Energy Transition in Motion (Week of Feb. 16, 2024)

Solar and battery storage developers are expected to add record amounts of utility-scale capacity additions in 2024 as the renewables share of electric-generating capacity continues to climb, according to the U.S. Energy Information Administration.

If the planned 36.4 gigawatts (GW) of utility-scale solar comes online as expected, the addition will mark a record with more than one-third of that growth coming from Texas.

“This growth would almost double last year’s 18.4 GW increase, which was itself a record for annual utility-scale solar installation in the United States,” the EIA said Feb. 15. “As the effects of supply chain challenges and trade restrictions ease, solar continues to outpace capacity additions from other generating resources.”

Incentives in the Inflation Reduction Act may also be driving some of the growth. Signed into law in 2022, the IRA has fueled a clean energy boom in the U.S. by offering up billions of dollars in incentives. The law ushered in attractive tax breaks that has lured both domestic and foreign investors.

Growth comes amid efforts to lower emissions as many corporations, including tech powerhouses Google, Microsoft and Amazon, seek out renewable energy sources to shrink their carbon footprints.

The EIA also forecasts battery storage, typically paired with renewable energy projects such as solar, will hit a record for annual capacity additions this year.

“We expect U.S. battery storage capacity to nearly double in 2024 as developers report plans to add 14.3 GW of battery storage to the existing 15.5 GW this year,” the EIA said. “In 2023, 6.4 GW of new battery storage capacity was added to the U.S. grid, a 70% annual increase.”

Texas is again expected to lead in capacity gains, adding an anticipated 6.4 GW this year. The Lone Star State is followed by California at 5.2 GW. Together, they are expected to account for 82% of new battery storage capacity in the U.S.

Here’s a look at other renewable energy news.

Energy storage

Arevon, Blackstone Credit Close $350MM Deal for Storage Project

Renewable energy developer Arevon Energy and Blackstone Credit & Insurance closed a $350 million preferred equity, debt and investment tax credit transfer financing deal for the Condor Energy Storage project.

The transaction for the 200-megawatt (MW) project located in Grand Terrace, California, was announced Feb. 13. With a 15-year agreement in place with Southern California Edison, operations at the site are expected to begin in second-quarter 2024.

“Blackstone continues to see tremendous need for large scale financing solutions in the energy transition market, and we look forward to partnering with Arevon on future opportunities,” said Zachary Rubenstein, managing director in Blackstone Credit & Insurance’s Sustainable Resources Group.

The transaction was structured to simplify monetization of tax credits, avoiding the need for traditional tax equity financing, according to the release. Financing includes a commitment from Stifel Financial Corp. to buy investment tax credits, and the transaction is supported with a $164 million debt facility.

Exxon Aims to Make Key Lithium Technology Decision by Year-end

Exxon Mobil plans to decide by the end of the year which lithium filtration technology it will use in Arkansas as part of its push to become one of the world's top producers of the battery metal, an executive said Feb. 15.

Last fall, the company announced its long-anticipated plan to filter lithium from the Smackover brine formation flowing under Arkansas, with the aim of producing enough of the metal by 2030 to power 1 million electric vehicle (EV) batteries.

The plan will require a complex mix of equipment, including at least one of a so-far unproven fleet of direct lithium extraction (DLE) technologies to filter the metal from the brine.

Exxon has built a pilot plant in Houston and spent recent months testing various DLE technologies, producing small amounts of battery-grade lithium, Patrick Howarth, head of Exxon’s lithium business, said in an interview on the sidelines of the Arkansas Lithium Innovation Summit in Little Rock.

Howarth said the facility allows the company to test how the DLE processes interact with the rest of the vast network of equipment needed for production. “DLE is a small part of a really complicated process that has many different steps,” said Howarth. “We’re really focused on how do they interact with one another.”

Lithium production with partner Tetra Technologies is expected to begin in Arkansas by 2026. Production on Exxon’s independently-owned 120,000 acres (48,562 hectares) will begin by 2027.

Exxon has had early discussions with automakers about purchasing lithium, but no agreements have been made, Howarth said.

“What we’ve seen, especially following the announcement in November, is a very real strong pull for the projects and ultimately the (lithium) product that we’re bringing to market,” he said.

