Search
`
November 1, 2024

Posted on

Gates, Musk Discuss Clean Energy Innovation for Starstruck EEI Audience

AUSTIN, Texas — Two of the world’s richest men, who are using their billions to help the clean energy transition, drew gawkers and rubberneckers in the halls of the JW Marriott Austin hotel’s event space during Edison Electric Institute’s annual conference last month.

Bill Gates and Elon Musk each filled the main ballroom with their respective keynotes. Gates, dapper in a business casual blazer, needed little prodding to share his thoughts on a clean energy future. Musk, wearing a fashionable outfit that included an open zipper across his chest and cowboy boots, was a man of fewer words, but big thoughts.

Gates showed up the day before his appearance. Trailed by a camera crew, he slipped into the conference’s networking center, which doubled as a trade show. It wasn’t long before Gates was surrounded by scores of observers as he made the first of several stops to the booths.

“Hey, Bill Gates is over there,” whispered one EEI staffer to another.

Bill Gates visits with a staffer from Antora Energy, one of his Breakthrough Energy projects. | © RTO Insider LLC

His first stop was at Antora Energy, a startup that uses thermal batteries to store renewable energy in carbon blocks that are then heated to 2,700 degrees Fahrenheit. The energy is discharged as zero-emission heat and/or power.

Antora is just one of more than 110 clean energy technologies that Gates’ Breakthrough Energy has invested in, about a dozen of which set up booths at the conference. The organization, founded by Gates in 2015, is working to accelerate innovation in sustainable energy and other technologies to reduce greenhouse gas emissions and reach a goal of net-zero emissions by 2050.

“Great ideas are just the beginning,” Gates explains on Breakthrough’s website. “We need a plan — and the willingness to do the hard work — so we can get on track over the next decade.”

“The key playbook of Breakthrough Energy has been to drive innovation and to drive policies for innovation,” Gates said from EEI’s main stage. “When we got this thing started in 2015, I didn’t know if we would find the innovative ideas. We raised several billion dollars, and amazingly, mostly here in the United States, we found phenomenal entrepreneurs and scientists together applying [for investment]. And so in any area of emissions, we now see the path to get there with execution, particularly on the green grid, which will be two and a half times the size of what we have today because of massive electrification.

“Massive electrification is daunting, but you can see that there is a path, a path that doesn’t involve saying to people, ‘OK, you now have to pay a lot more money for all your goods, including electricity,’” he said.

Asked by Ameren’s executive chairman, Warner Baxter, why he has such a rosy view that the 2050 net-zero goal will be reached, Gates pointed simply to civilization.

“The modern economy is about energy intensification. Crude oil and natural gas are magical things. The energy density there has allowed us to transform life in this very dramatic way,” Gates said. “The idea that now we have this goal, that by 2050 will basically replace all those cement plants, steel plants, coal plants — there’s no equivalent thing, even if you take the work that was done during World War II.”

He said the multidecade effort will have to be coordinated to make it work. That includes the “incredibly complex” task of designing a new electric grid.

“Many people, when they look at the climate problem, they’re like, ‘OK, what can we do to make a little bit of progress?’ But as you look at it, you’d say, “Oh, no, I need to get all the way to zero,’” he said. “You have to do the very hard things, and you have to do it not just in the rich countries but also in middle-income countries that now account for the bulk of the [world’s] nations. We have a lot of work to do to get to that in a very short period of time.

“We’re no longer able to say, ‘OK, in the near term, it’s business as usual,’ and then that payment comes later. We are now in the time period where the rate of renewable build and the rate of transmission permitting is completely inadequate to this goal. And yet, people have worked with us to lead on this.”

While obviously a fan of renewable energy, Gates said individual states’ incentives for generation and transmission projects will make it difficult to ensure reliability as more renewables are integrated onto the grid.

“If a huge part [of generation] is renewable energy — offshore wind, onshore wind, solar — then you’ll have parts of the United States where they will not be able to generate enough energy,” he said. “And so the idea that this has been done overwhelmingly at the state level — here’s a load; here’s [a] generator that’s fairly near that load — that paradigm does not work to get to zero emissions.”

Musk: Demand to Triple by 2045

Musk focuses much of his energy on electric vehicles, batteries and solar panels. That is, when he’s not exploring space, boring tunnels underground or attempting to manage his social media company.

Elon Musk | © RTO Insider LLC

He rose to fame and riches with Tesla, which dominates the EV market. Its massive Austin Gigafactory —driving past the 2,500-acre facility at the nearby state highway’s speed limit takes about 45 seconds — produces 5,000 Model Ys a week. Globally, more than 440,000 EVs rolled off Tesla production lines during the first quarter of this year.

Just before Musk’s appearance at EEI, Tesla announced it was partnering with Ford and General Motors and sharing charging infrastructure. Electrify America, the country’s largest fast-charging network for other EVs, has said it will incorporate Tesla’s charging standard into its stations as part of its commitment to “broaden charging solutions.”

“I think opening up the chargers is morally right, and it was something that will help power sustainability,” Musk told his audience. “We’re really trying to do everything here. We will support all electric vehicles on equal footing. We’re not advocating for special treatment of Tesla. We’re trying to clear a path for sustainability.”

However, Musk said, if the U.S. is to achieve a sustainable future, his back-of-the-envelope projections indicate electricity demand will triple by 2045.

“Everything is going to be electric,” he told his EEI audience. “I don’t know what your plans are for future electricity demand, but it’s going to be much higher than you think. You should start to plan now. We’re trying to work to a sustainable energy future, and it’s going to take many technology solutions to get there.

“I think this is good news for everyone who produces electricity, but it entails a tremendous amount of work ahead,” Musk added.

The key is the three pillars of a sustainable energy future, he said. They are sustainable power generation like solar, wind, hydro and nuclear; stationary batteries; and electric transportation.

“Once we have those three pillars in place, we’ll have a sustainable future for as long as the sun shines and the wind blows,” Musk said. “It will very much be a joint effort. The utilities have the wires; they’re the distributors of electricity. It’s hard work to actually put that generation in place and transport it to where it gets used, but we have to take advantage of the valleys of power production.”

