Regulators in the state of New York have approved filings for four major land-based wind projects in the Upstate region totaling 573.6 megawatts, as well as the transmission line for a 924-megawatt offshore wind farm in the Atlantic Ocean. New York currently has 2,192 megawatts of wind online and these projects would increase its capacity by 68%.
On 17 November 2022, the New York State Public Service Commission (PSC) approved compliance filings for the Eight Point Wind, Bluestone wind, Baron Winds, and Number Three Wind projects in Steuben, Broome, and Lewis Counties. These compliance filings are one of the final project milestones before construction can begin.
On the same day the PSC approved a 25-mile transmission line to deliver electricity from the proposed Sunrise Wind Farm to the town of Brookhaven on Long Island. Orsted and Eversource are jointly developing the Sunrise Wind farm, which they plan to make fully operational in 2025. The 924-megawatt plant is not only larger than any project in the region that has yet been built, but larger than other offshore wind projects in New York and New England. It would also be the first to be built in the New York Bight, the area of water south of Long Island and east of New Jersey in the Atlantic Ocean.
New York has one of the most aggressive renewable energy mandates in the United States, with a target to reach 70% renewables in electricity generation by 2030. It has a long way to go; in 2021 wind supplied 3.3% of New York’s electricity, far below the national average of 9.2%, and solar supplied another 3.1%. The New York State Research and Development Authority expects its targets to be met by a combination of existing and new hydroelectric capacity, wind, and solar, with offshore wind representing 18% of total generation.
Federal regulators have ordered the North American Electric Reliability Corporation (NERC) to create new standards for wind plants, solar plants, and other inverter-based resources to prevent them from unexpectedly tripping offline. The new standards must cover the areas of data sharing, model validation, planning and operational studies, and performance requirements, and must also cover implementation.
The Federal Energy Regulatory Commission’s (FERC) Notice of Proposed Rulemaking follows a series of incidents where solar plants have tripped offline at inopportune times. On 9 May 2021, 1,112 megawatts of solar and 36 megawatts of wind spread over 500 miles tripped offline due to a drop in voltage on a line caused by a failure at a gas plant. In its analysis of the “Odessa Incident,” NERC states that the solar and wind going offline was not caused by the fault itself, but due to inverter-level or feeder-level tripping or control system behavior within the wind and solar plants. NERC has also documented several such instances in California, dating back to the failure of 1,200 megawatts of solar plants during the 2016 Blue Cut Fire.
FERC says that this new effort should complement existing voluntary efforts including UL 1741, IEEE 1547-2018, and IEEE 2800-2020. However, voluntary efforts have been unsuccessful efforts to contain this problem. In its analysis of the Odessa Incident in Texas, NERC states that solar and wind plant owners and operators are aware of the guidance materials it has published but have not comprehensively adopted them. FERC also states that the continued occurrence of these events despite voluntary efforts at the state, level, and individual system level, and the risks they pose, mean that there is a need for mandatory reliability standards on a nationwide basis.
FERC will now go through its formal process to finalize this rule. Once it is finalized, NERC will have to submit a compliance filing within 90 days of the effective date of the final rule that includes standards development and implementation plans.
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Growing penetration of renewable energy on the U.S. grid is boosting the need for energy storage, to balance out peaks and troughs in demand and production. Currently, lithium-ion batteries are dominating the energy storage segment, but these batteries typically only have durations of up to 4 hours. We have witnessed long-duration energy storage projects involving lithium-ion batteries that can offer even 8-hour energy storage duration as per the current demand. The high cost of non-lithium-ion long-duration technologies is a big hurdle to their widespread adoption.
On 14 November 2022, the U.S. Department of Energy (DOE) announced nearly $350 million of funding for emerging long duration energy storage (LDES) demonstration projects offering energy storage for 10-24 hours or longer. Up to 11 demonstration projects will be selected based on their potential to comply with the DOE’s long-term goal of reducing LDES’ cost by 90%. Each project will receive funding equivalent to 50% of its cost. Furthermore, each selected project will be required to include a community benefits plan with the aim of creating good domestic jobs and benefits for communities.
