US Senate approves $3.5 trillion spending plan; US calls for first California offshore proposals

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US Senate approves $3.5 trillion climate, social spending plan

The U.S. Senate narrowly approved August 11 a blueprint for President Joe Biden's $3.5 trillion spending plan that includes game-changing climate initiatives, Reuters reported.

The budget bill would address climate change, expand social programs and pay for new initiatives with tax hikes on US corporations and the wealthy - objectives that Republicans and some moderate Democrats reject.

The Senate approved the bill in a vote of 50 to 49 along party lines just a day after it passed a $1 trillion bipartisan infrastructure bill that authorises spending on road, rail and water infrastructure and electricity networks.

The Senate passed the infrastructure bill in a 69-30 vote but Nancy Pelosi, Speaker of the Democratic-controlled House of Representatives, has agreed not to take up the infrastructure bill until the Senate passes the larger $3.5 trillion spending bill under a budget reconciliation process.

In the budget bill, the Biden administration wants to include a clean electricity standard (CES) that requires electricity suppliers to source 80% of power from zero-carbon sources by 2030 and expand tax credits for renewable energy developers.

President Biden has pledged to fully decarbonise the power sector by 2035, requiring a rapid acceleration in renewable energy deployment and an expansion and modernisation of the power grid.

US wind capacity in interconnection queues at end of 2020

                                 (Click image to enlarge)

Source: Berkeley Lab, May 2021

A CES "provides a level of certainty for long-term investments that this country needs and we are going to move these pieces together," Gina McCarthy, the White House climate adviser, said in June.

The Democrats hope to pass the budget bill in the coming months through a reconciliation process that allows the legislation to pass with a simple majority. The Democrats hold a slim eight vote majority in the House and with mid-term elections next year, more centrist Democrats have voiced concern over the scale of the budget bill, potentially risking the dual bill strategy.

US calls for California offshore wind proposals in Morro Bay

The U.S. Bureau of Ocean Energy Management (BOEM) has opened a call for interest from offshore wind developers for two development areas in Morro Bay, California, propelling the US towards its first West Coast offshore wind projects.

Offshore wind partners and public stakeholders have until mid-September to submit proposals and comments.

In May, the US government selected sea areas near Morro Bay and Humboldt Bay in Northern California for the state's first offshore wind projects. The sites could host up to 4.6 GW of capacity and will form part of the Biden government's plan to install 30 GW of offshore wind by 2030. California's deep waters mean the projects will use floating wind structures, an emerging technology which is yet to gain the economies of scale that has made fixed-bottom offshore wind highly competitive in many global markets.

The Morro Bay Call Area East and West Extensions span 399 square miles and could host 3 GW of capacity. The BOEM has also formally designated a 270 square-mile site in Humboldt Bay for development and will now proceed with an environmental review of the area, it said.

“While we are still in the initial stages of BOEM's leasing process, today's announcement reflects years of working with ocean users, Tribal governments and local, state, and federal agencies to obtain the best available information to reduce potential conflicts,” Thomas Liu, BOEM's Acting Pacific Region Director, said. “The Morro Bay Call and Humboldt Environmental Assessment offer important opportunities to further solicit feedback from Tribes, ocean users and stakeholders.”

West Coast developers have been working with local stakeholders to reduce risks and accelerate deployment. Early movers incude Castle Wind, a joint venture between Trident Winds and German power group EnBW, which hopes to build a 1 GW project in Morro Bay. In Humboldt Bay, Portuguese utility EDPR has teamed up with Aker Solutions, Principle Power and the Redwood Coast Energy Authority (RCEA), to develop a 120-150 MW facility.

Offshore wind will prove critical for California's carbon reduction aims. Last month, the California Public Utilities Commission (CPUC) ordered utilities to procure 11.5 GW of new renewable energy or demand management measures by 2026, to reduce supply crunches during heatwaves and other extreme weather events.

The offshore projects are still several years away and should play a key role in reducing fossil fuel usage from the second half of the decade.

"We strongly support moving forward with this technology as expeditiously as possible, the CPUC said in June. “We expect to address the needs of offshore wind projects more fully in our next procurement and [preferred generation portfolio] decision later this year."

Economic studies have also shown significant potential for offshore wind further north in Oregon.

Two more companies invest in UK offshore wind manufacturing

Siemens Gamesa and GRI Renewable Industries will invest 266 million pounds ($368.3 million) in new offshore wind manufacturing facilities in eastern England, the UK government announced August 9.

The funding includes grants from the UK's 160 million Offshore Wind Manufacturing Investment Support scheme, launched by the government in November as part of a "Ten Point Plan for a Green Industrial Revolution." The government aims to quadruple UK offshore wind capacity to 40 GW by 2030 and plans to set a minimum local content requirement of 60% for new projects.

                         Europe offshore wind installation forecast

                                                            (Click image to enlarge)

Source: WindEurope, February 2021

Turbine supplier Siemens Gamesa will invest 186 million pounds to expand its blade manufacturing facility near Hull, the government said. Spain's GRI Renewable Industries will invest 78 million pounds in a new offshore wind tower factory at the Able Marine Energy Park on the south bank of the Humber.

In March, the government designated the Able Marine Energy Park and the Teesworks park in Teeside as offshore wind Freeports - zones that offer tax breaks and tariff exemptions to entice investors. The two sites could together host up to seven manufacturers and create 6,000 jobs, the government said.

GRI's new factory will initially supply 100 offshore wind towers per year, equating to 100,000 tons of steel, park developer Able UK said in a statement.

In July, Korean steel group SeAH confirmed it will invest 260 million pounds at the Able Marine Energy Park to build the UK's first manufacturing facility for monopile offshore wind foundations.

The factory will have an annual production capacity of 240,000 tons and will start manufacturing operations in 2023, Able UK said.

In March, turbine supplier GE Renewable Energy announced it would build a blade factory at Teesworks by 2023.

Naturgy to spend 9 billion euros on renewables by 2025

Spanish utility Naturgy plans to invest around 9 billion euros ($10.6 billion) in renewable energy and new businesses in the next five years as it shifts away from fossil fuels towards zero carbon technologies, the company announced July 28.

By 2025, Naturgy aims to triple its installed renewable energy capacity to 14 GW. This includes 5.2 GW of new capacity in Europe, it said.

Formerly named Gas Natural Fenosa, Naturgy is the largest integrated power and gas group in Spain and a major energy supplier in Latin America.

In January, the group entered the US solar market through the acquisition of Hamel Renewables. Naturgy will invest $1.8 billion in the US and install 1.9 GW of solar power over the next five years, it said.

Hamel's portfolio includes 8 GW of solar projects and 4.6 GW of energy storage projects across nine US states. Some 3.2 GW of these solar projects and 2 GW of storage could be operational before 2026, Naturgy noted.

In total, Naturgy will invest 14 billion euros by 2025, including around 4 billion euros in gas and power grids and 1 billion euros in energy management and marketing. Around 95% of Naturgy's gas distribution pipelines are able to transport hydrogen or other renewable gases and by 2025 they will be able to inject 1 TWh of renewable gas into Spain's transmission network, it said.

Naturgy aims to achieve earnings before interest, tax, depreciation and amortization (EBITDA) of 4.8 billion euros by 2025, compared with 3.7 billion euros in 2020.

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