d been a few cities within California (Lancaster led the way in 2013, with Sebastopol, Santa Monica, and San Francisco) requiring solar with new construction. Now, of course, we live in a time where the whole of the State of California has set a requirement for all new low-rise residential construction to have solar in 2020, and there is much speculation on what that might do to lower installation costs.

On November 27, Watertown, Massachusetts, population ~35,000, voted unanimously to set a requirement that all new commercial construction greater than 10,000 feet, retrofits of sites that are greater than 10,000 feet, and all new residential structures with ten or more units must include solar power.

The Planning Board Report zoning amendments require a solar system equivalent to 50% of the roof area of the building, as well as 90% of uncovered areas of garages. The new zoning requirements did allow for exceptions where the solar ready zone is shaded for more than 50% of daylight hours.

A history of the new solar requirement by Wickedlocal.com, shows that the work on it it started in January of 2016. The legislation was revived in September 2017 after moving slowly, and with the time passing it had to be completely rewritten. And between that rewrite and November 27, there were more iterations before it finally came to a vote that ended unanimously.

NREL suggests that rooftop spaces in the USA could meet 39% of the country’s electricity needs. Of note in this study is that the most recent version significantly increased the potential of rooftop based on increasing technology in the field, specifically noting that it used a 16% efficient module for those calculations. The report noted that if the industry standard moved to 20% efficient solar modules, we’d see that 39% number increased by 25% to just over 48% of the USA’s electricity load.

Also of note in this report is that the data did not include parking lots, building facades and only supposed that 23% of the nation’s buildings could sustain solar power on their rooftops. Recent research suggests that if we could install a 15% efficient solar glass on building facades, that would meet 40% of the nation’s electricity needs on its own.

Recent polling suggests a majority of Americans would support state level mandates requiring solar power with all new homes. Support for a state home solar mandate was strongest among Democrats, at 73%, with 57% of Republicans saying they would support one.

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Infrastructure Bill May Stall as Democrats Demand Climate Measures

2018-12-23T04:42:00.000-08:00

Tying infrastructure bill to climate change will be ‘dead on arrival,’ says expert.

President Donald Trump signaled that infrastructure could be a key area of focus next year, which has been a priority for Democrats for decades. Democratic congressional leaders, however, are coming up with legislative demands that may impede Trump’s much-hoped-for infrastructure reform.

In an op-ed for The Washington Post, Senate Minority Leader Chuck Schumer (D-N.Y.) calls for “massive” spending on renewable energy, as a condition for approving Trump’s infrastructure plan.

“If the president wanted to earn Democratic support in the Senate, any infrastructure bill would have to include policies and funding that help transition our country to a clean-energy economy and mitigate the risks the United States already faces from climate change,” he wrote.

Schumer also lists the types of policies Democrats expect to see in an infrastructure bill. He calls for “massive investments” in climate resiliency and renewable energy, especially in technologies such as battery storage.

“We should provide permanent tax credits for clean-energy production and storage, electric vehicles, and energy-efficient homes,” he continues.

He also pushes for measures to “reduce the release of methane pollution from domestic energy production” and cut “the amount of carbon we release into the atmosphere.”

These requests mean imposing considerable costs on American taxpayers, according to Nicolas Loris, an economist and environmental policy expert at The Heritage Foundation.

“Introducing climate into an infrastructure package only creates more division among members of Congress,” he said. “It’s been pretty clear that ever since cap-and-trade legislation failed there’s been no real appetite to move any big climate bill because of the cost and the negligible climate benefit that you would get from it.”

‘Dead on Arrival’

In June 2009, the U.S. House of Representatives passed the American Clean Energy and Security Act of 2009. The legislation aimed to establish an economy-wide greenhouse gas cap-and-trade system under which the government would set a limit on total emissions. Companies would then buy or sell permits to emit these gases. The measure, however, died, as it never reached the Senate floor for discussion or a vote.

According to Loris, if Democratic demands are introduced into an infrastructure package, it will be “dead on arrival.”

That’s “the opposite direction of which this administration and a lot of members of Congress want to go, especially given in light of what you’ve seen in France over the past few weeks and revolts against these energy taxes,” he said.

Democrats will control the House of Representatives in the 116th Congress. But Senate Democrats will have substantial leverage as well, says Schumer in his op-ed. The Senate needs to garner 60 votes for an infrastructure bill.

