Energy Finance Report

Renewables Can Play a Big Role in Puerto Rico's Fresh Start

Posted by Jeffrey Karp on 6/27/17 11:23 AM

This article originally appeared on Recharge.

Just two years ago, the future seemed promising for renewable energy development in Puerto Rico. Much of the groundwork was established, numerous developers had entered into Power Purchase Agreements (PPAs) with the state-owned utility, PREPA, and discussions were ongoing with funding sources.

However, decades of fiscal irresponsibility and bad deals finally caught up with Puerto Rico, leading to a terrible debt crisis. The government defaulted on bonds, sales taxes escalated to 11% (higher than any mainland state), and businesses began fleeing the island.

The generous incentives that initially had attracted development dried up. For the last couple of years, energy investment has been at a virtual standstill, with the exception of Oriana Energy’s solar plant that commenced operations in May 2017.

Despite these setbacks, and with the Commonwealth’s [government's] bankruptcy filing in May 2017, the Puerto Rican government now has a second chance to regain its financial footing, and the development of renewable energy may play an integral part in accomplishing such a task.

In 2010, the Commonwealth enacted Renewable Energy Portfolio Standards (REPS) that required 12% of the island’s electricity to come from renewable sources by 2015 and 20% by 2035. Following the enactment of the REPS, utility PREPA entered into dozens of PPAs with renewable energy developers agreeing to purchase the power to be generated. By the end of 2015, Puerto Rico had 318MW of renewables in place, according to latest available data from the International Renewable Energy Agency.

However, as Puerto Rico became mired in its debt crisis, developers were unable to secure financing as investors grew fearful of funding long-term energy deals with PREPA. Adding to the uncertainty, due to PREPA’s financial woes, the utility serially renegotiated the terms of developers’ PPAs, which only served to make investors more jittery about financing the underlying renewable energy projects. Eventually, most of the agreements expired before the power plants could be financed or built.

Despite its financial travails, Puerto Rico’s commitment to renewable energy has not waned. In June 2016, Congress passed the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). The legislation, intended to provide Puerto Rico with a pathway out of its debt crisis and establish a baseline for fiscal responsibility, also established the framework within which investment may occur. In providing a blueprint for interested investors, PROMESA also reaffirmed Puerto Rico’s commitment to renewable energy.

Recognizing that PREPA was incapable of shouldering the burden of energy development entirely on its own, PROMESA emphasized the need for public-private partnerships that shifted the initial funding burden to private investors. In April 2017, a P3 Summit was held to encourage developers and investors to collaborate with the Commonwealth on a wide variety of infrastructure projects, including energy, water, waste management, and transportation. The presentation on the energy sector reaffirmed Puerto Rico’s commitment to achieving the REPS of 20% renewable energy by 2035.

In setting the stage for infrastructure investment, PROMESA created an Oversight Board, which has authority over revitalization and infrastructure development. Importantly, the Oversight Board may “fast-track” projects deemed “critical,” such as projects that reduce the Commonwealth’s reliance on oil and diversify its energy sources. Moreover, the Oversight Board gives priority to privately-funded projects.

Following PREPA’s recent settlement with its bondholders, we understand the utility is ready to reengage with developers to amend PPAs that have been in limbo for several years. Many of these developers already have performed much of the engineering for these renewable energy projects. Once PREPA amends the extant PPAs, the underlying projects would qualify as “existing projects,” which would enable the Oversight Board to prioritize them.

In light of these recent fiscal and regulatory developments, investors again are inquiring about “shovel ready” renewable energy projects that require funding. Investors also may have gained a level of comfort having seen Oriana Energy successfully reengage in Puerto Rico. Since May 2017, the company is operating the largest solar plant in the Caribbean at 58MW, the power from which PREPA is purchasing pursuant to a renegotiated PPA.

