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INFLATION PUT DIABLO CANYON OVER THE TOP: One key factor that influenced the decision to extend the life of the Diablo Canyon nuclear power plant was the inflationary pressures and high materials costs for renewable energy projects, which have hampered development of solar projects and battery storage in California, leaving its grid vulnerable to severe supply shortfalls.
Just days before the Nuclear Regulatory Commission ruled that PG&E can operate Diablo Canyon beyond its planned closure in 2025, the California Energy Commission completed a lengthy assessment of the state’s power resources and contributions from Diablo, which provides 17% of its zero-carbon electricity and 9% total electricity.
They concluded that before taking the plant offline, California should first confirm that the necessary resources are online or available to supply the power it once generated.
This would take longer than expected, it found, due to fast-rising price pressures for solar panels, transformers, and other commodities used in renewable energy projects.
These inflationary pressures have hurt California’s effort to connect clean and renewable energy resources to its grid at the scale or scope once envisioned.
According to the CEC, all parts of the supply chain have experienced inflationary pressures—not just panels and batteries, but also cement, transformers, and other balance of plant equipment crucial to delivering on its ambitious clean energy goals.
Fast-rising commodities prices for materials such as lithium carbonate, which is critical to battery development and storage, have also forced some projects to be placed on hold. (Per the IEA, global demand for lithium carbonate is slated to increase rapidly by the end of the decade, from 400 kt in 2020 to more than 1,000 kt by 2030—more than double that if countries adopt recommended sustainability policies.)
Combined, the inflationary pressures and high materials costs could make it “unviable” for developers to complete some projects: Price increases make it more costly to complete clean energy projects at the negotiated price versus defaulting on the contract and losing the deposits altogether, the assessment found.
Supply chain problems are not going away: Delays in shipping and manufacturing continue to slow the delivery time for batteries, inverters, transformers and switches for projects. Per the CEC, this is due to both lingering disruptions caused by the COVID-19 pandemic, as well as tariffs and labor issues, including those affecting solar manufacturers. (Utility-scale solar installations fell nationwide by 23% in 2022, while prices for solar power purchasing agreements, or SPPAs, jumped by 33% in Q4 compared to the same period in 2021.)
Combined, this has delayed the availability of resources in the state and requires it to diversify its energy supply in the near-term.
“Given the potential delays in resource build out to meet ordered procurement and increasing risks of climate-related threats to grid,” the report determined it is prudent to pursue extension of DCPP until the state can confirm that the necessary resources are online or available to supply the power once generated by Diablo.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
NORFOLK SOUTHERN TO TEST FOR DIOXINS IN EAST PALESTINE: The EPA said yesterday that it will require Norfolk Southern to test East Palestine for the presence of dioxins, citing conversations with residents in East Palestine one month after the train derailment.
In a statement, EPA said the freight operator will be required to conduct a background study of local water samples in East Palestine compared to other towns unaffected by the derailment, and to sample for “indicator chemicals” which can signal the presence of dioxins, a toxic chemical compound created by combustion, and which can persist in environments for long periods of time.
Lawmakers from Ohio have voiced concern about the potential for dioxins, noting that they can be created by the burning of vinyl chloride, the toxic chemical that was burned off after the derailment.
EPA Administrator Michael Regan said the agency will order Norfolk Southern to conduct and fund “immediate cleanup if contaminants from the derailment are found at levels that jeopardize people’s health.”
BIDEN TO VISIT: President Joe Biden announced he will visit East Palestine “at some point,” a statement that comes one month after the train derailment and amid mounting pressure from Republican lawmakers to visit the site.
“I’ve spoken with every official in Ohio, Democrat and Republican, on a continuing basis, as in Pennsylvania,” Biden told reporters yesterday. “We will be implementing an awful lot through the legislation here, and I will be out there at some point.”
He also signaled his intent to sign new bipartisan legislation co-sponsored by Sens. Sherrod Brown and J.D. Vance of Ohio and John Fetterman and Bob Casey of Pennsylvania aimed at tightening federal oversight of trains carrying hazardous materials.
The Railway Safety Act of 2023 would introduce new safety requirements for trains carrying toxic materials, and would require trains to submit a “gas discharge plan” for each hazardous material. It also calls for other safety measures such as staffing requirements, and federal oversight of railroads’ heat sensors, which failed to alert the crew on the Norfolk Southern train about a wheel bearing issue, which the NTSB found caused it to derail.
EXCLUSIVE ––– CMR LAYS OUT KEY ENERGY PRIORITIES IN LEADERSHIP POST: Rep. Cathy McMorris Rodgers has hit the ground running in her new role as House Energy and Commerce chairwoman. The Washington state Republican is the first-ever female leader of the committee, which has broad jurisdiction over energy policy, environmental quality, telecommunications, consumer protection, food and drug safety, public health, and more.
Already, she has introduced key bills aimed at protecting the U.S. emergency crude stockpile, and outlined priorities on permitting reform, protecting U.S. critical infrastructure, and increasing U.S. refining capacity. She oversaw back-to-back markup hearings this week, in which Republicans introduced and passed 16 separate bills aimed at restoring energy dominance and rolling back what they see as overly burdensome regulations.
At a time when issues of energy security and domestic production dominate political discourse and play a key role in the geopolitical landscape, Republicans —and Rodgers—hope to lead on these issues. We spoke with longtime colleagues and fellow lawmakers for an early look at Rodgers’ historic leadership role.
