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May 3, 2022January 30, 2024

Offshore Wind Conference Highlights NY, NJ Transmission Plans

ATLANTIC CITY, N.J. — As the U.S. offshore wind industry prepares to put steel in the water, it is paying increasing attention to how it will deliver its power to load centers.

At the Business Network for Offshore Wind’s 2022 International Partnering Forum last week, much of the discussion focused on the challenges and opportunities of an offshore transmission grid and how New Jersey and New York are approaching the puzzle.

No to ‘Reactive’ Planning

The conference’s theme was “Keep, change, toss.”

“We’re going to talk about keeping policies or practices for mature markets that strengthen the industry and changing or tossing practices that weaken the industry,” explained Liz Burdock, CEO of the Business Network. One practice to toss, she said, is the “outdated grid and transmission planning processes.”

FERC Chairman Richard Glick and New Jersey Board of Public Utilities President Joseph Fiordaliso talked about transmission in a conversation moderated RTO Insider Editor Rich Heidorn Jr. | Business Network for Offshore Wind

“We must move away from an overwhelmingly reactive planning process towards an anticipatory grid and transmission investment model. What does that mean? We need to build an offshore shared grid. If you build it, they will come, and the benefits to ratepayers and more offshore wind will follow.”

FERC signaled its support for more proactive planning on April 21, when it approved a Notice of Proposed Rulemaking that would require transmission providers to conduct regional transmission planning on a 20-year forward-looking basis. (See FERC Issues 1st Proposal out of Transmission Proceeding.)

FERC Chairman Richard Glick, in a conversation at the conference with New Jersey Board of Public Utilities President Joseph Fiordaliso, said he hopes to follow that NOPR “soon” with a rulemaking to expedite processing interconnection queues. “We need to expedite it dramatically, or a lot of your projects will take years to get hooked up to the grid,” Glick said.

“The worst dream I have is … that we’re generating energy out in the ocean, and there’s no place to plug it in,” Fiordaliso said.

‘Balancing Multiple Workstreams’

While there was wide agreement on the need for a networked transmission “backbone” that minimizes shore landings, there were also warnings that long-term transmission plans not slow construction of projects that have already been awarded.

“I think we also need to take a very focused look at costs and timelines,” said Joshua Weinstein, vice president and head of offshore development for Invenergy. “A fully integrated, backbone-style grid is not necessarily directly coincident with meeting targets in the short term.”

Sam Eaton, executive vice president of offshore development in the Americas for RWE, said the current approach is “not sustainable.”

“It’s clear, there’s a lot of planning and thinking that has to go into what is the right solution. … But I think we also have to recognize [that] in the interim, we need to get the first projects in the water. We need to demonstrate we can do this while we’re figuring out in parallel what the longer-term sustainable solution is going to be.”

Doreen Harris, CEO of the New York State Energy Research and Development Authority (NYSERDA), said the state is attempting to balance multiple “workstreams”: implementing its climate law, delivering on five OSW projects under contract and the ports that will support them, and continuing to build the pipeline with a new solicitation this year. “None of these pieces will wait,” she said. “They all need to advance in parallel.”

Weinstein said New Jersey, which has committed to build 7.5 GW of OSW, and New York, which has a 9-GW target, are taking “fundamentally different approaches.” New York is mandating that wind developers include a “mesh-ready” design for a future offshore grid. (See NYPSC Mandates Meshed Offshore Tx Grids.) New Jersey is reviewing responses to a transmission development solicitation issued at its request by PJM. (See NJ Seeks Efficiency, Savings in OSW Transmission Process.)

“But I think that’s also good,” Weinstein said. “We need to look at the book ends; we need to understand the total challenge; the total problem. Different states, different regions of the bulk transmission system, have different problems.”

Interregional Backbone?

In a workshop, John Dalton, president of Power Advisory, touted the value of an interregional offshore grid, noting that Atlantic City’s average wind speed that day was 50% higher than the average for New Bedford, Mass.

“That’s [an indication of] the diversity that you can get when you start to interconnect the PJM system, the NYISO system and the New England system,” he said, predicting such a grid would allow lower operating reserve and capacity requirements.

The U.K., he noted, has five major interconnections with adjacent electricity markets, with more planned.

Dalton said planned transmission means fewer landfalls, “one of the most critical environmental pinch points that projects have when they’re being sited.”

“So when you can effectively reduce environmental pinch points, you can reduce the level of public opposition. … If this transmission infrastructure is in place, there’s going to be less risk that the offshore wind generation developer has to face. And that could result in benefits in terms of lower costs for the energy produced by these projects,” he said. “And then, obviously, once you have a network, it is going to potentially have the benefits of enhanced reliability performance and operability.”

But Dalton said he had no illusions about the challenges to building an interregional offshore grid. “I think that it’s probably easier to demonstrate the benefits [of such a grid] than to sort through the various commercial issues,” he said.

Laila El-Ashmawy, a project manager with NYSERDA’s OSW team, said New York officials have had some very preliminary conversations with ISO-NE and PJM about offshore interconnections. “We have the benefit of New York state [being] a one-state ISO, and that’s challenging enough. … Integrating in the region is something we all dream about. But I’d say [interregional connections are] part of that long-term planning, ongoing discussion process. As far as anything material, you have the mesh-ready [approach].” (See related story, New York Seeks to Protect Tx Options with Mesh-Ready OSW.)