The DOE has been strategically working on its target of reducing LDES’ cost since the Trump Administration, when the Energy Storage Grand Challenge competitive funding opportunity was launched. Under the Biden Administration, the DOE funded a $75 million center for LDES research at Pacific Northwest National Laboratory. In July 2021, the DOE announced an initiative called the Long Duration Storage Shot, which seeks to reduce costs for LDES by 90% by 2030. In May 2022, the DOE announced the new Long Duration Energy Storage for Everyone, Everywhere (LD ESEE) Initiative, created by the Infrastructure Investment and Jobs Act of 2021 The initiative aims to advance energy storage systems toward widespread commercial deployment by lowering costs and increasing the duration of energy storage resources.
In combination with the Inflation Reduction Act, which includes federal tax credits for standalone energy storage projects, this new $350 million funding from the U.S. government will further attract companies to build and deploy advanced energy storage technologies.
States like California and New York have also supported LDES technologies. In May 2021, California regulators called for a 1 GW LDES procurement for 2026. LDES was defined as “technologies offering between 8 and 100 hours of duration”. In January 2022, the Governor of California announced $380 million in LDES funding over two years as part of the $2 billion Clean Energy Investment Plan as part of the state’s budget for 2022 – 2023. In September 2022, the Governor of New York announced $16.6 million in funding for five LDES projects in the state. In addition, $17 million were announced for market players through a competitive funding opportunity for projects advancing the development and demonstration of scalable LDES technologies.
Through increased funding for advanced LDES technologies, the U.S. government aims to integrate grid storage more effectively, while increasing grid resilience, all towards the Biden-Harris Administration’s target of a carbon-free electric grid by 2035 and a net-zero emissions economy by 2050.
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According to data by Experian and published by Automotive News, 530,577 battery electric vehicles were registered in the United States in the first nine months of 2022. This represents a 5.2% share of new light-duty vehicles (car, truck, and SUV) registered in this period, which is a near-doubling over the 2.8% share in the first nine months of 2021.
Tesla represented 65% of these new EVs, with the Model 3 and the Model Y comprising most of its sales. However, the non-Tesla share of BEVs is growing faster, with a 71% year-over-year increase. The Ford Mustang Mach-E was the third-most popular EV, with 38,056 registered. As for automakers, the Hyundai Motor Group was ahead of Ford, with 49,567 registered between Hyundai, Ioniq, and Kia models.
The United States is one of the most car-dependent nations in the world and its share of EVs in new car sales lags well behind the global average. However, a recent report by Bloomberg New Energy Finance (BNEF) suggests that with the passage of the Inflation Reduction Act the U.S. EV fleet will be more than 20% larger in 2030 than it had previously forecasted.
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In late October and November 2022 the U.S. Bureau of Ocean Energy Management (BOEM) announced steps forward on new offshore wind lease areas in the Atlantic Ocean and Gulf of Mexico. On 31 October 2022 BOEM announced that it had finalized two wind energy areas in the Gulf of Mexico near the coast of Louisiana and Texas, as the first step towards a 2023 lease sale. And on 16 November 2022 BOEM announced eight new draft wind energy areas in the Central Atlantic.
This will be BOEM’s first offshore wind lease sale in the Gulf of Mexico. The total area of the two lease sales in waters near Galveston, Texas and Lake Charles, Louisiana are 2,762 square kilometers. The next step in the process for this lease sale is for BOEM to issue a proposed sale notice for public comment, which it plans to do later this year or in early 2023.
Graphic: BOEM
The eight draft offshore wind lease areas in the Central Atlantic are at an earlier stage but cover a much larger area of roughly 6,900 square kilometers off the shores of North Carolina, Virginia, Maryland, and Delaware. These eight areas are a subset of a 16,000 square kilometer call area that BOEM announced for public comment in April 2022, and the agency notes that these areas may be further modified after it incorporates feedback from other agencies in the federal government, ocean users, and other stakeholders. BOEM’s announcement kicks off a 30-day public comment period, during which the agency will hold virtual meetings that are open to the public.
BOEM has held 10 offshore wind lease sales to date and issued 27 offshore wind leases, all on the U.S. East Coast. On 6 December 2022 it will hold its first offshore wind lease sale on the West Coast.
