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November 8, 2024

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Park City Wind to Cancel PPAs, Exit OSW Pipeline

Another New England offshore wind project has gone off the rails.

Avangrid on Monday announced an agreement with two Connecticut electric distribution companies to terminate power purchase agreements for its Park City Wind proposal (Conn. PURA 19-12-18).

The 804-MW wind farm is “unfinanceable” under the terms agreed on, because of subsequent sharp cost increases, the company said. It hopes to rebid Park City Wind at more favorable terms.

Park City was an important component of Connecticut’s emissions reduction/climate protection planning, and Gov. Ned Lamont (D) expressed disappointment in the turn of events. The move will likely delay the arrival of offshore wind in the state, and almost certainly increase its cost to ratepayers.

It also is the latest in a yearlong series of setbacks for offshore wind in southern New England.

With its steady winds, shallow waters, nearby customer base and deepwater ports, the region had a pioneering role in launching the industry in the U.S. Now it is feeling the blowback as the industry struggles with supply chain constraints and soaring costs.

Avangrid this year negotiated a similar exit from its PPAs in Massachusetts for the Commonwealth Wind project, again because the financial terms were untenable (Mass. DPU 22-70, 22-71, 22-72).

The Shell/Ocean Winds joint venture SouthCoast Wind bailed out of its Massachusetts PPAs for the same reason; state regulators approved the termination agreement Friday (Mass. DPU 20-16, 20-17, 20-18).

Rhode Island’s most recent offshore wind solicitation drew just one bid — the Revolution Wind 2 proposal by Ørsted — and it was rejected as too expensive.

Ørsted still has not made a final investment decision on Revolution Wind 1, although it obtained federal approval for construction and operations in late August. The company is looking for incentives to improve the financials.

Massachusetts utility Eversource Energy is in the late stages of exiting the partnership with Ørsted that has resulted in multiple wind power proposals off the New York and New England coastlines.

Even the two bright spots in New England waters — construction starting this year on the nation’s first two utility-scale offshore wind projects — have not been without hiccups. WBUR reported Monday that Vineyard Wind is behind schedule because of a spate of rough seas and foul weather. Newsday reported Tuesday that South Fork Wind’s schedule is in flux because of issues with availability of a ship needed to complete the work.

New York and New Jersey offshore wind projects are struggling with the same headwinds as these New England projects, but none has progressed beyond threats of cancellations.

Park City Wind

Park City Wind’s exit erases much of Connecticut’s offshore wind pipeline — only 304 MW from Revolution Wind 1 remains.

Connecticut Department of Energy and Environmental Protection Commissioner Katie Dykes told NetZero Insider on Tuesday that Avangrid’s exit was an unwelcome development.

“Over the last several months, DEEP engaged Avangrid, and industry experts, to understand concerns about the economics of Park City Wind and the significant near-term challenges facing offshore wind projects in general,” she said via email. “We hoped to hear proposed solutions to enable the Park City Wind project to move forward while protecting Connecticut’s ratepayers and respecting our state’s commitment, embodied in statute, to conduct competitive procurements. Unfortunately, these discussions failed to materialize in a proposal that met these goals. DEEP is working with the state’s utilities to ensure that bidders into future solicitations — including our upcoming solicitation for offshore wind — are able to deliver completed projects at the prices they offer and face steeper penalties if they do not.”

Charles Rothenberger, climate and energy attorney for environmental advocacy group Save The Sound, said the financial pressures on wind power developers are real. The goal now is to preserve a viable offshore wind program without transferring too much of those pressures to utility ratepayers.

“Given the really substantial financial commitments these companies already have made … what it tells me is this was not simple gamesmanship on the part of the industry, if anybody thought that,” he told NetZero Insider.

Rothenberger added that the inflation adjustment mechanism included in the next solicitation should go both ways and require developers to refinance at a lower cost when interest rates decrease.

Avangrid addressed the situation in a statement Monday.

“One year ago, Avangrid was the first offshore wind developer in the United States to make public the unprecedented economic headwinds facing the industry, including record inflation, supply chain disruptions and sharp interest rate hikes, the aggregate impact of which rendered the Park City Wind project unfinanceable under its existing contracts.”

The company said it, stakeholders, and state and federal officials were unable to find common ground to preserve the PPAs.

Park City Wind LLC’s termination agreements with Eversource and United Illuminating Co. call for a combined $16.08 million in payments to the two utilities. That is substantially less than the termination penalties negotiated by SouthCoast ($60 million) and Commonwealth ($48 million) in Massachusetts.

Other Developments

In this challenging financial environment, offshore wind development in New England continues.

South Fork and Vineyard have said they plan to generate their first power this year.

Connecticut is preparing to issue a request for proposals for up to 1,196 MW of offshore wind — potentially larger than Park City, but not vastly larger. The solicitation had been scheduled tentatively for September.

The developers of SouthCoast and Commonwealth plan to bid into the latest (and largest) Massachusetts offshore wind solicitation, announced in August. As it ranks the bids on a points-based system, the state may penalize the two companies for bailing out on their previous agreements.

The Environmental Protection Agency issued its final preconstruction permit to Revolution Wind 1 on Thursday.

Rhode Island issued a Strategic Plan for Offshore Wind Jobs & Investment. Numerous offshore wind lease areas are clustered south of the Ocean State; state and business leaders hope to establish Rhode Island as an onshore hub for the offshore industry as it grows.