Of course, he pushed Tesla Energy’s Powerwall as part of the equation. The sleek rechargeable lithium-ion residential battery stores solar energy for self-consumption, time-of-use load shifting and backup power. Aggregated together, they can be even more beneficial to the grid, Musk said.

“You’re operating collectively and helping to stabilize and preserve everything. The Powerwall battery pack is a helpful part of solving the energy problem because there’s a lot of neighborhoods where it’s hard to get incremental power to that neighborhood because you need more substations and you need more wires. Local storage helps alleviate some very boring situations where it’s just so frustratingly difficult to get more power to that neighborhood. It’s really a big deal and really helpful because obviously, it’s battery at scale, and it pumps electricity. We can do electricity better.”

Posted on

California Makes $150M Available for Zero-emission School Buses

The California Air Resources Board (CARB) is now taking applications for $150 million in state funding to help public school districts buy zero-emission buses and related infrastructure.

In announcing the funding round on Friday, the agency said recipients can get up to $395,000 to replace fossil fuel-powered buses with zero-emission models, as well as $100,000 per bus to acquire and install necessary charging equipment. Winners of the awards are required to scrap an old bus for every new vehicle purchased.

This marks the second year CARB is making money available under the state’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) Public School Bus Set-Aside program, which last year helped 81 school districts buy 300 zero-emission buses, according to CARB.

“Zero-emission school buses play a key role in California’s efforts to achieve carbon neutrality [by] 2045 and help protect children who are particularly vulnerable to the health impacts from diesel exhaust,” the agency said in a statement.

CARB is partnering with the California Energy Commission’s Energy Infrastructure Incentives for Zero-Emission Commercial Vehicles Project (EnergIIZE) to help fund the charging infrastructure, which can include vehicle-to-grid (V2G) hook-ups that allow bus batteries to transmit energy back to the electricity grid to meet peak demand. California’s largest utility, Pacific Gas and Electric, last year received regulatory approval to establish the nation’s first V2G export rates for commercial electric vehicles, including school buses. (See PG&E to Offer Nation’s First V2G Export Rate.)

According to the U.S. Department of Energy, the average price of a large “Type D” electric school bus is $400,000, compared with $200,000-$250,000 for an equivalent diesel bus. Charger costs can range from $596 per port for a low-power dual-port Level 1 station to $140,000 for a 350-kW single-port DC fast charger. School districts expect to see significant savings from lower fuel and maintenance costs for electric buses.

This HVIP set-aside funding will be available to public school districts, public charter schools, joint power authorities, county offices of education and the California Department of Education’s Division of State Special Schools. Applicants must be in small- or medium-sized air districts — the state entities responsible for regional air quality planning and monitoring.

“The program prioritizes applicants located in low-income and disadvantaged communities in small and medium air districts that have historically had limited access to funding for investments in zero-emission transportation,” CARB said.

CARB will accept applications for the program until Sept. 29. Applicants must submit a letter of intent, a copy of the vehicle registrations for the buses they intend to replace and “preliminary information regarding existing and planned charging infrastructure.”

Posted on

Entergy Regulators Mount Challenge to MISO South Cost Allocation

State regulators from MISO South have publicly opposed a “postage stamp” cost allocation design, potentially setting the stage for a showdown between them and RTO planners preparing a third portfolio of long-range transmission projects.

The Entergy Regional State Committee (E-RSC) on June 30 adopted a resolution denouncing any use of postage stamp rates — in which costs are allocated across an entire footprint based on transmission customers’ load-ratio shares — to pay for the third of four iterations of MISO’s long-range transmission planning (LRTP).

Last month, MISO suggested eschewing a total subregional postage stamp design in favor of a half-subregional, half-zonal cost-sharing plan as it prepares to assemble a third LRTP portfolio that concentrates for the first time on the MISO South region. (See MISO Suggests Changing Cost Allocation for South Projects.)

But the E-RSC — which comprises the public utility commissions of Texas, Arkansas, Mississippi and Louisiana, as well as the New Orleans City Council, each of which regulates entities in one of the five cost allocation zones in MISO South — said any use of a postage stamp allocation is unacceptable. It called for “cost-causation and beneficiary-pays principles” and said parties who “receive negligible or negative benefits” should not owe anything.

For the third cycle of LRTP, “not all retail jurisdictions and loads are likely to be equal cost causers and beneficiaries,” the E-RSC said. A postage stamp design will “not align LRTP-related costs with the expected beneficiaries.” MISO should consider assigning costs to interconnecting generators that will benefit from LRTP lines through reduced network upgrade costs, it said.

The resolution called upon MISO to develop an allocation that metes out costs “based only on accurate, objective, measurable, quantifiable, non-duplicative, forward-looking and replicable metrics that are supported by data” to protect consumers. MISO’s design should be shaped by benefit ideas from MISO South regulators and stakeholders, and each LRTP project should be able to pass a benefit-cost analysis on a stand-alone basis, as opposed to sizing up benefits from a portfolio perspective, it said.

MISO did not say whether the E-RSC’s resolution will influence its cost allocation proposal. Via spokesperson Brandon Morris, the RTO said it appreciates the E-RSC’s feedback and is reviewing its resolution.

“We are committed to working with our stakeholders to develop a cost allocation solution for tranche 3 that balances the different needs of our subregions,” Morris said in a statement to RTO Insider.

In May, leadership of the Organization of MISO States said the RTO’s allocation proposal for its South subregion sparked several questions and a need to understand MISO’s end goal. State regulatory staffs said it was unclear whether the 50/50 allocation will completely replace MISO’s subregional postage stamp rate going forward and whether the RTO is planning to use the design on the fourth LRTP portfolio.

At the time, multiple representatives from MISO state regulatory bodies also said they remain interested in adding a generator-pays component to LRTP cost allocation.

