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November 5, 2024

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FERC Approves New England Generation Deal Over Competition Objections

Federal regulators last week signed off on a Japanese company’s plan to buy three gas-fired generators in New England, despite opposition from consumer advocates who had argued that the deal would lead to undue consolidation in the region.

The investment firm Stonepeak asked FERC this summer for approval to sell two units at Canal Generating Station in Sandwich, Mass., totaling 1,457 MW, and another 160-MW unit in Bucksport, Maine, to JERA, a joint venture between two Japanese utilities, Tokyo Electric Power’s TEPCO Fuel & Power and Chubu Electric Power (EC22-71).

Massachusetts Attorney General Maura Healey and the advocacy group Public Citizen had both challenged the acquisition saying that it would give JERA — which already owns 50% of two other gas units totaling more than 400 MW in Massachusetts — too large a share of the generation market. (See Mass. AG, Public Citizen Raise Alarm Over Proposed Generation Deal).

But FERC sided with the buyer and seller, accepting their argument that the transaction would not have an adverse effect on vertical or horizontal competition.

Although JERA will own more than 18% of the capacity cleared in the Southeastern New England zone, FERC wrote that “Applicants’ analysis shows that, when considering ISO-NE as a whole, the proposed transaction does not increase market concentration such that there will be an adverse effect on competition.”

FERC also shot down protests arguing that the deal could have adverse effects on rates and on regulations. And it refused a request from Public Citizen to make public the confidential purchase price of the deal, finding no reason to break with the standard of allowing the submitter to keep prices confidential.

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NY Slaps Moratorium on Certain Crypto Mining Permits

New York has imposed the nation’s first moratorium on permitting for certain new cryptocurrency mining operations.

The move drew criticism from business advocates and the digital currency industry but was applauded by environmental advocates concerned about the greenhouse gas emissions generated to feed the huge electrical demand of crypto mining.

Gov. Kathy Hochul signed the two-year moratorium into law Nov. 22, and it took effect immediately. It blocks approval or renewal of air emissions permits for carbon-fueled power plants that provide behind-the-meter electricity to operations that use proof-of-work authentication methods to validate blockchain transactions.

Existing operations and applications filed before Nov. 23, 2022, are not subject to the moratorium. Nor are those that rely on zero-emissions sources of electricity, such as New York’s abundant hydropower.

New York is widely regarded as one of the most expensive and highly regulated states in the nation. Its upstate region, where crypto mining operations have been established or proposed, has seen a decades-long loss of industry and population.

Hochul acknowledged this in her memorandum of approval.

“As the first Governor from Upstate New York in nearly a century, I recognize the importance of creating economic opportunity in communities that have been left behind,” she wrote.

She said the effort to support economic development and job creation upstate would continue but gave priority in this case to protecting communities from greenhouse gases and addressing the global climate crisis.

Crypto mining uses huge amounts of electricity.

Greenidge Generation Holdings (NASDAQ:GREE) in its 2021 10-K filing said its Dresden, N.Y., and Spartanburg, S.C., datacenters are rated at a combined 51 MW.

The Dresden facility has become a poster child or a flashpoint of sorts for the debate over the environmental impact of crypto mining. Its re-permitting process attracted nearly 4,000 public comments.

The circa-1937 plant sits on the west shore of the largest of the Finger Lakes, squarely in the middle of one of upstate New York’s most scenic and tourist-friendly regions.

It was coal-fired for most of its existence, but Greenidge converted it to natural gas and bought it back online at 106 MW in 2017, with a claimed 70% reduction in emissions. Greenidge says it is committed to carbon-neutral crypto mining by using low-carbon energy sources and offsetting its carbon footprint.

That’s not enough for climate activists, whose opposition is due not just to the emissions from burning natural gas but the environmental impact of extracting it with hydrofracking. New York has banned fracking, but it is in widespread use in Pennsylvania, 50 miles south of Dresden. The Marcellus Shale formation underlies the entire region.

Opponents cheered in June when the New York state Department of Environmental Conservation denied Greenidge’s application to renew its Title V permit for the Dresden plant on the grounds that it did not meet the requirements of the state’s Climate Leadership and Community Protection Act.

Greenidge decried the “arbitrary and capricious” decision and said DEC never once engaged it in discussion in the three months after it proposed an additional 40% reduction in greenhouse gas emissions at the Dresden plant.

The facility continues in operation while Greenidge appeals the denial.

But opponents are hoping that is only temporary.

Seneca Lake Guardian, one of the groups advocating for the moratorium on new crypto mining, called on Hochul to take the next step and shut down Dresden and similar facilities.

