By Christian Roselund

The U.S. Department of Energy is forecasting that three new liquefied natural gas (LNG) facilities currently under construction will come online on the U.S. Gulf Coast in 2024 and 2025. These will further expand the LNG export capacity of the United States, which became the world’s largest exporter of LNG in the first half of 2022.

Exxon Mobil and Qatar Petroleum reached final investment decision (FID) on the Golden Pass LNG facility in Texas in 2019. The new project is expected to start ramping in January 2024 and will add 12 million metric tons per annum (MMtpa) of export capacity. Venture Global reached FID on its Plaquemines LNG facility in Louisiana in March 2022, which will add 14 MMtpa.

Cheniere reached FID on its Corpus Christi 3 LNG export facility in Texas in June 2022, which will represent another 18 MMtpa.

Together, the three will add 34 MMtpa to the United States’ aggregate 106 MMtpa LNG export capacity which will be online when the Calcasieu Pass facility ramps to full output later this year. This will allow more LNG to be exported to Europe and other sources of demand. However, if not matched with new gas production and/or reduced demand, increased exports will also put upward pressure on U.S. domestic natural gas prices.

Source: U.S. LNG export capacity to grow as three additional projects begin construction (U.S. Energy Information Administration, Today in Energy)

By Anjali Joshi

Long-duration energy storage (LDES) technologies are likely to play a vital role in helping the United States achieve its energy system modernization and transition to a clean energy economy. LDES systems offer stable energy output, ranging from 10 hours to days or weeks or even seasons, and provide enhanced grid reliability compared to short-duration energy storage systems. 

Several U.S. states have set energy storage targets to meet their climate and clean energy goals. New York aims to deploy 6 GW of energy storage on its networks by 2030 in response to its Climate Leadership and Community Protection Act. The state has set a target to increase the share of renewables in its electricity mix to 70% by the end of this decade. However, these targets typically do not specify the duration of storage, and the overwhelming majority of the energy storage deployed in recent years has been 2- and 4-hour lithium-ion batteries.

New York has taken steps to remedy this, and on 8 September announced US$16.6 million in funding for five LDES projects through the New York State Energy Research and Development Authority (NYSERDA). The state committed a further US$17 million for advancing the development and demonstration of different LDES technologies through a competitive funding opportunity. The funding aims to support the development of non-lithium-ion battery LDES technologies- hydrogen, thermal, electrochemical, and mechanical- due to safety concerns regarding the use of lithium-Ion battery storage in and around building in the state. The state has placed a heavy emphasis on hydrogen, as three of the five projects are based on this technology.

Below is the detailed description of each of the five projects:

Nine Mile Point Nuclear Station

Awarded US$12.5 million to demonstrate long-duration hydrogen energy storage paired with peak power generation from nuclear and hydrogen. The projects aims to demonstrate the efficiency of the hydrogen energy storage unit in reducing emissions from the New York Independent System Operator (NYISO) electric grid. Constellation Energy, the leading operator of nuclear plants in the United States, plans to use heat and electricity produced by its nuclear power plants to produce hydrogen for power generation. The company’s pilot project includes the demonstration of the production, storage, and use of hydrogen produced from nuclear power through Nel Hydrogen’s 1 MW electrolyzer powered by Nine Mile Point Nuclear Station. The project is expected to come online before the end of 2022.

Borrego Solar Systems

Awarded US$2.7 million to design, develop, and construct two standalone zinc-based battery storage systems with six-hour duration of storage. The project is aimed to demonstrate the cost-competitive of zinc hybrid technology against lithium-ion. There have been speculations in the market that the technology provider could be Eos Energy Enterprises which offers the same, zinc-based battery technology solutions.

JC Solutions and RCAM Technologies Solutions and RCAM Technologies

Awarded US$1.2 million to develop a 3D printed concrete marine pumped hydro energy storage (PHES) system that integrates directly with offshore wind enhancing grid reliability and peaking power capacity.

Power to Hydrogen

Awarded US$110,000 to develop Clean Energy Bridge, a proposed technology for reversible fuel cells which can produce and store hydrogen.

Roccera

Awarded US$100,000 for the evaluation and demonstration of prototype ‘Solid Oxide Electrolyser Cell’ for clean hydrogen production that can be manufactured to scale.

Although LDES technologies have been around for a long time, most notably in the form of pumped hydro storage systems, factors like high cost, permitting issues, technological barriers, and lack of regulatory support have prevented the widespread adoption of new alternative technologies other than pumped hydro which is widely deployed.

However, the demand for long-duration energy storage technologies is increasing at a significant rate as more and more renewables are being added to the grid. Cost declines in all types of storage technologies, including LDES, due to the recent inclusion of the standalone investment tax credit (ITC) under the Inflation Reduction Act (IRA) is expected to further accelerate the adoption of LDES technologies in the United States.

Source: CEA Research

By Christian Roselund

On 9 September, 72 members of the U.S. House of Representatives sent a letter to House Democratic Party Leadership calling on them to oppose moves to curtail the environmental review process for energy projects. This letter comes in response to news of a deal between Senate Energy and Natural Resources Committee Chair Joe Manchin and Senate Majority Leader Chuck Schumer to reform the permitting process.

