Energy Department: Renewables to Reach 26% of U.S. Generation in 2024

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By Christian Roselund

The United States Department of Energy’ Energy Information Administration (EIA) has forecast that the share of U.S. electricity generation from renewable energy will rise from 21% in 2022 to 24% in 2023 and 26% in 2024. This change is driven by wind and solar, which EIA expects to rise to 16% of generation in 2023 and 18% in 2024. EIA published these figures in its Short-Term Energy Outlook on 10 January 2023.

As the share of generation for wind and solar increases, EIA expects the share for both natural gas and coal to fall, with coal declining to only 17% of total generation in 2024. This would represent a continuation of the fall in coal-fired power that has been happening for the past decade. However, the two years of consecutive decline in gas-fired power from 2022 through 2024 would represent a new trend, as the portion of gas-fired generation in the U.S. electricity mix has been climbing for
a decade.

EIA forecasts that other key metrics in the U.S. electricity system will remain stable, with relatively flat electricity usage in 2023 and 2024 and nuclear power continuing to supply 19% of the nation’s electricity through 2024.

EIA expects 2/3 of the new wind and solar generation in 2023 and 2024 to come from utility-scale solar. It bases its forecast on the expectation that the United States will install 32 gigawatts of utility-scale solar in 2023 and another 32 gigawatts in 2024. EIA also expects 9 gigawatts of small-scale solar capacity to be added in 2023 and a further 12 gigawatts in 2024.

However, it is not clear whether EIA has incorporated the effects of U.S. trade policies that have restricted the availability of PV modules in its forecasts. In the second half of 2022, CEA estimates that Customs detained multiple gigawatts of PV modules from at least three major PV makers under the Uyghur Forced Labor Prevention Act (UFLPA). To CEA’s knowledge, the first releases of modules detained under UFLPA were in late November 2022, and a limited number of shipments have been released to date.

Furthermore, beyond the direct market impact of detentions, suppliers have indicated that they are shifting supply to other markets. For example, in its Q3 earnings report, Jinko Solar revealed that it has deferred shipments of 2 gigawatts of modules from the U.S. market due to UFLPA impacts.

Wood Mackenzie cites UFLPA as first among several factors in its estimate that the United States only installed 16 gigawatts of solar in 2022. John Smirnow, SEIA’s general counsel and VP of Market Strategy, recently told UtilityDive that he expects the market to see “hangover effects through 2023” from 2022’s detentions.

Overall, EIA expects a 3% decline in energy-related CO2 emissions in 2023. However, the agency expects energy-related emissions to remain the same in 2024, with increased petroleum usage for fuel offsetting declines in electricity sector emissions.

Source: Short-Term Energy Outlook, January 2023 (EIA)

Bill Introduced to Roll Back Biden’s Moratorium on Solar Import Duties

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By Christian Roselund

On 26 January 2023 six member of the U.S. House of Representatives introduced a bill to nullify the regulations implementing President Biden’s emergency proclamation which pauses any import duties on solar cells & modules from four Southeast Asian nations. Presidential Proclamation 10414 was a response to the chilling effect on imports of modules from Cambodia, Malaysia, Thailand, and Vietnam caused by the solar anti-circumvention investigation initiated by Auxin Solar.

H.J.Res.22 would use Congressional Review Act (CRA) powers, through which Congress can void executive orders implemented in the previous six months, to void the U.S. Department of Commerce’s regulations implementing Presidential Proclamation 10414.

The arguments by the bill’s sponsors echo the anti-China rhetoric which has become increasingly popular as geopolitical tensions between the United States and China over Taiwan, intellectual property, human rights, and other matters escalate.

“We cannot allow foreign solar manufacturers to violate trade law, especially when it comes at the expense of American workers and businesses,” stated bill sponsor Representative Dan Kildee (D-Michigan). “The Biden administration found in its own investigation that China is evading U.S. tariffs on solar imports, but has paused action on this matter, which is unacceptable.”

To pass, the bill will need to achieve a simple majority in both Houses of the U.S. Congress and to be signed by the President. As President Biden is nearly certain to veto this bill, it will require a 2/3 majority in both houses to overturn this veto.

