Month: June 2019

WoodMac: Decarbonised US power needs trillions, time, flexibility

Longer timeframes and a more open stance with natural gas and nuclear would help the US overcome the “unprecedented” challenge of decarbonising its power sector, according to Wood Mackenzie.

New analysis by the firm estimates achieving a fully renewable electricity system would cost the US US$4.5 trillion over the next one to two decades, a “staggering” US$35,000 per household.

According to Wood Mackenzie, adding the necessary 1,600GW of solar and wind from today’s installed capacity of 130GW would constitute an “unprecedented buildout”, taking up US$1.5 trillion of the total US$4.5 trillion bill. Transmission upgrades would cost a further US$500 billion.

However, rolling out 900GW of energy storage – the scale required to ensure wind and solar are available exactly when needed, Wood Mackenzie said – would carry the highest price tag by far, demanding investments of US$2.5 trillion.

In its present state, the firm argued, the storage supply chain is proving inadequate to deliver a zero-carbon power system. Only 5.5GW of battery systems is up-and-running or under construction worldwide and what little is operational is too short-term to balance seasonal swings, it added.

Dan Shreve, Wood Mackenzie’s head of global wind research, said a fully renewable power system entails challenges “far beyond” new generating assets. It will require, he argued, a “substantial” shift from “traditional energy-only constructs” to a capacity-style market.

Moving the goalposts to 2040-2050

Given the scale of the challenge, Wood Mackenzie recommended a patient, flexible approach.

Pushing decarbonisation goalposts from 2030 to 2040 or 2050 would create room for emerging innovations – flow batteries, demand response, renewable hydrogen, carbon capture and storage – to mature and reach commercial scale.

Success with decarbonisation would also be helped along by a lenient stance with natural gas, Wood Mackenzie said. Having existing plants cover 20% of the US’ power mix – rather than opting for a fully renewable system – would make the roll-out of clean energy and storage cheaper by a respective 20% and 60%, the firm added.

According to the analysis, the zero-carbon agenda would also benefit from involving nuclear, which presently accounts for 60% of all US clean energy flows. Including existing installations in a decarbonised mix would save US$500 billion in investment in solar and wind, Wood Mackenzie said.

The focus on decarbonisation costs comes as US clean energy players fight to keep up the momentum towards raising a trillion dollars by 2030, an aspiration threatened by looming policy vacuums.

Incentives to solar have become a particular campaign issue for Democratic candidates vying to unseat Donald Trump at next year’s elections. Elizabeth Warren and 19 other senators recently urged for a continuation of investment tax credits until alternative incentives are found.

US solar prospects amid a changing incentive landscape will take centre stage at Solar Media’s Solar & Storage Finance USA, to be held in New York on 29-30 October 2019

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US senators join push for solar tax credit extension

US senators have pushed solar incentives into the spotlight one year ahead of the presidential election, urging policymakers to extend federal support.   

The planned phase-down of investment tax credits (ITC) starting this year should be delayed at least until the US can pass alternative incentives for clean energy, according to a letter penned by 20 US Democratic senators, including presidential hopefuls Elizabeth Warren and Kamala Harris.

“We are … concerned about the impact on jobs if the ITC decreases at the very moment it’s needed most,” the 19 June letter said, noting that the wind-down would kick in while the US continues to lack major federal programmes to foster renewables and discourage fossil fuels.

“Because of these credits, solar has averaged 50% annual growth for a decade,” said the missive, addressed to US Senate leaders Mitch McConnell and Charles Schumer. “There are 240,000 [solar] workers nationwide…we should make every possible effort to avoid putting these jobs at risk.”

US solar trade body SEIA endorsed the calls for an ITC extension, describing the scheme as a “common-sense policy” that has generated “hundreds of thousands of jobs” and triggered US$140 billion worth of private investment.

“The ITC has a record of bipartisan support, and circumstances since 2015, such as trade tariffs and a heightened awareness of climate change, only serve to bolster the case for extending the wildly successful policy,” said SEIA CEO Abigail Ross Hopper.

