Energy Transition in Motion (Week of Sept. 6, 2024)

Initiatives to provide more access to clean energy in rural America are set to get a $7.3 billion boost after the Biden administration announced 16 selections this week for funding.

Funded by the Inflation Reduction Act, the move marks the largest investment in rural electrification since U.S. President Franklin D. Roosevelt’s New Deal in the 1930s, the White House said Sept. 5. The financing, awarded by the U.S. Department of Agriculture’s Empowering Rural America (New ERA) program, is expected to help rural cooperatives upgrade infrastructure and invest in lower cost electricity projects.

“Thanks to the New ERA program, co-ops will build or purchase over 10 gigawatts [GW] of clean energy and make enabling investments in areas including transmission, substation upgrades and distributed energy resource management software that will lower energy costs for rural Americans and enhance grid performance, resiliency and reliability,” the White House said.

Wisconsin’s Dairyland Power Cooperative is the first recipient with an award of about $573 million. The others are in the underwriting process to receive awards.

Dairyland plans to use the funds for solar and wind installations, totaling 1.02 GW, in Iowa, Illinois, Minnesota, North Dakota and Wisconsin. The award comes as Dairyland works to shrink its carbon profile. The cooperative said it has retired nearly 580 megawatts (MW) of coal generation since 2014.

“Through a carefully cultivated portfolio of renewable energy projects, New ERA will drive substantial carbon reduction across the Dairyland system, facilitate new economic growth and job creation, promote environmental stewardship and lower energy costs for rural and agricultural communities,” Dairyland Power Cooperative President and CEO Brent Ridge said in a statement.

The White House said the New ERA investments will prevent at least 43.7 million tons of greenhouse gas pollution annually, equivalent to eliminating pollution from over 10 million gasoline-powered cars annually.

Here’s a look at other renewable energy news.

Energy storage

USB Asset Management Lands Financing for Texas Storage Projects

Four energy storage projects being developed by an affiliate of UBS Asset Management’s Energy Storage Investment Fund I have secured $315.7 million in financing.

The financing was announced Sept. 4 by First Citizens Bank, which served as a co-lead arranger on the transaction.

“We see expanding opportunities for battery storage systems, such as these four projects in Texas, to support the reliability and cost-effectiveness of clean energy sources,” said Ken-Ichi Hino, co-head of energy storage investment strategy at UBS Asset Management.

Combined, the projects have a 730-MW capacity and are expected to begin commercial operations later this year.

Hydrogen

ADNOC to Acquire Stake in Exxon’s Hydrogen, Ammonia Facility

Abu Dhabi National Oil Co. (ADNOC) will acquire a 35% equity stake in Exxon Mobil Corp.’s proposed low-carbon hydrogen and ammonia production facility in Baytown, Texas, the U.S.-based energy giant said Sept. 4.

The move came as companies across the world take steps to help decarbonize sectors with high greenhouse gas emissions while meeting growing demand for lower-carbon fuels.

“This is a world-scale project in a new global energy value chain,” said Exxon Mobil CEO Darren Woods. “Bringing on the right partners is key to accelerating market development, and we’re pleased to add ADNOC’s proven experience and global market insights to our Baytown facility.”

The facility is expected to produce up to 1 Bcf of hydrogen daily and more than 1 million tons of low-carbon ammonia per year, if it receives required regulatory permits. The facility, which Exxon said is also contingent on supportive government policy, will also capture about 98% of the associated CO₂ emissions.

“This strategic investment is a significant step for ADNOC as we grow our portfolio of lower-carbon energy sources and deliver on our international growth strategy,” said Sultan Ahmed Al Jaber, managing director and group CEO for ADNOC.

A final investment decision on the facility is expected in 2025, a year later than previously expected. Anticipated startup is in 2029, Exxon said.

In June, Exxon Mobil said it reached an agreement with Air Liquide, enabling the transport of hydrogen through the industrial gases company’s existing pipeline network. Air Liquide also plans to build and operate four large modular air separation units for the facility. The units will supply 9,000 metric tons of oxygen and up to 6,500 metric tons of nitrogen daily to the facility.

Nitrogen is combined with hydrogen to produce ammonia, which is a key ingredient in fertilizer and other products.