Rhode Island is taking another swing at drawing electricity from the industry as well. Gov. Dan McKee last week announced that the state’s largest electric utility, Rhode Island Energy, will issue a request for proposals this month for up to 1,200 MW of offshore wind capacity.

Each person quoted in the announcement stressed the word “affordability” — the issue that torpedoed the previous offshore wind solicitation.

“Rhode Island has big clean energy aspirations, and Rhode Island Energy is committed to helping achieve them,” said utility President Dave Bonenberger. “This new procurement can help advance the state’s clean energy goals and support achievement of Rhode Island’s emissions-reduction targets. We look forward to seeing how offshore wind developers can balance those goals with affordability and wider economic benefits for the state.”

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NARUC, NASEO Release Solar Cyber Toolkit

A new toolkit from the National Association of State Energy Officials (NASEO) and the National Association of Regulatory Utility Commissioners (NARUC) aims to help state regulators grapple with cybersecurity concerns with distributed solar resources that “have not been fully addressed.”

The toolkit was produced by the Cybersecurity Advisory Team for State Solar (CATSS), which NARUC and NASEO launched in June 2020 with the U.S. Department of Energy’s Solar Energy Technologies Office. (See NARUC, NASEO Launch Solar Cybersecurity Resource.) CATSS includes experts on digital security, the electric grid and photovoltaic technologies, with leadership drawn from state-level policymakers and regulators and additional support from the federal government and private sector.

CATSS’ focus is on distributed solar because, as the document states, “less attention has been given” to it from cybersecurity efforts than to “legacy assets and bulk power” despite the “significant forecasted growth” of distributed energy resources as part of the overall generation mix. This attention deficit is particularly concerning because DERs rely on remote communication tools to a degree that traditional resources do not, meaning a successful cyberattack could lead to serious consequences.

“As the leaders in state energy policy and program development in support of their governors’ and legislators’ cybersecurity and DER goals, state energy offices are increasingly engaged in cybersecurity actions,” said NASEO President David Terry in a statement. “This toolkit will help states achieve their energy and resilience goals by creating more cyber-secure distributed energy resources.”

The kit comprises 10 tools divided into two areas of focus. The first is education and risk awareness to inform state energy officials and public utility commissions of the underlying issues around distributed solar and other DERs.

The category includes four documents. Photovoltaic solar engineering and system overview covers the components of a local solar panel network and their communication with each other and grid controllers. The Standards quick guide provides relevant standards from regulators like FERC and NERC, along with industry groups such as the Institute of Electrical and Electronics Engineers.

Assessing solar cybersecurity is a list of discussion prompts for energy officials and commissions to discuss cybersecurity issues with utilities. The final tool in the section, Hypothetical solar cyberattack scenarios and impacts, discusses “approachable, plausible scenarios of cyberattacks affecting [solar] assets and interconnected infrastructure.”

In the second set, NARUC and NASEO provide practical actions to address cyber threats. The Decision support tool for solar energy cybersecurity policy and regulation includes a probable risk assessment to help users understand the risks and ownership of a solar network’s physical assets. Next, the Case studies and model guidance tool assists states with forming working groups, a “critical first step to establishing state cybersecurity programs.”

In Cybersecurity and the solar workforce, the writers suggest competencies and skillsets that should be looked for in solar-related cybersecurity professionals, along with tactics that energy offices and commissions can use to encourage good hiring practices. Cybersecurity considerations for state procurement of solar assets offers sample language for procurement agreements, contracts and grants, as well as models for setting up state solar cybersecurity practices.

Exercise design guidance for solar cybersecurity provides recommendations for designing energy emergency exercises, drills and other solar cybersecurity-focused simulations. Finally, the last tool approaches the cybersecurity issue from the perspective of state legislatures, offering example bills for “states seeking legislative options to help mitigate these risks.”

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Texas High Court to Review Decision on Uri Charges

The Texas Supreme Court has agreed to review a lower court’s invalidation of the Public Utility Commission’s emergency pricing orders during the deadly 2021 winter storm, potentially placing billions of dollars of transactions at stake.

The state’s high court granted the PUC’s petition for review Friday and set oral arguments for Jan. 30, 2024 (23-0231).

The commission in March asked the court to review the decision, reverse the judgment and either dismiss the case or rule in the PUC’s favor. It said the orders it issued expired years ago and therefore cannot be voided, and said the commissioners made “split-second decisions” necessary to help correct a market failure. (See Texas PUC Appeals Court’s Decision on Uri Transactions.)

The PUC filed its petition shortly after the 3rd Court of Appeals reversed two commission orders to keep the market’s wholesale prices at the $9,000/MWh cap during Winter Storm Uri. The court found the commission’s actions “entirely” eliminated competition and were contrary to state law. It remanded the case for “further proceedings consistent” with its ruling.

The actions resulted in $16 billion of market transactions that ERCOT’s Independent Market Monitor said were incorrectly priced during the 33 hours that followed once the grid operator stopped shedding firm load. The PUC declined to re-price the transactions. (See “Monitor: $16B ERCOT Overcharge,” ERCOT Board Cuts Ties with Magness.)

Some of the $16 billion balance has since been securitized and some participants have been paying off debts they now might not even owe. Other transactions have been settled outside ERCOT and can’t be undone, according to legal expertise.

Luminant Energy, Vistra’s generating subsidiary, filed the appeal with the 3rd Court and has been joined by Exelon. They say the commission exceeded its authority in allowing the high prices while the ERCOT grid was trying to find generation after more than 50 GW of resources were knocked offline by the storm.

