The Infrastructure Investment and Jobs Act authorized billions of dollars to upgrade the nation’s roads, bridges, airports and railroads. It also included less-talked-about but enormous funding for transportation fuels, from propane to ethanol to electric drivetrains.
The result, says EPA’s top transportation administrator, is that the stage is set for a “golden age of just amazing technologies and policy choices” that he predicts will “transform transportation.”
Karl Simon, director of the agency’s Transportation and Climate Division, office of transportation and air quality, is optimistic that the competition will quickly lead to real progress, he said during the Congressional Renewable Energy and Energy Efficiency Policy Forum in D.C. on Monday.
Calling the legislation’s funding a “transformational set of investments,” Simon said the $5 billion allocated in the bill to implement “a clean school bus program,” for example, compares to a budget of $11 billion for the entire agency a year earlier.
The mission set out by Congress is the replacement of older buses, he said, “and the technologies can be hydrogen, biofuels, propane, natural gas and electric.”
Noting that the legislation speaks to “environmental justice” as well as air quality, Simon said the agency is “allocating funding in various portions that we think will help address different school districts. There are about 500,000 school buses in use at any one time [in] over 13,000 school districts.”
Noting that there is a “buy American” provision in the bill, Simon said “$5 billion is an awful lot of money,” but it will replace only a portion of the existing fleet.
“When the last federal dollar goes out, we are going to be thinking about designs to have a sustainable market so that the bus cost has come down. And those choices for electric buses, for example, which are very pricey at the moment, are not as hard a decision for school districts to think through.”
Electric drivetrains are expected to become less costly, and one reason is that the technology is going to be developed by automakers, said Genevieve Cullen, president of the Electric Drive Transportation Association.
“In 2010, there were two plug-in cars on the road: the Leaf and Volt. Now there are 70 models that you can buy at different price points. And there are a total, I think, of about 2.7 million cumulative plug-in vehicles.
“At the same time there is a growing investment in the [charging] infrastructure … 49,000 public stations, which translates into about 123,000 charging ports.”
Another panelist, Chris Bliley, senior vice president of regulatory affairs for Growth Energy, an ethanol trade group, noted that ethanol gasoline blends are expanding as gasoline prices have increased.
And Art Guzzetti, vice president of the American Public Transportation Association, said the level of funding for infrastructure is significant.
“There are enough funds to make a difference. We’re just not keeping up with … repair needs. If we make the right choices, we can make it a transportation transformational bill,” he said.
“There are provisions in it for low- and no-emissions buses. There is a discretionary grant program that is steered towards policy outcomes, such as access to opportunity, emissions reductions, favorable environmental outcomes; that’s going to give communities and regions the opportunity to make the choice for energy-efficient policies going forward.”
Simon said the significant funding, as well as the specificity regarding how it must be spent, is aiming to help each technology reach a point at which it can survive in a competitive market.
“What is it that you need to kind of get past the kind of the economic tipping point? It doesn’t need to be 70% of the market; it needs to be 20 or 30%,” he said.
Officials from the departments of Energy and Defense spoke at the Congressional Renewable Energy and Energy Efficiency Policy Forum at the Dirksen Senate Office Building in D.C. on Monday to express their concerns about the growing threats to the grid.
Andy Bochman, senior grid strategist for national and homeland security at the Idaho National Laboratory, acknowledged “the imperative for the United States to move as rapidly as possible from carbon-emitting fossil fuels.”
Adding that “one can’t help but imagine a grid with many more wind turbines and solar panels that are currently deployed,” he said additional renewables will not be enough.
“We’re going to need to add much more power to the grid in the near- and mid-term future than renewables alone can provide. There are also some serious grid stability issues to address like voltage support and other ancillary services, which become much more challenging with high penetration of variable generation sources,” he explained.
“We’ve been closing coal plants without fully accounting for the lost baseload generation they provide. Renewables are necessary and super helpful in reducing emissions, but with few exceptions, they’re not ready to play that role, at least not on their own. Gas plants do provide baseload, but they must also be [eventually] phased out.”
Bochman suggested the solution lies in the further development and installation of small modular nuclear reactors, one of which the Idaho lab has assisted in developing. The new plants would be built at the site of former coal plants in order to take advantage of existing transmission lines.
“It’s maybe a tough sell for some, but overall, the public’s attitude towards new nuclear energy is improving swiftly as climate concerns begin to eclipse fears of nuclear energy, and a recent Pew study confirms this.
“There are still plenty of well founded objections to overcome, but small modular reactors and other advanced nuclear designs do meaningfully address most of them,” Bochman argued, adding that the Idaho lab has developed new cybersecurity technology incorporated into the software control system of a small nuclear plant.
Military Microgrids
Joseph Bryan, DOD’s chief sustainability officer and senior adviser for climate, said that the Pentagon has been concerned about the reliability of the commercial power system as it affects the operations of its bases throughout the country.
