On May 12, the U.S. Department of Energy (DOE) started a US$505 million four-year initiative to support the commercialization of emerging long-duration energy storage (LDES) technologies that can power grids for at least 10 hours. Funding for the Long Duration Energy Storage for Everyone, Everywhere (LD ESEE) program was made available through the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law.
LDES technologies are expected to gain significant traction in the market as more wind and solar is deployed . LDES enables the capture and storage of clean energy for longer durations, to be used when electricity generation is unavailable or lower than demand.
The initiative aims to increase the deployment of LDES solutions by lowering their costs and enhancing their energy storage capacity. As part of the initiative, the DOE will implement three energy storage demonstration programs: general energy storage demonstration projects, grants for pilot projects, and specific long-duration demonstrations. The focus on demonstration projects and pilot programs is to de-risk the technology adoption at scale in the long term.
Through this $505 million initiative, along with the Long Duration Storage Shot initiative announced in July 2021, the DOE aims to drive down the costs of LDES technologies to US$0.05/kWh by 2030. Cost reduction in LDES technologies will primarily depend on R&D, and the degree of efficiency achieved by manufacturers. The DOE is also collaborating with the Department of Defence for long duration storage demonstrations on government facilities. The DOE has launched RFI (Request for Information) for optimal implementation of its LDES program by June 16, 2022.
While several LDES technologies are currently under R&D phase, other mechanical, thermal, and electrochemical LDES technologies are commercially available. These include vanadium and iron flow batteries, compressed air storage and pumped hydro storage However, for many of these technologies the high cost is currently hindering their large-scale adoption; the application of pumped hydro storage is limited by geography.
In the recent past, many Li-ion battery energy storage systems with four, six, and even eight-hour duration, entered the market. At present these lithium-ion batteries are the most competitive in terms of providing LDES, as major manufacturers of these batteries have already achieved economies of scale.
But despite enjoying a competitive advantage over other LDES technologies currently in focus, Li-ion-based LDES systems experience significant challenges that could present openings for other technologies. Large Li-ion battery energy storage systems are currently very expensive and increasing the energy storage duration of these systems further increases their cost. In contrast, the cost of long-duration battery technologies like vanadium flow and iron flow increases marginally with increase in duration, thus making them more cost-effective for larger system sizes.
News coverage: DOE provides $505M to advance long-duration energy storage fed by renewables (UtilityDive)
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The organization that oversees reliability on the US electric grid has issued a report warning of an “elevated” risk of power outages this summer across the entire Western United States, and an even higher risk in the Midwest. The North American Electric Reliability Corporation’s (NERC) report was supported by another report providing similar warnings from California’s grid operator, even as Texas’ grid operator indicated that it has plenty of power for the summer.
Causes identified in the NERC and California Independent System Operator (CAISO) reports are complex. NERC’s Summer 2022 Reliability and Resources Assessment states that the primary driver of grid challenges across the West is a combination of severe drought conditions, which is reducing the output of hydroelectric generation, and extreme heat and wildfires. This drought is a contributing factor to the frequency and severity of wildfires, and in Texas to prolonged heatwaves.
For the Midcontinent System Operator (MISO) in the Midwest, NERC identifies several contributing factors including a long-standing failure to add sufficient reserve capacity and the loss of a significant powerline connecting its Northern and Southern regions. In all cases a changing resource mix, climate-driven extreme weather, and supply chain challenges all play a role in what may be the “perfect storm” for U.S. grids.
While climate-driven weather, and not renewables, is the primary cause of reliability concerns this summer, the shift to renewable energy intersects with this challenge in multiple ways. Specifically, NERC has identified the tendency of solar installations to “trip” offline during grid disturbances as a additional challenge to maintaining reliability. The report notes that this is often the result of lack of ride-through capability in inverters, which can “cause a minor system disturbance to become a major system disturbance.” NERC notes that these large-scale “tripping” events have been reported as recently as summer 2021. The organization has recommended various standards to make sure that inverters have the necessary ride-through capabilities.
Graphic: NERC
Another place that solar comes up in the report is the circumstances on California’s grid. Southern California suffered extended outages due to insufficient power supply to meet demand during a heatwave in August 2020, and officials warn that this could happen again. Both the NERC and CAISO reports note that while the state has ample power from its widespread deployment of solar to meet demand during the day, as this output wanes in the evening there may not be sufficient resources to meet demand.