While three of the bill’s sponsors are from the Democratic Party and three from the Republican Party, this bill is likely to gain much more support from Republicans than Bident’s Democratic Party. And given the difficulty of getting 2/3 of both houses to support this or any bill, this effort to overturn the moratorium is very unlikely to succeed.

Despite the dismal odds of H.J.Res.22’s passage, the could be a means to build political and public support for other means of overturning the pause on duties, such as a lawsuit. For Republicans, the bill could be the opening salvo in efforts to slow the transition to clean energy by stressing the association between clean energy technologies and China and Chinese companies.

Source: H.J.Res.22 – Disapproving the rule submitted by the Department of Commerce relating to “Procedures Covering Suspension of Liquidation, Duties and Estimated Duties in Accord With Presidential Proclamation 10414” (U.S. Congress)

Press release: Kildee Leads Bipartisan Effort to Repeal Biden Administration Rule Suspending Tariffs on Solar Imports from Southeast Asia (Rep. Kildee)

S&P Global: Large-Scale Solar, Wind Installations Declined in 2022

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By Christian Roselund

S&P Global has published data for newly installed electricity generation capacities for 2022, indicating that both solar and wind installations fell sharply during the year. S&P reports that while solar and wind were the largest forms of generation, that only 9.3 gigawatts-AC of large-scale solar (installations larger than 1 megawatt) and 6.7 gigawatts-AC of wind were installed.

Together these two sources represented 64.7% of new generating capacity, with natural gas-fired power plants making up most of the remainder.

The 6.7 gigawatts of wind installed represents a 41% decline in wind installations from 2021 levels. S&P Global did not provide analysis to explain the decline, however in its report on Q3 installations American Clean Power Association (ACP) cited the effects of policy uncertainty around tax incentives. While this uncertainty was resolved in August with a 10-year extension of the Production Tax Credit via the Inflation Reduction Act, due to the time it takes to permit, interconnect and build new wind projects there will inevitably be a delay between the restoration of incentives and
market recovery.

The 9.3 gigawatts figure for large-scale solar should be seen as a preliminary number. Between March 2022 and January 2023 S&P Global revised its estimate of total 2022 solar installations upward by 2.3 gigawatts, and currently estimates that during the year 13.4 gigawatts of utility-scale solar. As such we can estimate some upward revision of installation numbers during the coming months. Regardless, during the first nine months of 2022 only 76% of the solar was installed in 2022
compared to the same period in 2021.

ACP, Solar Energy Industries Association, and consultancy Wood Mackenzie all attribute the decline in solar installations in 2022 to trade policies that have restricted imports and created uncertainty in the market. And as gigawatts of modules are still detained under the Uyghur Forced Labor Prevention Act, these organizations expect that this policy will depress 2023 installations as well.

Source: US generating capacity additions down YOY in 2022; solar takes top spot (S&P Global)

Tesla to Massively Expand Nevada EV, Battery Factories

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By Christian Roselund

Image: Tesla

On 24 January 2023 Tesla announced that it will invest $3.6 billion in its Nevada “Giagafactory” complex, including a factory to produce its 4680 cells with 100 gigawatt-hours (GWh) of annual capacity and its first high-volume electric truck factory. This is one of the largest announcements in a wave of new EV and EV battery manufacturing plans in the United States following the passage of the Inflation Reduction Act (IRA).

Tesla plans to hire 3,000 additional workers, in addition to its current 11,000 headcount, at the new battery and truck production facilities. The company has provided few additional details about the investment and expansion plans. Tesla expects the new-generation 4680 battery cells to feature greater energy density with lower costs than its current 2170 cells. The 4680 cells will be used to power new heavy EV models, including the Tesla Semi. In the company’s Q4 results call, Tesla CEO Elon Musk clarified that not all of the new 4680 capacity at Gigafactory Nevada will go to its electric Tesla Semi, but that some will go to unspecified “new products.”

The new production comes on the back of very high capacity utilization and incremental improvements in battery output at Gigafactory Nevada. As the result of the last major battery cell investment the factory reached a rated annual capacity of 35 GWh, but as of January 2023 Tesla estimates that it is producing 37 GWh of cells annually.

