NewEnergyNews: 01/01/2019 - 02/01/2019

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on climate change makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

The challenge now: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT THURSDAY, July 18:

  • TTTA Thursday-U.S. Could Get Very Hot
  • TTTA Thursday-New York Needs Ocean Wind
  • TTTA Thursday-New York Needs Rooftop Solar
  • THE DAY BEFORE

  • ORIGINAL REPORTING: Taking Energy Storage To The Markets
  • THE DAY BEFORE THE DAY BEFORE

  • TODAY’S STUDY: Energy Storage Solutions For Medically Vulnerable Households In Power Outages
  • QUICK NEWS, July 16: What We Have Here Is A Failure To Communicate; EVs As Energy Storage
  • THE DAY BEFORE THAT

  • TODAY’S STUDY: The Cost Of Wind
  • QUICK NEWS, July 15: Key To The Climate Crisis Fight; Economics Send Red States To New Energy
  • THE LAST DAY UP HERE

  • Weekend Video: Bill Maher On Mars, Earth, And The Environment
  • Weekend Video: Extreme Midwest Weather And The Climate Crisis
  • Weekend Video: The Lies That Became The ClimateGate Smear
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    Founding Editor Herman K. Trabish

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • FRIDAY WORLD, July 19:

  • A Climate Crisis Choice Worth Wrestling With
  • New Energy Around The World
  • New Energy Needs New Policy

    Thursday, January 31, 2019

    Scanning Public Opinion On Climate Change

    Fact Checking The Claim Of A Major Shift In Climate Change Opinion

    Earl J. Ritchie, January 30, 2019 (Forbes)

    “… Overall, the change [in public opinion about climate change] is minor…[but] in some segments it has changed greatly…Reported change over time varies with the polling organization and specific question…Questions may include “explainers,” nominally to give some understanding of the subject. These explainers are often biased, usually in favor of climate change belief. Not surprisingly, this skews poll results. One study found a 40% increase in overall results and a 100% difference among Republicans as a result of explainers and question structure…Despite claims of margin of error of 5% or less, differences among surveys show that poll results are not that accurate…

    Per recent Pew poll results, approximately half of Americans believe climate change is caused by human activity…[A]n increasing majority of Democrats believe warming is due to human activity, but the belief by Republicans is low and little changed…[Differences by age, gender, location and education level are small] compared to political affiliation and ideology…[P]roponents make a big deal out of any news that favors their viewpoint…[but it is clear a] strong majority of Americans believe climate change is happening…Roughly 50% believe human activity is a significant contributor…Democrats are largely believers that human activity is the cause of climate change; Republicans are not…” click here for more

    New Energy Stocks To Watch

    3 Top Renewable-Energy Stocks to Watch in January; If you want to add renewable-energy stocks to your portfolio, then Enviva Partners, SolarEdge Technologies, and Darling Ingredients are worth watching.

    Tyler Crowe, Rich Smith, and John Bromels, January 29, 2019 (The Motley Fool)

    “…[T]he long-term outlook for renewable energy looks incredibly promising…[The economics for renewable energy make it, in many cases,] cost-competitive without subsidies or other incentives…[Three stocks that reflect this are] Enviva Partners(NYSE:EVA), SolarEdge Technologies (NASDAQ:SEDG), and Darling Ingredients(NYSE:DAR)…[Enviva Partners is a] wood-pellet producer..[Its long-term contracts ensure] its revenue will be relatively stable over the next decade…[and] they bake in production growth of] 53% between now and 2023…It may be worth watching Enviva Partners for a few quarters…

    [Darling Ingredients is steadily ramping up] its biofuel production…[Its Diamond Green Diesel joint venture with Valero Energy plans] a 70% increase in annual production capacity…[Solar-inverter maker SolarEdge recently expanded beyond solar by taking] a majority stake in Italy's S.M.R.E. SpA, a leader in ‘integrated powertrain technology and electronics for electric vehicles,’ including motorcycles, commercial vehicles, and trucks…[Its stock then] soared 19% in value…Priced at just 12.5 times earnings and expected to grow those earnings at 22% annually over the next five years, SolarEdge seemed to be a bargain even before this S.M.R.E. deal…” click here for more

    The Game Changing Drop In Energy Storage Costs

    Costs are falling for renewable energy stored in batteries

    Jed Kim, January 29, 2019 (Marketplace)

    “…[Batteries can help smooth out renewables’] peaks and valleys, but cost has limited wider adoption…[It is] becoming an increasing part of the resource mix that electric utilities are currently owning and operating…[Cost drops are being driven by demand from utilities and consumers and by regulators with climate change concerns] directing the utilities to go for a cleaner renewable grid…[Battery costs have seen an] 80-85 percent cost reduction over the past decade…

    [Demand was triggered in 2015 and 2016 by utilities and] end customers getting more familiar with the technology…[Tesla added to the momentum when it started] selling Powerwalls in 2015…[That coincided with increased interest] from the various market participants, including private sector competitors, residential homeowners, businesses and] large electric utilities…” click here for more

    Wednesday, January 30, 2019

    ORIGINAL REPORTING: California screaming — policymakers demand wildfire prevention

    California screaming — policymakers demand wildfire prevention while the state burns; 2017 wildfire records will likely be broken this year; can state lawmakers stop the madness?

    Herman K. Trabish, July 31, 2018 (Utility Dive)

    Editor’s note: This story anticipated the PG&E bankruptcy filing. All the elements that could have prevented it are in the story, including the recognition of the root factor as climate change, but stakeholders could not act fast enough or boldly enough.

    California is on fire again in 2018. There were at least 19 fires burning across the state, consuming at least 210,000 acres, according to the Department of Forestry and Fire Protection (CALFIRE) at 6 p.m. on July 30. It was "a record-setting pace and conditions are primed for more," California Public Utilities Commission President Michael Picker told the committee. [In the end, the 2018 Camp Fire in Northern California was the deadliest and most destructive in California history. It destroyed 18,661 structures and killed 86 people.] The conference committee faced questions about how to compensate victims for the mounting losses of life and property and the role of the state's utilities in prevention and compensation.

    The 2017 fires left the utilities facing huge, possibly even insurmountable, liabilities. Decisions by the conference committee [could have but did not] protect their ability to continue delivering California's electricity. In his letter to the conference committee, Governor Brown asked the lawmakers to use the last four weeks of the 2018 legislative session to address wildfire-related questions. He recommended changes in fire prevention and preparedness, forest management, utility infrastructure hardening and fire liability issues. The committee put a wide range of questions on the table for discussion. There was wide agreement that fuel-loading must be addressed by vegetation management. There was much less agreement on how utility liability should be handled… click here for more

    ORIGINAL REPORTING: Hawaii initiates performance incentives to give its utility 'skin in the game'

    Hawaii's new fuel price performance incentive gives HECO 'skin in the game' - A new sharing mechanism moves some risk of fuel price volatility from customers to the utility.