Schumer claims that his proposed plan can be fully financed by reversing some of the corporate and individual tax cuts passed last year.

Trump has been calling for an infrastructure overhaul since the start of his presidency. He has called on Congress last year to produce a bill that generates at least $1.5 trillion for the new infrastructure investment to fix the nation’s roads, bridges, airports, railways, and ports.

He also signed an executive order to speed up the environmental review and permitting process for infrastructure investments. The order aims to fix the fragmented approval system and shorten the time for processing approval documents for infrastructure projects. Congress now has to codify these changes into law.

The American Society of Civil Engineers gave a near-failing D-plus grade to U.S. infrastructure last year. And the grade extends across every state and every asset class in infrastructure.

On Dec. 10, Trump is set to meet with Schumer and House Minority Leader Nancy Pelosi (D-Calif.) to discuss a budget deal and funding of a border wall. Infrastructure reform may also be brought to the table during the meeting.

“The real issues should be fiscal responsibility and long lasting regulatory reforms that allow for infrastructure to actually be built in a reasonable timeframe,” Loris said, adding that there’s still a hope of getting bipartisan support to fix the nation’s broken permitting process. The regulatory hurdles affect all infrastructure investments including renewable energy projects.

A lot of the renewable energy projects in the country “have been stalled in regulatory red tape,” he said.

“There’s a lot of room to get some of those long-lasting regulatory reforms that the country desperately needs to encourage more investment and innovation in infrastructure.”

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US House Signals Offshore Wind Charge

2018-12-21T04:36:00.000-08:00

The Offshore Wind for Territories Act would allow Puerto Rico, Guam and other islands to tap their offshore resources.

The US House passed a bill on Monday that could bring offshore wind farms to territories like Guam and Puerto Rico.

The Offshore Wind for Territories Act would amend federal law to allow development in federal waters off the coasts of five US territories, including American Samoa, Mariana Island and the US Virgin Islands.

HR 6665 was introduced by Del. Madeleine Bordallo, a non-voting member of Congress representing Guam, and supported by representatives for all five territories affected by the bill. The House Committee on Natural Resources approved the bill in September.

Representatives of the offshore wind industry and the US Department of the Interior spoke in support of the legislation during a committee hearing earlier this summer.

The president of the National Ocean Industries Association immediately released a statement calling on US Senate leaders to pass the bill.

“The House passage of HR 6665 is welcome news for many Americans this holiday season,” NOIA President Randall Luthi said. “Too often, Americans in the US territories are our forgotten citizens.

The Offshore Wind for Territories Act empowers US territories such as Guam and Puerto Rico to tap their offshore resources and strengthen their energy security, all while providing jobs and economic growth for hardworking Americans.”

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DC Council Passes Nation's Most Aggressive 100 Percent Renewable Energy Bill, Mandates Eliminating Fossil Fuels

2018-12-20T09:51:00.000-08:00

The Washington, D.C. city council on Tuesday unanimously passed the nation’s most aggressive 100 percent renewable energy bill, in what would be the fastest-acting climate change legislation in the country.

D.C. Mayor Muriel Bowser, a Democrat, is expected to sign the bill. If she does, Congress will have 30 days to veto the bill.

The bill would require District utilities to source all electricity from wind and solar by 2032 — up from its current goal of 50 percent renewables in that time — and would set tough new energy efficiency standards for buildings. The bill's authors say it will reduce greenhouse gases in the District 44 percent by 2032.

“This will be the strongest climate law in the country,” Jamie DeMarco, who focuses on state and local policy for Citizens' Climate Lobby, told the Washington Examiner. “The science tells us very clearly we need to reduce emissions more than 40 percent by 2030. D.C. will be the only jurisdiction in the country with a specific binding comprehensive law to help achieve those reductions.”

The bill would also impose a fee on electricity and natural gas consumption that the legislation’s authors say would add $2.10 to D.C. residents’ average monthly gas bills and less than $1 to their average monthly electricity bills. That fee is unrelated to the 100 percent renewable mandate, but instead intended to encourage cleaner energy use in heating homes.

About 20 percent of the money raised from those fees would be used to provide financial help to low-income D.C. ratepayers. The rest would go to local “sustainability” projects used primarily for energy efficiency retrofits.

The Democrat-controlled states of California and Hawaii also have laws mandating 100 percent electricity from carbon-free sources, but those set a later target date than D.C. is proposing — 2045.