In addition to its own production, Tesla sources battery cells from suppliers including Panasonic, CATL, and LGES. For its stationary battery storage applications, Tesla imports cells from CATL.

U.S. EV Battery Production Booms

The Inflation Reduction Act featured expanded incentives for deployment of batteries and new domestic battery manufacturing incentives in the form of the Section 45x production tax credit. This same credit is the primary driver in the IRA for new solar factories.

Driven by these incentives, battery plant announcements have increased sharply in recent quarters. During Q3 and Q4 2022, the announced U.S. battery cell capacity planned for 2025 increased by more than 50%. A total of around 242 GWh of battery capacity was added to the country’s domestic battery cell manufacturing pipeline in the second half of 2022.

Overall, the United States announced more battery capacity and gigafactories to its pipeline than Europe in the second half of 2022 and North America has become the fastest growing region in terms of anticipated battery cell manufacturing capacity. Total announcements to date equal over 570 GWh of new battery cell capacity by 2025, 10x the nation’s current 57 GWh. These planned cell manufacturing announcements are likely to increase the share of North America in the global lithium-ion battery cell production capacity to nearly 14% by 2025, up from 5% in 2021.

Like Tesla’s new investment, most of the planned battery cell capacity is dedicated to the EV sector. New announcements include significant investments by automakers including General Motors, Toyota, Ford, Hyundai, and Volkswagen into new domestic battery and materials plants to take advantage of the Inflation Reduction Act aimed to boost the domestic EV supply chain.

These moves often involve collaborations/joint ventures with leading battery cell manufacturers. Some of the larger collaborations include Ultium Cells, a joint venture between General Motors and LGES, and BlueOval SK, a joint venture between Ford and SK ON. In September, BlueOval SK started the construction of an advanced battery cell manufacturing facility in western Tennessee. Ultium Cells plans to invest over $7.2 billion into its planned lithium-ion battery plants in Michigan, Ohio, and Tennessee. Samsung SDI and Stellantis will construct a cell and module production facility in Indiana. Panasonic, one of Tesla’s leading cell suppliers, also announced plans to set up a $4 billion battery manufacturing facility in Kansas.

Some of these investments are directly supported by the U.S. federal government, and the U.S. Department of Energy has provided a $2.5 billion loan to Ultium Cells for its planned battery cell manufacturing facilities in the United States.

Stationary Storage to be Served by Smaller Suppliers

The market for stationary storage is growing rapidly in the United States and the IRA’s tax credits are expected to further boost demand in this sector. An increasing portion of this demand may be met with domestic production that can take advantage of the IRA Section 45x incentive for
battery manufacturing.

the U.S. energy storage market is likely to be served by smaller battery cell manufacturers that cater primarily or exclusively to the stationary storage sector. Cell suppliers including KORE Power, Kontrolmatik Technologies, and Microvast have announced plans for U.S. factories to make cells solely for stationary storage applications. LGES will also be manufacturing battery cells for energy storage systems at its Holland, Michigan facility.

Source: Continuing Our Investment in Nevada (Tesla blog)

New Roundup

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DOE Makes Conditional Commitment to Finance Nevada Lithium Production

The U.S. Department of Energy (DOE) has offered a conditional commitment to loan $700 million to a new lithium mining and mineral processing project in Nevada. Ioneer’s Rhyolite Ridge project will mine lithium and boron and produce lithium carbonate for use in lithium-ion batteries. DOE’s loan will be for the mineral processing portion and the agency estimates that this project could support up to 370,000 EVs per year.

This conditional commitment follows final commitments to two other lithium-ion battery supply chain projects: a $102 million loan to Syrah Vidalia, which will process active anode material, and a $2.5 billion loan to battery cell maker Ultium Cells. All three of these loans are being made under the Advanced Technology Vehicles Manufacturing program. If finalized, the loan to Ioneer would be the first to support the processing of lithium, a part of the global supply chain dominated by China.

Source: LPO Announces Conditional Commitment to Ioneer Rhyolite Ridge to Advance Domestic Production of Lithium and Boron, Boost U.S. Battery Supply Chain (Department of Energy)

Mercedes-Benz, ChargePoint to Launch EV Charging Network

Mercedes-Benz has announced that it has teamed up with EV charging provider ChargePoint to build out a global network of charging stations, starting in North America. Mercedes and MN8, a developer that spun out of Goldman Sachs, plan to jointly invest “just over 1 billion Euros” to build out a network of over 400 charging hubs the United States and Canada over the next 6-7 years. Each hub will offer 4-30 charging ports, for a total of more than 2,500 chargers.