Calpine, Talen Energy and TexGen Power are among the generators that support the PUC’s position.

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NERC: Battery Facilities Also Vulnerable to Inverter Faults

Battery energy storage systems (BESS) may be vulnerable to the same systemic performance problems seen in several disturbances in solar generators and other inverter-based resources (IBR) over the past few years, according to a joint report released by NERC and WECC on Monday.

The 2022 California Battery Energy Storage System Disturbances report concerns two events that occurred in Southern California last year and resulted in the loss of significant amounts of BESS in the region. According to NERC and WECC, they are the first major grid events to involve battery facilities and demonstrate why grid planners “need to consider these systems in the same light as any other” IBR.

The first event began just after 6 p.m. Pacific Time on March 9, when a generator circuit breaker at a natural gas-fired simple-cycle facility in Riverside County, Calif., suffered an internal failure, causing a generator bus fault. Generator units relayed and disconnected the natural gas generators, which were producing 694 MW, and the fault was cleared after about 4.5 cycles.

At the same time, IBRs at several facilities unexpectedly reduced output by a collective 408 MW. 124 MW of this reduction was attributed to BESS. As a result, the total generation loss topped out at 1,102 MW and system frequency dropped to 59.916 Hz. In response, CAISO raised regulating unit output, and frequency returned to normal in three minutes.

The second event began at 3:06 p.m. PT when a B-phase-to-ground fault occurred on a 220 kV bus at a new BESS plant that was still undergoing testing. While the fault was cleared normally in about four cycles, it caused a further unexpected reduction of output from multiple IBRs — including both battery and solar facilities — totaling 498 MW. CAISO again raised regulating unit output to assist in the recovery from the frequency nadir of 59.924 Hz, and frequency returned to normal in one and a half minutes.

Three BESS facilities were involved in both events: a 66-MW facility containing 29 inverters, a 250-MW facility with 88 inverters, and a 70-MW hybrid solar and BESS facility with 13 battery inverters. In addition, the April event involved an additional BESS unit rated for 115 MW and containing 45 inverters.

Causes of Reduction Unclear

NERC and WECC identified inverter AC overcurrent tripping and unbalanced AC current tripping as the cause of reduction for two of the battery facilities involved in the March event. The reduction in the third battery plant was caused by DC bus voltage undervoltage for two of the 13 inverters involved. Investigators have been unable to determine the reason the remaining 11 inverters tripped.

Determining the reason for reduction in the April event was more difficult because of incomplete data from three of the four BESS facilities involved. However, investigators concluded that in one of the plants — which suffered reductions in both events — inverters tripped due to a mix of AC overcurrent tripping, unbalanced AC current tripping, DC bus unbalance, half bus DC voltage max, DC bus overvoltage and high AC voltage.

According to records, five inverters tripped in the plant that was involved in only the April event. Three tripped because of unbalanced AC current protection; the cause of the other trips is still unknown. However, the report suggested record quality may still be an issue because the output of the five inverters that tripped “does not add up to the total 26 MW lost.”

The cause of tripping could not be determined for the remaining two plants because of faulty recording at one facility and a lack of metering data for the other, which is part of a multiphase project for which data at individual plants was not available.

NERC and WECC recommendations for utilities include checking for causes of tripping identified in both this and previous IBR incident reports. Generator owners should even check for causes of tripping in incidents that did not involve BESS facilities; the ERO explained that “causes … associated with solar PV resources” had been found in the most recent incident as well.

The report also warned that transmission owners and GOs should assess BESS ride-through performance during the interconnection process, while transmission planners and planning coordinators should also “conduct ride-through performance assessments … and confirm that installed equipment, performance and capabilities match those in the studied models.” NERC plans to assess the quality of performance modeling for the affected facilities.

Finally, NERC and WECC warned that the lack of data on the incident made deep analysis of the event challenging. The report noted that none of the facilities involved met CAISO’s 10-millisecond recording data resolution requirements. Other “significant data quality issues” included a lack of individual facility metering, inconsistency between BESS data and CAISO data, and the tendency of monitors at several facilities to freeze recording at the onset of the fault.

IBR Issues Continuing

While the March and April events are the first significant disturbances on record involving battery facilities, the ERO has long been familiar with the sometimes-unexpected behavior of other IBRs like wind and solar generators. Just last month, NERC and WECC released a joint report on a Utah event in which nine solar facilities lost a total of 921 MW of generation. (See NERC Utah Event Report Underlines Ongoing IBR Issues.) Previous reports have detailed multiple similar events in California and Texas. (See NERC, WECC Repeat Solar Performance Warnings.)

“These events are the first faint signal that the systemic performance issues we have identified with other inverter-based technologies may very likely apply here as well,” Ryan Quint, NERC’s director of engineering and security integration, said in a statement. “Battery … systems will play a critical role during the energy transition; therefore, it is imperative that we design, study, commission and operate them in a manner that supports [grid] reliability.”

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Green Jobs are Growing Far from Fossil Fuel Workers

Green jobs may be growing, but the vast majority of the 1.7 million fossil fuel extraction workers whose jobs are threatened by the energy transition will not fill them, according to a new paper in the journal Nature Communications.

Authors Junghyun Lim, Michaël Aklin and Morgan Frank found a significant mismatch between where green jobs are being created and where fossil fuel extraction workers are located and little likelihood of many relocating for those green jobs, even when skill sets match.

