ORIGINAL REPORTING: WHAT THE SOLAR MARKET LOOKS LIKE NOW, AND WHERE IT'S HEADED

What the solar market looks like now, and where it's headed; Solar saw record growth in 2014, but a tougher business environment is coming

Herman K. Trabish, March 26, 2015 (Utility Dive)

Solar is firing on all cylinders and running all-out — but a new report shows there are pitfalls as well as opportunities ahead.

The U.S. installed more than 6.2 GW of photovoltaic (PV) solar in 2014, up 30% on the year before, making it the best year ever for PV. The expansion was fueled by record growth for both residential sector and utility-scale solar, but there's reason to believe that the explosive growth for both sectors could soon sputter.

“We are now coming off three years in a row, 2012, 2013, and 2014, where the residential market grew 50% each year,” said GTM Research Senior Vice President Shayle Kann, co-author of the recently-released report, "U.S. Solar Market Insight 2014 Year in Review," which his researchers produced in partnership with the Solar Energy Industries Association.

“You rarely see that kind of growth and we are forecasting a fourth year of it in 2015 and probably a fifth year in 2016," Kann told Utility Dive.

Solar made up 32% of the year's U.S new generating capacity, more than any other generation source except natural gas. All three solar market sectors — utility, non-residential, and residential — had over 1 GW of new capacity. Over a third of all currently-operating solar went into service during 2014.

In the residential solar boom of last year, California was the key. It now constitutes over half of all U.S. residential solar.

More importantly, Kann noted, “The California Solar Initiative expired about a year ago but the California market continues to grow by leaps and bounds with no state-level incentives besides net metering and rate structures.”

Most of the other major state residential solar markets still have state-level incentives in place.

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Utility scale solar and the 'cliff'

Utility-scale solar overcame a lull in 2014 that had plagued it over the last few years, Kann said. Utility procurements previously driven by state renewables mandates had slowed as utilities reached their required capacities. But utility scale solar’s price of $1.55 per Watt is now low enough for developers to win power purchase agreements from utilities in the absence of a regulatory mandate.

“We are tracking almost 5 GWs of PPAs that have been signed for utility scale solar outside of RPS standards,” Kann said.

Developers are winning PPAs through competitive bidding for technology-agnostic utility proposals, meeting avoided-cost PURPA requirements, and by directly selling solar-generated electricity to large volume retail offtakers like Apple and Google.

Utility scale solar could, however, be racing toward a cliff, according to the report. The 30% federal solar investment tax credit drops to 10% for business installations and to zero for private installations on January 1, 2017.

“Virtually all the utility scale solar in the pipeline is planned for completion in 2015 or 2016,” Kann said. “There will be a huge boom this year and next, and then a cliff in 2017.”

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The rate structure cliff ahead of residential solar

Residential solar will feel the consequences of the ITC sunset as well, but an equally sharp drop off could hit the sector before the beginning of 2017.

“Rate structure revisions threaten growth,” the report notes. ”There are more than 20 ongoing proceedings that could impact residential solar’s value proposition through either changes to net energy metering or electricity rate structures.”

Some of the proceedings will be settled this year, it predicts, though “new debates will undoubtedly emerge.” So far this year, solar has been hurt by a legislative action in West Virginia and by rate cases brought by Arizona utilities Salt River Project and Tucson Electric Power. An Indiana bill to change net metering laws was turned back. An important renewables mandate decision is now working through the Illinois legislature, and the North Carolina General Assembly has just taken up a solar leasing law.

“The most important ones are those that will influence a big solar market,” Kann said. “Because California is about half the country’s residential solar, the results of its AB 327 process and the NEM 2.0 proceeding will make or break the U.S. residential market.”

Arizona and Hawaii are other state proceedings to watch, Kann said. New York’s REV process is important both because of the innovations it would initiate and because the state is now one of the biggest distributed solar markets.

Massachusetts is also important to watch because of the size of its market. Whether its solar advocates can revive the landmark 2014 compromise that gave the minimum bill concept so much notoriety is not yet clear, Kann said. But the minimum bill idea continues to be important.

“Solar advocates are pushing a minimum bill provision as a compromise solution in a number of state proceedings,” Kann said. It is preferable to a demand charge or a fixed charge “because it has a smaller impact on the economics of solar but allows utilities to have some visibility into the revenue they will get from solar customers.”

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The coming changes in non-residential and residential solar

Kann said one of the report’s surprises was that it revealed the non-residential, commercial-industrial market didn’t rebound late in the year.

“We had forecast it would have single digit market growth, but it contracted,” he said. After 3% growth in 2013, it fell off 6% in 2014.

Following growth driven by federal stimulus act funding support for government and school installations between 2009 and 2012, the sector has been flat. Also, Kann said, the SREC-driven New Jersey boom “busted” and impacted much of the commercial-industrial-scale solar market.

Perhaps most importantly, “nobody has yet cracked the code on how to scale commercial solar,” Kann said. “It is a big potential market opportunity but it is also really hard to get the details done, to finance it, to get things uniform across different installations, and to keep transaction costs down.”

Community solar could be a breakthrough for the sector and the GTM Research team is “bullish” on it, Kann said. It is still “geographically limited” because there are only a few states with meaningful programs. But a lot of others are considering it.

One of the strengths of community solar, Kann said, is that it offers utilities a way to get involved with distributed generation.

“There are a number of program models. Some have a utility as an active participant and some don’t," he said. "But utilities see in it the opportunity to own solar and rate base the asset. And even if they don’t, they can maintain the customer relationship, which they care about, and they can sometimes get lines and wires fees.”

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Growth in 2014 was driven primarily by utility-scale solar PV but the fastest 2015 growth will come in the residential market, according to the report. And the residential market is about to shift.

Third party ownership of residential solar grew to about three-fourths of the sector in 2014. But Kann believes it has peaked. With the many new loan opportunities now offered by solar companies, he said, the 2015 market will start to turn back toward direct ownership. That might have happened last year, but many of the important loan products — beginning with SolarCity's loan option — were not available until the fourth quarter.

The hope for concentrating solar power

In the next two years, utility-scale solar will be led by PV rather than concentrating solar power (CSP).

CSP can provide more and cheaper storage than PV and can therefore provide either smoother power or 24-hour power, Kann acknowledged. But utilities have so far failed to value those attributes and, instead, awarded contracts to lower-cost PV projects.

When there are higher penetrations of PV and other intermittent generation, utilities could start placing more of a premium on storage or smooth power. Then CSP could make a comeback. Or, conceivably, Kann said, utilities could stop signing fixed-price PPAs for utility scale solar and instead choose variable-price or time-of-use PPAs in which CSP’s storage would be more competitive.