In the near term, Dalton said he was encouraged by news that Massachusetts (5.6 GW) and Connecticut (2 GW) officials are considering collaboration on their transmission. “Unlike New York, which has such an ambitious offshore wind goal … Massachusetts has a more modest, residual offshore procurement target. So to really make this investment effective, it makes sense to increase the volume that you’re planning this transmission for,” he said. “So that’s [the driver for] Massachusetts [and] Connecticut, as well as conceivably Rhode Island, to work together.”

Another factor: “Building [onshore] transmission in New England on new rights of way is, I think, a nonstarter.”

New Jersey Transmission Procurement

The BPU’s 2019 award to Ørsted’s Ocean Wind project (1,100 MW) and its June 2021 awards to Ørsted (1,148 MW) and EDF/Shell’s Atlantic Shores (1,510 MW) makes those projects responsible for their own transmission.

To make sure that it can plug in its additional offshore wind farms, New Jersey contracted with PJM to use the State Agreement Approach (SAA) to solicit transmission proposals. (See FERC Approves PJM-NJ Transmission Agreement.)

PJM is reviewing 80 proposals from 13 transmission developers. It has broken up the proposals into four categories: onshore upgrades on existing facilities (option 1a); new onshore transmission connection facilities (option 1b); new offshore transmission connection facilities (option 2); and an offshore network (option 3).

PJM is reviewing 80 proposed transmission projects from 13 transmission developers to deliver New Jersey’s offshore wind farms. | PJM

The RTO said it is performing reliability studies for about 20 potential points of interconnection. The winners of the 2021 OSW projects could seek to buy into the SAA transmission if it provides a cheaper alternative than siting their own lines.

Some of the proposals include cost-containment pledges. Under the SAA, New Jersey would be obligated to fund all of the transmission itself.

Asked whether New Jersey would consider a transmission proposal that didn’t include a cost cap, Fiordaliso said “it depends on the proposal.”

“We are prudent in our approach. We just don’t throw mud up against the wall and hope something sticks. We have to be prudent in the approach; always keep in mind — and this is a direct instruction from [Gov. Phil Murphy] — the impact on the ratepayer.”

Clarke Bruno, CEO of Anbaric Development Partners, said he supports the approach behind FERC’s NOPR. “The notion of planning in a comprehensive way for two decades and more is, I think, critical to the development of an offshore grid,” he said.

But he said he was dismayed by FERC’s proposal to reinstate the federal right of first refusal (ROFR). (See ANALYSIS: FERC Giving up on Transmission Competition?)

“Candidly, I was disappointed in the treatment of competition,” he said. “The Murphy administration has demonstrated, I think, the benefits of an RTO working closely with the state to identify goals, to identify how to get there, and to ask the best of the private sector to come in, and design and price what can work for PJM and New Jersey. And I think that’s a proof point that the current approach is working.”

May 3, 2022February 6, 2024

NERC Hits SPP, SRP for $406K in Penalties

FERC on Friday approved a settlement between WECC and Arizona’s Salt River Project (SRP) for violations of NERC reliability standards carrying a $126,000 penalty (NP22-19), along with one between NERC itself and SPP with a penalty of $280,000 (NP22-23).

WECC also reached a settlement with the U.S. Bureau of Reclamation, also approved by FERC, that did not carry a monetary penalty (NP22-20).

NERC submitted the agreements to FERC on March 31, along with several settlements involving violations of NERC’s Critical Infrastructure Protection (CIP) standards (NP22-17, et al.); details about these settlements and the underlying violations were not disclosed, in keeping with FERC and NERC’s policy about such cases. FERC indicated on Friday that it would not review the settlements, leaving the penalties intact.

SRP Inherits Flawed Ratings System

WECC’s first settlement involved the Gila River Power Station, blocks 1 and 4 of which SRP acquired from Gila River Power and Sundevil Power in 2017 and 2018. WECC found several potential violations of reliability standard FAC-008-3 (Facility ratings) during a compliance audit in 2019.

Prior to the acquisition, the facility was operated by the Gila Bend Operating Co. (GBOC); when GBOC transferred operational responsibility to SRP, the utility adopted the former operator’s facility ratings methodology (FRM) as well. GBOC had contracted with a third party to complete its FRM and “did not have a method to evaluate their work,” according to WECC. SRP also failed to ensure the methodology was enough to ensure compliance after the acquisition.

During its audit, the regional entity discovered that the FRM did not meet several requirements of the standard, including the following:

The methodology didn’t specify that facility ratings respect the most limiting rating of the equipment comprising the facility.
GBOC did not list the facility rating for every generator step-up transformer in the facility ratings appendix, or state the conditions under which the ratings were meant to be used.
The FRM “did not identify clearly the points of interconnection … with [the] transmission operator.”

WECC determined that the violations “posed a serious and substantial risk” to bulk power system reliability. To mitigate the shortcomings, SRP promised to implement its own FRM to the Gila River station, enter all equipment ratings into the asset database and facility ratings spreadsheet, and verify the accuracy of the data in the asset management database against the equipment’s nameplate ratings. WECC verified that the mitigating activities had been completed on April 27, 2020.

