Category: Renewables

1
Join K&L Gates at NEBC’s Energy Workshop on Thursday, June 7
2
Congressional Committee Charges Up for EV Hearing
3
California Energy Storage Update – What’s In the Latest Procurement Plans?
4
K&L Gates Energy Storage Handbook Volume 2 is Now Available!
5
Join K&L Gates at #ESACon18
6
Women in Power event: Indentifying and Innovating through Points of Resistance in Renewables
7
California SB 1399 Proposes to Expand Renewable Energy Opportunities for Non-Residential Customers
8
Tax Credits for Storage After Solar or Wind?
9
Tax Credits for Energy Facilities Extended in New Budget Bill
10
Energy Storage: 2017 Year in Review

Join K&L Gates at NEBC’s Energy Workshop on Thursday, June 7

Please join us on Thursday, June 7, 2018 as we host the Northwest Environmental Business Council’s (NEBC) Energy Workshop “Powering Our Future: Insight into the Growth of Renewables.”

As host of the event in our Seattle office, our partners Ankur Tohan and Alyssa Moir and associate Endre Szalay will speak on a panel titled “Solar & Wind Project Development: Navigating Risk and Seizing Opportunity.”

PROGRAM OVERVIEW

Join us for an engaging afternoon of discussions on policy, technology, and legal hot topics in the renewable energy industry. Panelists representing perspectives from power producers, power purchasers, energy investors, utility, and the legal industry will discuss the role of competitive markets in the renewable energy sector, the impact and increasing presence of renewables and storage on the grid, and renewable project development issues and opportunities with a focus on the Northwest.

The workshop is presented free of charge to NEBC members and all interested parties.

DETAILS

Thursday, June 7
1:45 – 2:00 p.m.: Registration & Opening Remarks

2:00 – 5:00 p.m.: Technical Workshop

5:00 – 6:00 p.m.: Happy Hour

Location: K&L Gates LLP, 925 Fourth Avenue, Suite 2900, Seattle, WA

REGISTRATION

For more details and to register, click here.

Congressional Committee Charges Up for EV Hearing

By Scott Aliferis

Congress will continue its review and oversight of automotive and energy issues this week. On Tuesday, May 8, the House Energy and Commerce Subcommittee on Environment will hold a hearing entitled “Sharing the Road: Policy Implications of Electric and Conventional Vehicles in the Years Ahead”.

The Subcommittee, chaired by Congressman John Shimkus (R-Illinois), has invited a diverse set of witnesses to provide testimony on the wide range of issues, opportunities and challenges facing consumers, automakers, utilities and other stakeholders.

According to a subcommittee memo, the following issues may be examined at the hearing:

  • The reasons for the current growth in EVs and expected future trends in electrification.
  • The policy implications of increasing EV market penetration.
  • The impact of EVs on fueling infrastructure and on the nation’s electrical grid.
  • The response of liquid fuel providers and automakers to changing market trends.
  • The consumer impacts of changing trends in transportation fuels and vehicles.

Another likely topic is the federal tax credit of up to $7,500 on the purchase of a plug-in electric vehicle, depending upon the size of the vehicle and its battery capacity. During last year’s Congressional debate on tax reform, the credit was preserved despite opposition from some House Republicans. However, the incentive begins to phase out after each manufacturer sells 200,000 electric vehicles. Many automakers may hit the limit this year. A group of 36 utilities cosigned a letter in March urging Congress to modify the credit and eliminate the cap. Pacific Gas & Electric was a signatory and its CEO is one of the witnesses for tomorrow’s hearing.

Other witnesses will offer important perspectives and data on the current marketplace and outlook for EV adoption. Additionally, there will be debate surrounding the existing policy and regulatory structures at the state and federal levels and what changes or modifications should be considered.

California Energy Storage Update – What’s In the Latest Procurement Plans?

By Buck B. Endemann and  Kristen A. Berry

Just as Prometheus hid fire in a fennel stalk to gift it to the unaware ancients, the pioneers of energy storage technology seek to harness and store energy in increasingly novel ways. Transforming captured energy into storable and consumable power stands at the forefront of this century’s revolution in green energy technology. In 2017, the United States deployed 431 MWh of energy storage capability, largely spurred by state-specific energy storage mandates.[1] California’s state legislature has continued to lead the nation and spread Prometheus’s “secret spring of fire.”

