Solar projects hinge on DOE loan guarantees

ERCOT Winter Capacity RFP seeks up to 3,000 MW through generation and demand response to bolster Texas grid reliability during peak load, leveraging Reliability Must-Run, incentive factors, and EEA risk mitigation for the 2023-24 season.

Key Points

An ERCOT initiative to procure 3,000 MW of generation and demand response to reduce EEA risk and improve reliability.

✅ Targets 3,000 MW from generation and demand response

✅ Uses RMR-style contracts with flexible incentive factors

✅ Aims to lower EEA probability below 10% this winter

The Electric Reliability Council of Texas (ERCOT) issued a request for proposals to stakeholders to procure up to 3,000 MW of generation or demand response capacity to meet load and reserve requirements during the winter 2023-24 peak load season (Dec. 1, 2023, through Feb. 29, 2024), amid ongoing Texas power grid challenges across the region.

ERCOT cited “several factors, including significant peak load growth since last winter, recent and proposed retirements of dispatchable Generation Resources, and recent extreme winter weather events, including Winter Storm Elliott in December 2022, Winter Storm Uri in February 2021, and the 2018 and 2011 winter storms, each of which resulted in abnormally high demand during winter weather.” It now seeks additional capacity under its “authority to prevent an anticipated Emergency Condition,” reflecting nationwide blackout risks identified by grid experts.

In its notice regarding the RFP, ERCOT identified a number of mothballed and recently decommissioned generation resources that may be eligible to offer capacity under the RFP. It further stated that offers must comport with the format of its “Reliability Must-Run” agreement but could include a proposed “Incentive Factor” that reflects the revenues the unit owners determine would be necessary to bring the unit back to operation. It added that the Incentive Factor is not necessarily limited to 10%. Providers of eligible demand response can submit offers based on similar principles that are not necessarily constrained by cost. The notice identifies potential acceptable sources of demand response, describes certain parameters for the kinds of demand response that are permitted to respond to the RFP, and outlines the time periods during which ERCOT must be able to deploy the demand response resources to improve electricity reliability across the system.

To meet the Dec. 1, 2023, service start date, ERCOT developed an aggressive timeline to solicit and evaluate proposals through the RFP. Responses to the RFP are due Nov. 6, 2023. ERCOT’s schedule provides that it will notify market participants that obtain awards on Nov. 23, 2023. Expect contracts to be executed by Nov. 30, 2023.

Unlike Regional Transmission Organizations in the Northeastern United States, ERCOT does not have a capacity market. Instead, ERCOT relies on a high price cap of $5,000 per MWh for its energy market (decreased from the $9,000 per MWh cap in effect during Winter Storm Uri) and an Operating Reserve Demand Curve adder that pays additional funds to generators supplying power and ancillary services, an area recently scrutinized for improper payments when supply conditions are tight. In the wake of Winter Storm Uri, some calls were made to have ERCOT adopt a capacity market for reliability reasons, and a number of legal battles continue to play out in the wake of Winter Storm Uri. (See recent McGuireWoods legal alert “Winter Storm Uri Power Dispute Reaches the Supreme Court of Texas.”) Though a capacity market was not adopted, the Texas Legislature approved a $7.2 billion loan program, widely described as an electricity market bailout for generators, to build up to 10,000 MW of dispatchable generation. The legislature also approved a version of the Public Utility Commission of Texas’ proposal to establish a “Performance Credit Mechanism,” but with a cost cap of $1 billion.

The loss of life and economic impacts of Winter Storm Uri in 2021, along with the energy crunches and calls for conservation this past summer, are driving changes to ERCOT’s “energy-only” market, including electricity market reforms under consideration. Texas policymakers are providing multiple financial incentives to promote investment in dispatchable on-demand generation, and voters will consider funding to modernize generation measures this year to make the Texas grid more reliable and able to deal with power demand from a growing economy and increased demand for electricity driven by weather. In the meantime, ERCOT’s plan to procure 3,000 MW through this RFP process is a stopgap measure intended to bolster reliability for the upcoming winter season and lower the probability of load shed in the event of severe winter weather.

Related News

• Electricity Forum News

• Energy Policy News

UK Coal-Free Energy Transition highlights the West Burton A closure, accelerating renewable energy, wind, solar, nuclear, energy storage, smart grid upgrades, decarbonization, and net-zero goals while ensuring reliability, affordability, and a just transition for workers.

Key Points

A nationwide shift from coal power to renewables, storage, and nuclear to meet net-zero while maintaining reliability.