“The vast majority of extraction workers (98.97%) will not transition to green jobs according to our model,” they found. Even in two idealized scenarios — one where all the green jobs are co-located with fossil fuel jobs and the other where fossil fuel workers’ skills match green occupations’ skills exactly — only 13.7% and 5.5% of extraction workers respectively will transition to green jobs. “While both skill similarity and spatial distance play important roles, geospatial distance is the primary barrier to transitions,” they wrote.

Their study analyzed power plant data from the U.S. Energy Information Administration, job transition data from the Census Bureau and employment and skills data from the Bureau of Labor Statistics to look at whether those fossil fuel workers were likely to benefit from the growth in green jobs. While the study looked at green jobs in general, it also compared worker locations with two large green job sources, solar and wind plants, and found wind-related jobs were a little more likely to be close to fossil fuel workers’ current locations.

Wind farms are a little more aligned with where fossil fuel extraction workers are located. | Lim, Aklin and Frank in Nature Communications

Is a Just Transition Possible?

The term “Just Transition” entered the public discourse as the energy sector began moving from fossil fuel-based energy to solar, wind and other low- and zero-carbon energy sources. The International Labour Organization defines it as: “Greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind.”

For the energy industry, it’s a question of what fossil fuel workers do if their jobs go away. The U.S. coal industry, which almost halved in size between 2012 and 2020 as fracking grew, shows the impact of an unjust transition. Coal workers who lost jobs had few other opportunities, leaving some already-struggling areas in Appalachia the most economically distressed in the country.

“Large-scale labor market transitions are notoriously costly and difficult to complete,” Lim, Aklin and Frank wrote. “Accordingly, workers, unions and policymakers are seeking a ‘Just Transition’ in which fossil fuel workers receive public support to find new jobs.”

Achieving a Just Transition takes more than simply creating enough green industry jobs. “The issue is more complicated than simply the total number of job opportunities that will be created,” the authors said. “To be successful, this transition requires a high degree of skill similarity and geographical congruence between green and fossil fuel jobs — in addition to solutions for other non-economic social barriers.”

The Biden administration has been focused on green jobs growth, most recently announcing the “American Climate Corps,” a New-Deal style plan to train 20,000 young people. However, the relocation barrier may demand a more nuanced approach to assist those with established careers in fossil fuel extraction. Policies could address the issue “either by creating incentives for today’s fossil fuel workers to relocate or by stimulating new employment opportunities in the regions where fossil fuel workers currently reside,” the authors said.

Some states face a larger mismatch than others: “Several regions within Great Plains states will have green employment that is comparable to their local fossil fuel employment in 2019,” they wrote, “However, many of the regions with the greatest number of fossil fuel workers, including regions in Nevada, New Mexico, Western Pennsylvania and North Dakota, will not experience comparable green job growth.” Skills were less problematic, however. Lim, Aklin and Frank found that “some re-skilling may be required even though fossil fuel workers’ skills are better matched to green occupations than to other industries.”

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Overheard at Deploy23

WASHINGTON — Every energy industry conference has its own particular buzz ― what attendees are talking about, not only on stage but in the side conversations between sessions, at lunches and receptions. At Deploy23, it was all about two questions: How can we do more and how can we do it faster?

Coming off the Earth’s hottest summer on record, the two-day conference Sept. 26 and 27 zeroed in on the public-private partnerships that will be needed to optimize the impact of every single penny of the billions in clean energy funding in the Infrastructure Investment and Jobs Act (IIJA)  and the Inflation Reduction Act (IRA).

More than one speaker said that building and maintaining a sense of urgency is critical. A recent report from the International Energy Agency calls for a tripling of renewable energy and doubling of energy efficiency improvements by 2030, along with a major ramp-up in electric vehicle (EV) and heat pump sales, to limit climate change to 1.5 degrees Celsius.

The IIJA and IRA funds, while unprecedented, are insufficient, said Jonah Wagner, chief strategist for the Department of Energy’s Loan Programs Office (LPO), which cosponsored the event with the Cleantech Leaders Climate Forum.

“We have to execute,” Wagner said. “And we have to execute in a way that captures the complexity and the implications of government engaging in competitive markets and supply chains, labor, workforce and community engagement, all of it. … We have to develop a shared understanding between the public sector and the private sector and then a whole broader ecosystem around how we’re going to get there.”

In his opening remarks, White House Senior Advisor John Podesta called for private sector “ownership” on the three key issues creating a drag on clean energy deployment — permitting, supply chains and workforce.

“We need you to keep voicing support for broader permitting reform at the federal, state and local level, and we need you to take responsibility for community engagement for your own projects,” Podesta said. “Get in early, engage local leaders early; and often we can address concerns that are raised at the community level, find ways to mitigate challenges on the ground and get these projects built.”

Breaking China’s dominance over clean energy supply chains is a more complex issue. While Podesta and other administration officials typically boast about the $150 billion in private sector investments in clean energy supply chains announced since the passage of the IRA, that early money has been concentrated in certain low-hanging opportunities – electric vehicles, batteries and solar panels.

But companies need to “get creative … to invest in projects up and down the supply chain, innovate in pursuit of a circular economy,” he said.

Podesta stayed on message on workforce development, calling for good wages and benefits, apprenticeship programs and opportunities for unionization. But, according to Undersecretary for Infrastructure David Crane, the immediate need at the Department of Energy is for professionals who know the nuts and bolts of project development.

“We’re looking at having 200 to 300 projects in active development by next year,” Crane said. “The skilled workforce that we need now, and where we’re entirely dependent on the private sector, is on structuring these transactions. We need the lawyers, the financiers, the tax advisors. We need the developers that can structure these transactions.”