    Herman K. Trabish, Aug. 6, 2018 (Utility Dive)

    Editor’s note: Hawaii is breaking ground in changing utility incentives so they align with the interests of its customers.

    Hawaii regulators took a step toward performance incentives for its dominant electric utility, but transitioning to true performance-based regulation (PBR) will be contentious, judging from the stakeholder response. The cost of importing expensive fuel oil for power generation in the state has led to many debates over the best way to align utility incentives with customer interests — such as using a sharing mechanism to split fuel price volatility risks between the utility's shareholders and its ratepayers. On June 22, the Hawaii Public Utilities Commission (HPUC) approved a risk sharing mechanism that is a step toward performance-based incentives.

    Many in the state see the move as an indication that more reforms are coming in the state's regulatory docket on PBR, initiated this year. But both HECO, the state’s dominant electricity provider, and Hawaii's consumer advocate question whether the new PBR provision will ultimately serve customer interests. Under Hawaii's Energy Cost Adjustment Charge (ECAC), HECO was able to pass 100% of its fuel costs to customers, giving it no incentive to minimize its use of fuel oil and working against Hawaii's 100% renewables by 2045 mandate. The new risk sharing mechanism follows other state innovations on fuel costs and aligns HECO and customer interests on the high and volatile cost of the imported fuel oil by giving the utility a direct financial incentive — reward or penalty — to stabilize and reduce power supply fuel costs… click here for more

    NO QUICK NEWS

    Tuesday, January 29, 2019

    TODAY’S STUDY: Resolving The Financial Risks Of New Energy

    A Corporate Purchaser’s Guide To Risk Mitigation Strategies To Manage Risk In Corporate Renewables Procurement

    Rachit Kansal And Tim Singer, January 2019 (Rocky Mountain Institute)

    Executive Summary

    The US corporate renewable market has grown by leaps and bounds in the past five years. Corporate procurement has rapidly expanded from a niche to a substantial part of the US electricity system—one that has cumulatively brought online over 12% of all utilityscale wind and solar installed in the country today.1

    However, risk mitigation solutions have not kept pace with a rapidly diversifying and expanding corporate market. The issue of buyer risk has been raised with increasing frequency over the last few years and the market must address this issue seriously and immediately.

    For its own long-term health, the market must move away from the current one-size-fits-all approach to a “many-sizes-for-all” approach to risk mitigation.

    The report, of which this is the executive summary, dives into five specific risks buyers find unfamiliar— price, shape, basis, volume, and operational risk. It then reviews a range of mitigation strategies, including those that are widely available and those that are emerging in the market today—hub-settled contracts, floors and collars, proxy generation, volume firming agreements, and fixed volume swaps. The report also explores mitigation and procurement strategies such as longterm renewable energy certificate (REC) agreements, project tranches, and contract tranches.

    Lastly, the report highlights best practices for buyers to contract for off-site renewable power in a way that meets their risk priorities.

    Buyer Diversification And Expansion

    As Figure ES1 shows, 2018 has been a landmark year for corporate renewables in the United States. The market has seen over 6 gigawatts (GW)2 of renewable energy announcements in this year alone—more than the previous two years combined.

    The market holds promise for even greater growth in the future, as a sizeable majority of US electricity consumption comes from the commercial and industrial (C&I) sector (see Figure ES2).

    While the IT sector continues to be a leader in the market (with 29% market share), 2018 has seen the sustained participation of many other industries in this space. More than half the procured capacity over the past year came from outside the IT sector and included industries like telecommunications, retail, manufacturing, and healthcare. This is reflected in Figure ES3, which shows how the participation from different industries has evolved over the years.

    Despite the tremendous growth in 2018 (with a 70% increase in announced transaction volume from 2017)i and the increasing diversity in the market, only around 60 companies have completed additional, off-site procurement of renewable energy in the United States.3 When that is compared to the number of companies with decarbonization targets (over 150 companies set targets4 just in the past year), it is clear that this market holds enormous potential for future growth and change.

    The Business Renewables Center (BRC) engages with a broad group of stakeholders to bring down market barriers and enable more megawatts of clean energy on the grid. The BRC consists of a membership that is representative of the market it has seen evolve and now works with—over 90% of all US corporate buyers are BRC members and 96% of all US off-site procurement involves a BRC member.5

    Through conversations with a variety of members and stakeholders, the BRC believes that risk mitigation needs to be seriously addressed—and in a timely fashion—to ensure the sustainable growth of this market. The following section will dive deeper into the reasons behind this conclusion.

    Insight #1: Mitigation Solutions Have Been Outpaced By Buyer Expansion

    While the corporate procurement market has expanded and diversified rapidly in the last few years, risk mitigation solutions have not. This has led to a one-size-fits-all approach to risk, which is expanded upon in the next section.

    The power purchase agreement (PPA) is and has been the dominant contracting structure in the US corporate procurement market (see Figure ES4).

    The PPA contracting structure brings a unique set of risks for each counterparty. Some of these risks (including price, basis, and shape risk) are specific to the wholesale electricity market, and are thus risks that corporate buyers do not encounter in their core business operations. A lack of familiarity with these risks makes it all the more important for buyers to understand them, their implications, and the applicability of different mitigation options (as highlighted in the report). Failure to assess and address these risks could cause buyers to experience unexpected—and significant—financial downside over the lifetimes of their contracts.

    While the PPA contracting structure has proven scalable and effective for delivering renewable power, it is only one contract structure with one set of specific risks. The PPA’s unique set of risks may align well with one company’s risk appetite, while misaligning entirely with a different company’s risk appetite. This lack of variety around risk mitigation is increasingly at odds with a market diversifying in size and industry as the spectrum of risk appetites is broadening.

    The set of available risk mitigation solutions has simply been outpaced by the rate of change in the market. As a result, the PPA is often the only viable option for companies that want cost-competitive, utility-scale renewable power.

    The BRC came to this conclusion through three points of observation:

    • Market evolution: the BRC has been at the center of this market since its inception. It has seen how this market has grown and diversified in a short period of time. Through conversations with solution providers and by means of general domain knowledge, the BRC has gathered that the pace of risk solution expansion has been much slower than the pace of market expansion.

    • Market interest: the BRC has observed that there has been significant and growing interest in risk mitigation options. This interest has intensified over the past year and indicates a real appetite in the market for more ways to manage risk.

    • Stakeholder conversations: the BRC has spoken to many stakeholders from multiple stakeholder groups—buyers, developers, risk managers, lawyers, financiers, and consultants. All the stakeholders are market leaders in their own right and one theme that emerged from many conversations was that risk mitigation is a growing challenge that must be addressed sooner rather than later.

