Tag: Offshore Wind

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The Energizer – Volume 82
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The Sun Also Rises: Congress Votes to Stimulate the Renewable Energy, Efficiency, Carbon Capture, and Storage Industries
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FERC Announces Conferences on Carbon Pricing and Offshore Wind in RTOs/ISOs
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‘Fitness for Purpose’ and Conflicting Obligations in Offshore Wind Projects
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Digital Optimization of the OSW Industry: Big Data, AI & Blockchain
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RENEWS SOUTHEAST – VOLUME 4
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Offshore Wind Farms Are Spinning Up in the US—At Last
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Next Massachusetts Offshore Wind Solicitation Ready for DPU Review
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Join K&L Gates at the Infocast Wind Power Finance & Investment Summit
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Winds of Change

The Energizer – Volume 82

By: Buck B. Endemann, Daniel S. Cohen, Molly K. Barker, Olivia B. Mora, Natalie J. Reid, Matthew P. Clark

A biweekly update on clean technology applications, distributed energy resources, and other innovative technologies in the renewable energy and clean transport sector.

There is a lot of buzz around cleantech, distributed energy resources (DERs), microgrids, and other technological innovations in the renewable energy and clean transport industries. As these innovations develop, energy markets will undergo substantial changes to which consumer and industry participants alike will need to adapt and leverage. Every other week, K&L Gates’ The Energizer will highlight emerging issues or stories relating to the use of DERs, energy storage, emerging technologies, hydrogen, and other innovations driving the energy and clean transportation industries forward.

IN THIS ISSUE: 

  • Kaua‘i Island Utility Cooperative to Develop Solar + Pumped Storage Hydrogen Project
  • New York Announces the Largest U.S. Award for Offshore Wind Contracts
  • Hydro-Québec Invests in New Electrolysis Plant
  • StoreDot to Provide Samples of Fast-Charging EV Battery

The Sun Also Rises: Congress Votes to Stimulate the Renewable Energy, Efficiency, Carbon Capture, and Storage Industries

By: Elizabeth C. CrouseMary Burke BakerLaurie B. PurpuroElias B. Hinckley, and David P. Hattery

On 21 December 2020, the shortest day of the year in North America, the U.S. Congress passed a historic stimulus package. Among its more than 5000 pages, the bill includes important, if not quite historic, clean energy-related provisions ranging from new and extended tax incentives to government programs for research and development. Assuming the legislation becomes law, a new day for U.S. carbon capture, offshore wind, and many more renewable energy technologies may dawn.

FERC Announces Conferences on Carbon Pricing and Offshore Wind in RTOs/ISOs

By: William Keyser, David Hattery, Buck Endemann, and Abraham Johns

On June 18, 2020, the Federal Energy Regulatory Commission (“FERC”) announced that it will hold two separate technical conferences later this year.  First, FERC will hold a Commissioner-led technical conference on September 30, 2020 to discuss issues related to carbon dioxide emission pricing (i.e., “carbon pricing”) as adopted by states in FERC-jurisdictional wholesale electricity markets (“Carbon Pricing in Organized Wholesale Electricity Markets”).  Second, FERC staff will hold a technical conference on October 27, 2020 to discuss whether existing frameworks for transmission, interconnection, and merchant transmission facilities can incorporate the growing offshore wind generation efficiently and effectively (“Offshore Wind Integration in RTOs/ISOs”).

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‘Fitness for Purpose’ and Conflicting Obligations in Offshore Wind Projects

By Charles Lockwood and Owen Chio

Two recent cases in the UK illustrate the tricky issues Employers and Contractors have to grapple with in defining the responsibilities of contractors involved in the construction of offshore wind projects.

There are no established standard form contracts for offshore wind farm projects. The standard forms that are often adapted for this purpose include traditional offshore forms used in the oil and gas industry such as the LOGIC forms and standard engineering contracts more commonly used for onshore projects such as FIDIC, particularly the FIDIC Yellow Book.

Neither form is ideally suited for use in the offshore wind industry and they are often heavily amended, particularly in relation to design obligations. The cases summarized below illustrate some of the tensions that can arise, particularly in relation to design and fabrication of monopiles and transition pieces and requirements that they should be fit for their intended purpose.

To read the full alert, please click here.

RENEWS SOUTHEAST – VOLUME 4

K&L Gates reports on the latest renewable energy policies and activities in the southeastern United States

By Kenneth J. GishWilliam M. KeyserAbraham F. JohnsOlivia B. Mora, and Laura B. Truesdale

K&L Gates’ ReNEWS Southeast is a periodic bulletin that will track key developments in renewable energy policy, activities, and technologies that are driving the industry forward.

IN THIS ISSUE:

  • Dominion Energy Breaks Ground on Virginia’s First Offshore Wind Installation
  • Duke Energy Hits Milestone of 1GW of Owned Solar Energy
  • Offshore Wind Areas Examined Off East Coast from Virginia to South Carolina
  • North Carolina Legislature Drops Ban on Wind Projects

View more details of Volume 4 by clicking here.