Posted on

Moniz Calls for ‘Substantial Effort’ on Bioenergy with Carbon Capture

To achieve its net-zero targets by 2050, the United States will need a major deployment of bioenergy paired with carbon capture and storage (BECCS), with a goal of sequestering 500 million metric tons (MMT) of carbon dioxide per year, according to a new report from the Energy Futures Initiative (EFI).

Ethanol from corn and biodiesel from cooking oil are the most common forms of bioenergy, but the report sees wider options for feedstock, such as agricultural waste or trees and underbrush culled for forestry management. It also stakes out a claim for BECCS as a carbon-negative technology, taking more carbon out of the atmosphere than it emits, which could “counterbalance residual emissions from difficult-to-decarbonize sectors of the economy.”

“We know there are voices that would prefer other pathways toward very deep decarbonization,” said Ernest Moniz, former U.S. secretary of energy and EFI’s CEO. “But the reality is ― in our view, has been consistently ― that we need all [technologies] because the fight … for every damn tenth of a degree is really important.”

Speaking at a recent launch event for the report, Moniz cited figures from the United Nations International Panel on Climate Change, projecting that carbon dioxide removal technologies will need to cut global emissions by 6 gigatons per year by midcentury to keep climate change to 1.5 or 2 degrees Celsius. About half of that total could come from BECCS, Moniz said.

“And to put that in context, that 6 gigatons … is larger than the total U.S. emissions today of carbon dioxide,” he said. “So, this is not for the faint of heart. We’re going to need a very, very substantial effort.”

A gigaton is one billion tons, and the most recent figures from the Environmental Protection Agency, for 2021, peg U.S. CO2 emissions at 5.58 MMT.

The EFI report outlines what that substantial effort might look like, from setting ambitious goals, to expanding sources of biomass, to enacting supportive federal policies, such as tax incentives and changes to the Farm Bill now being debated in Congress. Last amended and reauthorized in 2018, the Farm Bill is updated every five years.

EFI recommends the 2023 update include increased funding for BECCS research and the inclusion of BECCS in existing programs, such as the Advanced Biofuels Payment Program, which provides financial support for biofuels not based on corn.

The report also sees a major opportunity to increase BECCS feedstocks through forest management, harvesting fast-growing trees and other plants that can result in “overstocked” forestlands and increased risk of wildfires. Citing a study from Yale University and the University of California, Berkeley, the report estimates “that between 265 million and 1 billion bone-dry tons (BDT) of biomass overstock are in wildfire prone counties in five Western states alone (California, Idaho, Nevada, Oregon and Washington).”

A bone-dry ton is a measure of wood with zero moisture content.

“BECCS creates a value proposition for more active forest wildfire management by providing a market for this overstocked biomass,” the report says. Job creation and economic development for rural communities would be another strong selling point, the report says.

But federal regulations strictly limit the use of forest biomass harvested from federal lands for biofuel production, the report says. For example, biofuels made from biomass harvested from federal forests do not qualify for EPA’s Renewable Fuel Standard. The EFI report recommends that exclusion be lifted.

Neutral or Negative?

With the world’s hottest days on record grabbing headlines, Moniz’s call for all-of-the-above climate action is timely and undeniable, but like carbon capture itself, BECCS raises skepticism and a lot of questions among environment groups.

EFI’s basic argument for BECCS begins with its claim that bioenergy is essentially carbon neutral — that is, the CO2 naturally sequestered in wood or other organic matter via photosynthesis offsets the carbon emitted when that feedstock is burned or otherwise processed to produce biofuels or other energy. Storing those emissions underground or sequestering them by other means makes them, at least potentially, carbon negative, said Joseph S. Hezir, EFI’s executive vice president.

“Depending on where you want to start the cycle, you could either have the carbon intake up front and then release [it] later or the release now and then capture or recapture later,” Hezir said in an interview with NetZero Insider.

EFI also notes that biomass already is the largest source of renewable energy in the U.S., based on figures from the International Energy Agency (IEA), which include its use in ethanol and other biofuels. Biomass is more widely used for heat and power generation in Europe, but it accounts for only 1.3% of power generation in the U.S, according to the U.S. Energy Information Administration.

An analysis from the National Resources Defense Council (NRDC) disputes the carbon neutrality of bioenergy, arguing such calculations leave out emissions associated with the full supply chain of procuring and transporting biomass.

“Far from being carbon negative, the lifecycle of this approach to BECCS generates about 80% as much carbon as comes out of a coal plant smokestack per megawatt-hour. This is because a large fraction of the total emissions occur off-site,” according to an NRDC issue brief.

Echoing NRDC, a Sierra Club analysis says, “The process of vegetation capturing CO2 from the atmosphere is carbon negative. Transporting those plants and refining, capturing and storing CO2 is not. For BECCS to be carbon negative, all of the above would have to be done with renewable energy.”

NRDC also raises concerns that widespread deployment of BECCS “would tax global ecological limits, threaten public health and cost a fortune.”

Food vs. Fuel

The EFI report acknowledges the carbon accounting, land use and economic obstacles BECCS will have to overcome and calls for “responsible” development of the technology.

One of the report’s key priorities is the development of “science-based, transparent guidelines for estimating … [greenhouse gas] emissions contributions from BECCS,” while also noting the challenges of building consensus and confidence for such guidelines. For example, given the wide range of bioenergy feedstocks, developing science-based carbon accounting will be complicated, Hezir said.

Tracking CO2 emissions is “different for crops than it is for forestry,” he said. “Forestry is … particularly challenging because forests sometimes are managed at a very macro level, where you might be planting in one area and harvesting in another, and then the question is how [do] you look at that whole landscape?”

Similarly, carbon accounting for agriculture will have to take into account fertilizers, irrigation and harvesting, Hezir said.

Roger Ballentine, president of Green Strategies, an industry consultant, said carbon accounting for BECCS should look at what the technology delivers “on a systemic basis,” rather than using a lifecycle analysis of individual BECCS facilities or feedstocks.

“What’s the decarbonization impact of providing [different] funding streams?” Ballentine said during a panel at the launch event. “You have energy production. You have carbon dioxide removal. You may have wildfire mitigation and waste management. So how do these opportunities and some of the challenges … compare to other pathways, especially carbon dioxide removal?”

