Department Of Energy Loan Guarantee Would Support Virtual Power Plant Program
April 21, 2023
by Peter Maloney
APPA News
April 21, 2023
The Department of Energy has granted a conditional commitment for a partial loan guarantee of up to $3 billion to Sunnova Energy for the company’s solar-powered virtual power plant program.
Sunnova’s Project Hestia would aggregate grid-connected distributed energy resources such as photovoltaics, battery storage systems, electric vehicles with communications and control software to create virtual power plants.
If finalized, the Department of Energy partial loan guarantee would support the origination of Sunnova loans associated with solar, storage, or other Sunnova technologies that use the company’s demand response and virtual power plant software.
Sunnova anticipates the partial loan guarantee would support $4 to $5 billion in Sunnova loan originations for approximately 75,000 to 115,000 homeowners.
The project is expected to prioritize households in disadvantaged communities across the United States, as well as homeowners with lower credit ratings. Sunnova would also aim to provide up to 20 percent of Project Hestia loans to homeowners in Puerto Rico for installations that would include both solar and battery storage.
The partial loan guarantee would be the Department of Energy’s first for a virtual power plant project.
To be eligible for the program, each energy system must be outfitted with Sunnova’s technology, accessible by smart phone or other personal electronic device, that is designed to improve customers’ visibility into their power usage and enable them to reduce electricity use or contribute electricity to the grid when it is under stress.
Sunnova has agreed to provide monthly servicing reports supplemented by hardware and software deployment information to the Department of Energy. Sunnova also has agreed to measure the reduction in greenhouse gases associated with Project Hestia.
Several steps remain for Project Hestia to reach critical milestones, and certain conditions must be satisfied before the Department of Energy partial loan guarantee is issued, including finalization of definitive financing documents.
The transaction is expected to close in the second quarter of 2023. Sunnova said it plans to issue its first securitization under the program in the first half of 2023.
Clean Energy Projects Flood Interconnection Queues, Causing Backlogs
April 20, 2023
by Peter Maloney
APPA News
April 20, 2023
Requests to connect clean energy projects to the grid have soared in recent years, leading to longer wait times and backlogs for project developers, according to new research from Lawrence Berkeley National Laboratory.
At the end of 2022, the total capacity of projects in interconnection queues across the country stood at over 2 terawatts, which is greater than the current United States generating capacity of 1.25 terawatts, the report, Queued Up: Characteristics of Power Plants Seeking Transmission Interconnection, found. The capacity in those queues is more than six times the capacity that was queued up for connection in 2014, the authors noted.
Solar, battery storage, and wind energy account for 95 percent of all the proposed capacity, almost equal to the nation’s total installed capacity, according to the report. In addition, the amount of solar, wind, and storage projects in the queues exceeds the amount needed to reach to 90 percent of United States electricity from zero-carbon resources by 2035, the report said.
President Joseph Biden has set goals to create a carbon dioxide pollution free power sector by 2035 and net zero emissions economy by no later than 2050 to combat climate change. “The trends in these interconnection queues suggest that developers are eager to meet this ambition, though they may face some headwinds,” said Joseph Rand, an energy policy researcher at Berkeley Lab and lead author of the study, said in a statement.
The report’s authors also noted that the recent passage of the Inflation Reduction Act, which increased incentives for renewable energy, is likely to drive even further growth in interconnection requests in coming years.
“The interconnection queues illustrate both the opportunity and challenges of electric sector decarbonization in the U.S.,” Rand said. “On the one hand, we see unprecedented interest and investment in clean energy development. On the other hand, the increasing delays and high withdrawal rates point to a major barrier for developers of these projects.”
Interconnection requests now typically take more than three years to complete the requisite grid impact studies in most regions, and the timeline from the initial connection request to having a fully built and operational plant has increased from less than two years for projects built in 2000 and 2007 to nearly four years for projects built between 2018 and 2022, the report found.
In addition, much of the proposed capacity in the queues will not be built for a variety of reasons, the authors noted. Analyzing a subset of queues for which data are available, only 21 percent of the projects, and 14 percent of capacity, seeking connection from 2000 to 2017 reached commercial operations, the report found.
Huntsville Utilities, Toyota Announce Solar Project Power Purchase Agreement
April 20, 2023
by Paul Ciampoli
APPA News Director
April 20, 2023
Alabama public power utility Huntsville Utilities, Toyota Alabama and Toyota Tsusho America Inc. on April 5 announced a power purchase agreement to support a 168-acre, $49 million solar project.
The 30-megawatt solar-generated system will be located in the North Huntsville Industrial Park, surrounding the Toyota engine plant. It is expected to generate 62,000 megawatt hours annually.
