HANWHA Q CELLS LOOKS TO SITE MASSIVE SOLAR FACTORY

/in

By Christian Roselund

In what could be the first large manufacturing project spurred by the IRA, Hanwha Q Cells is scouting locations for a factory to produce ingots, wafers, solar cells, and modules in the United States. The factory would be the first U.S. ingot and wafer operation since SolarWorld closed its ingot pulling in Oregon. And at 9 gigawatts of output, it would be larger than the crystalline silicon module capacity of all other factories in the United States combined. Hanwha has filed applications with Texas school districts related to tax matters for the factory. pv magazine also states that Hanwha is considering South Carolina and Georgia, where the company is currently expanding its crystalline silicon module production capacity from 1.7 gigawatts to 3.1 gigawatts annually.

Additionally, in November 2021 Hanwha Q Cells invested $160.47 million in REC Silicon, which the company said at the time was a move to secure a supply of polysilicon to meet growing U.S. demand for domestic product. REC Silicon has said that the investment will enable it to re-start production of solar-grade polysilicon at its Moses Lake site in the state of Washington in 2023.

Source: Application (Texas Comptroller) News coverage: Nine gigawatt solar manufacturing facility being scouted for Qcell module manufacturing (pv magazine)

H1 2022 SOLAR INSTALLATIONS LESS THAN HALF OF EXPECTATIONS

/in

By Christian Roselund

The latest information from the U.S. Department of Energy’s Energy Information Administration (EIA) documents major delays and potentially cancellations of utility-scale solar projects in the United States during the first half of 2021. Chiefly, EIA noted that the 4.2 gigawatts-AC of utility-scale solar projects that came online in the first half of 2022 is less than half the volume that developers anticipated.

EIA found that 20% of planned H1 2022 solar capacity was delayed but did not indicate what had happened to the other projects that did not come online. Most of these delays were for less than six months. EIA cites several factors for the delays, including “economic factors, such as supply chain constraints, labor shortages, and high prices of components” as well as “issues with obtaining permits or testing equipment.” EIA did not mention the impact of the Withhold Release Order (WRO) on Hoshine Silicon, under which multiple gigawatts of modules were detained for three to eight months before being released. It is CEA’s assessment that this WRO was a major factor in creating a supply-constrained market for solar panels in H1 2022, particularly when combined with the other factors that EIA cites.

EIA estimates that 1.9 gigawatts-AC of solar projects under construction have been delayed but will still come online in 2022, with another 1.7 gigawatts of solar projects delayed to 2023. EIA also does not mention the effects of detentions under the Uyghur Forced Labor Prevention Act (UFLPA). Under UFLPA solar modules made by at least three of the largest PV module makers have been detained. Some of these companies have either reduced shipments to the U.S. market or are insisting on terms that shift all risk to buyers, and that buyers are reluctant to agree to. Despite these headwinds EIA expects the share of renewable energy in annual U.S. electricity generation to grow from 20% in 2021 to 22% in 2022, and 24% in 2023. The growth in renewable penetration is driven by increased deployment of wind and solar. Across regions EIA finds that the Northwest, Rocky Mountains, and California have the highest portion of electricity from renewables and expects these regions to get more than 50% of their electricity from renewables by 2023.

Two other regions are notable for their rapid progress in deployment of renewables. The share of renewables in the Southwest Power Pool (SPP) grid, which covers the Great Plains Region, rose from 13% in 2013 to 40% in 2021. EIA expects it to reach 44% in 2022. EIA expects renewables to represent 32% of Texas’ generation in 2022.

Source: Utility-scale solar projects report delays (EIA)

Source: EIA expects renewables to account for 22% of U.S. electricity generation in 2022 (EIA)

INFLATION REDUCTION ACT INCENTIVES US BATTERY DEPLOYMENT AND PRODUCTION

/in

By Cormac O’Laoire

The Inflation Reduction Act (IRA), which was signed into law on 16 August, 2022, contains multiple provisions related to transport electrification and increased support for both deployment and manufacturing of batteries.

Lithium-ion batteries will play a crucial role in the United States’ energy transition, but currently most lithium-ion batteries are manufactured in China and US battery production accounts for about 10% of global supply. Besides battery production, China also dominates battery material refining. Developing greenfield mining projects, refining capacity and cell manufacturing in the United States could take many years. In the medium-term CEA expects global suppliers to accelerate plans to establish battery cell production closer to US soil. The longer-term goal of the law is to incentivize companies to build more mining capacity and battery manufacturing plants in the United States, and in turn reduce dependence on China.