The District is already among the cities that has gone the furthest in transitioning away from fossil fuels and conserving energy.

Little coal is consumed in the District, less than in any state other than Vermont or Rhode Island.

The District uses less energy than any state except Vermont, according to the Energy Information Administration.

D.C. currently gets almost half of its electricity from nonemitting sources, a mix that includes nuclear, hydropower, and biomass, along with solar and wind. The rest is mostly natural gas.

D.C. doesn't generate any its own electricity. So, most of the renewables' mandate will be met through out-of-state purchases.

About 74 percent of D.C.'s greenhouse gas emissions come from buildings.

To address that, the D.C. bill would create energy efficiency standards for existing buildings, both privately-owned ones and those owned by the District, a first-of-its-kind proposal in the nation.

D.C.’s legislation would also allow the district to enact regional agreements with neighboring Virginia and Maryland to reduce greenhouse gas emissions. And it would address transportation emissions as well, directing the Department of Motor Vehicles to issue rules incentivizing fuel efficient vehicles, and requiring the city to use 100 percent electric public buses — including school buses — by 2030.

D.C. council members hailed the ambition of their bill, saying it lives up to the urgency of a recent United Nations report that said global emissions should be net zero by midcentury to avoid the worst outcomes of climate change.

But many experts say 100 percent policies must include “clean” energy sources that aren’t renewable for it to be technically feasible, such as nuclear power or carbon, capture, and storage technologies that can collect carbon emissions from coal or natural gas plants and store it underground.

Lawmakers in California recently recognized the limitations of a wind- and solar-only approach, passing a bill this summer to require that 100 percent of the state’s electricity come from carbon-free sources by 2045 — allowing nonrenewable sources to qualify.

D.C. Councilwoman Mary Cheh, however, insisted that the more aggressive 100 percent renewable energy target is “not pie in the sky.”

“This bill is historic,” she said. “It will put D.C. at the nation’s forefront on reducing greenhouse gases. In default of the federal government doing what it should be doing, we are doing what we can at the local level to respond to climate change.”

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New Governors Could Mandate 34 GWac More Solar, Wind by 2030

2018-12-19T04:18:00.000-08:00

Illinois, Nevada show most potential for solar

A new analysis by Wood Mackenzie Power and Renewables finds that the renewable energy and climate ambitions of governors elected on November 6 could increase the total market for solar in five states by 17.7 GWac, if all five pass 50% by 2030 mandates.

November 6 was a big night for renewable energy and climate policies. While voters rejected a 50% by 2030 renewable energy mandate in Arizona and a carbon tax in Washington, they also elected governors in five states that have called for stronger renewable energy mandates.

Four more either pledged to commit to the Paris Agreement or are in states that have already joined an alliance of states committed to meeting Paris Agreement goals. Wood Mackenzie Power and Renewables has identified renewable portfolio standard (RPS) policies as the most likely way to meet those goals, bringing the total number of states that could potentially see RPS increases to nine.

In a new report, Wood Mackenzie looks at the market ramifications of states passing 50% by 2030 renewable energy mandates. This is less than the 100% being called for by three of these governors, however both timelines and total ambition of the final policies will likely be decided through political processes.

The report found that if all five pass 50% by 2030 RPS policies, this could increase the total solar that is built by 2030 by 17.7 GWac, and the total wind by 16.5 GW. These volumes and ratios are based on current electric demand and the current wind/solar ratio in each state, and it is important to note that these numbers are outside of other renewable development which may happen for other reasons, including to meet current RPS mandates or driven by factors such as voluntary utility and corporate procurement.

The state that would see the most solar market growth as the result of a more ambitious RPS is Illinois, which at 9.1 GWac makes up more than half of the total anticipated increase. This is doubtless due to the much larger population in Illinois, including 8 million residents in Chicago and surrounding suburbs, than other states that are considering raising their mandates.

Wood Mackenzie has expressed concerns regarding Illinois’ financial condition, and it is also unclear how the state’s sizable nuclear fleet would fit into all of this. However, the firm points to a large interconnection queue for wind and solar projects, and also the state’s ability to import capacity from other wind-rich states in the region.

The state with the 2nd-greatest potential for more solar is Nevada. And while Governor-elect Steve Sisolak (D) has called for putting the state on a path to 100% renewable energy, the initial path forward is up to Nevada voters. November 6 saw an electoral victory for the state’s Question 6, which calls for 50% renewables by 2030, however the bill must go to the voters one more time before becoming law.

