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SOLAR SUPPLY CHAIN NEWS: A pair of solar manufacturers announced plans to build new facilities and hire thousands of workers in the U.S., which will bring home more of the solar supply chain that’s overwhelmingly controlled by China and other Asian countries.
It shows the brightening future for an industry expected to do a lot of heavy lifting to enable a transition away from fossil fuels but which has fallen behind on performance forecasts this year due to supply chain and sourcing issues.
The news: First Solar, an Arizona-based manufacturer, selected an industrial complex in northern Alabama to site a $1.1 billion solar module facility, where the company expects to employ 700 workers, it announced yesterday.
The facility will be the fourth U.S. facility for First Solar, which already operates facilities in Ohio, and is expected to come online in 2025.
First Solar is different from most solar manufacturers in that its modules use cells made with cadmium telluride rather than the more common semiconductor material used in solar tech, silicon.
Italian energy company Enel separately announced plans to build a facility to manufacture solar cells in the U.S., although no site has been selected. Enel expects to ultimately manufacture up to 6 gigawatts of bifacial photovoltaic modules and cells each year.
Enel’s announcement is especially notable. The U.S. functionally has no solar cell manufacturing capacity, meaning the already humble domestic module manufacturing sector has had to import their cells from foreign suppliers.
Thank the ‘tailwinds’: Executives for both companies said the Inflation Reduction Act, which offers a new advanced manufacturing production tax credit for solar and other components, was a decisive factor in their expansions.
“Recent policy tailwinds from the Inflation Reduction Act have served as a catalyst for our solar manufacturing ambitions in the US, ushering in a new era of made-in-America energy,” said Enrico Viale, head of Enel North America.
Mark Widmar, CEO of First Solar, said the IRA “has firmly placed America on the path to a sustainable energy future.”
The larger story: Producing panels and solar components in the U.S. is a major priority of the Biden administration and members of Congress in both parties.
The solar industry writ large has also been lobbying policymakers for years to pass new incentives to expand manufacturing, although the industry is split over another mechanism that Democratic and Republican administrations both have employed to protect domestic manufacturers: tariffs.
Manufacturers like First Solar have supported existing tariffs — and petitioned for additional ones — to cut into the market share commanded by Chinese companies whose products are heavily subsidized by the government there.
Project developers and the industry’s largest lobby, however, insist tariffs are not an effective strategy for expanding manufacturing and have consistently warned that new tariffs on imports will hamstring solar installations.
For now, the latter group has won the day on new tariffs.
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.
BREAKING—FERC GIVES GO AHEAD TO COMMONWEALTH LNG TERMINAL: The Federal Energy Regulatory Commission approved Commonwealth LNG’s application for a 1.18 billion cubic feet per day export terminal, the first new project approval in more than two years.
Commissioners voted unanimously to approve Commonwealth’s certificate.
WHITE HOUSE SEEKING $500 MILLION IN FUNDS TO MODERNIZE SPR: The White House is asking Congress for $500 million in funds to modernize the U.S. Strategic Petroleum Reserve, which was drained this year to a nearly four-decade low.
The funds would help the U.S. SPR storage facilities maintain operational readiness and alleviate anticipated shortfalls due to “supply chain issues, the COVID-19 pandemic, and related schedule delays,” officials said in their request.
DOE spokesperson Charisma Troiano told Reuters the money was needed to perform necessary infrastructure repairs and keep the SPR ready for future scheduled sales and to “address global energy supply chain disruptions” including those caused by Russia’s invasion of Ukraine.
The SPR comprises four underground salt caverns along the Gulf Coast in Texas and Louisiana. The structural integrity of these caverns can be stressed by repeated petroleum withdrawals, requiring corrective maintenance or even closure of the facilities.
Congress already allocates money for SPR modernization: Lawmakers in 2015 passed a bill that includes funding for SPR facility operations, including land acquisition, equipment, site development, and “other necessary costs related to capital improvement.” In its request, the White House did not say why the additional modernization funds were needed.
