Dozens of Montana organizations are demanding that NorthWestern Energy decarbonize by 2035, years ahead of its midcentury target for net-zero emissions.
More than 30 groups, including environmental nonprofits, public consumer advocates, health care professionals, consultants and a Montana State University professor, sent a letter Thursday to NorthWestern Board Chair Dana Dykhouse. The organizations demanded the utility decarbonize its fleet no later than 2035, saying the plan should be based on science and contain benchmarks.
The letter also said NorthWestern, which serves 753,600 customers across Montana, South Dakota and Nebraska in SPP and MISO, should model multiple scenarios that “eliminate the utility’s dependence on fossil fuels.”
“We urge you, as a fiduciary of NorthWestern Energy, to exercise your responsibility in a manner that guarantees the company’s long-term financial well-being,” the letter urged Dykhouse. “That can only be accomplished by requiring the company to adopt a meaningful climate strategy that will make it more resilient and prepared for the clean energy future.”
The same day, NorthWestern set a goal of achieving net-zero carbon emissions by 2050. Montana’s largest utility called it an “achievable target” in a press release.
“NorthWestern Energy begins this transition to an even cleaner energy future building on the considerable progress we have already made,” Energy CEO Brian Bird said. “We have the tremendous honor to be the stewards of this critical energy infrastructure that delivers safe and reliable energy to our region. Now is the time to raise the bar and start the transition to net zero by 2050.”
Northwestern said that last year, 56% of its electricity was generated from carbon-free resources, better than the electricity industry’s 40% average. It pointed out that its 10 hydroelectric facilities supplied 33% of the utility’s load.
Montana Environmental Information Center Co-Director Anne Hedges, one of the letter’s signatories, blasted the 2050 goal as a “PR move to improve lackluster” environment, social and governance perception. She said the target allows NorthWestern to raise emissions through 2035 by building more fossil fuel generation and pipelines.
“There are no benchmarks for reaching its 2050 goal in the electricity section of its business. Until we see NorthWestern actually plan for a clean energy future with benchmarks and actions that decrease its reliance on fossil fuels instead of increasing its reliance, it’s hard to take its proposal seriously,” Hedges said in an email to RTO Insider. “Anything short of meaningful planning and implementation is just more of the same from this laggard utility.”
She said NorthWestern’s largest financial investors have “raised concerns about companies that fail to plan for a lower carbon future” and added that financial analyst Moody’s has recently given the utility poor environmental and social scores. She said NorthWestern’s 2050 net-zero goal is only a “small step” and about decade behind other utilities in the region.
“Increased fossil fuel dependency means increased costs for customers, more expensive stranded assets and a failure to decarbonize according to the latest scientific research,” Hedges said.
NorthWestern did not respond to a request for comment.
MISO and SPP on Friday announced that they have completed their Joint Targeted Interconnection Queue (JTIQ) study, though two of the project proposals might not proceed under the interregional planning effort.
The final study report’s portfolio includes seven projects, costing about $1.65 billion, designed to foster more generator interconnections and unclog the RTOs’ queues. If approved, the transmission projects could resolve 48 reliability constraints and deliver about $724 million in adjusted production costs savings to MISO and $247 million to SPP.
However, two of the JTIQ’s portfolio projects are also included in MISO’s long-range transmission portfolio. The transmission lines, in North Dakota and from South Dakota to Minnesota, could invalidate or seriously alter the RTOs’ plans for similar projects. (See MISO Stakeholders Uneasy Over Long-range Tx, JTIQ Overlap.)
MISO stakeholders have asked that SPP load bear some of the two projects’ costs, even if SPP’s benefits are shown to be small. Both projects are in the MISO footprint.
MISO planners have been firm that their long-range planning takes priority over the JTIQ study. Staff have also said the RTO’s benefits on the two projects eclipse SPP’s, and they have pointed out that the grid operators haven’t yet delved into meaningful cost-allocation negotiations.
According to the JTIQ study, the $424.5 million South Dakota-Minnesota line yields a $487 million APC benefit to MISO and a $32 million benefit to SPP. The $165 million North Dakota line results in $405 million in benefits to MISO and $56 million in SPP benefits.
The JTIQ study began in late 2020 and evaluated 59 project ideas. MISO kicked off its long-range planning in mid-2020.
In a joint statement accompanying the study’s release, MISO CEO John Bear and SPP CEO Barbara Sugg said the need to build transmission to accommodate increasing renewable energy requests “transcends boundaries.”
They said a lack of new transmission projects along their seam caused generation projects in both footprints “to drop out of the study process because costly network upgrades are triggered.”
MISO’s interconnection queue currently contains 127.1 GW of proposed generation. SPP has 97 GW worth of new generation in its queue. Both are overwhelmingly tipped toward renewable energy and storage projects.Their analysis shows the JTIQ portfolio could support a range of 28 to 53 GW worth of new generation along their seam.