One challenge identified in both reports is the reduction in hydroelectric output not only in California but throughout the West as a result of the going drought. This makes it harder to import power, particularly when other grids are also at peak demand due to the widespread use of air conditioning. California’s regulators have been ordering the state’s utilities to procure unprecedented battery capacities, and CAISO estimates that 3,124 megawatts of battery storage will have come online between July 2021 and June 2022. However, it also warns that additions of batteries have not been enough to offset reductions in the state’s gas fleet.
A day before CAISO’s 2022 Summer Loads and Resources Assessment report came out, Governor Newsom revealed a new budget with $5.2 billion set aside for a 5-gigawatt Strategic Electric Reliability Reserve. This reserve could include existing generation that was scheduled to retire, new plants, new storage project, backup generation, and demand-side reduction programs that are visible to and dispatchable by CAISO.
Meanwhile, in Texas the grid operator is expecting solar to help keep the lights on. The state’s grid operator expects peaks to come between 3 pm and 8 pm and expects solar to contribute 81% of its nameplate capacity during this period.. Texas became the nation’s largest solar market in terms of annual installations 2021 and the 11 gigawatts of solar that the state has on its grid contributes 10% of expected capacity available to meet peak demand. However, the Electric Reliability Council of Texas (ERCOT) does not appear to have refined its methodologies to deal with the decline of solar output towards the end of this five-hour period. This could be a problem as the state comes to rely more and more on solar to meet peak demand.
It is notable that despite ERCOT stating that it has adequate capacity, NERC has warned that Texas could experience outages. NERC’s main concerns are prolonged heat waves that could stress the grid and cause reduced power from both thermal and renewable generation.
NERC singled out its strongest concerns for a grid with much less renewable energy generating capacity than California. MISO is running the lowest “reserve margin,” – the delta between capacity on its grid and its estimates of peak demand – of major any grid in the United States. NERC chided MISO for a repeated failure to add capacity, noting that this issue came up as early as 2018 and that between 2021 and 2022 MISO’s capacity declined.
While NERC rarely mentions specific generation sources in its report, MISO has been retiring coal-fired power plants at a rapid pace over the last decade. And while MISO has plenty of solar projects that have applied for interconnection, like other grid operators it is experiencing lengthy delays as it struggles with a higher volume of projects than it processed in the past. Furthermore, it is unclear how much MISO values solar’s contribution to grid reliability during peak demand, as each U.S. grid operator assigns a different value for this.
MISO appears to be banking on greater regional interconnection, but here extreme weather is again a challenge. NERC’s report notes that a transmission line providing 1,000 MW of “firm” power from its Southern region to its Midwest region was damaged by a tornado on December 10, 2021. This line will not be fully operational until the end of June 2022.
NERC notes that “supply chain issues and commissioning challenges” are also a concern where new generation and/or transmission is needed for reliability during summer peaks. The organization lists problems that are familiar to the solar industry, including product unavailability, shipping delays, and labor shortages, and singles out California and the Southwest as its areas of greatest concern.
Similar concerns were raised by Governor Newsom in a recent letter to Commerce Secretary Raimondo protesting the anti-circumvention investigation and warning that many of the solar and battery projects that were needed in the state were being held up. However, Commerce Secretary Raimondo has noted that the statute does not allow the agency to consider other policy priorities. While Secretary Raimondo named clean energy goals among these policy areas, electric system reliability may also be collateral damage.
White House Releases Plan to Speed Up Federal Infrastructure Reviews
The Biden Administration has released a new “action plan” to attempt to speed up federal permitting of infrastructure projects including clean energy, while still giving stakeholders such as tribal members sufficient opportunities to participate. The action plan focuses on cross-agency coordination, establishing clear timelines goals and tracking project information, early and meaningful engagement of stakeholders, and improving responsiveness and support. Part of this will be through increased staffing to agencies. The plan will create sector-specific teams in the permitting council, including one for offshore wind and one for renewable energy writ large. E&E News has noted that the plan does not carry the weight of an executive order and questioned what about the plan will be different from past efforts.