The details of what this reform would look like are not yet available in a final form. The closest that has been published in the press is a one-page memo from Senator Manchin’s office, which sets out seven areas of action. These seven points include designating a list of 25 high-priority energy projects – including fossil, nuclear, renewable, carbon capture and storage, transmission, and others – for prioritized permitting.

The permitting reform deal also includes a 2-year limit on National Environmental Policy Act (NEPA) reviews of major projects, as well as a one-year limit for minor projects. As a final item, it requires relevant agencies to take the necessary actions to complete the contested Mountain Valley Pipeline. Whatever the final form of these changes, they are expected to be inserted into a bill funding the federal government, instead of being proposed as independent legislation.

The letter opposing this move is led by House Natural Resources Chair Raul Grijalva and focuses on the reform of NEPA reviews, stating that “attempts to short-circuit or undermine the law in the name of reform must be opposed.” The letter also warns that permitting reforms would disproportionately affect low-income communities, indigenous communities, and communities
of color.

To overcome the opposition of the 72 members signing on to the letter, Democratic Party leadership would need the support of Republican members of the House. Republicans in Congress often vote along party lines and will usually vote against measures proposed by the Democratic Party. However, Congressional Republicans also receive a higher portion of campaign funding from oil and gas companies than Democrats and could break ranks to support the bill if it is seen as a priority.

A bill with permitting reform for fossil fuel projects could also have trouble in the Senate. On 19 September Senator Ed Markey, a Democrat, also expressed his opposition to this move.

Source: Group NEPA Letter to Pelosi and Hoyer (House Committee on Natural Resources)

Source: Energy Permitting Provisions (U.S. Senator Joe Manchin)

News coverage: To fight, or not to fight? Progressive Caucus warily eyes Manchin’s energy deal (Politico)

News coverage: The Democratic infighting over Joe Manchin’s “side deal,” explained (Vox)

By Christian Roselund

Wood Mackenzie and Solar Energy Industries Association (SEIA) have increased their forecast of U.S. solar deployment from 2022 through 2027 by 40% over their previous outlook in response to the passage of the Inflation Reduction Act (IRA). This change represents 62 gigawatts-DC of additional solar capacity. However, the two organizations have also quietly downgraded their 2022 solar installation forecast to 15.7 gigawatts, its lowest level since 2019.

Analysts at Wood Mackenzie note that the 10-year timeline of investment tax credit (ITC) extensions under the IRA is far greater than the previous 2- and 5-year ITC extensions. Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report notes that this gives the U.S. solar industry the most long-term certainty in terms of incentive levels that it has ever had.

However, near-term module supply is anything but certain. SEIA and WoodMac had previously increased their installation forecast for 2022 to 18 gigawatts-DC following a 2-year suspension of duties under the anti-circumvention investigation. They have now dropped it back down to 15.7 gigawatts, citing the detention of solar modules under the Uyghur Forced Labor Prevention
Act (UFLPA).

UFLPA creates near-term challenges

The UFLPA was implemented in June 2022. The law creates a rebuttable presumption that goods made wholly or in part in Xinjiang, China, are made using forced labor and thus cannot be imported into the United States. Polysilicon was identified in the law as a priority area of enforcement, and as of 1 September, 2022, Customs had detained $393.6 million worth of PV modules under the law. CEA estimates that this represents 1.1 gigawatts of solar PV.

These detentions compound the existing supply shortage which has existed since mid-2021, after module shipments were detained by Customs under the withhold release order (WRO, an import ban) on Chinese metallurgical grade silicon maker Hoshine Silicon.

One of the challenges has been long uncertain timelines for release of detained product, under both the WRO and UFLPA. In early September, Customs released a shipment of JA Solar modules detained in June 2022 during the final days of the Hoshine WRO. However, to CEA’s knowledge, none of the modules detained under UFLPA have yet been released.

SEIA and Wood Mackenzie estimate that UFLPA could limit solar deployment through 2023 due to constraints on available modules. The organizations note that this pushes the near-term effectiveness of the IRA out to 2024.

Uneven deployment during Q2 2022

SEIA and Wood Mackenzie estimate that 4.6 gigawatts-DC of solar was installed during the second quarter of 2022, down 12% from the second quarter of 2021. However, installation volume trends vary widely by segment. The organizations find that the residential segment set another quarterly record with 1.36 gigawatts installed, while commercial solar was down a modest 7% year-over-year to only 336 megawatts.

In sharp contrast, installations in the utility-scale segment fell 25% year-over-year to 2.7 gigawatts-DC. This segment has experienced the brunt of the industry’s trade policy challenges, as it relies on imported modules, whereas the residential and commercial markets can be supplied by domestic modules. These U.S.-made modules Most of the domestic supply of U.S. modules are produced for the residential and commercial cost more to manufacture and are sold at a higher price to less price-sensitive markets.

SEIA and Wood Mackenzie also estimate that average PV system prices increased $0.07 to $0.27 per watt from Q2 2021 to Q2 2022, depending on the market segment. Most of the price increases resulted from the above-mentioned supply shortages and resulting higher module prices driven by trade policies, but the organizations also note that high polysilicon prices played a role.

Source: U.S. Solar Market Ready for Rebound after Tumultuous First Half of 2022 (SEIA)