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November 5, 2024

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Clean Energy Startups Earn Millions in California Energy Commission Grants

A company specializing in conductors that cut down on electricity line loss by as much as 40% was awarded a $3 million grant from the California Energy Commission last week.

The grant to TS Conductor Corp. was one of four that the commission approved on Wednesday as part of the Realizing Accelerated Manufacturing and Production for Clean Energy Technologies (RAMP) initiative.

The program is aimed at helping clean energy startups move from hand-built prototypes to the low-rate initial production stage, a step toward mass production. Companies at the initial production stage might be struggling to secure capital or figure out how their technology can fit into a manufacturing process, CEC staff said during the meeting.

TS Conductor will use the funds to expand manufacturing at its Huntington Beach factory, with a goal of producing up to 2,300 miles of covered smart conductors per year. The company’s conductors feature smart sensors that can provide information on power line conditions in real-time, while an insulated cover prevents lines from sparking and causing wildfires. The conductors have the potential to increase grid efficiency, lower ratepayer costs and improve safety.

The commission approved funding to three other companies on Wednesday as part of the RAMP initiative:

  • Liminal Insights, which has developed an ultrasound-based inspection system used during EV battery manufacturing, will receive $2.75 million. Liminal’s system is designed to rapidly detect problems during battery manufacturing to improve battery yield, quality and safety.
  • Skyven Technologies will receive $2.97 million. The company has developed steam-generating electric heat pumps that can be used in industrial applications, replacing natural gas boilers. The technology uses electric power to recycle industrial heat waste back into steam, using substantially less energy than electric boilers.
  • Next Energy Technologies, which makes energy-generating windows for commercial buildings, will receive $3 million. The windows convert infrared and ultraviolet light to electricity, while allowing visible light to pass through. Multi-level commercial buildings often don’t have enough roof space for solar panels to offset the buildings’ energy usage, the company noted.

The CEC has previously funded 14 clean energy startups through two rounds of the RAMP program. Those companies have since raised $480 million in additional funding and now employ almost 600 workers.

CEC Chair David Hochschild said the RAMP projects help promote clean energy, in-state manufacturing and ratepayer benefits. Some projects have been more successful than others, he said, “but on balance, we are winning.”

“This is the role we should be playing,” Hochschild said. “This is the role of government.”

Battery Manufacturing

The commission also approved an initial $2.5 million award to CALSTART to administer a $25 million grant program for EV battery manufacturing in California. CALSTART, a nonprofit national consortium focused on clean transportation, administers other California programs, including the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, or HVIP.

The CEC funds will allow CALSTART to get started on soliciting grant applications. Proposals will return to the CEC for approval of funding and environmental review. The money is coming from the California Budget Act of 2022.

The goal of the program is to increase in-state manufacturing of zero-emission vehicle batteries. Hochschild said he hopes some of the projects will be in Lithium Valley, an area of lithium extraction by the Salton Sea in Southern California. Co-location could lead to “very real process savings” in the manufacture of lithium batteries, he said.

Another CEC funding award on Wednesday was a $500,000 grant to GC Green Inc., a company that plans to install public EV chargers at the Tule River Eagle Feather Trading Post No. 1, about 60 miles north of Bakersfield.

The project includes two DC fast chargers, a Level 2 charger, and on-site solar with battery storage. The site is along State Route 190, an important rural corridor, proponents said.

The project aims to encourage EV adoption by the Tule River Indian Tribe and promote workforce development for the tribe. It’s also intended to demonstrate an EV charging model that other tribal communities can replicate.

“When you think about EV charging, you think about it as sort of a coastal elite phenomenon, and we have to make it for everybody,” Commissioner Patty Monahan said in supporting the grant.

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MISO Unveils New Seasonal Auction Timeline, Ratio

MISO has circulated a new timeline for its first seasonal auction after a FERC order to rework a capacity value ratio forced it to delay the auction last month.

The grid operator now plans to open its offer window at 8 a.m. ET Tuesday. It will accept offers until 6 p.m. Friday and then begin the 20-day planning resource auction on April 24.

MISO anticipates sharing clearing prices in a stakeholder workshop May 19, about a month after it usually posts auction results. The planning year begins June 1.

The auction was on hold as MISO recalculated its unforced capacity-to-intermediate seasonal accredited ratio that it uses to determine supply in the auction. The new ratio stands to lower some thermal resources’ accredited capacity values. (See FERC Order May Delay MISO’s 1st Seasonal Capacity Auction and Vistra, EPSA Protest MISO’s Show-cause Order.)

The RTO said it published the new ratio for review on March 30. Staff said they gave stakeholders two weeks to confirm revised seasonal-accredited capacity and zonal-resource credit values based on the reworked ratio.

MISO said that after it wraps the auction, it will initiate stakeholder dialogue in Resource Adequacy Subcommittee (RASC) meetings “to investigate opportunities for future improvement.” It said it will reserve the July RASC meeting to examine 2023/24 auction data and discuss trends. Later in the year, it said it will likely begin work on a process to “codify publishing, updating, and locking down” the ratio in future auctions.