    To satisfy this broadening spectrum of risk appetites, the BRC advocates for an expanded set of risk mitigation solutions and contracting tools, as highlighted in the report. There is a need to move from a one-size-fits-all to a “many-sizes-for-all” approach in risk management that ensures rapid but sustainable market growth in the long run.

    Insight #2 – A “Many-Sizes-For-All” Approach Is Needed For Future Market Growth

    A many-sizes-for-all approach is needed to identify the key risks for buyers and, more importantly, to expand on corresponding mitigation options to manage those risks.

    To that end, the report identifies five key risks that are unfamiliar to buyers and difficult to manage—price, basis, shape, volume, and operational risk.

    It discusses the implications of these risks and how they can affect the financial performance of contracts. The report subsequently dives into current and emerging risk mitigation solutions—both within and outside the VPPA (virtual PPA) construct. The VPPA is a popular version of the PPA that involves a financial exchange of cash flows and no ownership of electrons from the buyer’s side.ii

    For each mitigation solution, the report then details how it works, where it has been implemented before, the counterparties involved in it, and the risks that are being mitigated. The report also provides a framework that will help buyers navigate this growing suite of available solutions.

    Eight risk mitigation solutions are identified in the report—five within the VPPA construct and three outside it. The solutions within the VPPA construct are:

    • Hub-settled VPPAs

    • Floors and collars

    • Proxy generation

    • Volume firming agreements

    • Fixed volume swaps

    The three risk mitigation solutions outside the VPPA construct are:

    • Long-term REC agreements

    • Project tranches

    • Contract tranches

    To ensure that a diverse array of corporate buyers understand what each solution means for them, three buyer archetypes are modeled. This will accomplish the following:

    • Contextualize abstract risk mitigation solutions

    • Demonstrate different buyers’ priorities

    • Show the growing diversification among corporate buyers

    • Allow a buyer to relate to an archetype

    The three buyer archetypes are:

    SuperComputer Electronics: a very large IT firm with load across the United States, internal capacity for energy procurement, and a desire for firm power

    Regular Café: a chain of retail shops with a small and highly dispersed load spread across the United States and low internal capacity for energy procurement

    Heavy Metal: a heavy manufacturing company with a large, regionally concentrated load that has some internal capacity for energy procurement.

    The report examines the possible reaction of each buyer archetype to, and likeliness to engage with, the eight risk mitigation solutions under consideration. The solutions (within the VPPA construct) and the risks they mitigate are summarized in Table ES1 below. This table encourages a buyer to visualize how different solutions work, and how they could align with their own risk priorities.

    Conclusion

    Corporations represent a majority of the electricity load in the United States. This puts them in a unique position as they can leverage their tremendous buying power to shape the grid of the future—a grid that delivers clean and affordable power for all.

    However, to achieve that future, the market needs to develop and implement a robust set of risk mitigation solutions. While the market has grown and diversified rapidly over a short period of time, solutions to mitigate risk have not done so at a similar rate.

    Corporate buyers need to plan in advance and engage with key (internal and external) stakeholders to address risk. Such planning will ensure that the buyer makes informed decisions that best suit its own risk priorities. This report can help corporate buyers in their planning.

    QUICK NEWS, January 29: The Real National Emergency? - The Better Batteries

    The Real National Emergency? Should a future president declare climate change a national emergency?

    Greta Moran, January 22, 2019 (Grist)

    “…[Talk persists that the president will] declare a national emergency on the southern border to get the wall built…[It] would allow Trump to dip into federal funding used for actual crises, like the ongoing Hurricane Maria recovery effort…[Senator Bernie Sanders from Vermont tweeted that the real national emergency is the climate change-driven and potentially irreversible] severe damage done to our country and planet…The National Emergencies Act, passed in 1976, gives the president legal authority to declare a state of emergency. Under the law, the president could invoke up to 136 statutes…

    In the case of a climate emergency, the president could theoretically suspend oil leases, support the expansion of battery and electrical vehicles, divert military funds to renewable energy, and impose further regulations on the fossil fuel industry…But Congress doesn’t like being bypassed…[Also,] each statute has its own history and quirks, so there are possible legal snags…[And the money comes at the expense of someone else who was is] prepared to push back legally and politically…[Some lawyers say declaring climate change to be a national emergency] would be an overreach of executive power and a digression from more meaningful legislative work…[Climate change is unlike other] national emergencies…[It is] not an unexpected crisis…[It is] a new normal…” click here for more

    The Better Batteries Solar Battery Storage Comparison Table

    24 January 2019 (SolarQuotes)

    “…Once an individual product’s [cost per warranted kilowatt-hour of stored electricity] gets below 10 cents, battery storage is likely to be a worthwhile investment for a large number of households…[The energy stored in a solar battery system that can actually be used is, in most cases,] less than the nominal storage capacity figure provided…For example, the Enphase AC battery has a total storage capacity of 1.2kWh. But as only 95% of that stored energy can be discharged (aka a 95% Depth Of Discharge) the battery’s usable capacity is really 1.1kWh…

    A solar battery’s power is how fast it can be charged or discharged…For example, an Enphase AC battery is a low power battery system (also known as an ‘energy’ battery) because it takes 4 hours and 23 minutes to discharge all its usable energy…[A high power battery] can discharge all its usable energy in under 40 minutes…A high power home battery system isn’t necessarily more desirable than a low power battery – your household’s unique energy usage needs will determine how much power you will require from a solar battery and the best energy storage solution for you…[An All In One Unit] includes batteries, a battery management system (BMS) and an inverter…” click here for more

    Monday, January 28, 2019

    TODAY’S STUDY: Trends In World Solar

    Global Solar PV Markets; Top 10 Trends to Watch in 2019

    Tom Heggarty and Benjamin Attia, January 2019 (Wood Mackenzie)

    Introduction

    2018 was a year of upheaval for the global solar PV market. It was the first year in which the market contracted since before 2000. From Section 201 tariffs in the US; China’s 531 policy shift; to India’s mega-tender cancellations; Japan’s FIT cut, and the lack of clarity around the memorandum of understanding (MOU) between Saudi Arabia and Softbank’s Vision Fund for 200GW of solar PV with storage, the year was characterised by uncertainty.

    But even just a few weeks into 2019, there are positive signs for the global solar market. We’ve already seen policy clarity in China and Saudi Arabia, highly aggressive solar-plus-storage pricing in Hawaii, and more bold plans for some of the world’s largest single-site PV projects in India. Here are some thoughts on the top 10 trends to watch this year:

    1. The market will (finally) crack 100 GW for the first time

    After a muted 2018 decline—the industry’s first ever—brought on by China’s policy brake, the global solar market will finally breach 100 GW in 2019, with Wood Mackenzie’s latest 2019 forecast topping at 103 GW. The global market continues to diversify. The top 20 largest global PV markets will account for 83% of new global demand to 2023, the fastest growing of which are concentrated in the Middle East and Mediterranean (Saudi Arabia, Iran, Egypt, and Italy).