“Our military installations … are in communities around the country, and they rely almost exclusively on the commercial electric grid for power. And what we all know in this room is that the commercial electric grid is at risk from a couple of different threats. One [is] climate-induced severe weather, from hurricanes to extreme heat, which we’re experiencing in real time [from] wildfires out west.
“We also have a risk from cyberattack. We know that critical infrastructure around the world and even in the United States — think about things like the Colonial Pipeline attack last year — that our adversaries are interested in targeting our critical infrastructure,” he said.
That has led DOD to embrace energy efficiency and build its own distributed generation “to take our facilities off the grid and relieve pressure on the commercial grid,” he added.
To do this, the department has embraced renewable generation, batteries and efficiency “to preserve the [commercial] grid and preserve our own mission by being more efficient and [using] distributed generation.”
“A solar storage [facility] … attached to critical missions can ensure that those functions stay up and running, even if you lose the commercial grid. So, the grid goes down, and you have an efficient operation that has battery backup and PV or other renewable energy assets that do not require logistic support or don’t require fuel deliveries to an installation in times of crisis; that can be important.”
Energy service companies and a data policy coalition on Monday urged New York regulators to reject or amend a petition from the state’s investor-owned utilities to strengthen cybersecurity requirements regarding customer data (Case Nos. 20-M-0082; 18-M-0376).
The joint utilities on May 4 petitioned the New York Public Service Commission to approve six updated and three new requirements in the current self-attestation (SA) of the commission-approved Data Security Agreement (DSA) and a process for regular SA review and potential updates.
The utilities should use a risk-based approach to evaluate cybersecurity concerns, distinguishing between the risk to utility IT systems and the risk of improper access to customer data, whereby they could classify the sensitivity of such data and align appropriate levels of protection, NRG Energy said.
“Instead, the JU Petition opts to overly burden energy service entities [ESEs] and customers by requiring cyber security and encryption methods normally reserved for highly sensitive data at the highest levels of government,” NRG said.
Because the New York State Energy Research and Development Authority (NYSERDA) is working to implement the Integrated Energy Data Resource (IEDR) platform and the commission is considering the utilities’ Data Access Implementation Plan (DAIP), which includes a Data Ready Certification process, the utilities requested that the PSC “move expeditiously” to address the petition no later than Sept. 15, the date of the commission’s regular monthly session.
The utilities’ petition is “misguided and administratively inefficient” and should rather address “the root of the matter,” which is utility liability for a data breach caused by a customer-authorized third party, said Mission:data, a Seattle-based policy advocacy coalition.
Until the commission conclusively removes such liability from the joint utilities, a policy choice that has been made by numerous other states, the PSC will face unending requests from the utilities to increase cybersecurity requirements, even if such requirements are unreasonable, costly, impractical or ineffective, Mission:data said.
“Ultimately… the petition is ‘security theat’ — the performance of precautionary gestures that lack underlying substance,” Mission:data said.
In its July 26 comments, D.C.-based software company Arcadia Power concurred with Mission:data and requested that the commission conclusively remove liability from the utilities for customer-permissioned third-party data breaches. It also urged the PSC to establish a right to due process for ESEs with respect to cybersecurity standards while also requiring ESE representation on a proposed governance committee.
In addition to the general request to adopt a risk-based approach to cybersecurity that includes the SA, Arcadia recommended the commission remove or modify the current SA requirement that all confidential customer utility information be stored in the U.S. or Canada only (Cybersecurity Protection 10).
“Such a blanket restriction is not informed by risk level and is also premised on a flawed understanding of zero trust architecture. There are better ways to address national security concerns related to data processing than implementing such an overly broad geographic restriction,” Arcadia said.
To the extent there is any actual, incremental risk associated with processing data outside of the U.S. and Canada, Arcadia suggested there are numerous mitigation measures under a risk-based framework that would offset such a perceived risk.
“At a minimum, ESEs should be allowed a waiver from these unduly burdensome geographic restrictions upon implementing risk-based mitigation measures that more fully address the data processing security risks at the core of that policy’s rationale,” Arcadia said.
All of the modifications and additions to the SA proposed by the utilities should be reviewed in a stakeholder collaborative prior to the commission rendering a decision, a process that would allow stakeholders to articulate concerns about implementation, said New Jersey-based energy services company Family Energy, which offers gas and electric products throughout New York state.
New York Attorney General Letitia James in March announced that her office was requiring Family Energy to reimburse customers more than $2.1 million for its “dishonest business practices.”
The Infrastructure Investment and Jobs Act (IIJA) provides $753 million to help hydropower dams improve their efficiency, safety and resilience, as well as providing production incentives for existing dams to add hydropower to their operation, according to a fact sheet from the National Hydropower Association (NHA).