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QUICK NEWS, September 30: UTILITIES GO SOLAR; WIND COMES TO THE SOUTH; BUILDING EFFICIENCY ADVANCES

UTILITIES GO SOLAR Big utilities enter market for small rooftop solar

Ray Henry and Susan Montoya, September 28, 2015 (Philadelphia Inquirer)

“Traditional power companies are getting into small-scale solar energy and competing for space on your rooftop…The emerging competition comes as utilities and smaller solar installers fight over the future of the U.S. energy system. While the market for residential solar power remains a financial drop in the bucket for a big utility, the installation of solar panels overall grew by more than 50 percent in 2014 and is on track for another record-breaking year at time when the traditional utility business is pretty flat…These moves may have a range of effects for customers. The utilities experimenting in Arizona, Georgia, Michigan and Texas could make solar more affordable for average consumers by energizing competition and driving down prices…Smaller solar companies fear the incumbents will use their power to drive competitors from the market…These experimental programs are one part of a bigger, years long battle between the solar industry and utilities…” click here for more

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WIND COMES TO THE SOUTH Recognizing North Carolina’s wind-energy potential

Harvey Seim, September 28, 2015 (The News & Observer)

“Earlier this summer, the online retailer Amazon announced its plans for a large-scale wind energy facility in northeastern North Carolina. The $400 million project will include 104 wind turbines and generate the equivalent of electricity needed to power 61,000 homes annually. The project expects to be operational in late 2016 and represents the first of its kind in the state and the South…For land-based wind projects, the future is clearly now. The project also illustrates the significant wind resources available in North Carolina – both on land and offshore. While an offshore wind farm may not be in the state’s immediate future, recent policy developments and ongoing research confirming the significant potential of offshore wind resources continue the momentum for offshore sites down the road…” click here for more

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BUILDING EFFICIENCY ADVANCES Leading Global Real Estate Companies Mark Sixth Year of Improved Sustainability; ULI Greenprint Center Releases Building Performance Report; Shows Reductions in Energy and Carbon Emissions in Properties Worldwide

September 29, 2015 (Urban Land Institute)

“Over the past year, global real estate firms have reduced energy consumption in buildings by the equivalent of almost 280,000 barrels of oil and cut carbon emissions by the equivalent of removing 25,000 cars from the road, according to…Greenprint Performance Report: Volume 6…[It] shows that some of the world’s leading real estate firms are on track to reach Greenprint’s overall goal of reducing building emissions and energy consumption by 50 percent by 2030…Between 2013-2014, ULI Greenprint members have successfully reduced overall energy use and emissions: 3.3 percent reduction in energy consumption…2.7 percent reduction in carbon emissions…2.0 percent reduction in electricity…1.9 percent reduction in water use…These reductions are equivalent to: 277,856 barrels of oil not consumed…25,153 cars taken off the road…10,901 homes not consuming energy…3,063,538 trees planted 58,211 metric tons of coal not burned…” click here for more

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TODAY’S STUDY: WHAT SOLAR'S TAX CREDIT MEANS AND WHAT COULD HAPPEN IF CONGRESS PULLS IT

How extending the investment tax credit would affect US solar build

15 September 2015 (Bloomberg New Energy Finance/Applied Research – Solar Energy Industries Association)

Under current policy, the US can expect 73GW of solar PV online by year-end 2022. A pending reduction of the 30% investment tax credit (ITC) in 2017 will reduce build rates from an average of 8GW/year from 2014-16 to 6GW/year from 2017-22. A five-year extension of the 30% ITC would add over 22GW to the US solar PV install base, boosting average build rates to 10GW/year from 2017-22.

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National Solar Build Forecast

All eyes in the US solar industry are on 2017. The federal investment tax credit (ITC) – which provides a tax credit equal to 30% of the total system value – decreases for any project placed in service after 31 December 2016. The personal investment tax credit (Section 25D) fully expires, while the business energy investment tax credit (Section 48) falls to 10%. To quantify the impact of the ITC change, Bloomberg New Energy Finance forecasted US solar build under two scenarios (Figure 1 and Figure 2):

• Current policy: The personal and business tax credits step down to 0% and 10%, respectively, for projects commissioned in 2017 onward.

• ITC extension: The ITC is extended 5-years, pushing the year-end 2016 deadline to 2021. In addition, a ‘commence construction’ clause is added to the business tax credit, which allows projects that begin construction prior to 1 January 2022 to receive the full 30% credit (instead of only those that are fully commissioned). Our forecast assumes that the extension is confirmed in mid- 2016, giving projects time to prepare for the new policy.

Under existing policy, we expect the US to add 54GW of new capacity between 2015 and 2022 (6.8GW/year) – a nearly three-fold increase over the 19GW built through 2014. But the incremental capacity gained with an ITC extension exceeds 22GW: the US builds over 76GW from 2015 to 2022 in the extension case.

The timing of the extension is important. We view summer 2016 as the latest deadline needed for an extension to significantly affect developers’ timelines for utility-scale projects. The uncertainty alone regarding the policy could force 2016 to look closer to the existing policy case in Figure 1 and Figure 2, even if an extension did eventually pass by end-of-year; few large project owners would risk losing the 30% credit.

Total build for top states are shown in Figure 2. State-level results for each customer segment – utility, residential, and commercial and industrial (C&I) – are highlighted in Figures 3-5 below

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Utility-scale

The impact of the ITC extension is greatest for utility-scale among the three segments. With current policy, we expect total build to hit nearly 26GW from 2015-22; an extension boosts build to over 36GW, for an increase of over 10GW (Figure 3). The states that gain the most, on an absolute basis, are California (4.3GW), Nevada (1.1GW) and Texas (0.7GW).

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Residential

We model 15.7GW of new residential capacity from 2015-22 under current policy – a 4x growth over the 3.8GW operating in 2014. Annual build rates average 2GW/year after the 2017 ITC stepdown, and the national market takes 3 years to bounce back to 2016 install levels.

An extension increases total build to 22.6GW, and annual build steadily climbs each year through 2021, averaging 3.2GW/year after 2017. Those states that gain the most with an extension are California (3.2GW), New York (0.4GW) and Maryland (0.4GW).

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Ownership assumptions for residential economic build

Our residential forecast is based on a consumer adoption model, and we scale the total addressable market based on the fundamental economics of building a new system, measured by the payback period (how many years are required for a consumer to break even on the upfront equipment costs). In this analysis, we calculated the payback period for host-owned systems – meaning that, no project receives a tax credit after 2016 in the policy as usual scenario.

This choice is conservative. It ensures that forecasted build reflected fundamental changes in system costs without the ITC, rather than an assumption for the future distribution between hostand third-party owned systems. In addition, the calibration of our model against historical adoption by state inherently captures the growth where third-party ownership is used. The economics scale the market, but the adoption curves determine the rate of build.

But in reality, under current policy, we expect that third-party installers will have an advantage because they will be able to monetize the remaining 10% business investment credit after 2016. As a result, a greater uptake of third-party ownership in the absence of the extension represents an upside risk to our forecast.

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Commercial and industrial

Under current policy, we forecast 12.9GW of new C&I capacity from 2015-22, just under a 3x increase over 4.6GW of operating capacity in 2014 (Figure 5). With an extension, build grows to 17.8GW over the same time period, with annual build rates averaging 2.2GW/year.