While the concept of storing energy is centuries-old, new battery technologies promise to mitigate California’s infamous duck curve and provide the low carbon, flexible ramping resources necessary to accommodate the state’s increasing penetration of solar power. The Union of Concerned Scientists estimates the United States’ total current storage capacity at 23 gigawatts (GW), which approximates the capacity of 28 coal plants.[2] Ninety-six percent of this capacity, however, derives from pumped hydroelectric storage, most of which was built in the 1960s and 1970s and is increasingly vulnerable to drought and other environmental risks. More recently, energy storage developers have focused their efforts on battery technologies, with lithium-ion batteries in particular making great strides in terms of duration and cost-effectiveness. Market watchers have projected that by 2020 the price of battery storage could decline to $200 kWh, compared to today’s market price of approximately $340/kWh.[3]

As detailed in the K&L Gates Energy Storage Handbook (Version 2.0), California’s two landmark energy storage bills require California’s Investor-Owned Utilities (IOUs) to procure and install nearly 2 GW of storage by 2024.[4]  Under AB 2514, the California Public Utility Commission (CPUC) required California’s IOUs to procure by 2020 1,325 MW of storage capacity split among the transmission, distribution, and customer domains.  In AB 2868, the legislature set an additional procurement target of 500 MW for distributed-connected energy storage systems, with individual 166 MW goals established for Southern California Edison (SCE), Pacific Gas & Electric (PG&E), and San Diego Gas & Electric (SD&E). Under both laws, California’s IOUs must submit periodic procurement plans to show progress toward each law’s targets.  In February and March 2018, SCE, PG&E, and SDG&E submitted their 2018 energy storage procurement plans, which lay out each IOU’s strategy to meet its energy storage goals in its respective service territory.

SCE proposes to procure a total of 60 MW of energy storage by 2018 in two separate procurements of 20 MW and 40 MW.  The 20 MW of procurement would respond to an additional legislative directive, SB 801, under which SCE is required to deploy energy storage in response to the natural gas shortages caused by the Aliso Canyon gas storage facility’s well failure.  For the remaining 40 MW, SCE plans to launch programs and investments to solicit utility-owned storage, as mandated under AB 2868. SCE’s procurement plan also seeks CPUC approval to allocate $9.8 million to install energy storage at low-income, multi-family dwellings.

PG&E’s procurement plan focuses on the 166 MW of energy storage under AB 2514 that it is required to procure in the 2018-2019 procurement period.  To meet that target, PG&E proposes an energy storage request-for-offers framework. To achieve its AB 2868 target, PG&E outlined its four categories of distribution-connected storage investments: (1) researching the role of distributed energy storage in wildfire safety, particularly within the context of the North Bay Wildfire rebuilding efforts, (2) launching a behind-the-meter storage program for up to 5 MW of thermal storage, (3) identifying and seeking immediate CPUC approval (via a Tier 3 advice letter) for storage investments up to 166 MW, and (4) requesting authorization for additional investments beyond the categories identified in the 2018 application.

SDG&E’s filing proposes seven utility-owned micro-grid projects, all of which would exist at the distribution circuit level. These projects would provide services to entities that contribute to public safety, like police stations and firehouses, by providing storage capabilities separate from the main grid.  SDG&E argues that these distributed storage systems will provide a wide-range of benefits, including grid resiliency, wholesale market revenues, and reduced dependency on non-renewable energy sources by minimizing the need for back-up generators.  SDG&E also plans to contribute $2 million toward a pilot energy storage incentive program for non-profit facilities, such as nursing homes.

Each of these utilities will roll out its initiatives over the remainder of 2018 and beyond.  K&L Gates will continue to monitor energy storage developments and provide updates.

[1] GTM Research / ESA, U.S. Energy Storage Monitor, https://www.greentechmedia.com/research/subscription/u-s-energy-storage-monitor#gs.KZIlnzQ (2017).

[2] Union of Concerned Scientists, How Energy Storage Works, https://www.ucsusa.org/clean-energy/how-energy-storage-works#.WtAsTq2otD8 (2013).

[3] McKinsey & Company, The New Economics of Energy Storage, https://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/the-new-economics-of-energy-storage (August 2016). Energy Storage Report, Study: Flow Batteries Beat Lithium Ion, http://energystoragereport.info/study-flow-batteries-beat-lithium-ion/#sthash.c07jCAVv.gXdjY17t.dpbs (July 2017).

[4] K&L Gates, Energy Storage Handbook, http://www.klgates.com/epubs/Energy-Storage-Handbook-Vol2/ (April 2018).

K&L Gates Energy Storage Handbook Volume 2 is Now Available!

 

 

As a courtesy to our clients and friends, the K&L Gates Power practice has updated the popular resource for you – the Energy Storage Handbook.

Designed as a basic primer on what energy storage is, how it is regulated and what sorts of issues are encountered when such projects are financed and developed, the Handbook is intended to highlight the most common regulatory and developmental issues faced by our clients and the industries we serve.

New In Version 2

To view Version 2 of the Energy Storage Handbook, please click here.

Join K&L Gates at #ESACon18

K&L Gates is proud to sponsor the Energy Storage Association’s 28th Annual Conference and Expo

K&L Gates welcomes you to join us at #ESACon18.  As the ESA News Desk Host, we are excited to have the opportunity to meet with you at this renowned conference and expo.  The conference will be held on April 18-20 at the Hynes Convention Center in Boston, MA.

K&L GATES HIGHLIGHTS

DISCOUNT CODE
As a member of the ESA Board of Directors, Portland Partner Bill Holmes is pleased to offer a 10% discount on registration.  Enter code BILLAC18 to receive the discount.