The group’s vice president, Yvonne Taylor, said in a prepared statement: “Thank you, Gov. Hochul, for stepping up to protect New Yorkers from corporate bullies who want to exploit communities like mine in the Finger Lakes … Gov. Hochul did the right thing by putting real New Yorkers over the failing outside speculators who choose not to mine crypto in more efficient ways that don’t destroy the climate, environment, and local economies.”

The environmental group Earthjustice said it hoped New York’s moratorium would be a precedent for the rest of the nation, as “crypto mining is a major threat to climate security and needs to be closely regulated.”

Others have supported the Dresden operation as a high-tech infusion of good new jobs and new property tax revenue in a region that is often lacking in both.

“The Business Council does not believe the legislature should seek to categorically limit the growth and expansion of any business or sector in New York,” said Heather Briccetti Mulligan, CEO of the Business Council of New York State. “We plan to further engage and help educate them regarding this industry and the benefits it provides to the local, regional, and state economy.”

And the digital community was aggrieved.

“We are severely disappointed in Gov. Hochul’s decision to approve a moratorium on digital asset mining operations that use proof-of-work (PoW) authentication methods to validate blockchain transactions,” the Chamber of Digital Commerce said. “To date, no other industry in the state has been sidelined like this for its energy usage. This is a dangerous precedent to set in determining who may or may not use power. The PoW mining industry has been spurring economic growth, job creation, and inclusion for historically underrepresented populations in New York, while also creating financial incentives for the buildout of renewable energy infrastructure.”

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TVA to Repurpose Coal Ash Dump with Solar Generation

The Tennessee Valley Authority will embark on a $216 million pilot project to install solar panels on top of a sealed coal ash dump following the Board of Directors’ funding approval earlier this month.

TVA plans to close in place a 300-acre coal ash dump at its 1.2-GW Shawnee Fossil Plant in Paducah, Ky., with a patented system that includes a geosynthetic liner and closure turf. The federal agency said it will attach a 100-MW solar array to the site without disturbing its integrity.

The Shawnee project is “a first-of-its-kind project in the nation that could potentially be duplicated at other suitable locations,” TVA said. It said the project will support its decarbonization goal and will preserve greenfield sites for other economic developments.

TVA still must submit the project for review under the National Environmental Policy Act and other regulatory and environmental approvals.

TVA doesn’t yet know when the solar project will achieve commercial operation.  

“At this time, it is premature to know a specific timeframe, but the process is underway,” TVA spokesperson Ashton Davies said in an emailed statement to RTO Insider. She said TVA intends to begin the solar installation as it wraps up the site’s closure.

During the November board meeting, TVA COO Don Moul called the pilot a “revolutionary new approach to install utility-scale solar on closed landfills.”

“Directly attaching the mounting mechanisms to the turf layer without penetrating the liner maintains the integrity of the closed coal combustion residual impoundment,” Moul said. “This makes available to us the potential to use similar sites across the TVA footprint.”

Moul said the project alleviates “land constraints” while advancing TVA’s goal of building 10 GW in solar generation by 2035.

The agency’s goal is to achieve net-zero carbon emissions by 2050, which some conservation groups have called too gradual. The agency’s decarbonization target drew scrutiny from the U.S. House of Representatives’ Committee on Energy and Commerce. (See TVA Defends Rates, CO2 Reduction Plans in House Inquiry.)

Next year, TVA will contract with a third party to conduct a decarbonization study to analyze how it can further slash emissions.

“Moving quickly on this solar cap installation at the Shawnee site allows us to move further and faster as we build out towards our renewable generation goals,” Moul said.

Moul said Shawnee was “by and far” best situated for an initial project. He said TVA’s footprint has the potential to house up to 1,000 MW in solar generation atop sealed coal ash dumps.

“We’re very excited that this is a first step in some of the intentional actions we’ll be taking towards decarbonization,” he said.

Moul said while he wouldn’t “presuppose” the environmental review process, he said TVA estimates having the system online within two years.

He also said TVA will look into whether the Inflation Reduction Act will cover the project’s funds.

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California CCAs Add 1.4 GW to Clean Energy Portfolios in 2021

California’s community choice aggregators expanded their long-term procurement of clean energy by 1,431 MW over the past year, a 14% increase that includes 119 MW of long-duration storage.

The new power purchase agreements bring the overall long-term procurement by the state’s CCAs to 11,258 MW, up from 9,827 MW in November 2021. The figures are included in an annual report released this month by the California Community Choice Association (CalCCA), an organization representing the state’s community choice electricity providers.

The 243 long-term contracts are for “new-build” resources, including solar, wind, geothermal, demand response, biogas and energy storage. The clean energy projects are spread across California, and some are in Arizona, New Mexico and Nevada.

“CCAs are procuring the diversity of resources that are needed for the state to achieve a 100% clean electricity system, with a focus on affordability, reliability and resilience,” CalCCA Executive Director Beth Vaughan said in a statement.