    China will remain crucial to global installations, but its market share will fall from 55% in 2017 to 19% by 2023. As emerging markets in Latin America, the Middle East, and Africa scale-up rapidly and begin to deliver results post-2020, installations will settle at 115-120 GW through 2023. We expect quarterly installations to break 30 GW for the first time in Q4 of 2019.

    2. More sub-$30/MWh bids—and maybe even another record low

    Although 2018 was the first year since 2012 which didn't produce a world record-low solar PV tariff, technology costs have continued to fall rapidly, with global average utility-scale solar costs falling another 15% last year. We believe that ultra-low PV costs still have room to fall as low as $14/MWh under optimised assumptions, and the recent cratering of average bids in Egypt, Jordan, the UAE under US $30/MWh suggest 2019 is likely to see more pricing at a similar level.

    There are several upcoming tenders in the first half 2019 that could play host to more ultra-low prices. The twice-delayed auction in Mexico, to be held in January 2019, could deliver another record, as could the 2.25 GW of solar PV set to be auctioned in 2019 under Saudi Arabia’s revised renewable energy program. The first auction held in the country was won by ACWA Power for US$23.4/MWh. However, these ultra-low tariffs are starting to have broader market impacts. In Latin America, some developers are looking to PPA or merchant markets for higher returns on investment.

    3. Revised policy targets will determine the market’s long-term growth

    The first few weeks of 2019 have already seen clarity on policies and targets relating to solar PV in both China and Saudi Arabia. Before these announcements, we forecasted that these will be the first and eighth largest installers of solar PV to 2023, so how these markets evolve is critical for the trajectory of global demand. In China, the National Energy Administration has released guidelines clarifying measures to promote subsidy-free solar PV. The announcement – though lacking in details – provides investors with much-needed clarity as to how solar will be promoted in China following last year’s 531 decision to effectively end the award of feed-in tariffs to new projects.

    In Saudi Arabia meanwhile, a revised 2030 renewable energy target of 58.7 GW by 2030 – of which 40 GW will be solar PV – has been announced and an auction timeline specified for 2019. The plan is far more practicable than the original 200 GW MOU, but the jury is still out on how Renewable Energy Project Development Office (REPDO) solar PV and wind project tenders will co-exist with the Public Investment Fund’s activities to develop 70% of the country’s new solar target.

    In Europe, too, we should see more clarity for solar as we move through 2019. EU Member States are to release their draft National Action Plans by the end of January 2019. These plans will set in place their targets for growth in renewable energy to 2030 and how they intend to meet them. Final plans are ratified by the end of the year. The EU has committed to reaching a renewable energy share of 32% of total final consumption, building on the bloc’s 20% target for 2020. Solar PV will have a key role to play in meeting this goal and the new National Action Plans should include a raft of new targets, policy measures and auctions to boost growth in the region’s solar market

    4. Another entrant to the subsidy-free club in Europe

    Spain, Portugal and Italy have been at the vanguard of subsidy-free utility-scale solar PV, with multiple gigawatts in the development pipeline. This year will see the first wave of those projects delivered. As costs continue to come down, 2019 is also set to be the year that the trend spreads beyond Southern Europe. In the UK, there has been no support scheme available for large-scale solar PV since the Renewables Obligation closed in the first quarter of 2017. Nonetheless, there is 2.3 GW of projects with that either already have or are awaiting planning permission in the development pipeline that could be delivered without subsidy.

    Most project developers will be looking to sign power purchase agreements with corporate offtakers. Lightsource BP has already announced it is to develop 300 MW of PPA-backed projects, some of which will likely be delivered during 2019. We see solar PV costs heading towards £40/MWh (US$51/MWh) in the UK, a price level which makes projects look attractive to potential offtakers compared to power prices. As most European markets still offer some kind of support scheme for large solar projects, the UK is likely to be the only country to join the subsidy-free club in 2019, but others will follow as support programs come to a close over the next 2-3 years. Subsidy-free solar in Europe is here to stay.

    5. Big business goes big on corporate solar procurement in the US

    An increasing portion of U.S. utility PV demand is being driven by corporate, non-utility entities looking for savings or to reach voluntary renewable energy targets. 56% of these corporate buyers are from the technology and data sectors. In Q3 2018, corporate procurement has seen the largest surge in market share of any utility-scale segment, growing from 13 to 15% of utility PV in development in a single quarter. The fastest growth has been in ERCOT and PJM. As of the latest Solar Market Insight report, 25% of all projects announced in 2018, representing 2.9 GW of new PPAs, were corporate procurement driven, and this share is expected to rise modestly in 2019 due to eagerness from corporate buyers to sign PPAs before expected interest rates rises and the 30% investment tax credit (ITC) expires.

    Outside of the U.S., 2019 should see increased corporate procurement activity in Europe. In part this is due to the large pipeline of low-cost unsubsidised projects in development, particularly in Spain, but the regulatory environment should also begin to look more favourable. The EU’s revised Renewable Energy Directive, adopted in December 2018, states that Member States must remove barriers to the signing of long-term power purchase agreements for renewable energy where possible.

    6. More projects trading hands, particularly in the U.S.

    Last year saw an uptick in global secondary market activity, a trend we expect to continue in 2019. We tracked almost 21 GW of solar PV asset transactions globally in 2018, up 38% on the previous year – though a large proportion of this was down to Global Infrastructure Partners’ acquisition of SunPower’s 4.7 GW U.S. utility-scale pipeline. Financiers are becoming more comfortable with solar as an asset class; and strategic investors and asset owners have increasingly been looking to acquire projects earlier in the development cycle, taking on increased development risk to capture a greater share of the project’s margin.

    In the U.S., where 47% of all solar asset transactions took place in 2018, we expect to see an increase in activity with sponsors looking for early-stage, large-scale portfolios in advance of the ITC step-down. Elsewhere, India should see more M&A activity as markets consolidate in the wake of highly aggressive auction bidding; and in some South East Asian markets, the transition away from FITs will be followed by an increase in M&A.

    7. Large-scale solar-plus-storage comes into the spotlight, but remains a niche solution in emerging markets

    Following three headline-grabbing solar-plus-storage procurements in 2018 from Xcel Energy ($30-32/MWh), NV Energy ($31-37/MWh), and PG&E (567.5-MW across four projects), the solar-plus-storage space started 2019 off with a bang. Seven projects have been proposed in Hawaii that would add 262 MW of solar and over 1 GWh of storage at prices as low as $78/MWh. Wood Mackenzie currently estimates that 1.4 GWh of energy storage installed across the whole US and forecasts 8.8 GWh of front-of-the-meter solar-plus-storage capacity installed in the US by 2023, growing at an 82% CAGR starting in 2018 and led by California, Arizona, Colorado, and Hawaii.