China’s Hygreen Energy, Partners to Invest $2.2B in Hydrogen Projects

(Reuters) Chinese electrolyzer manufacturer Hygreen Energy said on Sept. 3 it and its partners would invest more than $2.21 billion in green hydrogen projects in the southern Spanish region of Andalusia.

The plans include a new plant to produce electrolyzers, which use electricity to split water into hydrogen and oxygen, and green hydrogen plants.

The electrolyzer production factory will have a capacity of up to 5 GW, depending on demand in Europe, and will initially focus on 5-MW electrolyzers.

Andalusia is positioning itself as a green hydrogen leader in Spain and Europe, taking advantage of its abundant wind and solar power potential.

Green hydrogen is produced using renewable electricity. While it is seen as key to decarbonizing Europe’s economy in the future, green hydrogen projects in general are not competitive without subsidies due to high costs.

Solar

EDF Renewables Secures Investment in Solar Energy Storage Project

Power Sustainable Energy Infrastructure Inc. (PSEI) is investing in North American solar with the acquisition of a 50% stake in EDF Renewables North America’s Desert Quartzite Solar+Storage Project in Riverside County, California.

The investment is PSEI’s largest to date and was executed with Potentia Renewables Inc., PSEI’s integrated developer and asset manager.

Desert Quartzite is under construction for a capacity of 300 MW of solar generation and a battery energy storage system with a capacity of 150 MW every four hours. Construction is expected to be finished by the end of the year, and with the commencement of commercial operation the final phase of PSEI’s investment will close.

EDF Renewables’ asset optimization team will continue the project’s long-term operations and maintenance.

Clean Power Alliance has a 20-year power purchase agreement for the electricity generated at Desert Quartzite to service Los Angeles and Ventura counties.

TotalEnergies, Adani Green Form Solar JV

TotalEnergies has partnered with Adani Green Energy Ltd. (AGEL), one of India’s largest renewable energy companies, to form a joint venture (JV) with a 1.15-MW solar portfolio in India.

In a Sept. 3news release, TotalEnergies said it will provide an equity investment of $444 million to support their development, and AGEL will contribute assets to the JV.

AGEL, which is 19.75% owned by TotalEnergies, is developing 30 GW of solar and wind projects across 538 sq km in Gujarat’s Khavda region in India, according to the news release. The projects are expected to generate enough electricity to power the equivalent of 16 million homes in India.

“The electricity generated by the solar projects will be sold through Power Purchase Agreements (PPAs) signed with the federal government agency, Solar Energy Corp. of India (SECI) and through sales on the wholesale market. This new transaction will allow TotalEnergies to capitalize on the ongoing liberalization of the Indian electricity market.

Completion of transaction is subject to the approval of AGEL’s shareholders and customary closing conditions, including regulatory approval, the release said.

Britain Grants Development Consent to Large Solar Farm Project

(Reuters) Britain’s Planning Inspectorate on Sept. 5 granted development consent to a large solar farm project comprising three electricity-generating stations with anticipated capacity in excess of 50 MW.

The Cottam Solar Project in East Midlands has been classified as a nationally significant infrastructure project, and would also include the development of energy storage and grid connection, the agency said in a statement.

The project, which is being developed by Island Green Power and would cover 1,150 hectares of land over three sites, could generate enough clean energy to power 180,000 homes, according to the company's website.

The Labour government, in power since July, plans to decarbonize the electricity sector by 2030 but requires a big increase in renewable power capacity such as wind and solar to do so.

Trina Solar to supply Vanda RE Solar PV Modules for Indonesia Project

(Reuters) Trina Solar signed an agreement to supply 1.2 GW worth of solar photovoltaic modules to Vanda RE for its power project in Indonesia, the Chinese solar panel firm said Sept. 4.

Vanda RE, controlled by Gurin Energy, is building the project in Indonesia’s Riau Islands under a consortium with other Singaporean and Indonesian companies.

The consortium has proposed to install about 11 GW peak of solar photovoltaic capacity and 21 GW of battery storage capacity in Indonesia.

Singapore's Energy Market Authority last year gave a conditional approval for the import of 2 GW of low-carbon electricity from the solar power project.

Once completed in 2027, the project will supply Singapore with 300 megawatt hours of non-intermittent, zero-emission electricity—enough to power 390,000 households annually, Trina said.

