Greentech Media: Headlines

Saul Griffith on Mobilizing America to Fight Climate Change and Win the Future

info@greentechmedia.com — Thu, 24 Dec 2020 06:16:55 +0000

It will take a massive war-time mobilization effort to effectively address the climate emergency, argues Saul Griffith — inventor, MacArthur genius fellow, CEO of Otherlab, and co-founder of Rewiring America, an organization dedicated to creating millions of American jobs while combating climate change.

So, what does a war-time mobilization effort look like? How much will it cost? Will we have to make sacrifices in the process? What does this shift mean for the future of utilities? And will politicians ever get on board? Griffith explains in this episode of Political Climate.

Plus, he weighs in on the massive year-end spending bill that passed in Congress this week and includes significant climate and clean energy measures. If signed into law, will this legislation put the U.S. on the right track to achieve deep decarbonization?

PG&E’s Latest Energy Storage Procurement Includes Fleet of Behind-the-Meter Batteries

info@greentechmedia.com — Thu, 24 Dec 2020 00:04:52 +0000

Pacific Gas & Electric is asking state regulators to approve another massive round of energy storage procurements, including its first large-scale contract for behind-the-meter batteries to serve grid needs.

The six projects announced Wednesday add up to 387 megawatts and 1,548 megawatt-hours of energy storage, including two utility-scale solar-storage systems in Southern California and three standalone battery installations across the state.

But the 27-megawatt/108-megawatt-hour behind-the-meter battery project represents a departure from PG&E’s current roster of utility-scale storage contracts. The 15-year agreement calls for Nexus Renewables Inc., a portfolio company of Ontario, Canada-based Nexus Energy, to deploy a fleet of batteries at multiple sites in PG&E service territory and provide them for grid services starting in August 2022.

UPDATE: Nexus sources its energy storage equipment through Fluence, a prominent energy storage systems integrator, and operates its systems through its energy trading and dispatching desk, PG&E spokesman Paul Doherty said in a Wednesday email.

Amcor, an Australian-based packaging materials manufacturer with several facilities in Northern California, will host the batteries a common industrial zone in PG&E’s service area, Doherty said. That will allow the batteries to provide backup and resiliency features for the host sites, as well as providing PG&E with resource adequacy value to bolster grid reliability.

This foray into behind-the-meter battery aggregation comes as part of PG&E’s efforts to meet the California Public Utilities Commission’s call for energy storage and other resources to help balance the state’s increasingly solar power-influenced grid.

Last year, the CPUC ordered the state’s utilities and community-choice aggregators to procure a total of 3.3 gigawatts of new resources by 2023 to help make up for the capacity to be lost from the pending closure of natural-gas-fired power plants along Southern California’s coast.

PG&E and fellow investor-owned utility Southern California Edison have been inking massive battery and solar-storage contracts to meet this 2019 mandate, as have the state’s community-choice aggregators (CCAs).

California’s rolling blackouts in August 2020 have driven regulators to seek out new resources, including batteries, that can be brought online quickly to store grid power for evening peaks in grid demand, when the state’s solar generation fades away but customer demand for electricity remains high.

PG&E’s first procurements in May contracted for 423 megawatts, or nearly 1.7 gigawatt-hours, of energy storage projects. Those projects are set to come online by August 2021, as are the seven solar-storage projects adding up to 770 megawatts, or more than 3 gigawatt-hours, of storage capacity that Southern California Edison contracted this spring.

PG&E’s latest contracts for lithium-ion battery systems with four hours of storage duration are scheduled to come online in 2022 and 2023, as the chart below shows:

California’s growing need for multipurpose behind-the-meter batteries

The 27 MW aggregation is the first large-scale behind-the-meter battery project for PG&E, but not for the state as a whole. Southern California Edison has contracted for 180 MW of behind-the-meter batteries under a 2014 plan to replace the capacity lost from the closure of the San Onofre nuclear power plant.

Behind-the-meter batteries can serve multiple functions, from emergency backup power and managing on-site power consumption to reduce utility bills or increase the value of solar, to providing system capacity to transmission operators or local grid relief for utilities. California is a focus of these efforts to “stack” behind-the-meter battery values and to create the new regulatory models to manage their interplay with existing energy markets and utility billing and tariff structures.