The delayed auction means MISO’s 2023 joint resource adequacy survey with the Organization of MISO States will also have a later timeline than usual.

The OMS-MISO survey form is open to utilities through May 9. The organizations expect to publish their findings, normally posted at the end of spring, in late June or early July.

During an OMS board meeting Thursday, Executive Director Marcus Hawkins said the survey’s new seasonal aspect should give stakeholders “more granular” adequacy estimates.

This year’s survey will reflect MISO’s seasonal auction format and project capacity values across four seasons for the next four years; count future capacity according to the grid operator’s seasonal accreditation method; and use seasonal planning reserve margin requirements to compare against capacity values. The 2023 survey will also allow for one- to three-year lags beyond developers’ stated commercial operation dates when counting potential new resources in the generator interconnection queue. MISO said its queue data shows that future generation has historically come online up to three years — and sometimes beyond that — after proposed commercial operation dates.

Hawkins said it’s critical that utilities complete the survey so that stakeholders have the best snapshot of the footprint’s near-term resource adequacy landscape. The survey is MISO’s only annual footprint-wide adequacy survey.

Hawkins said it’s up to states to decide how to use survey results and said OMS strives to communicate with regulatory staffs before the survey’s reveal to manage expectations and ease the “drama” of unexpected results.

He said because the OMS-MISO survey is delayed, it will also postpone the kickoff of OMS’ annual distributed energy resources survey, which seeks to get an annual count of the RTO’s DERs.

Hawkins said the double survey delays are meant “to avoid survey fatigue and confusing emails about multiple surveys.”

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ERCOT Stakeholders Endorse Staff’s Bridge to PCM

ERCOT stakeholders agreed last week to endorse staff’s recommended changes to the operating reserve demand curve that will serve as a bridge to Texas regulators’ proposed performance credit mechanism (PCM).

Staff are proposing to add multistep floors within the same range of operating reserves. Their analysis has shown floors of 6,500 MW at $20/MWh and 7,000 MW at $10/MWh would have increased revenues to generators by about $500 million during the 2020 and 2022 pricing years.

ERCOT says that the ORDC increasing during substantial operating reserve surplus periods will improve pricing signals, help retain existing assets, add new dispatchable generation and reduce the frequency of reliability unit commitments — all objectives of the Public Utility Commission when it directed the grid operator to evaluate bridging options.

After exploring several other alternatives in recent weeks, the Technical Advisory Committee sided with the staff proposal during a special meeting April 10 by a 21-6 vote, with two abstentions. All six representatives of the Consumers segment voted against the endorsement, citing a preference for a dispatchable reliability reserve service that they said would create more reserves and lead to a bigger reserve margin.

TAC members were supportive of an initial staff recommendation to publish an indicative PCM but determined it didn’t meet the bridging option’s requirements. The PUC required alternatives that make only minimal system changes and be implemented within a year, align with the existing market framework and can be hedged by market participants through their energy positions.

Mark Dreyfus, who represents the city of Eastland and other commercial consumers, said the proposed floors will create a “significant” wealth transfer from consumers to generators. He called for more transparency and reporting from the generators on the increased revenues intended to stimulate generation construction.

“I think it is important that we get … some commitment that these funds won’t be used for the purposes that are laid out in the investment in existing generation and in new generation,” he said. “There’s no obligation on the part of the generators at the end, nor are they competing for these funds.”

Dreyfus found support from Randy Jones, a 17-year Calpine executive who spent two years on the previous ERCOT Board of Directors representing the Independent Generators segment. TAC Chair Clif Lange jokingly introduced Jones as “member emeritus.”

“I get nervous when we talk about mechanisms to absolutely push money from the demand side to the supply side, without real justification and without delving into what the potential unintended consequences are,” Jones said. “It seems to me that the policy shift that is occurring in Austin and at the commission is one that says, ‘Look, we’re tired of feeding money to renewable resources and allowing them to enjoy the benefits of the ORDC that dispatchable units actually earned.’

“Whatever change for a bridge mechanism we put in place should contain a proposal of not paying additional revenues to wind and solar and focusing on moving those revenues strictly to what it is you’re trying to encourage, which is dispatchable generation.

“I couldn’t agree more with Mark in the sense that we need to know … if this is actually going to serve the policy decisions that the commission has made. Maybe it’s time that we shift from being revenue neutral to being more targeted with these changes,” he added.

Staff will present their alternative and TAC leadership its minority position to the board’s Reliability and Markets Committee on Monday. The full board will take up the recommendation Tuesday. It is expected to eventually make a recommendation to the PUC.

Credit Group Adds Members

TAC members also confirmed two additional members to the committee’s newest stakeholder group, the Credit Finance Sub Group (CFSG).

National Grid Renewables Energy Marketing’s Jacqui Runholt and CPS Energy’s Jimmy Kuo will represent the Independent Power Marketer and Municipal segments, respectively.