SPP Glitch Disables Alarms

NERC’s settlement with SPP stemmed from a violation of IRO-002-2 (Reliability coordination — facilities). The RTO self-reported the violation to SERC Reliability on Dec. 22, 2017, in its capacity as a reliability coordinator for the Eastern Interconnection; NERC later assumed responsibility for the violation, having taken over from SERC as the compliance enforcement authority for SPP on July 1, 2018.

Requirement R4 of the standard requires that each RC “have detailed real-time monitoring capability of its [RC] area and sufficient monitoring capability … to ensure that potential or actual system operating limit or interconnection reliability operating limit violations are identified.” SPP’s operations engineering staff had discovered in May 2017 that some of the alarm flags in the RTO’s real-time contingency assessment (RTCA) system were disabled, specifically for “some of an individual registered entity’s 345-kV and 500-kV facilities.”

Upon investigation, SPP found that a computer program used to verify the RTCA database was automatically disabling those flags, going undetected despite the RTO’s “multiple validation steps” meant to prevent such a condition. Staff determined that 1% of the total lines monitored by SPP, and 8% of the total transformers, were affected by the error.

SPP corrected the alarm flags and then implemented a workaround in the emergency management system to ensure the affected facilities were properly monitored. It then contacted the software vendor to notify them about the problem and seek a patch. This was done the same day it discovered the flaw. The RTO had found that the issue began on Jan. 1, 2016, meaning that the condition persisted for more than 16 months.

SPP’s mitigation activities, submitted with its self-report to SERC, included the workaround that it created the day of discovery, along with updating its processes to run the validation process that found the error every time the relevant software is updated. It also verified manually that the appropriate monitoring was in place and installed the vendor’s patch for the underlying issue. SERC verified that the activities were complete on March 21, 2018.

Reclamation Admits to Ratings Issues

Finally, WECC settled with the Bureau of Reclamation over a violation of FAC-008-3; once again, the RE found during a compliance audit that the elements recorded for a facility in the bureau’s ratings database were not compliant with the standard.

According to the settlement, auditors discovered that the facility’s elements listed in the database “were described in megawatts or megavolt-amperes.” This was inconsistent with the FRM, which specified that the elements should be rated “based on amps or current capability,” and could have led to confusion when dealing with elements that used different units of measure. In addition, the ratings included mechanical components, which goes against both the FRM and FAC-008-3.

According to a D.C. Circuit Court of Appeals ruling, the bureau is not subject to monetary penalties as a federal entity. However, it did submit a mitigation plan to WECC, which the RE accepted in April 2021. The plan includes training regional engineers on performing the facility ratings evaluations and updating the ratings to match the FRM’s requirements, along with clarifying compliance activities related to FAC-008-3 in its compliance bulletin. Mitigation activities were still ongoing at the time of the settlement’s submission to FERC.

May 3, 2022January 26, 2024

Vermont City Ramps up Rental Weatherizations with Novel Ordinance

A first-of-its-kind weatherization ordinance for rental housing in effect in Burlington, Vt., since Jan. 1 is starting to ramp up enforcement for much needed efficiency measures.

The ordinance, which the City Council approved last year, will bring 750 rental properties into compliance with basic weatherization over the next five years, according to Christopher Burns, director of energy services at the Burlington Electric Department (BED), a municipally owned utility.

About 40 of the city’s most inefficient rental properties were targeted for compliance with the building code this year, Burns said Thursday during Efficiency Vermont’s Better Buildings by Design Conference.

Incentives for rental property owners to pay for weatherization measures have not worked over the years, according to Burns.

“Vermont Gas Systems for years was offering 50% off the cost of deep, really good weatherization to the same group, but there wasn’t the motivation to do it,” he said. “We frankly needed some muscle.”

That muscle comes in the form of penalties for noncompliance that are identical to those for other city building code requirements, such as smoke detectors. Property owners will receive a fine of $50 to $500/day for violating a provision of the code, which now applies to basic weatherization measures such as insulation and reduction of air leakage by windows and doors.

Burlington’s Department of Permitting and Inspections has already issued its first round of violations related to the weatherization ordinance, WCAX-TV reported last week.

Precedent

Enforcing weatherization of rental properties under a city housing code is unprecedented in the U.S., Jennifer Green, director of sustainability and workforce vitality at BED, told NetZero Insider. The approach, she said, builds on a previous time-of-sale weatherization ordinance that required efficiency upgrades when a building passed between owners. The ordinance was inconsistent because of sales patterns and did not “move the needle” as much as the city hoped, Green said.

Burlington’s net-zero-by-2030 goal, however, motivated city officials find a solution to what Burns calls the “split-incentive paradigm,” where rental property owners do not pay the energy bills for their buildings. Between 85 and 90% of renters in the city pay their natural gas and electric bills directly, he said.

“Utility practices are to encourage individual metering, because individual metering encourages conservation, but it also creates a split paradigm because now the owner doesn’t pay the bill,” Burns said.

Armed with solid natural gas usage data already in place from the time-of-sale ordinance and robust state and city weatherization program incentives, Burlington found a pathway under the housing code.

The ordinance applies to residential rental buildings that use more than 50,000 BTU/square foot/year for space heating through a phased approach. Buildings that use more than 90,000 had to demonstrate compliance at the start of this year. Additional buildings are phased in by usage each year through 2025.