Background: President Joe Biden ordered the sale of 180 million barrels of oil from the SPR in March in an effort to drive down soaring U.S. gas prices caused by Russia’s invasion of Ukraine. But the drawdowns prompted concern that the drawdowns could leave the U.S. vulnerable and resource-strapped during an actual domestic supply emergency.
U.N.-BACKED GRAIN EXPORT DEAL EXTENDED FOR FOUR MONTHS: Russia and Ukraine have agreed to extend the U.N.-brokered Black Sea grain export deal for another 120 days, helping avert a global food crisis and keeping open a major economic lifeline for Ukraine as Russia’s war rages on.
The initiative was slated to expire Nov. 19. Russia had repeatedly threatened to abandon the deal, and had suspended participation for several days earlier this month, prompting fears it would not sign onto an extension.
Ukrainian Infrastructure Minister Oleksandr Kubrakov said on Twitter that the deal, brokered by Turkey and the U.N., was “another important step in the global fight against the food crisis.”
U.N. Secretary-General Antonio Guterres praised the agreement, which he described in a statement as “essential” to keeping down food and fertilizer prices.
Still, the deal stops short of the one-year extension that Ukraine had pushed for, giving Russia potential leverage to re-negotiate terms in March. It also fails to meet their request to broaden the scope of the deal to include more seaports.
EU LIKELY TO EXIT WINTER WITH BETTER-THAN-EXPECTED GAS STORAGE LEVELS: EU gas storage facilities are expected to be around 30% full at the end of the 2022-2023 winter heating season, according to a new analysis from Goldman Sachs, putting the bloc in a stronger-than-expected position heading into next winter.
The new projection is due to mild winter weather that has allowed the bloc to conserve energy for longer than anticipated, Bloomberg reports, as well as lower Chinese demand that has freed up more LNG supplies for Europe. All told, this will ease pressure on the EU next summer as it works to refill its inventory.
Analysts had previously expressed deep concern about Europe’s gas storage next winter, noting that without any Russian supply and Chinese demand coming back online, it will be much more difficult for the bloc to hit its gas storage target of 90%.
NEW EIA NUMBERS SHOW SOARING HEATING OIL PRICES: Heating oil prices were 65% higher this October compared to last thanks to tight inventories and constraints on refining, according to Energy Information Administration data put out yesterday.
It reflects the dire situation facing New England, as Breanne noted in a magazine story last week, where a significantly higher share of households use heating oil for home heating compared to the national average.
In Vermont, more than half of households heated their homes primarily with heating oil in 2021.
Northeastern grid operators and their customers are again facing a confluence of cost and reliability problems ahead of winter that go well beyond heating oil.
Governors and utilities in the region have requested the Biden administration waive the Jones Act, a law restricting shipments between U.S. ports on non-U.S. ships, in order to get more liquefied natural gas to the region.
INTERIOR ANNOUNCES EIGHT NEW DRAFT WIND ENERGY AREAS: The Interior Department’s Bureau of Ocean Management announced eight new draft wind areas in the central Atlantic yesterday, totaling approximately 1.7 million acres offshore in North Carolina, Virginia, Maryland, and Delaware.
Each of the four states have already set targets to deploy more clean energy in the coming years, with Maryland requiring 50% renewable energy by 2030. The eight draft WEAs are part of the 3.9 million acres DOI announced for public comment earlier this year.
Read more about the announcement here.
The Rundown
Wall Street Journal Egypt dims the lights in Cairo to free up more gas for Europe
The Hill Climate hawks say midterms prove environment is a top voter issue
Reuters Hess CEO says OPEC ‘back in the driver’s seat’ as U.S. shale growth slows
Calendar
FRIDAY | NOVEMBER 18
The COP27 climate change conference concludes in Sharm el-Sheik, Egypt.
