Green Energy

Tri-State Generation & Transmission unveiled its new Responsible Energy Plan this week, which will transition the company’s power portfolio further into renewables to reduce electric rates for its members.

Among the highlights of the new plan is the closing of Nucla Station in early 2020.

Currently, almost half of Tri-State’s power generation comes from coal, and about one-third comes from renewable sources.

“Our membership and board are unified in our pursuit of a cleaner, reliable and lower-cost resource portfolio,” said Rick Gordon, chairman of the cooperative’s board of directors, in a Wednesday news release. “We are making a strong and unequivocal commitment to transform Tri-State’s resource portfolio in a prudent and responsible manner.”

In May, Tri-State refused an offer by Denver’s Guzman Energy to buy and subsequently shut down the remaining coal-fired generators at Craig Station.

According to Guzman, the offer involved a “substantial cash infusion into Tri-State” worth about $500 million and would have closed and remediated the mine feeding Craig Station unless another customer is found for the coal.

Guzman recently finalized a deal with the Kit Carson Electric Co-op in northern New Mexico to help the co-op leave Tri-State in order to build its local renewable base. Once the co-op pays off an exit fee loan from Guzman sometime in 2022, KCEC officials say their member’s electricity costs will plummet to $47MWh, well below Tri-State’s 2017 wholesale average of $75MWh.

In May, Lee Boughey, Tri-State’s senior communications and public affairs manager, said Kit Carson’s power has been more expensive after making the deal with Guzman.

“According to documents filed with the New Mexico Public Regulatory Commission, it would appear that Kit Carson in 2018 paid about 40% more for power than Tri-State’s members,” Boughey said.

The details

Among the details of Tri-State’s newer, cleaner power portfolio will be a partnership with former Colorado Governor Bill Ritter and the Center for the New Energy Economy, a research initiative at Colorado State University seeking to help transition the country to a clean-energy economy.

“My team and I welcome the opportunity to work with Tri-State in facilitating this stakeholder process,” Ritter said. “At a time when the power sector is transitioning in a dynamic way, assisting Tri-State in developing a resource plan that reflects that transition is a true privilege.”

Tri-State Chief Executive Officer Duane Highley said the company understands that in order to achieve major carbon reductions, renewable energy planning requirements, grid reliability, and affordability through lower wholesale rates under their new plan, Tri-State will have to work directly with those most affected.

“As a cooperative, we understand that transformative change requires understanding and engagement with stakeholders,” Highley said. “Governor Ritter and the Center for the New Energy Economy will convene for Tri-State the best and brightest to surface ideas that will inform and advance our planning.”

Tri-State has been criticized for its cap on local renewable generation to 5% of the area’s electricity, so much of the new plan centers around allowing local communities more flexibility to develop and build their own renewable power sources like solar arrays and wind farms.

“Our members are developing recommendations to make their wholesale power contracts more flexible,” said Rick Gordon, chairman of the cooperative’s board of directors. “With partial requirements contracts, members could increase local renewables while also maintaining the value and security of being a member of Tri-State.”

Tri-State hinted at several other areas of the plan, including a probable expansion of hydroelectric capacity.

“Tri-State will address key issues, including developing Western regional electricity markets, assisting impacted energy-producing communities, continuing and developing new tax incentives, addressing permitting for transmission line and power plants, and reconsidering the value of hydropower to ensure the Responsible Energy Plan’s success,” the release stated.

Tri-State and other electric co-ops have all had to deal with a shifting regulatory climate in Denver as new rule-makings related to new state laws are soon to be decided.

“We recognize that Tri-State facilities, employees and communities will be affected by the changes ahead,” Highley said. “Regulatory rulemakings and significant study must be completed to understand how to comply with new laws while preserving reliability and affordability, but we know our system and operations will change.”

As for Nucla Station in southwest Colorado, Tri-State will provide about $500,000 over five years to help support the Nucla community after the plant shuts down in early 2020. The plant currently employs 35 people and was on track to be retired in 2022 as part of Colorado’s State Implementation Plan to improve air quality.

“For decades, Nucla Station has been part of the fabric of Nucla and Naturita, and we understand the retirement of the plant impacts our employees, their families and the community,” Highley said. “We will work to support the community through this difficult transition.”

Kenya has unveiled Africa’s largest wind power plant, a project aimed at reducing electricity costs and dependence on fossil fuels and moving the nation to meet an ambitious goal of 100 percent green energy next year.

The sprawling wind farm of 365 turbines on the shores of Lake Turkana in northern Kenya was designed to boost the nation’s electricity supply by 13 percent, giving more Kenyans access at a lower cost, President Uhuru Kenyatta said at its launch on Friday.

