News Roundup

New Jersey Opens Auction for 4 Gigawatts of Offshore Wind

On 6 March 2023 the New Jersey Board of Public Utilities (NJBPU) opened the application window for a third solicitation of offshore wind projects, seeking to award 1.2 – 4 gigawatts of new capacity. NJBPU will accept applications for this round through 23 June, 2023, and plans to select projects for awards by the end of the year.

New Jersey has a goal to deploy 11 gigawatts of offshore wind by 2040 and has already awarded three projects totaling 3.75 gigawatts in the previous two rounds of solicitations. All three projects are still in permitting, and Orsted plans to begin construction on the 1.1-gigawatt Ocean Winds I in 2024. New Jersey plans to award the remaining 7.25 gigawatts of its 11-gigawatt goal through a series of five solicitations to be held over the next six years.

Press release: New Jersey Board of Public Utilities Opens Third Offshore Wind Solicitation of Between 1.2 GW and 4 GW (NJBPU)

Work Begins at Thacker Pass Lithium Mine

Lithium Americas has begun site preparation, geotechnical drilling, water pipeline development and associated infrastructure work on a site in Northern Nevada poised to become the second lithium mine in the United States. Lithium Americas has also awarded contracts to companies including Bechtel Corporation to build the Thacker Pass Lithium Mine.

The mine will operate in two phases. Lithium Americas estimates that the first phase will have the capacity to produce 40,000 metric tons of battery-grade lithium carbonate per year, and the second phase will add another 40,000 metric tons. The site is the largest known lithium reserve in the United States and Lithium Americas overcame legal and permitting challenges as well as an allegation by Native Americans that the mine is the site of a massacre in the 19th century.

News analysis: ‘Silicon Valley of lithium’: Nevada mine breaks ground (E&E News)

Three Major Transmission Projects to Break Ground in 2023, 2024

By Christian Roselund

A new analysis by Bloomberg finds that three major U.S. transmission projects to bring electricity from wind and solar installations to population centers will begin construction in 2023 and 2024: the SunZi, TranWest Express, and Grain Belt Express. A fourth project, New York’s Champlain Hudson transmission line to bring hydroelectric power from Canada to New York City, began construction in late 2022. These represent some of the first large-scale transmission projects to break ground in decades, but experts including the U.S. Department of Energy say that more transmission is
still needed.

Many studies have shown that as the U.S. electric grid transitions to wind and solar, more transmission in new locations will be needed to move power from solar and wind farms to population centers. Additionally, reservoir hydropower can provide flexible power during extended periods of low wind and solar resources and facilitate the integration of higher levels of wind and solar. But this only works if there are sufficient electrical interconnections to move electricity from hydro dams
to load centers.

The three that have not yet begun construction are still running a gauntlet of permits. The SunZia project has had to seek approval from 10 federal agencies, five state agencies in New Mexico and Arizona, and nine local authorities. It has acquired most of these permits, but as of January 2023 was still obtaining the final permits needed.

NameDeveloperCapacityLengthYear ProposedConstruction to Begin
Champlain HudsonBlackstone Group1.25 GW339 miles20102022
SunZiaPattern Energy3 GW515 miles20082023 (projected)
TransWest ExpressAnschutz Corporation1.5-3 GW (varies by segment)732 miles20082023 (projected)
Grain Belt ExpressInvenergy5 GW530 miles20112024 (projected)

Invenergy has sought a loan guarantee from the U.S. Department of Energy (DOE) for the Grain Belt Express, and as part of this process is waiting on the results of an environmental impact statement being prepared by DOE.

News coverage: Billion-Dollar Power Lines Finally Inching Ahead to Help US Grids (Bloomberg)

US, EU to Negotiate Battery Materials Deal

By Christian Roselund

U.S. President Biden and EU President von der Leyen have announced that their administrations will immediately begin negotiating an agreement to enable minerals mined or processed in the EU to count towards new requirements for the U.S. EV consumer tax credit.

The Inflation Reduction Act added requirements that vehicles eligible for $7,500 Section 30d clean vehicle tax credit contain a certain portion of local manufactured product and materials. This includes a requirement that batteries incorporate a minimum portion of critical minerals mined or processed in the United States, or a nation with which the United States has a free trade agreement, to claim a $3,750 portion of the credit.

The United States and the European Union did not have such an agreement, and this new requirement led to protests by EU, German, and French leaders, including EU Trade Minister Dombrovskis warning that the 30d credit violates WTO rules.