Women in Power event: Indentifying and Innovating through Points of Resistance in Renewables

3 April 2018
8:30 a.m. to 1:30 p.m.

K&L Gates
925 Fourth Avenue
Floor 29
Seattle, WA 98104

Presenters: Elizabeth ThomasJessica C. TsaoElizabeth C. Crouse, Elisabeth Yandell McNeil

The Seattle office is hosting a series of exciting discussions about the innovations driving the renewables industry into the future. A diverse range of women panelists from across the industry will discuss methods that industry participants are currently developing to move through known constraints and collaboratively identify additional points of resistance and possibilities for pushing through them.

8:30 a.m. Registration & Breakfast
9:00 a.m. Morning Updates
12:15 p.m. Keynote Panel & Lunch
1:30 p.m. Conclusion

Morning Updates
Regulatory Considerations
Moderator: Liz Thomas, K&L Gates LLP, Seattle
Mariah Kennedy, Puget Sound Energy
Rachel Brombaugh, King County

Technological Advances
Moderator: Jessica Tsao, K&L Gates LLP, Seattle
Jennifer Worrall, Iteros
Kristine Parra, Washington Clean Energy Testbeds
Laura McCarty, Local-E and Energy Trading Technology, Inc.

Finance and Strategy of Expansion
Moderator: Elizabeth Crouse, K&L Gates LLP, Seattle
Corey Camacho, Vestas
Karin Berardo, SIRES Advisors
Kate McGinnis, Fluence

Keynote Panel Discussion and Lunch
Moderator: Elisabeth Yandell McNeil, K&L Gates LLP, Seattle
Vanessa Miler Fels, Microsoft
Tess Williams, Doosan GridTech
Christina Page, Page Sustainability Consulting

California SB 1399 Proposes to Expand Renewable Energy Opportunities for Non-Residential Customers

By Buck Endemann and Nicholas Nahum

Introduced in February by State Senator Scott Wiener (D-San Francisco), California Senate Bill (“SB”) 1399 would create a new program in which non-residential customers could facilitate the development of off-site renewable energy projects of up to 20 megawatts (“MW”) to satisfy their energy needs.

Traditionally, California’s “over the fence” rule limits distributed solar producers to selling power directly to two or fewer properties and only if such properties are located immediately adjacent to the property where the power is produced. [1] These restrictions, along with California’s net metering tariffs, have historically deterred property owners from installing distributed energy generation beyond what is necessary to service their on-site electricity needs. Properties with little electricity demand but large generating potential (like warehouses or parking lots) are therefore provided little incentive to invest in on-site solar projects without a willing (and often large) buyer.

Read More

Tax Credits for Storage After Solar or Wind?

By Elizabeth Crouse, Elias Hinckley and William Holmes

On Friday, March 2, the Internal Revenue Service released Private Letter Ruling (“PLR”) 201809003. The PLR is not binding precedent, but it indicates that the IRS will permit a taxpayer to claim a Code Section 25D credit in respect of a residential battery installed after the solar panels to which it will be attached was installed. In the PLR, the IRS expressly states that it will treat the battery as property that “uses solar energy to generate electricity,” provided only solar energy is used to charge it.

The PLR concerns individuals claiming a credit for a residential system, but don’t stop reading. This outcome matters for C&I and utility scale projects also.

Read More

Tax Credits for Energy Facilities Extended in New Budget Bill

By Charles Purcell,  Won-Han Cheng, Elizabeth Crouse, and Andrea Templeton

Congress recently enacted the Bipartisan Budget Act of 2018, which contained a number of extenders applicable to tax credits for energy facilities.  In the case of PTC-eligible energy facilities that were not covered by the earlier extension applicable to wind and solar, the credit was extended to facilities where construction was commenced before January 1, 2018.  This new rule applies to closed and open loop biomass, geothermal, landfill gas, trash, qualified hydropower, and marine and hydrokinetic facilities.  In addition, the election to claim the ITC in lieu of the PTC on these facilities was also extended to facilities where construction was commenced before January 1, 2018.

The ITC provisions were amended to extend the “commence construction” dates for 30% credits for fiber optic solar, qualified fuel cell, ground based thermal heating and cooling systems, and qualified small wind energy property to be consistent with solar facilities (terminating at the end of 2021). The Act also extended the “commence construction” dates for 10% credits relating to qualified microturbine and combined heat and power system property (also terminating at the end of 2021).  To be eligible for the extension, combined heat and power system property must be placed into service after December 31, 2016.

In addition, the credits for fiber optic solar, qualified fuel cell and qualified small wind project will step down over the next 5 years.  It also appears that any such property not placed in service by the end of 2023 will not be eligible for any ITC.

Energy Storage: 2017 Year in Review

This issue of EDGE Advisory: Energy Finance Report reviews energy storage developments in 2017, focusing on the key factors that will impact the sector going forward. This issues covers the following topics:

To view the full newsletter, please click here.

Highlights in this issue include:

Heading into 2018, we look forward to the industry’s accelerating growth, and to continuing to work closely with companies, investors, trade associations, and policy makers in addressing changes in market rules and maximizing the opportunities for energy storage across the electric power sector.

To download a printable PDF of the publication, open the link above and click on the fifth icon from the left in the magazine toolbar at the top of the page.

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