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A note on C&I economics

The economics for commercial and industrial systems (C&I) are subject to greater variation than to residential systems. Electricity tariffs are more complicated – often featuring the addition of demand, fixed, and time-of-use charges – and the variable portion, which solar generation can directly offset, is usually lower. (Our rate assumptions are based on a bottom-up analysis of C&I tariffs by utility. While far from perfect – we do not know how many customers ultimately lie within each tariff – the analysis does provide a better estimate of actual value to C&I customers over utilizing EIA average rates.)

But, C&I projects have two cost advantages host-owned residential systems do not: they can monetize the 10% business tax credit post-2016 and take advantage of other tax benefits that hostowned residential systems are not (such as accelerated depreciation).

The states with the greatest C&I build in Figure 5 are those that have strong historical patterns of adoption and feature short payback periods, driven either by low system costs or higher-than average variable rates.

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QUICK NEWS, September 29: THE ONLY CLIMATE CHANGE DENYING PARTY IN THE WORLD; BARRIERS TO APPLE’S EV; HUGE BOOM DUE IN NEW ENERGY STORAGE

THE ONLY CLIMATE CHANGE DENYING PARTY IN THE WORLD Why Are Republicans the Only Climate-Science-Denying Party in the World?

Jonathan Chait, September 27, 2015 (New York Magazine)

“…Of all the major conservative parties in the democratic world, the Republican Party stands alone in its denial of the legitimacy of climate science. Indeed, the Republican Party stands alone in its conviction that no national or international response to climate change is needed. To the extent that the party is divided on the issue, the gap separates candidates who openly dismiss climate science as a hoax, and those who, shying away from the political risks of blatant ignorance, instead couch their stance in the alleged impossibility of international action…[Sondre Båtstrand’s new paper] studies the climate-change positions of electoral manifestos for the conservative parties in nine democracies, and finds the GOP truly stands apart…[T]he influence of the fossil-fuel industry alone cannot explain the right’s brick-wall opposition…Nor can a fealty to free-market theory…It is the nature of long-standing arrangements to dull our sense of the peculiar, to make the bizarre seem ordinary. From a global standpoint, the entire Republican Party has lost its collective mind.” click here for more

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BARRIERS TO APPLE’S EV 3 Hurdles for Apple Inc's Electric Car; Apple may be working on its own car, but it won't come without some major challenges.

Chris Neiger, September 28, 2015 (The Motley Fool)

“Rumors of Apple's alleged electric car are on the rise…[A launch date of 2019 was recently reported]. But the road to an Apple Car release may be a long and arduous one…While Apple has enjoyed high margins on its devices, the automotive industry is not so lucrative. Even luxury automaker Porsche's operating profit percentages fall far below Apple's. And then there's the long product cycle development of autos, the strict government safety regulations, and the punishingly slow battery technology improvements…Of course, Apple and its $203 billion in cash could overcome these hurdles, but at this point, it's anything but proven that the iPhone maker can make it in the automotive business…” click here for more

3 Hurdles for Apple's Electric Car from The Motley Fool

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HUGE BOOM DUE IN NEW ENERGY STORAGE Energy Storage for Renewables Integration; Market and Technology Issues, Business Cases, Key Industry Players, and Market Forecasts for Energy Storage Systems for Renewable Energy Integration

3Q 2015 (Navigant Research)

“The fastest-growing renewable energy markets continue to be solar PV and wind…[Increased penetrations of variable] generation present challenges to the electrical grid, which was designed using a centralized model with predictable power flows…[They] can cause distortions in the energy market and instability on the grid…[They also present] opportunities for energy storage systems (ESSs) situated either at the distribution grid or behind the meter…While system costs are still one of the biggest barriers to the industry’s growth, declining prices and a flood of new systems integrators are opening up new use cases and geographic markets. According to Navigant Research, global new installed energy storage systems for renewable energy integration (ESRI) power capacity is expected to grow from 196.2 MW in 2015 to 12.7 GW in 2025…” click here for more

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TODAY’S STUDY: THE RISE OF ENERGY STORAGE

North America Renewable Energy Brief; Energy Storage Charges Up – Summer 2015

September 2015 (Cohn & Reznick Capital Markets Securities)

Primed For Growth

Nearly every market report out there points to the same conclusion: Energy storage is poised for significant growth in the US. According to GTM Research and the Energy Storage Association in their US Energy Storage Monitor (released in March 2015), 220 MW of storage capacity will be installed in the US this year. This is three times the 62 MW installed in 2014. By 2019, the report forecasts that more than 860 MW will be brought online annually, and that the market will be worth around $1.5 billion.

Every industry executive interviewed for North America Renewable Energy Brief agrees that storage is ready to go mainstream. “The market is ready for storage”, confirms David Fennema, Managing Director, M&A/Environment, CohnReznick Capital Markets Securities. “This industry has evolved very quickly from a venturetype driven business to a commercially and industrially driven sector. This year will witness a huge breakout for storage. It is no longer a matter of if, but when.”

From financing and technology limitations to incentives and regulatory frameworks, this report highlights the main challenges the storage market must overcome to realize its potential. By examining some of the markets where it has already made inroads, along with interviews with leading experts in the storage industry, this report also looks at how these challenges can be addressed.

Conventional wisdom suggests that the storage industry is not homogenous. There are a wide variety of available storage technologies and business models. The size of storage infrastructure varies significantly between residential installations and commercial gridscale infrastructure. The applications of storage are diverse – from frequency regulation to backup power. The regulatory frameworks for storage differ between states and the motivations behind building storage capacity are very different throughout the country.

As a result, the most pressing questions facing the storage industry today, such as how will projects be financed, can only be answered with respect to specific geographic markets and storage applications on the customer or utility side of the meter. A single answer to this question simply does not exist…

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Addressing The Funding Challenge

One of the greatest challenges to energy storage realizing its full potential is financing development. For large-scale projects, project finance structures might be a viable option. This is especially true in markets like California where the three investor-owned utilities’ energy storage agreements indicate contracts will include a financeable tolling component. However, even if the contract structure is palatable for banks, financing will not be forthcoming unless the banks can become comfortable with the technology risk.

The limited track record of energy storage technology means equipment providers need to provide robust, long-term warranties to attract debt and equity investors. In addition, these warranties must be backed by large balance sheets in the wake of multiple bankruptcies among major battery manufacturers in recent years.

“There are at least ten different versions of how storage providers are structuring agreements with customers, and this diversity applies to both small and utility scale projects,” explains Fennema. “There won’t be a straightforward model that everyone will use to finance projects as there is with tax equity for renewable energy projects. One option is project financing. But, to secure this, projects will need to demonstrate that they have three critical components in place – stable cash flow, strong guarantees on storage technology performance, and strong credit on the back end of the agreement.”

Even if banks become comfortable with lending to utility-scale energy storage projects, it is unlikely that project finance structures will be suitable for financing commercial and industrial behind the meter storage infrastructure. Given the high upfront cost of storage, the critical challenge is how to locate and access financing structures that reduce the initial cost to the consumer.

This is why a “no money down financing” option is gaining traction. In this model, a storage company offers to install batteries for businesses at no upfront cost. Instead of owning the asset, the business housing the batteries pays for energy storage as a service through a longterm contract. Storage offered through this financing mechanism helps businesses reduce their demand charges (charges levied on large electricity consumers for the right to have large volumes of capacity available to them). Storage helps reduce these bills during periods of high demand – similar to the leasing model that has proven to be successful with solar.