The joint announcement does not mention the condition that a minimum portion of battery components be manufactured or assembled in North America, which is a requirement for the second $3,750 portion of the credit. However, the United States and European Union have announced a Clean Energy Incentives Dialogue to coordinate respective incentive programs so that they are “mutually reinforcing.” This dialogue will be part of the EU-U.S. Trade and Technology Council and will including information-sharing on “non-market practices of third parties,” explicitly
mentioning China.

“We are working against zero-sum competition so that our incentives maximize clean energy deployment and jobs—and do not lead to windfalls for private interests,” reads the joint statement.

Statement: Joint Statement by President Biden and President von der Leyen (White House)

DOE Offers $375 Million Loan to Battery Recycler

By Anjali Joshi

On 27 February, the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional loan commitment of $375 million for Canada-based lithium-ion battery recycler Li-Cycle Holdings. If finalized, the loan is expected to close in Q2 2023. This is the fifth conditional commitment under LPO’s Advanced Technology Vehicles Manufacturing Loan Program (ATVM) to work around the localization of the EV battery supply chain. The project is the first conditional commitment under ATVM that supports battery recycling to further amplify the country’s efforts to boost domestic battery raw material supply while reducing its reliance on global supply chains or even new mining.

The loan is intended to help Li-Cycle expand its Rochester, New York facility, currently under construction, to supply recycled battery-grade lithium and other metals for the domestic manufacturing of EV batteries. Li-Cycle aims to increase production of the recycled battery materials using both scrap materials and used batteries. With low energy use, operational costs, and emissions, Li-Cycle will recover battery-grade lithium carbonate, cobalt sulfate, and nickel sulfate along with other critical battery materials. The factory, once it become fully operational, will supply battery metals for about 200,000 EVs annually. The project has already secured an agreement to supply LG Energy Solutions with recycled battery materials for its cell production in the United States.

Li-cycle’s Rochester “hub” facility will receive black mass (recycled lithium-ion battery feedstock) sourced from production scrap and used batteries from its four operational “spoke” facilities located in Rochester, Arizona, Alabama, and Ontario. Across its four operating spokes in North America, Li-Cycle currently has a total annual input processing capacity of 30,000 metric tons, which is equivalent to batteries for around 60,000 EVs. The company is also planning to build another spoke facility which will be co-located at GM’s Ultium Cells battery cell manufacturing facility in Ohio. This will be the largest of Li-Cycle’s spoke facilities.

Li-Cycle also has plans to expand its presence in Europe. The company is planning recycling facilities in Norway and Germany, and each will have 10,000 metric tons of annual processing capacity. By the end of 2023, the company expects to have a total of 65,000 metric tons per year of lithium-ion battery material processing capacity across its spoke network in North America
and Europe.

Press release: LPO Announces a Conditional Commitment for Loan to Li-Cycle’s U.S. Battery Resource Recovery Facility to Recover Critical Electric Vehicle Battery Materials (DOE Loan Programs Office)

RWE Expands in the United States with ConEd Acquisition

By Christian Roselund

On 1 March 2023 German energy giant RWE AG announced that it has acquired U.S. power company Consolidated Edison’s renewable energy businesses for $6.8 billion. With the acquisition RWE now owns 8 gigawatts of operating U.S. energy assets, making it the fourth-largest owner of renewable energy generation and the second-largest solar owner in the nation. Additionally, RWE now has a pipeline of 24 gigawatts of renewable energy projects and offshore leasing areas for 3.9 gigawatts of offshore wind.

UtilityDive estimates that RWE Clean Energy’s operating portfolio in the United States is 60% land-based wind and 40% solar by capacity.

RWE is consolidating its previous U.S. renewable energy activities and the former ConEdison business into a new company. Former Con Edison Clean Energy Businesses (CEB) CEO Mark Noyes will serve as the CEO of the newly formed RWE Clean Energy, and the executive management team will draw from the former leadership teams of RWE Renewables Americas and Con Edison CEB.

By investing heavily in U.S. renewable energy, RWE is following in the footsteps of other major European energy companies, including Energias de Portugal, Electricité de France, Iberdrola, and Orsted. But this sale also follows a more recent trend of large U.S. power companies either selling off their renewable energy businesses or slowing investments in them to focus on utility-deployed renewables. This reflects the creation of a “direct pay” option in the Inflation Reduction Act for utilities and non-profit entities to take advantage of the Investment Tax Credit (ITC) and Production Tax Credit (PTC), the two main federal incentives for renewable energy.