Vaughn said previously that the state’s CCAs “continue to drive a clean energy project-building boom throughout California and the West.”

The purchase agreements, ranging in length from 10 to 25 years, are for power from newly built clean energy resources. More than 4,000 MW are in operation now and almost all the rest is expected to be online by 2026.

Solar paired with storage is the largest category of long-term clean energy procurement, contributing 4,232 MW to the total. Storage that accompanies solar is the second-largest category, providing 2,451 MW.

CCAs increasingly are turning to solar-plus-storage rather than standalone solar in solar energy contracts, according to CalCCA. The 2,016 MW of standalone solar energy procurement in this year’s report is a 71 MW decrease from last year’s figure.

Even with the reduction, standalone solar is the third largest clean energy procurement category for the CCAs, followed by wind, with 1,376 MW.

Long-duration Storage

The 119 MW of long-duration storage reported this year came from two contracts approved in early 2022 by California Community Power, a joint powers agency representing nine CCAs. One contract is with REV Renewables for 69 MW at the company’s Tumbleweed project in Kern County. The other is for 50 MW at Onward Energy’s Goal Line project in Escondido. The lithium-ion battery projects will have an eight-hour discharge duration.

Another addition to this year’s list was demand response, which accounted for 23 MW of the power purchases.

In addition, geothermal power procurement increased this year to 287 MW, up from 14 MW as of November 2021. In one of the agreements, announced in May, Fervo Energy will supply 40 MW of geothermal power to East Bay Community Energy from a project in Churchill County, Nevada.

In April, Ormat Technologies announced an agreement with Peninsula Clean Energy to buy 26 MW of energy from the company’s Heber 2 geothermal facility in Imperial Valley, California.

RPS Requirements

Community choice aggregators are nonprofit providers of energy within the territory of investor-owned utilities. Customers who choose to buy power from a CCA still receive transmission and distribution service from the IOU.

This year, CCAs served about a third of the load in the territories of the state’s three primary IOUs, CalCCA said. That figure is expected to increase to 36% in 2023.

And according to the California Public Utilities Commission, CCAs are playing “an increasingly significant role” in meeting state and local greenhouse gas reduction goals.

CalCCA said that the long-term contracts for clean energy are helping the CCAs meet requirements of the state’s renewables portfolio standard (RPS).

In 2021, CCAs achieved an RPS percentage of 50%, when considered in aggregate, the CPUC said in an annual RPS report released this month. That’s well above the 44% RPS requirement for the 2021-2024 compliance period.

“The CCAs’ generation has increased to keep pace with RPS requirements through 2023, even exceeding the 2023 forecasted target,” CPUC said in the report.

But current forecasts show online generation starting to drop in 2024 for 16 of the 25 CCAs, the report said. Considered in aggregate, the RPS percentage is projected to drop to 41% in 2024. CPUC said that’s due to expiring contracts and the launch of new CCAs that have little to no RPS procurement.

The RPS target grows to 60% in 2030, and most CCAs will need more renewable resources, CPUC said.

Another RPS requirement is that 65% of procurement should come from long-term contracts, considered to be 10 years or longer.

All the CCAs are expected to meet the long-term procurement requirement for the 2017-2020 compliance period, CPUC said. And most have met, or are close to meeting, the long-term procurement requirement for 2021-2024.

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FERC Staff Finds Dynegy Manipulated 2015 MISO Capacity Auction

FERC’s Office of Enforcement has concluded that Dynegy “knowingly engaged in manipulative behavior” during MISO’s 2015/16 capacity auction — rejecting the commission’s 2019 order that cleared the company.

As a result of  enforcement staff’s heavily redacted 85-page report, the commission will now consider briefs on whether Dynegy should refund $429 million to Illinois ratepayers (EL15-70).

The commission announced a second look at Dynegy’s behavior in June after the D.C. Circuit Court of Appeals ruled that FERC hadn’t sufficiently supported its decision to accept the Southern Illinois capacity price produced in the 2015/16 auction. (See FERC to Take 2nd Look at 2015 MISO Capacity Auction.)

OE’s report, issued in September, said Dynegy participated in a fraudulent scheme to “corner the relevant portion of the market, consisting of those megawatts that MISO would likely need to clear the auction and that could be offered into the auction at a zero price if not held on Dynegy’s unsold books.”

Dynegy, which was acquired by Vistra in 2018, took four steps outside of market fundamentals to make sure it could set prices in the capacity auction, FERC said. Staff described the utility’s actions in the report’s redacted portion and said Dynegy made sure it increased the odds that one of its resources offered into the auction at a non-zero price would become the marginal resource and set the clearing price for Southern Illinois.