While the chargers will be available to drivers of other vehicles, Mercedes-Benz customers will have the option of reserving chargers in advance.

News analysis: ChargePoint and Mercedes-Benz team up to bring hundreds of fast charging hubs to EV drivers (Electrek)

Interior Department Moves to Streamline Offshore Wind Approval

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By Christian Roselund

While federal energy permitting reform legislation remains stalled, the U.S. Department of the Interior is moving to update its regulations to ease deployment of offshore wind. Interior’s Bureau of Ocean Energy Management (BOEM) is proposing regulatory changes that it says will streamline overly complex and burdensome processes, clarify ambiguous provisions, and enhance compliance. The agency says this will decrease the costs and uncertainty of deploying offshore wind and estimates that this will save developers $1 billion over a 20-year period.

The proposed rule has eight major components:

  • Eliminating unnecessary requirements for the deployment of meteorological buoys
  • Increasing survey flexibility
  • Improving the project design and installation verification process
  • Establishing a public Renewable Energy Leasing Schedule
  • Reforming BOEM’s renewable energy auction regulations
  • Tailoring financial assurance requirements and instruments
  • Clarifying safety management system regulations
  • Revising other provisions and making technical corrections

BOEM posted its notice of proposed rulemaking on 12 January 2023, ahead of publication in the federal register. Publication will open a 60-day comment period.

BOEM’s move was praised by industry groups including American Clean Power Association (ACP), which described existing regulations as “largely unchanged since 2009.” “BOEM’s proposed rule is major step in the right direction,” said Josh Kaplowitz, ACP Vice President of Offshore Wind. “Updating and enhancing BOEM’s rule-making process is critical to ensure the offshore wind industry maintains momentum in the permitting and deployment of clean energy.”

The Biden Administration has held three offshore wind leases in federal waters, including the first lease sale for waters off the West Coast in California. However, despite the awarding of multiple gigawatts of offshore wind leases, the nation only has 42 megawatts of operational offshore wind turbines, with another 932 megawatts under construction and scheduled to be online by the end
of 2023.

This move follows a 10 January 2023 announcement that Elizabeth Klein has been named to succeed Amanda Lefton as director of BOEM. Klein has been promoted to this position internally, after serving as legal counsel to Interior Secretary Deborah Haaland and chair of the Indian Water Rights Working Group. Prior to joining the Biden Administration Klein was deputy director of the State Energy & Environment Impact Center at the New York University School of Law. Press release: Interior Department Takes Steps to Strengthen Offshore Clean Energy Development (BOEM)

Federal Agencies Publish Joint Strategy for Transportation Decarbonization

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By Christian Roselund

On 10 January 2023, four federal agencies published a new document that outlines strategies for removing all emission from the transportation sector by 2050. The U.S. National Blueprint for Transportation Decarbonization is a joint effort of the Department of Energy, the Department of Transportation, U.S. Housing and Urban Development, and the Environmental Protection Agency.

Transportation has increasingly become a focus in U.S. emissions reductions efforts due to its central role. Transportation is the largest sector at 33% of all emissions, and emissions from this sector have been increasing over the last decade, even as electricity sector emissions have declined.

Much of the focus is reducing emissions from light-duty vehicles (LDV: cars, trucks, and SUVs) and medium-and-heavy duty on-road trucks and buses, as these represent 49% and 21% of total emissions in the sector. Existing federal greenhouse gas reductions goals include reaching 50% of new LDV vehicle sales being zero-emissions by 2030, and the deployment of 500,000 EV chargers, and ensuring that 100% of federal fleet procurements are zero-emission by 2027. For the medium- and heavy-duty sector, the federal government aims for 30% of new vehicle sales to be zero-emission by 2030 and 100% by 2040, with 100% of new federal fleet procurements zero-emissions by 2035.