Puerto Rico appears primed for renewed interest by energy investors. For several years, investors have been unwilling to accept the risks inherent in financing long-term energy projects in which PREPA is the counterparty. More recently, these concerns have shown signs of abating as PREPA has successfully engaged with its bondholders, and the Oversight Board created by the PROMESA legislation appears to have imposed an acceptable level of fiscal discipline on the Commonwealth.

With solar energy on the cusp of coming to Puerto Rico, the question is which financiers will enter the market soon enough to bathe in the sunlight.

Jeffrey Karp is a partner in the Washington, D.C. office of Sullivan & Worcester LLP and leader of the firm’s Environment, Energy & Natural Resources practice group. Zachary Altman, an associate, and Paul Tetenbaum, an intern at the firm, were co-authors of this article.

Topics: Energy Finance, Renewable Energy, Energy Investment, Puerto Rico, Power Purchase Agreements, Renewable Energy Portfolio Standards

Biofuel Mandates Escape Current EPA Scrutiny

Posted by Jerry Muys on 6/21/17 2:16 PM

The Renewable Fuel Standard (RFS) is a regulatory program administered by EPA that requires petroleum-based transportation fuel sold in the U.S. to contain a minimum volume of various categories of biofuels. The program’s mandates are subject to a statutory waiver provision that may be exercised by EPA in the event that market conditions present an obstacle to meeting the minimum volumes. With the new administration’s continuing scrutiny of EPA’s numerous regulatory programs, there has been a great deal of uncertainty regarding the likely fate of the RFS Program.

Under the RFS program, biofuel must be blended into transportation fuel in increasing amounts each year, capping out at 36 billion gallons by 2022. Compliance with the blending obligations are imposed on petroleum importers and refiners, known as “obligated parties.” The annual amounts of the various categories of biofuels that must be blended are referred to as Renewable Volume Obligations (RVOs). Obligated parties can comply with the RFS program by either blending the requisite volume of renewable fuel into their transportation fuel or purchasing credits designated as Renewable Identification Numbers (RINs) to meet the RVO.

Although the Clean Air Act sets forth annual volumetric targets for certain biofuels, EPA is required to establish enforceable RVOs through a formal rule-making process. Separate quotas and blending requirements are determined for cellulosic biofuels, biomass-based diesel, advanced biofuels, and total renewable fuels. Refiners and importers must either blend the requisite amount of each of the four categories of biofuels, or acquire the necessary amount of RINs for each of the categories. Parties that purchase or sell RINs are required to enter the transaction information into the EPA Moderated Transaction System.

Initial uncertainty over the fate of the program began in 2015, when EPA exercised its statutory waiver authority for the first time and set an RVO lower than the benchmarks established by Congress. Litigation ensued, and many in the biofuel industry argued that EPA had abused its waiver authority by setting an RVO lower than the statutory minimums. As of the current date, the litigation remains unresolved.

In November of 2016, EPA set an RVO of 19.28 billion gallons of total biofuel for 2017; this was an increase from the 18.11 billion gallon figure adopted for 2016, but still below the statutory standard of 24 billion gallons. However, renewed uncertainty arose in January of 2017, when President Trump ordered a temporary freeze and review of thirty EPA regulations that had been issued between the time of the U.S. election and his inauguration, including the 2017-18 RVOs.  

To the industry’s relief, the regulatory freeze expired without the new administration making changes to the 2017-18 RVOs, and immediately thereafter RIN prices spiked for a period of time. However, overall RIN prices have dropped 19 percent since President Trump’s election, reflecting continued uncertainty about the future of the program.

Though the new administration did not revise the current RVOs, it is entertaining a policy initiative by Carl Icahn (an investor in the petroleum sector who also serves as a special adviser to President Trump) to shift responsibility for meeting RVO requirements away from refiners and importers to blenders and others in the chain of commerce. A ruling by EPA on the Icahn initiative may be several months away. The public comment period on the Icahn-backed measure ended February 22.