FERC staff said Dynegy’s malfeasance began a year ahead of the 2014/15 auction when it purchased 3,152 MW in MISO Zone 4 in Illinois, and 1,241 MW in a neighboring zone, from Ameren. FERC said Dynegy failed to set the price in that auction, when no zone cleared above $16.75/MW-day.

“After failing to set the price in the 2014/15 auction, Dynegy saw an opportunity to set the price in the 2015/16 auction,” FERC staff said.

In the April 2015 auction for 2015/16, MISO saw clearing prices of $3.48/ MW-day or lower in all zones except Zone 4, which  cleared at $150/MW-day.

2015-16-MISO-PRA-results-(MISO) Alt FI.jpg2015/16 MISO PRA results | MISO

 

The OE report was compiled using evidence from a three-year, non-public FERC investigation that included testimony from 11 Dynegy witnesses and more than 500,000 pages of documents. The original investigation, which began on a vote by the entire commission in 2015, was ended by then-chair Neil Chatterjee in 2019 without giving notice to his fellow commissioners.

That prompted a dissent by current Chair Richard Glick when the commission voted 3-1 in July 2019 that Dynegy had not committed market manipulation and that the $150/MW-day clearing price was just and reasonable. The commission said a clearing price isn’t unjust simply because it’s higher than expected (EL15-70).

Glick contended Chatterjee prematurely “cut short” the investigation. Chatterjee said he was acting within his purview as chair and did not need to consult with his colleagues. (See FERC Clears MISO 2015/16 Auction Results.)

Staff’s report gives no indication of Chatterjee’s reason for closing the probe. The report said the original investigators agreed in mid-2017 that Dynegy had engaged in market manipulation and that the company’s responses in 2017 and 2018 failed to change staff’s conclusion.

Vistra Rejects Staff Findings

Vistra said last week it “strongly disagrees with staff’s allegation in this report” and contends that it “acted in accordance with all applicable market rules and procedures.”

“This matter has thoroughly been investigated several times and adjudicated,” Vistra spokesperson Meranda Cohn said in an emailed statement to RTO Insider. “When FERC cleared Dynegy in 2019, they found that no market manipulation occurred and that the MISO 2015/2016 capacity auction results were just and reasonable. No new facts, circumstances or evidence have come to light in the three years since this decision.”

Cohn said in the “years-long process, the same allegations have been periodically repeated but have routinely been disproved by experts and independent regulatory authorities, including FERC and the Independent Market Monitor for MISO.”

Financial Impact not Disclosed

OE staff calculated the financial impact of Dynegy’s actions,  but the details were redacted.

Public Citizen and the Illinois Attorney General asked FERC in February to recoup $428.6 million, plus interest from June 1, 2015, to load serving entities in Illinois in MISO Zone 4 to reimburse their customers.

Tyson Slocum, the director of Public Citizen’s energy program, told RTO Insider he believed the company raised capacity costs by about $100 million, an estimate he said was “confirmed by reams of non-public Enforcement staff conclusions.”

In addition to the $100 million in direct rate impacts, Slocum said, there are “hundreds of millions of dollars in cascading rate impacts.”

In ordering OE staff to reconsider Dynegy’s actions in June, the commission said it would determine any remedy in a later phase of the proceeding. On Oct. 7, the commission ordered initial briefs on the remand report by March 1, 2023, and reply briefs on May 1, 2023.

Cohn said that Vistra will “continue to vigorously defend Dynegy’s conduct.” She said FERC staff’s actions are “unwarranted, without merit, beyond the scope of the remand order and inconsistent with prior decisions and action by FERC.”

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NY CAC Debates the ‘Nomenclature’ of Natural Gas

ALBANY, N.Y. — New York Climate Action Council (CAC) members clashed last week over definitions of natural gas during discussions of potential edits to the Gas System Transition portion of its draft scoping plan.

Jessica Waldorf, director of policy implementation at the New York Department of Public Service, on Nov. 21 presented a summary of feedback given at earlier sessions, which included proposals to both change the term “fossil gas” to “natural gas” and to use the term “fossil natural gas” to differentiate from renewable natural gas (RNG) in the plan.

Waldorf explained that part of the thinking is that the distinction struck a middle ground between members who want the term “fossil natural gas” while addressing members’ concerns around public perception of the use of the term.

RNG refers to biogas produced by a variety of processes, such as anaerobic digestion or capturing agricultural waste emissions. Critics of labeling it “renewable” say it is misleading, as it is not produced naturally, and argue that “recycled” or “sustainable” would be better substitutes. According to EPA, “RNG is a ‘term of art,’ and there is not at present a standard definition.”

Some CAC members expressed opposition to the proposed revisions, however, based on the fact that RNG projects can still result in increased emissions.

Although he believed the proposal was a fine compromise, Bob Howarth, a professor at Cornell University, thought that too much weight was being given to RNG, which he said was an untested resource whose decarbonization role would likely be limited.