The Blueprint goes beyond existing goals and focuses on three main strategies: reducing demand for transportation through implementing system-level and design solutions, improving efficiency through mode shift and more efficient vehicles, and deployment of zero-emissions vehicles and fuels. The document addresses each of the three categories to work towards a system that is “clean, safe, secure, accessible, affordable, equitable and decarbonized.”

The emphasis on strategies to reduce vehicle miles traveled (VMT) in the document shows how much the conversation around transportation emissions has changed in recent years. While past efforts to reduce emissions focused almost solely on electrification and avoided strategies that involved a shift to mass transit and change to urban forms, the Blueprint starts with strategies to “increase convenience by implementing system-level design solutions that prioritize access and proximity to work opportunities, community services, and entertainment options.”

In terms of zero-emission vehicles and fuels, the document ranks three options (battery electric, hydrogen, and sustainable liquid fuels) according to their relative long-term opportunity for each of the main transportation applications. The document is clear that battery electric will be the choice for most LDV, but for long-haul heavy trucks rates hydrogen as the most having the greatest long-term opportunity. For medium, short-haul heavy trucks & buses the document ranks battery electric ahead of hydrogen or sustainable liquid fuels, but with less certainty than LDV. For maritime and aviation, sustainable liquid fuels are ranked as having the greatest opportunity.

The recommendations of the blueprint are where the work gets more complex. For example, the strategy calls for policy and regulation to expand the market share and use of EVs. However, this is not a strategy that the Republican Party supports and with a split Congress there are limited paths to achieve this through federal legislation. Most of the progress to date has come from states, where targets are more aggressive. Oregon, Massachusetts, New York and nine other states are moving to adopt California’s mandate that 100% of new car sales must be electric by 2035.

The Biden Administration has had more success with implementing strategies to invest in EV charging infrastructure, including by funding such charging infrastructure through the Infrastructure Investment and Jobs Act. The Blueprint notes that the Joint Office of Energy and Transportation will be a critical part of efforts to expand charging infrastructure.

And despite a focus on VMT reduction earlier in the document, specific means to do so are missing from the section on applying the strategies.

Source: National Blueprint for Transportation Decarbonization (U.S. Department of Energy)

More PV Shipments Released from UFLPA Detention

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By Christian Roselund

CEA has confirmed that U.S. Customs and Border Protection has released additional shipments of PV modules manufactured by Jinko Solar from detention under the Uyghur Forced Labor Prevention Act (UFLPA). Roth Capital reported on 5 January 2023 that the volume of these modules is equivalent to a “modestly-sized” utility-scale project.

The modules released contain polysilicon from both Wacker Chemie and Hemlock Semiconductor, produced in Germany and the United States. CEA has not confirmed any other reports of modules being released from detention and has seen no indications of modules made with Chinese polysilicon being released from detention.

Customs implemented UFLPA in late June 2022 and began detaining shipments of PV modules from Jinko Solar, LONGi, and Trina Solar shortly thereafter. It is unclear what volume of PV modules have been detained. Customs values total UFLPA detentions to date at around $1.3 billion but the agency has not disaggregated the value of PV modules versus other product. Customs released its first shipment of Jinko modules in late November 2022 and additional shipments followed in
December 2022.

Not only have detentions directly limited solar deployment, but they have also caused suppliers to divert product from the United States to serve other markets. In its Q3 results call, Jinko Solar estimated that over the course of 2022 it would divert 2 gigawatts of PV modules intended to serve the U.S. solar market to other markets.

While attempts to quantify the impact of ULFPA have been frustrated by incomplete quantitative information, renewable energy trade groups report serious effects on the U.S. utility-scale solar market in 2022. Solar Energy Industries Association (SEIA) forecasts in late 2022 that only 10.7 gigawatts-DC of utility-scale solar would be installed in 2022, versus 17 gigawatts in 2021, and lists UFLPA implementation first among multiple causes.

Source: CEA Research

New York Publishes Roadmap for 6 GW of Energy Storage by 2030

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By Christian Roselund

Two New York State agencies involved with energy have completed a roadmap to facilitate the state’s deployment of 6 GW of energy storage by 2030. New York’s 6 GW Energy Storage Roadmap: Policy Options for Continued Growth in Energy Storage proposes the creation of a new Index Storage Credit program for bulk storage, and expansions of existing residential and retail programs. It also calls for a new requirement for utilities to study the ability of energy storage to provide grid services at lower costs than other options. Finally, it proposes continued state research, development, and demonstration for technologies that can provide long-duration energy storage.

