Dominion Threatens to Pull Out of Major Offshore Wind Farm

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By Christian Roselund

Dominion Energy Virginia has warned that it will not move forward with a planned 2.6-gigawatt offshore wind project if a performance guarantee imposed by the state of Virginia is not waived. The Virginia Corporation Commission, in its approval of a rate rider for the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) Commercial Project, had earlier stipulated that Dominion must compensate its customers for any shortfall of less than 42% of rated output of the project over a 3-year period.

In a 22 August 2022 filing, Dominion warned that such a stipulation was “untenable.” It also argued that similar requirements were not placed on other energy generation projects, and that fluctuations in output would be beyond the company’s control.

Regardless of the outcome of this case, offshore wind continues to progress in the United States. In its most recent Offshore Wind Market Report, the U.S. Department of Energy included CVOW among more than 20 gigawatts of offshore wind projects off the Atlantic Coast that have reached the permitting stage. Currently two projects totaling 932 megawatts are under construction, and the United States’ total operational offshore wind capacity is only 42 megawatts at two sites.

Source: Petition of Virginia Electric and Power Company for Limited Reconsideration (Virginia State Corporation Commission) News coverage: Dominion threatens to abandon 2.6-GW offshore wind farm over performance guarantee (UtilityDive)

IRA Presents Opportunities for Korean Companies in North American EV Market

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By Anjali Joshi

Battery cell manufacturers have started taking action to reduce the proportion of Chinese battery material components from the supply chain and are announcing additional factories in the United States. Both of these moves are in response to the Inflation Reduction Act (IRA), which sets strict domestic content requirements for EV incentives while offering incentives to build batteries in the country.

After the announcement of its new Kansas factory in July, Panasonic has recently announced its plans to set up another battery cell production factory, expected to be in Oklahoma. LGES and Honda will also establish a joint venture company to build a 40 GWh lithium-ion EV battery plant in Ohio which is slated to come online by 2025. Toyota will invest around US$2.5 billion in Toyota Battery Manufacturing in North Carolina.

In addition to existing battery cell manufacturers, strong support and incentives provided by the IRA is also encouraging new companies to expand their presence in the U.S. market. Turkey-based integrator Kontrolmatik Technology, Energy and Engineering Inc., which announced its expansion to the US market through a 2 GWh cell manufacturing facility in April, stepped up its planned capacity to 3 GWh right after the IRA was passed. While the construction of the factory has not even started yet, the company has already begun planning for its second U.S. factory.

The IRA not only provides incentives for domestic battery cell production, but also on the midstream segment of the battery supply chain. As a result, South Korean battery makers- LG Energy Solution, SK On, and Samsung SDI- are looking to expand their collaboration with domestic battery material suppliers as the US sanctions on Chinese battery material components are becoming more material. Precursor companies like EcoProBM and POSCO Chemical are already supplying cathode and anode materials to South Korean battery cell makers. These South Korean battery material companies are now looking to expand their precursor production capacity, both domestically and in North America.

EcoProBM plans to expand its current precursor production capacity from 50,000 tons to 200,000 tons by 2024, both at existing South Korean plants and a new U.S. production facility. POSCO Chemical plans to increase its precursor production capacity to 220,000 tons by 2025 and 440,000 tons by 2030 via a new U.S. production facility. The company is also looking to start production of artificial graphite in the United States. Furthermore, the two companies are also planning to develop their own raw materials needed to produce cathode and anode active materials.

Going one step further in the battery supply chain, localization of electrolyte and separator materials is also expected to take place in the near future. Companies like Enchem, SK IE Technology, and Enerever Battery Solutions are looking to set up facilities to make electrolytes, wet separation membranes, and dry separators in the United States.

Source: CEA

Wind Stalls in Q2 but Outlook Is Strong

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By Christian Roselund

An analysis of installations by S&P Global is showing again how much the ups and downs of the U.S. wind market have been driven by policy changes. While Q2 2022 brought the lowest quarterly level of wind installations in the United States in three years at only 945 megawatts, installations are expected to pick up again with the restoration of the Production Tax Credit (PTC) through the Inflation
Reduction Act.

S&P Global finds that the decline in Q2 additions, a fall of 66% from the 2,786 installed in the previous quarter, was due to the wind industry waiting to see if Congress would re-instate the PTC. It also found that wind equipment manufacturers were experiencing delays in orders that were partially attributable to supply chain disruptions and rising prices.

Since it was first introduced in 1992, the PTC has been extended at least 13 times, including multiple lapses which correlated to declines in wind installations. However, under the Inflation Reduction Act (IRA) the PTC has been extended through 2032, including through a technology-neutral PTC for projects that start construction after 2025.