Raya Salter, executive director of the Energy Justice Law & Policy Center, expressed discomfort with the proposal, saying that the fossil fuel industry wants us to move forward with untested fuel models.

Meanwhile, supporters of the proposal argued that the distinction would enable flexibility within the scoping plan and that any debate was moot because these wider disagreements would not be resolved by the council.

Donna DeCarolis, president of the National Fuel Gas, stressed that it was important that the scoping plan include all available fuel options for the state to meet its energy goals.

Gavin Donohue, CEO of the Independent Power Producers of New York, agreed with DeCarolis’ assessment and added that he objected to the inclusion of the word “fossil” anywhere in the scoping plan because the word is not contained nor defined anywhere within the Climate Leadership and Community Protection Act.

Thomas Falcone, CEO of Long Island Power Authority, told the CAC that he supported the compromise, understanding both sides of the argument, but that it was more of a symbolic issue that, although important, would not be solved through the scoping plan.

Peter Costello, general counsel of the New York State Energy Research and Development Authority (NYSERDA), explained that the scoping plan is not a legally binding document, but, from a legal standpoint, these clarifications would help inform those who may be required to legally contextualize these terms in an effort to avoid any legal action.

Doreen Harris, CEO of NYSERDA, argued for the CAC to include a glossary at the end of the scoping plan that defines unresolved terminology or better contextualizes contentious topics. Paul Shepson, dean of the College of Marine and Atmospheric Sciences at Stony Brook University, agreed, saying readers could be confused.

Climate Protesters in NY (Allison Considine Sierra Club) Alt FI.jpgClimate protesters call for the end of gas usage in New York. | Allison Considine, Sierra Club

 

The debate around natural gas was fortuitous, as the start of the meeting was interrupted by protesters carrying a long string of photographs and signs calling for the end of gas usage across New York. Protesters told NetZero Insider that the photos were of individuals calling the governor’s office throughout the day to demand for the elimination of gas from the CAC’s final scoping plan.

“The actions we take today will have major implications for our future,” one protester said, adding that they were disheartened by the CAC’s debate around the “nomenclature” of gas.

Only two more CAC meetings remain, with Dec. 5 being the final day to resolve any outstanding items before the final vote on the scoping plan on Dec. 19.

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NY PSC Accepts NYSEG Proposal to Address Gas Leak Fire

The New York Public Service Commission this month approved New York State Electric and Gas’ (NYSE:AGR) proposed plan to address the installation errors that caused a natural gas explosion that destroyed a two-family home in the village of Brewster last February (22-G-0425).

The PSC on Nov. 17 directed NYSEG to repair and remediate all errors identified in the 450 randomly selected inspection sampling sites no later than May 17, 2024, and submit quarterly progress reports.

The commission indicated that it may fine NYSEG a “civil penalty not exceeding the greater of $250,000 or ‘[0.03%] of the annual intrastate gross operating revenue of the corporation’” for each established violation.

The incident at 2592 Carmel Ave. was caused by “an underground gas leak, which contributed to a residential fire and ultimately led to the complete destruction of the duplex residence,” according to the PSC.

The commission’s investigation determined that efforts to prevent the fire were complicated because NYSEG employees lacked proper equipment to effectively respond to the leak, installed the nearby tapping tee improperly and failed to maintain reliable record keeping.

Specifically, NYSEG informed the PSC it could not “ascertain from its own historical records the specific personnel involved in installing the PermaLock Tapping Tee” related to February explosion, leading the PSC to write that additional “opportunistic inspections” are likely.

NYSEG intends to perform inspections “before the 2023 winter season, and subsequently completing the project by spring 2024,” but if additional “anomalies and defects are detected,” the company “may be required to increase its sampling size.”

If additional evidence is found that NYSEG has not maintained reliable “record keeping pertaining to piping and component installation,” the PSC “has the regulatory authority to order changes to internal utility protocols and procedures.”

The commission stressed that it expects that “utilities maintain their distribution systems and components to ensure public safety and that they avoid or replace components whose failure can harm to public.”

In a statement to NetZero Insider, the PSC said that they are currently focused “on testing before any next steps are decided” in response to questions about whether it planned on tightening the rules or regulations surrounding tapping tees.

Earlier this year, one person died and many more were injured due to gas leak explosion in a Bronx three-story home.

Meanwhile, National Grid recently agreed to pay approximately $650,000 to settle a 2018 natural gas explosion in Herkimer County that destroyed an entire home and settled a 2018 gas explosion in Long Island for nearly $2 million (18-G-0716 and 15-G-0298).

According to a report released by the U.S. Public Interest Research Group’s Educational Fund, a gas pipeline incident occurred roughly every 40 hours in the U.S. between 2010 and 2021, with 2,600 of those incidents being serious enough to report to the federal government and resulting in the death of 122 people.