The CFSG now has 13 members, and they will eventually vote on the group’s leadership. Austin Energy’s Brenden Sager and Reliant Energy’s Loretto Martin are running unopposed for the group’s chair and vice chair positions, respectively.

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Virginia SCC Approves 800 MW of Renewables for Dominion

The Virginia State Corporation Commission on Friday approved Dominion Energy’s (NYSE:D) 2022 Renewable Energy Portfolio Standard plan, which includes more than 800 MW of carbon-free electricity.

The utility has to file such a plan every year in compliance with the Virginia Clean Economy Act. The SCC approved Dominion’s $89.154 million revenue requirement for VCEA-related costs in the rate year of May 2023 through April 2024.

“This is another big step forward in delivering reliable, affordable and cleaner energy to our customers,” Dominion Energy Virginia President Ed Baine said in a statement. “These projects will bring jobs and economic opportunity to our communities, and they will deliver fuel savings for our customers. That’s a win-win for Virginia.”

The projects approved on Friday are expected to lead to $250 million in fuel savings for customers over their first decade of operation. They include nine solar facilities and one energy storage project, which total nearly 500 MW and will be owned by Dominion itself. Kings Creek Solar and Ivy Landfill Solar are being built on previously developed land, with the latter being the first solar plant Dominion has built on a former landfill.

The commission also approved power purchase agreements with 13 solar and energy storage projects, which total more than 300 MW and are owned by independent developers.

Construction of the projects is projected to support thousands of jobs and more than $920 million in economic benefits across Virginia. The projects will cost the average residential customer an extra 38 cents on their monthly bill, with construction of the new renewable projects expected to be complete by 2025.

The SCC directed Dominion to provide additional analysis with its next RPS plan due later this year, including an assessment of the impacts of the federal Inflation Reduction Act and modeling that shows Virginia both inside and outside the Regional Greenhouse Gas Initiative’s cap-and-trade system for power plants.

The commission sided with the utility and against its own hearing examiner’s report, which recommended the rejection of cost recovery for the Shands Storage project. The project will be the largest storage facility in Virginia at nearly 16 MW once completed, but the report found it would cost consumers $36.8 million without corresponding benefits, especially given the so-far light development of renewables in PJM, though Dominion argued that was changing.

“The extent to which Shands Storage can take advantage of any such market evolution would depend in part on both the actual market design changes (which cannot be known at this time) and timing,” the examiner said in their report filed in early March. “As Shands Storage degrades over time, each year this project is operational under PJM’s current market design seemingly means it will have less product to sell in PJM if and when a market redesign occurs.”

The SCC disagreed, noting that the VCEA includes targets for storage and that Dominion will benefit from starting to roll out the resource in Virginia.

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Maryland Legislature Ends Session with Big Wins for Clean Energy

Offshore wind isn’t the only clean energy technology that got a boost in the Maryland General Assembly this year.

In addition to the Promoting Offshore Wind Energy Resources (POWER) Act (S.B. 781), raising the state’s goal for offshore projects to 8.5 GW by 2031, the state legislature also approved bills aimed at growing markets for energy storage, community solar and zero-emission heavy-duty trucks. (See Md. Legislature Sends POWER Act to Governor’s Desk.)

All told, at least 12 clean energy and transportation bills were passed in the final days of the session and are now sitting on Gov. Wes Moore’s (D) desk. Moore has signaled strong support for the POWER Act but has yet to make statements on some of the other legislation.

House Bill 910, for example, would require the Maryland Public Service Commission to establish an energy storage program, with the goal of putting 750 MW of storage capacity online by 2027, 1,500 MW by 2030 and 3,000 MW by 2033.

Evan Vaughan, deputy director of renewable energy trade group MAREC Action, said the bill would help Maryland leverage the new 30% investment tax credit for standalone storage in the Inflation Reduction Act.

“You often need complementary state policies to work in tandem with most federal policies to really encourage a new market to take off,” Vaughan said in an interview with NetZero Insider. “That’s exactly what this legislation … will do. It’s a huge step forward.”

The Climate Solutions Now Act of 2022 (S.B. 528) commits the state to reducing its greenhouse gas emissions 60% by 2031 and to net zero by 2045, which means “there’s going to be a lot of clean energy capacity needed,” Vaughan said. “As you get to those really high grid penetrations of renewables in Maryland, it’s important to have a storage industry that’s there, that’s established, that’s ready to ensure the grid continues to operate reliably and affordably.”

However, according to the bill’s fiscal and policy note, “if a target cannot be met cost effectively, the target must be reduced to the maximum cost-effective amount for the relevant delivery year.”

Another key provision calls for the program to be implemented by July 1, 2025. The PSC only recently finalized rules for an energy storage pilot program that was established by the legislature in 2019.

Community Solar

H.B. 908, which would make the state’s community solar pilot program permanent, was another bill that was closely tracked by clean energy advocates. The seven-year pilot program was set to expire in 2024, said Rebecca Rehr, director of climate policy and justice for the Maryland League of Conservation Voters, “so, it was really important that the program was made permanent this year so that there wasn’t market disruption.”