The land use issue is another major challenge, pitting food production against “energy crops” used for fuel, said Virginia H. Dale, a corporate fellow at Oak Ridge National Laboratory. But, she said, “The U.S. has a large amount of nonfood crops, waste and forest residues that can provide biomass for this expanded BECCS deployment. … More than 300 million tons of biomass are readily available from currently unused agriculture and forestry waste, as well as including municipal waste. …

“We need to recognize that food and bioenergy … don’t need to compete for land. They could be integrated together to provide an appropriate resource for both of these if managed collectively. One thing we can do is develop flex crops, that is … resources that can be used for fuels as well as food, so that when there’s a food need, they can be adapted to that.”

Compared to direct air capture technologies, the economics of BECCS also requires a systemic approach that includes its potential to provide firm, dispatchable power to the electric power grid, said Sasha Mackler, executive director of the Energy Program at the Bipartisan Policy Center.

Direct air capture’s business model is simpler, he said. “You need to have a technology system that can effectively and efficiently capture carbon. We really have one product you’re selling: carbon removal.”

Widespread deployment of BECCS will require monetizing multiple value streams, such as power production, carbon removal and forest management for wildfire prevention, which will in turn depend on figuring out the carbon accounting, Mackler said.

“For product developers to actually get to the work of building out this business, they need to have clarity on what they’re able to monetize,” he said.

Ballentine also noted that the Inflation Reduction Act’s generous tax credits for carbon capture — up to $180/ton for direct air capture — do not specifically incentivize carbon-negative technologies. Further, he said, expanding biomass supply “doesn’t do you any good if there’s not demand.”

Will There be Demand?

Besides monetization, applications that build demand for BECCS could be the biggest roadblock to widespread deployment.

While supporting carbon removal technologies in general, the IEA cautions they should not be used as “an alternative to cutting emissions or an excuse for delayed action. But they can be part of the portfolio of technologies and measures needed in a comprehensive response to climate change.”

Hezir sees near-term applications for biofuels like renewable natural gas and sustainable aviation fuels, both areas where emerging demand exists among well-established industries, in this case, utilities and airlines. For example, the Renewable Natural Gas Coalition, an industry trade group, counts major utilities such as Consolidated Edison, National Grid, Dominion Energy, and Pacific Gas and Electric among its members.

Longer term, the EFI report sees much potential for BECCS, but also uncertainties that will require new policies and investments. “We’re now at a stage where we actually need to deploy more pilot projects, collect data and get more learning,” Hezir said. “Then use that to grow the industry.”

Posted on

Court Sends DOE Back to the Drawing Board on Boiler Efficiency Rule

A three-judge panel on the D.C. Circuit Court of Appeals on Friday vacated the U.S. Department of Energy’s proposed efficiency rule on commercial package boilers because of its failure to follow the Administrative Procedure Act (APA).

Such boilers are used to heat commercial and institutional buildings including schools, hotels, office and apartment buildings and hospitals. DOE estimated it would have saved 27 trillion BTU and $2 billion in customer spending, and cut carbon emissions by 16 million metric tons.

The American Public Gas Association and American Gas Association, which both represent natural gas utilities, and gas utility Spire had challenged the rule when it was proposed in 2020, and the court remanded it to DOE in 2022. The groups had challenged the department’s data and assumptions that it used to justify the more stringent standards.

When DOE issued a new rule last year, the groups argued that the department did not properly notice it and allow for comment, violations of the APA.

DOE has to periodically update efficiency standards for such equipment, with the law requiring it to at least adopt standards developed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), which is a private professional association that writes standards and guidelines for the industry. If warranted, DOE can approve more stringent rules, and if ASHRAE fails to update them for six years, then it can update them on its own.

But even under the six-year rule, DOE must have clear and convincing evidence that its standard will result in significant conservation of energy, is technologically feasible and economically justified. The case stems from DOE’s use of that part of the law.

ASHRAE has not updated the standards since 2008, and DOE worked on its proposal for several years before publishing an initial final rule in 2020, which required more efficient boilers.

The initial rule was based on modeling from DOE in which it assigned random boilers to buildings. The petitioners argued that purchasers would make more rational decisions to choose the most effective boilers for their sites. They also questioned the natural gas prices that DOE used.

The court agreed, finding that DOE failed to provide a reasoned response to such arguments.

The gas groups said that DOE’s second attempt also failed to adequately explain its reasoning and that they were denied the opportunity to comment on the proposal as required in the APA. The court again agreed, as the rule on remand relied on new studies and documentation, which made it subject to comments under the APA.

DOE supported its use of random assignment with a more detailed explanation of market failures and behavioral biases that it said leads to irrational investments such as less efficient boilers. It also cited data showing boilers of varying efficiency levels are used in a variety of building types.

The department claimed that it did not need to put the rule on remand up for comment because the new data just advanced a hypothesis and provided some supporting explanation. That new data, however, did not address deficiencies in the pre-existing data, the court said, and were entirely new and critical to the department’s determination of life-cycle costs.

Petitioners on such APA issues do not face a high burden, so those objecting to an agency’s late reference to critical documents can show “prejudice” by claiming uncertainty as to whether their comments might have changed the outcome, the court ruled.

The petitioners also raised an issue with energy prices that DOE used from the Energy Information Administration, but the court sided with DOE there, saying the new rule provided a sufficient response to their concerns.

The department argued that the rule should not be vacated because it went into effect early this year and some manufacturers have started following it.

“However, none of the DOE’s arguments demonstrate that ‘the egg has been scrambled and there is no apparent way to restore the status quo ante,’ namely the state of affairs under the prior, less stringent standards,” the court said, quoting a case in which it found that the Department of Agriculture had violated the APA but declined to vacate the department’s action.

Vacating the rule would let manufacturers produce the more efficient boilers, along with those that comply with the pre-existing efficiency standard, the gas utilities argued.