To date, a small number of companies have secured funding to allow them to finance the initial cost of the storage…

“Several battery storage technology companies have raised funds intended to finance 100% of the actual storage unit through the use of shared savings or power purchase agreements,” said Mark Hooley, CPA, Office Managing Partner – San Diego, CohnReznick. “If you take the capital investment decision and long-term maintenance cost out of the sales discussion, the value proposition is very compelling and will promote aggressive adoption.”

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Establishing Consistent Regulatory Frameworks Is Key

Another challenge to storage reaching its full potential is an inconsistent regulatory structure. In some markets, regulatory change has enabled the full value of storage to be realized. FERC Order 755, enacted in 2011, is a prime example. Until the Order was enacted, frequency regulation in PJM, which is part of the Eastern Interconnection grid, was sold as a capacity resource, with providers receiving a certain price for each MW provided during a certain period, regardless of how fast or effectively that service was delivered.

Realizing that frequency regulation sources such as batteries, flywheels, and demand response can respond much quicker to grid signals than centralized generators, FERC Order 755 increased payments for faster sources. ‘Fast’ frequency regulation tripled in the year after this regulatory change was enacted.

“The fastest growing markets for storage will be driven by policy,” said Victor Babbitt, Vice President Energy Storage, RES Americas. “PJM has been very proactive in adjusting its policies in a way that allows energy storage to compete fairly. Other markets are headed that way but haven’t come as far.”

Regulation has also slowed the development of storage in an emerging, but potentially huge, market – the co-location of residential solar with storage. Many utilities have demanded that battery-backed solar panels undergo a lengthy and costly assessment for safety reasons. They want to ensure that batteries don’t store grid power before feeding it back to the grid through net metering under the guise of solar power.

In some markets, regulators are overruling utilities that adopt this stance. For example, in April 2014, the California Public Utilities Commission issued a proposed decision that exempted combined solar and battery installations from additional fees and studies (subject to certain requirements)…

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Who Is Entering The Storage Market?

From utilities and independent power producers (IPPs) to electric vehicle companies such as Tesla, many different businesses are exploring ways to enter the storage market. Some companies have entered the market by developing new storage products. Others have acquired, invested in, or formed partnerships with storage companies.

One of the most high profile entrants to the residential storage market is Tesla. In April 2015, Tesla launched Powerwall—a 130cm by 86cm rechargeable battery for the home. Priced at $3,000 for the 7KWh unit, the battery provides load shifting, power backup, and stores excess solar energy. The system is closely based on Tesla’s electric vehicle battery. The company has enlisted SolarCity to help distribute its batteries.

In addition, utilities and IPPs have acquired, invested in, and partnered with storage companies to broaden their product offerings. A few notable transactions have already been completed:

• In March 2015, SunEdison acquired the team and assets of Solar Grid Storage, a provider of combined energy storage and solar PV systems, for an undisclosed sum.

• In May 2015, NRG participated in the $23 million Series C funding round of Eos Energy Storage, a manufacturer of grid-scale battery technology.

• In December 2014, leading solar company SunPower entered into an exclusive partnership with storage and solar business Sunverge Energy to offer a joint solution to residential customers and utilities in the US.

“I expect M&A activity to pick up for storage companies,” said Anton Cohen, CPA, Partner, Renewable Energy Industry Co-National Director, CohnReznick. “It will be driven by companies seeking a full vertically integrated, solution. Whether it’s from unregulated utilities or developers, we will see an increase in M&A.”

M&A activity will also be driven by the fact that most storage companies are small and venture-backed. As such, they will need to align themselves with larger companies capable of funding project construction. “The storage market is at an early stage so the companies building projects are quite young and often venturebacked,” explains Fennema. “It’s hard for them to finance projects themselves, so it’s become attractive for those companies to merge with an IPP or utility. If they can get the economics of the merger right, it’s very attractive for them as it can provide an established customer base. So, we expect M&A activity to continue for some time.”

What Does CohnReznick Think?

There is no doubt that explosive growth in the US energy storage market is imminent. The size of the market is projected to expand 250% in 2015 and, with the right conditions in place, could be worth $1.5 billion by 2019. This is 11 times the size of the market in 2014. While the potential is clear, many regulatory and financial obstacles need to be overcome to make storage commercially attractive.

Increased adoption will be primarily driven by policy. PJM and California, two storage trailblazers, demonstrate the importance of adequate regulations and incentives. PJM housed two-thirds of all storage capacity installed in the US in 2014, and California plans to procure over 1.3 GW of energy storage over the next five years.

Private sector investment in storage will increase as the industry matures and technology advances further. However, financing structures are still relatively unsophisticated so access to funding is limited. Innovation in funding models is crucial because the large upfront costs of installing a system mean storage is not possible for many consumers.

Despite the challenges, we are confident that the energy storage market will successfully demonstrate significant growth in the next five years…

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QUICK NEWS, September 28: MORE SCIENCE AGREEMENT ON CLIMATE; CALIFORNIA TO FLOAT WIND; OIL GUY LIKES SOLAR

MORE SCIENCE AGREEMENT ON CLIMATE Study: Most Non-Climate Scientists Agree on Global Warming Too

Justin Worland, September 27, 2015 (Time)

“…Supporters of policies to address man-made climate change are quick to cite research showing 97% of climate scientists believe that humans are contributing to global warming…[New research now shows] nearly 92% of biophysical scientists [in fields like biology, chemistry and physics] surveyed believe that human activity has contributed to global warming. Nearly 94% said they believe global temperatures are rising…The study’s design specifically addresses the belief that scientists who are skeptical of climate change come from fields outside of climate science. The new research weakens that argument…The consensus among scientists on climate change stands in sharp contrast to the views of the general public in the United States. Less than two-thirds of Americans believe change is happening. And only 40% believe it’s caused by humans…” click here for more

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CALIFORNIA TO FLOAT WIND Wind-energy company eyes waters off Morro Bay for floating turbines

Stephanie Finucane, September 26, 2015 (Fresno Bee)

“In a generation or two, offshore wind farms could be as common along the California coast as offshore oil rigs are today…Trident Winds LLC has approached the city of Morro Bay with a proposal to install about 100 floating turbines 15 miles offshore. It’s a 1,000-megawatt project that would produce enough energy to power 150,000 households. The turbines would rise 360 to 400 feet above sea level, would cover about 63 square miles and would be spaced about half-a-mile apart…A transmission cable would run from the wind farm through [an existing oil] pipeline and on to the Morro Bay Power Plant switchyard, which is connected to the state power grid…Morro Bay was chosen both for its constant offshore winds and because the existing infrastructure minimizes the onshore work that would be required…[Because cost and environmental issues are involved,] it could take as long as five years to make it through California’s permitting process…” click here for more

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OIL GUY LIKES SOLAR Why an oil guy believes solar has a big future

Scott Nyquist, September 26, 2015 (Fortune)