Other key changes in the bill includes an increase to the amount of power from the projects required to go to low- and moderate-income (LMI) households from 30% to 40%, and a provision allowing customers subscribing to a community solar project to receive a single, consolidated bill. Under the pilot, subscribers have received two bills, one for the community solar project and one from their utility, which can be confusing for some customers, said Stephanie Johnson, executive director of the Chesapeake Solar and Storage Association.

In some cases, “subscribers thought that they owed much more money than they did,” Johnson said. “So, including the consolidated billing, it makes it easier for subscribers to see what they’re actually paying.”

Solar advocates also pushed hard for H.B. 692, which aims to resolve a bottleneck in local permitting of renewable energy projects and related transmission or distribution lines. While the PSC issues certificates of public convenience and necessity (CPCNs) for new energy projects, local jurisdictions must still issue certain “nondiscretionary” permits, like site plan or storm water permits.

Some counties were uncertain if they had the authority under a CPCN to issue these permits, causing delays, Vaughan said. “This bill just clarifies that they do in fact have that authority, and that the counties should grant those permits or deny those permits in a timely fashion … [to] prevent a potential inadvertent delay to project permitting.”

But the bill may only provide limited help in counties where local officials are generally opposed to solar, he said. “If a county was intentionally trying to slow-walk a permitting process based on an argument that they didn’t have the authority, that would be a narrow instance where this would help,” he said.

Other solar-friendly bills include:

  • S.B. 143, which would allow solar owners to accrue net metering credits indefinitely, rather than on a year-by-year basis, as currently required under state law. Community solar subscribers receiving virtual net metering credits would also be able to accrue them indefinitely, and the PSC would be required to establish a method for valuing these credits. Utilities would be required to pay customers the value of the accrued net metering credits within 15 days of an account being closed.
  • S.B. 469, which would establish a task force to study the state’s solar incentives and make recommendations for improving them to help the state meet its clean energy and emission-reduction goals. The task force would be required to deliver a report with its findings and recommendations to the General Assembly by Dec. 15.

Revving up Clean Transportation

Building on the Moore administration’s adoption of California’s Advanced Clean Cars II rule in March, the Clean Trucks Act (H.B. 230) would also move ahead with the adoption of California’s Advanced Clean Trucks regulation, which requires an increasing percentage of new medium- and heavy-duty trucks sold in the state to be zero-emission vehicles. (See Maryland to Adopt California’s Advanced Clean Cars II Rule.)

The Advanced Clean Cars II rule sets 2035 as the deadline for all new passenger cars, SUVs and light-duty pickups in the state to be ZEVs. With the adoption of the Clean Trucks targets in Maryland, 55% of all new class 2b and 3 vehicle sales, 40% of truck tractor sales and 75% of new class 4 through 8 truck sales would have to be zero-emission by 2035.

The Maryland Department of the Environment would be required to establish the program and also to “prepare a related needs assessment and deployment plan in consultation with specified state agencies and submit the plan to the General Assembly by Dec. 1, 2024,” according to a fiscal and policy note.

The bill would also increase funding for a state grant program to support medium- and heavy-duty truck sales from its current level of $1 million per year to $10 million per year.

An analysis from the Maryland League of Conservation Voters said the bill “is of particular importance because communities of color and low-wealth communities often face disproportionate burdens from traffic and transportation pollution.”

Rehr is hoping the needs assessment will not slow implementation of the law, but rather help to “identify priorities for implementation.”

“We’re hoping that what it does is actually show the need and show where we can invest in charging stations … and invest in [other] infrastructure needed to implement the bill,” she said.

Other clean transportation bills include:

  • H.B. 123, which would allow electric vehicles registered with the state to use HOV lanes regardless of how many passengers are in the vehicle. EV drivers would need a permit, which will cost no more than $20. The program would end Sept. 30, 2025.
  • H.B. 830, which would require all new residential construction with a garage, driveway or carport to include an EV charger or be wired for charger installation. The bill would also require that the Maryland Energy Administration conduct a study on the costs and other considerations for installing EV chargers in multifamily housing, for example, how many chargers would be needed per number of apartments in a building.
  • H.B. 834, which would allow electric utilities to install EV chargers at multifamily housing in underserved communities. The program would continue through Dec. 31, 2025, and utilities would have to ensure the chargers have an average annual uptime of 97%.
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ERCOT, Austin Energy Settle Uri Dispute

ERCOT said Wednesday that it will pay Austin Energy a $2.86 million to settle an alternative dispute resolution (ADR) stemming from the February 2021 winter storm.

The settlement covers 15 pricing intervals over Feb. 14-15, when ERCOT issued high-dispatch limit override (HDLO) instructions for Austin Energy’s Fayette Power Plant, reducing its power output during the storm’s first two days. At the time, the grid operator was desperately cutting load to help keep the system afloat after more than 50 GW of generation was knocked offline by the frigid weather from Winter Storm Uri.