The court found that because DOE failed to comply with the initial remand order, it made sense to vacate the rule. DOE will have to conduct additional proceedings to deal with the court’s concerns if it wants to implement a new standard, it ruled.

Posted on

Report: Planned OSW Fisheries Impact Studies Fall Short

Fisheries studies proposed by developers of the first wave of U.S. offshore wind projects would not fully replace federal monitoring that will be hindered by the wind farms, federal scientists report.

A recent article by three National Marine Fisheries Service (NMFS) scientists follows other reports citing scarce data about the impacts of wind power development off the U.S. coast.

The U.S. Bureau of Ocean Energy Management (BOEM), in its environmental assessments of individual wind farm proposals, has said some impact on nearby fisheries is likely as the facilities are built and operated, and that a collective impact is likely from the numerous wind farms planned along the New England and mid-Atlantic coasts.

This potential effect extends beyond target species to the rest of the ocean ecosystem, with a resulting effect of unknown severity on the people who harvest seafood. The fishing industry has been among the most vocal critics of the efforts by state and federal leaders to build an offshore wind power sector.

President Biden has set a goal of 30 GW by 2030. That is 29.958 GW more than is online today, but momentum is growing: Foundations are being placed in the water this summer for the first two utility-scale projects, which will provide a combined 935 MW to Massachusetts and New York. And BOEM on July 3 greenlighted the third project, which will supply 1.1 GW to New Jersey.

By 2025, BOEM expects to review at least 16 construction and operations plans for projects with a combined capacity of more than 27 GW.

Development is envisioned along most of the U.S. coastline, eventually, but initial efforts are focused on the Outer Continental Shelf from North Carolina to Maine, where more than two dozen projects are in some stage of development.

They would occupy more than 2.3 million acres of what NMFS calls one of the most productive fishing grounds in the world.

NMFS also considers those fishing grounds to be one of the best-understood marine ecosystems in the world, thanks to data gathered by hundreds of scientists and thousands of fishers over the past 60 years, at a cost of hundreds of millions of dollars.

And that’s where the scientists see problems arising.

Survey Says

During its environmental review, BOEM and NMFS in 2021 determined Vineyard Wind 1 would have major adverse impacts on fisheries surveys and agreed to develop a program to mitigate those impacts.

In December 2022, the two agencies released a strategy for doing this, but said it would be too late to implement that strategy in lease areas already in development off the coast from Massachusetts to New Jersey.

However, they said, the strategy would be useful in Northeast waters not yet leased. Also, the general framework, goals and objectives of the strategy could inform mitigation efforts in other regions of the country, even if specific actions would vary by region.

The issue is not academic: NMFS is steward of the nation’s marine resources, and in the face of scientific uncertainty, it generally takes a precautionary approach, such as lowering fishing quotas.

NMFS has tried to avoid this through extensive efforts to maintain year-to-year consistency in surveys begun anywhere from 1961 to 1998. It considers this especially important in the face of climate change, which is blamed for multiple impacts on marine ecosystems.

Dozens or hundreds of towering wind turbines spaced a nautical mile apart in a grid pattern across a wide area would create the inconsistency of data that NMFS tries to avoid.

They would hamper the use of surface vessels, aircraft and other platforms to perform surveys; they would affect the statistical design of surveys; and they would alter the characteristics of the ocean surface, the airspace above, the water below and the sea floor.

Plans Fall Short

More recently, three scientists at the NMFS Northeast Fisheries Science Center in Rhode Island and Massachusetts wrote that the surveys proposed by offshore wind developers would not serve to fill the data gaps that the wind farms are expected to create in 14 different surveys ranging from towed plankton recordings to sea scallop dredging to aerial seal counts.

NMFS did not specify when the paper was completed, but it is more recent than the strategy issued in December. It was published Thursday on the science platform Frontiers.

The authors identified 67 monitoring studies created by developers of nine offshore wind projects from Virginia to Massachusetts and found multiple shortcomings with them, including:

    • The majority offer no indication that quality-checked raw data will be shared or accessible.
    • None state that supplementing or calibrating to existing NMFS surveys is an objective.
    • All lack specificity about technique.
    • None include nighttime sampling.
    • All intend to address habitat change or biological response to wind development, but their design — such as a too-short baseline study duration — reduces the likelihood the studies will succeed in this.
    • Only two of the 67 plans — both involving drop-camera studies — have the potential to provide a sample that is functionally equivalent to the comparable NMFS study.
    • Most species-specific surveys would focus within an individual project area, and therefore not provide regional data comparable to NMFS surveys.

The authors conclude with a blunt assessment: “Project-level monitoring for offshore wind projects as currently designed for the [Northeast U.S. Continental Shelf] ecosystem will not yield information that can be integrated into NOAA Fisheries scientific survey time series, nor are they designed with that intention. Therefore, they cannot help to mitigate scientific survey impacts from offshore wind development.”

As a result: “The development of offshore wind will disrupt the collection of data for every NOAA Fisheries survey and will thus create spatial and temporal gaps in every data set it collects.”

Knowledge Gaps

Emissions-free offshore wind is being pursued as a climate-friendly alternative to fossil-fired power generation. But its effects are not fully understood.

Whales get a lot of attention, but for every whale that might be harmed or disoriented during construction of a wind farm, thousands of fish might avoid the local area, changing the local ecosystem, altering predator-prey dynamics and affecting commercial or recreational fishing operations.

When construction is complete, the dozens of tower foundations would provide a favorable underwater habitat for multiple species; would preclude use of certain commercial fishing equipment; and might make for better sport fishing opportunities.

BOEM and the Northeast Fisheries Science Center collaborated with a frequent adversary — the fishing industry group Responsible Offshore Development Alliance — to create a report earlier this year laying out what is known and not known about the interaction of offshore wind power with the fisheries.

In fact, one of the authors told NetZero Insider that the report apparently was the first to bring together in one place the body of knowledge, and lack of knowledge, about the ecological effects of offshore wind. (See Report Flags Gaps in Knowledge of OSW Effects.)

