US debt deal includes faster permitting; California agrees $7.3 billion of new power lines
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US debt deal shortens permitting deadlines but jettisons grid booster
The bipartisan U.S. debt deal announced on May 27 includes provisions to limit the duration of environmental impact studies for energy projects but left out important legislation to expand power transmission capacity between regions.
Slow permitting processes and dwindling grid capacity is holding back renewable energy developers and hampering the Biden administration's efforts to decarbonise the power sector by 2035. Permitting of solar and wind can take several years due to lengthy administrative processes and a lack of resources at permitting authorities, increasing project risks and inflating costs.
The deal between Democrats and Republicans would update the National Energy Policy Act (NEPA) and require environmental assessments to be conducted within one year and impact statements within two years.
However, proposals to expand interregional grid capacity were jettisoned during final deal talks. The U.S. needs new transmission lines to transmit large-scale solar and wind to demand centers and a proposal that would have required power networks to be able to transfer at least 30% of peak electricity demand to other regions was shelved by deal negotiators. Instead, the North American Electric Reliability Corporation (NERC) will study how much transfer capacity is needed in a process that would likely take two and a half years to get to Congress, Reuters reported.
Significant transmission deployment is needed by 2030 in the Great Plains, Midwest, and Texas but the largest benefits will come from increasing interregional transmission, the Department of Energy (DOE) said in a draft National Transmission Needs Study published in March.
Congress must "build upon these initial steps," the American Clean Power (ACP) association said following the deal.
"Absent significant improvements in the siting and construction of new clean power transmission capabilities, our nation will fail to achieve critical economic, national security and climate goals."
California grid operator signs off on $7.3 billion of power lines
The California Independent System Operator (CAISO) plans to spend $7.3 billion to build 45 new power transmission projects that will support the construction of more than 40 GW of new clean energy capacity.
CAISO's 2022-2023 Transmission Plan will allow the state to add more than 17 GW of solar resources, 8 GW of wind generation (including 4.5 GW from Idaho, Wyoming, and New Mexico), and 1 GW of geothermal development, as well as battery storage projects, the grid operator said on May 18.
The plan aims to "better synchronize power and transmission planning, interconnection queuing and resource procurement," CAISO said. Last year, CAISO shelved new applications for grid connections to tackle a backlog of projects.
Power capacity in U.S. grid connection queues
(Click image to enlarge)
Source: Berkeley Lab, April 2023
The grid operator will prioritize interconnection requests in areas with high solar and wind resources, and those coming from stand-alone storage projects located closer to major load centers in the LA Basin, greater Bay Area, and San Diego, it said.
The investments would also allow CAISO to better cope with "increasing levels of net load forecast uncertainty between day-ahead and real-time markets," as the state sometimes relies on regional power transfers at times of peak demand or when solar output drops.
CAISO expects next year's transmission plan to identify the need for 70 GW of new capacity by 2033, to meet increased demand from the transportation and building sectors, and a total of 120 GW by 2045 to reach the state's clean energy goals.
Enel to build 3 GW solar cell, panel factory in Oklahoma
Italy's Enel will invest $1 billion in a 3 GW solar cell and panel factory in Oklahoma that may be expanded to 6 GW in future years, the company announced on May 22.
The factory will manufacture silicon-based cells and will be located 25 miles east of Tulsa. Construction is scheduled to begin this fall and commercial power production is expected to start by the end of 2024 with full capacity reached in 2025.
"Enel’s expansion is a huge win for Oklahoma, and I’m thrilled by their record investment in our state’s economy and workforce," Oklahoma Governor Kevin Stitt said in a statement.
Enel is the second large developer to invest in new U.S. solar manufacturing facilities following the passage of President Biden's Inflation Reduction Act. The act includes a 10% bonus for projects that use U.S. components, an attempt by the Biden administration to accelerate domestic capacity and reduce developers' reliance on Asia. Invenergy, the largest independent renewable energy developer in the U.S., has committed to build a 5 GW panel manufacturing facility in Ohio with China's Longi.
Until now, most U.S. solar projects have sourced panels from Asia, where costs are lower, but international supply risks have worsened since the coronavirus pandemic. Customs delays, uncertainty over tariffs and soaring global demand have hiked import costs. With U.S. deployment set to soar, more developers are seeking domestic products to reduce delivery risks.
Tax credits for clean tech manufacturing in the inflation act have significantly improved the business case, an Invenergy spokesperson said last month.
The credits send a "much-needed long-term signal to the marketplace” and will make domestic solar products competitive with imports, the spokesperson said.
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