Category: Renewables

1
Making Room for Electric Storage: RTOs/ISOs Propose Changes to Their Market Rules to Comply with FERC Order 841
2
RENEWABLE ENERGY: Leveraging the Opportunity Zones Tax Incentive to Improve Returns on Renewables, Storage Plus, and Standalone Storage
3
US Offshore Wind Market Handbook Helps Investors Navigate Technical and Regulatory Issues
4
Invigorated Federal Interest in Fusion Energy Presents Opportunities and Questions for Growing Private Fusion Energy Sector
5
K&L Gates’ Quick Guide to the Polish Auction System for Renewables
6
K&L Gates Advises innogy on Acquisition of More Than 2,000 MW Onshore Wind Projects
7
Powering America: The Role of Energy Storage in the Nation’s Electricity System
8
Loose Lips Sink Ships: Public Statements and the Contractual Rights to Renewable Energy Credits in Solar Power Purchase Agreements
9
Balancing the Interconnect: FERC Reforms Large Generator Interconnection Process in a Manner That Could Benefit Energy Storage
10
Join Us for LSI’s Energy Storage Conference on June 11 & 12 in Seattle, WA

Making Room for Electric Storage: RTOs/ISOs Propose Changes to Their Market Rules to Comply with FERC Order 841

By Abraham F. Johns, William M. Keyser, and Toks A. Arowojolu

On December 3, 2018, the Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) filed proposed market rule changes to provide energy storage resources with greater opportunities to participate in the wholesale markets as required by Federal Energy Regulatory Commission (FERC) Order No. 841. These widely anticipated FERC filings will likely provide the framework for how energy storage resources will be developed and used in the coming years.

In February 2018, FERC released Order No. 841, which requires each regional grid operator to revise its tariff to establish a participation model that allows energy storage resources to participate in the organized wholesale markets and sell the relevant products offered by each market. K&L Gates covered the details of this Order in a blog post and in the Energy Storage Handbook.

FERC set a deadline for each RTO/ISO to submit a compliance filing including tariff revisions by December 3, 2018. We have provided links to the compliance filings for each RTO/ISO below. The deadline for public comments on the filings is December 24, 2018 by 5 p.m. Each RTO/ISO has until December 3, 2019 to implement the changes. Considering the holiday season, some commenters may request an extension on this comment deadline. We will continue to monitor the development of these proceedings.

RENEWABLE ENERGY: Leveraging the Opportunity Zones Tax Incentive to Improve Returns on Renewables, Storage Plus, and Standalone Storage

By Elizabeth C. Crouse and Mary Burke Baker                     

Federal and state tax credits for renewable energy facilities are winding down, but a new federal tax incentive enacted in tax reform may provide a boost to many new installations, repowering projects, and storage facilities. The Qualified Opportunity Zones (“QOZ”) incentive provides attractive tax benefits for investors with capital gains that, unlike other federal incentive programs such as the New Markets Tax Credit and Historic Rehabilitation Tax Credit, can be combined with the Investment Tax Credit (“ITC”) and Production Tax Credit (“PTC”) for facilities located in geographic areas that are designated as QOZ. Further, QOZ benefits will remain in place for a significant period after the ITC and PTC have become less valuable or expired. Recently released regulations provide significant clarity and highlight how valuable the QOZ incentive can be for qualified investments. See our October 23 alert for a discussion of how the regulations make the QOZ incentive even more interesting.

To view the full alert on K&L Gates HUB, click here.

US Offshore Wind Market Handbook Helps Investors Navigate Technical and Regulatory Issues

K&L Gates LLP, and Atkins, a member of the SNC-Lavalin Group recently released an Offshore Wind Market Handbook to help guide investors through technical- and regulatory issues in the emerging US offshore wind market.

“Many large companies and institutional investors who have been successful with offshore wind projects in Europe are now poised to invest in the US,” said Andrew Thompson, Director, Offshore Wind at Atkins. “However, technical and regulatory issues unique to this market can be a barrier to developers for offshore wind energy projects. Our handbook provides practical information that addresses key matters.”