✅ West Burton A closure ends UK coal-fired generation

✅ Wind, solar, nuclear, storage strengthen grid resilience

✅ Government backs a just transition and worker retraining

The United Kingdom marks a historic turning point in its energy transition with the closure of the West Burton A Power Station in Nottinghamshire. This coal-fired power plant, once a symbol of the nation's industrial might, has now delivered its final watts of electricity to the grid, signalling the end of coal power generation in the UK.

A Landmark Shift Towards Clean Energy

The closure of West Burton A reflects a dramatic shift in the UK's energy landscape. Coal, the backbone of the UK's power generation for decades, is being phased out in favour of renewable energy sources like wind, solar, and nuclear. This transition aligns with the UK's ambitious net-zero emissions target, which aims to radically decarbonize the country's economy by 2050, though progress can falter, as when low-carbon generation stalled in 2019 amid changing market conditions.

Changing Energy Landscape

In the past, coal-fired power plants provided reliable, on-demand power. However, growing awareness of their significant environmental impact, particularly their contribution to climate change,  has accelerated the move away from coal. The UK government has set clear targets for eliminating coal power generation, and the industry has seen a steady decline as the share of coal fell to record lows in the electricity system.

Renewables Fill the Gap

The remarkable growth of renewable energy sources has enabled the transition away from coal. Wind and solar power, in particular, have experienced rapid development and falling costs, and in 2016 wind generated more electricity than coal for the first time. The UK now boasts substantial offshore and onshore wind farms and extensive solar installations. Additionally, investments in nuclear power and emerging energy storage technologies are increasing the reliability and diversity of the UK's power grid.

Economic and Social Impacts

The closure of the last coal-fired power station carries both economic and social impacts. While this change represents a victory for environmentalists, marked by milestones like a full week without coal power in Britain, the end of coal mining and power generation will lead to job losses in communities traditionally reliant on these industries.  The government has committed to supporting affected regions and facilitating a "just transition" for workers by retraining and creating new opportunities in the clean energy sector.

Global Implications

The UK's commitment to a coal-free future serves as a powerful example for other nations seeking to decarbonize their energy systems, including peers where Alberta's last coal plant closed recently. The nation's experience demonstrates that a transition to renewable energy sources is both possible and necessary. However, it also highlights the importance of careful planning and addressing the social and economic impacts of such a rapid energy revolution.

The Road Ahead

While the closure of West Burton A Power Station marks a historic milestone, the UK's transition to clean energy is far from complete. Maintaining a reliable and affordable energy supply, even as coal-free power records raise questions about energy bills, will require continued investment in renewable energy sources, energy storage, and advanced grid technologies.

Related News

• Electricity Forum News

• Power Generation News

Alberta Lithium Brine can power EV batteries via direct lithium extraction, leveraging oilfield infrastructure and critical minerals policy to build a low-carbon supply chain with clean energy, lower emissions, and domestic manufacturing advantages.

Key Points

Alberta lithium brine is subsurface saline water rich in lithium, extracted via DLE to supply EV batteries.

✅ Uses direct lithium extraction from oilfield brines

✅ Leverages Alberta infrastructure and skilled workforce

✅ Supports EV battery supply chain with lower emissions

After a most difficult several months, Canadians are cautiously emerging from their COVID-19 isolation and confronting a struggling economy.
There’s a growing consensus that we need to build back better from COVID-19, and to position for the U.S. auto sector’s pivot to electric vehicles as supply chains evolve. Instead of shoring up the old economy as we did following the 2008 financial crisis, we need to make strategic investments today that will prepare Canada for tomorrow’s economy.

Tomorrow’s energy system will look very different from today’s — and that tomorrow is coming quickly. The assets of today’s energy economy can help build and launch the new industries required for a low-carbon future. And few opportunities are more intriguing than the growing lithium market.

The world needs lithium – and Alberta has plenty

It’s estimated that three billion tonnes of metals will be required to generate clean energy by 2050. One of those key metals – lithium, a light, highly conductive metal – is critical to the construction of battery electric vehicles (BEV). As global automobile manufacturers design hundreds of new BEVs, demand for lithium is expected to triple in the next five years alone, a trend sharpened by pandemic-related supply risks for automakers.

Most lithium today originates from either hard rock or salt flats in Australia and South America. Alberta’s oil fields hold abundant deposits of lithium in subsurface brine, but so far it’s been overlooked as industrial waste. With new processing technologies and growing concerns about the security of global supplies, this is set to change. In January, Canada and the U.S. finalized a Joint Action Plan on Critical Minerals to ensure supply security for critical minerals such as lithium and to promote supply chains closer to home, aligning with U.S. efforts to secure EV metals among allies worldwide.