“Both MISO and SPP have existing planning processes, and the JTIQ partnership allowed us to focus on future reliability risks based on the trends in our generation portfolios,” Antoine Lucas, SPP vice president of engineering, said in a press release. “The resulting portfolio of projects fully resolves the set of transmission constraints evaluated in the study, providing considerable reliability benefits to both RTO regions.”
The RTOs said they’re after an “equitable cost allocation mechanism between interconnection customers and load in MISO and SPP.” They expect cost-allocation discussions to continue “well into 2022.”
NYISO on Wednesday presented stakeholders with a plan to clarify by year-end what increasing amounts of renewable energy mean for the grid over the next decades.
“I want to look at the evolution of load and net load shapes over time, i.e., load net of wind and solar, both behind the meter and in front of the meter, because that is really what the rest of the resources have to respond to,” Nicole Bouchez, principal economist for market design, told the Installed Capacity/Market Issues Working Group.
The multiphase study will first dive into the ISO’s Climate Change Phase I report from 2020 and follow with two studies coming this year that will have additional information.
The first new analysis planned is the Outlook study, followed by the Reliability Needs Assessment (RNA), which could possibly be leveraged for the Grid in Transition effort. (See NYISO Updates Grid in Transition Work and Plan for 2022.)
NYISO will examine “things like the distribution of hourly ramps over time, because in many ways that is what we are anticipating will be changing and what California has seen changing,” Bouchez said. “We’re also going to be looking at periods with low wind and solar and what that implies for these net energy and hourly ramps.”
Several stakeholders said that while some previous studies identified the dispatchable emission-free resource capacity that New York will likely need in the future, there is not much information available on the duration and magnitude of wind and solar lulls.
“It’s not just the energy amount, but how long and how often do we have a one-week lull; how many times do we have a two-day lull; and how many times do we have an hour or two lull — [in order] to understand what kind of pallet of dispatchable emission-free resources would most appropriately apply to the system conditions that we’re likely to see,” said David Clarke of Long Island Power Authority.
Accurate forward weather forecasting will become increasingly important, and the duration and frequency of wind lulls directly impact other resource requirements and other technology requirements as planners start to look out over a 10- or 20-year period, said Chris Wentlent of the Municipal Electric Utilities Association.
“So if we’re seeing a two- or three- or four-day lull, that creates a certain requirement as we think about storage going forward and storage capability,” Wentlent said. “Same thing with zero-carbon resources and the amount that we might need as backup in in those type of events.”
In terms of forward weather forecasting, Bouchez said she didn’t know of any studies specific enough to say at exactly what time of the year lulls will change, but that the second phase of the climate change study looked at historical data, and what scenarios could happen.
NYISO system energy forecast shows the Policy Case is lower as additional EE savings and PV adoption outweigh gains from electric vehicles and electrification. After 2030, CLCPA forecast is significantly higher than the Reference Case, largely driven by aggressive statewide electrification. | NYISO
NYISO commissioned Analysis Group to perform the Phase II study, which examined the potential impacts on reliability based on the electricity demand projections for 2020-2050 developed in the initial climate change study. Those include the impacts on load and resource availability from more frequent and severe storms and extended heat waves and cold snaps.
“We can definitely go back and re-leverage that information and look to see what we can leverage in terms of wind lulls, especially when we’re looking at periods of multiday potentially low solar,” Bouchez said. “We’ll see what we can pull to make those as realistic as possible, given what is expected in the future.”
The ISO plans to present the Phase I analysis in March and April in terms of market design and then the policy case from the Outlook study in the third quarter, Bouchez said. The RNA study would be presented in the fourth quarter.
MISO said it will alter some interconnection rules so that generation owners can more easily replace generation at the same point of interconnection or share a single point of interconnection with other owners.
The RTO will remove the requirement that transmission owners must sign off on a shared facilities agreement among interconnection customers, saying there was never a need for transmission owners to be signatories to agreements for shared interconnection facilities.
During a March 1 Planning Advisory Committee, MISO’s Jackson Evans said that after the RTO’s shared network upgrade process was introduced in 2019, multiple disputes arose between interconnection customers and transmission owners over who has ownership rights to interconnection facilities and who would be responsible for their maintenance.
“It almost led to multiple withdrawals” in the interconnection queue, Evans said.
MISO will still require interconnection customers wishing to share interconnection facilities to submit a shared facilities agreement upon filing their request. However, that agreement will no longer be tied to the transmission owners’ interconnection facilities.
Customized Energy Solutions’ Ginger Hodge thanked MISO for the changes and ending a year of “delays, disagreements and frustrations.”