Kenya has made great strides in renewable energy in recent years and is considered one of the few African nations making progress toward clean power.

About 70 percent of the nation’s electricity comes from renewable sources such as hydropower and geothermal – more than three times the global average.

But one in four Kenyans – mostly in rural areas – does not have access to electricity. Those with power face high costs and frequent blackouts due to unreliable supply.

“Today, we again raised the bar for the continent as we unveil Africa’s single largest wind farm,” said Kenyatta.

“Kenya is without doubt on course to be a global leader in renewable energy.”

Kenyatta, who has announced plans to move the country to 100 percent green energy by 2020, said power from the $775m wind farm would help the government reach its goals of ensuring housing, healthcare, jobs and food security to all citizens.

“Today marks an important milestone in the country’s steady march towards achieving self-sufficiency in power production,” said Mugo Kibati, chairman of the Lake Turkana Wind Power, a private consortium that runs the plant.

Tradepoint Atlantic in Baltimore County is expected Tuesday morning to announce a new offshore wind energy partnership with Ørsted U.S. Offshore Wind.

Both companies described the partnership as “a first-in-Maryland” collaboration in a news advisory released Thursday, though they declined to discuss details. The partnership comes amid Tradepoint Atlantic’s development as an offshore wind energy hub. Likewise, Ørsted is in the middle of developing its Skipjack Wind Farm, which is a 120-megawatt wind farm under development 19.5 miles off Maryland’s coast.

Skipjack, one of nine Ørsted projects under development on the Eastern Seaboard, is expected to create 1,400 jobs across Maryland and generate enough clean, reliable energy to power 35,000 homes. Backers hope the project could make Maryland a leader in wind energy.

Maryland’s Public Service Commission authorized the Skipjack project and awarded offshore wind renewable energy credits in 2017. Ørsted plans to begin construction by 2021 for Skipjack to be operational by 2022.

The partnership also comes after Maryland’s General Assembly in May enacted the Clean Energy Jobs Act, which authorized an additional 1,200 megawatts of offshore wind energy capacity. Thomas Brostrøm, President and CEO of Ørsted North America, said in a statement that enactment of the Clean Energy Jobs Act will “dramatically” expand offshore wind energy capacity in Maryland to support an estimated 25,000 local jobs and $1.5 billion in worker and business income.

Skipjack is one of two offshore wind projects in development off the coast of Ocean City after the state Public Service Commission approved ratepayer subsidies to support wind farms in 2017. U.S. Wind, a subsidiary of Italian energy and construction company Toto Holdings SpA, plans to build 32 turbines at least 17 miles off the coast of Ocean City, a $1.5 billion project expected to start operating in 2022.

U.S. Wind also plans to build $100 million worth of industrial and manufacturing facilities associated with the project in Baltimore County, which could be at, or near, the Tradepoint Atlantic redevelopment of the former Sparrows Point steel mill.

The completed expansion of Tradepoint Atlantic is expected to generate 11,000 permanent jobs, $2.9 billion in annual economic impact and add a percentage point to Maryland’s gross domestic product, according to company projections.

General Electric is a big and sprawling company that’s undergone some dramatic reorganizations over the past few years, particularly in its renewable energy, energy storage and grid edge business lines.

But over the past four years, amid these large-scale corporate changes, a small unit of GE has built a growing business around developing distributed solar and solar-plus-storage projects.

On Tuesday, GE announced it’s taking this business to a new stage, via a partnership and majority investment by asset management firm and heavyweight renewables investor BlackRock Real Assets.

The new company, named Distributed Solar Development, will be 20 percent owned by GE Renewable Energy and 80 percent owned by a fund managed by BlackRock. The business, which has been incubated within GE since 2012, will focus on commercial, industrial and public-sector customers.

Erik Schiemann, CEO of Distributed Solar Development and a veteran of various GE business units, said in an interview that the investment would allow the company to expand its current project development work — and, for the first time, own the projects it’s developing.

“What we specialize in at Distributed Solar Development is the origination, development, design, execution, building, and asset management of distributed solar and storage projects,” he said. Most of its projects to date have been behind-the-meter.

“BlackRock’s investment further advances our growth in that platform, allows us to take on new markets, and allows us to double down in the markets we’re currently successful in.”

And while the business hasn’t owned any of the projects it’s developed to date, that’s set to change with BlackRock’s investment. “The cash infusion allows us to participate as an owner of the assets,” he said.

BlackRock’s push into distributed energy resources

BlackRock Real Assets has primarily invested in utility-scale renewables, with $5 billion invested in over 250 wind and solar projects with a total generation capacity of over 5.2 gigawatts. But it has made moves into distributed-scale solar projects this year, including April’s undisclosed investment into small-scale solar project owner CleanCapital.