The utility said in its ADR claim that Fayette’s power reduction kept it from fully serving Austin Energy’s native load and it incurred financial losses by purchasing power in the real-time market to cover contractual obligations.

Under ERCOT protocols, Austin Energy and other qualified scheduling entities (QSEs) are eligible for real-time HDLO payments if a resource’s power output is reduced by a manual dispatch override and it can show a “demonstrable” financial loss.

To be eligible, QSEs must have complied with the grid operator’s dispatch instructions to reduce power, received an economic dispatch base point equal to the resource’s HDLO during the 15-minute interval, and filed a timely dispute.

ERCOT found Austin Energy met its obligations. However, it denied compensation for eight other intervals on Feb. 14, saying the utility’s total generation and trade energy purchases were higher than its total load obligations during that period.

Austin Energy is an ERCOT non-opt-in entity (meaning it has not opted into the competitive retail market) that meets its load obligations through its own generation fleet, day-ahead market purchases and bilateral trades. The utility uses 600 MW of Fayette, which it jointly owns with the Lower Colorado River Authority.

ERCOT declined comment beyond its market notice.

The grid operator last year denied a settlement and billing dispute by Engie Energy Marketing after the company failed to meet a responsive reserve service obligation during the height of the winter storm. ERCOT said Engie was unable to demonstrate that ERCOT staff violated any obligations under the protocols.

Engie was seeking $48.7 million in damages.

Calpine: Time to Build Plants

Calpine said Tuesday that it is relaunching its Texas development program following the Public Utility Commission’s embrace of market-based incentives under its performance credit mechanism (PCM) design.

“We are encouraged that the PUC has laid the foundation to ensure Texas maintains a reliable power supply through market-based mechanisms, and we are excited to move forward with projects that will deliver on that mission,” Caleb Stephenson, Calpine’s executive vice president of commercial operations, said in a statement. “Our hope is that the legislature will respect the regulatory certainty offered by the PUC and avoid discriminatory programs or direct government procurement that would undermine competition in Texas.”

Stephenson said the PUC has “sent a clear signal that Texas is ready to support ambitious investments in a more reliable grid based on the principles of competition, not government mandates.”

Texas lawmakers have responded to the PCM proposal by coalescing around a bill that would build 10 GW of gas generation to sit on the sidelines, for use only to prevent load shed. That plan was originally estimated to cost $10 billion, but recently uncovered documents indicate it may cost as much as $18 billion. (See Texas Legislature Moves Bills Remaking the ERCOT Market.)

Calpine said it plans to complete a new 425-MW gas-fired plant before the summer of 2026 at its existing Freestone Energy Center north of its headquarters. It also said it will develop another 425-MW gas unit near Austin and a large-scale combined cycle gas plant to support co-located industrial load.

70-MW Unit to Stay Offline

BHER Power Resources on Tuesday notified ERCOT that it will indefinitely suspend operations at one of three gas-fired units near Abilene in West Texas.

The company said the unit suffered a forced outage last summer. Unit 3 went commercial in 1988 and has a summer seasonal rating of 70 MW.

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PJM: Elliott Nonperformance Penalties Total More Than $1.8B

VALLEY FORGE, Pa. — PJM has assessed more than $1.8 billion in performance penalties on generators that underperformed during the December 2022 winter storm, the RTO told the Market Implementation Committee on Wednesday.

The penalties are being levied against 187 members through PJM’s Capacity Performance (CP) system, which charges generators that underperform during performance assessment intervals (PAIs) and allocates those funds to generators that overperformed. (See PJM Weighs Options for Winter Storm Elliott Follow-up.)

A significant share of companies assessed with nonperformance charges during the storm, also known as Winter Storm Elliott, are also receiving bonuses, leaving a net total of $1,296,628,015 in penalties allocated among 116 members whose penalties outweigh their bonuses. PJM Director of Market Settlements Initiatives Lisa Morelli told the MIC that 260 members are set to receive bonuses, 182 of whom will be receiving payments that outweigh any penalties they’ve been assessed.

The net figures assume that every generator pays their penalties, but two companies have already filed for bankruptcy because of their inability to pay: Lincoln Power and Heritage Power Marketing. PJM is holding back 25% of monthly bonus payments to account for the possibility of nonpayment; any penalty payments made above that in a given month will be trued-up in the following payment. (See “Lincoln Power Declares Bankruptcy Because of Penalties,” Complaints to FERC over PJM Performance Penalties Multiply.)

FERC Approves Alternative Billing Schedule

About 70% of members facing nonperformance charges have elected to make their payments under the standard three-month billing schedule. The remaining companies — which account for the bulk of the gross penalties — have elected for a longer nine-month payment period approved by FERC last week.

In an April 7 order, the commission said that allowing the payments to be spread out could reduce the number of defaults as a result of the penalties. The approval, effective April 4, was conditioned on PJM making a compliance filing within 30 days aligning the proposed tariff revisions to reflect language in the filing stating that when extensions in the billing period are approved by PJM, the longer period will be applied to all resources — rather than being granted on a unit-specific basis (ER23-1038).