Regulatory issues include a discussion of the interplay between US federal jurisdiction and the various coastal states that have enacted laws and regulations encouraging offshore wind projects. Technical issues include turbine and foundation options and solutions, performance assurance strategies and a discussion of innovations in design and equipment that are particularly suited to US coastal waters.

“Essentially, technical and regulatory legal issues are intertwined such that project success requires a closely coordinated cross-discipline team,” said David Hattery, co-leader of K&L Gates’ power practice. “Together, K&L Gates and Atkins demonstrate a pool of knowledge and a depth of experience to draw on that gives us uniquely valuable insight into the legal and technical challenges facing the US offshore wind industry.”

The K&L Gates renewable energy practice combines European project experience with US regulatory and project development expertise. Atkins is a leading provider of full range technical and operational expertise in the energy industry, including engineering design and owner’s engineer services in the global offshore wind market. Together, K&L Gates and Atkins demonstrate market leadership on key issues and can help investors build a leading position in the US offshore wind market.

To read the full press release, click here.

Invigorated Federal Interest in Fusion Energy Presents Opportunities and Questions for Growing Private Fusion Energy Sector

By Tim L. Peckinpaugh, Michael L. O’Neill, R. Paul Stimers                     

Significant investment is flowing into private companies seeking long-sought-after breakthroughs to develop practical power generation solutions based on nuclear fusion reactions. [1] Fusion reactions have become relatively commonplace in the laboratory setting, but no one has developed a nuclear fusion reactor yet that produces more energy than the device uses to operate and maintain the reaction. Numerous private companies, in the United States and around the world, are attacking this challenge with a variety of approaches, with the goal of making the technology sustainable, practical, and commercial. These companies are receiving significant investment from backers who believe a solution is within reach.

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K&L Gates’ Quick Guide to the Polish Auction System for Renewables

K&L Gates is pleased to introduce our Quick Guide to the Polish Auction System for Renewables. Find the full version of the guide here.

Wind energy is breaking new ground in Poland. After a few years of stagnation, there is well-grounded optimism for the dynamic development of onshore and offshore RES.

A 1000 MW wind auction is expected in November 2018, with more to come in 2019. Bidders will compete in offering the lowest price over a 15-year period, plus indexation, and the auction winners will receive an estimated 12–15 billion PLN, i.e., ca. 4 billion EUR over this period.

The government is working on a separate piece of legislation concerning public support for the first offshore wind farms on the Polish Baltic Sea. However, concessions for offshore wind are already awarded and the industry is gearing up for the construction phrase. Offshore wind will likely feature here sooner rather than later.

Never before experienced growth is also anticipated in the solar market, with an auction for around 750 MW of new capacity in 2018. This exceeds by a few times the capacity of all solar installations existing so far in Poland.

The auctions are bound to bring the country closer to meeting the 15% target of renewables’ share in electricity generation. The Polish renewable generation will finally get a much needed boost after the delays experienced on the EU 2020 path.

It is therefore our pleasure to present this quick guide on the auction system for renewables – a compendium of knowledge prepared by the Polish Wind Energy Association and one of the association’s members

– K&L Gates law firm.

We hope that you will find the guide interesting.

K&L Gates Advises innogy on Acquisition of More Than 2,000 MW Onshore Wind Projects

3 August 2018

Powering America: The Role of Energy Storage in the Nation’s Electricity System

By Kathleen Nicholas and Tim Peckinpaugh

Today, the House Energy and Commerce Committee convened its eleventh hearing in its “Powering America” series.  The series goal is to examine all aspects of the U.S. electricity sector, and today the focus was on energy storage.  Members on both sides of the political divide agreed utilization of battery and other storage systems presents an opportunity to better optimize the country’s electricity system, and help bolster vulnerable places like Puerto Rico and rural areas.