The law contains several tax credits that relate to EVs and batteries, including an advanced manufacturing production tax credit and an extension of the investment tax credit (ITC) to battery installations. In terms of the 45x advanced manufacturing tax credit, this allows battery makers to claim a credit of $35 per kilowatt-hour (kWh) for cell and $10/kWh for the batteries they produce. There is also a 10% tax credit for electrode active materials, and incentives for mineral production. These provides a runway for incumbents and startups to compete with cheaper Asian cells. Additionally, standalone energy storage is eligible for the Section 48 ITC at 30% for new systems over 5 kWh. The tax credit is also available for co-located solar power projects and energy storage systems. Like the solar ITC, the full 30% is contingent upon meeting labor provisions, and there are adders for domestic content and installations in energy communities.

The law also contains significant domestic content requirements to access tax credits for the purchase of EVs. For the $7,500 electric vehicle tax credit, there are two separate components, each valued at $3,750. beginning in 2023 when the tax credits begin 40% of battery metals (lithium, etc.) must be mined, processed, or recycled in the United States or a free-trade partner; this increases to 80% in 2026. These metal origin requirements are a concern for vehicle manufacturers wishing to qualify for EV tax credits. Under these timelines, US EV makers will have to quickly establish battery material partnerships in either the United States or in free trade partner nations. CEA expects supply chain traceability will be a crucial part of contracts moving forward.

The second $3,750 component covers the actual location the battery is manufactured. Starting in 2023, 50% of the battery components need to be manufactured and assembled in North America, rising to 100% by 2029. In addition, electric vehicles may be excluded from the tax credits if any mining, processing, or manufacturing is conducted by a “foreign entity of concern.” This requirement takes effect in 2024 for the battery components and in 2025 for critical minerals. These changes to the EV tax credit may make the incentive useless for the next few years. E-Source, in its analysis of the IRA, states that it is “plausible” that no cars will qualify for the tax credits until at least 2025, citing the onerous domestic content requirements. Bloomberg Opinion writer Anjani Trivedi slammed the IRA’s domestic content requirements for being “off-point,” stating that these sort of actions keep the United States as a laggard behind China in EV adoption.

This is not the first time such measures have been taken in the battery industry. Over a decade ago the Chinese government created the “battery manufacture whitelist” which essentially froze Korean battery makers out of China for four years. During this time CATL and BYD grew into leading global battery makers. In the case of the IRA, we may see similar US cell manufactures and component suppliers seize domestic market share at the expense of imports.

Source: Text: H.R. 5736, Inflation Reduction Act of 2022 (U.S. Congress)

BIDEN SIGNS THE INFLATION REDUCTION ACT INTO LAW

/in

By Christian Roselund

On 16 August 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA), which includes robust incentives for both deployment and domestic manufacturing of solar, wind, energy storage, and a variety of other clean energy technologies. The bill represents a breakthrough for clean energy policy, eight months after U.S. Senator Joe Manchin killed the previous Build Back Better bill. The bill passed the Senate on August 7 with Vice President Kamala Harris providing the tie-breaking vote. In the Senate all Democrats and Independents voted in favor, and all Republicans voted against the legislation.

The IRA both extends and expands existing tax credits for clean energy deployment and manufacturing, as well as including significant new measures. Following the 29 July U.S. Energy Transition Report special edition CEA has examined the bill in more detail, and what follows is an updated assessment of the provisions in the bill and their potential market impacts for solar and wind (energy storage provisions will be addressed in the following article).

Solar, wind, and energy storage deployment

IRA includes extensive measures designed to boost solar, wind, and energy storage deployment. These include:

• Section 48 Investment Tax Credit (ITC) extension at 30% for projects starting construction before the end of 2024

• Section 45 Production Tax Credit (PTC) extension at $15/MWh (adjusted for inflation, estimated $26/MWh for 2022) for projects starting construction before the end of 2024

• Optionality for solar projects to take the ITC or the PTC • A new technology-neutral ITC (Section 48E)

• A new technology-neutral PTC (Section 45Y) • Direct pay of the ITC and PTC for non-profits, state & local governments, tribes, and the Tennessee Valley Authority

• Transferability of the ITC and PTC The above incentives are all contingent on meeting labor provisions, which include the requirement that all workers are paid prevailing wage and that a minimum number of apprentices are utilized. If not met, the incentives drop to 20% of the above levels; i.e., a 6% ITC and $3 per megawatt-hour PTC.

Additionally, there are bonuses for use of domestic content, projects in communities that formerly hosted fossil fuel jobs, and low-income areas. All told, these bonuses can potentially increase the ITC to 60% and the PTC to $19.5/MWh (before adjustment for inflation).