The grid operator said it will prepare a FERC filing for either April or May. The revised process would apply to entrants in the generator interconnection queue’s next cycle
The RTO also said it will make it easier for generation owners to replace units, allowing generators to request longer-term suspension reliability studies with the replacement requests. Previously, the grid operator granted reliability assessments only for the gap period between winding down generator operations at the outgoing unit and the replacement unit’s startup.
MISO added that it will reduce its decision time to approve suspensions for units set to be demolished and replaced. It also said it can shorten a required 26-week notice period to 30 days for generator suspensions in certain replacement situations.
The RTO intends to file the replacement generation process changes with FERC sometime in May.
New York officials on Thursday outlined a schedule to complete a final scoping plan by year-end to reduce economywide greenhouse gas emissions 40% by 2030 and no less than 85% by midcentury from 1990 levels.
NYCAC Director Sarah Osgood | NYDPS
The Climate Action Council (CAC) in December approved a draft scoping plan that sets the approximate steps needed to achieve the emission limits set by the Climate Leadership and Community Protection Act (CLCPA).
Based on the discussion that occurred on the draft scoping plan, CAC staff pulled out a few topics on which council members do not concur and additional deliberation is needed, said CAC Director Sarah Osgood.
The council will hold nine, three-hour public comment hearings throughout the state between April 5 and May 11, two of them virtual and the remainder in person, with a mid-June deadline for submitting written comments.
Undefined Terms
Of the terms the council will deliberate, the state’s approach to transitioning the gas system is “of great interest to many of the council members,” Osgood said. “It sounds like we need to determine what New York’s approach to decarbonizing the gas system should look like.”
If council members do not reach “100% agreement” on the topic, Osgood said there is “still plenty of room for additional progress.”
In approving the minutes of the December meeting, Donna L. DeCarolis, president of the National Fuel Gas, said she wanted to repeat her opposition to the council’s adoption of the term “fossil gas” in place of natural gas, noting that the term is not defined by the Public Service Commission or under state law.
Gavin Donohue, president and CEO of the Independent Power Producers of New York, agreed with DeCarolis and asked that their “no” votes be identified by name in the minutes, along with that of Dennis Elsenbeck, president of lithium-ion storage developer Viridi Parente.
Bob Howarth, Cornell University | NYDPS
The CAC voted to apply vote breakdowns consistently throughout the minutes.
The council also will deliberate the potential applications of advanced fuels, including potential regulatory mechanisms, limits or conditions for their use, and the role of research, development and demonstration in these areas, Osgood said.
“Finally, we see room for further progress on carbon pricing policies, potential regulatory mechanisms around funding, the role of private funds and private financing, and how to align markets to help facilitate the needed resources,” Osgood said.
Beyond the cost benefit analysis, issues of how the state will pay for initiatives seem to be absent from the discussion and need to be included, said Bob Howarth, professor of ecology and environmental biology at Cornell University.
Urgency and Equity
The Intergovernmental Panel on Climate Change (IPCC) 6th assessment report issued on Feb. 28 is focused on impacts, adaptation and vulnerability. Much like prior IPCC reports, there are calls to action and updated forecasts for the causes and effects of climate change, said Doreen Harris, President and CEO of the New York State Energy Research and Development Authority (NYSERDA).
NYSERDA CEO Doreen Harris | NYDPS
“This report also paints a stark picture for humanity, warning that climate change risks are greater than thought,” Harris said. “In fact, the final two sentences of this new report really say it all, and I quote, ‘the scientific evidence is unequivocal: climate change is a threat to human well-being and the health of the planet. Any further delay in concerted global action will miss a brief and rapidly closing window to secure a livable future.’”
This week, the state Department of Environmental Conservation will put out the disadvantaged community criteria and maps, said Commissioner Basil Seggos, who also introduced the DEC’s first deputy commissioner for equity and justice, Adriana Espinoza.
The CAC this year will include advancing the integration of equity throughout the scoping plan and ensuring that it’s central to the council’s decision-making processes, Seggos said.
DEC Commissioner Basil Seggos | NYDPS
As the council approaches the topics set aside for further deliberation, a couple of questions to consider are how equity and justice will be considered and weighted, and what role the Climate Justice Working Group (CJWG) should have in shaping that approach as partners in this work, Espinoza said.
“The group’s meaningful involvement, combined with a robust public input process that we were just discussing will help ensure that the [CLCPA] is informed by priorities of disadvantaged communities, and as concerns from the [CJWG] are representative of concerns expressed by frontline communities, so these concerns must be considered when we deliberate,” Espinoza said.
She reminded the council that the working group “previously shared a lot of really poignant and helpful comments and resources about integrating equity into the council’s work” and that “we can consider reviewing these resources and others during future discussions to ensure that our shared commitment to equity and justice is clear in the final scoping plan.”
A drop in anticipated funding will significantly alter New Hampshire utilities’ plans for their large commercial and industrial energy efficiency programs.