News coverage: White House issues ‘action plan’ to speed up energy reviews (E&E News) Source: The Biden-Harris Permitting Action Plan to Rebuild America’s Infrastructure, Accelerate the Clean Energy Transition, Revitalize Communities, and Create Jobs (E&E News)
Lawsuits, Legislation Attempt to Stop the Postal Service from Buying ICE Trucks
Environmental groups, state attorney generals and a union are all filing lawsuits to attempt to stop the Postmaster Louis DeJoy from replacing the U.S. Post Office’s fleet of up to 165,000 delivery vehicles with internal combustion engine vehicles. Concurrently, a U.S. House committee has passed a bill that would invalidate the Post Office’s environmental review in an attempt to derail the current sale and force the Post Office to buy more EVs. Postmaster DeJoy, a Trump appointee, has been under steady criticism for signing a deal with a Wisconsin military vehicle provider to replace the Post Office’s fleet of vehicles with 90% internal combustion vehicles. This move is in direct conflict with President Biden’s goal to replace the entire federal vehicle fleet with American-made EVs. The federal government owns around 645,000 vehicles, and the Post Office’s 220,000 vehicles are the largest single portion.
News coverage: Lawsuits seek to stop Postal Service from buying gas-guzzling trucks (Canary Media) News coverage:Panel moves bill to scrap NEPA study of Postal Service fleet (E&E News)
California Proposes 3 Gigawatts of Offshore Wind by 2030
On 13 May the California Energy Commission published a draft report setting a “preliminary planning goal” for the state to install 3 gigawatts of offshore wind by 2030, with an additional 7 – 12 gigawatts by 2045. This would be the first such goal for a state on the West Coast, and would be more ambitious than many other states that seek to deploy offshore wind. The report plans for the initial 3 gigawatts to come from planning areas in Morro Bay off the Central Coast and off the shore of Humboldt County in Northern California.
The report makes repeated references to floating turbines. Due to the steep drop-off in the Pacific Ocean, it is likely that much or all of the offshore wind deployed off the coast of California will need to be floating designs anchored to the seabed with cables, instead of the fixed offshore wind designs utilized on the East Coast. E&E News says that a finalized version of the plan could come as early as June.
Source: Offshore Wind Energy Development off the California Coast: Maximum Feasible Capacity and Megawatt Planning Goals for 2030 and 2045 (California Energy Commission) News coverage: Calif. unveils largest U.S. offshore wind target (E&E News)
Months after quietly abandoning its efforts to make big changes to California’s fundamental policy to compensate rooftop solar, California regulators are again revisiting the proposal. On 9 May, the California Public Utilities Commission (CPUC) re-opened the docket to alter the state’s net metering policy, requesting public comment on certain aspects of the proposal. This comment period will be open through 24 June, 2022, meaning that a new policy could be implemented as early as July 2022.
The CPUC’s proposal in December elicited strong responses from the state’s solar industry, with hundreds to thousands of workers demonstrating against the change. It was also criticized by celebrities and political leaders including Governor Newsom and former Governor Schwarzenegger. CPUC withdrew the proposal on 3 February, 2022 (see the 10 February U.S. Energy Transition report for more details).
But despite the widespread popularity of the policy, an analysis by Canary Media suggests that the two sides of the debate are no closer to a compromise than they were in February. And the CPUC may not be backing down; California Solar and Storage Association Executive Director Bernadette Del Chiaro has noted that the CPUC is not seeking public comment on a costly “grid access fee” on rooftop systems.
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On 6 May, officials from three California state energy agencies warned that modeling indicates a likely deficit of 1,700 megawatts of electricity this summer during times of highest demand. The state experienced blackouts due to lack of available capacity in August 2020, and narrowly evaded blackouts during a heatwave in July 2021.
The California Public Utilities Commission, the California Energy Commission, and the California Independent System Operator (CAISO) made these comments at a briefing for press and did not provide written statements or analyses. However, CAISO’s annual assessment of summer reliability is expected within the next two weeks.
California’s grid is suffering under a combination of threats. These include higher peak temperatures, lower hydroelectric capacity due to an ongoing drought, and wildfires that are spurring the state’s utilities to proactively shut off the power in forested areas when it is hot and windy.
The warning by energy officials also comes as California governor Newsom warns that solar plus battery projects to meet evening demand are being held up by the anti-circumvention investigation against solar cells and modules from Southeast Asia (see the 2 May 2022 U.S. Energy Transition Report for more on Governor Newsom’s letter to Commerce Secretary Raimondo). Governor Newsom has also proposed cancelling the planned retirement of the Diablo Canyon nuclear power plant.
In December, CAISO estimated that there was than 2.5 gigawatts of battery capacity deployed on its grid, with more coming. However, this is still a long way from what is needed. In both 2006 and 2017 demand on California’s grid peaked at more than 50 gigawatts.
