U.S. energy secretary warns tariff case could thwart solar targets; EU to set out one-year permitting rule

The solar news you need to know.

U.S. energy secretary ‘deeply concerned’ about solar tariff impact

A prolonged investigation of solar panel tariffs by the U.S. Department of Commerce could prevent the U.S. from achieving the Biden Administration's goal of a zero-carbon power sector by 2035, Energy Secretary Jennifer Granholm told a Senate hearing May 9.

In March, the commerce department launched an investigation into imports from Malaysia, Thailand, Vietnam and Cambodia after U.S. manufacturer Auxin claimed Chinese manufacturers shifted production to these countries to avoid paying U.S. anti-dumping duties on imports from China.

The four Southeast Asian countries supply most of the modules installed in the U.S. and the trade probe could result in retroactive tariffs of 50 to 250%.

“I know it’s an adjudicative process that’s in the Department of Commerce and therefore it’s not in the Department of Energy’s purview, but I certainly am deeply concerned about being able to achieve the goal of getting to 100% clean electricity by 2035 if this is not resolved quickly,” Granholm told the Senate Committee on Energy and Natural Resources.

"[What’s] at stake is the complete smothering of the investment, and the jobs, and the independence that we would be seeking as a nation to get our fuel from our own generation sources," Granholm said.

The tariff investigation will cut U.S. solar installations by 24 GW over the next two years as developers delay or cancel projects due to price uncertainty, the Solar Energy Industry Association (SEIA) said April 27. 

This is equivalent to total solar capacity installed in 2021. If implemented, the tariffs would reduce solar installations by 75 GW by 2025 and result in 100,000 job losses in the solar sector, SEIA said.

U.S. solar installations were already set to drop this year due to soaring global materials costs and ongoing logistics challenges as economies recover from pandemic slowdowns.

Indiana utility NiSource postponed the closure of its 850 MW Schahfer coal plant to the end of 2025 as the tariff case delayed its solar projects.

"NiSource anticipates that most solar projects originally scheduled for completion in 2022 and 2023 will experience delays of approximately 6 to 18 months," the company said in its quarterly results on May 4.

NextEra, the largest renewable energy company in the U.S., expects about 2.1 to 2.8 GW of its solar and storage build to shift from 2022 to 2023 as the solar sector grapples with price uncertainty and scrambles for alternative supplies.

The company expects final solar tariff amounts to remain unknown until the first quarter of 2025, assuming commerce department officials conclude their probe by 2023.

The tariff case is pushing the U.S. further behind its objectives to decarbonise the power sector and cut national carbon emissions by 50 to 52% by 2030.

U.S. solar installations must quadruple to around 60 GW/year by the middle of the decade and 70 GW/year in 2031-2035 to meet the President's power sector goal, the Department of Energy (DOE) said in a report in September.

California officials warn of summer electricity shortfall

California could suffer a shortfall of 1.7 GW of power during extreme heatwave conditions this summer due to delays to renewable energy projects and the impact of droughts on hydroelectric supplies, state energy officials said May 6.

Officials forecast the shortfall could rise to 5 GW under extreme summer heat waves that ramp up energy demand while curbing supply, Reuters reported, citing an online briefing from three state agencies and the office of Governor Gavin Newsom.  Demand typically peaks in the evening when solar resources wane, increasing the importance of dispatchable generation assets such as fossil fuel plants, hydroelectric stations and energy storage.

            California summer 2022 power shortfall risk by time of day  

                                                             (Click image to enlarge)       

Source: California ISO, May 2022

State officials ordered utilities to procure more renewable energy after a heatwave in August 2020 prompted rotating power outages, but many solar and storage projects have been delayed due to supply chain challenges following the pandemic and market uncertainty following an investigation of solar import tariffs by the Department of Commerce. The Western U.S. also suffered a historic drought in 2021, cutting California's hydroelectric power generation to 48% below the annual average.

In June 2021, the California Public Utilities Commission (CPUC) ordered utilities to procure 11.5 GW of new renewable energy or demand management measures in 2023-2026. Several GWs of new capacity were already set to come online following earlier procurement orders and in February the CPUC approved a long-term plan to build 19 GW of solar and 15 GW of storage by 2032.

The current capacity shortfall could see Californian operators extend the lifespan of fossil fuel and nuclear plants, setting the state back in its quest to supply 100% of power from renewable sources by 2045.

"We need to make sure that we have sufficient new resources in place and operational before we let some of these retirements go," Mark Rothleder, chief operating officer at the California ISO grid operator, told the online briefing.

"Otherwise we are putting ourselves potentially at risk of having insufficient capacity."

EU to set out one-year deadline for renewable energy permitting

The European Union executive will propose EU countries designate areas in which renewable energy permits must be awarded within one year of application, Reuters reported May 9, citing a draft document by the European Commission.

The EC is expected to unveil next week measures that accelerate renewable energy projects in a bundle of policies aimed at ending the EU's reliance on Russian gas and oil.

The proposed rules will require EU members to identify "go-to areas" areas on land and sea where renewable energy would have a low environmental impact, the EC document said. An environmental assessment would be performed for these areas as a whole, removing the need for individual projects to go through the full process.

The overall permitting process within these areas "shall not exceed one year," the document said, adding that this could be extended by three months in "extraordinary circumstances."

Solar and wind permitting can take several years due to complex administrative processes and a lack of resources at permitting authorities. Several EU members are adapting national permitting procedures in a bid to speed up deployment.

Spain plans to fast-track permitting of solar projects with capacities up to 150 MW and new wind farms up to 75 MW while Portugal plans to waive environmental impact assessments for solar projects up to 50 MW. Germany will fast-track new energy laws this summer that remove permitting hurdles for renewable energy projects.

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