Duke Energy’s tax equity-backed 150MW plant

The ITC programme was first set up by the Republican administration of George W. Bush in 2005. Ten years later, Democrats and Republicans struck a deal at Congress to withdraw the tax credits over five years, culminating in a phase-out after 2021.

Polled investors recently predicted the scheme’s last few years will prompt a boom of US clean energy finance until 2022. Surveyed by renewable body ACORE, the financiers feared the momentum could wane after that point if the ITC is not replaced with new support programmes.

One to seize the closing tax credit window was Duke Energy Renewables. The firm recently switched on a 150MW project in California, financed via tax equity from US Bank’s tax credit division and three other backers.

The North Rosamond plant, boasting 477,000-plus panels at a site in Kern County, was bought from Clearway Energy Group and built by First Solar Electric California. It will supply power to Southern California Edison via a 15-year PPA. 

See here for the letter by US Senators and here for SEIA’s reaction

US solar prospects amid a changing incentive landscape will take centre stage at Solar Media’s Solar & Storage Finance USA, to be held in New York on 29-30 October 2019

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Bifacial modules now exempt from Trump’s trade tariffs

Bifacial solar modules are now officially exempt from President Trump’s trade tariffs.

Modules imported from all the major producing countries are levied at 25% currently, falling to 20% in February next year under the Section 201 measures.

A statement by the US trade representative yesterday confirmed that the exemption would be entered on the Federal Register on Thursday.

Many Chinese manufacturers face both anti-dumping duties and the Section 201 levies. Between January and September 2018, only 46MW of modules were imported from mainland China to the US. The latest twist creates a route to market for China-sourced modules into the US.

Bifacial breakthrough

The technology has spent some time hamstrung by a lack of performance data. This has made some investors wary of financing projects. As technology costs have continued to fall a new strategy has emerged to sidestep the ‘chicken-and-egg’ situation. Developers of three different projects on three different continents have told PV Tech that they are essentially financing bifacial solar projects based on projections of the front-side power only. After a few years of operation, site-specific data on the yield from the rear side will present the opportunity to refinance based on power from both sides, theoretically lowering the cost of that finance.

Meanwhile, Chinese module manufacturers are preparing for significant growth in bifacial demand.

Enel Green Power has been selecting bifacial modules for projects in Australia and Mexico. One Chinese module manufacturer told PV Tech it expects all Middle East utility plants to opt for bifacial panels from this point forward.

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Salmon fishing in Alaska gets a battery-powered renewable boost

Cordova, Alaska, is isolated from the grid, but fortunate to be blessed with hydropower resources – and now a 1MWh battery storage system will help this coastal Arctic community increase its self-reliance in a “harsh and unforgiving climate”.

Technology provider Saft announced today that it delivered a turnkey energy storage system (ESS), which is being integrated into the microgrid of Cordova Electric Cooperative (CEC), sole utility provider of electricity to the 2,300 locals and around the same number of seasonal visitors during summer.

CEC already runs off as much as 80% renewable energy at times: it has 7.25MW of hydropower at two sites, along with a 10.8MW diesel plant, sending power through 78 miles of underground cables and wires, buried to protect them from the freezing cold. With the desire to reduce its reliance on Orca, the diesel power plant and the associated costs of maintenance and importing fuel, while increasing resilience of the local network, CEC commissioned Saft to deliver the 1MW rated 1MWh capacity storage system. The Saft-supplied the containerised battery system is integrated with ABB power conversion equipment and controls.

CEC has developed a programme, RADIANCE (Resilient Alaskan Distribution system, Improvements using Automation Network analysis, Control and Energy storage), which as the name suggests, sees energy storage as key to enhancement of the utility’s ‘grid’. back in 2017, Saft rival Younicos (now Aggreko Microgrid and Storage Solutions) delivered a 3MW lithium-ion battery to another Alaska community, pairing the ESS with a 9MW wind park and 23MW of hydropower.