American Electric Power plans to sell 1,200 megawatts of wind and 165 megawatts of solar assets during Q2 2023 to a partnership owned by Invenergy, pension fund Caisse de dépôt et placement du Québec, and funds managed by Blackstone Infrastructure. In February 2023, Dominion Energy said that it will no longer invest in solar projects that are not part of its regulated utility business.

Press release: RWE becomes a top tier renewable energy company in the United States (RWE Ag)

House Republicans Propose Energy, Mining Permitting Reform

By Christian Roselund

Republicans in the U.S. House of Representatives have released two drafts and one full piece of legislation to reform the National Environmental Policy Act (NEPA), a foundational environmental law that sets conditions for permitting of energy and other infrastructure on federal lands and waters. All three bills put various limitations on environmental reviews and the ability to file lawsuits to challenge permitting decisions. Additionally, the TAP American Energy Act seeks to expand oil and gas leasing on public land, and the Permitting for Mining Needs Act focuses on easing permitting and providing additional support for mining.

The draft of the BUILDER Act, presented by Garret Graves (R-Louisiana), contained the most comprehensive reforms to NEPA. This bill would set a 2-year deadline for most environmental reviews, limit most environmental impact statements to 150 pages and restrict what federal agencies could consider during the permitting process. The bill would also put require parties that seek to challenge permits to have participated in the NEPA process and give them a 120-day deadline after the issuance of a permit to file lawsuits challenging the process.

In a hearing of the House Natural Resources Committee, Rep. Jared Huffman (D-California) described the BUILDER Act as a “rehash of Republican attempts to gut NEPA,” and “zombie legislation.” Other Democrats on the Environment committee also criticized the bill. Rep. Mike Levin (D-California) indicated that he would like to work with Republicans on permitting reform, but he described the bill as unacceptable in its current form.

While the BUILDER Act and the TAP American Energy Act were presented as discussion drafts, Republicans have introduced the Permitting for Mining Needs Act of 2023 as active legislation. In addition to setting timelines for environmental assessments and environmental impact statements under NEPA, this bill would apply the critical minerals provisions of the Infrastructure Investment and Jobs Act to all mineral extraction. It would also designate uranium as a “critical mineral” and apply a 120-day deadline for filing suit to challenge permitting actions.

These three bills follow an attempt by Senator Joe Machin (D-West Virginia) to push through permitting reform in the fall of 2022. The attempt was opposed both by the senators on the Left of the Democratic Party and by Republicans. Democrats were opposed to measures that would force the permitting of a natural gas pipeline as well as the changes to NEPA, whereas Republicans stated that the bill gave too much power to the federal government to approve transmission lines.

Unlike Manchin’s bill, the BUILDER Act avoids specific measure to reform approval of transmission, instead focusing on NEPA reform. BUILDER Act does not call out specific projects or specific technologies, as did Manchin’s bill and the other two pieces of legislation.

American Clean Power Association has put out a statement in support of the TAP American Energy Act. But despite support from a clean energy trade group, these bills have little chance of becoming law in their current form due to Democratic control of the senate and presidency. They are more likely to serve as the starting point for negotiations.

Source: BUILDER Act of 2023 (House Committee on Natural Resources)

Source: TAP American Energy Act of 2023 (House Committee on Natural Resources) Source: Permitting for Mining Needs Act of 2023 (U.S. Congress)

Longi, Invenergy to Build 5-Gigawatt Module Factory in Ohio

By Christian Roselund

US clean energy developer Invenergy has joined forced with China’s LONGi to announce plans to build the largest PV module factory in the United States. Through Illuminate USA, Invenergy will invest $220 million to acquire and equip a 100,000 square meter factory near Columbus, Ohio to build PV modules, with plans to produce 5 gigawatts of modules annually at the site. LONGi will serve as the technology partner, and the companies plan to being producing PV modules by the end of 2023.

The factory is expected to employ 850 permanent workers.

When fully ramped, Illuminate is expected to be the third-largest PV module maker in the United States, following First Solar (10.6 gigawatts by 2025) and Hanwha Q Cells (6.4 gigawatts by 2025), both of which are building new factories. It will be the second factory with the participation of a
Tier-1 Chinese PV module maker, following JinkoSolar’s 400-megawatt factory in Florida.