Despite uncertainties regarding the future of biofuel mandates in the U.S. and elsewhere, advancements within the industry continue to occur. The liquid biofuels industry now employs more than 1.7 million people globally, and recent technological developments have expanded the range of biofuel applications.

It has been reported that Cool Planet Energy Systems developed a technology that converts farm waste, wood chips, and nut shells into liquid jet fuel. The company has secured investments from three major oil companies, in addition to a $91 million grant from the Department of Agriculture, and is continuing to refine its process with the hopes that it will become a viable supplement or replacement for traditional jet fuel.

The U.S. Navy has also taken an active interest for a number of years in utilizing greater quantities of biofuel in order to reduce its dependency on fossil fuels. During the Obama Administration, the Navy conducted several training exercises in which a large number of the ships and planes participated using a fuel blend that was 10% biofuel. Those efforts appear to be continuing.

More significantly, on June 19, Exxon Mobil Corp. and Synthetic Genomics Inc. announced a possible breakthrough in biofuel technologies. Their scientists reportedly discovered a way to double the fatty lipids in algae, bringing them a step closer to being able to use algae as a biofuel feedstock, a potentially more sustainable alternative to the feedstocks currently utilized.

Jerry Muys is a partner and Leigh Ratino is a law clerk with Boston-based law firm Sullivan & Worcester LLP.

Topics: Biofuels, Renewable Fuel Standard, Cellulosic biofuel, Biomass-based diesel, Renewable Volume Obligation, Advanced biofuel, Renewable Fuel, Renewable Identification Number

Monetizing Vacant Land Through Mitigation Banking

Posted by Jerry Muys on 6/13/17 3:14 PM

A mitigation bank is a wetland, stream, or other habitat area that has been restored, established, enhanced, or (in certain circumstances) preserved for the purpose of providing compensation for unavoidable impacts to such natural resources. When a corporation or other entity undertakes these activities, it can generate “compensatory mitigation credits” (“CMCs”), which in recent years have significantly increased in value. Corporations and other owners of brownfield or dormant/underutilized properties are increasingly using these lands to create mitigation banks in order to generate CMCs that can be sold into the mitigation market.

Mitigation banking originated under Section 404 of the Clean Water Act and similar state statutes intended to protect wetlands and streams. Developers of projects which involve the discharge of dredged or fill materials into wetlands, streams, or other waters of the United States are required to obtain a permit from the U.S. Army Corps of Engineers (Corps) or an approved state, and must avoid and minimize negative environmental impacts to the extent feasible. When negative impacts are unavoidable, compensatory mitigation is required to offset the impacts on aquatic resources. The Corps or an approved state authority determines the necessary quantity and method of compensatory mitigation, which can be performed by the permittee, a third party under contract to the permittee, or through the purchase of CMCs from a mitigation bank.

Mitigation banking is completed off-site, meaning it is performed within the same watershed as the site of the impacts but not at the same location. Banks are regulated by Interagency Review Teams (IRTs), which are chaired by the district engineer or a designated representative and include federal, tribal, state, and/or resource agency representatives. The person or entity that establishes a mitigation bank and undertakes the restoration activities is sometimes referred to as a “mitigation banker” or “bank sponsor.”

In order to generate CMCs, the mitigation banker must first negotiate a written agreement with the IRT that provides for the long-term funding and management of the bank, as well as the design, construction, monitoring, ecological success, and long-term protection of the bank site. The agreement also identifies the number of credits available for sale and requires the use of ecological assessment techniques to certify that those credits provide the required ecological functions. See EPA Mitigation Banking Factsheet.

Federal policy favors the use of mitigation banks and CMCs to offset the negative environmental impacts of development for a number of reasons. Since mitigation banking is performed prior to development, there is less uncertainty about whether environmental impacts will be effectively offset. In addition, mitigation banking allows for the use of scientific expertise and financial resources that are not always available when mitigation is performed directly by the developer. Mitigation banking also tends to be more cost-effective and to allow for shorter permit processing times.