S&P finds that there is a strong U.S. wind development pipeline, with nearly 6.2 gigawatts of projects currently under construction. Most of these projects are scheduled to come online this year. S&P Global also found another 1.5 gigawatts in advanced development and planned for 2022.

Wyoming has the largest capacity of projects in advanced development, at 6.5 gigawatts. Texas has a roughly 4-gigawatt pipeline, and Massachusetts has 2.7 gigawatts of offshore wind in advanced development or under construction.

Source: US wind additions in Q2 hit lowest level since 2018 (S&P Global)

California Approves Plan for 100% EV Sales – 17 States Could Follow

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By Christian Roselund

On 25 August, the California Air Resources Board (CARB) approved a rule which requires that electric vehicles (EVs) comprise a minimum of 35% of the state’s new car sales by 2026 and 100% by 2035. The Advanced Clean Cars (ACC) II rule is the first binding commitment to phase out internal combustion engine car sales in the United States, and the 100% by 2035 requirement in follows a 2020 executive order by California Governor Newsom.

EVs comprised more than 16% of California’s new light-duty vehicle sales in the first half of 2022, and automakers including Tesla have stated that they will be able to meet the 2026 requirement. However, Kia warned of difficulties caused by “elements outside the control of the industry” including supply chain challenges and insufficient charging infrastructure.

ACC II has been adopted entirely or in part by 17 other states, and CARB’s move could trigger similar internal combustion engine vehicle phase-out mandates across the nation. UtilityDive states that Connecticut, Massachusetts, New York, Oregon, and Washington are among the first states that are expected to follow California’s lead, and CARB says that this could lead to 35% of the national car and light truck market establishing similar standards.

Electrification of light-duty vehicles is considered a key action for reducing transportation emissions, which comprise 41% of California’s total emissions. However, as the average new car stays on the road for more than a decade, reductions in transportation emissions will lag the share of EVs in new car sales. Due to this, CARB estimates that this program will result in only an 8% reduction in the state’s transportation emissions by 2030, and 29% by 2035 – even as the state’s entire new car fleet transitions to electric vehicles.

Source: California moves to accelerate to 100% new zero-emission vehicle sales by 2035 (CARB)

News coverage: California sets road map to complete ban on gasoline-powered vehicle sales by 2035 (UtilityDive)

Developers Plan 92 Gigawatts of U.S. Wind, Solar through 2026

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By Christian Roselund

A new analysis of wind and solar projects by S&P Global finds developers plan to build 51,172 megawatts of solar and 40,933 megawatts of wind projects through the end of 2026. The top 10 developers, led by NextEra, EDF Group, and Invenergy, are responsible for 83% of this capacity.

NextEra has the largest solar project pipeline (13,152 megawatts) and the largest pipeline overall (18,496 megawatts). Apex Clean Energy has the largest wind pipeline at 8,489 megawatts. Invenergy has the most solar power currently under construction at 1,807 megawatts; NextEra has the most wind under construction at 2,031 megawatts.

Several European companies are listed among the top U.S. developers. EDF is the second-largest wind and solar developer overall (8,447 megawatts) and Orsted is the fourth-largest wind developer (4,253 megawatts). European companies including Orsted have been particularly active in the United States’ growing offshore wind sector.

The extensions of the Investment Tax Credit and Production Tax Credit via the Inflation Reduction Act are further stimulating demand for U.S. wind and solar. However, the U.S. solar market remains supply-constrained due to multiple trade policy challenges and the uncertainty that
they bring.

Source: Top developers plan 92.1 GW of wind, solar projects in U.S. through 2026 (S&P Global)

First Solar Plans Massive U.S. Factory Expansions

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By Christian Roselund

Production of First Solar’s Series 6 modules at an Ohio factory
Image credit: First Solar

On 30 August, the largest U.S. module maker made the first public announcement of a solar PV manufacturing expansion following the passage of the Inflation Reduction Act (IRA). First Solar has revealed plans to build a factory at a new site in the southeastern United States, as well as expanding the capacities of its existing factories in Ohio.

The company will invest up to $1.2 billion in these ventures, which will increase the capacity of modules it is able to make each year by 4.4 gigawatts. Once its factory currently under construction in Ohio and these investments come online, First Solar expects to have the ability to produce 10.6 gigawatts of modules each year in the United States.