Wood Mackenzie is projecting that all new capacity under an RPS in Nevada will come from solar, not wind, and that this additional 4 GW by 2030 would more than double the current volume in the state. Nevada is one of only three states where solar met more than 10% of in-state electricity demand in 2017, and the state also has developed its geothermal resources.

Political and infrastructure constraints

The report projects that New Mexico, Colorado and Minnesota would each deploy from 1-2 GWac of additional solar to meet a 50% by 2030 RPS. In Colorado and Minnesota wind is expected to dominate capacity additions, but none of these states have particularly large populations and electric demand.

Wood Mackenzie also included Michigan in the report, but as major actors in this state do not appear to be contemplating an RPS increase we have omitted this from our summary of the findings.

The firm also noted that Democratic governors who have taken office in Kansas and Wisconsin are unlikely to pass RPS policies with Republican control of both houses of each state’s legislature.

Wood Mackenzie additionally did not provide forecasts for Connecticut and Maine, due to a variety of factors. This includes a preference in the region for importing Canadian hydropower, and “severe transmission constraints” in Maine.

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Renewable Industry Urges Congress to Modify the Tax Code to Include Energy Storage

2018-12-18T04:01:00.000-08:00

The US Solar Energy Industries Association (SEIA), alongside a broad coalition of energy trade and advocacy organizations, filed a letter to urge the US Congress to modify the tax code to include energy storage as an eligible technology for the investment tax credit (ITC). Energy storage systems are critical to modernization of the electric grid. The National Governors Association has underscored the multiple benefits of energy storage to save utilities, businesses, and households money while enhancing grid reliability and resilience. Energy storage systems are also fuelneutral and help any generation resource connected to the grid become more efficient, productive, and competitive.

"'In the energy world, you’d be hard-pressed to find an example of two technologies that complement each other as well as solar plus storage," commented SEIA president and CEO Abigail Ross Hopper:

"Yet without clear rules of the road, companies continue to face financial uncertainty in their investments. SEIA, alongside with partner organizations, is urging Congress to enact the Energy Storage Tax Incentive and Deployment Act, a common-sense bill that will encourage investment, jobs and accelerated deployment of solar plus storage projects."

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New State Governors Committed to Solar and Renewables

2018-12-17T03:56:00.000-08:00

Contrary to President Trump, more and more U.S. states are setting their sights on an ambitious expansion of solar and other renewables. Five new state governors elected in the midterms are committed to achieving 100% renewable electricity. Several others are also pro-clean energy and pro-solar.

Jared Polis, the new governor-elect of Colorado, wants to transition the state to 100% renewable power by 2040. Governor-elect Ned Lamont’s aim for Connecticut is at least 50% renewable electricity by 2030, and 100% by 2050. Governor-elect J.B. Pritzker wants to bring Illinois “toward 100% clean, renewable energy,” according to his campaign website. Nevada’s new governor-elect Steve Sisolak says that “I’d like to get us on the road to 100%” renewables and “enable community solar,” underlining that “clean energy creates jobs.” Governor-elect Janet Mills has proclaimed her goal for Maine to run “virtually entirely” on renewables by 2050. Oregon’s reelected governor Kate Brown endorses “100% clean energy by 2050.” The governor-elect of New Mexico, Michelle Lujan Grisham, pledges to increase the renewable portfolio standard, develop transmission infrastructure for renewable energy, enable community solar and expand the use of storage. The new governors-elect Tim Walz of Minnesota, Gretchen Whitmer of Michigan and Gavin Newsom of California are pursuing similar objectives.

So far Hawaii has set a goal of 100% renewable electricity by 2045, while California aims to achieve 100% zero-carbon electricity by the same year.

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Moea Defends Renewable Energy Plan After Control Yuan Pans Feed-in Tariff

2018-12-16T03:42:00.000-08:00

The Ministry of Economic Affairs (MOEA) yesterday defended its renewable energy policy roadmap after the Control Yuan issued corrective measures on Friday.

The Control Yuan in a report pointed to several shortcomings in the ministry’s renewable energy development plan, saying they could hamper the nation’s long-term progress.