    Outside the United States, solar-plus-storage procurements, while still in their infancy, are already starting to compete with combined-cycle gas turbines (CCGT). In the Middle East and Africa, utility-scale solar-plus-storage can already compete with CCGT in Morocco, and will be competitive in Jordan, the UAE, and South Africa on an LCOE-LCOS basis by the early 2020s despite heavily subsidised gas prices. Even once it is cost-competitive, large-scale solar-plus-storage procurement will still be driven by government tenders and unable to displace new-build CCGT until electricity markets in the region are restructured to value the full value stack of front-of-the-meter storage. However, it may be able to displace open-cycle gas turbine systems (OCGT), which are costlier on an LCOE basis and more comparable as a flexible peaking resource.

    Globally, 2019 will see solar-plus-storage will continue to expand as prices drop below benchmark prices of peaking plants, utilities and states pass favorable policies like clean peak standards, and stand alone solar’s all-in cost continues to decline. Particular progress is expected in island power markets in Southeast Asia and the South Pacific as well as in the Western US.

    8. Mono PERC and Bi-facial modules keep CAPEX costs marching down

    Next-generation module technologies will offer increased performance and unit cost reductions in 2019. In 2019 41% of global module manufacturing capacity will be dedicated to mono PERC production, up from 36% in 2018. This year will also be the first where we will see substantial installations of bi-facial modules. While industry standards have yet to be codified and several stakeholders await additional performance data before making procurement decisions, 2019 will see several flagship projects incorporating bi-facial modules, particularly in desert environments. By the end of 2019, as global blended module prices fall below $0.25/Wdc, global average CAPEX will fall to US $0.95/Wdc – this is skewed by high-cost projects in Japan, however, and most countries in Asia will see average CAPEX fall below US $0.80/Wdc.

    9. A make or break year for mega project plans

    2018 saw mega-project announcements stall the progress of solar PV markets in India and Saudi Arabia: in India, Solar Energy Corporation of India (SECI)'s 10 GW tender has been repeatedly delayed; while in Saudi Arabia the previouslymentioned 200 GW MOU has been shelved. As a result, 2019 is set to be a make-or-break year for the concept of tendering very large volumes of capacity through a single request for proposals (RFP). Such large programs have yet to demonstrate economies of scale efficiencies in hardware, soft costs or construction timelines.

    According to Wood Mackenzie’s Global Utility-Scale PV Project Tracker, there are over 63 GW of single-developer mega project capacity (500 MW+) in the global pipeline, 84% of which is comprised of projects in pre-construction phases. Although these project announcements could drastically alter the trajectory of the global market in 2019, fewer than 10 GW of mega projects are operational globally, half of which are in China. Many of the in-development projects are concentrated in India, China, the Middle East (Oman, Kuwait, Iran, UAE), and Australia.

    Although they face similar logistical challenges, single-developer mega-project announcements differ from the solar parks model, where many developers construct projects on shared land. Regardless of policy environment, these megaprojects face unique project execution risks across land, permitting, financing, construction logistics, interconnection, and site security. The level of coordination between developers, tendering bodies, utilities, and grid operators is extremely high, and local government support is typically crucial. They can also create liquidity issues if mega projects can't be portioned off and sold into secondary markets after interconnection. As 14.7 GW of contracted projects are set to commence construction this year, 2019 will reveal whether mega-projects are a scalable solution.

    10. Oil and Gas majors embrace solar in upstream and power

    As the energy transition accelerates, oil and gas majors are increasingly making strategic moves to adapt to the changing energy landscape. From large private utilities to battery manufacturers to EV charging infrastructure companies to rural solar home system companies in Sub-Saharan Africa, the most forward-thinking oil and gas Majors are moving into the electricity space. Despite a lot of challenges, including much lower rates of return than upstream investments, they are well-positioned to succeed because of their strong balance sheets, scale, global presence and brand, and commodity trading and risk management expertise.

    There are also opportunities for renewables to complement oil and gas (and metals) extraction. Solar PV has been applied as a mainstream solution to offset diesel consumption for energy intensive mining operations in places like SubSaharan Africa, Australia, and Chile for several years. Increasingly, solar PV is also emerging as an obvious opportunity for upstream oil and gas companies to integrate with their extraction operations in remote areas. Wood Mackenzie has tracked over 50 planned or operational resource extraction projects (mining, oil, or gas) globally, powered in-part or full by solar PV.

    Along those lines, solar PV, CSP, and wind projects will increasingly be co-sited at on and offshore oil and gas fields to power drilling and even hydraulic fracturing. On-site solar PV or wind capacity can reduce the need to burn oil or gas at the well head, freeing more fuel to be sold at international market prices. In countries with heavily-subsidised domestic energy prices, the export price delta is particularly high. These integrated projects will lead to a demonstrable reduction in scope 1 emissions (defined as direct emissions from owned or controlled sources) – this is increasingly a requirement of some of the oil and gas Majors’ key shareholders, and some – including Shell – already have emissions reduction targets in place. 2019 should see further efforts by oil and gas companies to reduce their own emissions, with solar PV well-placed to capitalise.

    QUICK NEWS, January 28: Extreme Weather Is Firing The Climate Fight; The New Energy Policies The Nation Needs

    Extreme Weather Is Firing The Climate Fight Most Americans say weather disasters shifted their views on climate change

    Ellen Knickmeyer, Hannah Fingerhut, Emily Swanson, January 22, 2019 (Associated Press via PBS Newshour)

    “…[Views on climate change are shifting as Americans face] record deadly wildfires in California, rainfall by the foot in Houston when Hurricane Harvey hit and the dome of smog over Salt Lake City…[A November 2018 poll finds 74 percent of Americans say extreme weather in the past five years — hurricanes, droughts, floods and heat waves — has influenced their opinions about climate change. That includes half of Americans who say these recent events have influenced their thinking a great deal or a lot…About as many, 71 percent, said the weather they experience daily in their own areas has influenced their thinking about climate change science…The share of Americans who said they think the climate is changing has held roughly steady over the last year — about 7 in 10 Americans think climate change is happening.