This expansion will give First Solar a capacity more than the United States’ second-largest module maker, Hanwha Q Cells. Q Cells is currently expanding at its manufacturing site in the state of Georgia, and when its new lines come online the company expects to have an annual capacity of 3.1 gigawatts at the site. Q Cells is further scouting for locations for a new integrated 9-gigawatt ingot, wafer, cell, and module factory. However, the company told pv magazine that its plans are at the due diligence stage and that it has not made a final decision regarding the new integrated plant (see the 23 August U.S. Energy Transition Report for more details).

Technology Meets Policy

First Solar’s modules comprise thin layers of cadmium telluride applied to glass. As such, First Solar is not dependent on the supply of polysilicon and its precursors that have been at the heart of U.S. trade policy challenges such as the Uyghur Forced Labor Prevention Act (UFLPA). The company was one of only two among dozens of thin-film startups to reach gigawatt-scale manufacturing and is the last remaining large thin-film solar PV manufacturer outside of China.

Nor is First Solar currently competing directly with other U.S. manufacturers. The company makes products almost exclusively for large solar farms, as opposed to other module producers in the U.S. that produce higher-priced crystalline silicon modules primarily for the residential and
commercial segments.

These characteristics put First Solar in a unique position to serve the U.S. utility-scale market with less trade policy risk and the company utilizes this as a competitive advantage. As of July 2022, First Solar was sold out through the end of 2024 (excepting a new factory in India that has yet to come online) and was taking orders for deliveries through 2026.

First Solar will make its Series 7 product at its new factory under construction in Ohio and the new factory to be located in the U.S. Southeast. This is a large-format module with power ratings of 505 – 540 watts, which at 2.3 meters by 1.2 meters is even larger than First Solar’s Series 6.

First Mover Advantage

First Solar is far from the only PV manufacturer considering an expansion in the United States following the passage of the Inflation Reduction Act and its generous incentives for production along the solar value chain. CEA is tracking around 15 gigawatts of potential U.S. solar manufacturing expansions and expects more of these plans to finalize in the coming weeks and months.

However, as a first mover First Solar may be able to claim not only an $0.11 per watt credit for each module it produces, but also a share of the Advanced Energy Project Credit. This is a 30% credit for investments in clean energy manufacturing and recycling facilities that is capped at $10 billion, and CEA expects that this credit will be fully claimed within the next few years.

Source: First Solar to Invest up to $1.2 Billion in Scaling Production of American-Made Responsible Solar by 4.4 GW (First Solar)

News Roundup

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Massachusetts Signs Comprehensive Climate Bill into Law

News coverage: Mass. enacts sweeping climate and energy law (E&E News)

Magnis Energy Begins Production at New York Battery Factory

Magnis Energy has announced the beginning of operation at its 22,000 square meter factory in Endicott, New York. According to pv magazine the company expects to reach 1 gigawatt-hour of annual battery cell production in 2023, on its way to ramping to 1.8 GWh on an undefined timeline. This is a much smaller scale than the battery factories by Panasonic, SK Innovation, and LG that are coming online to serve EV makers. Magnis’ batteries are based on a bio-mineralized lithium manganese phosphate cathode technology, which does not contain nickel or cobalt.

Source: Magnis Energy begins production at US battery gigafactory

California Adopts Offshore Wind Planning Goal

The California Energy Commission has adopted preliminary planning goals for the state to deploy 2 – 5 gigawatts of offshore wind by 2030, and 25 gigawatts by 2045. This is an increase from previous goals to deploy 10 – 15 gigawatts by 2045. The move was made in response to 2021 legislation to directed the commission to develop planning goals for offshore wind and a strategic plan to develop the resource in waters off its coast. In 2021, Governor Newsom opened the state’s coastline to offshore wind development, but the West Coast’s offshore wind industry remains years behind the East Coast’s.

Source: CEC Adopts Historic California Offshore Wind Goals, Enough to Power Upwards of 25 Million Homes (California Energy Commission)

WIND REPORTS FIND U.S. MARKET GROWTH, MORE POWERFUL TURBINES, LOWER PRICES

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by Christian Roselund

A pair of new reports by the U.S. Department of Energy (DOE) are showing the progress of both onshore and offshore wind in the United States. These reports show that the nation has reached 135,886 megawatts of wind power, with two states generated more than 50% of their electricity from wind in 2021. Additionally, they found that turbines are getting more powerful and costs for offshore wind are falling; the average capacity of new wind turbines is now above 3 megawatts and that the average cost of offshore wind has fallen to $86 per megawatt-hour.