“…I’m an oil guy…But I am also bullish on solar…There is no contradiction here. The point of energy is to move people around the world, to keep us warm (and cool), and to power an industrial economy that has created more wealth in the last 150 years, by far, than in any other time…There are lots of ways to provide energy. Which technology makes sense at any given time is a matter of geography, economics, and policies. And what I am seeing is that solar is building potential on all three dimensions, for three reasons…It is getting cheaper and better…Public support is steady…[and] Sun-rich countries are getting serious. This matters because solar obviously has the most low-cost potential in places that get a lot of sun…[A]s costs come down, a number of developing countries are seeing solar as a realistic option… [I do not believe] the end of fossil fuels is nigh…There is room for both; in fact, there is a need for both.”click here for more

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The Obama Rolling Stone Interview

The President isn't backing down. From Rolling Stone via YouTube

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Colbert Talks Pope And Climate Change

More on the church’s “emissionary position.” From The late Show With Stephen Colbert via YouTube

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See Climate Change At The Mount Blanc Glacier

This young woman's story makes the immediacy of climate change vivid. From Bloomberg News

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CLIMATE CHANGE AT THE MONT BLANC GLACIER – THERE IT IS

Want to See Climate Change? Come With Me to the Mont Blanc Glacier; When I visited in 1988 it took just three steps to reach the ice. Today it takes 370.

Helene Fouquet, September 24, 2015 (Bloomberg News)

“…[In the French Alps, the Mer de Glace, or “Sea of Ice” is the most famous part of the Mont Blanc glacier and the most visible symbol in France of climate change. In 1988, when we went there, it took just three stair-steps to get down to the ice and to a huge cave carved inside the glacier but the Mer de Glace has melted and shrunk so fast that visitors now have to go down 370 steep steps to get there]…The blue ice is lost under a thick layer of dust and rubble. It’s a sad sight, and a striking example of the reality of climate change and global warming…Glaciers aren’t static, they are like rivers of ice. They flow, they grow, they shrink…They vary a lot from one year to another. But the Mer de Glace has never shrunk as rapidly as it has in the last 15 years…

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“The Mer de Glace has retreated by two kilometers from its 1850 position, when it was so big that it reached Chamonix, down in the valley. About every year in the past three decades it has lost a net three to five meters at its snout, the word used to describe the lower end of the glacier…The snout may go back another 1.2 kilometers by 2040…and the thickness of the ice there will shrink by dozens of meters. In the worst-case scenario it could even retreat 1.4 kilometers…Global warming has had other visible and irreversible impacts in the Alps and other mountains. As summer temperatures added 1.5 degrees Celsius in the past 30 years, the heat attacked the permafrost, the layer of soil and stones that remains below freezing point throughout the year...Globally, the 10 warmest years in the past 134 all have occurred since 2000, except for 1998, and 2014 was the warmest year on record, according to data from NASA…[S]cientists fear July 2015 was the worst of all summers…” click here for more

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CHINA SOLAR STOCK CORRECTION

China's Solar Power Analysts Can't Agree Why Shares Are Plunging

September 24, 2015 (Bloomberg News)

“…Since peaking in May, the NYSE Bloomberg Global Solar Energy Index of 127 companies has plunged 47 percent, more than quadruple the pace of the MSCI World Index. Yet panel makers anticipate record installations this year and have mostly recovered from a plunge in prices that slashed margins at the beginning of the decade...So why are shares not following industry fundamentals? Analysts offer a number of explanations ranging from the slump in oil prices hurting confidence in all energy companies to the fact that developers in China, the world’s biggest market for the technology, aren’t getting paid on time…

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“The world may install as much as 61 gigawatts of solar panels in 2015, up 36 percent from the previous year, according to Bloomberg New Energy Finance. The London-based researcher expects installations to rise to almost 70 gigawatts next year…China’s solar companies are tumbling because of systematic risks, [according to some analysts]…The relatively unknown profile of Chinese solar companies may also be behind the declines, some analysts say… While oil isn’t widely used for power generation, the cost of other fuels used to make electricity such as coal and natural gas are often fixed in contracts linked to crude. So cheap oil translates into cheap energy, which makes more-costly photovoltaics less attractive…China’s solar industry is warning that the government itself is undermining the industry it nurtured by failing to pay for power in a timely manner…In August, the government said it expects consolidation to accelerate among solar companies.” click here for more

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ISRAEL WINS LONG FIGHT FOR WIND

Israeli Company Building First Wind Turbine Farms in 30 Years; Israel’s first wind farm was built 30 years ago in the Golan Heights

September 25, 2015 (JNS News Service)

“…[Israel will see, for the first time in 30 years, new wind installations when] Afcon Holdings, a part of the Shlomo Group, [begins] building two farms that will house 25 wind turbines each…south of the Kinneret (Sea of Galilee)…[The 850 kilowatt turbines will produce 21 megawatts of electricity] and will become operational in 2016…Israel’s first wind farm was built 30 years ago in the Golan Heights…The plan for a wind farm at Ramat Sirin was approved 10 years ago after the National Planning and Building Board’s committee rejected augments by the Society for the Protection of Nature in Israel that the farm will damage a scenic open space…[Geographically, there are] few sites in Israel with winds strong enough to justify a wind turbine farm…Some environmental groups also oppose wind farms…” click here for more

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SLOW STEADY GLOBAL BIOFUELS GROWTH

Biofuels Capacity to Grow to 61 BGY in 2018; Ethanol and biodiesel continue their domination but remain relatively flat, while novel fuels and novel feedstocks grow at double-digit rates…

September 22, 2015 (Lux Research)

“Global biofuels capacity will grow to 61 billion gallons per year (BGY) in 2018, up from 55.1 BGY in 2014. Ethanol and biodiesel will continue to dominate with 96% of the capacity in 2018, but novel fuels and novel feedstocks will be major drivers of capacity growth, according to Biofuels Outlook 2018: Highlighting Emerging Producers and Next-generation Biofuels from Lux Research…With a 52% share, biodiesel made from novel feedstock, specifically waste oils, will lead novel fuels capacity in 2018. Cellulosic ethanol and renewable diesel follow with 19% and 18%, respectively…With a 64% share of global biofuels capacity, the Americas are a dominant force. The region, led by the U.S. and Brazil, also leads in utilization of global production capacity with 86%, much higher than the global average of 68% in 2014….China, Indonesia and Thailand in Asia; Colombia and Argentina in the Americas; and Portugal, Poland and France in Europe are the biggest emerging production centers…” click here for more

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CLIMATE CHANGE AND THE RISE OF ISIS

Fact-checking the link between climate change and ISIS

Linda Qiu, September 23, 2015 (PolitiFact via Tampa Bay Times)