Critics have said that the plan was hastily put together to meet President Tsai Ing-wen’s (蔡英文) policy goal of generating 20 percent of the nation’s electricity from alternative energy sources by 2025.

The feed-in tariff (FIT) of NT$5.8498 per kilowatt-hour does not take into account the falling levelized cost of electricity generated by offshore wind farms, made possible by technological advances and economies of scale, the Control Yuan said.

Minister of Economic Affairs Shen Jong-chin (沈榮津) told a news conference in Taipei that the FIT is about NT$0.1 higher than the UK’s NT$5.7246, albeit significantly lower than Japan’s NT$9.8316.

It is also NT$3.3 higher from the NT$2.5 that was determined in an auction, he said, adding that the discrepancy was intentional and would save the nation about NT$400 billion (US$12.95 billion) in wind power purchases.

“Taiwan’s wind power FIT is within the average range of prices seen abroad,” Shen said.

The plan adheres to the law and there are no compliance issues as the Control Yuan has claimed, he added.

Regarding foreign offshore wind developers criticizing a decision to cut the FIT by 12.7 percent, Shen said that the ministry would continue to review supporting evidence presented by the firms, adding that a public hearing would be held at the end of this month.

The ministry’s tight timeline requiring seven offshore wind developers to complete 16 projects in seven years overlooks the challenges the nation faces in developing a local offshore wind energy supply chain, the Control Yuan said.

The challenges include the cultivation of talent, overcoming steep learning curves and addressing project financing risks, it said.

The burden of the government’s green energy ambitions is made heavier by the ministry’s decision to apply the FIT scheme to a majority 69.7 percent of the planned 5.5 gigawatts of wind power capacity, leaving only 30.3 percent capacity to auctions, the report said, urging the ministry to improve its policy roadmap.

The selection and assessment committees overseeing the wind projects are mostly occupied by government officials aiming to meet the government’s 2025 energy goal and they have overlooked the aspects that determine the success of wind projects, it said.

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California Mandates 2 Largest Pension Funds Factor Climate Risk into Investments

2018-12-14T03:21:00.000-08:00

Big news from California: The state legislature has just passed a bill, SB 964, that requires two massive pension funds run by the state, the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS), to factor in climate-related financial risk and report progress both on that, and towards meeting the goals of the Paris Agreement.

“This vote was about what we value,” Dan Jacobson, director of Environment California, said in a statement. “California is saying there's nothing we value more than our children and grandchildren — and their inheritance must include clean air and a healthy planet.”

Climate risk is, in simple terms, the risk to businesses, financial institutions, infrastructure and other physical and non-physical assets from climate change. It can range from the obvious — lost value of coastal property due to rising sea levels — to the more hard-to-determine impacts of complex systems, such as crop reductions due to drought.

“Climate risk is ultimately going to affect every sector of the economy,” Janet Cox, executive director of Fossil Free California, who supported the bill, told Sustainable Brands. “Prudence requires that investors act expeditiously to protect their investments and their beneficiaries from the effects of climate change.”

Over the past few years, climate risk has gone mainstream, as more and more investors, asset managers and others in the financial industry are accepting the conclusion that climate change will impact business operations, and that smart businesses will not only plan for this but report on how they are addressing these potential impacts.

When companies refuse to act, investors and shareholders, increasingly, will. Last year, shareholders at ExxonMobil, the US’ largest oil company, went against the board’s recommendation and voted overwhelmingly to ask the company to disclose the impacts on its business under a 2-degree scenario — something that the oil giant had blocked the previous year; Harvard Business Review called it a “tipping point for climate issues.”

“Part of why the Exxon vote was so high was because Exxon has been in the news for covering up climate change, and that played a role in investor concern about [the company],” Danielle Fugere, president & chief counsel at the non-profit As You Sow, told Sustainable Brands.

Notably, the California bill takes a broad view of climate risk, including “risk that may include material financial risk posed to the fund by the effects of the changing climate, such as intense storms, rising sea levels, higher global temperature [and] economic damages from carbon emissions.” This, Cox believes, will give it real teeth and power.

“The fact that this bill requires them to look at fairly broad-definition climate-related financial risk means that businesses and companies that the funds invest in are going to be on notice,” she said.

California is the largest state in the country, and by some estimates, the sixth-largest economy in the world; thus CalPERS and CalSTRS are the two largest public pension funds in the United States, and among the top 15 globally. That means the impact will be felt widely, as both funds invest heavily outside of the Golden State.