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NJ’s $2M Agrivoltaics Study Advances

A more than $2 million New Jersey study that will look at whether crops and cows can thrive next to bifacial vertical and rotating solar panels is moving ahead even as the state is nearly a year behind in the legislature’s timeline for implementing rules that will govern dual-use solar projects, also known as agrivoltaics.

The New Jersey Agricultural Experiment Station (NJAES) is on track to complete construction by April, David Specca, assistant director of Rutgers University’s EcoComplex, said at the New Jersey Farm Bureau’s annual conference in Princeton on Nov. 15.

Crop trials will begin immediately after, and initial results from the study could be ready in a year, said Specca, who heads the Rutgers Agrivoltaics Program.

The study will be carried out at three sites around the state, two of which will study the growth of crops beneath a 337-kW, single-axis tracking system of 695 solar panels that rotate as the sun moves from East to West. Aside from improving energy production efficiency, the rotation will give the crops — including soy beans, hay and vegetables — a more evenly spread exposure to shadow and sun than would fixed panels, Specca said in an interview with NetZero Insider.

The third site, with 378 solar panels and a capacity of 179 kW, will study the experience of cows grazing next to vertical bifacial panels. “Our observations are going to be of the grass and forage crops [that] are being grown for feed for the animals,” he said, adding that researchers will also look at how the cows react, such as whether they graze contentedly in that environment and whether they prefer the shade from the panels or direct sunlight.

Agrivoltaics, which enables the land below or around solar developments to be used for farming, has proven successful in other parts of the country but is still largely an unproven quantity in New Jersey. The study comes amid friction in New Jersey and other states over the merits of using farmland for solar projects, with some farmers wary that solar projects will eat up farmland and weaken the farming sector, and others concluding that solar projects could provide already struggling farmers with another revenue stream — especially if that can be done side by side with crop cultivation or animal rearing.

The tension over solar use of farmland is heightened in some parts of New Jersey by the loss of farmland to the voracious demand for logistics and e-commerce warehouses that serve the Port of New York and New Jersey and the New York market. But that pressure also heightens the attraction of agrivoltaics, which can provide revenue without destroying farms or permanently assigning farmland to another use, as do warehouse developments. (See NJ Solar Push Squeezes Farms.)

Peter Furey, executive director of the Farm Bureau, said that Specca’s presentation showed “some real promising activity.” He said he has no doubt that farms and solar projects can cohabit the same space and be productive, but that doesn’t mean the concept will work.

“Is it financially feasible?” he said. “Well, the answer to that remains to be seen.” Given the high cost of solar equipment and installation, a key factor will be the incentive structure laid out by the New Jersey Board of Public Utilities (BPU), he said.

Developing Rules

What that will look like is still pending. More than a year after Gov. Phil Murphy signed a law, A5434, that required the BPU, in consultation with the state Department of Agriculture, to adopt rules and regulations for a pilot dual-use solar program within 180 days, the program has yet to emerge. The legislation set aside $2 million for the agrivoltaics study.

The pilot program, as set out in the law, would establish a framework for the “construction, installation and operation of dual-use solar energy projects that are connected to the distribution or transmission system owned or operated by a New Jersey public utility or local government unit and located on unpreserved farmland.”

The law limits the annual capacity of all projects in the program to 200 MW and will restrict each project to no more than 10 MW. The rules will define the incentives available, and the law requires the BPU to convert the pilot to a permanent program between 36 and 60 months after the rules are approved by the BPU and Agriculture Department.

BPU staff are currently “in the process of developing the program and do not have a timeline to share for release at this time,” said spokesman Peter Peretzman.

More imminent are the rules for another program that will affect farmland use, the Competitive Solar Incentive (CSI) program, which are expected to be released in the coming weeks. The program uses a competitive solicitation process to allocate incentives for grid-scale solar projects, those larger than 5 MW. Draft rules released earlier in the year included guidelines on what land can be used for such projects and the steps needed to mitigate the impact on the land of an approved project. (See NJ Tries to Balance Solar Growth vs. Farmland Protection.)

Furey said the agricultural and solar sectors are waiting for them to drop.

“The law put parameters limits on how much farmland can be used for industrial-scale solar,” he said, and the official release of the rules will start the process of developers thinking “about whether they want to come out on farmland.”

Grid Connection Impact

New Jersey’s initiative comes amid other advances toward implementing dual-use programs in the Northeast. Sheep grazing on solar array lands has already shown some success, and the possibilities of pairing solar with beekeeping, crops and even cattle is under scrutiny, according to speakers at the Renewable Energy Vermont conference in October 2021. (See Overheard at REV2021: Cattle, Crops, Bees Trend in Agrivoltaics.)