Because of the scarcity of data, the report made no predictions on fisheries impact. The authors also noted the window has closed to establish some of the baseline data.

Other nations have been developing offshore wind for much longer than the United States, but there, too, knowledge gaps persist. The International Council for Exploration of the Sea is working to better understand the interaction of fisheries and wind farms.

BOEM is the lead federal agency on U.S. offshore wind development. The National Marine Fisheries Service, informally known as NOAA Fisheries, is part of the National Ocean and Atmospheric Administration, which has a consulting role in the development of offshore wind.

Posted on

Counterflow: Competition Versus Monopoly

Steve Huntoon | Steve Huntoon

One would have thought this answered many times over the last 25 years. Most recently with the poster child of the Vogtle nuclear plant in Georgia that is seven years late and a mere $16 billion over budget.[1] And with regulatory capture resulting in regulated equity returns greatly exceeding the true cost of equity.[2] But every so often the utility monopolies manage to get the opposite proposition back on the public policy radar screen.

So it was with a New York Times story in January this year claiming that 35 states that deregulated some or all of their electric system tend to have higher rates than the other 15 states.[3] Where to begin?

What Matters

The sea change over the last 25 years has been the introduction of competition in the generation of electricity in some states — this is where the big money is and what warrants study. This should not be confused with the introduction of retail competition in some states — retail prices largely reflect generation (supply) prices. Or whether a state’s utilities are in an RTO — largely irrelevant to whether generation remains a monopoly. Or whether competition in transmission is a good thing — which, by the way, I have argued ad nauseum is yes.[4]

Reporting by RTO Insider revealed that the Times story relied on an analysis that defined as “deregulated” all states with utilities in RTOs — regardless of whether the utilities still had monopolies to supply customers with their rate-regulated generation.[5] This is, for example, generally the case with the states/utilities in SPP and MISO. So the Times story was way off base at the get-go.

The Energy Institute Rebuttal

Two weeks after the Times story came out professor James Bushnell at Berkeley’s Energy Institute posted a crushing rebuttal with these four insights:[6]

    1. Deregulation is best defined as the “the degree to which generation is compensated by market-based prices rather than cost-based regulation,” a proposition Bushnell and Berkley professor Severin Borenstein established in 2015.[7] A cogent statement of what I suggested above.
    2. Retail prices in states that deregulated generation were already very high. As Bushnell says, “That’s a big part of why they deregulated!” So the measure of success isn’t whether deregulated states’ rates are still higher than other states, it’s whether their rates are lower than they would have been if they hadn’t deregulated. This is a subject I will return to below.
    3. Prices in deregulated markets more closely follow the marginal cost of fuel, typically natural gas, so those prices are more volatile. When gas is expensive, deregulation can look bad. When gas is cheap, deregulation can look good. So when you measure makes a difference.
    4. Generation is at most half the retail price of electricity. California has adopted policies dramatically increasing retail prices, as I’ve discussed in past columns.[8] When Bushnell removed California from the “deregulated” group because of these policies, the data shows that the difference in price between the deregulated states and the regulated states has decreased over the years. As Bushnell says, “The gap between those two groups, in real terms, is now about half of what it was in 1998.” In this graphic it’s the bottom line (no pun intended) that matters.

Competition works!

Wait, There’s More

I could stop here, and rest the case on Bushnell’s insights and data. But I think there is another way to look at available data, based on the experience of the 13 PJM states.

We can divide the 13 PJM states into generation-deregulated states and generation-regulated states. For that I’ll adopt the Energy Institute’s division from a 2015 paper by Borenstein and Bushnell.[9] Deregulated states are Delaware, Illinois, Maryland, New Jersey, Ohio and Pennsylvania. Regulated states are Indiana, Kentucky, Michigan, North Carolina, Tennessee, Virginia and West Virginia.

According to EIA data,[10] the average retail price in the deregulated PJM states was 7.42 cents/kWh in 2001 and 10.98 cents/kWh in 2021, an increase of 3.56 cents/kWh or 48%. The average retail price in the regulated PJM states was 5.71 cents/kWh in 2001 and 9.93 cents/kWh in 2021, an increase of 4.22 cents/kWh or 74%. So the absolute price increase in the deregulated states, 3.56 cents/kWh versus 4.22 cents/kWh is less, and the relative price increase in the deregulated states, 48% versus 74%, is much less.

Is this proof positive that competition works? No. There are many factors and plenty of ways to slice and dice data. To paraphrase Ronald Coase, if you torture the data long enough it will confess to anything.[11] But it is one more data set that supports competition over monopoly.

And Relative Carbon Emissions

I’ve discussed before how generation competition in PJM has dramatically decreased carbon emissions, largely by market-driven natural gas displacing coal.[12]

I took a look at whether this might show up in relative carbon emissions of the deregulated states versus regulated states. According to Energy Information Administration data, average carbon emissions in the deregulated states went from 1,423 pounds/MWh in 2003 (first year of reported data) to 851 pounds/MWh in 2021, a 40% reduction. Average carbon emissions in the regulated states went from 1,641 pounds/MWh in 2003 to 1,214 pounds/MWh in 2021, a 26% reduction. Again, lots of factors, but I think this shifts the burden to those who claim that competition isn’t good for the climate.

Key Takeaways

Deregulation/competition in generation works. And it’s good for the climate. Win, win.

Columnist Steve Huntoon, principal of Energy Counsel LLP, and a former president of the Energy Bar Association, has been practicing energy law for more than 30 years.

[1] https://www.bloomberg.com/graphics/2023-vogtle-nuclear-largest-clean-energy-plant-in-us/#xj4y7vzkg.

[2] https://energy-counsel.com/wp-content/uploads/2022/10/Nice-Work-If-You-Can-Get-It-Take-2.pdf; https://www.energy-counsel.com/docs/Nice-Work-If-You-Can-Get-It-Fortnightly-August-2016.pdf.

[3] https://www.nytimes.com/2023/01/04/business/energy-environment/electricity-deregulation-energy-markets.html.