But what it doesn’t do, said NHA CEO Malcolm Woolf, is address a more pressing issue in the industry: reform of the multiyear, massively expensive federal relicensing process that is driving some dams to stop producing power and give up their licenses.
Malcolm Woolf, NHA | EESI
“The number of voluntary license-surrenders has been increasing,” Woolf told a live and virtual audience at the Environmental and Energy Studies Institute (EESI) Congressional Renewable Energy and Energy Efficiency Policy Forum on Capitol Hill on Monday. “We had 41 facilities give [licenses] up in the 2010s. We’ve had another 17 in just the last two years … which becomes really dangerous when you realize that half the nonfederal fleet is up for relicensing by 2035.”
Woolf was one of eight energy industry officials speaking at the live event, which focused on the opportunities created by the IIJA, the challenges of the law’s implementation and the policy gaps that still need congressional action, including hydropower relicensing.
For Curt Rich, CEO of the North American Insulation Manufacturers Association, the law’s $225 million to help update and implement more energy-efficient building codes represents “an unheard-of level of investment.”
“The Department of Energy building code program kind of walks along at about $5 [million] to $10 million a year,” Rich said. With the increased funding, and “as you train the workforce to enforce updated codes and implement updated codes, it in turn is really going to catalyze energy-efficient construction and just support all of the other initiatives that are underway across building sectors to drive energy efficiency.”
Rich also sees IIJA money going to states for energy-efficiency incentives as a key driver for the industry, especially to motivate commercial or multifamily building owners to move ahead with upgrades.
“It’s really hard to get people to just act in their own interest,” he said. “The money for efficiency programs that will be flowing through residential, commercial and industrial buildings, principally through the states, that will provide decent incentives for building owners to act.”
Bill Parsons, ACP | EESI
Bill Parsons, vice president for federal and state affairs at the American Clean Power Association, spoke about the IIJA provisions giving FERC backstop siting authority to override state opposition to interstate transmission projects as a vital step forward.
Increasing renewables on the grid will make a major buildout of the transmission grid essential, Parsons said, but he also argued that intermittent renewables should not be automatically viewed as “unreliable.”
Nationally, renewables “were about 14% of the generation mix last year,” he said. But “at times, in certain areas, we have been 80%. You didn’t hear about it because there was no reliability issue.”
Parsons also raised concerns about the IIJA’s Made in America preference on projects receiving federal dollars: for example, funds for building out the electric vehicle and lithium supply chains. While a domestic energy storage supply chain is “critically important,” he said, it is “unrealistic” to require a 100% U.S. supply chain on projects receiving IIJA funds.
“We don’t hold many other industries to a standard of 100% sourcing domestically,” he said.
Pitching to the audience of congressional staffers at the event, Parsons additionally pointed to a crew-mandate bill passed in the House of Representatives earlier this month as part of the defense authorization bill, which would require crews on U.S. ships working on offshore wind or oil projects to be American citizens or permanent residents, or from the same country as the vessel’s flag.
“It’s literally going to freeze the first 19 offshore wind projects in [their] tracks,” he said. “We need to train people to crew [these ships], but we need to be realistic about time frames as it relates to mandates and how these vessels are crewed if we don’t want to freeze the offshore wind industry before it has a chance to begin.”
The Digital Energy Workforce
The IIJA provided $62 billion to the Department of Energy, which Kelly Speakes-Backman, principal deputy assistant secretary for the department’s Office of Energy Efficiency and Renewable Energy, said is “the biggest investment to the department since our founding. It stands up 60 entirely new programs, and it expands 12 existing ones.”
In the nine months since President Biden signed the bill into law, $13 billion in funding has been made available, and about half of the 60 new programs have issued requests for information, drawing thousands of pages of industry and public input, she said.
“That’s one thing you’ll see about the way we do our business these days: really making sure that it is locally placed information to draw from to build out our program,” Speakes-Backman said.
Joy Ditto, CEO of the American Public Power Association, also talked about the importance of community engagement in making sure the IIJA is implemented to benefit smaller communities. While the law’s many programs and funding announcements are a huge opportunity for the nation’s 2,000 publicly owned utilities, Ditto said, many of her members, especially smaller utilities, have challenges just applying for the money, either because of limited staff and expertise, or they are not sure if they will qualify for specific programs.
“A lot of our focus now is just enabling our members to interface with the federal government, giving them resources to access funds as they become available,” Ditto said.
The close connection between workforce development and ensuring the success of IIJA projects was another key theme at the forum. As of 2021, the U.S. energy workforce stood around 7.8 million, with 40% of that total employed in “net-zero-emissions-aligned” jobs, according to DOE’s recently released U.S. Energy and Employment Report.
But Jeannie Salo, North America vice president for government relations at Schneider Electric, was adamant that those workers and others coming into the energy sector need to be trained with digital jobs skills.