TAI’s Energy Infrastructure Solutions team led the project’s development and will manage the construction, scheduled to begin this spring. As the owner of the solar facility, they will be responsible for long-term operations.
Through a long-term agreement with the Tennessee Valley Authority, the facility is part of a shift in TVA’s relationship with local power companies across the Tennessee River Valley.
The solar facility is scheduled to begin generating solar energy in summer 2024.
Wisconsin’s Manitowoc Public Utilities Secures Community Solar Project Site
April 19, 2023
by Paul Ciampoli
APPA News Director
April 19, 2023
Wisconsin public power utility Manitowoc Public Utilities on April 10 reported that it has secured a site for a community solar project. MPU is building the facility with GRNE Solar.
MPU recently signed a lease with the City of Manitowoc to utilize the space, which is an old gravel pit, for solar panels as part of the utility’s new community solar program.
The program “is intended to give customers the opportunity to participate in solar without the upfront cost that rooftop solar panels require,” MPU said. Additionally, the site will offer optimal panel placement, which is hard to accomplish on residential homes, it said. The 20-year project is offered to current MPU electric customers.
Blocks of solar are available for subscription in 1 kilowatt increments, up to 20 kW, on a first-come, first-serve basis. The project developer will be installing the 1,000 KW solar generation facility with work anticipated to begin in May and with an expected completion date of November.
Lazard Report Finds Continued Declines In Renewable Generation Costs
April 19, 2023
by Peter Maloney
APPA News
April 19, 2023
Continued declines in the costs of renewable energy have made some renewable generation technologies cost competitive with conventional generation, according to the most recent edition of Lazard’s energy cost analysis.
The 16th version of Lazard’s Levelized Cost of Energy+ report analyzed the levelized costs of energy from various generation technologies, as well as energy storage technologies and hydrogen production methods, and found that selected renewable energy generation technologies are cost-competitive with conventional generation technologies under certain circumstances.
Specifically, at the low end of Lazard’s unsubsidized levelized cost of energy analysis, utility scale solar photovoltaic and onshore wind came in at $24 per megawatt hour compared with $39 per megawatt hour for the most competitive conventional generation source, combined-cycle gas-fired generation.
The low-end unsubsidized levelized cost of energy for coal and nuclear generation was $68 and $141 per megawatt hour, respectively.
The low-end unsubsidized levelized cost of energy for solar photovoltaic and onshore wind generation paired with energy storage, at $46 and $42 per megawatt hour, respectively, was approaching competitive levels with conventional generation, Lazard found.
Lazard’s analysis also found that the low-end unsubsidized levelized cost of energy for solar photovoltaic and onshore wind generation — $24 per megawatt hour – is competitive with the marginal cost of existing conventional generation. The low-end of the marginal cost of nuclear and coal generation is $29 per megawatt hour and for combined-cycle gas generation is $51 per megawatt hour, according to the report.
Lazard’s unsubsidized levelized cost of energy analysis also showed “significant historical cost declines for utility-scale renewable energy generation technologies driven by, among other factors, decreasing capital costs, improving technologies and increased competition.”
“Even in the face of inflation and supply chain challenges, the LCOE of best-in-class onshore wind and utility-scale solar has declined at the low-end of our cost range, the reasons for which could catalyze ongoing consolidation across the sector,” the report’s authors noted, though they added, “the average LCOE has increased for the first time in the history of our studies.”
The authors said their findings reinforced their observation that across the energy industry “companies of scale that can take advantage of supply chain and other economies of scale will continue to lead the buildout of new renewable assets given the observed LCOE declines for best-in-class renewable generation relative to smaller or more regionally focused companies that have seen moderate to significant LCOE increases.” That trend, they said, “will lead to ongoing consolidation across the sector as well as development of evolved business models and strategies to address supply chain and scale considerations.”
In the eighth edition of its levelized cost of storage analysis, Lazard said that the use-cases and applications for energy storage are becoming more valuable, well understood and, therefore, more widespread as grid operators adopt methodologies to value energy storage systems.
Lazard’s analysis found a 100-megawatt wind plant paired with a 50-megawatt, four-hour energy storage system to be the most cost effective with an unsubsidized cost of energy ranging from $69 to $79 per megawatt hour and from $33 to $44 per megawatt hour for subsidized projects. Stand alone, utility scale energy storage systems ranged from a low of $154 per megawatt hour to a high of $323 per megawatt hour, depending on the size of the energy storage system and the inclusion of subsidies.