“CalPERS and CalSTRS are seen as national leaders among pension funds, and the kinds of risk that SB 964 requires them to consider are the kinds of risks asset owners and investors are going to have to be dealing with nationally,” Cox said.

Moreover, there’s momentum at the national level. Shortly following the passage of SB 964, Senator Jeff Merkley (D-Oregon) introduced the Retirement Investments for a Sustainable Economy (RISE) Act in the US Congress. If passed, it would create a mechanism to factor climate risk into investments made on behalf of federal workers' pensions.

The ultimate lesson? Climate risk is a real concern, and building a business that factors it in is now a necessity. Investors, consumers and now governments, increasingly, are all demanding it.

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U.S. Senate Confirms Fossil Fuel Advocate Bernard Mcnamee to FERC

2018-12-13T12:12:00.000-08:00

The 50-49 party line vote shows the great controversy that surrounds McNamee, who has worked for pro-fossil fuel think thanks and has made hyperbolic negative statements about renewable energy.

Only one day after Cincinnati became the 100th U.S. city to commit to 100% renewable energy, the U.S. Senate confirmed Bernard McNamee as the third Republican on the Federal Energy Regulatory Committee (FERC).

In an administration which has routinely appointed individuals with strong ideological orientations and relatively few technical qualifications to head federal agencies, the appointment of Bernard McNamee is not inherently unusual.

Regardless, a video discovered by UtilityDive showing McNamee’s outspoken positions sparked significant controversy over his nomination, with both Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R) and Ranking Member Maria Cantwell (D) mentioning this video before the committee’s vote to advance his nomination.

According to RTO Insider, the final vote that came down this afternoon was 50-49, with all Democrats voting against McNamee. This includes Senator Joe Manchin (D-West Virginia), who has been one of the greatest allies of the fossil fuel industries in the Democratic Party.

FERC and renewable energy policy

The implications for renewable energy are clearly negative. McNamee worked on the proposed bailout of coal and nuclear power plants when he served under Secretary Perry at the U.S. Department of Energy, and could be instrumental in setting market rules that favor these resources.

However, it is also important to note where FERC’s jurisdiction begins and ends. As the regulator of wholesale energy markets, FERC oversees grid operators in the Eastern and Midwestern United States as well as the California Independent System Operator (CAISO).

However it does not have direct jurisdiction over the Electric Reliability Council of Texas (ERCOT) grid, and does not have the same kind of input on the electricity system in the many regions that do not have wholesale electricity markets – including much of the South, Mountain West and Pacific Northwest.

FERC also has jurisdiction over interstate transmission, and over the enforcement of the Public Utility Regulatory Power Act of 1978 (PURPA). PURPA has been instrumental in the growth of utility-scale solar markets in North Carolina, Utah and other states that do not have strong renewable energy mandates, however in many cases PURPA implementation has been weakened at the state level.

There is a potential for FERC to gut PURPA, and the National Association of Regulatory Utility Commissioners (NARUC) has already called for state-level exemptions to the policy. However PURPA may already be on the way out as a driver of utility-scale solar markets, such as in North Carolina which has moved to a solicitation-based system.

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The New Sunshine State! California Officially Becomes the First State in the U.S. To Require All New Homes to Be Powered by Solar Energy

2018-12-12T12:04:00.000-08:00

California has become the first state in the U.S. to mandate that all new homes built in the Golden State must be solar powered, after law makers passed a historic vote last Wednesday.

The initiative, which will come into action in 2020, has been passed unanimously by the California Building Standards Commission and will see all homes in the area equipped with more sustainable energy sources.

Members of the board declared the move as a 'historical undertaking' that should act as 'a beacon of light' for the rest of the country to follow.

Coming as a fulfillment of a 10-year initiative to make the state more reliant on clean renewable energy, the move will bring solar power into mainstream use in a way it has never been before.

The move will bring solar power into mainstream use in a way it has never been before, an unprecedented shift members of the board are calling 'historic'.

Upholding a May 9 vote by the California Energy Commission, the Building Standards Commission's seal of approval made the motion official on December 5.

However, despite the rapturous applause the bill's passing was met with, there are some opposed to the new provisions because of the additional costs homeowners will now incur.

The solar furnishings add an estimated $10,000 to the cost of building a single-family home – including more than $8,400 for installing panels and roughly $1,500 for energy efficiency.

