Renewables – Page 12 – Global Power Law & Policy

WUTC Proposes Changes to Planning Paradigms and IRP Models for Energy Storage Technologies

Mar 28 2017

By Vanessa Pronovost, Eric Jay, Molly Suda, and William Holmes

The Washington State Utilities and Transportation Commission (the “WUTC”) has issued a Draft Report and Policy Statement on Treatment of Energy Storage Technologies in Integrated Resource Planning and Resource Acquisition (the “Draft Report”) in connection with two consolidated dockets, UE-151069 and U-161024 (the “Dockets”). The Draft Report is intended to provide useful guidance regarding energy storage technologies to investor-owned utilities (“IOUs”), vendors seeking to promote energy storage for use by IOUs, and anyone interested in the use of energy storage on electric distribution systems. The WUTC is seeking comments to the Draft Report by 5:00 pm on Monday, April 3, 2017 for the WUTC’s consideration in preparing its final policy statement on the Dockets.

Before issuing the Draft Report, the WUTC held two formal workshops and solicited two rounds of comments. Commenters generally agreed that current integrated resource planning (“IRP”) models are inadequate for purposes of capturing the benefits of energy storage technologies. The following is a summary of the WUTC’s conclusions and guidance with respect to investments in energy storage technologies.

MassCEC Solicits Proposals for Innovative Energy Storage Uses Cases and Business Models

Mar 27 2017

By William H. Holmes, Molly Suda, and Michael L. O’Neill

On March 9, 2017, the Massachusetts Clean Energy Center (MassCEC) issued a Request for Proposals for the “Advancing Clean Energy Storage” (ACES) Program. MassCEC is offering up to $10 million in funding for energy storage demonstration projects that “pilot innovative, broadly replicable energy storage use cases/business models with multiple value streams in order to prime Massachusetts for increased commercialization and deployment of storage technologies.” The organization expects to make 10-15 awards of between $100,000 and $1,250,000 each. Applications are due to MassCEC by 4 pm Eastern Time on June 9, 2017.

Avangrid Wins Latest BOEM Auction for Offshore North Carolina Lease and Moves Towards Full Commercial Lease

Mar 23 2017

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, Michael L. O’Neill

Following an auction on March 16, 2017, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) named Avangrid Renewables, LLC (Avangrid) the provisional winner of the auction. Avangrid, majority owned by global energy firm Iberdrola, S.A., outbid three other auction participants to secure rights to a 122,405-acre area off the coast of Kitty Hawk, North Carolina. Avangrid and BOEM will now work to finalize the provisional lease and continue to develop the project.

BOEM has not scheduled any other lease auctions for offshore wind projects on the Outer Continental Shelf. However, as this month’s unsolicited bids for offshore Massachusetts and New York demonstrate, businesses remain interested in developing offshore wind projects with or without an open lease application solicitation. Therefore, in addition to submitting unsolicited lease applications, there is an opportunity to advocate at the federal level with the Trump Administration and BOEM to continue the leasing program on the Outer Continental Shelf and to continue advocating for state-level incentives for offshore wind projects.

The Auction Process and the Winning Bid
Following years of preparation, BOEM announced its plans to hold the North Carolina Outer Continental Shelf lease in January 2017. Nine bidders pre-qualified as “eligible bidders” under BOEM’s auction rules. Four companies participated in the March 16 auction:

Avangrid
Statoil Wind US LLC
Wind Future LLC
wpd offshore Alpha LLC (wpd offshore)

The bidding lasted 17 rounds, with Avangrid and wpd offshore both bidding more than $8 million in the 16th round. Avangrid’s 17th round bid of $9,066,650 successfully secured the provisional win for Avangrid.

Next Steps for the North Carolina Lease and Beyond
Part 585 of the Code of Federal Regulations lays out the next steps for finalizing the lease for the offshore North Carolina block. First, the U.S. Department of Justice and the Federal Trade Commission will review BOEM’s auction process. Then Avangrid must execute the lease, file financial assurance, and pay the balance of the “bonus bid” (the difference between the winning bid and the applicable bid deposit) within 10 days of receiving the lease documents.

Once the lease is finalized, Avangrid will have one year to submit its Site Assessment Plan (SAP) to BOEM. The SAP describes the initial activities the leaseholder will undertake to evaluate the lease site (federal guidance available here). If approved, BOEM’s regulations allow Avangrid five years to develop and submit a Construction and Operations Plan for BOEM’s approval, although the plan must be filed at least six months prior to the end of this five-year period. A Construction and Operations Plan outlines the facilities that the leaseholder plans to construct and use for its project, as well as construction activities, commercial operations, and decommissioning plans (additional federal guidance here). Once the Construction and Operations Plan is filed, BOEM will evaluate the potential environmental impacts of the proposed project and reasonable alternatives, as well as solicit public comment. If BOEM approves the Construction and Operations Plan, Avangrid would have a 25-year commercial lease term with the possibility of renewal.