In addition, despite being subjected to the same cost pressures as other energy technologies, the levelized cost of energy values for energy storage systems have remained relatively neutral compared with Lazard’s last analysis, version seven for 2021, because of the energy storage investment tax credit granted as part of the Inflation Reduction Act.
In the third edition of its levelized cost of hydrogen production analysis, Lazard found given its versatility as an energy carrier, “hydrogen has the potential to be used across industrial processes, power generation and transportation, creating a path for decarbonizing energy-intensive industries” where other technologies are not yet viable.
Additionally, clean hydrogen, produced from renewable sources, is “well positioned to reduce CO2 emissions in typically ‘hard-to-decarbonize’ sectors,” such as cement production, centralized energy systems, steel production, transportation and mobility (forklifts, maritime vessels) applications, the report’s authors found.
The report also noted that natural gas utilities are likely to be early adopters of green hydrogen as methanation, that is, combining hydrogen with carbon dioxide to produce methane, becomes commercially viable and pipeline infrastructure is upgraded to support hydrogen blends. In addition, the Inflation Reduction Act “provides a distinct policy push to grow hydrogen production” through the hydrogen production tax credit and investment tax credit., Lazard said.
Navajo Tribal Utility Authority to Explore Opportunities to Develop Up to 1 GW of Green Energy Projects
April 18, 2023
by Paul Ciampoli
APPA News Director
April 18, 2023
The Navajo Tribal Utility Authority and AVANGRID on April 17 announced that they have signed a Memorandum of Understanding to explore opportunities to develop up to 1 gigawatt of green energy projects within the Navajo Nation in the states of New Mexico and Arizona.
“This partnership will allow the two parties to collaborate and study the feasibility of developing wind and solar projects, as well as battery storage solutions, to create new jobs, create economic development on the Navajo Nation, offset lost revenue on the Navajo Nation, and bring reliable, affordable, and renewable energy to power Navajo Nation businesses and residents,” a news release related to the MOU said.
“NTUA Generation has been working diligently to explore renewable energy development opportunities on the Navajo Nation with the promise of new jobs and clean green energy,” said NTUA General Manager Walter Haase. “We do believe the partnership we have with AVANGRID will advance clean green energy development on the Navajo Nation and will help provide benefits to the communities served by NTUA,” Haase said. “We look forward to the progress this partnership will bring.”
“The Navajo Nation appreciates Navajo Tribal Utility Authority’s efforts in the clean energy generation space. As a wholly owned entity of the Navajo Nation, the utility’s tenacity and development of partnerships shows what can be accomplished,” said Navajo Nation President Nygren.
As part of the partnership, AVANGRID and NTUA will explore how the projects being contemplated could benefit from the Inflation Reduction Act. The IRA “opens a path to meaningful emissions reductions in Indian tribes through the development of projects that can help them transition to a cleaner energy economy,” the news release said.
NTUA was established on January 22, 1959, to address the absence of utilities on the 27,000 square-mile Navajo Nation. Since then, NTUA has grown into a self-sustaining, not-for-profit, successful tribally-owned enterprise.
NTUA is organized for the operation, maintenance and expansion of electric, communications, natural gas, water, wastewater and generation, including off-grid residential solar services for the Navajo people at reasonable costs.
In addition to providing multi-utility services, other objectives of NTUA are to promote employment opportunities on the Navajo Nation, and to improve the health and welfare of the residents of the Navajo Nation while improving the standard of life.
NTUA Renewable Energy Projects
NTUA has already been actively pursuing renewable energy projects.
In early 2022, officials with NTUA, Arizona’s Salt River Project, and leaders of the Navajo Nation agreed to extend an agreement that paved the way for the first-ever, large-scale utility solar farm on the Navajo Nation, the “Kayenta I” facility.
The groups also signed a contract for a new, 200-megawatt solar resource on the Navajo Nation called “Cameron Solar” that is set to be operational by the end of 2023.
The SRP Board of Directors approved a long-term energy and environmental-attribute agreement through March 2038 from the 27-MW Kayenta I portion of the Kayenta Solar generation facility.
CPS Energy President and CEO Rudy Garza Raises Supply Chain Concerns Tied to DERs
April 9, 2023
by Paul Ciampoli
APPA News Director
April 9, 2023
The growth in the development of technologies such as solar farms or battery storage will face some limitations due to supply chain constraints, Rudy Garza, President and CEO of San Antonio, Texas-based public power utility CPS Energy said on March 31.
He made his comments during a recent U.S. Energy Association briefing related to challenges facing distributed energy resources and virtual power plants.