No cell manufacturing has been announced as part of this project and it is unclear where Illuminate will source its cells. China is the world’s largest maker of PV cells, but the 2012 anti-dumping and countervailing duty orders impose import duties on cells that are determined two years after these cells clear Customs. This and the addition of a 25% import tariff through Section 301 of U.S. trade law has essentially stopped all but the smallest volumes of cells from being shipped from China.

There is also substantial PV cell production capacity in Southeast Asia, however most of the cells made there are assembled into modules in the region, often as part of vertically integrate cell and module operations.

CEA expects more companies to announce US cell factories after the US Treasury issues guidance on the domestic content adder to the Investment Tax Credit (ITC) and Production Tax Credit (PTC). We expect this guidance to determine whether a US-assembled module is given full credit or whether Treasury will assess the source of the cell and other module components towards the minimum domestic content threshold.

Source: Leading American Solar Developer Brings Landmark Manufacturing Facility to Ohio (One Columbus)

Solar + Wind Supply 14.8% of US Electricity in 2022

By Christian Roselund

Solar represented 4.7% of U.S. electricity generation in 2022 and wind supplied another 10.1%, according to the latest data from the U.S. Department of Energy’s Energy Information Administration (EIA). EIA’s February 2022 Electric Power Monthly shows solar generation rising 24.1% over 2021 levels, with wind increasing 15.0%.

In 2022 all renewable energy sources including solar, wind, hydroelectric power, biomass, and geothermal reached 22.5% of US generation. Nuclear generation supplied another 17.9%, meaning that all zero-carbon sources of power together represented 40.5% of generation. EIA data shows not only the share of fossil fuel-fired generation falling to 59.5%, but the ongoing shift from coal to gas. Coal-fired generation fell 7.7% to 19.3% of total generation, while natural gas-fired generation grew 7.0% to represent 39.3% of the total.

State-Level Data

In addition to national data, Electric Power Monthly also features state-level data. EIA estimates that California generated 60.3 terawatt-hours (TWh) of electricity from solar in 2022, around 30% of the total in the nation. However, California’s year-over-year growth in electricity generation from solar was only 14.5%, much less than the national average. In second place was Texas, which generated 25.4 TWh from solar, representing a 47.4% increase over 2021 levels. By far the state with the fastest rate of growth was Maine, which grew electricity generation from solar 185% during 2022 to 843 gigawatt-hours; however, the state was starting from a relatively small base.

Texas remained the undisputed leader in wind generation in 2022, with 113 TWh of generation. This is up 14.5% from 2021 levels and represents more than one quarter of the wind generation in the nation. However, during 2022 Iowa – a much smaller state – generated 44.6 TWh and Oklahoma generated 37.4 TWh.

Transition Must Accelerate to Meet Goals

From 2018 through 2022, electricity generation from solar showed a compound annual growth rate of of 21.5%, and wind 11.4%. If electricity demand were to remain stable and solar and wind continue to grow at these rates, in 2030 wind would represent 28.8% of electricity generation and solar 22.3%. If hydro and other renewable energy output were to remain constant, this will result in a roughly 59% share of renewable energy, well short of President Biden’s goal to reach 80% renewables in electricity generation. If nuclear output also remains constant, this would bring the share of zero-carbon generation to around 77%.

Energy modelers expect the extension of the Investment Tax Credit (ITC) and Production Tax Credit (PTC) to increase the rate of solar and wind deployment over the next decade. However, there are many challenges to this projected growth, including everything from supply chain challenges to restrictions on solar imports due to trade policies and the very slow pace of
interconnection approvals.

Additionally, electricity demand is expected to grow as more electric vehicles and heat pumps are sold. This means that even more renewables will need to be put online to displace fossil fuels and reach President Biden’s target.

Source: Electric Power Monthly (EIA)

News analysis: One State Generates Much, Much More Renewable Energy Than Any Other—and It’s Not California (Inside Climate News)

News analysis: Solar produced 4.7% of U.S. electricity in 2022, generation up 25% (pv magazine USA)

News Roundup

Battery Recycler Secures Conditional $2 Billion DOE Loan Commitment

On 9 February 2023 the U.S. Department of Energy’s Loan Programs Office (LPO) made a conditional commitment to provide a $2 billion loan to Redwood Materials to build and expand a battery materials operation in Nevada. The facility will recycle end-of-life battery and production scrap and remanufacture that feedstock into anode copper foil and cathode active material. DOE states that when complete, this will be the first domestic facility to produce these materials through a closed-loop manufacturing process.