Communication, Collaboration, Coordination

Getting projects built often means people who disagree on some issues have to find ways to work together, said Mitch Landrieu, White House infrastructure coordinator.

Recalling his own experiences as mayor of New Orleans, rebuilding the city in the wake of Hurricane Katrina in 2005, Landrieu said creating a “virtuous cycle of success” for infrastructure development required alignment of federal, state and local government, along with the private, nonprofit and community sectors.

“It’s about setting up what I call a mousetrap, the scaffolding of government where not only are we trying to do a thing, but how we’re trying to do it is coordinated — so, communication, collaboration, coordination,” Landrieu said. “If, for example, we get in a fight with a red state governor or … a blue state mayor, or the mayor and the governor are not on the same page, it will slow down our ability to move stuff to the ground because government is kind of an essential part of the spine in partnership with the private sector.”

Landrieu also argued for a broad definition of “infrastructure,” encompassing bridges, broadband and childcare.

“If you sit in a room of all women ― CEO all the way down to the person who’s cleaning the floor ― and you ask them what’s the most important thing that they need to actually show up and do that work, they’ll say childcare ― 100%,” he said. “So, my brain goes with ― childcare is infrastructure ― because if you can’t have people that do it, you can’t build stuff.”

Whether for clean energy or childcare, the foundation of public and private partnerships, he said, is “a commitment and then a willingness for everybody to show up and find common ground by pushing away the extremes and staying focused” on shared goals.

‘Getting Scrappy’

A “fireside chat” on electric cars and buses as grid assets explored both the opportunities that managed charging and virtual power plants (VPPs) present and the challenges of working with utilities to get charging stations and manufacturing plants interconnected.

Light-duty electric vehicles (EVs) typically use about 12 kWh of power a day, but when fully charged, their batteries have a much larger capacity, said Patrick Bean, director of infrastructure policy and business development at Tesla.

“So, there’s a lot of opportunity and diversity in [when people] charge … and their cars are typically sitting either 23 hours a day, 22 hours a day,” he said. “It’s a great opportunity to optimize that charging behavior for the best off-peak time, low-carbon times.”

Tesla has been piloting virtual power plants that aggregate capacity from its residential Powerwall energy storage units, and it recently launched another pilot in Texas offering Tesla EV owners a flat monthly rate of $25 for unlimited charging scheduled by the company for off-peak hours between 10 p.m. and 6 a.m., he said.

Customers can enroll via a cell phone app, “so it’s something we’re trying to make very digestible, very easy for customers to understand because if it gets too complex, they’re going to say, ‘This is too much,’” Bean said.

California–based Zum is offering school districts electric transportation — buses, vans and passenger vehicles — as a service, with apps so parents can track when their kids will be home from school.

School buses are “the largest mass transit system in the U.S.,” getting 27 million students to and from school each day, said founder and CEO Ritu Narayan, and their set schedules and evening, weekend and summer availability make them perfect for electrification and managed charging applications, like VPPs.

But, Narayan said, “the challenges are various. … The first step to that is optimizing the entire system and application, and second is establishing of the entire ecosystem, right from the manufacturers to the charging infrastructure to establish the aggregation around it” so Zum can be a one-stop shop for school districts seeking to electrify fleets.

On the interconnection side, working with utilities has become a critical part of Bean’s work at Tesla, as the company looks to expand its factories and charging networks and runs into the multiyear timeframes utilities often set for distribution system upgrades and interconnection.

As Tesla looks toward exponential growth in EV sales, he said, it can be “really hard to build utility infrastructure at an exponential rate, and I hope we can try it … because there are a lot of no-regrets investments [in] infrastructure that we know are going to be necessary. …

“There’s a lot that can be done just from a process perspective and better coordination … and just getting scrappy and coming up with new ideas to get infrastructure built,” he said, pointing to a recent example in which Tesla was able to get a new energy storage factory interconnected in 12 months.

The challenge, Bean said, is getting utilities and industry trade groups to “realize and understand that what has worked in the past is not going to work going forward. So, we need to change the processes together. …

“This is not a distributed grid versus a central grid,” he said. “Seven or eight years ago, there were concerns about a ‘utility death spiral.’ Now we’re just trying to figure out how can we support double-digit load growth, and that’s going to take a lot of coordination between the central grid and the distributed grid.”

Getting to Scale

JB Straubel, founder and CEO of Redwood Materials, knows all about scaling a business. The former cofounder and chief technology officer at Tesla, says the U.S. EV and battery supply chains have a long way to go, which is part of why he started Redwood, which recycles lithium-ion batteries to produce the critical minerals needed for EV production.

Tesla received a $465 million loan from the LPO in 2010 and finished paying it back in full by May 2013, according to the agency website. Earlier this year, Redwood received a conditional commitment from the LPO for a $2 billion loan to help it expand its plant in Nevada.

But, Straubel said during an on-stage conversation with LPO Director Jigar Shah, “I think it’s underappreciated, especially by some of the … early investment community and a lot of startups, how difficult it is to achieve scale. It’s a whole new category of problems.

“Supply chains break, geopolitics come into it. [Challenges] rise to a whole new magnitude in terms of what you’re doing when you do 100 times as much of it,” Straubel said. “It requires a different set of engineering skills and a different set of business skills.”

With a series of recent announcements on new EV and battery manufacturing facilities across the U.S., “it’s sort of tempting to feel like we’re almost there,” he said.