“Whether it’s solar farms or battery storage or whatever the case might be, I think the growth in the development of these technologies will absolutely face some limitations from a supply chain standpoint because I don’t think our supply chain issues will go away for the next probably two to three years,” he said.
Garza noted that CPS Energy has been “talking about virtual power plants through our Save for Tomorrow energy plan, which is our energy efficiency and conservation program, for ten years.”
He noted that while VPP has become “a trendy topic across the country,” it is something “we’ve been involved in for quite some time now.”
Virtual power plants, generally considered a connected aggregation of distributed energy resource technologies, offer deeper integration of renewables and demand flexibility, the Department of Energy notes on its website.
“We know that we’ve got three hundred megawatts – give or take – of distributed energy resources in San Antonio right now. We know individually that they’re placed in locations where they’re not going to cause issues on our distribution grid,” Garza said. “But if that became three thousand megawatts, obviously we’d be in a much different situation.”
He noted that “we’re actually working with some technology partners to figure out how to model the distribution planning work that we have to do to really create that future energy bank that will exist as market signals are being sent, as rates are developed that monetize distributed resources in a way that looks like a central station.”
Garza added that “our operations centers will look much different because we’ll need screens that will show us where the solar is, where the batteries are, where the demand response is.”
In January, the Board of Trustees for CPS Energy voted to approve a generation planning portfolio that includes a blend of gas, solar, wind and energy storage.
Western Minnesota Municipal Power Agency Board Approves Solar Plus Storage Agreement
April 5, 2023
by Paul Ciampoli
APPA News Director
April 5, 2023
The Western Minnesota Municipal Power Agency’s Board of Directors has approved a build-own-transfer agreement with US Solar for the development and construction of the Marshall Solar Plus project in Marshall, Minnesota. The action followed a recommendation by the Missouri River Energy Services Board of Directors.
The solar project will have a rated capacity of 10 megawatts and is expected to produce about 22,470 megawatt-hours of electricity annually. Marshall Solar Plus will include over 26,000 solar panels on 57 acres of land owned by WMMPA and a substation owned by Marshall Municipal Utilities.
WMMPA will also install a 5 MW battery energy storage system. WMMPA intends to have controls on the battery system to allow energy to be stored or injected into the grid based on conditions at the time.
Site-grading work has already begun and will be completed prior to construction of the project. US Solar will obtain state and local permits for the project as it develops, designs and constructs the project. US Solar was selected in part because of their substantial track record in Minnesota, having developed and completed over 85 individual projects.
WMMPA expects to submit an application to MMU in the near future with the intent to finalize an interconnection agreement. WMMPA will provide financing for the project.
WMMPA is a joint-action agency made up of MRES members in Minnesota. It has provided financing for all of the major generation and transmission facilities with which MRES serves its 61-member municipal electric systems in Iowa, Minnesota, North Dakota and South Dakota.
MRES has a power supply agreement with WMMPA obligating MRES to pay for and WMMPA to supply the entire output of WMMPA-owned facilities. MRES, in turn, has long-term power sales agreements with its members to supply them with wholesale power, energy and transmission to serve their customers.
MMU is a community-owned, not-for-profit municipal utility serving the residents and businesses of Marshall, Minnesota. MMU provides electricity and water service to over 6,500 customers, along with a variety of energy services.
NYPA, Partners Complete Study Tied to Weather Forecasting for Solar Energy
April 3, 2023
by Paul Ciampoli
APPA News Director
April 3, 2023
The New York Power Authority and research partners have completed a multi-year study to help New York State’s growing solar industry deploy weather forecasting technology to better anticipate power generation and improve electric grid reliability, NYPA said on March 30.
The project addresses challenges raised by the uncertainty related to solar output by offering advanced forecasting methods and making a roadmap to help maintain grid reliability, optimize production of renewables, and reduce operating costs.
The technology informs and will help advance New York State’s goal of at least ten gigawatts of distributed solar by 2030 and move New York closer to its goal of 70% renewable generation by 2030 and a zero-emission electricity sector by 2040, NYPA said.
The study, the final $1.5 million phase of a $2.4 million project, lays out lessons learned for how forecasting can be deployed, improved and integrated into New York State to allow grid operations to remain effective as solar becomes more integral to day-to-day grid operations.
The research was funded by NYPA, the New York State Energy Research and Development Authority and the U.S. Department of Energy Solar Energy Technologies Office, and co-managed by EPRI, an independent, non-profit energy R&D institute.
Other partners included National Center for Atmospheric Research, Brookhaven National Lab and the State University of New York at Albany. Advisors included the New York Independent System Operator and Central Hudson, a New York distribution utility.