“…[Democratic presidential candidate Martin O’Malley was derided when he suggested] that climate change contributed to the rise of ISIS…[We rate his claim Mostly True]…A spokesperson for the O’Malley campaign…[said] his source was a March 2015 study published in the Proceedings of the National Academy of Sciences. The study, which was well received in its field, does not mention ISIS at all, but…found evidence that climate change led to an extreme drought in Syria’s breadbasket between 2006 to 2009. Food prices skyrocketed, nutrition-related diseases became widespread, and 1.5 million internal refugees abandoned their farms and flooded into Syrian cities already crowded with 1.5 million Iraqi refugees displaced by the Iraq war…This influx of people exacerbated existing problems like unemployment, corruption and brewing discontent with the regime of Bashar al-Assad, which failed to respond to the situation…In 2011, the unrest reached boiling point and erupted into the Syrian uprising…[According to a study co-author, it is] reasonable to say the next fallen domino is the rise of ISIS…” click here for more

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GRID-SCALE SOLAR-PLUS-STORAGE COMES TO TEXAS

Younicos To Deploy Solar Energy Storage System In Texas

22 September 2015 (Solar Industry)

“Younicos Inc. has entered into an agreement with OCI Solar Power to provide…the first integrated, grid-scale, solar-plus-storage project to be deployed in the Electric Reliability Council of Texas (ERCOT) market. It will also be the first use of LG Chem battery technology in ERCOT…[Younicos] will be responsible for the design, engineering integration and construction of the 1 MW system, which is expected to come online in early 2016. Younicos' proprietary control software will manage system performance within the ERCOT market in conjunction with the operation of the solar farm.” click here for more

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MORE ON APPLE’S EV

Why Would Apple Make an Electric Car, Not a Driverless One? There are hints the tech giant is dipping into its classic playbook.

Adrienne LaFrance, September 22, 2015 (The Atlantic)

“Apple is doubling down on developing an electric car, and has assigned a 2019 ship-date to its secret automotive project, code-named Titan…Earlier this year, Apple lawyers met with officials at California's Department of Motor Vehicles and Apple engineers quietly scoped out a 2,100-acre campus in the Bay Area that’s being used as a high-security testing ground for autonomous vehicles…The Wall Street Journal, citing anonymous sources familiar with the matter, reported that although Apple won’t make its first electric car fully autonomous, that capability is ‘part of the product’s long-term plans’ …Apple has overnight created brand buzz for itself in the auto market, for which Google had to spend millions…Five years from now, if the company meets its target, we may better understand what kind of car Apple truly wants to build…” click here for more

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DRONES FLY INTO WIND

Drones for Wind Turbine Inspection; Unmanned Aerial Vehicles and Inspection Services for Wind Turbines: Global Market Assessment and Forecasts

3Q 2015 (Navigant Research)

"By the beginning of 2015, there were nearly 270,000 individual wind turbines operating globally [with over 800,000 blades battered by the elements]…This is driving a brisk business in wind turbine blade inspections, a role that has traditionally been accomplished from the ground…A new approach using unmanned aerial vehicles (UAVs), commonly known as drones, is rapidly muscling in…Commercial-grade UAVs handled by professional operators can provide higher-resolution [quicker, easier, and less costly and risky inspections]…According to Navigant Research, cumulative global revenue for wind turbine UAV sales and inspection services is expected to reach nearly $6 billion by 2024…” click here for more

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ORIGINAL REPORTING: NORTH CAROLINA: THE NEXT BIG UTILITY-SOLAR SHOWDOWN?

North Carolina: The next big utility-solar showdown?; Renewables advocates say they can pass solar reforms with or without Duke Energy's support

Herman K. Trabish, March 24, 2015 (Utility Dive)

The lawmaker sponsoring a major solar bill in North Carolina came to the House three years ago as an opponent of renewables.

Now, he and his supporters say they have enough support for a major pro-solar bill from the business community and voters that they can get it through the legislature with or without the support of Duke Energy.

“When I was elected in 2012, I was an opponent of solar,” recalled the originating sponsor of The Energy Freedom Act (H.B. 245), Republican Representative John Szoka.

But, his career in the military had taught him to be “a numbers and facts guy,” he explained.

“I was convinced by the numbers and the facts that my position on solar was based on emotion and not on facts, so I changed my position," he said.

Szoka's bill, H.B. 245, would allow third party solar financing and solar leasingin the state. While current law requires all third party energy companies to sell any output to the utility, which then passes it on to customers, the "Energy Freedom Act," as it's called, would allow third parties to sell power directly to consumers.

As long as a facility does not generate over 125% of the consumer's annual energy use, any company in North Carolina could build an "electric generating facility" on a utility customer's property and let that customer use or buy the electricity without the provider being defined or regulated as a utility.

The owner of the facility would have to register at a cost of $25 with the North Carolina Utilities Commission (NCUC). The generation would be eligible for net energy metering (NEM), but the NCUC can alter the “fees and credits” after “an investigation of the costs and benefits of customer-sited generation.”

If the bill passes, it could significantly boost solar in an economy where it's already getting a foothold.

In 2014, third party ownership accounted for over 70% of all U.S. residential solar installations, ranging from 90% in New Jersey to 65% in California, according Shayle Kann, lead author of the GTM Research 2014 U.S. Solar Market Insight Report.

The evolution of H.B. 245

Szoka originally intended the bill to only extend third party sales to military and government institutions, he said. A conversation with Kathyrn Wiseman, a public affairs official for Walmart, changed his mind.

Wherever third party ownership is available, she told him, Walmart is putting solar on their buildings or installing wind turbines.

After further talks with other business leaders, Szoka explained, “I decided that if it is good for the military and good for government, why wouldn’t it be good for the business community and for regular consumers like you and I?”

What Duke wants

One major roadblock for Szoka's bill could be Duke Energy, which says it wants to hash out a bill that covers reforms of the entire solar industry, not just third party sales and financing.

“We believe a comprehensive approach is the best way to make progress on solar in North Carolina,” said Duke Energy Communications Manager Randy Wheeless. “What we did in South Carolina worked out well. There was give and take. Not everybody was 100% happy but at the end of the day we had a framework for how we would do things going forward. And there was not a big fight.”

Duke wants to “get the right stakeholders at the table and craft out something comprehensive that will avoid these one-off fights over individual issues,”Wheeless explained. “We don’t want North Carolina to turn into the kind of state that argues over these things constantly and never gets anything done.”

The North Carolina Sustainable Energy Association (NCSEA) would be a good choice to participate in such a working group because they represent solar advocates, Wheeless said.

“We would be in favor of a group that mirrored the cross-section of important stakeholders in the renewable energy space that we worked successfully with in South Carolina, including developers, environmental organizations, and business leaders,” he told Utility Dive.

“We don’t want to discredit what is happening in South Carolina," responded NCSEA Communications Director Allison Eckley, "but they are at a much different stage of solar development than North Carolina.”

While South Carolina is just beginning to build a solar capacity, North Carolina’s cumulative installed capacity from 2012 to 2014 was second in the nation, she noted. “To try to replicate what they did in South Carolina would be to discreditNorth Carolina’s progress and ignore what is now possible," Eckley said.

NCSEA always welcomes the opportunity to engage in collaborative discussions with stakeholders, including Duke Energy, Eckley acknowledged. But, “tabling actions like the third-party sales bill in favor of a working group or study will only delay progress.

There's simply no reason to remain one of just five states in the nation to ban this common-sense, free market business model that will benefit all North Carolina ratepayers.”