[4] https://www.energy-counsel.com/docs/FERC-Order-1000-Need-More-of-Good-Thing.pdf; please see also https://www.energy-counsel.com/docs/waste-not-what-not.pdf.

[5] https://www.rtoinsider.com/31452-a-deregulation-debate-by-the-numbers/ (“In our interview, McCullough said the analysis he provided the Times wasn’t really a comparison of retail electricity prices in deregulated versus regulated states, but between states operating inside and outside of organized markets.”)

[6] https://energyathaas.wordpress.com/2023/01/17/more-breaking-news-california-electricity-prices-are-still-high/

[7] http://bushnell.ucdavis.edu/uploads/7/6/9/5/76951361/electricityindustry.pdf.

[8] https://energy-counsel.com/wp-content/uploads/2023/06/How-Many-Deaths.pdf; https://www.energy-counsel.com/docs/No-Carb-California.pdf.

[9] http://bushnell.ucdavis.edu/uploads/7/6/9/5/76951361/electricityindustry.pdf, footnote 16.

[10] For 2001, https://www.eia.gov/electricity/state/archive/062901.pdf.  For 2021, https://www.eia.gov/electricity/state/. If you email me at huntoon@comcast.net I’ll gladly send you my compilation of the underlying data (albeit in handwritten scribbles).

[11] https://en.wiktionary.org/wiki/if_you_torture_the_data_long_enough,_it_will_confess_to_anything;  https://quoteinvestigator.com/2021/01/18/confess/.

[12] https://www.energy-counsel.com/docs/we-see-through-a-glass-darkly.pdf; https://www.energy-counsel.com/docs/NRDC-Prescribes-More-Carbon-Emissions.pdf; https://www.energy-counsel.com/docs/Scary-wrong.pdf.

Posted on

Canadian Wildfires Trigger ISO-NE Capacity Deficiency

Forest fires in Québec forced the shutdown of a Hydro-Québec transmission line during New England’s peak-demand evening hours Wednesday, leading to a capacity deficiency and requiring ISO-NE to take emergency actions to balance the grid.

The event marks just the third capacity deficiency event in New England since 2016; the most recent prior incident was on Dec. 24, 2022. ISO-NE was able to draw on operating reserves to avoid major issues.

“The transmission outage occurring in the midst of the evening peak meant that sufficient resources were not able to respond quickly enough to avoid the capacity deficiency,” ISO-NE wrote in a press release, noting that the transmission issue coincided with higher-than-expected peak evening demand.

While calling on the region’s reserve resources, ISO-NE declared an Energy Emergency Alert Level 1, the lowest of the RTO’s three alert levels. These actions helped mitigate the capacity deficiency within a half-hour, and ISO-NE did not ask the public to reduce its energy consumption.

“In and of themselves, capacity deficiencies are not always emergencies,” ISO-NE said. “They simply mean that ISO operators are taking additional actions to maintain system reliability.”

A Hydro-Québec spokesperson told RTO Insider in a statement that the transmission outage was the result of forest fires in the Baie-James region of Québec, which caused a temporary shutdown of the company’s Phase-2 line.

“Heat and smoke can trigger automated system protection mechanisms, which will essentially shut down the power line in order to protect it,” Hydro-Québec said. “Our bulk transmission infrastructure has not suffered any damage as a result of the forest fires. We remain in constant communication with our ISO partners, providing as much visibility as we can on the current fire situation.”

The company also highlighted the link between the accelerating consequences of manmade climate change and the massive early season wildfires in Québec.

“While forest fires are not a new phenomenon, the intensity and increased frequency of these events in North America are the result of climate change,” Hydro-Québec said. “The amplitude of this event should serve as a clear reminder that we need to accelerate every effort towards transitioning away from the burning of fossils fuels for electricity generation.”

The wildfires already have broken Canada’s record for most area burned in a single year, and government officials expect above-average fire conditions to continue through July and August in many regions of the country.

Kristina Dahl, principal climate scientist for the Climate & Energy program at the Union of Concerned Scientists, said that while a large range of factors have contributed to the massive Canadian wildfires, climate change is a major driver.

“There’s a very clear connection between climate change and worsening wildfires,” Dahl said. She noted that climate change exacerbates wildfire risks by increasing temperatures and drying out ecosystems, as well as enabling tree-killing insects to survive the winter, which creates additional fuel for wildfires.

“It’s really alarming what’s happened in Canada so far this wildfire season,” Dahl added. “Wildfires have burned over 20 million acres of land; that’s roughly an area the size of the state of Maine.”

In early June, ISO-NE reported that wildfire smoke had led to reduced solar generation across the region. It emphasized the difficulty in forecasting demand amid the effects of this smoke because of the lack of historical data. (See RTOs Report Diminished Solar Output, Loads as Wildfire Smoke Passes.)

ISO-NE also recently released the preliminary results of its joint study with the Electric Power Research Institute about the grid reliability impacts of extreme weather, looking at the summer of 2027. While the study found no energy shortfall risk, it did not analyze the risks posed by wildfires to the grid.

“We did not directly consider wildfire risks, as the assessment was focused on resource adequacy risks where wildfires would not be expected to impact enough supply resources simultaneously in the region to be a primary hazard to consider for resource adequacy risk,” Daniel Brooks, EPRI vice president of integrated grid and energy systems, said in a statement to RTO Insider. “Wildfire risks might be a contributing factor potentially during extreme heat scenarios in the future. One area we could add for future versions would be the import capability with wildfire impacting transmission from neighboring regions such as Québec.”

Susan Muller, senior energy analyst for UCS, said the reliability issues experienced last week highlight the need to rapidly transition away from fossil fuels and to recognize the reliability attributes of nonemitting resources.

For clean energy sources, “you’re getting power, but you are also reducing the likelihood of extreme weather because you’re no longer adding carbon to the atmosphere,” Muller said.

Posted on

CARB, Manufacturers Partner to Support Clean Truck Rules

As a court battle heats up over California’s zero-emission truck regulations, a group of truck manufacturers on Thursday committed to follow the ZEV rules even if they’re overturned.