Exxon and Tetra’s agreement to develop roughly 6,100 acres in Arkansas is part of a memorandum of understanding both companies said they are working to finalize.

RELATED:

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Geothermal

Sage Geosystems Raises $17 Million in Latest Funding Round

Sage Geosystems has added Chesapeake Energy Corp., technology investor Arch Meredith and Helium-3 Ventures to its list of financial backers, the company said Feb. 15, announcing it has closed $17 million in Series A funding.

The proceeds, which came with continued support from Virya, Nabors Industries and Ignis Energy, will be used to fund a first-of-its-kind 3-MW geopressured geothermal system facility in Texas. Called Earthstone, the facility will harvest heat from pressurized water deep underground and store energy that can be paired with renewables to provide baseload dispatchable power, the company said.

“The success of our GGS technologies is not only critical to Sage Geosystems becoming post-revenue, but it is an essential step in accelerating the development of this proprietary geothermal baseload approach,” Sage Geosystems CEO Cindy Taff said.

Construction is expected to begin in second-quarter 2024 with targeted commissioning in fourth-quarter 2024.

RELATED: Oil, Gas Drilling Tech Transfer Boosts Fervo’s Geothermal Prowess

Hydrogen

ENEOS Selects Honeywell Technology for Novel Commercial Hydrogen Project

Japan-based Eneos selected technology developed by Honeywell to power what is being called the world’s first commercial-scale liquid organic hydrogen carrier project.

Honeywell said Feb. 13 that its technology will be used at multiple sites, enabling long-distance transport of hydrogen. Using its toluene hydrogenation process, Honeywell chemically combines hydrogen gas into methylcyclohexane (MCH), a convenient liquid carrier that is compatible with existing infrastructure, the company said. Hydrogen, in the MCH form, can be exported using the same methods as petrochemical products. After reaching its destination, the hydrogen will be recovered using the Honeywell MCH dehydrogenation process and released for use. The toluene can be sent back for additional cycles, Honeywell said.

“With more cost-effective long-distance transport, our liquid organic hydrogen carrier provides a method of more closely matching international supply and demand for hydrogen which enables hydrogen to play a critical role in the energy mix as we move toward lower-carbon economies,” said Ken West, president and CEO of Honeywell Energy and Sustainability Solutions. “By providing solutions to help overcome the challenges of hydrogen transportation, Honeywell is supporting ENEOS in transitioning to a hydrogen-powered future.”

Oulu Energy to Build 100-MW Hydrogen Plant in Finland

Finland-headquartered Oulu Energy said Feb. 14 it plans to build its first hydrogen plant, a 100-MW production facility in northern Finland.

Working with partner Finnish P2X Solutions, preliminary plans for the facility in the Laanila industrial area include an electrolysis plant, carbon capture plant, hydrogen and CO2 storage and a processing plant to create products including methane and methanol, the company said in a news release.

“The products created by the hydrogen plant could be used to replace fossil fuels in road, maritime and air transport,” according to Oulu Energy. “According to the preliminary estimate, approximately 200–400 gigawatt-hours (GWh) of heat energy per year would be created as a by-product, which could be transferred to the district heating network, while the oxygen could be recovered for industrial use.”

P2X Solutions, which is concurrently developing a hydrogen production facility in western Finland, is in charge of the project’s underway development phase to examine plant feasibility, location options and conduct an impact assessment.

A final investment decision is expected sometime in autumn 2025, with operations starting as early as 2028.

EU Approves $7.4B in State Aid to Boost Renewable Hydrogen

The EU commission said on Feb. 15 it had approved 6.9 billion euros (US$7.4 billion) in state aid for infrastructure projects to boost the supply of renewable hydrogen.

The aid provided by seven countries is expected to unlock an additional 5.4 billion euros in private investments, with 32 companies participating in 33 projects, the commission said.

The projects will support the deployment of large-scale electrolyzers to produce renewable hydrogen, as well as pipelines to transport it.

It will also help the development of large-scale hydrogen storage facilities and the construction of handling terminals and port infrastructure for carriers of liquid hydrogen.

“This will establish the first regional infrastructure clusters in several member states and prepare the ground for future interconnections across Europe, in line with the European Hydrogen Strategy,” European Commissioner Margrethe Vestager said.