SCE recently contracted for a 5 MW behind-the-meter battery aggregation from Sunrun, set for 2023 delivery. The leading U.S. residential solar provider is also aggregating 20 MW of solar-storage systems for three Northern California CCAs for use as grid resources and to assist vulnerable customers with backup power during wildfire-prevention power outages.

California’s increasing wildfire threat is forcing utilities to shut off power to high fire risk areas, with PG&E customers facing the brunt of the outages. The threat of blackouts has also driven California customers to add batteries to their solar systems at a rapid pace, aided by a CPUC mandate to direct lucrative Self-Generation Incentive Program battery funds to customers deemed most vulnerable to losing power.

PG&E emerged this year from a 2019 bankruptcy caused by tens of billions of damages from wildfires caused by its grid, and it is working with the CPUC to find clean energy microgrid alternatives to the mobile diesel generators it’s deploying to back up communities during blackouts.

In the long term, California will need a massive amount of new energy storage to meet its goal of 100 percent carbon-free energy by 2045. Most of the new solar power coming online in the next few years will be matched with batteries to better integrate solar’s generation profile with grid needs. Eventually, the state could need tens of gigawatts of longer-duration storage to cover the gaps in generation capacity from the closure of its last fossil-fuel-fired power plants.

PG&E’s existing storage projects include a 300-megawatt/1,200-megawatt-hour project by Vistra Energy and a 182.5-megawatt/730-megawatt-hour project from Tesla being built near a natural-gas plant in the Monterey County community of Moss Landing.

(Why?)

What Renewable Energy and Energy Storage Did, and Didn’t, Get from Congress This Week

info@greentechmedia.com — Wed, 23 Dec 2020 15:39:10 +0000

Clean energy industry groups are cheering the last-minute inclusion of key tax incentive extensions and billions of dollars in research and development funds that found their way into the $2.4 trillion spending package and coronavirus relief bill passed by Congress on Monday night. (Whether the bill would be vetoed by President Donald Trump remained an open question as of Wednesday morning.)

But solar and wind power groups and energy storage advocates didn’t get all they’ve been asking for from Congress in the bill — and they’re seeking support for those additional policies from the incoming Biden-Harris administration and lawmakers from both parties.

What’s in the bill: Tax credits, renewables on public lands

There’s no doubt that solar and wind power will benefit from the Investment Tax Credit extensions included in the bill. For solar, that includes a two-year extension of the ITC at its current 26 percent through 2022 and at 22 percent through 2023, as well as an extended Jan. 1, 2026 deadline for completing projects that have claimed the credit based on when they started construction under “safe-harbor” provisions.

“That’s a pretty significant change,” Abigail Ross Hopper, CEO of the Solar Energy Industries Association, said in a Tuesday webinar. “As we think about this solar decade, this gets us a lot of the way there.”

Offshore wind also gained full 30 percent ITC credits for projects started by the end of 2025. That will bolster a nascent industry that’s seen delays in federal permitting that could have threatened the build-out of a massive new clean energy resource in the coming decade, according to Dan Shreve, Wood Mackenzie’s head of global wind research.

These “commonsense emergency relief measures” represent “a bipartisan vote of support for the renewable industry and the hundreds of thousands of Americans building our clean energy future,” Gregory Wetstone, CEO of the American Council on Renewable Energy, said in a statement.

Solar and wind groups were also cheered by language in the bill to promote the development of renewable energy on public lands — something that the incoming Biden-Harris administration may be able to accomplish via executive action at the Interior Department and DOE, rather than through acts of Congress.

This includes instructions to DOI’s Renewable Energy Coordination Office to streamline permitting processes on public lands, giving incoming Interior Secretary Deb Haaland the authority to reduce lease rates on solar and wind projects, and setting a target of 25 gigawatts of renewable energy on public lands by 2025.

“Now the hard stuff comes in: making sure the administration takes that legislation and enacts it in a way that’s positive and beneficial,” SEIA Chairman Bill Shuster said in Tuesday’s webinar.

Renewable and energy storage in the $35 billion energy R&D package

Solar, wind and energy storage groups also praised the portions of Energy Department research and development funding aimed at clean energy technologies, including $1.5 billion for solar power, $625 million for wind power and $1.08 billion for energy storage over the next five years.