“But we really looked at the objective numbers on where we are on supply chain onshoring or even just supply chain geopolitical security … it’s not very far along,” he said. “Building out that robust supply chain, making sure we are being strategic ahead of time about where we invest, to kind of [look] at where the puck is going — it is just going to be critical.”

While Redwood is producing lithium and nickel, Straubel said, “until there is an entire EV supply chain, there’s nothing to do with it. … If I had a pile of lithium sitting here on the stage and went to go sell it, where do we think all the buyers would be?”

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Draft Environmental Statement Prepared for Maryland OSW

Federal regulators have completed their environmental review of a Maryland offshore wind plan, moving the potential 2.2-GW project one step closer to final approval.

The Bureau of Ocean Energy Management will publish the draft environmental impact statement on US Wind’s proposal in the Federal Register on Oct. 6, starting a 45-day public comment period.

The comments will be considered as BOEM prepares the final environmental impact statement, which typically has been followed closely by the decision on whether to approve construction and operation.

Lease Area OCS-A 490 was awarded in 2014 to US Wind, which is owned by Lenexa S.p.A., a subsidiary of Toto Holding S.p.A. and Apollo Global Management. The 46,970-acre lease area is near the Delaware-Maryland border on the Delmarva peninsula.

US Wind proposes to install up to 114 wind turbines with up to 2.2 GW of combined nameplate capacity as close as 10 miles offshore, with export cables making landfall and interconnection in Delaware.

The company thus far has proposed two phases — the 300 MW MarWin and the 808 MW Momentum Wind — and secured offshore renewable energy certificates for both from Maryland. It also plans to create an offshore wind component factory at a former steel mill near Baltimore.

“This is the most significant step forward in the history of Maryland offshore wind,” US Wind CEO Jeff Grybowski said in a news release Friday. “BOEM’s draft environmental impact statement sets us on a path toward starting construction on our offshore wind projects in 2025, putting Maryland’s goals that much closer to reality. We are proud to be the first to deliver this clean energy to Delmarva and look forward to the day we can get steel in the water.”

The draft EIS for the Maryland Offshore Wind Project is similar to others BOEM has prepared for the profusion of offshore wind farms proposed off the Northeast coast — it presents a range of possible adverse and beneficial effects that construction and operation could have.

As with the other studies, the Maryland draft EIS predicts an adverse impact on the fishing industry, the critically endangered North Atlantic right whale and scientific research.

The adverse impact could be major once the cumulative effects of all the other proposed wind farms are factored in. A major adverse visual impact also is predicted.

Minor to moderate beneficial impacts also are predicted in the draft EIS. Seals and toothed whales, for example, might have better feeding conditions near the turbine tower foundations. Air quality might improve to some degree, and birds might derive minor benefit from improved foraging opportunities.

Sea turtles likely would suffer moderate negative effects but recover completely once the factors causing those effects cease.

The draft EIS and its appendices are available on BOEM’s website.

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PUCT Rules Against SWEPCO on Pirkey Retirement

The Public Utility Commission of Texas last week approved an unopposed agreement over Southwestern Electric Power Co.’s (SWEPCO) request to reconcile its 2020-21 fuel costs related to the retired Pirkey coal plant, but rejected an administrative law judge’s proposed order that found the plant’s retirement prudent (53931).

Opponents of SWEPCO’s 2020 decision to retire the plant in East Texas contended the plant still had years of useful life.

Among the opponents was Commissioner Will McAdams, who said in a memo last week that because the utility’s action was not prudent, it should not be allowed to recover carrying costs from the mine that provided its fuel.

“I understand that the prudent standard is not a high bar, but the lack of depth in the 2020 analysis, especially when you’re retiring a plant 12 years early, it simply did not sit well with me,” he told his fellow commissioners Thursday.

McAdams said SWEPCO could have re-examined its analysis after the February 2021 winter storm “exposed reliability and resiliency issues of a kind never seen before and reinforced the need for existing dispatchable generation.” He said the utility’s decision to continue with its application as if the storm had not occurred “lacks fundamental credibility and common sense.”

“Had SWEPCO acted prudently, it would have updated the analysis based on the new reliability needs of grids, the volatility of the 2021 natural gas market, increased construction costs, supply chain issues and inflation,” he said. “It tells me that SWEPCO knew what outcome they wanted to achieve and may have nudged the analysis parameters to match that.”

The plant retired last spring after 38 years of operation.

The PUC also approved a pair of amended certificates of convenience and necessity for system improvements in the lower Rio Grande Valley. (See Texas PUC Directs Tx Construction in Valley, “Board Approves $1.28B Tx Project,” ERCOT Board of Directors Briefs: Dec. 10, 2021.)

It signed off on unopposed agreements filed by South Texas Electric Cooperative  (54936) and AEP Texas and Electric Transmission Texas (55001) for their proposed routes. The utilities are building new double-circuit 345-kV transmission lines and related facilities in South Texas.

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NJ to Add 400 EV Chargers with $12.7M Investment

New Jersey has awarded $12.7 million in grants to install electric vehicle chargers at 405 new locations, including multiunit dwellings and tourism hot spots, as the state seeks to dramatically increase EV use in the face of some opposition to the move.

The New Jersey Board of Public Utilities (BPU) made the awards in three programs designed to provide incentives for specific market sectors believed to be key to creating a critical mass of EV chargers. The awards were made in the program’s third round, from the 2023 budget, and the agency is accepting applications for the 2024 funding round, which closes Nov. 30.