Out-of-pocket expenses for property owners are capped at $2,500 per rental unit, excluding any weatherization program incentives. And if the cap is reached but a building is still not in compliance, owners can request a three-year extension, after which compliance is required no matter the cost.

Workforce Issues

Burlington uses its natural gas data to identify buildings that need to comply with the ordinance and then it notifies owners in advance of the compliance date. Owners are then responsible for enrolling in an existing weatherization program offered through the city or the state.

Despite the city’s desire to move quickly to make rental properties more efficient, Burns says Vermont has a worker shortage problem. There’s a six-month waiting list for Vermont Gas Systems’ weatherization program, so building owners need only demonstrate that they are on the waiting list to comply for now.

Getting through the entire process, including waiting for an initial audit and completing the weatherization work, could take “a couple of years,” Burns said.

May 3, 2022

CenterPoint Energy Now a ‘Pure Play Utility’

CenterPoint Energy (NYSE:CNP) executives celebrated their company’s status as a “pure play regulated utility” during their first-quarter earnings call Tuesday with financial analysts.

“We heard loud and clear that many of you wanted CenterPoint to exit the [gas] midstream industry,” CEO David Lesar said. “We did it in a way we believe was better and quicker than many of you ever expected.”

Late last year, CenterPoint and OGE Energy (NYSE:OGE) completed the $7.2 billion sale of their partnership in Enable Midstream Partners to Energy Transfer Partners (NYSE:ET). (See OGE, CenterPoint Complete Enable’s Disposal.)

CenterPoint sold all its common units within four months of the transaction at a 20% premium to Energy Transfer’s unit price when the deal was announced, Lesar said.

“Not a bad outcome for those shareholders who thought we would never get out of this investment, let alone receive approximately $1.3 billion of net after-tax proceeds from it,” he said. “We listen to our investors.”

The Houston-based utility in February also sold gas distribution businesses in Arkansas and Oklahoma for more than $1.6 billion. It has used $1.8 billion of the combined proceeds to reduce debt, with a goal of slicing parent-level debt to about 20% of the total by the end of the year.

Management expects full recovery of $1.1 billion in gas costs incurred during the 2021 winter storm through Texas securitization efforts. CenterPoint will also soon file in Indiana for the cost of retiring two coal plants. It expects a decision by the end of the year and, with approval, securitization bonds to be issued early next year.

The utility reported earnings of $518 million ($0.82/diluted share) for 2022’s first quarter, up from $334 million ($0.56/diluted share) for the same period a year ago. The non-GAAP earnings of 47 cents/share just missed the Zacks Consensus Estimate of 48 cents.

The company’s share price closed at $30.54 on Tuesday, a gain of 33 cents.

May 3, 2022

CAISO’s New Renewables Record Falls Hair Short of 100%

For a moment last Saturday, CAISO was able to serve nearly 100% of its native load with renewable energy, beating a record set just a month earlier.

The peak occurred at 2:50 p.m. on April 30, when the California grid operator served 99.87% of its momentary demand with renewables, breaking the previous record of 97.6% set on April 3, the ISO confirmed Tuesday after reviewing generation data. (See CAISO Sets 98% Renewables Record.)

In a tweet Tuesday, CAISO called the event “a significant milestone along the path to a carbon-free power grid.”

Preliminary data from the ISO indicated that output from renewables reached 18,629 MW during the peak, nearly matching demand. At the same time, gas-fired plants were generating 2,434 MW, nuclear 2,239 MW and large hydro 590 MW. Exports from the CAISO system hit about 4,400 MW during the interval.

The exports did not match total generation from those resources because a portion of the ISO’s natural gas generation consists of reliability-must-run units operating behind transmission constraints and combined heat and power units that cannot be curtailed.

Spring is typically a period of low demand in California, accompanied by relatively high output from solar, wind and hydro, often leading to energy surpluses.

CAISO’s installed renewable energy mix consists of about 57% solar, 30% wind, and smaller amounts of geothermal energy, small-hydro resources and biofuels. While emissions-free and technically renewable, large hydro resources are not included in the mix.

About 32% of California’s energy mix came from renewable power in 2020, the most recent year for which figures are available, according to the state Energy Commission.

May 3, 2022December 10, 2023

New Jersey Stakes Claims in OSW Supply Chain

ATLANTIC CITY, N.J. — New Jersey is staking its claims in the offshore wind supply chain, with a monopile factory preparing to start production and the announcement of the first tenant at its offshore Wind Port — both involving large European companies that have been in the industry for decades.

But building a thriving offshore wind industry in the U.S. will require many home-grown members of the supply chain, speakers told the International Offshore Wind Partnering Forum last week.

“If the offshore wind industry is going to survive and thrive, it needs a robust and sustainable and diverse supply chain in the U.S.,” said Amanda Schoen, U.S. policy specialist for Vestas, a Danish turbine manufacturer that has manufacturing facilities in Colorado. “This is where the market is, and there’s a desire to be where the market is. But you do need to grow the industry.”

That needs to happen soon, said Ross Gould, vice president of supply chain development for the Business Network for Offshore Wind, which organized the conference. He told a panel that the U.S. is not ready to meet President Biden’s goal of 30 GW of offshore wind by 2030.