    …Among those, 60 percent say climate change is caused mostly or entirely by humans, and another 28 percent think it’s about an equal mix of human activities and natural changes…Overall, 9 percent of Americans said climate change is not happening, and another 19 percent said they were not sure…[P]ersonal observations of real-time natural disasters and the weather around them have more impact than news stories or statements by religious or political leaders…A majority of Americans, 57 percent, would support a proposal that would add a $1 monthly fee to their electricity bills to combat climate change. But most oppose proposals that would increase their own monthly costs by $10 or more…” click here for more

    The New Energy Policies The Nation Needs Advanced Energy Economy Recommends Policy Priorities to 116th Congress

    January 24, 2019 (Advanced Energy Economy)

    “…[The U.S. must focus on] four key priority areas and specific policy actions to help achieve the broad goals of economic growth, cost savings, and a reliable grid…[It must:]…Remove regulatory obstacles for advanced energy, particularly in wholesale markets…Support deep electrification of the transportation system…Accelerate creation of a 21st century electricity system…[and]…Increase market access for corporate buyers…[According to AEE, the] $200 billion advanced energy industry is a strong segment of the American economy, supporting more than 3 million jobs across the country…As the industry continues to grow, there are opportunities to reduce market barriers that prevent advanced energy technologies from deploying fully into the economy

    …Costs have fallen so sharply that in some parts of the country investing in new wind and solar energy projects is more cost-effective than continuing operation (i.e., fuel and maintenance costs) of some traditional generating resources such as coal and nuclear plants…Advanced energy also improves reliability cost-effectively, and provides resilience during extreme weather events. During the 2014 Polar Vortex, extreme cold caused onsite coal piles to freeze, power plant control equipment to fail, and natural gas pipelines to become constrained. But grid operators were able to turn to demand-side resources and wind energy to keep the lights on during the emergency.” click here for more

    Saturday, January 26, 2019

    Dylan’s Superbowl Ad For Wind

    Dylan's immortal 60s civil rights anthem is just as fitting in the fight for the planet's rights. And Budweiser has been a leader among corporates in choosing New Energy. From Budweiser via YouTube

    A Way For The World

    The traditionally very conservative IEA now says New Energy’s share of global power must grow from today’s one-quarter to two-thirds in 2030. From the International Energy Agency via YouTube

    Climate Change And Health

    This primer on the health impacts of climate change details “the opportunities people can take advantage of” so that the risks foreseen by science “don’t actually turn into impacts.” From Climate Reality via YouTube

    Friday, January 25, 2019

    The Climate Change Threat To Health

    250,000 deaths a year from climate change is a 'conservative estimate,' research says

    Jen Christensen, January 16, 2019 (CNN)

    “Climate change could ‘halt and reverse’ progress made in human health over the last century…[and] lead to many more deaths than the 250,000 a year the World Health Organization predicted [from malaria, diarrhea, heat stress and malnutrition between 2030 and 2050] just five years ago…[Researchers said] climate change-related food shortages alone [could cause] a net increase of 529,000 adult deaths by 2050…[It could also] force 100 million people into extreme poverty by 2030 and poverty makes people more vulnerable to health problems…The depletion of freshwater resources, the unprecedented biodiversity loss, ocean acidification, overfishing, pollution, deforestation and the spread of invasive species, that are related to climate change, but are environmental problems on their own, all compound these public health threats…

    …[Doctors say the medical profession has a responsibility to increase efforts] to safeguard health in the face of these dramatic trends, all of which are caused by human activities related to patterns of economic activity…[and] encourage their organizations to reduce their carbon footprint…[P]hysicians can also pressure politicians to create better climate change-oriented public policy and put pressure on groups to use financial divestment as a tool…[One of the researchers said future] generations will, no doubt, look back at the missed opportunities for progress towards a healthy, sustainable economy and question why decisive action wasn't taken sooner…” click here for more

    New Research Shows New Energy Is The Answer

    State-of-the-art climate model shows how we can solve crisis

    January 21, 2019 (PhysOrg)

    “…[A]fter two years of research and modelling, scientists have come up with a groundbreaking new framework for achieving – and even beating – the target of limiting warming to 1.5°C…[and turning back climate change’s devastating] ever-rising sea levels, extreme storms, prolonged droughts and intensified bushfires…[Researchers at the University of Technology Sydney (UTS), the German Aerospace Center and the University of Melbourne, funded by the Leonardo DiCaprio Foundation (LDF) One Earth initiative, found] a transition to 100% renewable energy and strong measures to protect and restore our natural ecosystems, taken together, can deliver a more stable climate within a single generation…[The research] produced the most detailed energy model to date – and the first to achieve negative emissions through natural climate solutions.

    Its proposed transition to 100% renewables by mid-century, along with steps such as reforestation, would not only have benefits for the climate but would also create millions of permanent jobs…[with] about a quarter of the cost of current subsidies for fossil fuels…The research models 72 regional energy grids in hourly increments through 2050 and includes a comprehensive assessment of available renewable resources such as wind and solar, along with configurations for meeting projected energy demand and storage most efficiently for all sectors over the next 30 years…[Nearly all previous] models have relied upon technologies that are expensive and not proven to work at scale…This model is the first to achieve the required negative emissions through natural climate solutions, including the restoration of degraded forests and other lands, along with a transition to 100% renewable energy by mid-century…” click here for more

    The New Energy Deal Keeps Getting Better

    "Remorseless’’ Cost Reductions Drive Renewable Energy Revolution

    Nick Cunningham, January 21, 2019 (OilPrice)

    Renewable energy will march forward this year, due to ‘remorseless reductions in the costs of solar and wind electricity and of lithium-ion batteries’…[According to Bloomberg New Energy Finance, this means] every dollar invested brings more renewable energy capacity…[T]he world will add between 125 and 141 gigawatts (GW) of new solar this year, sharply up from the ~109 GW added in 2018…[Wind capacity additions will be] 70 GW in 2019, up from 53.5 GW last year…[Offshore wind will still remain a fraction of the wind installation total, but ‘eye-catching price drops’ will make it a ‘must-have’ technology this year…

    Europe is set to install 4.9 GW of offshore wind, with Asia installing 3.5 GW – both new record highs…Asia will take over as the global leader… Energy storage hits a milestone in 2019 as well, adding 10 GWh of new capacity for the first time. China will ‘establish a truly global presence’ in the energy storage market, with automakers increasingly seeking out the Chinese suppliers. Average battery prices could fall below $150/kWh this year, down from $176/kWh last year, which itself was a record low…The [2.6 million EV] sales of electric vehicles jump by 40 percent this year…adding to the cumulative total of 5 million already sold…” click here for more

    Thursday, January 24, 2019

    Climate Change’s Groundwater Time Bomb

    Climate Change May Be Creating a Groundwater 'Time Bomb,' Scientists Say

    Pam Wright, January 23, 2019 (The Weather Channel)

    “Climate change may be creating a groundwater ‘time bomb’ as the world's underground water systems catch up to the impacts of global warming…[More than half of the world’s groundwater systems — the largest source of usable freshwater in the world — could take more than 100 years to completely respond to current environmental changes from global warming…Groundwater is replenished primarily by rainfall through a process known as recharge. Concurrently, water exits or discharges from groundwater sources into lakes, streams and oceans to maintain an overall balance…When there is a change in recharge due to a lack of rainfall, for example, levels of groundwater drop until balance is restored…