Liberty Utilities, Unitil (NYSE:UTL), Eversource Energy (NYSE:ES) and New Hampshire Electric Cooperative filed a revised 2022-23 energy efficiency program plan on Tuesday to accommodate a 47.5% cut in their originally proposed $287 million budget for the period. The utilities’ large business C&I budget had the biggest decrease across the program offerings, dropping from $88.3 million to $29.4 million.
The NHSaves EE program went into lockdown last November after the Public Utilities Commission rejected the utilities’ proposed 2021-2023 Triennial Energy Efficiency Plan, which would have more than doubled spending. (See NH EE Plan Approaches 2nd Year Without Funding Certainty.)
New Hampshire Gov. Chris Sununu restored funding certainty on Feb. 24 by signing HB549, a bill that establishes funding rules for NHSaves. For this year, the law caps funding at the 2020 level and allows annual increases based on inflation. In addition, the law directed the utilities to file a revised 2022-23 program plan at the new funding level by Tuesday.
The utilities estimated in their revised plan that the large C&I sector program will serve 2,595 customers in 2022-23, which is 2,273 fewer than they expected to serve for the same period under their 2021-23 plan in September 2020. Annual kWh savings for the sector program will decrease by 136.1 million to 56.5 million, while annual Btu savings will decrease by 110.7 million to 135.3.
Offerings for the large C&I segment, which includes energy users with an average annual demand of at least 200 kW or 4,000 Therms, are pared down in the revised plan to incentives only for EE projects. Offerings under the original plan proposal included:
expanding retrofit services;
developing segment-specific services, such as chiller optimization for manufacturing;
exploring opportunities to integrate combined heat and power systems with energy-efficient projects; and
pursuing a codes and standards initiative.
Appeals
In its Nov. 12 order, the PUC said the utilities’ triennial plan was a burden on ratepayers and stood behind its decision to deny the plan, despite requests for rehearing and appeals to the state’s courts.
Legislators moved quickly at the start of the year to send HB549 to the governor, so the PUC is no longer able to change the basic components of the EE program and how it is funded. (See Legislators Step into NH’s Battle over EE Program.)
Passage of the bill means utilities are beginning to reopen programs they had suspended due to funding concerns, Sam Evans-Brown, executive director of Clean Energy NH (CENH), told NetZero Insider.
But the new law does not settle all outstanding issues from the PUC’s order, he said.
On Feb. 7, CENH and the Conservation Law Foundation (CLF) filed an appeal of the order with the New Hampshire Supreme Court after a Superior Court judge denied an earlier request for a temporary injunction.
The appeal says the commission did not follow the law in its order when, as the petitioners claimed, it essentially “dismantled” the Energy Efficiency Resource Standard, a framework the commission established in 2016. Under the EERS, programs are based on annual savings of kWh or Btu, and a budget is set to meet those annual savings.
Instead of focusing first on savings targets, the PUC’s order focused “solely” on rates and program budget, which “signaled a sharp departure” from the EERS, the appeal said. And the commission, the appeal claimed, failed to give stakeholders a chance to comment on that departure from the standing framework.
“What [HB549] does not do, that a repeal of the PUC’s order would, is re-establish the [EERS] policy framework,” Evans-Brown said. “There’s a symbolic policy discussion that can happen legally over whether the PUC had the right to dismantle the framework without telling anybody that’s what they were planning on doing.”
The state’s utilities and the nonprofit Listen Community Services each filed separate Supreme Court appeals in early February that are substantively similar to the CENH-CLF appeal.
On Feb. 10, the commission reached a settlement with the Office of the Consumer Advocate, which had asked the Supreme Court to stay the commission’s November order. Under the agreement, the OCA said it would withdraw its request and the commission reverted current EE program rates to the 2020 level, which is also what HB549 does.
The new law, however, takes the additional step of tying annual increases to inflation.
ISO-NE will publish the results of its capacity auction next week after the D.C. Circuit Court of Appeals lifted a stay retaining the capacity supply obligation of the Killingly Energy Center.
ISO-NE has also begun plotting out the schedule for next year’s capacity auction, FCA 17, a process which has been delayed as well by the Killingly saga.
In a presentation to the NEPOOL Participants Committee on Thursday, ISO-NE Resource Qualification Manager Alex Rost said that activities for FCA 17 will start in April and that the auction will take place on March 6, 2023, a month later than usual.
The process will be compressed in at least two sections to make up for the lost time, Rost said.
That plan is not final, and ISO-NE said it’s asking market participants for feedback before it publishes the schedule.
Financial Assurance Proposal Update
Also at Thursday’s Participants Committee meeting, Competitive Power Ventures delayed a vote on its proposal to revamp New England’s financial assurance rules, adding new penalties for developers who miss key milestones. (See NE Stakeholders Propose Retirement, Financial Assurance Changes.)