BNL, with assistance from the University of Albany, deployed high-definition digital cameras in sky-imager networks and advanced weather forecasting models focused on solar forecasting, combined with advanced data from the NYS Mesonet, a statewide network of weather stations, and other resources.
Advanced predictive methods, along with various hardware and software systems, were developed and evaluated against forecasts currently in use to show the benefits of more detailed models and data.
The study relied on an open source, gridded solar power forecasting system developed by scientists at NCAR. NYSolarCast makes predictions of global horizontal irradiance every 15 minutes for a three-kilometer grid covering all of New York, which are then used to predict solar power generation for both utility-scale photovoltaic plants and distributed (mostly rooftop) PV installations. NYSolarCast leverages machine learning techniques trained on NCAR-based weather prediction models, NYS Mesonet observations and historical data from PV plants across New York.
The study helped develop an underlying platform for solar and other utility-related weather forecasting, including building load management, based on improved solar irradiance forecasts. However, results indicated that the solar industry needs to acknowledge the need for growth and take steps to be more transparent by sharing data, having better maintenance and monitoring instrumentation, and filtering out erroneous data.
The research identified several possible ways the forecast models could be deployed and the feasibility of each: incorporation of research by a forecast provider, public deployment, or deployment by a private entity.
The new models could also form the basis of improved commercial tools. Several companies currently provide forecasting services for New York State, particularly for day ahead operations based on weather modeling.
Improved forecasts could be applied to individual solar plants and to predict distributed solar across a large region, not only for NYISO, but also for generation, transmission and distribution companies, private developers, and end user customers, NYPA said.
Read the report here.
Policy Intervention May Be Needed to Bolster Geothermal Energy’s Value: Report
March 29, 2023
by Peter Maloney
APPA News
March 29, 2023
Geothermal energy may need more policy support to successfully compete with solar and wind resources in western U.S. markets, according to a research paper by the Lawrence Berkeley National Laboratory.
Geothermal power has been “largely sidelined” during the ongoing energy transition of this century as many gigawatts of wind, and later solar, and most recently solar-plus-storage hybrid plants have been built instead, the Berkeley researchers said in the paper, Mind the gap: Comparing the net value of geothermal, wind, solar, and solar+storage in the Western United States.
“Relatively little new geothermal capacity” has been deployed in this century, the authors noted, adding that in the past decade, less than 0.5 gigawatts of new geothermal capacity has come online in the six western states that are home to geothermal power plants while more than 5 gigawatts of wind and 20 gigawatts of utility-scale solar have come online during the decade.
The Berkeley paper analyzed the development gap by gathering historical power purchase agreement prices for geothermal, wind, solar, and solar-plus-storage plants in the western United States and comparing them with wholesale market based energy and capacity prices to arrive at a net value for each resource, defined as the combined energy and capacity value of a resource minus its average power purchase agreement price.
The analysis showed that geothermal’s net value is lower than that of the other resources and has even been negative for much of the study period, which the authors said “largely explains the disparity in deployment rates seen over the last decade.”
The factors limiting geothermal deployment have not been physical potential or resource availability, but the economic viability, including higher resource risks, longer development timelines, and higher financing costs associated with geothermal development, the authors said.
In recognition that geothermal’s energy and capacity value is likely to remain “largely intact in future years,” while that of wind, solar, and solar-plus-storage will likely decline as their market share grows, the authors extended their assessment of relative net value through 2026, a date based on a California regulatory mandate.
In June 2021, California regulators mandated load-serving entities procure at least 1 gigawatt of new zero-emission, high-capacity-factor, non-weather-dependent resources – geothermal resources “in all but name,” the authors said – along with another gigawatt of long-duration, defined as at least eight hours energy storage by 2026.
California’s “mid-term reliability” procurement order injected new life into the geothermal industry, with several new power purchase agreements having been announced in its wake, the report’s authors said.
The extended analysis found “likely improvements in geothermal’s relative competitiveness based on net value—particularly relative to standalone solar and solar-plus-storage—though not enough to close the persistent gap with these other resources,” the report found.
“Such a scenario makes it hard to sustain a functioning, let alone improving, industry that will be ready to build new firm generating capacity when eventually called upon to do so,” the report’s authors said. “At risk are the many ancillary benefits and capabilities—besides firm energy and capacity—that geothermal can provide, including enhanced reliability and resilience, minimal land-use impacts (which is rapidly becoming an issue for solar in particular), the potential for valuable byproduct utilization” such as lithium extraction from geothermal brines.
“As such, additional interventions and policy support may be warranted to override the net value considerations examined in this paper and to ‘close the gap’ between geothermal and competing resources,” the authors concluded.