Programs targeted for research range from improving efficiency and lowering manufacturing and materials costs, to pilot projects and software platforms to integrate these technologies into the broader power grid at the local or systemwide scale.

The R&D package also includes $2.2 billion over the next decade for DOE grid modernization research, grants for demonstration projects and tools for local and state grid regulators to accelerate the adoption of new technology and grid controls, and a hybrid microgrid program for isolated communities.

Some of this funding will help “reduce the ‘soft’ costs of solar and batteries to further expand access” to solar power, said Anne Hoskins, chief policy officer at leading U.S. residential solar installer Sunrun, in a statement.

The energy storage R&D programs set in place by the Better Energy Storage Technology Act also offer energy storage companies opportunities to expand their role in renewable-powered grids, said Jason Burwen, VP of policy for the Energy Storage Association.

Beyond $500 million for energy storage research and development, the bill directs $71 million per year, amounting to $355 million over five years, to competitive solicitations for energy storage demonstration projects open to states, utilities and private companies.

Those projects are meant to demonstrate “not only new technologies but [also] working out new applications and new business models,” Burwen said in a Tuesday interview. That’s critical for an energy storage sector that’s focused not just on reducing battery costs but also on “making sure their full value to the grid can be realized.”

“If you can’t interconnect effectively, if you can’t provide the flexibility you can provide because the grid’s not designed to see it, you can’t realize all the value you can offer.”

What’s missing: Clean energy standard, direct pay, storage ITC

The bill did contain “sense of Congress” language directing the Energy Department to prioritize R&D to provide 100 percent “clean, renewable, or zero-emission energy sources.” But it does not include Biden administration priorities such as a clean energy standard or carbon-pricing mechanism that could reduce electricity sector carbon emissions to zero by 2035.

These policies face an uphill battle in Congress. Republicans may retain their Senate majority depending on the results of the January runoff elections for Georgia’s two U.S. Senate seats, and Democrats will hold a narrow 10-seat margin in the House.

“We’re certainly engaged with many of the groups that are engaged in a carbon-pricing mechanism. But I’m not sure it’s the right time,” Erin Duncan, SEIA’s vice president of congressional affairs, said in Tuesday’s webinar.

The tax credit extensions in Monday’s bill also lack the “direct pay” or refundability options being sought by wind and solar developers worried that the economic downturn caused by the coronavirus pandemic will reduce the demand for tax equity investments from banks and financial institutions. While it’s possible that another opportunity for this could emerge in Congress next year, “when it comes to direct pay, a lot of Republicans don’t have an appetite for that,” SEIA’s Shuster said.

Nor does the bill offer the energy storage and solar industries another key plank in their federal policy agenda: creating an ITC for standalone energy storage systems. While that was part of SEIA’s 100-day agenda for the Biden administration, “it did not make the cut in this extenders package,” Duncan said.

ESA’s Burwen agreed that a standalone storage tax credit was a key goal for future legislation: “We’re going to keep pushing,” he said.

ESA and SEIA are also seeking clarity from the Biden administration over the still-uncertain tax credit status of batteries paired with solar power.

Under the terms of an IRS advice letter from 2015, storage costs can be counted as part of a solar installation’s costs subject to the ITC, if the batteries are charged at least 75 percent of the time by the solar panels, rather than from the grid, over the course of a year. But this understanding has never been followed up by formal IRS guidance that could clarify the uncertainties contained in the advice letter, Burwen pointed out.

As for tax credits for batteries being retroactively added to solar systems, a 2018 IRS advice letter indicates that residential solar PV owners can apply the ITC to batteries added later — but only if they’re charged completely from solar. Larger-scale solar projects lack any provision to apply the ITC to batteries added later.

Clear IRS guidance opening up ITC eligibility for batteries being added to existing solar installations of all sizes could be a boon for projects and solar-rich regions facing a disconnect between when solar power is produced and when the grid needs it most, Burwen said.

“The single biggest immediate step the Biden administration could take [would be] to formalize that IRS guidance [and] make it retroactive,” he said. “That alone could be a huge boost to storage.”

(Why?)