The proposal, which has been discussed at several NEPOOL stakeholder meetings in the last few months, recently came under criticism from the renewable energy advocacy group RENEW Northeast.
RENEW wrote in a memo that the changes call for “excessive levels of Financial Assurance that would create an unnecessarily high burden for new entry, beyond what would be needed to incent the proper behavior.”
The group said it’s not opposed to increasing the required FA before each capacity auction, but that level should be a “careful balance” that doesn’t create overly punitive barriers for entry.
RENEW also challenged some of the language in CPV’s proposal as unclear. CPV is expected to revisit the proposal in other NEPOOL meetings over the next few weeks.
Consent Agenda
The committee also unanimously approved revisions to Planning Procedure No. 11 (Planning Procedure to Support Geomagnetic Disturbances) to conform to and support the requirements of NERC Reliability Standard TPL-007-4 (Transmission System Planned Performance for Geomagnetic Disturbance Events), as recommended by the Reliability Committee at its Feb. 15 meeting.
Staff from WECC and the Texas Reliability Entity said Thursday that repeated disturbances involving distributed energy resources (DER) in recent years show that integrating distributed energy resources into the bulk power system will take close coordination between NERC, the regional entities and industry.
The staff members were speaking at a Texas RE webinar to discuss last year’s Odessa disturbance. During the event, which occurred May 9, a fault in a combined cycle power plant near Odessa, Texas, caused nearly 20 solar photovoltaic (PV) and wind facilities, some as far as 200 miles away, to suffer reduced voltage.
NERC and Texas RE last September released a report on the event that concluded the power industry is not moving fast enough to implement NERC’s reliability guidelines, while also urging FERC and the ERO to add binding requirements related to reporting and correction of performance abnormalities. (See NERC-ERCOT Report Reviews Texas Solar Issues.)
Steve Ashbaker, WECC | Texas RE
Thursday’s webinar compared the Odessa disturbance to recent incidents in the Western Interconnection, also involving performance drops by solar and wind facilities, to emphasize that the issue is not limited to one region.
Steve Ashbaker, WECC’s reliability initiatives director, said that just in the last year, the West has dealt with four events involving disruption to power output from DERs: the Victorville disturbance on June 24; Tumbleweed on July 4; Windhub on July 28; and the Lytle Creek Fire on Aug. 25. This is the same number of events seen in the previous five years, indicating a significant increase.
James Hanson of WECC’s event analysis department pointed out that the rise in disturbances parallels the penetration of DERs, particularly solar panels, in the Western Interconnection. Generation interconnect requests for solar power have risen from a bit more than 10,000 in winter of 2016 to nearly 100,000 in summer 2021. This trend represents a growing “reliance” on solar power in the interconnection, Hanson said, which means system planners need to be aware of the unique characteristics of DERs, which have contributed to these incidents.
Older Plants Lack Flexibility
The most important factor is not the recently installed plants but the older ones, which have been involved in multiple events. The reason, he said, is that these veteran plants do not incorporate the technology controls that allow greater flexibility in newer facilities.
“We have some legacy plants here that have inverters that are eight to 10 years old, and … their settings can’t be altered, so you can’t disable the momentary cessation settings … as the newer, modern technology can be disabled,” Hanson said.
Ashbaker also pointed out that the “data resolution” provided by many inverters is low due to infrequent sampling; many plants have equipment that records data only every five minutes, even though faults can be cleared in as little as 50 milliseconds. This denies investigators the information they need to determine the cause of incidents and recommend actions to fix the underlying issues.
Mark Henry, Texas RE | Texas RE
Another common issue pointed out by Mark Henry, Texas RE’s director of reliability services, is the lack of accurate models for DERs and other “weak areas in the grid” that leave grid operators with little idea what to expect in the event of a problem.
“We want to be able to understand the characteristics of this equipment,” Henry said. “We’d like the equipment all to perform fully within expected specs, but we also understand that inverter-based resources are different than the synchronous generation that we’re more used to. And it turns out that we’ve got to have very sophisticated models that use electromagnetic transient analysis. … When I started my career, that was a very rare thing to see that sort of analysis. Now it’s becoming more routine.”
The presenters reiterated the earlier report’s calls for utilities to follow the recommendations of NERC and their regional entities but went further by urging listeners to volunteer for the groups in those organizations working to set those guidelines. They emphasized that equipment manufacturers, regulators and registered entities need to hear from each other in order to manage the system properly.
“We have abundant opportunities for dialogue between all the parties involved with this, and we expect to see more of that. We expect that NERC will have a very active role with their staff and engaging the different people who are involved,” Henry said. “There’s a lot of work that has to be done, and everyone can expect that we will be reaching out to engage on these things … to a higher degree.”
