Berkley Lab Releases Utility-Scale Solar Report

Earlier this week, the Lawrence Berkeley National Lab (LBNL) released Utility-Scale Solar 2016, its fifth annual report of the utility-scale (i.e., ground mounted and greater than 5 MWAC) solar project fleet in the United States.  The report summarizes installation and technology-related trends, and provides data on installed project prices, operation and maintenance costs, project performance, and power purchase agreement (PPA) prices.  Some of the report’s key findings include:

  • More than half of the states now house at least one utility-scale solar installation;
  • Utility-scale solar and distributed solar installations, combined, added more capacity to the grid in 2016 than any other resource, including natural gas and wind;
  • In 2016, 146 photovoltaic projects totaling 7,385 MWAC achieved commercial operation; and
  • Levelized PPA prices have continued to decline.

A presentation, data files, and data visualizations associated with the report can be found here.

LBNL plans to hold a webinar about the report on October 11th at 10 am PST.  Registration for the webinar is available here.

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Tenth Circuit Rejects “Perfect Substitution Assumption” in NEPA Analysis of Coal Leases

On Friday, the Tenth Circuit issued a decision in WildEarth Guardians v. Bureau of Land Management, Docket No. 15-8109, rejecting the Bureau of Land Management’s (BLM) decision to approve four coal leases in Wyoming’s Powder River Basin (PRB) Region on the basis that the BLM’s Environmental Impact Statements, and the economic analysis related to future coal use contained therein, were flawed.  BLM’s Environmental Impact Statements were based on the “Perfect Substitution Assumption”—that is, the assumption that if the federal government declined to approve the lease, the same amount of coal would be mined elsewhere through private development.  The Tenth Circuit found that BLM’s analysis was arbitrary and capricious because: 1) BLM could not point to any information in the administrative record indicating that a national coal deficit created by the loss of the leases at issue—nearly 20% of the country’s annual domestic coal production—could be easily filled from elsewhere or at a comparable price, and 2) because it ignored basic supply and demand principles.

The case involves four coal leases that will expand two existing surface mines in the PRB Region.  These mines already account for 19.7% of the United States’ annual domestic coal production, and contain approximately two billion tons of recoverable coal.  Under the new leases, coal will be extracted at a rate of about 230 million tons per year.

In order to authorize new leases for the four coal tracts, BLM was required under NEPA to draft an Environmental Impact Statement for each lease that compared the environmental impacts of the proposed action against environmental impacts of any alternatives—including not taking any action at all. 42 U.S.C. § 4332(2)(C).  In its decision, the court explained that while NEPA does not prevent an agency from taking major Federal action that is found to have adverse environmental impacts, it requires agencies to rigorously explore and objectively evaluate all possible alternatives to inform agency deliberation and facilitate public involvement in the decision.

In each Environmental Impact Statement, BLM compared the environmental impacts of issuing the lease to a no-action alternative in which none of the licenses were issued.  Utilizing the “Perfect Substitution Assumption,” BLM concluded that there would be no appreciable difference between the United States’ total carbon dioxide emissions should it decide to issue the leases versus the no action alternative in which none of the licenses were issued.  BLM reasoned that approving the leases would have no significant impact on either national carbon dioxide emissions or domestic coal consumption because even if it were to reject the leases, “[n]umerous mines located outside of the PRB extract and produce coal in the United States [and] many mines outside the PRB have the capacity to replace the coal production generated” at the PRB mines.

The plaintiff, WildEarth Guardians (a non-profit environmental group) sued BLM alleging that its “Perfect Substitution Assumption” was arbitrary and capricious.  WildEarth presented its own economic analysis, alleging that if the tracts were not leased the price of coal would increase, as it would be difficult for domestic or internal coal mines to replace 230 million tons of coal per year at a comparable price.  This would result in other sources of electricity with lower carbon dioxide emissions becoming more competitive with coal, thereby significantly impacting national carbon dioxide emissions.  The Tenth Circuit agreed, remanding the case and directing the district court to enter an order requiring BLM to revise its NEPA analysis.  The appeals court declined to vacate the leases themselves, leaving the question of relief up to the district court.