This follows a particularly strong year for land-based wind; 2021’s 13.4 gigawatts installed was the second-highest volume to date, following 2020’s 17.2 gigawatts. This represented 32% of the new capacity additions during the year, surpassed only by solar which represented 45% of capacity additions. Additionally, developers have applied for interconnection for 247 megawatts of wind projects. However, land-based wind remains highly geographically concentrated in a band of states with very strong wind speeds situated between the Midwest and the Rocky Mountains. The following table shows that several states in this region have reached very high levels of wind penetration in 2021.

In 2021, the size and capacity of wind turbines also increased; the average turbine is now around 95 meters in height, 130 meters in rotor diameter, and more than 3 megawatts. Capacity factors are also increasing over time; the average 2021 capacity factor for projects built from 2014 to 2020 was 39%, compared to an average of 26% for projects build from 2004 to 2011.

The reports find that average installed costs for land-based wind have flattened out in recent years. However, for offshore wind the trend is different. The levelized cost of electricity for U.S. offshore wind fell 13% on average to $84 per megawatt-hour in 2021, and DOE notes that the mid-range estimate is for offshore wind prices to fall to $60 per megawatt-hour by 2030. The U.S. offshore wind industry is in its infancy, with only 42 megawatts of operational turbines in two projects. However, DOE counts 24 projects that have signed contracts for 17.6 gigawatts of total capacity. Of these only one has begun construction: the 800-megawatt Vineyard Wind 1 project.

Source: Land-Based Wind Market Report: Edition (U.S. Department of Energy)

NEW YORK APPROVES TRANSMISSION, WIND, SOLAR PROJECTS

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By Christian Roselund

On 11 August 2022, New York regulators approved the upgrade of a major transmission line along the northern edge of the state that could enable the integration of more wind and solar. On the same day they approved a transmission line for a 291-megawatt wind farm and five wind & solar facilities totaling 517 megawatts.

The Smart Path Connect runs across 100 miles of Canadian border and replace a 70-year-old transmission line with a combination of 230-kilovolt and 345 kilovolt lines, as well as repair or replacement of 10 substations along the route. This will complete a larger line that connects Northern New York with the central and western parts of the state, and the project’s backers say that it will further allow the integration of more new wind and solar projects as well as connecting to legacy hydroelectric dams. The state has identified this line as a priority project to help it meet its target of getting 70% of its electricity from renewable energy by 2030. New York regulators have also approved a transmission connection for Invenergy’s 290.7-megawatt Canisteo wind farm in Jasper, New York, along with compliance filings for five other wind and solar projects.

New York is one of only six states that mandate that utilities procure 70% or more of their electricity from renewable sources by 2030, or for utilities to reduce emissions by 70% or more by 2030. And while the state gets around 25% of its electricity from hydroelectric power, it has been slower to deploy wind and solar in proportion to its electric demand. In 2020, solar and wind only represented around 6% of in-state generation. New York has a massive pipeline of contracted renewable energy, but around 30% of this is offshore wind, and the state has yet to install a single offshore wind turbine.

News coverage: New York regulators OK key National Grid and Invenergy transmission projects, reject NextEra solar farm (UtilityDive)

GRID-SCALE BATTERIES NOW MAINLY PAIRED WITH SOLAR

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By Christian Roselund

A new briefing by Lawrence Berkeley National Laboratory (LBNL) has documented the increasing popularity of hybrid solar and energy storage plants, finding that most of the grid-scale (1 megawatt and larger) batteries that have been installed in the United States to date are paired with solar PV. The briefing found 7 gigawatt-hours of hybrid plants versus 3.5 gigawatt-hours of standalone batteries, including several large solar projects that have been retrofitted with batteries.

LBNL found that wind plants are far less frequently paired with energy storage and that wind plus storage plants were more often used for grid services. By contrast, solar plus storage projects are increasingly charging during periods of low power prices and discharging during periods of high prices. This is particularly true in California and other regions where high penetrations of solar drive down mid-day power prices. The largest number of solar plus storage projects were found in Massachusetts, where 49 of 54 PV plants 1 megawatt and larger were solar plus storage. However, by far the largest capacity of solar plus storage was in California, as the individual systems were much larger.

LBNL also found that while solar plus storage power contract prices have been on a downward trend over the last seven years, the price per megawatt-hour of the battery portion of contracts has been increasing since 2020. Prices for solar plus storage contracts remain much higher in Hawaii than in the rest of the country. LBNL’s review of interconnection data at the grid operator level suggests that the trend of combining energy storage and solar will continue as more projects come online. The report found that 42% of the capacity of solar projects currently proposed is in projects paired with energy storage. This varies widely by region, from a low of 6% in New York to a high of 95% in California.

Source: Hybrid Power Plants: Status of Operating and Proposed Plants, 2022 Edition (LBNL)