In 2021, the U.S. pulled in $105 billion in capital investments in the clean energy transition, installed 37 GW of new wind and solar, along with 42 MW of battery storage, and put 657,000 new electric vehicles on the road, more than double the 325,000 EVs sold in 2020.
At the same time, according to the 2022 Sustainable Energy in America Factbook, U.S. greenhouse gas emissions rose 5.8% year over year, and climate disasters cost the country $145 billion in damages. Meanwhile, high natural gas prices opened the way for coal-fired generation to once again become competitive in wholesale power markets. Coal produced 22% of the nation’s electricity in 2021, the highest level in 14 years, the Factbook says.
A joint project of the Business Council for Sustainable Energy (BCSE) and BloombergNEF (BNEF), the 2022 Factbook was one of two major energy industry reports released Thursday, with each providing different and somewhat conflicting views of the U.S. energy transition.
The U.S. Energy Information Administration’s Annual Energy Outlook 2022 reported that fossil fuels will continue to dominate through the middle of the century even as renewables and electric vehicles ramp up.
“We don’t see liquid fuels and natural gas losing their place as the top two sources of energy in the United States through 2050,” said EIA acting administrator Stephen Nalley during an announcement webinar.
The 2022 Factbook provides a chart-packed, by-the-numbers look at a U.S. and global clean energy transition that has become unstoppable but still faces many uncertainties as to its speed, costs and evolving portfolio of technologies and fuel sources.
A key chart in the report compares the $80 billion in energy research and development funding — mostly for nuclear, hydrogen and carbon capture — in the Infrastructure Investment and Jobs Act with the $300 billion in incentives and tax credits for renewables, storage, transmission and manufacturing in the stalled Build Back Better Act.
“We need every technology that we can bring to bear, and we need them to be affordable, deployable and practical” to reach economy-wide decarbonization, BCSE President Lisa Jacobson said in an interview with RTO Insider. “Investments are needed in many innovative technologies, in addition to dramatically scaling up what we have readily available today.”
At a prerelease press briefing on Thursday, other energy industry officials spoke of the need to ramp up investments, deployments and the policies that will support them. Dan Whitten, vice president of public affairs at the Solar Energy Industries Association (SEIA), said solar deployments could drop in 2022 “if we don’t get this right.”
SEIA is particularly focused on the tax credits for manufacturing in Build Back Better, which he said are “critical, both in terms of investing in facilities and also in supporting production of everything from ingots to cells to wafers to panels themselves. We’ve got make that commitment.”
Records for Venture Capital
For Ethan Zindler, head of Americas for BNEF, one of the report’s biggest takeaways is the growth in investment and renewables deployment in 2021, which he called “a truly blockbuster of a year.”
“In the flows of capital, almost every type of asset class or way that money could get deployed into the sector, it did,” Zindler said. “We saw records for venture capital investment. It was everything from early-stage technologies to deployment of existing and commercially viable technologies … which reflected a lot of bullish sentiment on the part of investors.”
<img src="//www.rtoinsider.com/wp-content/uploads/2023/06/140620231686782058.jpeg" data-first-key="caption" data-second-key="credit" data-caption="Renewables accounted for about 45% of the $105 billion invested in U.S. clean energy assets last year, with EVs not far behind at 34% of the total.” data-credit=”BloombergNEF” data-id=”6152″ style=”display: block; float: none; vertical-align: top; margin: 5px auto; text-align: right; width: 500px;” alt=”Clean energy assets (BloombergNEF) Content.jpg” data-uuid=”YTAtODQ1MjE=” align=”right”>Renewables accounted for about 45% of the $105 billion invested in U.S. clean energy assets last year, with EVs not far behind at 34% of the total. | BloombergNEF
Renewables took the largest chunk of new U.S. investment, $47 billion (45%), followed by electric transportation at $35 billion (34%), he said. And investment in hydrogen doubled to $200 million.
Paralleling those investments, the solar industry added 24 GW of new power to the grid and wind added 13 GW, helping to push renewables’ contribution to U.S. power generation — including hydropower — to a new high of 21%.
Transmission also saw record-breaking investments from both utilities and independent developers, close to $28 billion, an 11% increase from 2020, according to the factbook. But, despite the hundreds of gigawatts of renewable energy projects in interconnection queues across the country, BNEF is predicting a slight downtick and plateau in coming years.
Transmission investments jumped 11% to $27.5 billion in 2021. | EEI
“I don’t think the issue is the lack of available capital,” Zindler said. “The challenge is lack of investible projects … [caused by] the incredible challenge it takes to get a transmission project permitted.”
Emily Duncan, director of federal government relations for National Grid and BCSE board chair, pointed to the indefinite hold on construction of the $1 billion Hydro-Quebec transmission line following a 2021 vote by Maine voters against the project.