INTEREST GROUPS MAKE FINAL APPEALS TO BIDEN ON WILLOW: Environmental and other interest groups are making closing arguments to the Biden administration before the Bureau of Land Management issues a record of decision for ConocoPhillips’s Willow oil project, which could come as soon as next week.
Sierra Club and other environmental groups will rally in Biden’s front yard this afternoon to discourage approval of the project in Alaska’s North Slope, or else tarnish his legacy on the environment and thwart his own agenda of reducing greenhouse gas emissions.
“The Willow project has been roundly criticized by Indigenous communities and environmental groups, citing its massive increase in carbon pollution and threats to wildlife, lands and waters, and traditional Indigenous subsistence practices,” Sierra Club said in a notice for the rally.
Alaska natives local to the project, along with Alaska’s congressional delegation, fiercely dispute that characterization.
“There is not 100% unanimous support. Across America, there is no issue that has 100% unanimous support,” Democratic Rep. Mary Peltola, who is urging the administration to approve the project, said this week. “But clearly, there is the preponderance of the majority of Iñupiats who are in support of this, the majority of Alaska natives, the majority of Alaskans.”
Authorities in the North Slope had to rezone for industrial use the areas ConocoPhillips wants to develop in order for the project to move forward. Those areas were rezoned before the company approached BLM to get federal approval.
The Iñupiat authorities would never have approved the rezoning unless they approved the project, Nagruk Harcharek, president of Voice of the Arctic Iñupiat, told Jeremy.
Some 95% of the North Slope Borough’s revenues, which help fund local infrastructure, schools, and emergency services, come from levies on existing oil and gas infrastructure in the region.
Willow and its windfall for the region is about capitalizing on its resources and maintaining the self-reliant way of life on the North Slope, Harcharek said.
BLM GIVES MORE TIME TO WEIGH IN ON LAVA RIDGE: BLM extended the comment period for its initial environmental analysis of Idaho’s Lava Ridge Wind project, which has united farmers, environmentalists, and the local Japanese-American population in opposition.
Mike Courtney, BLM’s Twin Falls district manager, said yesterday the depth of the nearly 600-page draft environmental impact statement prompted many to request more time to review and weigh in on the document. Commenters will have an extra 30 days until April 20 to weigh in.
BLM published its draft EIS for Lava Ridge in January. Developers want to construct up to 400 wind turbines with an estimated generating capacity of more than 1,000 megawatts across approximately 84,000 acres of federal, state and private land in south-central Idaho. Almost 90% of the acreage of the proposed project covered BLM-managed lands.
The project would contribute to the Biden administration’s goal (and mandate from Congress) to permit 25 gigawatts of renewable energy on public lands by 2025. But it’s been subject to significant scrutiny and opposition — not only from farmers and environmentalists who oppose the change to the landscape but from Japanese-Americans in the region, who feel the project tramples the local Minidoka National Historic Site, which memorializes the Japanese internment camp located there during World War II.
The draft EIS identifies BLM’s two preferred alternatives to the proposed project, both of which would reduce the total acreage and number of turbines compared to the proposal, as well as reduce the impact of the project to the Minidoka NHS by excluding the land corridors closest to the site from development.
RUST BELT DEMOCRATS DEMAND END TO BIDEN’S SOLAR EMERGENCY: Sens. Bob Casey and Sherrod Brown are imploring Biden to rescind the solar energy trade emergency he declared last summer, which protects cell and module imports from Cambodia, Thailand, Vietnam, and Malaysia from being subjected to expanded antidumping duties.
The Commerce Department concluded in a preliminary determination that multiple Chinese-parented companies manufacturing solar products in those countries are circumventing existing tariffs against Chinese imports in violation of U.S. trade law.
The department is still working out tariffs rates on those companies, which include some of the globe’s largest solar suppliers, but even after it announces a final determination (set for May), the imports will be protected under Biden’s order.
Casey and Brown, the latter of whom represents a state with a significant existing and growing solar manufacturing base, said the investigation’s conclusion shows U.S. manufacturers are competing in a distorted market.
“U.S. trade laws are designed to protect our domestic market from unfair trade practices,” they told Biden, pressing for “strong enforcement” of the trade law and asking the administration to terminate the solar emergency.
Congress may get there first: A sizable coalition of Democrats opposed the Commerce investigation, along with the nation’s biggest solar lobby, and were pleased at Biden’s emergency declaration, but the issue has split the party.
A bipartisan group of House lawmakers introduced a Congressional Review Act resolution early in the Congress aimed at canceling Biden’s solar order. Democratic Rep. Dan Kildee, who helped lead the resolution, said supporters of it have a “veto-proof majority.”
The bipartisan resolution has failed to move yet, being outpaced even by the partisan CRA resolution to cancel Biden’s “waters of the United States” rule, which was introduced later.
The Rundown
Wall Street Journal How gas from Texas becomes cooking fuel in France
American Journal of Transportation EV sales collapse as subsidies and tax credits come to an abrupt halt
E&E News Midwest CO2 pipeline rush creates regulatory chaos
Calendar
MONDAY | MARCH 6
The annual CERAWeek conference kicks off in Houston, Texas. Learn more and register here.
THURSDAY | MARCH 9
10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a hearing to examine efforts to protect public health and the environment in the wake of the East Palestine train derailment and chemical release. Details and witnesses are expected to be announced in the coming days.