The targeted sectors include: multiunit dwellings, because they are tough for EV-owning occupants to install their own chargers in; tourism sites, to encourage EV drivers who might balk at coming to New Jersey visitor attractions for fear they won’t be able to recharge; and publicly owned fleets supporting local governments, which can lead by example, showing residents the benefits of EVs.

BPU President Christine Guhl-Sadovy announced the awards Monday, saying they are part of the agency’s effort to ensure drivers in all corners of the state have a place to plug in. The state had 2,047 Level 2 chargers and 972 Direct Current Fast Chargers in June, or about one charger per 3,050 residents, according to EvaluateNJ, an EV information website run by Atlas Public Policy.

“As we strive to combat the increasingly devastating impacts of climate change, reducing barriers to using an EV by building a robust network of public charging stations and supporting municipalities in electrifying their fleets remains a key focus of our clean energy agenda,” Guhl-Sadovy said.

The funding outlined Monday would increase the state’s charger total by about 13.5%.

Convenient, Affordable Charging

Last week, Gov. Phil Murphy (D) outlined a $10 million funding allocation to the state Department of Environmental Protection, about 80% of which went to “workplace and multi-dwelling charging station projects across the state.” He said the state is trying to make “the transition to electric vehicles more accessible and affordable than ever.” A BPU spokesperson said the two programs are unrelated.

The DEP’s EV charging funds go through the agency’s “It Pay$ to Plug in” program, which offers up to $4,000 for the installation of a single-port charger. The program has awarded about $14 million, funding the installation of 1,261 charging stations with 1,891 ports at 389 locations, according to the DEP.

“Convenient and affordable charging at home and at the workplace is core to our overall charging ecosystem, since that’s where the majority of charging will occur,” DEP Commissioner Shawn M. LaTourette said in a release at the time. “We must continue to act with the sense of urgency the climate crisis demands.”

About 37% of New Jersey’s carbon emissions are generated by transportation. The BPU’s EV charger announcement comes as the DEP moves to enact California’s Advanced Clean Cars II (ACC II), which requires that EVs account for a steadily rising share of new car sales until 2035, when all new vehicles bought in New Jersey must be EVs.

The rules, which eight states have adopted, is opposed by businesses, car dealers and fossil fuel interests, who say consumers aren’t ready for the move and the state doesn’t have the grid or charging infrastructure to cope with such a dramatic increase in EVs. (See NJ’s Push Toward Clean Cars Rule Sparks Vigorous Debate.)

Wine, Farming And A 280-year-old Restaurant

The round of BPU funding detailed Monday was about the same as in the previous round, which awarded $12.65 million through the three programs for the collective installation of 1,150 Level 2 and DCFC chargers and 106 public vehicles.

About half of the money outlined Monday — about $6.1 million — will pay for the installation of more than 1,300 chargers in multiunit dwelling residences. The agency’s MUD EV Charger Incentive Program awards up to $4,000 for a dual-port, Level 2 charging station in a multiunit development and up to $6,000 if it is in an overburdened community.

The Electric Vehicle Tourism Program, which provides up to $5,000 for a Level 2 charger and up to $50,000 for a Direct Current Fast Charger, awarded nearly $800,000 in two phases of the announced funding. The money will trigger the installation of 37 chargers, including: four Level 2 chargers at Phillips Farms, a 300-acre Central Jersey family farm that allows you to pick your own fruit and vegetables; two Level 2 chargers and two DCFC’s at Beneduce Vineyards, a fourth-generation winery in South Jersey; and two DCFCs at The Clinton House, a historic restaurant first opened in 1743.  (See NJ Seeks to Lure Tourists with EV Chargers.)

The $5.75 million awarded in the Clean Fleet EV Incentive Program will fund local schools, municipal commissions, state agencies or boards, and other local government bodies to help transition their fleets to EVs. The program awards up to $4,000 for the purchase of a light-duty EV, up to $10,000 for a Class 6 electric truck, up to $5,000 for a Level 2 charger and up to $50,000 for a DCFC.

The 36 grants will pay for 140 EVs, 25 DCFCs and 124 Level 2 chargers. The recipients include the Passaic Valley Sewerage Commission, which received $1.4 million for five EVs, eight DCFCs and 15 Level 2 chargers. New Jersey Transit, the state’s mass transit agency, received about the same for 20 EVs, six DCFCs and 15 Level 2 chargers.

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NY Makes Down Payment on School Bus Electrification

New York state has issued the roadmap for its first-in-the-nation school bus electrification program and is preparing to draw the first tranche from a $500 million pot of money to start carrying it out.

The $100 million announced Thursday will be enough to replace only several hundred of the 45,000 fossil-powered school buses in the state. Electric buses are quite expensive, so the state is providing substantial vouchers to help fleet operators buy them.

These early efforts are not intended to fully electrify the nation’s largest school bus fleet. Rather, the goal is for every fleet operator to gain experience with a handful of electric buses before 2027, when the sale of internal-combustion school buses will be banned in New York.

The hope also is that electric vehicle technology and grid infrastructure will evolve over the next four years to the point the lifetime cost of owning and operating electric school buses (ESBs) decreases to parity with internal combustion engine (ICE) school buses.

Then the special incentives for conversion can be reduced.

New York state in 2022 mandated the gradual conversion of the school bus fleets operated by hundreds of school districts and private contractors. It’s a step toward meeting the goals of the state’s 2019 climate protection law, protecting the health of children who ride buses and improving the air quality in neighborhoods near bus depots.