“We’re living that right now,” Duncan said. The uncertain fate of the project “is a perfect example of just how important this transmission problem really is — the fact that we are going to have to run transmission through states that may not directly benefit from it. And how do we square that moving forward?”
Cost of Renewables Matters
Offering a more cautious view of the energy transition, EIA’s Annual Energy Outlook begins with the premise that meeting global demand for cheap power will keep fossil fuels a growth industry in the U.S. Oil and gas production will continue to boom, hanging on to their top spots as the two biggest sources of energy in the U.S. through 2050, despite increasingly high rates of renewable energy growth, the report says.
“We see the United States continuing to produce record amounts of crude oil, natural gas and natural gas plant liquids through 2050 under a wide variety of assumptions examined in the reference case and side cases,” Nalley said.
Driving that trend is a nearly 50% baseline increase in global energy consumption between now and 2050, bringing with it hefty international demand for oil and gas.
Corporate procurement of renewable energy is expected to add hundreds of terrawatt-hours of new renewable energy to the grid by 2030. | BloombergNEF, The Climate Group, company announcements
On the emissions front, the report’s look at a number of scenarios — a reference case and eight “side cases” — finding that the ongoing energy transition decreases emissions until 2037, but then they begin to gradually tick upward again. EIA assistant administrator Angelina LaRose said the upward trend reflects “an increase in overall energy usage as a result of increasing population and economic growth,” as well as assumptions about current laws and regulations holding in place.
The share of renewables in the U.S. electricity generation mix more than doubles from 2021 to 2050 according to the outlook, with wind leading the way in the next few years and solar taking over after 2024. By 2050, the EIA sees solar at 22% of electricity generation and wind at 14%.
“The cost of renewables matters,” LaRose said. In one of the agency’s side cases, with low renewable costs, gas and nuclear generation fall compared to the reference case. In another, with renewables remaining at today’s costs, solar and wind still grow but gas prices remain competitive, and all of the energy sources keep growing.
“In the absence of changes in policy, the market is primarily driven by cost,” LaRose said. “There’s the potential for much variation.”
A ramp-up in electric vehicle sales, from 340,000 in 2021 to 1.52 million in 2050, starts to put a dent in the share of gasoline-powered vehicles in the reference case, which fall from 92% of light-duty vehicles in 2021 to 79% in 2050.
“There are a number of factors, including declining battery costs,” said Erin Boedecker, EIA’s team leader for energy consumption and efficiency modeling. “Also, an increasing number of available models on the market, and that’s expected to continue. And there’s a growth in the consumer market for longer-ranged electric vehicles, particularly in light trucks, in our projection period.”
WASHINGTON — FERC Chairman Richard Glick told Congress Thursday he has no regrets over the natural gas policy statements a split commission issued last month, rejecting criticism that he had overstepped the agency’s authority and increased uncertainty for developers.
FERC voted 3-2 along party lines on Feb. 17 to update its 1999 policy statement on natural gas infrastructure certificates (PL18-1) and release guidance on how it will evaluate the impacts of projects’ greenhouse gas emissions in its environmental analyses (PL21-3). (See Split FERC Updates Policies on Gas Infrastructure Applications.)
Glick defended the policy statements during a two-hour hearing before the Senate Energy and Natural Resources Committee, where Chairman Joe Manchin (D-W.Va.) and his Republican colleagues accused FERC’s Democratic members of pursuing a partisan climate agenda that undermined U.S. energy security.
Glick and his fellow Democratic commissioners, Allison Clements and Willie Phillips, said the statements were needed because projects have been remanded or vacated by federal courts because of insufficient environmental analyses by regulators, including FERC.
‘Beyond the Pale’
An angry Manchin opened the hearing by accusing FERC’s Democrats of “elevat[ing] environmental considerations above American energy reliability, security and independence.” After the hearing, Manchin joined Republicans and Democrats in both the House and the Senate to announce a bill that would bar the importation of Russian crude oil, petroleum products, LNG and coal until the country ends its invasion of Ukraine.
“To … put up barriers to natural gas projects and the benefits they provide, while Putin is actively and effectively using energy as an economic and political weapon against our allies is just beyond the pale,” Manchin said. “If we could actually get natural gas infrastructure built it would not only help with the energy transition, here at home that would also help keep costs down for American families, create good-paying jobs, and strengthen our ability to use energy as a geopolitical tool to fight for our values abroad and support our strategic partners.”
Republicans followed with their own fusillade, with Sen. Steve Daines (R-Mont.) accusing the FERC of “kneecapping energy providers,” and Sen. Mike Lee (R-Utah) saying the commission was pursuing a “radical climate agenda [that] makes us more vulnerable to attack.”
“These policies are going to make it next to impossible to build any new natural gas infrastructure or upgrade our existing facilities in the United States,” said ranking member Sen. John Barrasso (R-Wy.). “These orders were among the chief objectives of Commissioner [Allison] Clements’ former employer, a group with a mission to block pipelines.” Clements worked for a decade at the Natural Resources Defense Council.