“We often talk about the digital economy,” Salo said. “There is no other economy; it’s just the digital economy, and digitization is at the core of everything we need to do to be more efficient, to transform our infrastructure.”
“The barriers are training that’s tied to real jobs and [the] lack of awareness of clean energy careers at all in secondary schools,” she said. Schneider is upskilling its workers at a “smart factory” in Kentucky, she said, which is helping the company attract and retain workers.
Jason Walsh — executive director of the BlueGreen Alliance, a coalition of labor unions and environmental groups — agreed, saying a well trained and credentialed workforce “is going to matter more than ever.”
“The climate crisis is so urgent, we’ve only got one shot to do this right,” Walsh said. “And so verifiable, credentialed skills for the workers that do that work are going to be absolutely fundamental because they’re not going to get another go.”
At the same time, Walsh said the clean energy transition will require investment and workforce development levels well beyond the IIJA.
“The clean energy, energy-efficiency economy is inherently more labor intensive than an economy based on fossil fuels and waste,” Walsh said. “Manufacturing and installing sources of our fuel rather than burning them — that creates jobs. In the building sector, energy efficiency turns the wasted energy into work, so that goes from no jobs to lots of jobs.”
Washington state lifted its remaining drought designations last week because of an unexpectedly cool and wet May and June.
The unseasonably cool weather has caused Cascade Range snowpack to last longer into the summer, which will support late-summer water needs, Jeff Marti, statewide drought coordinator at Washington’s Department of Ecology, said in a statement.
“Conditions have improved. All areas of the state, including the five watersheds specified in the drought declaration, have received significantly above-normal precipitation,” Marti said. “The outlook is much better than forecast back in May.”
The wet weather doubled the normal June rainfall figures for much of Eastern Washington. “Conditions have been anything but drought-like,” Marti said. “We’ve experienced one of the wettest, coldest springs in recent memory.”
In July 2021, Gov. Jay Inslee declared a drought emergency for 96% of the state, citing the severe effects of climate change. Last year’s declaration sped up processing for emergency drought permits and allowed temporary transfers of water rights. The cities of Seattle, Tacoma and Everett were not included in the drought emergency because they have significant amounts of stored water.
On May 26, the area of Washington from the Cascades to the west was removed from the drought designation. Most of Eastern Washington, except for four areas, was designated as a drought advisory area. A “drought advisory” means that rainfall is above the 75% mark but could potentially drop below.
In May, five watersheds in areas spread across parts of eight northeastern counties were still in “drought emergency” because they had not received enough rainfall to recover. This land covers about 9% of the state. The drought emergency area covered parts of Spokane, Lincoln, Grant, Adams, Whitman, Stevens, Okanogan and Pend Oreille counties.
The lifting of drought designations addresses those Eastern Washington areas.
The U.K.-based Space Energy Initiative has set its sights on commercializing space-based solar power (SBSP) by 2035 as a renewable baseload option for the global effort to reach net-zero-emissions energy.
SBSP as a concept is not new, but interest in the technology has been stymied by technological and financial limitations. David Homfray, technical lead for the SEI, says those factors are changing in ways that now make SBSP deployment more viable.
The UK-based Space Energy Initiative wants to deploy solar energy technology in space by 2035 that can capture light perpetually and transmit it to Earth. | Satellite Applications Catapult
“Space-based solar power is a massive challenge; it’s going to be similar to an Apollo mission,” he said during a July 12 webinar hosted by Satellite Applications Catapult, one of Innovate UK’s research and development centers.
The catapult is a founding member of SEI, which has grown to a 50-member organization that established working groups to develop SBSP over the next 12 years, said Homfray, who is also space energy lead at SEI. Members of the initiative include U.S.-based Teledyne Technologies and KBR.
“The Americans are extremely invested in this, and we’re working in China and Japan, and Australia and Europe are interested as well,” he said.
The approach SEI is focusing on would require launching a spacecraft that is larger but lighter than the International Space Station (357 feet) and has big mirrors affixed to it. Sunlight would reflect off the mirrors onto photovoltaic modules and be transformed into radio waves. A transmitter would then send those waves to grid-connected ground receivers that take up about the same amount of space as an average solar array.
Deployment of the technology in space means the satellites could capture light perpetually, unlike their land-based counterparts.
Here are three things Homfray says about SBSP: as an option for net-zero, why it’s viable now and what SEI’s development timeline looks like.
Why SBSP?
Reaching net-zero energy by 2050 presents a unique set of challenges, not the least of which is the pace at which change must occur.
“By 2050, we need to have replaced around 40 billion MWh, and with around 10,000 days to do it, that would be about 4 MWh a day,” Homfray said. Collecting solar in space, he added, would provide 13 times as much energy as is generated from solar technology on average today.
SBSP is not the only clean energy solution needed for the net-zero transition, but SEI’s members believe it can be an important part of it.