The North Carolina Investment Tax Credit

The state also can’t afford to wait on a discussion about the 35% personal tax credit for renewable energy investment which expires at the end of 2015, Eckley said. It is another issue Wheeless said Duke would like to take up in a comprehensive approach to solar.

If Duke was serious about rooftop solar, they would have called for this working group several years ago, said Attorney John Runkle of NC WARN, an environmental advocacy group that has long pressured Duke on sustainability issues. “I’m not sure sitting down with Duke and discussing the tax credit now is any more than just a delay in dealing with it.”

Both Eckley and Runkle said they expected legislation this year to extend the tax credits. Senator Paul Lowe brought Senate Bill 329 to do so the same week Representative Szoka re-introduced his bill to the House. If the tax credit is axed, or the issue is not resolved before it expires, it could mean a tougher business climate for renewable energy developers of all stripes in the state.

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The coming political battle

Despite its legislative preferences, it now seems clear Duke is going to get exactly the kind of one-off political uproars it doesn’t want.

“We are confident of support for both the third party bill and the tax credits extension but both are still very much a fight,” Eckley said. “It is going to definitely be a long session.”

Duke approached Szoka about changing the bill to a call for a legislative study on third party ownership but that, he said, “is just another way to kick the can down the road.” Szoka saw two options, he said.

One was to “use the legislative body to set policy and then figure out how to execute it,” he explained. The other was to “study it and come to a grand agreement on the issues and from that decide what the policy is.”

“In the last session, there were over 100 legislative study bills passed in the House but only 10 or 11 ended up being studied,” Szoka said. “I don’t know what Duke’s intentions are. You have to ask them. I don’t like to gamble on a 10% chance. I think Duke is dealing fairly with me but they have their objectives and I have mine.”

Usually, bucking a powerful utility's opinion would spell disaster for energy legislation in the state legislature, but renewable advocates say this time it's different.

“If the third party sales bill fails it would be “a huge opportunity missed,” Eckley said. But she does not expect that to happen.

Despite Duke’s opposition, “there is a grassroots movement that is growing by the day behind this,” she said. “Recent polling commissioned by Conservatives for Clean Energy showed 77.3% of Republicans, 78.8% of Democrats, and 83.3% of unaffiliated voters think lawmakers should pass legislation allowing third party energy sales.”

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Duke Energy Carolinas, Dominion North Carolina Power, and other utilities seem to be the only ones standing in the way, Eckely said. “Corporations, including Walmart, Lowes, Family Dollar, and Target, signed a letter of public support of the bill.”

It appears the social conservative movement in the state is behind the measure as well.

"North Carolina families, schools, churches and businesses should have access to the best energy options that the market has to offer,” said North Carolina Christian Coalition Chair Ash Mason. “It's time to remove outdated and unnecessary barriers in order to enable North Carolinians to invest in solar technology on their property."

But at least for now, Duke is sticking to its guns.

“Some might say a comprehensive approach will take too long but at the end of the day, you have a collaborative solution that everyone has agreed to,” Wheeless insisted.

Duke does not support the Szoka bill but, he said, “in South Carolina we came out with third party leasing so it is not impossible. When you get together and hash out a lot of issues, there may be issues that mean more to us than this issue so maybe we could give and take.”

The bigger questions are, he said, “Why fight on these one-off issues? Why don’t we get all the issues together and come up with a more collective issue?”

What they agree on: Net energy metering

“Net metering is an issue that could be handled through the kind of working group Duke wants,” Eckley said. “Given what net metering is, there is only so much a non-utility can do about it without having the utility at the table.”

The Szoka bill’s provision requiring a study of solar costs and benefits could move the state toward a net energy metering debate. Though NCSEA alreadyhas such studies, it also welcomes data, according to Eckley.

“If we don’t have numbers, we are idealists,” she said.

“The question of doing a value of solar study could be on the table,” Wheeless said. “It is more about how to deal with net metering. Is it fine the way it is? Is it something that needs to be changed? That is what comes out of a comprehensive discussion.”

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ORIGINAL REPORTING: RADIOACTIVE POLITICS: INSIDE THE RENEWED PUSH TO SITE NUCLEAR WASTE AT YUCCA MOUNTAIN

Radioactive politics: Inside the renewed push to site nuclear waste at Yucca Mountain; A bipartisan coalition has a new bill aimed at moving the issue forward

Herman K. Trabish, March 25, 2015 (Utility Dive)

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When Republicans took control of the Senate last November, nuclear energy supporters were hopeful the new leadership would quickly address some longstanding issues for their industry. Now it appears they are getting their wish.

For decades, one of the biggest obstacles for nuclear energy growth in the United States has been the absence of a radioactive waste storage solution, and in recent weeks Senator Lamar Alexander (R-TN), the new Chair of the Senate Appropriations Subcommittee on Energy and Water Development, has renewed the push to license the controversial Yucca Mountain as a permanent waste repository.

The introduction of the bipartisan "Nuclear Waste Administration Act of 2015" was Senator Alexander’s first big step toward that goal. He and co-sponsor Senators Lisa Murkowski (R-AK), Dianne Feinstein (D-CA), and Maria Cantwell (D-WA) filed the bill March 24.

“Congress has already approved Yucca Mountain,” Senator Alexander said at a recent convening of his subcommittee. “The Nuclear Regulatory Commission has said we can safely store nuclear waste there for up to one million years. Continuing to oppose Yucca Mountain is to ignore both the law and science.”

His efforts, the Senator said, are due to the fact that “nuclear power provides about 20% of our nation’s electricity and more than 60% of our carbon-free electricity.”

When the Department of Energy (DOE) recently announced a study showingwind energy could meet 35% of U.S. electricity demand by mid-century, Alexander responded that “relying on windmills to produce that electricity when nuclear power is available is the energy equivalent of going to war in sailboats when nuclear ships are available.”

“Nuclear energy is a vital part of America’s energy portfolio and for far too long, the American taxpayer has been on the hook for the federal government’s failure to implement an effective plan to handle the back-end of the nuclear fuel cycle,” said Sen. Murkowski in backing up her Republican colleague.

Radioactive nuclear waste is currently stored at plants where it is generated although “the common ground, even including people skeptical of nuclear energy, is that we have to find a solution,” noted former Nuclear Regulatory Commission (NRC) Commissioner Peter Bradford. “This is not day one. There is not only the power plant waste but the military waste as well. It won’t do to leave it at the reactor sites forever.”

How safe is Yucca really?

The "science" Alexander referenced was the NRC staff Safety Evaluation Report that found Yucca Mountain meets all radiation safety concerns for “the period of geologic stability,” or one million years.

But the decision to source radioactive waste there isn't the NRC's or Congress' alone.

“If Nevada puts up the serious opposition it did when I worked there as a consultant, the staff approval won’t stand up,” said former NRC Commissioner Victor Gilinsky, a nuclear physicist.

The basic problem, Gilinsky explained, is that while the best disposal sites have a “reducing environment” that works against rust, Yucca Mountain has an “oxidizing environment” that promotes rust and corrosion.