Republican commissioners James Danly and Mark Christie, who had dissented on the policy statements, also were critical.
Danly said the majority put “far too much weight on a handful” of narrow court rulings and said the new policy would cause reliability problems for the electric grid.
Christie said he would have agreed to reduce the reliance on precedent agreements between corporate affiliates to prove the need for pipeline capacity and to measures guaranteeing due process to property owners and communities.
“On the contrary, what the majority did was essentially assume it had the power to rewrite both the Natural Gas Act (NGA) and the National Environmental Policy Act (NEPA) under the rubric of addressing climate change,” he said. “But that is a power that this commission does not have; only you — the elected legislators in Congress — have that power and you have not delegated that power to us.”
Glick: No Agenda
Glick said the majority made its decisions “based solely on the applicable law and the facts in the record,” insisting, “I have no other agenda.”
“The D.C. Circuit has spoken on several occasions, and unless the court’s interpretation is reversed, we have no choice but to follow with unambiguous guidance,” he said.
The commission received defenses from the panel’s Democrats and Independent Sen. Angus King (I-Maine).
Sen. Mazie Hirono (D-Hawaii) said it was “outrageous” that the commission had relied on contracts between corporate affiliates.
King recalled having to comply with environmental regulations while seeking a permit for a 2 MW hydropower project. “We had to do environmental analysis of wetlands; we had to work with U.S. Fish and Wildlife; we had to look at the effects on the water surrounding the project and fish passage and all of those issues,” he said. “And here we are saying that the FERC can’t require the examination of the most serious environmental threat that this country and world has ever faced — I think that’s preposterous.”
King said critics had made a case for FERC to work with stakeholders to clarify the order and reduce uncertainty. But, he added, “the fundamental premise is that this is an environmental impact. Methane is 80 times worse than CO2. And it’s the low hanging fruit of climate change.”
More or Less Uncertainty?
Glick said he was confident that the policy statements “will lead to project orders that are more legally durable.
“I think developers of energy infrastructure would agree that when regulatory agencies ignore judicial directives, or cut corners, the courts typically vacate permits and send the agencies back to the drawing board. This often adds a significant amount of time and hundreds of millions, if not billions, of dollars of additional costs onto a project.”
But Republicans said the commission’s actions would increase litigation and chill investments, with Barrasso citing a letter of complaint from Alan Armstrong, CEO of Williams Co., which transports about 30% of the natural gas in the U.S.
“There is no question that it will be wielded against every major natural gas project, future or pending, making the costs and uncertainties of even pursuing a project exponentially more daunting,” said Christie.
He said the majority was disingenuous in suggesting the statements were consistent with the commission’s prior handling of environmental impact analyses. “To compare drainage mitigation going through a wetland to ‘Oh, you’ve got to mitigate global climate change … that is a massive, massive step difference.”
Christie said he was certain that some licenses will be approved under the new policy but said they represented a “Potemkin Village.”
“I think what we’re going to see is the deterrent factor is so great, I think you’re going to see a lot of applications that are never going to get even proposed. And maybe that’s the point. Because who can raise $6 to $8 billion of risk capital based upon a standard that says, ‘try your luck.’”
Under questioning from Sen. Bill Cassidy (R-La.), Glick said the new policy would only require developers to mitigate fugitive gases associated with the pipeline’s construction and operation. But Danly said the statement goes far beyond that in “encouraging” mitigation of downstream emissions.
“It is, in my opinion, a classic case of doing indirectly what cannot be done directly,” Danly said. “The general premise in this shows you my judicial minimalist streak: Every time you get a multi-factor balancing test that is going to be done on a case-by-case basis by an administrative agency, what you effectively have is derogation of power to pick winners and losers at the whim of the decision maker. And that will be the case here, where I predict that you’re going to see favored parties being given the nod and those who aren’t will have their applications rejected.”
Looking Forward
Sen. John Hickenlooper (D-Colo.) said the issues raised by the pipeline debate are “similar to the issues we’re facing around [electric] transmission.
“Maybe it’s time that we get around the table and just discuss the legislative solution to gas and transmission at the same time,” he said, “because we really are running out of time” to address climate change.
Barrasso suggested Congress could seek to undo the policy under the Congressional Review Act.
“I’m now starting to think that perhaps we would be better off without FERC — which having been created by Congress, can be eliminated by Congress,” said Lee. “Perhaps it should.”
In an interview after the hearing, Glick said he had no regrets about how the commission issued the policy statements. “We have to move. These orders are sitting here,” he said.
“As I said before, give us some time. Let us pursue these orders. … And if you still don’t like it, call me back and scream at me some more. I’m going to take it, but at least see how we implement the policy statements.”