In 2008, the Corps and EPA adopted regulations that made mitigation banking the preferred method for both wetland restoration and compensation for wetland losses. Due to the success of mitigation banking, the concept was expanded to offset losses of endangered species and associated habitat; known as “conservation banks,” they are under the jurisdiction of the U.S. Fish and Wildlife Service and the National Marine Fisheries Service. Today, there are more than 1,200 mitigation banks in the U.S., and the market value of all CMCs exceeds $100 billion.

Jerry Muys is a partner and Leigh Ratino is a law clerk with Boston-based law firm Sullivan & Worcester LLP.

Topics: Compensatory Mitigation, Mitigation Banking, Compensatory Mitigation Credits, Wetlands

Converting Environmental Liabilities to Assets: Repurposing Inactive and Abandoned Mine and Mineral Processing Sites

Posted by Jerry Muys on 6/6/17 2:36 PM

Under the Brownfields Law of 2002, EPA and other federal agencies have established a variety of programs focused on promoting and funding the repurposing of abandoned mine lands (AMLs), broadly defined as lands, waters, and watersheds in close proximity to where extraction, beneficiation, or processing of ores and minerals has occurred. Among the most promising of these initiatives is EPA’s Re-Powering America Program, pursuant to which EPA has prioritized the development of renewable energy projects on brownfield properties such as AMLs.  

The Department of Energy’s National Renewable Energy Laboratory (NREL) has significantly contributed to the success of the Re-Powering America Program. As part of its initial characterization of sites on EPA’s brownfields inventory, NREL collects data sufficient to determine the renewable energy potential of each site. To date, NREL has screened over 80,000 sites for their development potential as solar, wind, biomass, and geothermal facilities.

Hard-rock mine sites, in particular, offer a number of distinct opportunities for renewable energy development. For example, they tend to be large in size, and thus can provide sufficient capacity for the installation of a large-scale wind farm or solar array in one location and are often near existing infrastructure, including roads and utilities. In addition, hard-rock mine sites can serve as excellent locations for wind farms because they are often situated in mountainous areas that receive consistent wind flow. 

Development of inactive coal properties can be more challenging, due in part to the remediation and procedural requirements of the Surface Mining Control and Reclamation Act. However, the Act also offers a potential funding source for site redevelopment under its AML Reclamation Fund, a benefit not available with respect to the hard-rock mine sites.

In addition to the foregoing, there is an array of emerging technologies that can enable value extraction and new reclamation approaches based on engineered natural systems or “green infrastructure.” For example, energy recovery from wastewater at mine sites can be a cost-effective option due to the often remote locations of such sites. In addition, residuals from wastewater treatment can be used as a soil amendment to add organic matter and nutrients to the soil to create a fertile soil profile with a reestablished microbial community, invertebrates, and plants. This approach can be used to help meet Clean Water Act stormwater discharge requirements as well as regulatory limitations on direct discharge to surface waters.

The use of green infrastructure can create a revenue generating ecosystem that will help offset the cost of mine remediation. At mine sites with substantial vacant land, sustainable forestry can be used to help manage stormwater as well as generate carbon credits recognized to varying degrees under both the California and Regional Greenhouse Gas Initiative frameworks. Furthermore, engineered wetlands can help address acid mine drainage and other contaminated flows from abandoned mines and potentially serve as a secondary revenue source through the generation of water quality trading credits under the Clean Water Act.

Historically, a significant obstacle to the redevelopment of AML has been the lack of funding available to characterize and remediate these sites. This gap in funding can be reduced by incorporating renewable energy and/or green infrastructure into the mine remediation plan. The installation of a solar array during or following mine reclamation can provide an energy source to power the remediation effort or create a revenue stream to offset the cost of remediation. A similar approach can be utilized through the use of green infrastructure.