More broadly, the North Carolina offshore wind lease auction was the last pending open auction. BOEM has evaluated potential commercial leasing and received indications of commercial interest in other Outer Continental Shelf areas, such as offshore California, Hawaii, and South Carolina, but the agency has not set a timetable for announcing any further competitive lease auctions. In the absence of an open auction, interested parties may submit unsolicited lease applications in accordance with 30 C.F.R. § 585.230.

There is also an opportunity to advocate for additional competitive Outer Continental Shelf lease auctions with the Trump Administration. President Donald Trump’s “America First: A Budget Blueprint to Make America Great Again” proposes a 12 percent cut to the Department of the Interior’s budget, suggesting that agencies like BOEM within the Department may be de-emphasized under the new Trump Administration. In contrast, Secretary of the Interior Ryan Zinke called the results of last week’s North Carolina auction a “big win for collaborative efforts with state, local, and private sector partners,” so the Trump Administration, as well as legislators in Congress, may be disposed to support continued offshore wind development as this year’s federal budget debate unfolds.

Developers Submit Unsolicited Requests for Wind Leases Offshore Massachusetts and New York

Mar 16 2017

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, and Michael L. O’Neill

On March 10, 2017, the U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM) posted four unsolicited applications for wind project leases on the Outer Continental Shelf. PNE Wind U.S.A., Inc. has filed three lease applications, two for offshore Massachusetts and one for offshore New York. Separately, Statoil Wind US LLC filed a lease application for offshore Massachusetts.

The developers’ lease requests, particularly the overlapping requests for offshore Massachusetts, indicate continued interest and growing competition in the U.S. offshore wind sector. The quickening pace of activity in the U.S. offshore wind market, including completion of Deepwater Wind’s Block Island offshore wind farm and today’s auction process for offshore North Carolina, suggests that offshore wind projects may become a more important part of the U.S. power generation portfolio in the coming years. In addition, the unsolicited application for offshore New York and the federal government’s response may provide an early indication as to the Trump Administration’s position on offshore wind development going forward. Increased activity and a new administration in the White House present opportunities to engage on this issue and shape the policies that will govern the federal offshore leasing program for the next four or eight years, or beyond. Read More

FERC Issues Policy Statement on Cost Recovery for Electric Storage Resources, But the Devil Will Be in the “Implementation Details”

Jan 24 2017

By Molly K. Suda, William H. Holmes, and Buck B. Endemann

Last week, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Policy Statement to provide guidance for electric storage resource owners and operators that may seek to receive cost-based rate recovery for certain services, as well as market-based revenues for other services.[1] The Policy Statement explains that an electric storage resource may provide transmission or grid support services at a cost-based rate, while also participating in the wholesale energy markets administered by a regional transmission organization (“RTO”) or independent system operator (“ISO”) and earning market-based revenues. As described below, the Policy Statement eliminates some uncertainty created by prior FERC precedent, which limited electric storage resources’ ability simultaneously to provide transmission or grid support services at cost-based rates and also participate in the wholesale markets.

However, the path forward for electric storage resources to “stack” payment streams and recover costs through both cost-based and market-based rates will not be without obstacles. The Policy Statement acknowledges that “implementation details” will need to be addressed. Additionally, FERC Commissioner Cheryl LaFleur dissented, disagreeing with the Policy Statement’s broad statements that electric storage resources’ ability to recovery costs through both cost-based and market-based rates will not adversely impact other market competitors. Commissioner LaFleur also disagreed with the decision to address the issue of electric storage resources’ ability to recover costs through both cost-based and market-based rates in a proceeding separate from the pending Notice of Proposed Rulemaking on electric storage’s participation in RTO/ISO markets (“Electric Storage NOPR”).[2] Thus, while the Policy Statement removes some uncertainty, electric storage resources will likely still have to grapple with cost recovery, competition, and other issues on a case-by-case basis.

This alert provides background on the Commission’s prior precedent related to electric storage resources and cost-based recovery, as well as the Commission’s recent efforts in several open proceedings to address potential barriers to the further development of electric storage resources. Provided below is a summary of the Commission’s Policy Statement, as well as an overview of open questions and unresolved issues that are intertwined with issues presented in the Commission’s Electric Storage NOPR and other recent orders.

Military Urges Renewed Commitment to Renewable Energy

Jan 17 2017

By Scott Aliferis and Elana Reman

On January 12, 2017, Noblis, in partnership with the Pew Charitable Trusts, released a report on energy assurance on U.S. military bases. Cost-effective and reliable energy is crucial to the success of U.S. military missions, and the Department of Defense’s (DoD) fixed military installations account for 1 percent of the total electrical energy consumed by the United States, costing almost $4 billion. The military has long relied on the commercial grid, with standalone generators during peak use, but these sources are vulnerable to disruption due to aging infrastructure, severe weather, and both physical attacks and cyberattacks. Instead, the report proposes shifting to a strategy of large-scale microgrids. It conducts a cost comparison, addresses implementation issues, and analyzes the efficiency and security of microgrids, concluding that they would be superior to the military’s current system for supplying energy.

