Energy Transition in Motion (Week of Jan. 5, 2024)

Plans by BP to transform an old oil refinery into a biofuels production facility have been recommended for approval by environmental authorities in Western Australia.

Western Australia’s Environmental Protection Authority (EPA) said this week it recommended to the environment minister that BP’s Kwinana Renewables Fuels Project moves forward with conditions that expected emissions reductions to be achieved. The project aims to redevelop hydrocarbon refining and production infrastructure to handle processing of vegetable oils, animal fats and other biowaste products.

Up to 1,600 cubic meters of biofuel feedstock is expected to be processed daily.

“The EPA notes the proposed emissions reduction trajectory will mitigate approximately 1,449,000 t CO₂-e of Scope 1 emissions over the 20-year life of the proposal,” EPA Chair Matthew Tonts said in a statement. “These reductions are considered reasonably achievable through adoption of emerging technology and the use of offsets.”

The Kwinana project is one of five biofuel projects BP has planned worldwide as part of its efforts to provide lower carbon fuels to help reduce global emissions. In addition to biodiesel, or hydrogenated vegetable oil, the company said it plans to produce sustainable aviation fuel at the biorefinery by 2026. Plans also include integrating the site’s existing import terminal operations and producing green hydrogen for domestic use and exports.

The integrated energy hub is part of BP’s net-zero by 2050 ambition.

Located in Kwinana, Western Australia, the site operated as a fuel refinery until early 2021, BP said on its website. The refinery conversion does not require clearing of vegetation, and existing pipeline, jetty and tank infrastructure will be used for the new operations, Tonts said.

The EPA’s report is open for a three-week public appeal period, which closes Jan. 23, before final consideration by the environment minister.

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Energy storage

South Africa Selects CIP, EDF Renewables for Storage Projects

Copenhagen Infrastructure Partners’ (CIP) majority-owned Mulilo Energy Holdings and partner EDF Renewables have been named the preferred bidder for three battery energy storage projects in South Africa, CIP said Jan. 4.

The three projects, which have a combined capacity of 1,028 megawatt-hours (MWh), were among the five awarded during South Africa’s first battery energy storage procurement program. The projects—Oasis Aggeneis, Oasis Mookodi and Oasis Nieuwehoop—are estimated to cost about ZAR7 billion (US$376 million). CIP said construction is expected to start in mid-2024.

When complete, each project will deliver electricity to South Africa as part of 15-year power purchase agreements, according to the news release.

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Geothermal

Ormat Closes Geothermal and Solar Assets from Enel for $271MM

Ormat Technologies acquired a portfolio of solar assets in four U.S. states from Enel Green Power North America subsidiary Enel SpA for $271 million, according to a Jan. 4 news release.

The acquired portfolio also includes two contracted operating geothermal power plants and one triple hybrid geothermal, solar photovoltaic (PV) and solar thermal power plant. The geothermal plant has approximately 40 megawatts (MW) of capacity; Solar PV has 20 MW; two solar assets have a nameplate capacity of 40 MW; and two greenfield assets are in development.

The assets are in Nevada, Utah, Connecticut and California and increase Ormat’s electricity segment generated portfolio to 1,215 MW.

The overall transaction was funded through available cash, in combination with $200 million in newly issued long-term corporate debt.

The acquisition is expected to be immediately accretive to both revenues and EBITDA. Ormat said it intends to further improve the performance of the acquired asset portfolio through a series of operational enhancement and optimization initiatives.

Hydrogen

Plug Power Installs Electrolyzer System at Amazon Fulfillment Center

Green hydrogen tech company Plug Power said Dec. 27 it installed and commissioned a 1-MW proton exchange membrane electrolyzer system and hydrogen storage at an Amazon fulfillment center in Aurora, Colorado.

The electrolyzer system is the first to be installed and used at an Amazon site, Plug Power said in a news release. It produces enough hydrogen to fuel more than 225 hydrogen fuel cell-powered forklift trucks at the site.

“Hydrogen is an important tool in our efforts to decarbonize our operations by 2040 in support of The Climate Pledge, and we’re excited about our ability to produce hydrogen at Amazon facilities through this partnership with Plug,” said Asad Jafry, the director of global hydrogen economy at Amazon. “On-site production will make the use of hydrogen even more energy efficient for certain locations and types of facilities.”

Plug Power said it deployed more than 17,000 fuel cells to replace batteries in forklifts at more than 80 Amazon fulfillment centers; however, the hydrogen has been mostly produced elsewhere.

Hydrogen produced at the Aurora facility will be compressed and stored in a gaseous hydrogen storage tank for use by forklifts, Plug Power said.

Solar

Wisconsin’s Largest Solar Park Begins Full Operations

The 300-MW Badger Hollow Solar Park, the largest solar project to date in Wisconsin, became fully operational with the completion of its second phase, operator We Energies and partner Madison Gas and Electric (MGE) said Jan. 4.

The solar park, developed in two 150-MW phases, is capable of providing enough electricity to power about 90,000 homes, according to a news release. The project’s first phase came online in December 2021.

Located near the communities of Montfort and Cobb in Iowa County, the solar park features 830,000 solar panels that capture solar energy on both sides.

“The completion of Badger Hollow is another step in our ongoing transition to greater use of cost-effective, carbon-free renewable energy to serve all MGE electric customers,” MGE’s CEO Jeff Keebler said in the release. “By 2030, we expect every MGE electric customer will have 80% fewer carbon emissions from their electricity use simply by being an MGE customer as we work toward our goal of net-zero carbon electricity.”