“When they started building, they discovered there is more water than they thought and it was moving faster than they thought,” he said. Rather than restart the search for a good site, “they dreamed up the idea of a five ton titanium drip shield for each of the 11,000 waste canisters that will be at Yucca to keep the water off the canisters and keep them from corroding.”

Though they are not currently installed, the application proposes to have them in place when the repository is closed in 100 years to 300 years, a completely impractical plan, Gilinsky believes. Without the drip shields, “the system fails in 1,000 years.”

“It is convenient for Senator Alexander to say Yucca Mountain is safe, but that is not certain,” Bradford agreed. “There were many unresolved contentions.The process includes hearings and cross-examinations and a final decision by the commissioners, and all you have so far is the assessment of a staff that routinely agrees with the applicants.”

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Consent and controversy

Alexander's new legislation is aimed at achieving a comprehensive solution to the nuclear waste management impasse. It would create a Nuclear Waste Administration with independent funding. That agency would drive a pilot program for short term storage site development and establish processes for the consent-based selection of a long term repository.

"The United States desperately needs a comprehensive nuclear waste policy," Feinstein, commonly considered one of the most liberal senators, said. "We simply cannot allow spent nuclear fuel to remain indefinitely at sites scattered throughout the country, stored at taxpayer expense, awaiting a clear path forward."

Nuclear waste facilities, under the bill, would "only be sited where they are welcome by state and local governments,” she said.

Feinstein's emphasis on consent is in part because Senate Minority Leader Harry Reid (D-NV) has long led a staunch, unrelenting opposition to the use of Yucca Mountain by the state of Nevada. But that pressure does not seem to have dimmed Alexander's enthusiasm for the site.

“Let me be clear," he said recently. "Yucca Mountain can and should be part of the solution. Federal law designates Yucca Mountain as the nation’s repository for used nuclear fuel.”

According to Bradford, that misses the point.

“Nevada was chosen by the U.S. Congress through a political process, not a study of the geology, something the Lamar Alexanders of the world prefer to completely ignore,” the Carter appointee told Utility Dive. “In a more open-minded, consent-driven process, it doesn’t seem like Yucca Mountain would be the place to emerge because Nevada doesn’t seem about to consent.”

What led to the impasse is that “49 states ganged up on one state in 1987 and forced the Yucca Mountain solution on Nevada,” agreed Natural Resources Defense Council (NRDC) senior attorney Geoff Fettus.

Nevada is not likely to accept Alexander’s initiative, Gilinsky, also a Carter appointee, agreed.

“Approval will require a hearing. The NRC administrative judges have already accepted something like 220 of Nevada’s contentions to be litigated," he said. "The case would be argued before administrative law judges. Their opinion would go to the commissioners. And Nevada would go to the U.S. Court of Appeals if it thinks the NRC is not acting properly.”

Despite the possible rancor at the state level over his proposal, Senator Senator Alexander is pushing forward and has announced he will pressure the NRC to request funding from the Obama administration budget to pay for the next steps toward licensing Yucca Mountain.

“The Nuclear Waste Fund, which is money that utilities have paid the government to dispose of their used nuclear fuel, has a balance of about $36 billion and there are still several steps to go in the licensing process for Yucca Mountain,” he told his committee. “Knowing that there are additional steps and they will cost money, why would you not request additional funds in your budget?”

Obama's Blue Ribbon Committee

In endorsing the bill she co-sponsored, Senator Cantwell was more diplomatic.

“I look forward to a dialogue that helps break the gridlock in a manner that’s guided by sound science and the important principles laid out by the Blue Ribbon Commission,” she said

The Obama administration created a Blue Ribbon Commission (BRC) to resolve the nearly three-decade old impasse over nuclear waste. In 2012, it concluded Yucca Mountain is unworkable as a waste repository and withdrew it, Fettus said.

The BRC has a legitimate claim to impartiality because “no one on it was fundamentally skeptical about nuclear power or hostile to nuclear power,” Bradford said. “Everybody who had said a skeptical word about the technology was eliminated during the vetting. It was pretty favorably disposed toward the idea that a solution could and would be reached.”

The Obama administration’s 2013 report, "Strategy for the Management and Disposal of Used Nuclear Fuel and High-Level Radioactive Waste," was based on BRC recommendations about sound science and public acceptance. But it has not resolved the impasse. Following the announcement of the new bill, DOE Secretary Moniz said his department is moving to develop a waste management solution according to conclusions of the administration report.

The Alexander-Feinstein bill would restart the search for a waste solution but it has two important shortcomings, according to the NRDC's Fettus.

“Creating an interim storage site is creating a de facto disposal site instead of a storage solution,” he said. “And it creates an interim storage proposal before it sets storage standards, whereas the BRC recommended getting the rules in place before choosing sites.”

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Possible routes forward

Waste Control Specialists’ recent proposal to establish a pilot waste storage site in West Texas’ Andrews County immediately won support from the Nuclear Energy Institute (NEI) as the type of facility called for by the BRC.

A 2014 Texas Commission on Environmental Quality report concluded such a facility is “feasible” and would “offer electricity consumers significant savings compared to storage at each nuclear power plant.”

Alexander's new bill meets two provisions NEI argues are necessary in a complete strategy for waste storage. First, it provides for an organization focused entirely on radioactive waste management with adequate authority and resources. Second, it recommends the use of Nuclear Waste Fund monies, with Congressional oversight, so as to avoid dependence on the annual Congressional appropriations process.

It does not, however, specify Yucca Mountain as the long term repository solution.

The only practical interim alternative, Fettus said, would begin with a pilot project for the temporary storage of stranded spent fuel from closed reactor sites at an operating reactor facility. It would have four crucial advantages over any proposed new site, he explained:

There is already implicit state and local consent

There would be far less need for new infrastructure at the site

There is also implicit consent for fuel management and transport

It consolidates the spent nuclear fuel and keeps it under the guardianship of the nuclear industry

Waste storage at the facilities that generate it is adequate, Gilinsky said, but "it would be better if it was where [waste management] is not a subsidiary activity, but a principle activity of the management.”

The fundamental NRDC insight and fundamental political recipe for resolving the impasse, according to Fettus, is an amendment to the 1982 Nuclear Waste Policy Act. As it stands, radioactive waste can only be regulated by the DOE and the NRC. This “federalism problem,” according to Fettus, means states and the EPA have no control. “Unlike any other type of industrial waste,” Bradford said, “states cannot set standards. Combined with the justifiable mistrust in the federal process, that is a formula for stalemate.”

“If the states want to impose a stricter standard for safety, they ought to be able to,” Gilinsky agreed. “Manufacturers like GE and Westinghouse will not build plants in the U.S. unless they are free of any third party claims. Congress passed the Price-Anderson Act to protect them,” he explained. “Why shouldn’t a city's Mayor have the same right as manufacturers?”

“The average well-informed citizen can't have a lot of confidence that the DOE, the NRC, or the Congress have discharged their responsibilities in anything resembling an impartial and open-minded way,” Bradford said. “Their instinctive resistance is not because people think they know enough geology but from watching those policymakers make fools of themselves in their near desperate eagerness to cram the used fuel and military waste into Nevada."

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