In its proposed 2018 budget, the Trump administration has requested $28.0 billion for the Department of Energy “to make key investments to support its missions in nuclear security, basic scientific research, energy innovation and security, and environmental cleanup." Of this total, $6.5 billion is designated specifically for environmental management to address “high-risk contamination facilities that are not in the current project inventory.” However, within this proposed budget, the EPA would receive $5.655 billion in funding, a 30% decrease from the enacted 2017 budget. This reduction in EPA funding may have adverse effects on the Re-Powering America program.

Jerry Muys is a partner and Paul Tetenbaum is a summer intern with Boston-based law firm Sullivan & Worcester LLP.

Topics: Environmental Liabilities, Renewable Energy Development, Green Infrastructure, Abandoned Mine Land, Repurposing Mine Land

Opportunities Abound in the U.S. Offshore Wind Market

Posted by Jeffrey Karp on 5/30/17 12:52 PM

Offshore wind projects have taken root in America. The country’s first operating offshore wind farm, in Block Island, Rhode Island, began contributing energy to the power grid in December 2016. Now, more than 23 offshore wind projects — collectively expected to produce 16,000 MW of power — reportedly are being planned. Thus, opportunities abound for developers, contractors, and investors in the U.S. offshore wind market.

The recent spike in offshore wind activity has been fueled largely by a surge of political interest. Some critics have decried President Trump’s apparent lack of commitment to renewable energy, but the U.S. Department of the Interior (DOI) has proved to be a willing partner in offshore wind energy development. In March 2017, DOI leased 122,000 acres off the coast of North Carolina to Avangrid, a subsidiary of Iberdrola, a Spanish company. Recently, DOI also finalized a lease with a Norwegian company, Statoil, for Long Island, New York waters. DOI evidently sees a future for U.S. offshore wind. According to a spokesperson, the Bureau of Ocean Energy Management currently is receiving annual rent payments of over $4 million for offshore wind project leases.

State activities also have primed the pump for offshore wind development. In August 2016, Massachusetts Governor Charlie Baker signed a law requiring utilities to procure 1,600 MW of electricity from offshore wind facilities by 2026. In May 2017, the Commonwealth’s Department of Energy Resources issued a request for proposals to develop up to 800 MW of offshore wind. New York Governor Andrew Cuomo announced that the state would commit to installing 2,400 MW of offshore wind by 2030, furthering his goal that renewable energy resources would supply 50% of New York’s power. To that end, in January 2017, Governor Cuomo approved Deepwater Wind’s 90 MW, 15 turbine South Fork Wind Farm project, which is expected to power 50,000 Long Island homes.

Moreover, the Maryland Public Service Commission recently awarded two developers, U.S. Wind and Skipjack Offshore Energy, contracts to build offshore wind farms totaling 368 MW. The projects are expected to create 9,700 new direct and indirect jobs.

With each completed project the supply chain grows stronger and developers become more efficient, making each successive project more cost-effective. For example, the estimated total cost of the South Fork project already has decreased 25% since Deepwater Wind’s first projections, and the energy generated is expected to cost 30% less per unit than at Block Island. Furthermore, the Department of Energy predicts that the cost of offshore wind energy will fall 43% by 2030. As this trend continues, there will be greater incentives to promote offshore wind as a clean energy resource.

Also, each successful project increases investor confidence. Deepwater Wind, developing its second offshore wind project, is owned by D.E. Shaw, a hedge fund and private equity firm managing over $40 billion in assets. Moreover, both Citigroup and HSBC have expressed interest in financing future offshore wind projects.

The U.S. offshore wind market is growing rapidly and approaching maturity. State and federal government actions appear to support a long-term horizon for offshore wind development. With every completed project, production and financing costs will continue to drop, the market will grow, and new jobs will emerge. The question now is whether the players in the renewable energy market — developers, investors, contractors, and vendors — are well-positioned to reap the rewards of this burgeoning industry.

Jeffrey Karp is a partner, Zachary Altman is an associate, and Leigh Ratino is a law clerk with Boston-based law firm Sullivan & Worcester LLP.