The solar park’s second phase is owned by We Energies (100 MW capacity) and MGE (50 MW capacity). The first phase is jointly owned by We Energies’ sibling company, Wisconsin Public Service, (100 MW) and MGE (50 MW), according to the release.

“From frigid winter mornings through the hottest summer days, Badger Hollow Solar Park will play an important role in helping us deliver affordable, reliable and clean energy,” We Energies’ CEO Scott Lauber said.

First Solar, Cleantech Solar Enter Solar, Wind Power Deal

First Solar Inc. entered an agreement with Cleantech Solar to power the solar panel maker’s new manufacturing facility in Tamil Nadu, India, with solar and wind energy, according to a Jan. 4 news release.

As part of a 15-year, captive power purchase agreement, First Solar said Cleantech will construct 150 MW of photovoltaic solar and 16.8 MW of wind-generating assets to supply about 7.3 gigawatt-hours of electricity to First Solar’s new 3.3 gigawatt (GW) vertically integrated solar manufacturing facility. Cleantech agreed to procure 150 MW of First Solar’s Series 7 thin film solar panels for the project. Module delivery is scheduled for first-half 2024.

“Our new manufacturing facility in Tamil Nadu sets a high benchmark for responsible and sustainable vertically integrated solar manufacturing, not just in India, but globally,” said Sujoy Ghosh, vice president and managing director for First Solar in India. “By powering our operations with clean, renewably-generated electricity, we are working to further reduce our environmental footprint, which is already the lowest in the industry.”

The assets are expected to meet up to 70% of the facility’s expected energy needs. Plans are for the wind and solar assets to the fully commissioned by third-quarter 2024, helping to displace an estimated 7,000 kilotons of CO₂ emissions during the PPA’s duration.

The agreement will increase Cleantech Solar’s portfolio in Tamil Nadu to nearly 500 MW, according to the release.

SolarEdge Sees Moderate Growth in US Solar Industry in 2024

The U.S. solar industry will experience modest growth in 2024, as electricity prices decline and support from the Inflation Reduction Act (IRA) rolls in, SolarEdge CFO Ronen Faier said Jan. 4.

“We’ve bottomed in the last two quarters,” Faier told investors at a Goldman Sachs conference in Miami. Macroeconomic uncertainties in the back half of the year weighed on demand for solar products in the U.S., he added.

The solar product manufacturer sees demand improving with expectations for lower interest rates this year.

Incentives from the IRA in top solar markets like California are also beginning to improve the economics and prices of solar products and components, Faier said.

The U.S. Department of the Treasury in December unveiled proposed guidelines for manufacturers of clean-energy products seeking to claim a tax credit, created under the IRA, in a bid to power the energy transition with American-made products.

Battery installation is also expected to continue to grow in both the U.S. and European markets, Faier said, as manufacturers clear out large inventories of battery panels and other equipment.

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Wind

Avangrid, CIP Deliver First Power from Vineyard Wind

Iberdrola’s U.S. renewables unit Avangrid and Copenhagen Infrastructure Partners (CIP) said Jan. 3 they delivered 5 MW of power from their Vineyard Wind 1 project offshore Massachusetts.

The milestone was reached as the U.S. continues efforts to increase offshore wind energy capacity, targeting 30 MW by 2030.

As part of the commissioning process, CIP said one turbine delivered about 5 MW of power on Jan. 2. Tim Evans, partner and head of North America for CIP, said the accomplishment “marks the dawn of a new era for American renewables and the green transition.”

“By delivering first power, we have broken new ground and shown a viable path forward with power that is renewable, locally produced and affordable,” Evans said.

Developers plan to have five turbines operating at full capacity early this year as they move towards producing 806 MW of power in total from 62 wind turbines. With a height of up to 260 m and a rotor diameter of 220 m, each turbine has one tower, three 107-m blades and one nacelle.

Vineyard Wind is expected to generate enough electricity for more than 400,000 homes and businesses, lowering carbon emissions by more than 1.6 million metric tons per year. That is equivalent to removing 325,000 cars from roads annually, CIP said in a news release.

Offshore construction for the project off Martha’s Vineyard started in late 2022. Power is transmitted via underground cables that interconnect to the New England grid in Barnstable, Mass. CIP and Avangrid said additional onshore and offshore testing at Vineyard Wind is expected to happen in the coming weeks.

BP, Equinor Terminate Empire Wind 2 Contract in NY

Citing inflation, interest rates and supply chain disruptions, BP and partner Equinor said Jan. 3 they reached an agreement to terminate their contract to sell power from the Empire Wind 2 project offshore New York.

The agreement with the New York State Energy Research and Development Authority (NYSERDA) came as the developers look to capture new offtake opportunities amid the changing economic environment for the offshore wind sector. The agreement announced Jan. 3 “repositions an already mature project to continue development in anticipation of new offtake opportunities,” Equinor said.

Rising costs challenged the economic viability of some mature offshore wind projects, including Empire Wind 2, that had contracts in place before inflation and interest rates soared. The higher costs prompted several developers, including Equinor and BP, to request in August a higher price for power produced at offshore wind farms—a request that was denied in October by New York authorities.

However, in late November, NYSERDA invited all project developers to compete in a new solicitation process, enabling companies to leave their old contracts and offer their already planned projects at higher prices.

New York aims to develop 9 GW of offshore wind energy by 2035, enough to power up to 6 million homes, and source 70% of its electricity from renewable energy.

Hart Energy Staff and Reuters contributed to this report.