The added expenses come at a time when affordable housing in California is already scarce - the state's house prices are already double the national average.

The provisions could cost homeowners an additional $10,000, at a time when the state is already facing an affordable housing crisis.

Additional worries were also raised on behalf of the victims of last month's devastating California wildfires, which destroyed more than 10,000 structures and left thousands of families homeless.

The concern was that those seeking to rebuild in the wake of the disaster may not be able to afford the additional up-front charges.

The committee however stated this wouldn't be an issue.

California was decimated by the most deadly wildfires in its history last month, with thousands of homes destroyed and 88 dead

California homeowners will have the option to either pay the costs up front or sign a 'power purchase agreement,' which pays for the electricity without buying the panels, according to an official with the California Energy Commission.

'The homeowners will be able to save money from the day they walk in the door,' said Kelly Knutsen, technology advancement director for the California Solar & Storage Association, to The Orange County Register.

Knutsen added: 'This is a historical policy. California is leading the country in clean energy, clean air and fighting climate change, all while saving consumers money.'

Officials also say the 30-year lifespan of the solar panels will offset the utility bills, helping families save up to $500 a year.

Kent Sasaki, a structural engineer and one of six commissioners voting for the new energy code, added: 'These provisions really are historic and will be a beacon of light for the rest of the country.

'(It's) the beginning of substantial improvement in how we produce energy and reduce the consumption of fossil fuels.'

Source

DC Gave Initial Approval to Weakened Clean Energy Legislation

2018-12-11T01:44:00.000-08:00

The DC Council gave preliminary approval to landmark clean energy legislation Tuesday that would make DC a leader in the fight against climate change.

Though it would be one of the strongest clean energy laws in the nation if passed, substantial changes were made late in the process, at least one of which significantly weakens the bill.

When Councilmember Mary Cheh introduced the bill in July, it included a provision requiring that DC’s electric utility, Pepco, buy renewable energy through long-term contracts. That would reduce DC’s greenhouse gas emissions by 710,000 tons of a year, or 8.1% of DC’s total emissions, according analysis of the bill from the DC Department of Energy and Environment.

But when Cheh’s Committee on Transportation and Environment and Councilmember Kenyan McDuffie’s Committee on Business and Economic Development (which has jurisdiction over utilities) approved the bill, the provision was eliminated.

Long-term contracts provide long-term revenue for renewable energy companies, allowing them to use that long-term revenue stream to borrow money to build new wind and solar farms to supply the clean energy those contracts require. That means more wind and solar farms providing electricity and less electricity from dirty sources like coal and gas.

Pepco doesn’t like long-term contracts for renewable energy, even running misleading ads on Facebook claiming that removing the measure would be good for the climate. Pepco is owned by the Chicago-based nuclear conglomerate Exelon, whose fleet of aging nuclear plants sells electricity that competes with renewable energy.

McDuffie told WAMU the long-term contracts for clean energy could raise costs for ratepayers who buy electricity. Exelon executives made similar claims when testifying before the DC Council about the Clean Energy DC bill.

States that have actually instituted long-term renewable energy contracts found the opposite is true – the contracts reduce exposure to volatility in energy markets and lower prices. Though long-term contracts (also called power purchase agreements) have not yet been tried in the Mid-Atlantic, in New England they’ve resulted in significant savings for electricity consumers.

A study from the New Hampshire Public Utility Commission found: “Long-term wind contract prices are known with certainty. While energy market costs could be cheaper in the future, they are much more likely to be higher than wind contract costs.”

In Massachusetts, state Attorney General Maura Healey, whose office advocates on behalf of electricity ratepayers, told CommonWealth magazine that long-term renewable energy contracts will save $682 million over 15 years.

DC is smaller than Massachusetts and New Hampshire, so it may not see as much savings from long-term renewable energy contracts as those states. But when DC signed a long-term agreement in 2015 for wind energy to meet a third of the DC government's electricity needs, it saved taxpayers $45 million over 20 years.

Councilmember Mary Cheh’s clean energy bill originally included long-term contracts to bring renewable energy to DC. Image by Chris Weiss used with permission.

The bill Cheh introduced over the summer would offer similar savings not just to the DC government, but to all Pepco customers in DC. The legislation given preliminary approval Tuesday excluded the long-term contracts provision. Environmental advocates are pushing to bring it back to life when the DC Council takes its final vote on the clean energy bill on December 18.