    The problem facing scientists, government officials and water management planners is knowing exactly when recharge changes occurring now as a result of global warming will be reflected in discharge from groundwater sources into lakes, streams and oceans…[Research found] that locations that are wetter and more humid like the Amazon and Florida Everglades may begin to experience recharge/discharge problems in the shorter term. It would take much longer in arid locations like the Sahara desert…With more than 2 billion people relying on groundwater as a source of drinking and irrigation water, a delay in reaction to the systems could become very problematic, especially in locations where people rely almost entirely on groundwater for personal, industrial and agricultural needs…” click here for more

    The Many Pieces Of A New Energy Transition

    Under one roof: How companies can simplify renewable energy development

    Brian Barthelmes, January 22, 2019 (GreenBiz)

    “…[Solar panels and wind turbines are] one piece of a complex puzzle…[that includes] project and balance sheet financing; power purchase agreements; completing the project safely, on time and on budget; capturing applicable tax incentives; energy product and service marketing to power projects anywhere; and owning and operating the project for 30 years or even longer…Renewable energy projects are among the biggest investments most large businesses and institutions undertake…but the process is extremely daunting for most. Accessing and managing the entire spectrum under one roof brings peace of mind to customers and enables them to stay focused on their core business…As of fall 2018, nearly 80 large companies — including Google, Amazon, LinkedIn, Dell and Procter & Gamble— have developed and signed Corporate Renewable Energy Buyers’ Principles (PDF), facilitated by the Renewable Energy Buyers Alliance (REBA) and the World Wildlife Fund (WWF)…

    At their core, each of the six principles comprise these companies’ requests for easier, simpler access to renewable energy…[One] principle advocates for improving access to power purchase agreements and other financing tools, along with simplified permitting and incentives, to help remove cost and complexity from renewable energy procurement…[To stay] focused on what really matters, large businesses and institutions should] ask prospective developer-owner-operators how they can remove cost, complexity and risk from a project; function as the expert that puts safety and operational excellence first; continue to serve as the customer grows and opens new locations…” click here for more

    The New Energy Revolution

    The US Underwent a Quiet Clean Energy Revolution Last Year

    Emily Kaldjian and Priya Barua, January 23, 2019 (World Resources Institute)

    “…[T]he United States saw unprecedented growth in renewable energy purchasing, development and commitments last year…U.S. corporations have spurred a global movement towards purchasing renewable energy over the last decade, and 2018 was a banner year. Companies in the United States purchased a record 6.43 gigawatts (GW) of renewable power, enough to power more than 1.5 million American homes each year and more than double the previous record of 3.22 GW in 2015. The number of corporations entering in to renewable energy deals for the first time doubled…[T]here are 53 Fortune 500 companies with 100 percent renewable energy goals; there were 23 companies with the same target in January 2017… As of November 2018, 99 U.S. cities have committed to 100 percent renewable energy, up from just 50 cities a year ago…

    …[Illinois, Colorado, New Mexico, Maine and Nevada gubernatorial candidates who ran on ambitious renewable platforms were victorious in the midterm elections…U.S. utilities are responding to this increased demand…Michigan-based utility Consumers Energy announced in February 2018 that it will cut carbon emissions by 80 percent and stop using coal, as well as produce 40 percent of its power from renewable sources by 2040…[In May, Iowa-based MidAmerican Energy] announced that it will become the first U.S. utility to source 100 percent of its customers' electricity needs from renewable energy upon the 2020 completion of a new wind farm. In December, Xcel Energy, one of the biggest utilities in the United States, became the first to commit to go completely carbon-free by 2050 (and 80 percent carbon-free by 2030)…A review of Midwestern investor-owned utilities found that 75 percent of them had made these pledges…” click here for more

    Wednesday, January 23, 2019

    ORIGINAL REPORTING: Pushback to the California grid expansion

    As California grid expansion nears finish line, hurdles only get higher; "With this bill, anything we do makes someone grumpy," said one architect of legislation to create a full Western electricity market.

    Herman K. Trabish, July 24, 2018 (Utility Dive)

    Editor’s note: California’s proposal for a regional grid did not get out of committee in the last session. Advocates are working on a new version, but it may not get traction in a legislature focused on wildfires and the PG&E bankruptcy.

    California policymakers’ longstanding dream of a regional transmission system would eliminate barriers between the 38 independent systems across the Western states and create a full regional electricity market. Advocates for Assembly Bill 813 say it could cut the West's electricity costs by eliminating interregional transmission charges and the building of redundant generation. Opponents agree the benefits are appealing. But, they say, regionalization will risk renewable energy jobs and incentivize the building of expensive transmission lines. Although the California Independent System Operator (CAISO) is already under federal jurisdiction, regionalization opponents argue that it would make California's nation-leading climate policies more vulnerable to action from Trump appointees on the Federal Energy Regulatory Commission (FERC).

    California Senate Bill 350, passed and signed in 2015, requires the state's investor-owned utilities (IOUs) to obtain 50% of their power from renewables by 2030. It also ordered CAISO to study the feasibility of expanding its market across the West. Studies completed in 2016 showed regionalization could generate $1 billion to $1.5 billion in annual benefits to California ratepayers. By 2030, it could also provide between 9,900 and 19,400 jobs throughout the West and significantly reduce greenhouse gas emissions. State lawmakers failed to pass a version of AB 813, the regionalization bill, in 2017 and 2018. It would restructure CAISO governance to allow participation by the other Western states that would be part of the market. A coalition of ratepayer, labor, and environmental advocates opposes the bill because they see it as exposing California to compromised renewables and climate policies and to Trump administration initiatives… click here for more

    ORIGINAL REPORTING: The disruptive power of low cost of New Energy

    Will lower cost renewables and natural gas accelerate PacifiCorp's generation transition? A new study shows 20 of the utility’s coal units may not be cost-competitive.

    Herman K. Trabish, Aug. 2, 2018 (Utility Dive)

    Editor’s note: Findings in the study reported here were confirmed by PacifiCorps its recent announcement of a rethinking of the coal holdings in its resource portfolio.

    New data adds to the growing evidence that new renewables are a better buy for utilities than old coal. The generation from 11 PacifiCorp coal plants costs more than it would for the utility to buy power in energy markets. The generation, on a net present value (NPV) basis, from 12 of PacifiCorp's coal units costs more than the NPV for solar PV power purchase agreements (PPAs). And wind PPAs beat the generation from 20 PacifiCorp coal plants. These are conclusions from a June 20 Energy Strategies study for Sierra Club, which used data from the utility's own 2017 reports to the Federal Energy Regulatory Commission (FERC) and the U.S. Energy Information Administration (EIA).