The filing allows those saddled with penalties stemming from Elliott to opt for a nine-month alternative, with the tradeoff of being subject to interest charges. For future PAIs, the proposal allows PJM to spread all payments over nine months, with no interest, when an emergency event occurs near the end of the delivery year, resulting in a shortened billing schedule. Under the status quo rules, nonperformance charges must be paid by the end of the relevant delivery year.

“Allowing members to pay their nonperformance charges over nine months instead of three should reduce the immediate risk of defaults, especially given that the tariff requires members to pay their monthly bills within one week and the first bill will be invoiced on April 7,” the commission said. “Although overperformers during Winter Storm Elliott may have their bonus payments delayed, we find reasonable PJM’s assessment that the transitional rule will maximize the total bonus pool by reducing the probability of defaults.”

In comments supporting the proposal, the PJM Power Providers said that extending the payment period nine months will allow generators that incur charges over the winter to make payments through the summer, allowing those that run more frequently in those months to earn revenue to put toward the penalties.

Invenergy protested that imposing interest on nonperformance charges for generators that choose the longer payment period for penalties stemming from Elliott is unreasonable and goes against the purpose of the filing: to reduce the risk of defaults and therefore maximize bonus payments.

The commission pointed to PJM’s argument that interest is necessary to balance the settled expectations of generators that based their operations on the tariff language in place at the time of the storm.

Commission OKs New Bankruptcy Provisions

FERC also approved two PJM filings modifying its provisions for market participant bankruptcies, providing flexibility to allow members to continue operating in the markets while in default and requiring members filing for bankruptcy to clarify the RTO’s rights in a first-day motion (ER23-1058, ER23-892).

PJM’s proposal to allow continued market participation for members in default is limited to a handful of circumstances: when that participation supports reliability; the member is a net market seller; the market participant has demonstrated the ability to post collateral; and when participation cannot be terminated without regulatory approval. (See “Deficiency Notice Interrupts Timeline on CP Penalty Payments,” PJM MRC/MC Briefs: March. 22, 2023.)

PJM argued that the proposal would allow it to maintain resource adequacy and generators with characteristics required by the grid, such as black start, while providing generators an opportunity to pay any obligations while earning revenue.

In an April 7 order approving the RTO’s filing, the commission agreed that it could “minimize relative risk to the PJM markets and provide PJM an opportunity to recover funds on behalf of the PJM membership.”

In response to comments on the filing, PJM committed to notifying the Risk Management Committee when these provisions are exercised and codifying that practice in the Credit Overview supplement. The RTO also stated it would work with the Independent Market Monitor and stakeholders to consider additional clarifications and changes.

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NJ to Update OSW Strategic Plan

New Jersey regulators agreed Wednesday to search for a consultant to help develop a new strategic plan to guide the state’s effort to install 11 GW of offshore wind by 2040.

The four members of the state’s Board of Public Utilities (BPU) voted unanimously to issue a “request for quotation” from consultants interested in compiling the plan, which would “guide New Jersey in achieving its offshore wind energy objectives and future solicitations,” said Jim Ferris, BPU’s deputy director of the Division of Clean Energy.

The move comes more than two years after the state released its first strategic plan, Navigating Our Future, which preceded the state’s aggressive pursuit of offshore wind capacity. The state has approved three projects totaling about 3.8 GW in two solicitations. And on March 4 the state opened a third solicitation that could add another 4 GW of capacity. (See NJ Opens Third OSW Solicitation Seeking 4 GW+)

In September, Gov. Phil Murphy increased the state’s OSW target capacity from 7.5 GW by 2035 to 11 GW by 2040.

Ferris said the aim of the new plan is not to duplicate past work but to “update [and] enhance based on the many changes in offshore wind since the first strategic plan was issued.”

The plan would likely be released before the third quarter of 2024, when the state expects to open a fourth solicitation, he said.

Learning Process

The board approved the consultant search after Commissioner Dianne Solomon, who has expressed concern about the costs of New Jersey’s renewable energy program, questioned whether the plan would “duplicate” work that has already been done.

Solomon said she was “glad to see that we’re looking at … different market forces and activity to give us some insight as to what these actual costs to ratepayers will actually be.

“In the past, we really have not had an opportunity to look at the all-in costs,” she said. “And this may give us maybe a little bit more insight, even though it’s not really a cost valuation.”

The board’s decision to create a second strategic plan comes as New Jersey’s first OSW project is moving ahead and the state is looking to position itself as a key player in providing services and supply chain support for wind projects along the East Coast. That includes developing the New Jersey Wind Port, with manufacturing and staging capacity designed to serve the industry. But the sector also has faced opposition from shore residents, tourism businesses and the commercial fishing sector, which all fear negative impacts from the OSW projects.