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The At the Smarter E Event in Munich, PV maker Hanwha Q Cells announced that it plans to build a 1.4-gigawatt factory to produce PV modules at an undisclosed location in the United States. The factory will represent a US$155 million investment, as part of $294 million that the company plans to spend on capacity expansions and an upgrade to high-efficiency TopCon technology.
This will be Hanwha’s second factory in the United States, following its 1.8-gigawatt factory in the U.S. state of Georgia. The Georgia factory is the largest crystalline silicon module plant in the United States. The United States currently has 7 gigawatts of active PV module manufacturing capacity; the addition of this plant and First Solar’s pending 3.3-gigawatt factory would bring the nation’s module capacity to 11.7 gigawatts. This is still far short of the 23.6 gigawatts of demand that the market saw
in 2021 and the United States remains an import-dependent market, even for modules.
Hanwha’s PV modules have been in high demand in the United States, as they can incorporate cells from the company’s Korean production that are not subject to potential duties under the anti-circumvention investigation against products from Southeast Asia. Others also have expressed interest in capitalizing on this, and various manufacturers have announced plans to build 13.4 gigawatts of module factories in the United States in recent months. However, unlike Hanwha’s and First Solar’s module factories these have consistently been contingent on the passing of the Solar Energy Manufacturing for America (SEMA) or similar incentives. Hanwha has told CEA that if SEMA is passed, it will also build U.S. ingot and wafer manufacturing as well.
The modules produced by Hanwha’s new U.S. factory will use Hanwha TopCon cells from a new factory that it plans to build in Korea. TopCon is a high-efficiency manufacturing process that CEA sees as one of the two main near-term future technology pathways for PV makers. The other is heterojunction, however, while heterojunction requires new cell lines TopCon can be accomplished with upgrades to existing cell lines.
News coverage: U.S. deal to shake up solar industry (E&E News)
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While the Biden Administration seeks to spur the production of critical minerals used in EV batteries, Biden’s Democratic Party is addressing what it considers outdated mining permit issues.
The Mining Law of 1872 allows mining of different critical minerals on federal public lands at no cost once the permit is provided to mining companies. Unlike other extractive industries like coal, and oil & gas, mining companies are exempted from paying royalties for mining activities on federal lands. The current mining law does not hold any strong environmental protection or consultation with tribal communities. The current law also does not make mining companies accountable for the pollution caused by mining activities, thus affecting communities and the environment.
The U.S. House Natural Resources Chairman Raúl Grijalva of Arizona and U.S. Sen. Martin Heinrich of New Mexico have each introduced bills aiming to modernize and reform the unchanged, 150-year-old mining law. Both legislations require mining companies to take the responsibility of cleaning up abandoned mines, consult with tribal communities throughout the mining project, and pay royalties for the revenue from using federal lands.
Under these legislations, miners would be required to pay a 12.5% royalty rate for operations on federal lands and 8% royalty rate on existing lands. One quarter of the total royalty would direct toward the state where the mine is located. The remaining amount would go to the Hardrock Mine Reclamation Fund created under the US$1.2 trillion infrastructure law in 2021 to clean up abandoned mining sites.
On May 11, the Biden Administration unveiled an action plan to improve the permitting process for large infrastructure projects under the Bipartisan Infrastructure Law. This includes the upgradation of the outdated permitting laws and regulations, including the Mining Law of 1872, to establish stronger environmental, sustainability, safety, tribal consultation, and community engagement standards.
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On 2 May, the U.S. Department of Commerce issued a memo that provided some incremental clarity on the process of the anti-circumvention investigation. Notably, the memo revealed that cells made from wafers sourced outside of China are not within the scope of the current investigation and therefore will not be subject to duties.
CEA has identified roughly 4 gigawatts of operational ingot and wafer capacity in Malaysia and Vietnam that can be used to make cells and modules for the U.S. market. In addition to this, JinkoSolar is currently ramping a 7-gigawatt ingot and wafer factory in Vietnam that can be used for U.S.-bound products that we expect to be fully online by 2023. LONGi is planning ingot and wafer capacity expansions in Malaysia this year as well.
CEA expects that this will only partially mitigate the current supply-demand imbalance in the U.S. market driven by the anti-circumvention investigation and a lack of available supply that is not subject to duties in China or potentially subject to duties in Southeast Asia. The position should improve in 2024 and 2025 as more wafer capacity comes online in Europe, India, and Southeast Asia, and other regions; however, many of the individual European wafer projects which have been announced are pending subsidies.