Offshore Wind Farms Are Spinning Up in the US—At Last

By Eric Niller of Wired

On June 1, 2019 the Pilgrim nuclear plant in Massachusetts will shut down, a victim of rising costs and a technology that is struggling to remain economically viable in the United States. But the electricity generated by the aging nuclear station soon will be replaced by another carbon-free source: a fleet of 84 offshore wind turbines rising nearly 650 feet above the ocean’s surface.

In this article from Wired, K&L Gates partner and Practice Group Coordinator for power David Hattery discusses how in recent years, wind turbines and their technologies have become more palatable, and therefore are more accessible, to communities. Because of this, turbines are able to generate more power than ever.

Click here to read the full article.

Next Massachusetts Offshore Wind Solicitation Ready for DPU Review

By Elizabeth C. Crouse and Michael L. O’Neill

On March 27, 2019, Massachusetts’s three electric utilities submitted a draft of their second offshore wind request for proposals (“RFP”) to the state’s Department of Public Utilities (“DPU”) for review and comment. This second solicitation is a follow-up to the initial RFP under Section 83C of Massachusetts’s 2016 renewable energy mandate that directs its utilities to procure 1,600 megawatts (“MW”) of offshore wind nameplate capacity by June 2027.

The initial solicitation in 2017 resulted in the selection of the Vineyard Wind project to enter negotiations with the utilities. The utilities executed power purchase agreements (“PPAs”) totaling 800 MW of offshore wind capacity with Vineyard Wind. DPU is reviewing those PPAs currently. [1]

Even though DPU has not approved the PPAs for the initial solicitation yet, the utilities have moved forward with the second solicitation because Massachusetts law requires that the second solicitation be issued within 24 months of the first solicitation. The second solicitation contemplates procurement of at least 400 MW of offshore wind capacity, although the utilities will consider proposals ranging between 200-800 MW of capacity. According to this draft RFP, the utilities will consider a larger project proposal if it is “likely to produce more economic net benefits to customers based on the evaluation criteria in the RFP.”

Some of the key bidding requirements and evaluation criteria include:

  • Each bidder must be in possession of development rights for offshore wind generation in a designated federal wind energy area (not closer than 10 miles from an inhabited area) as leased after January 1, 2012;
  • Each bidder must submit at least one bid of a 400 MW project, or explain why it cannot, and can submit its projects in up to two phases;
  • Each bidder must propose a generator lead transmission line;
  • Each proposal for the energy generation and/or associated renewable energy certificates must be less than $84.23 per MW-hour on a nominal levelized basis as calculated based on the first solicitation; and
  • Proposals will be evaluated on direct contract prices and other costs and benefits, including:
    • Direct benefits of any applicable energy storage systems,
    • Impacts on Massachusetts’s greenhouse gas emission rates,
    • Specific investments in supply chain infrastructure, port facilities, workforce and the Offshore Wind Accelerator Fund, and
    • Demonstrated direct benefits to low-income ratepayers.

As proposed, the utilities plan to issue the RFP on May 17, 2019, and expect to receive confidential proposals by August 9, 2019 (with public redacted versions due by August 16, 2019). The utilities plan to select the winner(s) by November 8, 2019, and finalize the PPAs for DPU approval by January 10, 2020.

In comments on the second Section 83C solicitation, several wind developers raised concerns that a timeline that does not permit developers to demonstrate a construction start by the end of 2019 imperils the developers’ ability to qualify for the 12% federal investment tax credit (“ITC”). The production and investment tax credits are currently phasing out for wind, but wind projects that begin construction in accordance with IRS guidance in 2019 may still qualify for the credits at a reduced rate, specifically a 12% ITC or 40% of the maximum production tax credit rate applicable to electricity produced in a relevant year. Many of the commenters indicate that the 12% ITC is more valuable to their projects.

Although the utilities propose to select the winning bidder(s) before the end of 2019, the timeline in the solicitation does not suggest that the utilities and the winners will execute their PPAs and submit them for DPU approval by 2020. Any activity that the developers undertake to begin construction in 2019 based on the unapproved PPA may expose them to the risk that DPU will reject or modify the PPA after a developer has made some expenditures towards the project.

[1] See Offshore Wind Handbook, K&L GATES LLP AND SNC LAVALIN at 19 (2018), http://www.klgates.com/files/Upload/2018-08_OG_Offshore-Wind-brochure.pdf.

Join K&L Gates at the Infocast Wind Power Finance & Investment Summit

K&L Gates welcomes you to join us at the Infocast Wind Power Finance & Investment Summit.  As a Gold Sponsor for the Summit, we are excited to have the opportunity to meet with you!  The conference will be held on February 5-7 at the Omni La Costa Resort and Spa in San Diego, CA.

K&L Gates Highlights

We look forward to seeing you!

Winds of Change

Federal Auction for Offshore Wind Leases in Northeast Set Record High

By David L. Wochner, Abraham F. Johns, and Michael L. O’Neill

On December 13 and 14, 2018, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) conducted an auction for three offshore wind power parcels in Massachusetts. The auction not only broke the record [1] for number of companies bidding, but also for being the highest grossing offshore wind lease sale. The promotion of federal offshore land auctions and positive statements [2] from both the Secretary of the Interior and the acting head of BOEM suggest that the Trump Administration remains committed to developing U.S. offshore wind resources.

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