The approval of the aid provided by France, Germany, Italy, the Netherlands, Poland, Portugal and Slovakia marks the third so-called “important project of common European interest” aimed at hydrogen.

Wind

Aker Solutions, Principle Power Land Floating Wind Contract

Aker Solutions and Principle Power have been selected to provide FEED work for Copenhagen Infrastructure Partners’ Haewoori 2 and 3 floating offshore wind projects, according to a Feb. 15 news release.

Combined, Haewoori 2 and Haewoori 3 have a capacity of 1 GW. The project is located offshore Ulsan, South Korea.

Aker Solutions’ work scope includes coordinating the design and delivery of the floating foundation structures required and perform FEED of the inter-array cable, marshaling port, wind turbine integration and transport and installation, the release said. The company will also carry out execution planning, and work with Haewoori Offshore Wind to engage with the Korean supply chain to maximize local engagement.

Working under subcontract, Principle Power will design the floating platforms and mooring system based on its WindFloat technology, according to the release.

FEED work was expected to begin immediately, with targeted completion by November 2024.

US Finalizes Wind Areas Offshore Oregon

The U.S. Bureau of Ocean Energy Management (BOEM) has finalized two wind energy areas (WEA) offshore Oregon with the potential to hold 2.4 GW of clean energy, the agency said Feb. 13.

The two areas, which BOEM said avoids 98% of areas deemed important commercial fishing grounds, are the 61,204-acre Coos Bay WEA and the 133,808-acre Brookings WEA.

“BOEM values its close coordination with the State of Oregon as we continue to work together to maintain a robust and transparent offshore wind planning process,” said BOEM Director Elizabeth Klein. “We will continue to work closely with Tribal governments, federal and state government agencies, ocean users, coastal communities and all interested stakeholders as we move forward with our environmental review.”

The U.S. is on a mission to deploy 30 GW of offshore wind energy capacity by 2030. However, progress slowed in 2023 after several offshore wind developers canceled contracts to sell power off the East Coast, citing inflation, higher interest rates and supply chain challenges.

EPA Issues Clean Air Permit for Equinor’s Empire Offshore Wind Project

Equinor has secured a clean air permit from the U.S. Environmental Protection Agency (EPA) for the company’s Empire wind project offshore New York.

The permit was issued after an air quality analysis showed federal air quality standards will not be violated during construction and operation of the project.

“When built, this project is expected to generate more than 2,000 MW of electrical power for New York State—enough to power as many as a million homes,” EPA Regional Administrator Lisa F. Garcia said in a news release.

The Empire Wind project is comprised of the 816-MW Empire Wind 1 and 1,260-MW Empire Wind 2. Combined, the wind farms will feature 147 turbines. In January, Equinor announced it had entered a swap agreement with BP to take full ownership of the Empire Wind lease, with BBP taking full ownership of the Beacon Wind lease and projects.

Five Groups Qualify for Norway Offshore Wind Tender

Five of the seven groups that sought to take part in Norway’s first commercial wind farm tender have been approved to participate in the auction that starts on March 18, the country’s energy ministry said Feb. 16.

The five groups include a consortium between Aker Offshore Wind, BP and Statkraft, another between Equinor and RWE, a joint project proposed by Shell, Lyse and Eviny, a cooperation between Parkwind and Ingka, and Energie Baden-Wurttemberg.

The ministry said it would go ahead with the process, despite being left with fewer than the six potential bidders it previously said were needed for it to run a subsequent auction for the rights to build the wind farm.

“We have decided to proceed,” Energy Minister Terje Aasland said in a statement. “I look forward to a good auction between these companies.”

Chinese wind turbine maker Mingyang Smart Energy failed to qualify, as did the company Hydroelectric Corp. The ministry did not say why the two were left out.

The tender offers the opportunity to build bottom-fixed wind turbines in the North Sea with a capacity of 1.5 GW in what Norway hopes will be the starting point for massive offshore power developments in the years leading up to 2040.

However, the global offshore wind industry has been struggling with soaring costs, and some analysts have questioned whether the 23 billion Norwegian crowns (US$2.18 billion) of subsidies on offer will be enough to attract bids in the auction itself.

Shell said this week it has not yet decided whether to bid even if it qualified, as there were questions over the project’s profitability.

Reuters and Hart Energy Staff contributed to this report.