The Biden Administration has also approved the nation’s first two large-scale offshore wind farms and construction has begun on the 130-megawatt South Fork Wind and the 800-megawatt Vineyard Wind projects. Both of these projects are located in Long Island Sound and both are expected to be operational by the end of 2023. Vineyard Wind may be the first of the two. On 1 November 2022 the project began laying the undersea cable to connect the wind farm to the mainland.
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Late October and November 2022 have seen a wave of new EV, battery, and battery component factory announcements in Georgia and Tennessee. This includes the groundbreaking on Hyundai’s $5.54 billion manufacturing complex in Georgia, LG Chem’s announcement of the nation’s largest cathode factory in Tennessee, and additional battery and supply chain announcements. Many of these announcements are explicitly tied to the availability of new incentives through the Inflation Reduction Act, both on the production side and the consumer side.
As the first of these, on 25 October 2022 Hyundai broke ground on its 11.8 square kilometer EV and battery “Metaplant” in Bryan County, Georgia. The new factory will make an estimated 300,000 Hyundai, Genesis, and Kia EVs each year after it comes online in the first half of 2025. This is about half the number of EVs that were sold of all models in the United States in 2021. Hyundai has not disclosed the battery partner for the plant, or other details about battery production, but has estimated that the entire project will create 8,100 jobs.
This was followed by two related factory announcements within the month. As the first, on 7 November 2022 a subsidiary of automotive body part and electronics manufacturer Ajin USA has announced that it will invest $317 million in a factory in Bulloch County, Georgia. And on 23 November, Hyundai Mobis announced that it will invest $926 million into a plant in Bryan County to make power electric systems and charging control units. The Hyundai Mobis plant will begin construction in January 2023 and is expected to open in 2024. Both the Aijin and Mobix plants will supply the Hyundai Metaplant in Bryan County.
Meanwhile, on 11 November Norway’s Freyr Battery announced that it will invest more than $2.6 billion into a new plant in Georgia’s Coweta County to make battery cells for stationary energy storage, electric mobility, and other applications. The first $1.7 billion phase of production will have an output of 34 gigawatt-hours per year. Freyr has stated that it intends to apply to the U.S. Department of Energy for packages that could include a grant and/or a direct loan.
Finally, in Tennessee LG Chem announced on 22 November that it will establish the nation’s largest cathode plant for US EV batteries. The Korean conglomerate plans to invest more than $3 billion to build a plant near Clarksville to make 120,000 tons of cathode material by 2027, enough to power 1.2 million electric vehicles. This is roughly double the volume of the entire US EV market in 2021.
LG’s cathodes will be based on nickel-cobalt-manganese-aluminum (NCMA) chemistry, which provides additional cycling stability for a longer life as well as greater thermal stability than standard nickel-manganese-cobalt (NMC) chemistries. However, the use of cobalt could become a problem in the future. This mineral was identified by the U.S. Department of Labor in a September report as being associated with child labor in the Democratic Republic of Congo, where most of the world’s cobalt is mined.
LG Chem says that its new 1.7 square kilometer factory will operate on 100% renewable energy from solar and hydroelectric sources. The company states that it chose the site due to proximity to key customers, ease of transporting raw materials, and the “active cooperation of the state and local governments.” LG Chem has additionally cited the role of the Inflation Reduction Act (IRA). Construction on LG’s cathode factory is set to begin in the first quarter of 2023, with mass production to begin in the second half of 2025.
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Senate Energy and Natural Resources Committee Chair Joe Manchin has declined to hold a confirmation hearing for a second term for Federal Energy Regulatory Commission (FERC) Chair Richard Glick. Senator Manchin’s move to hold up the process and deny the Democratics a 3-2 majority on FERC past the end of 2022 could frustrate the Democratic Party’s energy agenda including attempts to expedite transmission. The senator’s move follows an angry response to President Biden’s statements about the demise of coal-fired power in the United States.
FERC oversees interstate energy matters including oil and gas pipelines, transmission networks, and wholesale power markets. The agency’s commissioners are appointed by the president and are subject to senate confirmation. While commissioners will often remain after a new president comes into office, by custom FERC retains three members that represent the party that holds the presidency and two from the opposition party.