The Pew Charitable Trusts recently held a panel discussion, which supplements the report’s findings, focused on the intersection of national security, energy, and climate change. Three military secretaries examined past successes, and Dr. Jeff Marqusee, the Chief Scientist of Noblis and author of the report, discussed how the military could enhance its energy security going forward. The panelists argued that investment in renewable energy should continue to be a priority for the U.S. military because its goal is increasing mission assurance. The testimony was followed by a roundtable discussion and Q&A session.

Treasury Guidance Clarifies and (Again) Expands Field of Renewable Energy Projects That May Qualify for the PTC or ITC

Dec 22 2016

By Elizabeth C. Crouse, Charles H. Purcell, Won-Han Cheng, and Alex Weber

Notice 2017-04, issued on December 15, 2016, clarifies and expands the beginning of construction and continuity safe harbors applicable to certain alternative energy projects, including wind installations. Like Notice 2016-31, released on May 5, 2016, Notice 2017-04 concerns only projects that qualify for the Production Tax Credit (“PTC”) under Code Section 45 and, by extension, many projects that qualify for the Investment Tax Credit (“ITC”) through Code Section 48(a)(5). You may read more about the provisions and consequences of Notice 2016-31 in our previous e-alert.

To read the full alert, click here.

FERC Proposes New Rules to Make Room for Storage in Wholesale Electricity Markets

Nov 21 2016

By Molly Suda and Elizabeth Trinkle

On November 17, 2016, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Proposed Rulemaking (“NOPR”) to amend Section 35.28 of its regulations. The proposed amendment would remove barriers to the participation by electric storage resources and distributed energy resource aggregations in the capacity, energy, and ancillary service markets operated by regional transmission organizations (“RTOs”) and independent system operators (“ISOs”). FERC defines “electric storages resources” as resources capable of receiving electric energy from the from the grid and storing it for later injection back to the grid regardless of where the resource is located on the electrical system. Electric storage resources include all types of electric storage technologies, such as batteries, flywheel, compressed air and hydro-pump. “Distributed energy resource aggregators” are defined as entities that aggregate one or more distributed energy resources (including electric storage resources, distributed generation, thermal storage and electric vehicles) for participation in the RTO/ISO wholesale markets.

Specifically, FERC proposes in the NOPR that each RTO and ISO revise its tariff to (1) establish market rules that accommodate the participation of electric storage resources in the organized wholesale electric markets and (2) define distributed energy resource aggregators as a type of market participant that can transact in the organized wholesale electric markets.

The NOPR includes a number of high-level proposals, and FERC requests comment from interested stakeholders on specific issues related to development and implementation of these proposals. An overview of the NOPR and FERC’s key areas of interest for comment are summarized below.

Comments on the NOPR will be due 60 days from publication in the Federal Register. A copy of the NOPR is available here.

K&L Gates Welcomes Chicago Energy and Infrastructure Partner Joseph Condo

Nov 01 2016

The Chicago office of global law firm K&L Gates LLP welcomes Joseph Condo as a partner in the energy and infrastructure projects and transactions practice. He joins from global renewable energy firm Invenergy LLC, where he served more than a decade as senior vice president and general counsel.

Condo has broad experience in complex foreign and domestic commercial transactions, including debt and equity financing, M&A transactions, joint ventures, and complex commercial litigation management. As chief legal officer at Invenergy, which owns and operates large-scale renewable and clean energy generation and storage facilities around the world, Condo oversaw financial transactions and mergers and acquisitions totaling more than several billion dollars, key commercial transactions, employment and corporate governance practices, and litigation along with corporate formation- and IP/trademark-related matters. In addition, he closely managed the company’s state, federal, and international legislative and regulatory affairs, including working extensively on government affairs matters in the European Union. Condo served as an assistant corporation counsel for the City of Chicago from 1997-99 and was an assistant attorney general for the State of Iowa from 1992-95.

“We are thrilled to have Joe join the K&L Gates team,” said Michael Martinez, administrative partner of K&L Gates’ Chicago office. “Joe’s immersion in the energy sector and broad experience in renewable energy transactions and policy add tremendous depth to our energy practice and expands our client service offerings in Chicago and throughout the globe.”

Lawyers in K&L Gates’ global energy & infrastructure projects and transactions practice advise on projects across a broad range of sectors, including oil and gas, power, and renewables; transportation and social infrastructure; and waste management.

Condo is the fifth new partner or of counsel addition to K&L Gates’ Chicago office this year, following the arrivals of partners Joshua Yang (investment management), Sang-yul Lee (labor and employment), and Justin Weisberg (construction) and of counsel David Rieser (environmental).

Event: Infocast’s Corporate Renewables 2016, K&L Gates Platinum Sponsor

Sep 01 2016

We invite you to join us for Infocast’s Corporate Renewables 2016 program on September26-28, 2016 in Washington, D.C. Portland partners Teresa A. Hill and William H. Holmes will be co-sponsors, along with faculty from Renewable Choice Energy, of a one-day, interactive Corporate Renewables 101 workshop on Monday, September 26. Topics discussed will include developing a procurement strategy, offsite renewable energy options, and executing on your renewable energy strategy. The workshop will help corporations, universities, non-profits and other non-utility purchasers of renewable energy build a strong foundation in renewable energy procurement.

Catagory:Renewables