Source

Vietnam’s Wind Power Tariffs Attractive, but Grid Capacity a Major Concern

2018-12-10T01:25:00.000-08:00

Vietnam’s new feed-in tariffs are attracting great interest in wind power, but investors are concerned about grid connection and purchase agreements.

The new feed-in tariffs (FIT) are expected to be attractive to domestic and foreign investors, Tommaso Rovatti Studihard, South East Asia sales director for wind power developer Vestas Asia Pacific, told VnExpress International.

The government recently approved tariff revisions under Decision 39 on support mechanisms for the development of wind power.

The decision, effective from November 1 this year, raises the tariffs from 7.8 US cents per kWh to 8.5 US cents for onshore and 9.8 US cents for offshore generation respectively.

"Electricity demand will grow at an estimated 8 - 10 percent a year from now to 2030. This represents realistic opportunities for investors," Studihard said.

Conjecturing that the national plan envisages adding 1,000 MW of wind power by 2020 and 6,000 MW by 2030, he said the targets are achievable.

"Vestas is excited about the Vietnamese market, probably this is the most promising market in the Asian region with very good wind resources," he said.

Vestas has so far put three wind power projects into operation in Vietnam and plans to have another project come online by 2019 and "do a lot more in the future."

Studihard noted that over the next three to five years there are huge opportunities in Vietnam to have some gigawatts of wind power, but the bankability of the power purchase agreement (PPA) remains an issue with many investors, especially international investors, and banks finding it a little difficult to be comfortable with.

There are no clear termination and force majeure clauses in the PPA, which hinders the attraction of foreign investment, especially from banks and credit institutions, he explained.

"One more problem is Vietnam’s weak grid capacity, which would become a bottleneck for developing wind and other renewables. The grid needs to be upgraded to tap the great potential Vietnam has for offerable, sustainable and reliable wind power."

Bui Van Thinh, CEO of the Thuan Binh Wind Power JSC (TBW), said having gained success in developing the 24MW Phu Lac wind power project in the central province of Binh Thuan, TBW is completing procedures to start construction of a 30MW wind power project in neighboring Ninh Thuan Province.

But the weak grid capacity is the biggest challenge to expanding renewables like wind and solar power, he said.

The transmission line near Phu Lac site could handle 100MW, compatible with two 50MW wind power projects.

Overload capacity is imminent once a solar power project connects with the transmission line, Thinh noted, citing the concerning fact that there are eight solar power projects in the locality approved to connect with the grid.

"The government should instruct the state-run Electricity of Vietnam (EVN) to install transmission lines to cope with the renewable power projects across the country, especially those in Ninh Thuan and Binh Thuan."

Ninh Thuan and Binh Thuan are central provinces that have the greatest potential for renewable energy in the country.

While 2,000 MW of solar power are proposed to be generated in Ninh Thuan, the local transmission line can only handle a few hundred megawatts. Thus, 110 kV or 220 kV transmission lines need to be installed before pushing the power to the 500kV transmission line and sending it to Ho Chi Minh City or Danang City, Thinh added.

Nguyen Van Thanh, deputy head of the Ministry of Industry and Trade’s Electricity and Renewable Energy Authority, said demand for energy, wind power in particular, has been growing rapidly.

The need for ensuring energy security but also sustainable development has changed Vietnam from an energy seller to buyer, with the country’s dependence on imported energy sources also rising, he said.

Vietnam also faces a shortage of primary energy, with coal imports posing many risks related to supply, price and transportation, he noted.

"Given that, efficient exploitation of new and renewable sources would play a key role in the country’s socio-economic development, energy security and sustainable development.

"The country is working diligently to draft policies for the efficient and economical use of energy, diversification of energy sources and increasing application of new and eco-friendly technologies," Thanh added.

Under the revised Power Development Plan VII, power stations in the country are expected to generate a total of 60,000 MW by 2020. Of these, coal-fired stations would make the largest proportion of 42.7 percent, followed by hydropower (30.1 percent), gas-fired plants (14.9 percent) and renewable energy sources (9.9 percent).

By 2030, the total capacity would soar to 129,500 MW, with coal and gas-fired plants accounting for 42.6 percent and 14.7 percent respectively, similar to the figures set for 2020. But the ratio of renewable energy sources is set to double to 21 percent by then.

Source