New York State Energy Research and Development Authority (NYSERDA) said in August that developers that incorporate agrivoltaic strategies would get a “favorable scoring credit” in the state’s annual solicitation for large-scale renewable energy. (See NY Scorecard Makes Way for Utility-scale Agrivoltaics.)

Dual-use solar has proven successful in other, sunnier and drier parts of the country, Specca said. But its efficacy in New Jersey, “where there’s less sun but a lot of indirect light” because of the light bouncing off the frequent cloud cover, is still not clear, and the impact of that is part of what the study will determine, Specca said.

One thing that is already clear in New Jersey is that the feasibility of an agrivoltaic project may be determined by where it is in the state, and the availability of connections to the grid, he said.

“A lot of the areas in rural parts of the state don’t have very big wires, big electric service. And so it really limits how much [electricity] can be exported,” Specca said. That won’t affect grid-scale projects, which often install their own cabling to the grid, but for smaller farms looking to set up solar projects, “that’s where these constraints would come in,” he said.

Dual-use Legal Battle

The BPU’s delay in setting up an official agrivoltaics pilot comes as the agency is in litigation with the developers of two private projects: the 18.8-MW Washington Solar Farm in Washington Township, and the 17.6-MW Quakertown Solar Farm in Franklin Township.

In each case, the project has secured local approvals and about half of it is up and running. The two developers want the BPU to award them incentives under the state’s Transition Incentive Program, funds that would enable them to develop the second halves of the project as a mini-pilot program that will study the impact and benefits of agrivoltaics.

Part of the BPU’s argument against the effort, however, is that the state pilot program will soon be in place and there is no need for a small independent pilot to run in “parallel.”

The BPU denied the two projects petition for incentives on Dec. 1, 2021, agency spokeswoman Tracey Munford said.  An appeal of the board’s order “is pending before the Appellate Division,” she said, adding that the BPU would not comment further.

The developers argued that dual-use solar meets the criteria of an “innovative technology” under program rules, and so should be eligible not only for incentives, but for a high level of incentive, under the program rules.

“Petitioners urge the BPU to consider dual-use agrivoltiacs as an innovative technology that will play an important role in New Jersey’s solar future,” an attorney for the two projects, Mark S. Bellin, wrote in a June 4, 2021, petition to the BPU, laying out the developers’ case.

“The establishment of these pilot projects would give the BPU the ability to monitor and evaluate the performance of the dual-use solar farm as more than just a concept, more than just a classroom experiment,” Bellin wrote. The project would also provide a “a substantial means of delivering a meaningful number of megawatts towards the state goals and preserving farmland simultaneously.”

“The projects represent a short-term solution for the evaluation of the dual-use agrivoltaic concept at the same time as it promotes local agriculture, provides employment and municipal revenues,” according to the petition. “Creating this dual-use pilot program is a successful scenario for every stakeholder affected by the process.”

The land parcels beneath the two projects are no longer being used for farmland, Bellin argued, adding that “each of the property owners has indicated that if the complete buildout of the solar farm is not permitted, each will develop the property residentially or commercially.”

As a result, “the ability to preserve the ground for agriculture will be forever lost unless the solar use is preserved,” he wrote.

But the board on Dec. 1 rejected the petition, saying it was “duplicative and moot.”

“The goals and benefits of establishing a robust dual-use pilot program simply cannot happen in the limited context of evaluating the projects here, no matter how well intentioned,” the board said. It added that allowing the developers to create a pilot program “in parallel” to the one that the BPU will develop under the new legislation would “unnecessarily strain agency resources.”

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State Regulators Endorse New Demand Curve in MISO Capacity Auction

The Organization of MISO States (OMS) has released a position statement in support of a downward-sloping demand curve in MISO’s capacity auction.

MISO’s state regulators drafted language that said the existing vertical demand curve may not sufficiently value the reliability contribution of excess capacity and might cause load-serving entities to over-rely on the RTO’s market to procure capacity. They also said the vertical design might be hastening resource retirements and is likely not sending price signals that would spur investment in new generation.

The regulators said the grid operator’s current resource adequacy “has led to capacity shortfalls in part of the MISO footprint, may fail to maintain appropriate price signals and may not lead to reliability going forward.”

MISO has been seriously weighing adopting a sloped demand curve since early summer, after the spring capacity auction laid bare a 1.2 GW capacity deficit across MISO Midwest. (See MISO Promises Stakeholder Discussions on Capacity Auction Reform.)

The Kentucky Public Service Commission and the Public Service Commission of Wisconsin abstained from voting on the statement, and the Manitoba Public Utilities Board did not participate in drafting the letter. However, the Kentucky commission added that it “strongly believes that MISO must immediately endeavor to address the most prominent issues with its capacity market, through actions which include, but are not limited to, implementing a downward-sloping demand curve.”   