The commitment came through the Clean Truck Partnership, an agreement between leading truck manufacturers and the California Air Resources Board (CARB).

In exchange for their pledge to transition to zero-emission vehicles and meet tailpipe emission standards, CARB agreed to give manufacturers more compliance flexibility. The agency also promised to provide a minimum of four years’ lead time before imposing new requirements and at least three years of regulatory stability.

CARB Chair Liane Randolph called the agreement an “unprecedented collaboration.”

“This agreement makes it clear that we have shared goals to tackle pollution and climate change and to ensure the success of the truck owners and operators who provide critical services to California’s economy,” Randolph said in a statement.

The Clean Truck Partnership includes CARB and the Truck and Engine Manufacturers Association (EMA), along with the following manufacturers:

    • Cummins Inc.
    • Daimler Truck North America
    • Ford Motor Co.
    • General Motors Co.
    • Hino Motors Limited Inc.
    • Isuzu Technical Center of America Inc.
    • Navistar Inc.
    • Stellantis N.V.
    • Volvo Group North America

ACT Targeted

The federal Clean Air Act allows California to request an EPA waiver to enforce its own emission standards for new motor vehicles. EPA granted a waiver for CARB’s Advanced Clean Trucks regulation in March. (See Groundbreaking California Clean Truck Rules Win EPA Waiver.)

The regulation, which CARB adopted in 2020, requires truck manufacturers to sell an increasing percentage of zero-emission medium- and heavy-duty trucks in the state from 2024 through 2035. In addition, CARB adopted in April the Advanced Clean Fleets regulation, which will ban the sale of diesel trucks in the state starting in 2036. (See CARB Adopts Clean Fleets Rule Despite Broad Skepticism.)

Other states may adopt California’s regulations rather than use federal standards. States that have adopted California’s ACT regulation include Colorado, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington.

Under the Clean Truck Partnership agreement, truck manufacturers committed to selling as many zero-emission trucks as reasonably possible in every state that has adopted ACT. Those efforts will be “irrespective of the outcome of any litigation that has been filed or may be filed challenging the waivers or authorizations for those regulations or CARB’s or any state’s overall authority to implement those regulations.”

The EMA and the truck makers also agreed to be neutral when states are considering the adoption of ACT. But the parties can still comment on implementation issues, according to terms of the agreement.

On CARB’s end of the agreement, agency staff will propose giving manufacturers three years, rather than one year, to make up deficits in meeting ZEV requirements. CARB also committed to holding a workshop this year to discuss the concept of pooling ZEV credits and deficits across ACT states.

Also this year, CARB will hold a workshop “to discuss the appropriate role of hydrogen-fueled internal combustion engines” in meeting ZEV requirements.

In addition to ACT, the agreement addresses CARB’s so-called omnibus rules, which regulate truck tailpipe emissions. CARB has agreed to align its rules with EPA’s 2027 regulations for nitrogen oxide emissions and modify some parts of its 2024 NOx emission regulations.

“This alignment between California and the Environmental Protection Agency’s national standards for model year 2027 and beyond will help us get more clean trucks on the road across the country,” Cynthia Williams, global director of sustainability, homologation and compliance at Ford Motor Co., said in a statement.

Court Battle Waged

Last month, a coalition of 19 states, led by Iowa Attorney General Brenna Bird, petitioned a federal appellate court to review EPA’s approval of CARB’s Advanced Clean Trucks regulation.

Groups including the Western States Trucking Association and the Construction Industry Air Quality Coalition filed similar petitions.

Bird said in a release that ACT forces truckers to buy electric vehicles and “regulates trucking out of existence” through zero-emission standards.

Last week, California officials announced they were leading their own multi-state coalition seeking to intervene in the ACT lawsuits. Joining California in the motion to intervene were Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont and Washington, the District of Columbia, and the cities of Los Angeles and New York.

The Environmental Defense Fund and three other environmental organizations also filed a motion to intervene last week.

Posted on

California Invests in Zero-emission Port Equipment

California Gov. Gavin Newsom announced $1.5 billion in port infrastructure upgrades Thursday, including $450 million to fund zero-emission locomotives, vessels and vehicles at some of the West Coast’s largest shipping container ports.

“No other state has a supply chain as critical to the national and global economy as California,” Newsom said in a statement. “These investments — unprecedented in scope and scale — will modernize our ports, reduce pollution, eliminate bottlenecks and create a more dynamic distribution network.”

The money will finance 28 projects that together will create an estimated 20,000 jobs, the statement said.

“The historic level of state funding also puts these projects in a stronger position to compete for significant federal infrastructure dollars from the Biden-Harris administration,” California Transportation Secretary Toks Omishakin said during an event announcing the awards Thursday at the Port of Long Beach.

The ports of Long Beach and Los Angeles — among the three busiest container shipping ports in the U.S., according to maritime information website Marine Insight — are trying to convert to zero-emission operations in coming years.

As part of the grants, the Port of Long Beach was awarded more than $383 million to help modernize its freight transport system at the port and in surrounding communities, the California State Transportation Agency said in its summary of the projects.

The funding will pay for the development of a battery plug-in tugboat and up to 12 long-haul and switching zero-emission locomotives. It also will finance nine hydrogen fuel cell “top handlers” to stack and move freight containers and 44 pieces of zero-emission equipment to replace diesel tractors, forklifts and other heavy equipment, the agency said.

A $46 million grant to the Port of Stockton will fund a zero-emission electric railcar mover. And more than $15 million will help expand Sierra Northern Railway’s efforts to develop and demonstrate hydrogen-powered switching locomotives to serve the Port of West Sacramento.

The Port of Oakland, the largest container port in Northern California, will receive more than $103 million for its modernization efforts. The money will help pay for battery-electric tractor rigs and charging stations, hydrogen fuel cell top handlers and a battery storage system.

“We look forward to our continued partnership with Secretary Omishakin in building an Oakland seaport for the next generation that uses clean, zero-emissions energy like electricity and hydrogen,” Port of Oakland Executive Director Danny Wan said in a statement.