Clean energy manufacturing

In addition to the deployment tax credits, the IRA features the most robust incentives for clean energy manufacturing implemented in the United States to date. This includes both a revival of the Section 48C credit for advanced energy manufacturing and a new Section 45x tax credit based on the output of clean energy factories, based on Senator Ossoff’s Solar Energy Manufacturing for America (SEMA) Act. Solar and wind components whose domestic manufacture are subsidized under the Section 45x credit include:

Solar Components

  • Polysilicon
  • Ingots
  • Wafers
  • Cells
  • Modules
  • Backsheets
  • Torque tubes (for trackers)
  • Fasteners (for trackers)

Wind Components

  • Blades
  • Nacelles
  • Towers
  • Offshore Wind Foundations
  • Inverters

Additionally, there are incentives to produce more than 40 critical materials, including aluminum, cobalt, lithium, nickel, manganese, zinc, and others used in the manufacture of solar panels, wind turbines, and batteries. While the Section 45 production incentives phase down starting in 2030, the incentives for critical materials do not.

The IRA also funds the Section 48C Advanced Energy Project Credit with $10 billion. This credit allows manufacturers to claim a 30% credit for building clean energy factories and was first introduced under the Obama Administration but quickly ran out of funding. The IRA further expands this credit to recycling facilities, but like the deployment incentives the full 30% is only available if the workers who build the factory are paid prevailing wage and apprentices are utilized. CEA’s analysis shows that when measured against a benchmark for manufacturing in Southeast Asia the 45X production incentives more than offset the higher cost of U.S. manufacturing at the wafer, cell, and module levels.

In addition to the above, the IRA includes incentives for induction stoves, heat pumps, electrical upgrades, and insulation.

Market impacts

CEA’s assessment is that the sum of the deployment measures will provide additional demand in the U.S. solar, wind, and energy storage markets, but that this will not in all cases necessarily translate to equivalent deployment. We see a bigger push for domestic manufacturing, and we expect construction of new wafer, cell, and module factories in the United States. Ingot facilities may or may not be co-located with the wafer slicing, as the incentive applies only to the wafering.

Several solar manufacturers announced plans to build U.S. factories in 2021, pending the passage of the Build Back Better Bill. Given that the manufacturing incentives in IRA are similar, some of these and other new projects may move forward. Local government filings show that Hanwha is looking for locations for a 9-gigawatt integrated ingot, wafer, cell, and module plant in the United States. This may be one of the first factories to claim these incentives.

Per CEA’s estimated timelines, even if construction were to begin at the end of 2022, the first IRA-supported solar module factories would not be fully ramped until mid-2024, and the first solar cell factories at the end of 2024. Ingot and wafer factories will not be ramped until mid-2026.

And while the IRA’s deployment incentives are generous, for solar deployment a larger concern is supply, particularly until more U.S. factories come online. Roth Capital has recently suggested that as many as 3 gigawatts of solar modules may currently be detained under the Uyghur Forced Labor Prevention Act (UFLPA), and that 9 – 12 gigawatts of shipments may not arrive in 2022. If suppliers and importers are unable to navigate Customs and Border Protections requirements under the UFLPA, the U.S. market could be severely supply constrained until this issue is resolved and/or substantial new manufacturing comes online, blunting the benefit of deployment incentives.

Source: Text: H.R. 5736, Inflation Reduction Act of 2022 (U.S. Congress)

NEWS ROUNDUP

/in

>California’s Newsom calls for 20 GW of offshore wind, 6 million heat pumps

In a letter, California Governor Gavin Newsom has asked the California Air Resources Board to establish various clean energy, electrification, and CO2 removal targets. These include:

  • 20 gigawatts of offshore wind by 2045
  • Deployment of 6 million heat pumps by 2030
  • 20% clean fuels targets for aviation
  • 20 MMT of carbon removal by 2030

The letter includes other requests, such as that CARB plan for an energy transition with no new gas plants, and that state agencies form a task force to identify and address methane leaks. CARB is currently developing a 2022 update to its scoping plan, and Newsom’s requests echo criticisms made by environmental groups that a draft of the plan is inadequate and relies excessively on carbon
dioxide removal.

Source: Letter (Office of California Governor Gavin Newsom)

>GM secures battery materials for electric vehicles

General Motors has secured three sourcing agreements to provide key materials for its in-house battery production, as revealed on the company’s Q2 results call. Under the agreements LG Chem will provide GM with 1 million tons of cathode material by 2030, POSCO Chemical will supply the company with cathode active material from its Korean operations, and Livent will supply GM with “significant quantities” of lithium.