“The U.S. doesn’t have sufficient manufacturing infrastructure,” he said. “Meeting the national offshore wind target would require over 2,000 turbines.” It also will require 11,000 kilometers of cable, five wind turbine installation vessels, 10 feeder barges, eight crew transfer vessels and four cable-laying vessels, Gould said, citing data from a report released in March by the National Renewable Energy Laboratory.

And the U.S. can’t rely on getting those elements from other, more mature offshore wind markets, he said, because the “global supply chain will be occupied on … other markets and does not have the capacity to supply all the projects that are needed to meet the 30-GW target.”

Building an Industry from Ground Up

New Jersey officials say they are on their way to developing a supply chain that can serve the state and others on the East Coast, and they say that their experience to date can provide a guide on how to develop it for the future.

Speaking on the final day of the conference, Gov. Phil Murphy announced that the New Jersey Economic Development Authority (NJEDA) had signed up the first tenant for the New Jersey Wind Port, which the state says is the first purpose-built wind facility on the East Coast. Ørsted Offshore North America signed a letter of intent to marshal its Ocean Wind 1 project, including staging, assembling and transporting components, at the port.

“There are many more opportunities to come, including ongoing negotiations between offshore developers and major component manufacturers to bring them to New Jersey,” Murphy told the conference. “This is, if you will, New Jersey’s ‘If you build it, they will come’ moment.”

Murphy wants offshore wind to provide 23% of the state’s energy by 2050, and to that end the state plans to award offshore projects totaling 7,500 MW. The New Jersey Board of Public Utilities (BPU) approved the 1,100-MW Ocean Wind 1 project, owned by Ørsted and PSEG, in 2019, and Ørsted’s 1,148-MW Ocean Wind 2 and the 1,510-MW Atlantic Shores project, a joint venture between EDF Renewables North America and Shell New Energies U.S., last June. (See NJ Awards Two Offshore Wind Projects.)

The BPU expects to award projects in three further solicitations, the first of which will be held early next year.

New Jersey officials envision the Wind Port project as a manufacturing and supply chain hub that will serve not only the state’s wind projects but others along the East Coast, noting it is within one day’s ship travel to half of the U.S.’s OSW lease areas. The state has already committed $500 million to the port, which is sited on the Delaware River in Lower Alloways Creek. (See NJ Ramps up Wind Sector Support.)

Expected to open in 2024, the Wind Port will include heavy-lift wharfs and component laydown areas. Subsequent phases are targeted to come online between 2024 and 2026. The project is expected to create up to 1,500 jobs and add $500 million annually to the state’s economy, Murphy said. The EDA says it has seen high demand for space in the port, noting it received 16 non-binding offers in October from companies looking to become tenants. (See NJ Wind Port Draws Offshore Heavy Hitters.)

The Wind Port announcement came as EEW American Offshore Structures said it is close to starting operations at its monopile factory at Paulsboro Marine Terminal, also on the Delaware River, into which the state invested $250 million.

CEO Lee Laurendeau told a conference panel that EEW expected to receive an imported monopile last weekend on which to conduct welding tests.

After that, “our plan is to start working on the Ocean Wind 1 monopiles in November of this year,” Laurendeau said of the factory, which is expected to make 100 monopiles a year.

Case Study

New Jersey’s success to date provided the conference a case study on how the wind sector can overcome the challenges to building a sustainable industry.

New Jersey officials said they had a clear vision early on.

“Right from the start, in 2018, 2019, we really dove in headfirst into offshore wind, conducting a number of feasibility analysis studies, listening sessions with developers and industry visits abroad to really understand how do we bring this industry to New Jersey,” said Julia Kortrey, a senior project officer at the EDA.

“Our theory of the case has really been getting these big first movers, [like] EEW’s monopile fabrication facilities — something that feels tangible and helps really anchor the ecosystem,” to come to New Jersey, said Kortrey. And the state believes that the Wind Port will be attractive to suppliers seeking to locate near the larger companies.

Speaking at the International Offshore Wind Partnering Forum in Atlantic City, Lee Laurendeau, CEO of EEW American Offshore Structure (left), and Julia Kortrey, senior project officer for NJEDA. | © RTO Insider LLC

State officials are now looking at “who are those sub-suppliers? Who are the next tier to further create that ecosystem?” she said.

Laurendeau said EEW looked at multiple states — and at whether a U.S.-based manufacturing operation was feasible — before deciding to build a factory in New Jersey. A key event was a visit in 2018 by Murphy to EEW’s office in Berlin to pitch to the company the idea of building a factory at Paulsboro.

“From a Tier 1 [large] supplier standpoint, the very biggest question you have to answer is, can we build a product cheaper than one coming from Europe,” he said, noting that it costs $1 million to transport a monopile from Europe to the U.S. “That’s, the first business case item that you have to address. And, in Europe, the ports are subsidized. They’re already up and running, they’ve already capitalized their factories, they’re efficient.” That presents an operational challenge and a learning curve to newly created U.S.-based suppliers who are trying to compete, he said.