Most recently, a series of whale deaths along the New Jersey shore has raised concerns about the impact of the growing wind sector on marine life, sparking protests and a public hearing held by two of the state’s Republican congressmen, Reps. Jeff Van Drew and Christopher Smith, who have called for a halt to the projects. Federal marine authorities have said they see no connection between OSW developments and whale deaths.

BPU President Joseph L. Fiordaliso acknowledged that there had been “potholes,” unexpected developments in the process that turned into learning events, including the fact that some details should have been included in the early solicitations that were not. But he said the agency and state are trying to figure out how best to create a new industry.

In addition, he said, “a lot has changed from the first solicitation to where we are today.

“We just don’t throw mud up against the wall and hope something sticks,” Fiordaliso said. “That’s not how the approach goes. Your approach involves detailed research and information from wherever we can get it. And some of the price tags for this are certainly a little higher than was initially thought of.

“But we can’t stop. And I know, the next statement I’m going to make has been criticized by some. But can we afford not to do it? And the answer to that, in my opinion, is ‘no’,” he said.

Fiordaliso also dismissed claims that preliminary offshore studies conducted by OSW developers may have led to the whale death.

“As I’ve said many times before, there are very powerful forces out there that don’t want us to succeed,” he said. “And then we also say there is no evidence that what’s going on as far as offshore wind is concerned is in any way affecting the whales or the dolphins. There’s no scientific evidence to that.”

Reducing Barriers to Grid-scale Solar

In a separate proceeding, the board modified several requirements in the Competitive Solar Incentive (CSI) program, loosening some parts of the program to make it easier for developers to comply with rules.

The program — approved in June 2021 under the Successor Solar Incentive programs (SuSi) with the specifics being approved last December — created the state’s first grid supply program. It covers basic grid supply; grid supply projects located on the built environment; grid supply projects on contaminated sites and landfills; and net metered non-residential projects greater than 5 MW.

The board approved the removal of two elements that, according to the presentation by BPU research scientist Diane Watson, “create barriers to participation in the CSI program that considerably outweigh the intended benefit of ensuring project maturity.”

One removed element required a developer to “provide electrical and building permits, or documentation that applications for electrical and building permits have been submitted to the relevant municipality,” according to the order approved by the board. The board concluded that was detrimental because it “forces the registrants to make design and procurement decisions at too early a point in the development process.”

The board also removed a requirement that registrants “supply a contract between the primary installer or the third-party owner, and the bidder or customer of record, within 30 days after receiving an award.” The board found that the requirement “conflicts with the timelines of internal and external review for many of those entities,” according to the order.

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Committee Begins Effort to Measure OSW Impact on Fisheries

The U.S. Bureau of Ocean Energy Management on Thursday debuted its effort to better engage fisheries and their related stakeholders in the country’s offshore wind development process.

Liz Klein (National Academies of Science Engineering and Medicine) FI.jpgLiz Klein, director of the U.S. Bureau of Energy Management, speaks during Thursday’s webcast. | National Academies of Science, Engineering and Medicine

BOEM Director Liz Klein told the first meeting of the Standing Committee on Offshore Wind Energy and Fisheries that its input would be critical to informing the regulatory process, in which the agency plays a central role.

Potential impact on fisheries and ocean ecosystems has been one of the most contentious points in the drive to install thousands of towering wind turbines off the Atlantic, Gulf and Pacific coasts of the U.S.

Offshore wind is an emissions-free source of power, but its construction and operation will alter the marine environment to an unknown degree, as illustrated in a recent analysis by BOEM, the National Ocean and Atmospheric Administration and the Responsible Offshore Development Alliance. (See Report Flags Gaps in Scientific Knowledge of OSW Effects.)

That uncertainty has led to fear, resentment and litigation by the fishing industry and its advocates.

In an attempt to improve its engagement with the fishing community on offshore wind, BOEM earlier this year announced formation of the committee, established by the National Academies of Sciences, Engineering and Medicine.

Nearly 300 people signed up to watch the committee’s first meeting via webcast Thursday.

“We expect this committee to be an independent and credible forum to discuss pressing stakeholder concerns and relevant science knowledge,” Klein said.

The committee will seek a range of scientific expertise from a variety of disciplines, she said, as well as input from stakeholders such as tribal nations, commercial and recreational fisheries, non-governmental organizations, communities and the offshore wind industry.

“We know that fishing communities and other fisheries stakeholders are really critical to informing our offshore energy development process,” Klein said.

Offshore wind is an important part of the nation’s clean energy transition, she said, with President Biden having set a goal of 30 GW online by 2030.

“At the same time,” Klein said, “fishing is a crucial part of many of our nation’s coastal communities. It contributes to our food security, jobs and economic opportunity. And for many, it’s much more — it’s a way of life and national heritage.”

Fishing, she said, must not just co-exist with offshore wind but thrive alongside it.

Cumulative Impacts

The discourse during the meeting was polite but at times pointed.

Committee member Eric Kingma, executive director of the Hawaii Longline Association, asked whether BOEM would be seeking advice from the committee on individual OSW projects or be seeking more broad-stroke insight.