Glick’s first term at FERC has included a policy shift at FERC to consider the economic need for and environmental impacts of new interstate natural gas pipelines. Along with this move, FERC lowered the threshold for natural gas infrastructure to trigger a National Environmental Policy Act (NEPA) review. He has also proposed a rule that would require FERC to consider the greenhouse gas implications of pipelines. These moves have been opposed by both Republican members of FERC, the American Gas Association, and Senator Joe Manchin, who has summoned Glick for questioning during hearings of the Senate Energy and Natural Resources Committee.
Glick’s departure will leave FERC with a 2-2 balance, which will make it harder to come to majority opinions. Clean energy advocates have expressed concern at the prospect of losing Glick, with American Council on Renewable Energy (ACORE) CEO Gregory Wetstone calling Manchin’s move “disappointing.”
During November 2022 three PV manufacturers made major announcements related to expansions of PV cell and module production in the United States. This includes plans by 3Sun and Philadelphia Solar for at least 4.2 gigawatts of new crystalline silicon module manufacturing capacity in 2025, as well as First Solar revealing the location of its new 3.5-gigawatt thin film factory in the U.S. Southeast.
These are some of the first multi-gigawatt announcements made following the passage of the Inflation Reduction Act, which includes substantial incentives for domestic production of polysilicon, wafers, cells, modules, and PV materials. With these announcements, other announcements, and plans that have been revealed in the media, CEA is now tracking 25.6 gigawatts of cell capacity and 42.3 gigawatts of module capacity, up from 3.3 gigawatts of cell (all of which is First Solar’s integrated thin film production) and 8.6 gigawatts of module assembly in 2022.
Graphic: CEA
Polysilicon, ingot and wafer announcements are much more limited; the only new polysilicon capacity announced is the re-starting of REC Silicon’s Moses Lake facility. For ingot and wafer, two new projects are anticipated: Hanwha Q Cells’ plans for a 9-gigawatt integrated ingot, wafer, cell, and module facility, and a 3-gigawatt plant planned by SPI Energy
The first large announcement came from Jordanian module maker Philadelphia Solar, which has joined forces with newly formed U.S. entity Translucent Energy to manufacture PV modules in the United States. Philadelphia says that it is on track to complete a 1.2-gigawatt factory to produce modules using monocrystalline passivated emitter and rear cell (PERC) cells by Q4 2024. The company says that it will then transition to production of modules using heterojunction silicon cells in 2025.
Philadelphia has been suggesting that it will build a U.S. factory for months, and this announcement is the first definitive move. The module maker has not said where this factory will be located.
Philadelphia Solar does bring experience as the largest PV module manufacturer in the Middle East and North Africa region with a production capacity of 580 megawatts per year. Philadelphia has also suggested that it has a captive supply chain to serve this plant. The company’s press release contains the cryptic statement: “the alliance oversees module production from silicon to ingots, bricks, wafers, and cells, providing exceptional quality PV modules.”
Ten days after Philadelphia Solar’s announcement, Enel North America announced plans to build a cell and module factory in the United States with the capacity to make “at least” 3 gigawatts of bifacial heterojunction PV modules by 2025. While it still evaluating sites for the factory, Enel expects to start construction in the first half of 2023.
Like Philadelphia Solar, Enel comes with experience through its 3Sun facility in Catania, Italy, which it is currently expanding from 200 megawatts to 3 gigawatts. The company also has the benefit of a captive pipeline to sell its products into, given Enel’s substantial presence in the U.S. market as a wind and solar developer.
Enel plans to eventually scale the factory to 6 gigawatts annually. It is not clear from the company’s announcement if the volume of cells made will match the module production volume. However, this will still be the first commercial-scale crystalline silicon cell factory in the United States following the shut-down of Suniva’s facilities in 2017.
Of all the announcements in November, First Solar is the closest to building a factory. The module maker has revealed that the 3.5 gigawatt thin-film factory it has been planning for months will be in an industrial park in Lawrence County, Alabama. The facility will make First Solar’s massive Series 7 module, which at 2.794 square meters is even larger than its Series 6.
The factory will represent a $1.1 billion investment. Like Philadelphia Solar and Enel, the company plans to commission its factory by 2025. First Solar has many factories in Malaysia and Vietnam, but this will be the company’s first U.S. module factory outside the state of Ohio. First Solar is currently building a third factory in Ohio which it expects to come online in the first half of 2023. When the Alabama facility and the one in Ohio are online, First Solar expects to have the capacity to make 10.7 gigawatts of PV modules in the United States each year. This is more than the aggregate capacity of all U.S. module makers in 2022.