The initiative, therefore, aims to demonstrate that deploying solar in space as a baseload power solution will be affordable, reliable and scalable.
Why Now?
Traditionally, launching a spacecraft is very expensive, reaching $65,000/kg, according to Homfray. However, potential commercialization by companies like SpaceX and Blue Origin is going to bring per-launch costs down.
“If SpaceX develops their Starship, or similar companies develop fully reusable, heavy-launch vehicles, then we really are talking about being able to lift quite heavy mass” for each launch, he said.
Lowering launch costs will be critical for SBSP, which would require many launches to bring parts to space for construction.
“Space-based solar power should be more thought of as being a mobile phone producer than it is as large spacecraft,” Homfray said. “We’re going to build lots of modules, and we’re going to assemble them in space.”
Application of terrestrial-based solar technology to the SBSP concept also is helping the initiative lower its estimated project costs.
SEI expects the cost of building a SBSP facility to be less than a new nuclear facility.
Costs aside, SBSP will only reach its potential through deployment of a fleet of satellites, which Homfray said will require ongoing initiatives focused on making the space industry sustainable.
What’s the Timeline?
SEI has built a 12-year SBSP program that is divided into four phases.
The first phase is dedicated to de-risking the technology so “there are no fundamental technological challenges in our way,” Homfray said. In phase 2, the initiative will deploy demonstration projects with a goal of producing 6 MW of solar power from space.
SEI will work on commercializing SBSP in phases 3 and 4.
“In phase 3, we’ll put around about a 180-MW spacecraft up there … and phase 4 is where the technology is industrialized; it’s all about gigafactories and manufacturing throughput,” Homfray said.
If the plan succeeds, he added, SBSP can access a $5 trillion/year energy market and “inspire the next generation to take part in this net-zero race.”
MISO this week responded to blistering criticism from Illinois lawmakers, insisting that it and its members “fully understand the need for urgency when it comes to building new transmission and adding new generation to the electric grid.”
“It is important to remember that MISO since its inception has been by design and by rule both fuel agnostic and policy neutral,” the grid operator said in a statement to RTO Insider. “Our responsibility is to maintain a reliable electric grid and manage one of the world’s largest energy markets through collaboration with state officials and member utilities seeking to accomplish their energy goals and strategies. This includes supporting the clean energy goals of our states and member utilities.”
MISO pointed out that it has in total interconnected about 30 GW of wind generation and 2 GW of solar generation across its footprint. It said it has acted with resolve to shorten the time it takes for it to study, assign system upgrades and interconnect developers’ new generation through its interconnection queue.
Two Illinois lawmakers who sponsored the state’s Climate and Equitable Jobs Act held a press conference last week to criticize MISO over failing to bring renewable energy in its interconnection queue online to solve its current capacity deficiency. (See Illinois Leaders Blast MISO Inaction on Capacity Crisis.)
Also last week, the Illinois Commerce Commission (ICC) opened a docket directing Ameren Illinois to perform a cost-benefit analysis of remaining in MISO versus departing for PJM or another grid operator (22-0485). The ICC gave Ameren a year to produce the study and said it should cover between five and 10 years from mid-2024, focusing on “reliability, resource adequacy, resiliency, affordability, equity and the impact on the environment, and the general health, safety and welfare of the people of Illinois.”
Chair Carrie Zalewski said the ICC feels it “appropriate to explore whether membership in MISO continues to provide net benefits to Ameren Illinois’ electricity customers.”
MISO said it was “not invited to nor made aware” of the legislators’ press conference.
“We are always available to meet with public officials and provide independent facts and information to help them better understand our industry. This collaboration and information exchange has never been more vital, especially as we work together towards providing consumers with low-cost, uninterrupted power now and in the future,” the RTO said.
The grid operator disputed the legislators’ claim that 34 generation projects from the state wait in the queue. MISO said it’s in fact processing 95 generation interconnection requests totaling more than 15 GW for the state.
“MISO is and continues to be ‘on the job’ of ensuring reliability is maintained while managing through this unprecedented number of unique requests to connect new resources,” it said.
The RTO said that since 2015, it has connected about 2.1 GW worth of new wind and solar resources in Illinois. It said it has also approved another 4.4 GW of renewable energy and natural gas generation that is now just waiting on completion by developers. The grid operator insisted that its interconnection process “continues to be one of the most efficient in the electricity industry.”
MISO also said that $1.6 billion worth of projects from its recently approved $10.3 billion long-range transmission plan (LRTP) will be built in Illinois. (See MISO Board Approves $10B in Long-Range Tx Projects.) It added that an additional $445 million of new transmission approved through its annual MISO Transmission Expansion Plan cycles is set to come online by 2025.
“All this investment will help support Illinois’ state energy policy objectives,” the grid operator said.
Persistent triple-digit temperatures and extreme heat warnings across much of Texas forced ERCOT on Sunday to issue yet another operating condition notice (OCN) as it continues to flirt with the 80-GW threshold.