OMS said it “looks forward to contributing to the final design of a revised demand curve” and said its “support of a revised demand curve is contingent on reviewing and approving MISO’s final proposal.”

OMS also warned that it will oppose a minimum offer price rule in the capacity auction.

During the OMS’ annual meeting in October, North Dakota Commissioner Julie Fedorchak said the organization’s members still need to know the final shape of the proposed curve and understand the options for states to self-supply or opt out in meeting their reliability needs.

Fedorchak also said the sloped demand curve’s formation should be done in conjunction with other resource adequacy measures, like improved scarcity pricing and a new generation valuation that can provide necessary system attributes. She said a sloped demand curve is “just one tool” in the quest for resource adequacy.

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West Could Save $1.2B a Year in CAISO EDAM

CAISO’s proposed extended day-ahead market (EDAM) for its Western Energy Imbalance Market could generate $1.2 billion a year in benefits, or 60% of the savings of a West-wide RTO, if it encompassed the entire U.S. portion of the Western Interconnection, a new study commissioned by CAISO found.

The report by Energy Strategies was similar to a study the consulting firm performed last year that found a single RTO covering the entire U.S. portion of the interconnection could save the region $2 billion a year in electricity costs in test-year 2030. The study was prepared for state energy offices in Colorado, Idaho, Montana and Utah with funding from the U.S. Department of Energy. (See Study Shows RTO Could Save West $2B Yearly by 2030.)

The firm’s EDAM study for CAISO built on that work. It examined operational savings obtained through more efficient dispatch and management of transmission capacity, lower operating reserve requirements, and the removal of transmission wheeling costs in the market footprint. It also looked at capacity reductions from regionally shared planning reserve requirements met through geographic diversity of generation resources and peak demand.

“The methodology and the underlying databases used to perform this assessment were consistent with those that my firm used to perform the state-led market study for a consortium of Western states,” Energy Strategies Principal Keegan Moyer said Friday in a meeting hosted by the Committee on Regional Electric Power Cooperation (CREPC). CREPC is seeking to play a larger role in Western market formation. (See CREPC Seeks to Become an OPSI for the West.)

The EDAM study differs from the state-led study because it dealt with a specific market proposal instead of a generic RTO framework, Moyer said.

“The framework that we assume here is really just based off of a sharing of resources, assuming planning reserve margins stay consistent, and we just begin to plan for a consolidated peak relative to individual peaks,” he said. “It’s really quite simple. It’s just a regional arbitrage of non-coincident peaks.

“There are, of course, other energy benefits that were not captured in this analysis,” he said. “So, for example, an EDAM could produce price signals that improve the efficiencies of transmission planning. That would be helpful to see a day-ahead price process to plan the transmission grid better, but that benefit isn’t captured here.

“Markets also tend to increase access to public-policy renewable resources,” Moyer said. “The reason for that is that you don’t have to wheel them across the system and/or you have different settlement points or different transaction options that are typically seen in SPP and MISO and help to increase that offtake optionality for those resources. So, it just provides better access to those low-cost wind regimes and solar regimes.”

The Western Energy Imbalance Market (WEIM) operates in real-time to share lower-cost and renewable resources among its participants, which now number 19. It has generated nearly $3 billion in benefits since it launched operations eight years ago. (See WEIM Benefits Top $500M, Near $3B Total.)

The fast-growing WEIM produced $739 million in savings for its 15 participants last year and $325 million in 2020 for its then-11 members. Energy Strategies said the EDAM would more than double the average of $525 in annual benefits from the past two years.

California would be the single largest beneficiary, with about $309 million in benefits in 2030, it said. All other Western states combined would save $886 million in 2030, including operational and capacity savings.

“An EDAM footprint across WECC causes California operational costs to decline by 6.2% from the status quo,” the firms said.

The operational-only benefits of the EDAM would equal 78% of the operational savings from a single all-encompassing Western RTO, as modeled in the state-led study, it said. Including capacity savings, the EDAM would achieve 60% of the benefits of a Western RTO.

The report bolstered CAISO’s sales pitch to Western entities to join the EDAM once it is approved.

CAISO fast-tracked the EDAM stakeholder initiative this year amid competition for Western market share by SPP, which is pursuing its own day-ahead Markets+ program and a Western RTO.

In a Nov. 14 meeting, CAISO presented its draft final proposal for EDAM with hopes of finalizing it next month and seeking approval from its Board of Governors and the WEIM Governing Body in February. (See CAISO Finalizing Plan for WEIM EDAM.)

“Some of the design is still in flux, but we’re kind of at the tail end of the design phase,” CAISO COO Mark Rothleder said at the start of Friday’s CREPC meeting. “Hopefully these additional data points, in terms of the value proposition of EDAM, help in the final stages of the process and really understanding its total value proposition.”