The facility is expected to produce roughly 36,000 metric tons per year of ultra-thin battery grade copper foil to use as an anode current collector, and roughly 100,000 metric tons per year of cathode active materials. This is LPO’s fourth funding announcement related to lithium-ion battery supply chains in the last eight months, following the closing of a total of $2.6 billion in loans to an active anode material supplier and a series of lithium-ion battery cell factories and a conditional commitment for a $700 million loan to a lithium carbonate processing facility.

Source: LPO Offers Conditional Commitment to Redwood Materials to Produce Critical Electric Vehicle Battery Components from Recycled Materials (DOE LPO)

California, Western Regional Grid Operators Approve Day-Ahead Market

Both the board of the California Independent System Operator (CAISO) and the Joint Western Energy Imbalance Market have approved the creation of an Extended Day-Ahead Market (EDAM) for the sale of electricity. This will extend the existing day-ahead market in CAISO’s service area to participating utilities across the West and follows on the 2014 creation of the Western Energy Imbalance Market, a real-time regional market.  

A recent study by CAISO estimates that the EDAM will provide $543 million to $1.2 billion in annual economic benefit to participants, and CAISO further states that the day-ahead market can help to improve grid reliability and make it easier to integrate more wind and solar. The EDAM now goes to the federal government for approval and could be active in 2024.

News coverage: CAISO board approves Western day-ahead market, with expected economic, reliability benefits (Utility Dive)

3 GW Power Line to link Eastern, Western US Grids Planned

Two transmission companies have joined forces to attempt to build a power line that would more than triple the transmission capacity between two of the United States’ three major regional power grids. Allete and Grid United have announced plans to build a $2.5 billion, 385-mile transmission line between Colstrip, Montana, and central North Dakota, connecting the EastConnect and WestConnect grids.

The companies are planning to start federal permitting on the 600 kV North Plains Connector Project, which would provide 3 gigawatts of bi-directional capacity. The companies plan to begin transmitting power in 2029.

A study published in 2020 by the U.S. Department of Energy’s National Renewable Energy Laboratory shows that even in its base case a system of high-voltage transmission lines connecting the United States’ three regional grids (Eastern, Western, and Texas) would provide $4.5 billion in net benefits. In a scenario with high build-out of wind and solar, the benefit would increase to
$28.89 billion.

News coverage: Allete, Grid United plan $2.5B transmission line linking Western, Eastern interconnections (UtilityDive)

Graphite Exclusions from Section 301 Tariffs Extended

By Anjali Joshi

On 16 December 2022, the Office of the United States Trade Representative (USTR) announced a nine-month extension of 352 product exclusions from additional import tariffs imposed under Section 301 on products from China. These exclusions were scheduled to expire at the end of 2022 but are now extended until September 30, 2023. The list of exclusions covers a wide array of products on all four Section 301 “lists” imposed in 2018, including artificial graphite which is used to manufacture lithium-ion batteries for EV and BESS applications.

Graphite is the only material, with no alternatives, that is used to make anodes in lithium-ion batteries. According to the World Bank, graphite accounts for about 53% of the mineral demand in batteries, as against lithium which accounts for only 4% of the total demand.
The U.S. Geological Survey (USGS) has listed this battery raw material as a “critical mineral.” Currently, there is no graphite mining or battery-grade graphite refining in the United States, which makes the country entirely reliant on imports of battery-grade graphite. 

China is the world’s biggest producer of coated spherical graphite which is used to produce lithium-ion batteries. In 2021, China produced approximately 70% of graphite for EV batteries in the
United States.

In October 2021, the USTR said that it would consider tariff exclusions for imports that can only be obtained from China. In early December 2021, Tesla, the largest U.S. EV maker, requested to waive tariffs on both natural and artificial graphite in three separate filings with the USTR office. The company claimed that only China could provide the quantity of graphite it needs to manufacture its batteries in the United States. Korean cell maker SK On also supported the extended waiver for tariffs so that it can source enough graphite for its U.S. cell manufacturing facilities. Following these public comments, AUSTR reinstated 352 product exclusions, including one for graphite, on March 28, 2022.

With no domestic graphite production, and significant expected growth in domestic battery cell production capacity, CEA expects a continuous increase in imports of battery-grade graphite from China, at least until the expiration of these tariff exclusions in October 2023.

Source: CEA Research