Topics: Energy Finance, Renewable Energy, Energy Investment, Energy Project Finance, Offshore Wind, Wind Energy, Energy Project

Blog Update: The Future of Electricity Markets? Corporations Directly Buying Renewable Power

Posted by Elias Hinckley on 10/6/16 11:08 AM

future of electricity markets

An increasing number of corporations are directly buying from (or building) clean electricity sources. For decades most Fortune 1000 companies did little more than seek to manage costs as they bought electricity and fuel. This model of simply relying on the existing marketplace to meet energy needs has, however, suddenly become outdated. More and more companies are realizing the strategic advantages of sourcing renewable power. Companies that fail to adapt will face serious competitive disadvantages as this trend accelerates.

Several factors are driving this explosion in interest in direct purchases of clean energy. Reasons range from pure cost per kWh purchased, to market and regulatory certainty, to the brand value of reducing reliance on fossil fuels, to concerns over the future of specific markets in the face of a changing climate. Consistent in every one of these motives is an underlying economic case: replacing electricity generated from burning fossil fuels with electricity from wind and solar is a good business strategy.

Read the full article in the September 2016 issue of The EDGE Advisory. Click here.

 

Topics: corporate procurement, Renewable power

EDGE Advisory: Focus on Corporate Renewables

Posted by Elias Hinckley on 10/4/16 1:24 PM

Co-author Jim Wrathall and Morgan M. Gerard

Sullivan & Worcester, LLP recently released our EDGE Advisory: Focus on Corporate Renewables.  EDGE examines energy macro-trends through articles and expert contributions focusing on market direction, policy updates, and innovations in finance.


EDGE Energy Finance ReportCorporate renewable energy purchasing is one of the hottest topics in clean energy. Corporations and other large institutions are taking control of their environmental, climate, and energy foot-prints.  This new focus on energy includes on-site generation, the traditional power purchase agreements (PPA), synthetic PPAs, contracts for differences and other energy hedging tools as well as green tariffs and negotiated green sourcing with utility providers.  Renewable energy helps corporations achieve cost savings, green commitments, and brand enhancement. Corporate buyers are also discovering that renewable power can be an important resilience tool – protecting against price volatility, regulatory uncertainty, and even physical grid disruption.  Transaction complexity, a rapidly evolving power market, regulatory uncertainty, and some instances of poor execution have however, made deals challenging for new entrants into this market.

This issue of EDGE Advisory addresses these obstacles and focuses on strategies for success in the corporate procurement of clean energy, including transaction structuring; common pitfalls to avoid; the role of environmental attributes; regulatory developments and prospects; and attracting tax equity investment. We are excited to help build solutions for the structural and process roadblocks that can impede progress and look forward to opening a range of related discussions with our readers.  Featured topics include:

  • Energy Transition Driving Corporate Participation in Renewable Energy Purchasing
  • Keys to Success for Corporate Procurement Transactions
  • Market Outlook: Corporate Clean Energy Purchasing
  • Unlocking Clean Energy Value in Dormant Corporate Properties
  • Interview Q&As with:

    • Vince Digneo, Sustainability Strategist, Adobe Systems
    • Shalini Ramanathan, VP Originations, Renewable Energy Systems
    • Jonathan Silver, Managing Partner, Tax Equity Advisors, LLC
  • State Policy Developments and Prospects
  • Financing International Projects

We hope EDGE Advisory will provide helpful intelligence and add value to participants across the market. Please do not hesitate to contact any of us on the S&W Energy team if there are topics of particular interest or further follow up that may be of assistance in your business or investment projects.

Download PDF

Topics: corporate procurement, renewable energy finance, tax equity

SunEdison: A Cautionary Tale?