GM CEO Mary Barra says that these agreements mean that it now has all of the battery raw materials needed to support its goal of have capacity to product one million electric vehicles in North America annually by 2025. These statements are in contrast to Ford, which has also recently secured supply agreements but warned investors that inadequate supplies could limit is deployment of
electric vehicles. Source: General Motors Company’s (GM) CEO Mary Barra on Q2 2022 Results – Earnings Call Transcript (Seeking Alpha)

>Xcel seeks to add fast chargers in Minnesota, Wisconsin

Xcel Energy has filed proposals with regulators in Wisconsin and Minnesota for new programs for electric vehicles, as part of a push for vehicle electrification by the utility. These proposals include a plan to add 750 fast-charging locations with 1,500 ports. In Minnesota, Xcel says that 8,300 fast-chargers are needed to meet the state’s goal of 20% vehicle electrification by 2030, but currently there are only 92 non-Tesla fast-charging ports statewide. News coverage: Xcel eyes CO2-free transportation in 8 states (E&E News)

NEW ENGLAND GRID REPORT ARGUES FOR DISPATCHABLE POWER

/in

By Christian Roselund

On 29 July, New England’s grid operator published a report examining how the region’s grid can maintain reliability under the combination of increasing penetrations of renewable energy and the electrification of heating and transportation required to meet state decarbonization policies. The report found a need to maintain a high level of dispatchable resources, either from within the region or as the result of an active trade with New York and Canada, as well as expanded transmission. It also found that a need for additional studies using more advanced tools than the software ISO New England has used to date.

The Phase 1 Future Grid Reliability Study includes a modeling of scenarios where state goals to decarbonize the electricity sector are met, as well as one that includes high levels of electrification of heating and transportation. It found that the electrification of heating and transportation will “radically change the demand for electric power” in the region. In both scenarios the season of highest reliability concern is winter, due to a reliance on wind resources to meet demand and the high degree of variability of wind output on a week-to-week basis.

ISO New England’s main solution to the challenge of maintaining system reliability is to keep high levels of dispatchable power. In practice this means not retiring the region’s natural gas and oil-fired power plants, even as more wind and solar comes online, and potentially replacing the fuel for these generators with “another low-emission fuel source.” Despite plans by utilities in California and other parts of the United States to deploy hydrogen-burning power plants, the report did not mention hydrogen as a potential solution.

The Future Grid Reliability Study also looked at scenarios with increased two-way electrical interconnections to Quebec. Referencing a 2020 MIT study, it finds that “long-duration storage” utilizing Quebec hydropower could provide energy in place of natural gas during times of peak demand, as well as reducing curtailment of renewable energy sources.

However, the last two efforts to build additional transmission corridors from Quebec have been challenged in New Hampshire and Maine. New Hampshire stopped the Northern Pass project in 2018. The Northeast Clean Energy Connect line was initially rejected in a non-binding statewide vote, was recently approved by the state’s Board of Environmental Protection, and remains the subject of active litigation. The last transmission line connecting Quebec to New England was built in in 1990 and it is unclear if a compromise can be reached with the northern states on a suitable route.

Additionally, the study looked at the possibility of vehicle-to-grid storage using 8 million electric vehicles located throughout New England, finding that this would reduce renewable energy curtailment and displace fossil fuel generation.

However, for both balancing wind and solar with Canadian hydro and mass vehicle-to-grid storage, the study found “difficulties in modeling energy storage using current production cost modeling software.” Even when studying battery storage, there were challenges. The report noted that current software tends to optimize the profit of energy storage resources over short time periods, incorrectly assuming that this aligns with the needs of the system.

ISO New England is continuing to study these challenges, including through an economic planning study currently underway, and a future phase 2 of the Future Grid Reliability Study.

Source: 2021 Economic Study: Future Grid Reliability Study Phase 1 (ISO New England)

AMAZON TO DEPLOY RIVIAN ELECTRIC DELIVERY VANS IN 100 CITIES THIS YEAR

/in

By Christian Roselund

Amazon has announced that it will deploy “thousands” of Rivian electric delivery vans in 100 cities across the United States by the end of 2022. This includes major urban areas such as Chicago, Dallas, and Seattle, and Amazon has further pledged to deploy 100,000 electric delivery vans by 2030.

Amazon and Rivian first partnered in 2019, and the e-commerce giant started testing Rivian e-delivery vehicles in 2021. Amazon also has a partnership with Stellantis and will be the first company to deploy the automaker’s Ram ProMaster electric van when it becomes available in 2023.