    PacifiCorp is making major strides toward addressing this concern. Its most recent planning documents show much of the coal fleet scheduled for retirement in the late 2020s and 2030s and significant additions of renewables. But Sierra Club argues the utility is unnecessarily imposing costs on customers and the environment by keeping its coal plants in service. Since 2009, the cost of wind generation has dropped 38%, the cost of utility-scale solar has dropped 77%, and the cost of battery storage is down 79%, Bloomberg New Energy Finance (BNEF) found. Newer data show both wind and solar costs dropped 18% in just the first half of 2017. Battery prices are forecast to fall another 67% by 2030. Bids to Xcel Energy Colorado put wind-plus-storage projects at $21/MWh and solar-plus-storage was $36/MWh. But July EIA all-in prices for renewables generation are lower than just the fuel costs for natural gas generation, $23.11/MWh, and coal generation, $28.16/MWh. This shows that the cost of building renewables projects, which have zero fuel costs once they are in service, is lower than the cost of supplying fuel to existing coal and natural gas plants… click here for more

    NO QUICK NEWS

    Tuesday, January 22, 2019

    TODAY’S STUDY: The Huge Virginia Offshore Wind Opportunity

    The Virginia advantage; The roadmap for the offshore wind supply chain in Virginia

    December 2018 (BVG Associates)

    Executive Summary

    In 2015, BVG Associates carried out a detailed review of Virginia ports and associated opportunities relating to offshore wind.

    This study extends that work through the following actions:

    • Review of current and projected market development

    • Local engagement and development of tools, to help build partnerships between developers and suppliers with regional companies interested in diversifying into offshore wind

    • Port review and update

    • Review of Virginia’s business climate and workforce readiness and

    • Evaluation of the strategic fit with the current and future supply chain.

    Supply chain opportunity

    US offshore wind is accelerating rapidly, challenging the global and regional supply chain with at least 10GW of capacity to be installed by 2030. Approximately 2GW of power purchase agreements (PPAs) are in place in the northern states and an additional 3GW is anticipated in 2019.

    Virginia is well positioned to derive economic benefit by establishing a supply chain to serve first-mover projects. Growing the industrial base at this early stage will prepare Virginia to competitively deliver its own 2GW in the coming years.

    A timely supply chain entry will equip Virginia with the skills and infrastructure required to participate in a growing pipeline along the East Coast, future activity such as 2GW off the coast of North Carolina and potential wind energy lease areas beyond those currently established.

    Comprehensive supply chain concept

    This report outlines the benefits of a collaborative multistate cluster concept, envisaging a “Mid and South Atlantic Coast supply cluster”. The Virginia Offshore Wind Team holds the view that regional collaboration will deliver the most effective offshore wind supply chain. A multi-state industrial base, aligned with logistics benefits and workforce synergies in each area, would attract anchor tenants and lead toward a supply diversity delivering the best economic benefit. Manufacturing offshore wind components and offering offshore wind services in Virginia and other neighboring states will, once at scale, enable multiple offshore wind competitors to reach substantial cost savings. Logistics efficiencies, risk mitigation and a diverse supply network will enable comprehensive sourcing strategies, aligning global partners with local capabilities, coastal infrastructure and Jones Act marine logistic solutions.

    Recommendations

    The Virginia Offshore Wind Team is comprised of a selection of local, state and industry stakeholders. The Team was formed in order to provide local knowledge input into report deliverables as well as serve as a deployment arm for supply-chain tasks and strategies. In coordination with BVG Associates, the Team developed the following recommendations:

    1. Create a “Virginia Office for Offshore Wind” to provide a clearinghouse and facilitator to advance offshore wind

    • Hire or designate an individual to fulfill the role of leading the office in coordinating stakeholder collaboration and to serve as point-of-contact for offshore wind activities

    • Engage with the Offshore Wind Business Team and the Offshore Wind Workforce Development Team and Business Team partnerships to leverage resources and share supply chain expertise

    • Support both offshore wind prospects and businesses within the regional cluster, focusing on aligning offshore wind needs with regional business capacity

    • Provide regular updates covering market and technology development, project schedules, supply chain opportunities and other resources as appropriate, and

    • Develop a roadmap to achieve the Commonwealth’s 2GW offshore wind commercial development goal by 2028.

    2. Work toward a multi-state regional supply chain cluster, offering the industry a wide network and the best of what each state has to offer • Build partnerships in the Mid and South Atlantic region and develop close working relationships with state counterparts • Address federal issues as a single voice or with a common agenda • Work with other states on their core strengths and help secure business opportunities for regional state partners

    • Engage collectively with the offshore wind industry to understand supply needs/preferences to help facilitate a 'best fit' scenario, and

    • Promote the Virginia advantage as a logistical hub for major components, particularly for foundations, transition pieces and substations.

    3. Solicit and attract "anchor tenant" suppliers, with a focus on major components

    • Utilize state economic development resources to actively recruit major suppliers and consider engaging an offshore wind subject matter expert to provide introductions and help secure interest of prospects

    • Develop a 'tour package', hosting developers and major suppliers and offering clarity on what Virginia can offer to major employers that choose Virginia, and

    • Send a strong “open for business” message, addressing areas of interest and concern and reinforcing through commitment of local and state decision-makers.

    4. Enable and grow Virginia’s business opportunity through partnerships and infrastructure

    • Keep the Offshore Wind Business Team intact

    • Provide clear and timely guidance on eligibility and access to existing resources applicable to offshore wind

    • Consider establishing industry specific programs, incentives and resources

    • Dedicate assistance to second tier/lower tier suppliers and maintain partnership tools that connect regional cluster businesses with developers and investors, and

    • Pursue infrastructure improvements that enable port readiness, consider incentives for private assets and leverage existing programs such as the Virginia Waterway Maintenance Grant Program for dredging.

    5. Grow Virginia business opportunity through workforce development

    • Keep the Workforce Development Team intact

    • Identify and provide clear access to existing training resources applicable to offshore wind

    • Establish offshore wind specific programs, training and attraction options for the industry, and

    • Work with stakeholders such as the Navy and Department of Defense on ways to complement Navy activities and flatten the workforce fluctuations driven by Navy contracting.

    Virginia’s East Coast advantage

    This report further evaluates Virginia’s position in key areas that include business climate, workforce, infrastructure and location. Virginia recognizes that it has a number of key competitive advantages specific to the offshore wind supply chain that include:

    • Pro-business climate

    • Strategic geographic location

    • Unmatched port infrastructure

    • Congestion-free navigation

    • Progressive energy policy stance

    • Unrestricted air draft waterways

    • High-quality maritime workforce

    • Abundant waterfront land and infrastructure, and

    • America’s largest shipbuilding industry.

    The objective to capture first-mover, as well as long-term supply chain business relies on the ability to overcome the near-term lack of an early commercial scale offshore wind development in the region.

    The Virginia advantage is a combination of a diverse regional supply chain network, incentive/workforce packaging and established timelines to build out regional coastal projects to include Virginia and North Carolina will be key in securing the sustainable economic benefits, investments and jobs that a developed regional supply chain cluster will deliver.