David Giordano, global head of renewable power at BlackRock, said, “This investment will deepen our clients’ access to the tremendous growth potential in the U.S. solar industry.”

Distributed Solar Development has developed about 125 projects in 15 states, working with a variety of solar PV system providers and a set of regional electrical contractors, Schiemann said.

It has specialized in carport solar PV systems — “Our canopy solution, whether it’s in a carport or on top of a parking deck, is a big part of our volume, and something we’ve really differentiated” — and about two-thirds of its projects are behind-the-meter.

But it has also developed rooftop and greenfield projects, as well as front-of-meter, distribution-grid-connected systems, he said.

Battery storage systems now make up a small portion of its projects, but “a majority of our West Coast projects now have a high attach rate of storage,” he said, matching broader trends for solar power in those markets. “In most of the key states known for storage, almost all of our proposals and solutions incorporate them now.”

The U.S. commercial solar market has contracted in 2018 and 2019, according to Wood Mackenzie Power & Renewables, largely due to increasing market saturation and shifts to less favorable rate structures and incentive programs in key states such as California, Minnesota, Massachusetts, New York and New Jersey.

But WoodMac data also shows that developer-owners have captured an increasing share of this more challenging market, compared to those that limited their involvement to acquiring projects, while third-party financed projects have grown from about a third of projects in 2015 to more than half of all projects as of last year.

GE’s bumpy road through the solar landscape

Schiemann first started developing projects while working for GE’s PrimeStar thin-film solar PV manufacturing business, during the period when the company decided to abandon the field by selling it to First Solar.

“I started pushing us in startup fashion toward distributed solar and distributed solutions,” and the company started landing commercial contracts in 2012, he said. This project development work continued during his time at GE’s Current and then at GE Energy Ventures.

GE still makes solar inverters, switchgear and other solar-related equipment, and is heavily involved in financing and investing in large-scale wind power projects.

GE is among the world’s leading suppliers of onshore wind turbines and has big ambitions for the offshore market. Meanwhile, its approach to the solar, energy storage and distributed energy markets has shifted dramatically over the past few years.

In 2015, GE created its Current business with $1 billion in investment, meant to bundle smart lighting, solar, EV charging, energy storage and energy management services for commercial and industrial customers. But in late 2016, it underwent a major restructuring that essentially stripped Current down to smart lighting and building energy management, and in 2018 it sold that business to private equity firm American Industrial Partners.

In 2018, GE’s energy storage business was shifted to GE Power, while the company underwent a broader restructuring that led to the formation of GE Renewable Energy as a standalone business unit, to house its renewable energy and grid assets, including solar, storage, wind and hydropower.

Solar remains a tiny fraction of GE’s overall renewables business; onshore wind accounted for nearly 90 percent of the Paris-based Renewable Energy segment’s revenues last year, with hydro chipping in most of the rest.

The Hawaiian Electric Companies announced Wednesday its plans to put out requests for proposals for its largest and most ambitious push for renewable energy ever.

Hawaiian Electric is seeking new, clean energy projects to provide reliable service over the next five years following the expected closure of its largest fossil fuel plant on Oahu in 2022, and the retirement of its oldest, oil-fired plant on Maui in 2024.

“We’ve attempted to develop a competitive bidding plan that addresses concerns of all stakeholders while maintaining a fair process to reach our aggressive clean energy goals,” said Jim Alberts, Hawaiian Electric senior vice president for business development and strategic planning, in a news release. “Among our guiding principles are that transparency, predictability and streamlining lowers costs to customers and that community engagement is essential to success.”

The second phase of renewable energy procurement will be open to bids from developers locally and globally, upon approval by the Public Utilities Commission, which is anticipated some time this summer. Pending PUC approval, the first projects would come online in 2022.

Estimated targets of new renewable generation of various technologies are the equivalent of 594 megawatts of solar for Oahu; 135 MW for Maui and 32 to 203 MW for Hawaii island, depending on whether other renewable energy projects become available.

Proposals for Molokai and Lanai will be sought later this summer.

The approximately 900 megawatts of new renewables sought are expected to generate about two million megawatt-hours annually, Hawaiian Electric said, and would be among the largest single procurement efforts ever undertaken by a U.S. utility.

Hawaiian Electric in this phase will seek bids for standalone storage and grid services that help system operators manage reliability of modern electric grids, in addition to variable renewable generation, with or without energy storage.

On Oahu, the 180-MW, coal-fired AES Hawaii plant at Campbell Industrial Park is due to close by September 2022. It is the largest single generator on Oahu, meeting 16% of peak demand. On Maui, the 38-MW Kahului Power Plant is set to retire by the end of 2024.