First Solar is additionally investing $270 million in a new research and development facility in Ohio, to support its manufacturing.
The thin-film maker clearly has near-term demand for the output of its new factories. The company is sold out to 2025, and recently announced a deal with Intersect Power to provide 4.9 gigawatts of PV modules for the period 2025 through 2029.
Both First Solar and Enel explicitly cited the Inflation Reduction Act (IRA) as a support for U.S. manufacturing moves. The law provides a $0.07 per watt tax credit to produce PV modules in the United States, and a $0.04 per watt credit for cells. First Solar will be able to claim both of these. Additionally, CEA’s research indicates that First Solar will be able to claim the $12 per square meter wafer credit for its photon absorber layer.
In the following months, CEA will be tracking the progress of these factories and other manufacturing announcements. There are factors that can both reduce and expand the amount of manufacturing capacity that will ultimately be online by any given year. Chiefly, there are many challenges to completing factories on time, but we expect that as some factories are delayed or even cancelled other new announcements will be made.
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On 4 November 2022 the Washington Building Code Council ruled that new residential buildings must include heat pumps. While the code still allows for the installation of natural gas heaters in addition to the heat pumps, this is the closest any state has come to banning natural gas-burning appliances in new construction.
More than 40 cities and counties in California, New York City and Washington DC all have regulations to prohibit the use of fossil fuel combustion in new buildings. The Building Code Council’s decision begins the writing of a final rule, to be finalized in January 2023. The new code will take effect on 1 July 2023.
Dominion Energy and stakeholders have reached an agreement that the power company says will allow its 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project to move forward. While a previous decision by state regulators would have required Dominion, and not its customers, to bear the financial consequences of under-performance, the new deal will distribute the impacts of cost overruns and production shortfalls between both parties. Dominion expects to complete the CVOW project
In the final days of October and early November three Midwestern utilities have revealed plans for their future power supply. All are planning for expedited retirement of coal-fired power plants and to replace these with a mixture of gas-fired power plants, solar, wind, and battery storage, although the mix of these resources varies between the three.
As the first of these, AES Indiana provided a preview of its upcoming integrated resource plan (IRP) on 31 October 2022. The company’s preferred resource portfolio features the retirement of two units at its Petersburg coal-fired power plant, and the conversion of these units to 1,052 megawatts of natural gas-fired generation. Alongside this, AES plans to install a new 240-megawatt battery storage facility at the Petersburg plant, and to procure up to 900 megawatts of wind, 90 megawatts of solar combined with battery storage, and 75 megawatts of standalone storage by 2027.
In Michigan, DTE filed its IRP before state regulators on 3 November 2022. By 2027, the utility plans to add 800 megawatts of solar and 240 megawatts of battery storage, as well as retiring the 1,270-megawatt Belle River coal-fired power plant and convert it to a fast-ramping natural gas-fired “peaker” plant.
DTE then plans to retire the first two units of its coal-fired Monroe Power Plant, which total 1,535 megawatts, in 2028. This is 12 years ahead of the previous schedule, and the utility describes the pre-2027 capacity additions as necessary preconditions for this move. DTE plans to retire the Monroe plant’s remaining units in 2035, after which it will have no more coal-fired generation.
Finally, on 31 October 2022 Xcel Energy, which operates in eight states in the Midwest, Mountain West, and Texas, has announced that it will end operations at the coal-fired Tolk Generating Station in Texas in 2028. This is four years earlier than previously planned and will permit the utility to exit coal entirely by 2030.
In its quarterly earnings presentation on 27 October 2022, Xcel estimated that it plans to add roughly 4,000 megawatts of renewable energy in Colorado, 5,800 megawatts in the Upper Midwest, and 1,900 megawatts in Texas and New Mexico. These changes will reduce the emissions intensity of its operations by 70% – 85%, depending on the region. Xcel has calculated that the renewable energy Production Tax Credit (PTC) reduces the levelized cost of solar projects 25% – 40% and the cost of wind projects 50% – 60%.
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