The battery system will provide frequency response, which is needed especially in summer months when local industry becomes heavily geared towards salmon fishing from the nearby Copper River and the processing thereafter at local facilities. It will also help reduce peak demand, particularly in those summer months. As demand rises, at present the utility is forced to divert half a megawatt of hydropower to maintain frequency, while the diesel genset is needed when demand spikes.

Saft, acquired for around a billion dollars by oil major Total a couple of years ago, has experience executing projects in cold climates. It already delivered a battery system to a microgrid project close to the Arctic Circle, with a project in Colville Lake, Canada, completed in 2015, while more recently the company announced participation in a 10MW project in Siberia. The need for energy storage varies in different regions of the world, depending on scale and the proximity of the grid. The company has also just completed a 10MW / 5.5MWh project in Bermuda, for instance, which is another remote community but in this case with a local thermal generation-driven grid, where the battery system provides reserve capacity, in turn helping local system reliability and lowering costs, project manager for Bermuda utility BELCO Stephanie Simons told last week.

In a recent interview, Saft’s Michael Lippert told that in more developed markets and in grid-connected applications, customers are tending to favour longer durations of storage with higher rated outputs. As such the company’s newest iteration of its containerised solution Intensium Max, has been marketed as a 2.5MW complete system or modular building block. 

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22MW of ESS a lower cost alternative to network investment for Duke Energy Florida

Duke Energy Florida has announced three large-scale battery storage projects which will take the utility almost halfway to its target of installing 50MW of grid-connected battery systems by 2022.

The company issued a release earlier this week announcing 22MW of projects: one of 11MW and two of 5.5MW each. Megawatt-hour figures were not given, although Duke Energy Florida (DEF) did provide brief explanations of the applications and services each project is set to deliver.

Once again, lithium-ion battery-based solutions have been selected for projects that will “improve overall reliability” of electricity supplies, to enhance the grid and make it more efficient, while also providing backup in case of outages – clearly a major concern in the often extreme weather-hit state. Early last year, Holly Raschein, a Republican member of the House of Representatives proposed legislation for the state that could make energy storage and solar the de facto go-to solution for disaster relief and resiliency from extreme weather events. 

The “number and intensity of storms that have recently impacted the state,” the release said, make this backup function an increasingly important role that battery energy storage systems (BESS) can play. Meanwhile in day-to-day use they will provide “significant energy services to the power grid,” DEF state president Catherine Stempien said.

DEF is also manager and operator of the grid in its service area, meaning the utility will be able to realise all of the multiple benefits of installing the batteries, whereas other utilities in other markets may be prohibiting from accessing certain markets. The three lithium-ion systems will help balance energy supply and demand, help integrate variable renewable energy sources, increase energy security and prevent the utility from overspending on expensive transmission and distribution system upgrades.

The largest, Trenton (11MW), is being used to add reliability to the local network. Meanwhile Cape San Blas (5.5MW) will add power capacity in a constrained area which continues to experience growth in demand, with DEF describing it as “an economical alternative” to building out the distribution grid. Jennings (also 5.5MW) will improve power reliability in the local area while again being a lower cost alternative to installing additional distribution equipment.

As was the case with solar PV, Florida, ‘The Sunshine State’, has been slow to embrace battery storage for renewables. DEF only installed its first utility lithium-in battery system coupled with solar in the state last winter, a 100kW solar array with a small Tesla device.

Another utility, Florida Power & Light has claimed some victories thus far in the field, connecting a DC-coupled grid-scale battery at a solar farm in early 2018, announcing a 10MW / 40MWh project later that year and then in March of this year said it would be developing what at the moment stands to be the world’s largest battery combined with solar. Duke Energy Florida is meanwhile committed to constructing or acquiring 700MW of solar PV and 50MW of battery storage by 2022, which is expected to require investment of around US$1 billion.

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