Read more:
Source: CEA Research
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The U.S. Department of Energy (DOE) funding is one of the latest efforts of Biden Administration to develop a domestic EV battery supply chain. In early April, President Biden invoked the Defense Production Act (DPA) to boost the upstream supply of critical raw materials used in Li-Ion batteries. In mid-April, the DOE announced its first battery supply chain loan, under its Advanced technology Vehicles Manufacturing Loan Program (ATVM), to support the development of Syrah’s Resources’ graphite anode project in Louisiana. And on May 2, the U.S. Department of Energy (DOE) announced US$3.16 billion in funding, under the Infrastructure Investment and Jobs Act, to further ramp up the growth of the domestic battery supply chain.
Currently, the country is largely dependent on foreign production of critical minerals, refining, and Li-Ion batteries, especially from China. This makes U.S. battery production highly vulnerable to global supply chain disruption. The funding is the step taken by Biden Administration to plug the supply chain gaps and further its clean energy goals as well as national security. Currently, the country holds less than 2% of global lithium chemical and 0% of spherical graphite production.
The $3.16 billion will be allocated across the domestic battery supply chain, focusing on mid-stream processing to cathode, anode, and battery cell production. Out of the total, US$1.5 billion is allocated to material processing, which includes cathode precursors and graphite anode materials. US$1.45 billion is allocated among the manufacturing of cells (US$600 million), cathode (US$300 million), separator (US$200 million), and other components (US$150 million).
The remaining US$100 million will go towards the manufacturing of silicon anode, an alternative to graphite anode, which is gaining a lot of attention. Start-ups like Sila Technologies and Group14 are backed by global companies to develop high-performance silicon-based anodes. Recycling and second-life use of retired EV batteries will receive a total of US$210 million, out of which US$150 million will be directed towards the development of commercial-scale battery recycling and end-of-life infrastructure, and US$60 million for R&D.
Over the past few weeks an increasing number of political leaders, including within the Biden Administration, have openly come out against the U.S. Department of Commerce’s anti-circumvention investigation against solar imports from Southeast Asia. Most notably 20 senators sent a letter to U.S. President Joe Biden calling on the Commerce Department to quickly wrap up in the investigation with a negative finding. The governors of California and Indiana have similarly asked Secretary Raimondo to wrap up the investigation.
Other parties are also expressing their opposition to the investigation, with the Laborers Union stating that due to the investigation “the growth of the U.S. solar industry has stopped dead in its tracks, which will inevitably lead to more layoffs.” And in a rare show of criticism, in two different congressional hearings Energy Secretary Jennifer Granholm agreed that the anti-circumvention investigation is making it harder to reach the president’s climate goals.
The letters also reveal details on both the politics of this case and shed light on some of the impacts of the investigation. Of the 20 senators who signed the letter, 17 are members of President Biden’s Democratic Party. The majority are from Western States, with both senators from Arizona, California, Colorado, Hawaii, and Nevada signing, as well as Senator Heinrich from New Mexico. All of these states have large solar markets.
Governor Newsom’s letter also pointed to the impact of the investigation not only on solar project development, but also his state’s deployment of energy storage. Newsom warned that the investigation is delaying 4,350 megawatts of solar plus storage projects that he says are expected to come online between 2022 and 2024. This is particularly a concern as California energy officials are warning that the state is likely to face an energy shortfall this summer during peak demand.
Concurrently, a utility in Indiana has stated that due the investigation it will pause retirement of its largest coal-fired power plant by two years. Northern Indiana Public Service Co. has stated that it will keep two units at its RM Schahfer Generating Station running until 2025, as supply chain challenges are making it harder to deploy solar and energy storage to replace this plant.
It is unclear if any of this will sway the process. In anti-circumvention and other anti-dumping and countervailing duty investigations, the Department of Commerce is supposed to be immune to political pressures and follow a semi-judicial process that looks at the facts of the case. And in responses to these letters, Secretary Raimondo has reiterated these lines.
The Department of Commerce’s 2 May memo, which clarified duty rates, is notable in light of these pressures. However, Commerce has proceeded with selection of companies as mandatory respondents to represent the solar industries in these nations. This suggests that a quick rejection of this petition is unlikely and that instead the process will likely run its normal course.
Read more:
Source: Letter to President Biden (Office of Senator Jackie Rosen)
News coverage: ‘Massive disruption’: Senators pressure Biden to conclude solar trade probe (S&P Global)
Press release: Solar industry offers U.S. Department of Commerce strong evidence to reach negative determination in solar circumvention investigation (American Clean Power Association)
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