Posted by Jeffrey Karp on 9/27/16 9:53 AM

Cautionary_SunEdison.jpgU.S. Bankruptcy Judge Stuart Bernstein recently approved SunEdison’s proposed sale of $144 million of solar and wind assets to NRG Energy. The sale continues SunEd’s string of dispositions this year following its April bankruptcy filing. The company’s stunning descent has followed an equally aggressive rise over the preceding three years. According to The Wall Street Journal, citing its filing, the company “…spent more than $18 billion on acquisitions and raised $24 billion in debt and equity between 2013 and 2016.” While it’s acquisition strategy was highly aggressive, many point to two deals which did not occur - the proposed acquisitions of Vivant and Latin America Power - as the final straws in a failed strategy.

 

SunEdison, one of the “old-line” companies in the solar surge of the past decade, will undoubtedly serve as a cautionary tale to many. While the company bears the name of the Jigar Shah-founded pioneer in power purchase agreements, it’s DNA runs much deeper; MEMC, the company that acquired Shah’s company in 2009, was formerly an arm of Monsanto Company with history stretching to the 1950’s. Whether fairly or not, companies will likely consider the current woes of this former powerhouse before undertaking similarly acquisitive strategies in the future.

Is Renewable Energy in Puerto Rico Back On Your Radar?

Posted by Jeffrey Karp on 9/1/16 5:30 PM

Puerto_Rico.jpg

Renewable energy deal discussions centered on projects in Puerto Rico have been difficult – particularly for project owners – over the past few years. The foundations of most of the projects on the island were power purchase agreements (PPAs) with PREPA, the utility which, as an organ of the government was capable of issuing its own bonds and faced the same credit issues as the island itself. Therefore most projects have teetered along on life support for some time as financiers were unwilling to even open discussions with such a poor credit offtaker in the mix. However, interest in the island seems to have been heating up lately.

Proposals for behind-the-meter projects with private offtakers and wheeling scenarios have been popping up. Even old PREPA deals, many of which had died slow deaths in the wake of missed debt payments, may be in the process of resurrection. Why? Some may have missed it during the dog days of summer, but the main reason is the passage of PROMESA – the Puerto Rico Oversight, Management and Economic Stability Act. Among other things, the legislation: 1) created a fiscal control board; 2) granted the control board the power to force a debt restructuring; and, 3) allowed for the minimum wage to be lowered.

The Democrats on the Obama-appointed board are: Arthur Gonzalez, a senior fellow at New York University’s School of Law; Jose Ramon Gonzalez, president and chief executive officer of the Federal Home Loan Bank of New York; and Anna Matosantos, a financial and budget consultant at the Public Policy Institute of California. The Republicans are: Carlos Garcia, founder and chief executive officer of Bay Boston, a minority owned private equity firm; Andrew Biggs, a resident scholar at the American Enterprise Institute; and David Skeel, a University of Pennsylvania law professor; and Jose Carrion III.

While many – including some lawmakers who voted on the bill – have criticized PROMESA, and while it does not directly address solar deals on the island, it has seemingly given the island – and the solar industry along with it – a lifeline. If it hasn’t already, don’t be surprised if Puerto Rico shows back up on your radar very soon . . . .

NREL Report: Wind and Solar Could Supply 30% of the Eastern Grid without Increasing Reliability Concerns

Posted by Jeffrey Karp on 9/1/16 12:39 PM

East_Coast.jpgA recent National Renewable Energy Laboratory (NREL) report noted that wind and solar, despite being intermittent sources, could supply 30% of the annual power for the Eastern grid without increasing reliability concerns. Noting that wind and photovoltaic are the fastest growing electricity sources in the U.S., the authors determined that “under the study assumptions, generation from approximately 400 GW of combined wind and PV capacity can be balanced on the transmission system at a 5-minute level.”  However, despite what many renewable energy advocates would consider to be good news, it was also clear that to do so would mean much more frequent start-ups and shut downs of fossil fuel plants – activities that can put stress – and increase maintenance costs – on these facilities. That said, the authors also left demand response and storage solutions out of their assumptions, which could increasingly counterbalance potential negatives of an increasingly green energy supply mix. The study itself can be found here.

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