Klein said BOEM is seeking broad insight across multiple projects in a given region because “the goal is always to get to some level of consistency in how you’re treating projects.”

Committee Member Steve Joner, a fisheries consultant to the Makah Tribe in Washington, touched on a different aspect of the larger picture, saying: “One question that we really haven’t had answered from BOEM yet is the cumulative impact of all the potential wind area sites on the West Coast. What happens in California can and likely will impact fisheries all the way up into northern Washington and into Canada. I’m hopeful that BOEM will be open to our recommendations on [ecosystem impacts] and will address this very critical question.”

Klein said, “I think that’s certainly something that’s top-of-mind for us when we think about the potential leasing that might take place on the West Coast.”

Committee Chair Jim Sanchirico said the cumulative impact, which could be quite different between the West Coast and East Coast, would be a great discussion topic for the committee.

Committee member Daniel Doolittle, principal environmental scientist with the geo-data firm Fugro, asked if BOEM’s approach in the New York Bight — a single programmatic review of the several leases in the area — is a result of the agency listening to critical input from stakeholders and evolving the rule making.

Karen Baker, chief of BOEM’s Office of Renewable Energy Programs, said it was.

“New York Bight has been a pilot that we’re moving forward with in terms of looking at that whole lease area and looking at it collectively first,” she said.

“We do believe that’s more the wave of the future,” Klein said, though it may turn out that individual lease areas will require specific environmental impact statements, depending on what the collective review shows.

Regional review of impacts has its own challenges, but it’s probably more productive than single-project review, she said.

“I think we’re already learning lessons from New York Bight [that] we’re going to apply elsewhere.”

Committee member Dave Wallace, a fisheries consultant who represents members of the shell fishing industry, was skeptical about assumptions being made around the erection of up to 2,500 turbine towers on the Outer Continental Shelf from southern New England to the Mid-Atlantic states.

He specifically cited wind wake from turbine blades that might stretch nearly 900 feet above the water’s surface, with unknown effects on the water below.

“They are all going to be much bigger than anything that has ever been built in — the world? What are you going to do when all of the sudden some of the assumptions you have made end up not being true, and they’re going to have a much larger negative impact than originally planned?”

BOEM Chief Environmental Officer William Brown replied, “We’re very interested in the potential effects on ocean circulation, but we don’t know; we don’t have good information — we BOEM or we the world really — on what those impacts are. That’s why we’ve asked the Academy to help us answer that question.”

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US Aviation Industry Sees Synthetic Fuel as Crucial to Net Zero

U.S. commercial aviation is charting an ambitious flight plan to net-zero emissions by the year 2050 using synthetic liquid fuels rather than batteries or fuel cells envisioned for trucking and consumer automobiles.

“Those [electric] technologies do not work across the entire space of what we know as aviation,” said Steve Csonka, executive director of the Commercial Aviation Alternative Fuels Initiative (CAAFI), an industry effort that began in 2006.

Appearing Thursday in a webinar presented by the Washington-based Environmental and Energy Study Institute, Csonka said electrification may be fine for “some very modestly sized vehicles.”

“Electrification, however, does not offer the energy density per weight compared to synthetic liquid aviation fuels already available in limited volumes but with the potential to ramp up production in the coming years,” he said.

Steve Csonka (EESI) Content.jpgSteve Csonka, CAAFI | EESI

Synthetic aviation fuels (SAFs) are already available and offer an 80% reduction in emissions compared to jet fuels produced from petroleum, he said. The industry’s long-term goals are now achievable, he said, given the federal “grand challenge” targeting the production of 3 billion gallons annually by 2030 and ongoing research by several federal agencies working with the industry.

“We have offtake agreements [to purchase SAF] for between five and 15 years from the airlines … before any concrete is put in the ground. This is a fundamental, unique thing that the aviation enterprise is offering to potential producers to have that level of offtake commitment,” Csonka said.

“Aviation understands how some of the other technologies that spin around this space like power, liquids, biomass, energy, carbon capture and sequestration, [and] direct air capture and sequestration sort of fit into the rubric of the things that aviation is interested in.”

Csonka said that original equipment manufacturers, including the Department of Defense, are continuing to help fund fundamental research and development. The Pentagon funded initial research nearly 20 years ago.

“We’re talking about being able to continue to make aviation turbine fuel [jet fuel]. Why is that important? Because it allows us to have a drop-in approach with no changes required to infrastructure equipment.

“I don’t have to rebuild every airport in the world to bring in a new type of fuel. I don’t have to replace every airplane in the world. … I can get my carbon reduction by using a drop in fuel that has a lower greenhouse gas impact. We also want to do this sustainably.

“How do we do that? Instead of pulling hydrocarbon molecules out of the ground in the form of petroleum and then refining those to fuel products, we’re reaching into our own biosphere and picking up hydrocarbon molecules from things that nature hands us or using recycled components from the things that we do as a natural course,” he said.

Those sources include municipal solid waste, forestry residues, agricultural waste, food processing waste and cellulosic crops.