For Hawaii island, Hawaiian Electric is seeking additional renewable generation, even with the assumption that the Puna Geothermal Venture plant, which was knocked out by last year’s Kilauea eruption, returns to service, and the challenged, Hu Honua biomass plant, now Honua Ola Bioenergy, comes online.

New York State, which last month passed an ambitious law to reduce the emissions that cause climate change, said Thursday that it had reached an agreement for two large offshore wind projects.

The wind projects, to be built off the coast of Long Island, represent a big step forward for a technology that has been slow to take off in the United States because of local opposition and high costs. Experts have said offshore turbines, which are used extensively in Northern Europe, hold great promise because the wind tends to be stronger and more consistent offshore than on land.

Wind farms are a major energy source in the United States, providing about 7 percent of all electricity last year, up from about 2 percent in 2010. But almost all of those turbines are on land. By comparison, Britain expects to get 10 percent of its electricity from offshore wind next year, up from less than 1 percent in 2010.

The New York projects will start operation within the next five years and have the capacity to produce 1,700 megawatts of electricity, accounting for about 20 percent of Gov. Andrew Cuomo’s overall goal for offshore wind.

The wind projects, one of which will be 14 miles south of Jones Beach and the other 30 miles north of Montauk, are meant to be an important part of the state’s plan to get 70 percent of its electricity from renewable sources by 2030. The projects will be built by a division of Equinor, the Norwegian oil and gas company, and a joint venture between Orsted, a Danish company, and Eversource Energy, an American firm.

“With this agreement, New York will lead the way in developing the largest source of offshore wind power in the nation,” Mr. Cuomo said. “Today we are true to the New York legacy — to lead the way forward, to govern with vision and intelligence, to set a new standard and to match our words with action.”

Mr. Cuomo also signed a bill on Thursday that the Legislature passed last month requiring New York to eliminate net greenhouse gas emissions by 2050.

Developers of offshore wind farms have long struggled to win the support of Americans. Some projects foundered because electricity from offshore turbines generally costs a lot more than power from turbines on land. Politicians and coastal-property owners have also successfully opposed projects that they claimed would obstruct the picturesque views from East Coast shorelines.

Senator Edward M. Kennedy, the liberal Massachusetts Democrat, who died in 2009, famously opposed a proposed offshore wind installation near Cape Cod. Other elected officials, including President Trump, have also objected to wind farms. (Mr. Trump, who once called climate change a “hoax,” unsuccessfully opposed an offshore wind project near one of his golf courses in Scotland.)

Interest in offshore wind has been slowly growing in recent years as fears of climate change have mounted and technological advancements have reduced the cost of power from offshore turbines. Developers have also figured out ways to put turbines in deeper waters so that they are not visible from shore.

Still, there are just five commercial wind turbines in American waters, near Block Island, R.I. Several other projects are in development, including a small one under construction in Virginia by Dominion Energy. New Jersey last month selected Orsted to build a 1,100-megawatt wind farm off the coast of Atlantic City.

But some other projects, like Vineyard Wind’s plans for turbines near Martha’s Vineyard, have been delayed by federal and local officials.

The New York wind projects must still clear permitting and environmental hurdles. And the cost of the project will not be disclosed until after the agreements have been signed.

The state has set ambitious targets for renewable energy, but it received less than 5 percent of its electricity from wind and solar last year, according to the Energy Information Administration. New York faces numerous hurdles in increasing the use of renewable energy. In addition to finding space for more wind turbines and solar farms, it has to build more transmission lines — projects that invariably draw opposition from residents and others.

New York’s “enormous potential for clean energy production lies untapped, just off New York’s shores,” said Andrew Gohn, director of Eastern region state affairs at the American Wind Energy Association.

At the same time, the Trump administration has been seeking to roll back environmental regulations and make it harder for states to reduce emissions.

Other states, including California, are also looking closely at offshore wind. Lawmakers in California passed legislation last year requiring that 100 percent of the state’s electricity come from carbon-free sources by 2045.

But the deep waters off the West Coast will require wind turbines that can float, rather than be attached to the sea floor. The waters off the East Coast are shallower, making it easier and cheaper to install turbines there.

There are only slightly more than a dozen floating wind turbines around the world, mostly in Europe and Japan.

Some experts believe floating systems on the West Coast could eventually become a major energy source because the winds are even stronger and more consistent in the Pacific Ocean than in the Atlantic Ocean.

“These California projects could be the jumping-off point for what is far and away the largest offshore potential, and that is the Pacific Rim,” said Dan Reicher, a founding director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University. “It greatly dwarfs the East Coast. The floating systems are going to be really what we need to take advantage of the major wind resource globally.”