New Jersey’s investment of $250 million in the project also was key to it moving forward, Laurendeau said. The decision also was made easier when Ørsted committed to building monopiles at the Paulsboro factory if it was built, he said. EEW has since gained orders from the other offshore wind projects, among them a commitment by Atlantic Shores to make 89 monopiles at the EEW factory out of the 111 monopiles needed for the project. (See New Jersey Shoots for Key East Coast Wind Role.)

With those major hurdles overcome, the company is now “in the process of developing our sub-tier supply chain” that EEW expects will support growth well beyond New Jersey, Laurendeau said.

“The local content gives us that jumpstart,” he said. “Our New Jersey projects get us up to being a fully operational, efficient factory. But our eyes are certainly beyond that. We [have had] every project developer in the last two days up in our conference room, so there’s a lot of interest in our factory. We’ve put in proposals for almost every one of the U.S. projects that are there. So, we’re going to service the entire U.S. market from New Jersey.”

Catching Europe

That kind of calculation is going on in companies across the board as they look to the future and try to work out what is the best way to get a piece of the growing U.S. market, said Schoen, whose company, Vestas, has agreed to build a nacelle manufacturing facility at the Wind Port.

“There’s a lot of interest right now, in growing a domestic supply chain. There’s also a lot of challenges,” she said.

“We are competing with an established marketplace in Europe. And that’s the big challenge. So, if you’re looking at like how we can support this? Well, we need to play catch up. We’re a decade, two decades behind the European marketplace right now. And so, if we want big factories and a huge supply chain, it requires investment.”

May 3, 2022February 9, 2024

FERC Tables PJM Rehearing Request of FTR Credit Requirement Proposal

FERC on Monday denied PJM’s rehearing request of the commission’s rejection of the RTO’s plan to modify its financial transmission rights credit requirement calculation, but it said it would address the RTO’s arguments in a future order (ER22-703-002, EL22-32-001).

PJM proposed to modify the FTR credit requirement by implementing an initial margin calculation from a historical simulation (HSIM) model using a 97% confidence interval. The commission first rejected the proposal Feb. 28, saying the RTO failed to support the plan because its independent auditors only validated the model at a 99% confidence interval. (See FERC Rejects PJM’s FTR Credit Requirement Proposal.)

FERC directed PJM to show within 60 days why its existing FTR credit requirement remains just and reasonable or explain what tariff changes will remedy the commission’s concerns.

PJM appealed FERC’s decision on March 31 by requesting a rehearing after stakeholders voted to endorse a motion for the RTO to refile the original proposal “accompanied by some new supporting rationale.” (See Stakeholders Encourage PJM to Defend FTR Filing.)

On April 22, the RTO asked for another 60 days to respond to the order to show cause to “allow PJM to complete further analyses, and conduct further engagement with PJM stakeholders, that will help PJM better determine the need for, and prepare and support any just and reasonable revisions to, PJM’s financial transmission rights credit requirement and fully address the concerns identified” by FERC.

The commission on Thursday gave PJM only another 30 days, setting a new deadline of May 31. In its one-page notice on Monday, the commission said the request for rehearing “will be addressed in a future order.”

May 3, 2022October 31, 2023

Conn. Governor Set to Sign Expansive Clean Transportation Bill

Connecticut Gov. Ned Lamont on Friday applauded state legislators for passing a bill with a broad set of measures for reducing emissions from vehicles, including adopting California’s medium- and heavy-duty vehicle (MHDV) emissions standards.

The California regulations and other initiatives in the bill are an “important step” and will help “get the state headed back in the right direction” on greenhouse gas emissions reductions, Lamont said in a statement, adding that he looks forward to signing the bill.

The bill (SB 4) passed the House of Representatives 95-52 on Friday following Senate approval earlier in the week.

As enacted, the bill authorizes the Department of Energy and Environmental Protection (DEEP) to adopt regulations in line with the California MHDV standards, but it does not require or set a time frame for adoption.

MHDVs are responsible for 25% of GHG emissions in the transportation sector, which is the largest source of emissions in the state at 37%, according to DEEP.

Buses

SB 4 would update transit bus mandates and create new electric school bus mandates.

The Connecticut Department of Transportation would no longer be allowed to purchase diesel-fueled transit buses after 2024. ConnDOT’s electric bus initiative already has a goal of converting 60% of the state’s 600-bus transit fleet five years ahead of an existing full-conversion mandate for 2035, and all buses would be electric by 2031.

In addition, all school buses in the state would have to be zero-emission vehicles (ZEV) by 2040, and an interim target would require all school buses serving environmental justice communities to be ZEVs by 2030. A separate interim mandate for 2035 would require all school buses to be either ZEVs or alternative fuel vehicles, which include buses powered all or in-part by liquefied or compressed natural gas, hydrogen, propane or biofuels.

As of the beginning of this year, Connecticut had two electric school buses in operation, according to data released by the World Resources Institute. DEEP, however, awarded Volkswagen settlement funds in December for the purchase of 43 electric school buses that serve seven environmental justice communities.

The bill would also direct DEEP to establish a program to provide matching funds for towns and bus operators to apply for competitive federal grants. Under the Infrastructure Investment and Jobs Act, $5 billion is available for clean school bus grants.

Additional Measures

SB 4 would set additional measures for equitable EV charger installations and clean vehicle purchase incentives.