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DOE Releases “Voices of Experience” Paper on Integrating Intermittent Resources

“Start preparing now,” the Department of Energy (DOE) says in a recently released report intended to provide practical guidance to utilities seeking to integrate intermittent resources onto their systems.  The report, entitled Voices of Experience | Integrating Intermittent Resources: What Utilities are Learning, was prepared for DOE by the National Renewable Energy Laboratory, and lays out the challenges, solutions, and lessons learned from integrating variable generation based on the experiences of utilities on the leading edge of integrating intermittent resources.  Drawing on information collected from a 90-utility working group including San Diego Gas and Electric, Pepco, Vermont Electric Power Company, and the Salt River Project, the report offers utilities currently facing low levels of intermittent resource penetration the following advice:

Keep up with the Joneses.  The report warns utilities that penetration growth rates, particularly those associated with residential solar installations, are likely to follow an exponential growth pattern, with neighbor influence and peer pressure driving growth.  According to the report, one neighbor with a solar array increases other neighborhood residents’ likelihood to “go solar” by almost threefold; that figure jumps to nearly sixfold if there is a second solar household in the neighborhood.  As a result of this effect, the report cautions that “even if [a utility’s] growth rate is slow and steady now, [the utility] could quickly become inundated with interconnection requests.”

Data, data, data.  The report also urges utilities to “[c]apture [their] load profiles.”  Because customer-sited rooftop solar can impact load shapes significantly, the report advises utilities of the need to collect and manage newer, more granular data to assist in modeling their systems and studying customer energy usage and hosting capacity.

Have the right tools.  Given that “[g]rids are now dynamic and require integrated models that enable operators to look beyond one section at a time,” the report advises utilities of the need to develop system models that can rise to the challenge.  Those models should be capable of reflecting equipment characteristics such as phasing, line impedance, generator characteristics, the location of distributed resources, and inverter information, and should be incorporated into the utility’s toolset early on.

Other key topics covered in the report include operational impacts, the interconnection process, planning and forecasting, and customer engagement.

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California Legislature Passes Bill Requiring Utilities to Consider Using Distributed Energy Resources and Storage to Meet Peak Demand

Last week, the California Senate and Assembly passed a bill that would require utilities and the California Public Utilities Commission to consider the use of distributed energy resources, energy storage, and grid operational efficiencies to meet peak energy and reliability needs while reducing the need for new electricity generation and transmission.  The bill is now before California Governor Jerry Brown for approval.

A similar proposal to encourage clean energy specifically during peak load hours was recommended last year by the Arizona Residential Utility Consumer Office (RUCO).  Often, the output of variable renewable resources (such as solar) does not correspond with the periods of peak electricity demand.  As the RUCO report notes, traditional renewable portfolio standards (RPSs) do not look at what times of day renewable energy is consumed.  As a result, RPSs can result in an oversupply of renewable generation during the middle of the day, while conventional resources are needed to provide power during the hours of peak demand.  To address this issue, RUCO recommended “Clean Peak Standards” that would require a minimum percentage of energy delivered to customers during peak load hours to come from renewable sources.

The bill passed in California aims to minimize the need for additional conventional generation to meet peak demand.  It would require utilities’ integrated resource plans to specifically consider “the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency” in the hours of peak electricity demand.  According to the September 6, 2017 Senate Floor Analyses, the bill is designed to help California shift demand to times of the day when clean energy is more abundant, reducing the need to build more transmission and natural-gas-fired plants.

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Report Released on Economic and Jobs Impact of the U.S. Electric Industry

The American Public Power Association (APPA), National Rural Electric Cooperative (NRECA), and the Edison Electric Institute (EEI) have jointly commissioned a report, published last month, entitled Powering America: The Economic and Workforce Contributions in the U.S. Electric Power Industry.

The report reviews the impacts of the nation’s electric industry on jobs and the economy, highlights of which include:

  • The electric power industry supports close to 2.7 million direct jobs (including utility employees, and contractor, supply chain, and investment jobs), and more than 7 million total jobs (direct and induced).
  • Capital investment by the industry in 2016 exceeded $135 billion.
  • In 2014, the industry contributed $274 billion directly to the U.S. Gross Domestic Product.
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