The Texas grid operator said the OCN, its lowest-level market communication, was necessary because of forecasted temperatures above 103 degrees Fahrenheit in its North Central and South Central weather zones. The seventh OCN issued this summer, the notice was effective Monday until Wednesday.
Extreme heat will still be an issue in Texas and Oklahoma this week. | National Weather Service
Average demand Monday peaked at 78.8 GW during the hour ending at 5 p.m. CT. Staff expect demand Tuesday to just exceed 79 GW.
ERCOT has already set 11 new highs for peak demand this summer, the latest coming Wednesday when load came within 12 MW of breaking the 80-GW barrier. Demand averaged 79.8 GW during the hour ending at 5 p.m. CT.
Demand’s average peak has been above 70 GW every day since June 30. Before this year, ERCOT’s record peak was 74.8 GW, set in August 2019.
The National Weather Service said “sizzling” temperatures will stick around in the South Central U.S. before cooling off into the high 90s. Austin is expecting highs above 100 F into next week.
SPP Cancels Resource Advisory
SPP canceled a resource advisory for Monday, saying its forecast indicated more favorable conditions than originally anticipated. The RTO said it expected lower regionwide power usage and improved system capacity conditions.
“This summer has really put us the to the test,” CEO Barbara Sugg told SPP’s Regional State Committee on Monday.
The RTO’s most recent conservative operations and resource advisories expired as scheduled Thursday night.
SPP set a new mark for peak demand last week at 53.2 GW on July 19. It was the sixth time since July 5 the RTO has recorded a new high. The record before this year was 51.04 GW, set last July.
SAN DIEGO — The effort to limit global warming to 1.5 degrees Celsius will require a nearly half-and-half energy mix of renewable electricity and “clean molecules” such as hydrogen, according to Yuri Freedman, senior director of business development at Southern California Gas.
Drawing on research by BloombergNEF, Freedman spoke last week on a “Transforming the Gas System with Hydrogen” panel at the National Association of Regulatory Utility Commissioners’ Summer Policy Summit. Notably, the panel lacked any skeptics about a big role for natural gas companies — or hydrogen — in the decarbonization of the U.S. energy system.
“Molecules are as critical” as electrons in getting to a zero-emissions world, Freedman said.
“Today, we consume 80% of our energy as molecules, so 80/20 is the makeup today,” he said. “One implication of that: Think about what needs to happen if the share of electricity is going to go from 20% to 50%” — an increase of 250%.
“But the molecules we’ll need tomorrow are different [from those used today], so you actually need to find a way to phase out the molecules that produce carbon emissions and introduce at scale those molecules by 2050 that are going to have no emissions,” Freedman said.
Compared with other potential substitutes for natural gas (such as biomethane), hydrogen has the greatest potential to be adopted at scale in the next few years and can do most of what natural gas does today, Freedman said, including being used to power fuel cell electric vehicles.
“When I hear the debate, ‘Should it be battery or fuel cell’ … well fuel cell [vehicles] are electric vehicles. In fact, they often can be assembled at the same factory as the battery electric vehicles,” Freedman said.
SoCalGas foresees hydrogen being used in three different sectors in Southern California.
The first is power generation, based on plans by the Los Angeles Department of Water and Power to convert a number of its generation stations to a blend of natural gas and green hydrogen, followed by a full conversion to hydrogen to meet California’s emissions targets.
The second is transportation, with Freedman noting that about 20,000 trucks haul goods between the ports of Long Beach and Los Angeles.
“These trucks go through neighborhoods which are often low-income neighborhoods, so [it’s] not just the greenhouse gas emissions, but the air quality impact is very heavy. And we can be a significant director of environmental and social justice with the replacement of these diesel trucks with fuel cells,” Freedman said.
The third sector is manufacturing. “Los Angeles happens to be the largest manufacturing area in the country. That’s not typically what L.A. is associated with, but that’s the reality,” he said.
‘Not an Aspiration’
Panelist Jeff Reed is chief scientist for renewable fuels and energy storage at the Advanced Power and Energy Program at University of California, Irvine. He also previously worked at SoCalGas parent company Sempra Energy.
“From 2010 until I left Sempra in 2018, I was focusing on the leading edge of what Yuri is talking about: How do you decarbonize a gas utility? And in the state of California, that’s not an aspiration; that’s statute; that’s law; we must do that. So it’s really increased our efforts in this area,” Reed said.
Reed’s work initially focused on replacing natural gas with biomethane, which he called a “very important resource for the leading edge of the decarbonization process.”
But the evolving science around producing hydrogen means that fuel can potentially be produced at the price and quantities needed to replace fossil fuels, he said.