By 2024, all rental property owners would have to approve qualified requests from renters for installation of chargers. The bill establishes guidelines for those installations, including use by multiple renters and liability insurance policies. Starting next year, the bill would require the installation of EV chargers at any newly constructed state buildings, commercial buildings and multi-unit dwellings.

In addition, DEEP would have to establish a Connecticut Hydrogen and Electric Automobile Purchase Rebate program. Up to $3 million annually would be available for the purchase of EVs, plug-in hybrids and fuel-cell electric vehicles. And the bill would update the existing EV rebate program by increasing rebate amounts and increasing the cap on the cost of vehicles that can qualify for rebates.

Clean Power Bills

Lamont has signaled that he will sign a bill (SB 10) he introduced in February that would establish a zero-carbon electric grid mandate for 2040. The House of Representatives passed the bill 113-35 on Thursday following unanimous approval by the Senate earlier in the week.

“By codifying our zero-carbon electric grid target into state law, we are providing a critical direction for state and local agencies, utility companies and other partners as we collectively plan and implement Connecticut’s energy policies over the coming years,” Lamont said.

Legislators also sent a bill (SB 176) to the governor last week that would double the caps for the state’s non-residential and subscription-based renewable energy system programs.

“I’m excited by the prospects of these programs, especially the increased solar installation capacity for non-residential installation and the benefits these changes will provide for low-income customers,” Sen. Norm Needleman, chair of the Senate Energy and Technology Committee, said in a statement.

SB 176 would also increase the total capacity for a non-residential solar array by removing restrictions on the amount of rooftop space that a project can use.

May 3, 2022

DOE Announces $3.1B to Build out US Battery Supply Chain

The Department of Energy on Monday announced new funding totaling $3.16 billion aimed at jumpstarting the buildout of a U.S. supply chain for lithium-ion batteries for electric vehicles and grid-scale storage.

DOE is dedicating the lion’s share — $3.1 billion — to support the development of new commercial-scale plants for battery material processing, with a particular focus on cathode materials such as lithium and graphite. Grants for retrofitting existing plants or for demonstration projects are also part of the package. Individual grants will range from $50 million to $100 million, according to the funding opportunity announcement.

An additional $60 million will go to fund recycling projects and “second-life” applications for EV batteries. Grants for recycling buildout will range from $6 million to $12 million, and for second-life demonstrations, from $4 million to $6 million.

The funding is the first installment of $7 billion in the Infrastructure Investment and Jobs Act (IIJA) dedicated to the battery supply chain. At present, U.S. battery manufacturers are largely dependent on China, which dominates global lithium and other key mineral processing and battery cell manufacturing.

To further encourage a closed-loop U.S. supply chain, the announcement states that “priority consideration” will be given to projects that “will not use battery material supplied by or originating from a foreign entity of concern,” an official designation tracked by the Commerce Department. Chinese companies account for about a third of all organizations on the list.

“Positioning the United States front and center in meeting the growing demand for advanced batteries is how we boost our competitiveness and electrify our transportation system,” Energy Secretary Jennifer Granholm said in a statement released by the DOE. This “investment in battery production will give our domestic supply chain the jolt it needs to become more secure and less reliant on other nations.”

Administration officials also framed the new funding as a way to address current market volatility caused by Russia’s invasion of Ukraine, as reported in E&E News.

During a Monday press call with reporters, Brian Deese, director of the White House Economic Council, said, “We’ve seen even in just recent days [Russian President Vladimir] Putin trying to use Russia’s energy supply as a weapon against other nations. This funding announcement will punch above its weight in not only accelerating the transition to a clean transportation future, but also in securing one of the most important supply chains in the U.S. economy.”

The DOE has set an ambitious schedule for the application process and award selection for the grants, with first letters of intent to apply due May 27, applications due July 1 and awards to be announced in October. Applicants will be expected to match the grants dollar for dollar, for a 50-50 cost share.

The funding announcement includes a range of potential safeguards to ensure the companies receiving the grants can deliver on their projects. Applicants must have offtake agreements or letters of commitment from the companies that will buy the processed minerals or components they produce. They must also supply information on the project’s potential output and purity of materials produced.

A domestic supply chain for raw materials is also encouraged, for example, sourcing minerals from recycled batteries, coal or hard rock mine tailings or refuse materials.

“Responsible and sustainable domestic sourcing of the critical materials used to make lithium-ion batteries — such as lithium, cobalt, nickel and graphite — will help avoid or mitigate supply chain disruptions and accelerate battery production in America to meet this demand and support the adoption of electric vehicles,” the DOE release said.

The Future of Mobility

A former governor of Michigan, Granholm returned to her home state on Monday, accompanied by local lawmakers, to promote the energy programs, such as the battery supply chain grants, made possible by the $1.2 trillion IIJA. Many of Michigan’s top automakers, such as General Motors and Ford, are in the process of converting their fleets to electric, with major market growth anticipated in the coming decade.

According to figures from the DOE, more than 2.5 million plug-in EVs have been sold in the U.S., including 800,000 since President Joe Biden took office.

“The future of mobility is electric — and [the new grants] could help to ensure Michigan remains on the forefront of innovation by shoring up our supply chains for advanced battery technologies necessary to deploy the next all-electric fleet,” said Sen. Gary Peters (D-Mich.).