The witnesses today were:

  • Dr. Keith E. Casey, Vice President, Market and Infrastructure Development, California ISO (Opening Statement)
  • Mr. Mark Frigo, Vice President and Head of Energy Storage, E.ON North America (Opening Statement)
  • Mr. Kiran Kumaraswamy, Market Applications Director, Fluence (Opening Statement)
  • Dr. Zachary Kuznar, Director, CHP Microgrid and Energy Storage Development, Duke Energy Corporation (Opening Statement)
  • Mr. Kushal Patel, Partner, Energy and Environmental Economics, Incorporated (Opening Statement)

A variety of topics were broached during the hearing, including ways the federal government can be helpful to the storage industry and how large-scale storage can be applied to the grid in ways that increase resiliency and reliability, and are beneficial to ratepayers.

You can view an archived video of the webcast here.

Loose Lips Sink Ships: Public Statements and the Contractual Rights to Renewable Energy Credits in Solar Power Purchase Agreements

By William H. Holmes and Kristen A. Berry

This post is one of a series of “practice tip” articles about renewable energy power purchase agreements.

There is a well-known Chinese proverb: “All problems derive from your big mouth.” These are words of wisdom for parties who are negotiating renewable energy PPAs.

In due diligence, we regularly come across on-site solar power purchase agreements (PPAs) that state that the seller is reserving all environmental attributes and selling only the project’s electricity to the buyer. This type of reservation is common in states like Maryland and Massachusetts, where environmental attributes may have a fairly high market value and may be monetized by the seller to make the project more marketable by effectively reducing the delivered price of electricity.  However, despite this environmental attribute reservation, these PPAs too often go on to say, quite expressly, that the buyer has the right to announce that it is using “solar energy” or “renewable energy” produced by the project.  This seemingly innocuous provision, intended to enable the buyer to brag about its renewable energy purchase, can create problems in PPAs where the seller also reserves environmental attributes.

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Balancing the Interconnect: FERC Reforms Large Generator Interconnection Process in a Manner That Could Benefit Energy Storage

By William M. Keyser, Buck B. Endemann, Benjamin L. Tejblum, Kristen A. Berry, and Toks A. Arowojolu

On April 19, 2018, the Federal Energy Regulatory Commission (“FERC”) issued its much anticipated Final Rule to amend the pro forma Large Generator Interconnection Procedures (“LGIP”) and Large Generator Interconnection Agreement (“LGIA”) (“Order No. 845” or the “Order”). Order No. 845 aims to eliminate inefficiencies and to provide a more streamlined and transparent interconnection process by adopting several reforms. The Order’s objectives are three-pronged: (1) to improve reliability, (2) to promote more informed interconnections, and (3) to enhance generators’ interconnection processes by eliminating inefficiencies and bottlenecks.

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Join Us for LSI’s Energy Storage Conference on June 11 & 12 in Seattle, WA

K&L Gates is pleased to participate in Law Seminars International’s upcoming Energy Storage Conference.  The conference is scheduled to be held at our office in Seattle.  K&L Gates’ Portland partner William Holmes hosts this event as Co-Chair.  Washington DC partner William Keyser will present on “FEROrder 841: Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators” and Seattle partner David Hattery will join a panel on “Business and Transactional Issues.”

About the Conference

Many experts view 2017 as the year in which energy storage turned the corner from nascent technology to full-fledged energy market participant. Major milestones included the construction of a large-scale energy storage facility to replace a natural gas plant in California, completed in less than six months; a large-scale solar-plus-storage PPA in Arizona priced substantially below prior market floors; and Tesla’s announcement of the successful powering of a 100MW mega battery in South Australia.Evolving market rules are expanding revenue opportunities for energy storage, including from deferred transmission and distribution upgrades, reduced peak demand charges, integration of intermittent resources, and provision of ancillary services. With FERC’s Order 841 and state policy initiatives to facilitate energy storage and distributed energy resources, energy storage projects may soon receive additional regulatory support.LSI’s first Energy Storage conference will explore in detail all of the facets for energy storage project development with the goal of better positioning you to take advantage of the opportunities.
For more information and to register, click here.

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