In January 2022, TechCrunch estimated that Amazon has about 70,000 branded delivery vehicles, but it is unclear how many delivery vehicles it will have in 2030, and thus what portion of that fleet 100,000 electric delivery vans will represent. Amazon’s move follows on a commitment by the U.S. Postal Service to order at least 33,800 electric delivery vehicles, representing at least 40% of a larger order (see the 26 July U.S. Energy Transition Report for more information).

Source: Amazon’s electric delivery vehicles from Rivian roll out across the U.S. (Amazon)

GAF BEGINS WORK ON NEW FACTORY FOR SOLAR ROOF TILES IN TEXAS

/in

By Christian Roselund

Solar PV manufacturer GAF Energy has begun construction on a new 450,000 square foot (42,000 square meter) factory in Georgetown, Texas. The factory will have the capacity to make 300 megawatts of the company’s solar roofing tiles annually, a 5-fold expansion on GAF’s capacity at its current factory in California. The company says that when complete the new factory will make it the largest manufacturer of solar roofing tiles in the world.

The new factory has attracted $3.24 million in incentives from Georgetown, and GAF expects to put the plant online in 2023. Notably, construction on the factory began before Democrats in the U.S. Senate announced a deal on clean energy tax credits including incentives for manufacturing. If passed, GAF’s new factory could additionally benefit from the manufacturing tax credits in the Inflation Reduction Act.

Many iterations of solar roofing tiles have been introduced in the U.S. market in the past, but the companies making them have not achieved commercial success. One of the most prominent was Dow’s Powerhouse solar shingle, which the company started making in 2011 before discontinuing the product in 2016. The same year Tesla debuted a solar roofing product to great fanfare but has provided little information about how many solar roofs it has installed. Recent reports indicate that Tesla’s solar business is relying mostly on standard modules for residential installations.

Source: GAF Energy announces second U.S. solar roof manufacturing facility in Georgetown, Texas (City of Georgetown, Texas)

Source: Reuters: U.S. solar company GAF Energy to open Texas manufacturing plant (GAF Energy)

FUEL CELL MAKER BLOOM ENERGY OPENS “GIGAFACTORY” IN CALIFORNIA

/in

By Cormac O’Laoire

Bloom Energy has put online its first hydrogen “gigafactory” as the culmination a journey 20 years in the making. Founded in 2001, Bloom pioneered commercial solid oxide hydrogen electrolyzer cells (SOEC) and solid oxide fuel cells (SOFC). The company’s new 164,000 square foot facility in Fremont, California has the capacity to produce 1 gigawatt of fuel cells annually, and by also making electrolyzers tackles the emerging hydrogen economy from both the production and utilization sides.

The factory represented a $200 million investment and Bloom expects to hire more than 400 workers by year-end, bringing its total number of employees to almost 2,000.

Bloom’s SOFC can generated electricity using multiple fuel sources such as natural gas, biogas and of course hydrogen, which it says provides an advantage for resiliency applications. As Bloom’s CEO KR Sridhar pointed out “As Bloom’s power is generated on-site where power is consumed, we do not face the same challenges as traditional power plants, such as the maintenance of power lines.”

Source: Bloom Energy Celebrates Grand Opening of Fremont Multi-Gigawatt Factory, Adding Hundreds of New Clean Energy Jobs (Bloom Energy)

MIDWEST GRID OPERATOR APPROVES MAJOR TRANSMISSION BUILDOUT

/in

By Christian Roselund

On 25 July, the board of the Midcontinent Independent System Operator (MISO) approved a $10.3 billion investment in 18 high voltage transmission lines in its Midwest Region. These projects, which stretch from North Dakota to Michigan and south to Missouri, could support an estimated 53 gigawatts (GW) of solar, wind, and battery storage projects.

The projects have been presented as a means to preserve reliability as MISO’s supply mix shifts away from coal and towards renewable energy. MISO expects 9 GW of coal-fired power plants in its market area to retire over the next 17 years, while 39 GW of solar, 19 GW of wind, and 34 GW of natural gas-fired power plants are added.

MISO estimates that these 18 transmission projects will bring $23.2 – $52.2 billion in net benefits, mostly through congestion and fuel savings, as well as avoided capital costs of local resource investments.

According to UtilityDive, MISO expects some of these projects will begin to come online in 2028. MISO has provided a 2030 in-service date for all 18 projects. UtilityDive also notes that some of these projects will go through a competitive bidding process, and others will be assigned to utilities under state law. MISO plans to issue its first request for proposals under the competitive process on September 23.

These transmission projects represent the first phase of MISO’s Long-Range Transmission Plan.

Source: MISO Board Approves $10.3B in Transmission Projects (MISO)

News coverage: MISO board approves $10.3B transmission plan to support 53 GW of renewables (UtilityDive)