Wind

US Wind Secures Approval for Project Off Maryland

The U.S. Bureau of Ocean Energy Management on Sept. 5 said it approved the Maryland Offshore Wind project being developed by US Wind, a subsidiary of Italy-based Renexia.

The project will become the 10th commercial-scale offshore wind energy project for the U.S. and move the U.S. halfway toward its 30 GW offshore wind capacity 2030 target.

As approved, the project could generate more than 2 GW of renewable energy.

With this week's approval of the Maryland Offshore Wind project, the count of commercial-scale offshore wind projects approved in the U.S. is now 10.

“Today’s milestone marks another giant leap toward our ambitious goal of unleashing 30 gigawatts of offshore energy by 2030,” said Acting Deputy Secretary Laura Daniel-Davis. “Our work to approve the nation’s first ten commercial-scale offshore wind projects is the result of the tenacious public servants at the Bureau of Ocean Energy Management and the Biden-Harris administration’s commitment to expedite the federal permitting process.”

US Wind plans to develop the project in three phases on a 46,970-acre lease area about 10 nautical miles offshore Ocean City, Maryland. The project will include up to 114 wind turbine generators, four offshore substation platforms and four offshore export cable corridors, according to BOEM.

US Wraps Up Environmental Review of Gulf of Maine Offshore Wind Leasing

The U.S. Bureau of Ocean Energy Management has completed an environmental assessment of a 15-GW wind energy area in the Gulf of Maine.

The federal agency on Sept. 6 said it found that leasing and site assessment and characterization activities will not have a significant impact on the environment. The assessment, which will be published Sept. 9 in the Federal Register, covers an area offshore Maine, New Hampshire and Massachusetts.

“BOEM is actively assessing proposed offshore wind activities in the Gulf of Maine by collaborating with Tribes, state and federal agencies, ocean users, local communities and other stakeholders,” said BOEM Director Elizabeth Klein. “We are committed to ensuring that future offshore wind development proceeds in a manner that reduces potential impacts on other ocean activities and the surrounding ecosystem.”

In April, the Interior Department proposed having a lease sale in the Gulf of Mexico, potentially putting eight leasing areas up for bid. Together, the areas take up nearly 1 million acres.

The Gulf of Maine could become the site of floating wind developments due to its deep waters. The U.S. is targeting 15 GW of floating wind capacity by 2035.

Big Floating Wind Farm by Eni Unit, Hitec Wins Britain Support

(Reuters) Flotation Energy and Vaargroenn, a JV between Eni unit Plenitude and private equity firm HitecVision, said on Sept. 3 their floating offshore wind project Green Volt won a contract at Britain’s latest renewable power auction.

The $3.28 billion initiative, which is expected to have a capacity of up to 560 MW, is poised to become the world’s largest floating offshore wind farm supported by government incentives, they said. It will be located 80 km (50 miles) off the coast of northeast Scotland.

Once operational, Green Volt will supply clean power to the British grid, while supplying renewable electricity to nearby oil and gas platforms. Eni’s renewable energy unit Plenitude owns 65% of Vaargroenn with HitecVision holding the rest.

“Green Volt will stimulate investment in new port infrastructure and aggregate the efforts of an advanced supply chain, helping accelerate the development of more floating wind farms,” Vaargroenn CEO Stephen Bull said in a statement.

The British government announced it would support a total of 131 wind, solar and tidal projects capable of generating almost 10 GW of capacity, which would be enough to power around 11 million homes.

Ørsted giant offshore wind project Hornsea 4 secured the largest contract by capacity at 2.4 GW. Iberdrola also won contracts for its East Anglia Two and East Anglia Three offshore wind projects.

RWE U.K. Country Chair Tom Glover told Reuters it was positive to see offshore wind projects in the auction, but he was disappointed two-thirds of “the eligible pipeline” had been omitted when the government has said it wants to accelerate the sector.

RWE is developing the Norfolk Vanguard West and East offshore wind projects it bought from Vattenfall last year that have a combined capacity of 2.8 GW. The company did not confirm whether it had entered them into the latest auction.

RWE won contracts for a total of 218 MW of capacity across five onshore wind and solar projects.

Through the auctions, held annually, the government invites renewable project developers to bid for government-backed price guarantees for the electricity produced, called Contracts for Difference.

Reuters and Hart Energy Staff contributed to this report.