Around $6/kg — or $40/MMBtu — electrolytic hydrogen produced from renewables (green) is still expensive compared with hydrogen produced by the steam methane reformation (blue), which requires the resulting carbon emissions to be captured in order to be considered emissions-free.
But technological advancements also mean that green hydrogen “really does have the potential to have a rather steep cost-reduction curve, similar to what we’ve seen with wind and solar energy.”
Reed thinks the U.S. Department of Energy’s “Earthshot” goal of achieving $1/kg green hydrogen is a “stretch, but not impossible.”
“Once you get to a certain cost point, you can envision using hydrogen or renewable methane, for everything we currently use natural gas for. If we’re using hydrogen, we can also add a substantial additional demand for mobility and transport, which isn’t currently served by the natural gas system,” Reed said.
He noted that California policy currently assumes electric air-source heat pumps are the most efficient way to heat buildings.
“If we get near these Earthshot goals, that’s actually not the case. You can provide heating in the same way we do with natural gas, and be very cost-competitive,” he said.
Question of Cost
New Jersey Board of Public Utilities Commissioner Upendra Chivukula said his state is excited to be part of an effort to win part of $8 billion in DOE funding to become a national hydrogen hub, in partnership with New York, Connecticut and Massachusetts. (See DOE Hydrogen HUB Funding Program Announced.)
“The [New Jersey] legislature and governor are excited about hydrogen, and, of course, utilities have reached out to the commission, and they already started blending hydrogen into natural gas,” Chivukula said. “But the question is the cost, I think. Who’s going to pay for the cost?
“We look at hydrogen as promising, but it is going to take some time. The costs have to come down, and some of the technological advancements have to take place,” he said. “So we are looking forward to more on hydrogen, because I don’t know whether we’ll be able to get 100% clean energy with electrification alone.”
“What would allow those costs to come down,” Massachusetts Department of Public Utilities Commissioner Robert Hayden, co-moderator of the discussion, asked panelists.
Reed responded that natural gas-derived hydrogen can already be produced fairly cheaply at less than $2/kg, but it requires pipelines for the transportation and sequestration of carbon emissions. Regarding green hydrogen, he reiterated his comparison to solar development, where a high “demonstrated learning rate” has significantly reduced costs in the past decade. “So what we need is production volumes and global expansion in the market,” he said.
For Freedman, cost reductions will come down to building pipelines dedicated to transporting hydrogen.
“The majority of that cost is not production; the vast majority comes from the fact that they have to put it in a truck and haul it in cylinders, and that’s not cheap. So a pipeline is an absolute must to that low cost of hydrogen,” Freedman said.
Speaking from the audience, North Carolina Utilities Commissioner Floyd McKissick Jr. asked about the impact of DOE’s hydrogen hubs once they become operational.
“You can view these as a very exciting opportunity for us to catch up and maybe surpass where we think Europe is,” Freedman said.
Freedman envisions hub developments playing out “region by region,” given that some will be producing hydrogen from natural gas, while others will rely on renewables or nuclear power to generate hydrogen from water. But he does foresee the hubs becoming clusters of decarbonized industrial activity to overcome the issue of supplying hydrogen to multiple sectors.
The panel’s other moderator, Georgia Public Service Commissioner Tricia Pridemore, asked whether the “hydrogen rainbow” — using colors to refer to how the gas is produced — is still relevant.
“Within the trade groups that I work with, we really think we should be talking about carbon intensity, as our objective to a large extent is just to reduce carbon content in the gas system,” Reed said.
MISO’s Board of Directors voted unanimously Monday to approve the 18-project, $10.3 billion first phase of its long-range transmission plan (LRTP).
MISO Director Todd Raba called the July 25 open session of the board “one of the most important meetings” of his tenure.
MISO Vice President of System Planning Aubrey Johnson called it a “distinct honor” to summarize the plan a final time before the board greenlit it.
He said the portfolio will help MISO members ensure they can achieve their clean energy goals, “accommodate the rapid portfolio shift that’s well underway” and shore up the system as more extreme weather lashes the footprint.
Most of the projects’ routes use existing rights of way from other lines. The grid operator estimates the lines will be in service between 2028 and 2030 and deliver at least $37 billion in benefits to ratepayers from 2030 to 2050. The first LRTP portfolio is considered a late insert to MISO’s 2021 Transmission Expansion Plan. (See MISO Puts Finishing Touches on $10B Tx Plan, Hunts New Projects.)
To shape the transmission plan, MISO held more than 200 public stakeholder meetings over two years, some of them standing room only, Johnson said.
The portfolio is premised on MISO’s estimate that 58 GW of primarily coal resources will retire in the footprint within two decades, while the RTO adds 90 GW in solar, wind and natural gas generation, bringing its total installed capacity to about 160 GW.
MISO said the lines will result in a minimum 2.2-to-1 benefit-to-cost ratio across all its Midwestern transmission planning zones. MISO didn’t analyze its South region’s transmission needs for the portfolio and won’t for at least a year.