Later in 2022, state voters approved a $4.2 billion bond act for environmental projects, $500 million of which was designated for ESBs.

Other states since have enacted phase-outs of their own, but New York was first. ICE school buses will be banned from roads in the Empire State in 2035.

Program Details

ESB adoption is in its early stages.

The World Resources Institute estimates only 69,000 of the 20 million-plus U.S. children who ride buses to school each day are riding emissions-free.

New York had just 310 ESBs by the most recent count, according to the New York State Energy Research and Development Authority, which issued the ESB Roadmap in mid-September.

The roadmap guides the ESB program through 2027. It focuses on helping fleet operators afford their first few ESBs so that they, utilities and the state itself can gain experience and plan the wider buildout.

The most popular category of bus — the full-length Type C — runs in the $140,000 range with a diesel, gasoline or propane engine when purchased through one of New York’s school bus dealers. The cost jumps into the high $300s or low $400s with a battery electric drivetrain, depending on options chosen.

The base-level voucher offered by NYSERDA for purchase of an electric Type C bus in this first round of funding is $156,000. Up to $125,000 can be added through four bonuses for being a high-needs priority district, scrapping an ICE bus, adding vehicle-to-grid capacity and installing wheelchair capacity.

With the vouchers, an ESB might cost a fleet operator no more than an ICE bus.

A chart shows the demand for various sizes of school buses and the cost of electric versions. | NYSERDA

Additional aid will be available for charging infrastructure, but that portion of the program still is being developed.

(Hydrogen fuel cell buses also will be eligible for vouchers if any come to market.)

The early stages of the program are intended to focus on easy-to-electrify routes — those that will not test the range of present-day bus battery systems.

NYSERDA hopes to have up to 3,000 ESBs on the road by 2027, which with charging equipment would represent a roughly $780 million incremental cost over 3,000 similarly sized ICE buses. State and federal funding streams are expected to cover most of the added cost.

Challenges And Opportunities

NYSERDA expects to update the ESB roadmap in 2026, by which time it hopes to better understand best practices and costs from the early adopters’ experiences.

The 2023 edition of the roadmap outlines some of the challenges facing the ambitious goals and some of the early opportunities to overcome those hurdles:

New York school buses travel an average of 80 miles a day, which is within the 100- to 200-mile range of current ESB models.

The cold winters and hilly roads in the northern part of the state could reduce range. But range is expected to improve steadily: Federal data show improvements almost every year. From 2011 to 2022, the median range of electric vehicles offered for sale in the U.S. rose from 68 to 257 miles and maximum range from 94 to 520 miles.

The cost of ownership is something of a three-dimensional chess game. Upfront costs for ESBs are higher but maintenance costs are lower. To recoup the upfront cost, the service life must be maximized. ICE school buses average only 8.9 years on the road in New York — many are retired in good working order because of rust. So, it is best to use an ESB on longer routes to maximize return on investment — but not so long as to risk a dead battery.

Outside New York City, 96% of school buses are parked an average of 12 hours overnight every night — a long, predictable period ideal for a slower Level 2 recharge, when time-of-use rates are lower. More than half of New York’s school buses also are parked for four or more midday hours, presenting a window for a partial Level 2 recharge or more-complete Level 3 recharge.

Charger costs can range from $5,000 for a Level 2 unit to $100,000 for a Level 3 unit. Ideally, there is one plug per bus, but some fleet operators have found success with a combination of Level 2 and Level 3 chargers that add up to less than one plug per bus.

Recent problems for early adopters center on limited selection and availability — ESB manufacturers need clearer signals on market demand.

Future constraints as the 2027 and 2035 deadlines approach may include domestic content requirements, shortages of skilled labor for installation, permitting delays and extended timelines for transmission infrastructure upgrades.

Most school bus depots across the state lack the electrical capacity to charge more than a few buses, and many are in areas with limited grid capacity. There is no comprehensive database showing where these depots are and how many buses typically are parked there.

But the state Public Service Commission in April 2023 launched a planning process to address the charging needs of the medium- and heavy-duty vehicle sector.

Beyond the initial stages, electric infrastructure may range from 15% to 30% of the total cost of fleet electrification. This will be closely monitored.

Only 11% of fleet operators surveyed have assessed the electrification needs of their depots and their bus fleet.

With current technology limitations, fossil-fired cabin heaters may be needed for winter operation in the first generation of ESBs — battery-powered heaters would further limit mileage range already diminished by cold weather. This is counter to the whole point of bus electrification, but heaters can be turned on or off as needed while the bus is rolling, unlike the engine in an ICE bus.

Finally, the state has potentially put itself in a bind when it comes to paying for all of this.

NYSERDA expects the incremental costs of the first wave of ESBs — the 3,000 it hopes to see on the road by 2027 — will be covered by federal funds, utility incentives and the $500 million from the bond act.

That leaves 40,000 more electric buses to be purchased over the following eight years, and an untold number of megawatts of charging infrastructure to be installed. Whatever the eventual savings turn out to be, the up-front cost will be greater — high enough in some cases to cause sticker shock.

Public school budgets are subject to voter approval in New York state, as are supplemental capital spending proposals such as for a new building, roof replacements, a dozen electric school buses or rewiring a bus depot.

NYSERDA will help educate school district administrators and the public about the cost-benefit relationship in this conversion, and suggests districts conduct voter outreach of their own.

The state will focus its support of electrification in historically environmentally or economically burdened areas and those that are most at risk from transportation emissions.