According to the EPA, transportation accounts for 29% of U.S. greenhouse gas emissions, more than the electric power sector. Biden has set ambitious targets for EV adoption — 50% of all U.S. auto sales by 2030 — and the IIJA also contains $7.5 billion to help states install 500,000 EV chargers nationwide.

The funding announcement is the latest in a series of White House actions intended to lessen U.S. dependence on foreign sources for the critical minerals essential for battery storage and other clean technologies. On March 31, Biden invoked the Defense Production Act to accelerate “sustainable and responsible domestic mining … and value-added processing of strategic and critical materials for the production of large-capacity batteries for the automotive, e-mobility and stationary storage sectors.”

May 3, 2022December 7, 2023

ReliabilityFirst Considering Expansion of Grid Security Exercises

CLEVELAND, Ohio — ReliabilityFirst may expand the periodic preparedness exercises it conducts to include state and local authorities that would deal with the consequences of a grid catastrophe.

In remarks at RF’s quarterly meeting Thursday, CEO Tim Gallagher said he is considering developing a statewide group to focus on scenarios to deal with the “real vulnerabilities” if the grid were to fail, whether from a cyberattack, severe weather or other grid-threatening events.

As part of its mission, the agency conducts multiple “tabletop” grid catastrophe gaming exercises that include member companies as well as RF staff. Gallagher told the RF board of directors that he is considering involving state governments in future exercises because he sees a “potential lack of coordination.”

To test the hypothesis, Gallagher said he hopes to create an Ohio group that would “pull in communications providers, local governments and law enforcement.” Once developed, the scenario gaming process would be versatile enough to use in other states and by RF’s five counterpart regional entities across the nation, he said.

Representatives of both American Electric Power (NYSE: AEP) and FirstEnergy (NYSE: FE) at the meeting endorsed the idea.

In his opening remarks, George Hawkins, a NERC board member said it appeared that the pace of potential threats and responses to those threats seems to have accelerated since his arrival on the NERC board in 2015. Hawkins is a former regional EPA administrator and former CEO of the D.C. Water and Sewer Authority.

Hawkins pointed to three areas of increasing risk: 1) “internal changes” to the grid with a changing resource mix and generation retirements; 2) growth of “extreme” weather; and 3) cyberattack risks, particularly in light of the conflict between Russia and Ukraine.

Gallagher said he and Niki Schaefer, chief legal officer at RF, had been interviewing “selected trustees as part of our information gathering for updating the RF strategic plan.”

He said in recent years, RF has begun seeing a “drift” away from full compliance with NERC standards in some “facility operations.”

“That is a real risk. It’s a risk to safety; it’s a risk to reliable operations and planning; and it’s a risk to the proper administration of markets. Our entire footprint is market-dominated, so the [facility] ratings are extremely important in our footprint,” Gallagher said.

That drift has been reversed, he added. “We are nearing completion of our audits and the corrections with the collaboration of our industry partners across our footprint. And that’s a major risk taken off the table.”

“I can’t say too much about the impacts of the war that Russia started in Ukraine in an open session,” he added. “But I do want to share that the coordination and the sharing of information has been impressive.”

“We all continue to monitor progress and share [information],” he said, in reference to potential cyberattacks.

He revealed that RF auditors “were able to uncover multiple instances of a turnkey vendor system that left an open door into critical assets. That’s about as much as I can say. That door is now being closed, and I think that shows the power of the audits.”

“I know that no one likes to be audited; we were just audited by NERC,” he added, suggesting that outside audits should be looked at as “third-party risk analysis.”

“To my knowledge, there have not been any actual compromises,” he said. “But that does not mean that we should be comfortable. The future is unknown.

“Diligence is more required now and in the future than ever [before], and it’s not going to end. It’s not going to end when the actual physical conflict ends, which will hopefully be very soon but who knows, because I don’t know when the economic sanctions and all the other things will end,” he said about repercussions from the war.

“And there are a lot of things that are going on to retaliate in response to those [sanctions]. This is a marathon — I think we all know that now — not a sprint, and we need to be mindful,” he said of potential Russian cyber threats.

Annual Report

The RF 2021 annual report accompanying the agenda for the quarterly meeting noted an increase in noncompliance of NERC standards for Critical Infrastructure Protection (CIP) violations — including a jump in higher risk violations. NERC revised the CIP standards in 2016 in response to growing cyber threats.

The good news in the report was that most of the CIP violations in 2021 were self-reported rather than found in an RF audit.

“The percentage of noncompliance identified through self-reports and self-logs in 2021 was slightly higher than previous years, with entities self-reporting and self-logging 95% of noncompliance. This is a positive trend showing strong detective controls at entities and also relates to the increased numbers of self-logs (which are presumed to be minimal risk),” the report stated. “In other words, while the volume of violation intake remains high, the overwhelming majority are self-identified and many are presumed to be minimal risk.”

Marcus Noel, RF chief security officer, told the board that following the discovery in December of a vulnerability in open-source software Log4j affecting millions of applications and potentially allowing hackers to take control of a system, the RF team installed a patch and put firewall rules in place, including automatic detection rules.

He said the team also reviewed third-party software providers and cloud providers as well. More recently, in response to potential Russian threats, he said his group blocked some companies, especially those RF does not do business with.