More ‘Urgency’ Needed
Several stakeholders took advantage of an open comment period at the end of the meeting to urge MISO to get a jump on more future-looking system planning.
Clean Grid Alliance’s Natalie McIntire said the need for the lines has never been more evident than during this heatwave-laced summer, when MISO strained to manage increased demand.
“This is not the time to stop planning. … It is just the first step in much-needed investment in transmission capacity nationwide,” she said. “We have more work to do to fully achieve carbon reduction goals and build a more resilient grid to withstand increased weather-related challenges.”
“Not only does MISO need this, but our nation needs this as a model,” Sustainable FERC Project Attorney Lauren Azar told MISO directors.
Azar urged MISO not to waste any time in planning the second, third and fourth iterations of the portfolio.
Invenergy’s Arash Ghodsian asked that MISO consider high-voltage merchant transmission planning, including the Grain Belt Express, in future long-range modeling and analysis. (See Invenergy Announces Grain Belt Express Expansion.) He called for a “more comprehensive and realistic view of the future system.”
MISO’s Environmental Sector said the portfolio is “critical, but there is far more leadership and urgency needed from MISO.
“Much more remains to be done to shift away from fossil fuels and quickly meet clean energy goals. Note that none of the benefits [in the portfolio] is being provided to residents and businesses in MISO South, which includes Louisiana, Arkansas, Mississippi, and a portion of Texas. The South is left out in this set of projects, despite the region’s dire need for greater resilience, clean energy deployment, and access to low-cost power,” the group said in a statement released ahead of the vote.
Environmental Sector members said MISO has been “subject to pressure from utilities like Entergy in the South — and others in the North — that have succeeded in delaying progress on long-range transmission lines.”
They said the “status quo, fossil-fuel-heavy” MISO grid is costing consumers, noting that about 500 solar, wind and hybrid project proposals have withdrawn from the MISO queue in the last five years.
The Union of Concerned Scientists (UCS) said the portfolio is a “significant first step toward building the modern, resilient, and reliable electric transmission system necessary to decarbonize the energy sector.” The group estimated that the lines will enable enough renewable energy to power more than 12 million homes.
James Gignac, senior Midwest energy analyst at UCS, called the vote “exciting progress, and only the first of several portfolios of investment that we’ll need to keep up with the drive to decarbonize and meet the challenges of climate change.”
MISO estimates the portfolio will keep 400 million metric tons of carbon emissions out of the atmosphere between 2030 and 2050.
“We appreciate the spirit of collaboration and the hard work that MISO members and stakeholders have invested in these projects and look forward to continued discussion around future tranches,” MISO CEO John Bear said in a statement following the vote. “We also recognize the effort and strong support for LRTP from various regulators and policymakers in the states — including state utility commissions and governors.”
The new portfolio is already at the heart of one FERC complaint. Last week, an alliance of consumer groups jointly filed to challenge MISO’s practice of respecting state rights of first refusal (ROFR) laws in its regional transmission planning. The consumer alliance asked FERC to block MISO and other RTOs from applying “anticompetitive” state ROFR laws to their regional transmission planning, including the long-range portfolio. (See related story, Consumer Groups File FERC Complaint Against MISO.)
MISO estimates just $1 billion of its $10.3 billion LRTP portfolio will ultimately be open to competition. The grid operator said nearly $4 billion worth of the projects are considered upgrades to existing facilities, while another $5.5 billion worth of projects will be sited in states that have enacted ROFR legislation.
Tx to Bring Capacity Online, but Will it Solve Crisis?
The transmission approval also comes as MISO is facing heightened scrutiny from its Midwestern states over a capacity shortage in the entire MISO Midwest region, which some say is partly due to insufficient transmission to connect the 806 mostly renewable projects totaling 126.3 GW in its interconnection queue.
The Organization of MISO States is considering the Independent Market Monitor’s recommendation that MISO replace its vertical capacity demand curve with a sloped curve to incent new resources. (See MISO Warming to Patton’s Sloped Demand Curve.) In a July 18 OMS board meeting, Executive Director Marcus Hawkins said OMS members heard a “menu of options” on auction and energy market changes during closed-door meetings during MISO’s June Board Week in Indianapolis.
And the Illinois Commerce Commission (ICC) last week directed Ameren Illinois to perform a cost-benefit analysis of remaining in MISO versus departing for PJM or another grid operator (22-0485). Chair Carrie Zalewski said the ICC feels it “appropriate to explore whether membership in MISO continues to provide net benefits to Ameren Illinois’ electricity customers.”
Citizens Utility Board of Michigan Executive Director Amy Bandyk called it “good news that MISO is overcoming barriers that have blocked new transmission lines for years. A more connected grid benefits ratepayers by enabling lower-cost renewable energy to flow to where it is needed, improving the reliability of electric service.”