The Roadmap is a response by the Department of Public Service (DPS) and the New York State Energy Research and Development Authority (NYSERDA) to New York Governor Kathy Hochul raising the state’s target for energy storage. The previous target of 3 gigawatts by 2030 was mandated by legislation, and Hochul raised this to 6 gigawatts in January 2022. The roadmap also responds to the state’s interim goal to deploy 1.5 gigawatts of energy storage by 2025 as well as its mandate to reach 70% renewables in electricity by 2030.

NYSERDA and DPS count the 1.301 gigawatts of energy storage that has been awarded or contracted as of October 2022 towards the 6-gigawatt target, despite only .13 gigawatts being deployed to date. As such, the programs aim to support the remaining 4.699 gigawatts of storage.

The Roadmap calls for the Index Storage Credit Program to deliver 3 gigawatts of the 6 gigawatt goal. NYSERDA and DPS describe this program as being similar to the Indexed Renewable Energy Credit (REC) program that the state uses for most of its clean energy procurements. Unlike these RECs, the Indexed Storage Credit would pay for capacity, not energy delivered, with payments for each megawatt-hour of energy storage that is available on a given day. These payments would also be based on strike prices minus reference prices, ensuring that the projects would remain exposed to price signals from energy markets.

NYSERDA and DPS recommend continuing the Retail Storage Incentive program to procure an additional 1.5 gigawatts of energy storage by 2030. This program provides region-specific, declining block-grant incentives, similar to the NY-SUN incentives for solar. For residential storage, the state aims to deploy 200 megawatts by 2030. While the Roadmap was not as clear on the final form of residential incentives, it references an existing program by utility Long Island Power Authority.

The Roadmap estimates that these three programs combined will cost ratepayers $1.0-$1.7 billion by 2030. This includes $438 million for the retail program, $72 million for the residential program, and an estimate of between $474 million and $1.186 billion for the bulk procurement program. The report notes that the range of these projections represent future uncertainties, notably around energy and capacity prices. This cost amounts to $0.34 – $0.58 per month for the average residential customer, averaged across New York for the 22-year period where subsidies will be needed.


Source: New York’s 6 GW Energy Storage Roadmap: Policy Options for Continued Growth in Energy Storage (DPS, NYSERDA)

Biden Appoints Willie Phillips as Acting FERC Chair

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By Christian Roselund

On 3 January 2023, U.S. President Joe Biden named Willie Phillips the acting chair of the Federal Energy Regulatory Commission (FERC). Phillips takes over after Senate Energy and Natural Resources Committee Chair Joe Manchin refused to hold a confirmation hearing for Richard Glick, the previous chair, forcing Glick to step down from FERC. Phillips will be the first Black American to serve as chair at FERC.

Biden appointed Phillips to FERC in December 2021; later he was approved unanimously by the Senate. Before FERC, Phillips served as the chair of the DC Public Service Commission. He has also served as counsel for the North American Electric Reliability Corporation (NERC).

Phillips becomes chair of a FERC that is split 2-2, with two Democrats and two Republican commissioners. President Biden can appoint a fifth member of FERC and is widely expected to do so in coming months. Regardless of whether a fifth commissioner joins, FERC will be dealing with the notice of proposed rulemaking to revise the regulations governing the siting of interstate transmission lines.

Phillips describes himself as a consensus-builder, and in his time at FERC he has not dissented from a single ruling. Organizations representing a range of interests have congratulated Phillips on his ascension to acting chair, including clean energy advocates, utility trade groups, and natural gas groups. A former FERC chair has said that Phillips “quietly works within the building.” However, both expanded interstate transmission and consumer protection are two issues that Phillips has stressed.

Press release: President Biden Names Willie Phillips Acting Chairman (FERC)

News analysis: White House selects FERC Commissioner Phillips as acting chairman (UtilityDive)

Analysis: ‘Cautious’ FERC chair could drive consensus and clean energy (E&E News)