This presents a major opportunity for Canada and Alberta. Lithium brine will be produced much like the oil that came before it. This lithium originates from many of the same reservoirs responsible for driving both Alberta’s economy and the broader transportation fuel sector for decades. The province now has extensive geological data and abundant infrastructure, including roads, power lines, rail and well sites. Most importantly, Alberta has a highly trained workforce. With very little retooling, the province could deliver significant volumes of newly strategic lithium.

Specialized technologies known as direct lithium extraction, or DLE, are being developed to unlock lithium-brine resources like those in Canada. In Alberta, E3 Metals* has formed a development partnership with U.S. lithium heavyweight Livent Corporation to advance and pilot its DLE technology. Prairie Lithium and LiEP Energy formed a joint venture to pilot lithium extraction in Saskatchewan. And Vancouver’s Standard Lithium is already piloting its own DLE process in southern Arkansas, where the geology is very similar to Alberta and Saskatchewan.

Heavy on quality, light on emissions

All lithium produced today has a carbon footprint, most of which can be tied back to energy-intensive processing. The purity of lithium is essential to battery safety and performance, but this comes at a cost when lithium is mined with trucks and shovels and then refined in coal-heavy China.

As automakers look to source more sustainable raw materials, battery recycling will complement responsible extraction, and Alberta’s experience with green technologies such as renewable electricity and carbon capture and storage can make it one of the world’s largest suppliers of zero-carbon lithium.

Beyond raw materials

The rewards would be considerable. E3 Metals’ Alberta project alone could generate annual revenues of US$1.8 billion by 2030, based on projected production and price forecasts. This would create thousands of direct jobs, as initiatives like a lithium-battery workforce initiative expand training, and many more indirectly.

To truly grow this industry, however, Canada needs to move beyond its comfort zone. Rather than produce lithium as yet another raw-commodity export, Canadians should be manufacturing end products, such as batteries, for the electrified economy, with recent EV assembly deals underscoring Canada’s momentum. With nickel and cobalt refining, graphite resources and abundant petrochemical infrastructure already in place, Canada must aim for a larger piece of the supply chain.

By 2030, the global battery market is expected to be worth $116 billion annually. The timing is right to invest in a strategic commodity and grow our manufacturing sector. This is why the Alberta-based Energy Futures Lab has called lithium one of the ‘Five big ideas for Alberta’s economic recovery.’  The assets of today’s energy economy can be used to help build and launch new resource industries like lithium, required for the low-carbon energy system of the future.

Industry needs support

To do this, however, governments will have to step up the way they did a generation ago. In 1975, the Alberta government kick-started oil-sands development by funding the Alberta Oil Sands Technology and Research Authority. AOSTRA developed a technology called SAGD (steam-assisted gravity drainage) that now accounts for 80% of Alberta’s in situ oil-sands production.

Canada’s lithium industry needs similar support. Despite the compelling long-term economics of lithium, some industry investors need help to balance the risks of pioneering such a new industry in Canada. The U.S. government has recognized a similar need, with the Department of Energy’s recent US$30 million earmarked for innovation in critical minerals processing and the California Energy Commission’s recent grants of US$7.8 million for geothermal-related lithium extraction.

To accelerate lithium development in Canada, this kind of leadership is needed. Government-assisted financing could help early-stage lithium-extraction technologies kick-start a whole new industry.

Aspiring lithium producers are also looking for government’s help to repurpose inactive oil and gas wells. The federal government has earmarked $1 billion for cleaning up inactive Alberta oil wells. Allocating a small percentage of that total for repurposing wells could help transform environmental liabilities into valuable clean-energy assets.

The North American lithium-battery supply chain will soon be looking for local sources of supply, and there is room for Canada-U.S. collaboration as companies turn to electric cars, strengthening regional resilience.
 

Related News

• Electricity Forum News

• EV Infrastructure News

Alberta Hydropower Potential highlights renewable energy, dams, reservoirs, grid flexibility, contrasting wind and solar growth with limited investment, regulatory hurdles, river basin resources, and decarbonization pathways across Athabasca, Peace, and Slave River systems.

Key Points

It is the technical capacity for new hydro in Alberta's river basins to support a more reliable, lower carbon grid.

✅ 42,000 GWh per year developable hydro identified in studies.

✅ Major potential in Athabasca, Peace, and Slave River basins.

✅ Barriers include high capital costs, market design, water rights.

When you think about renewable energy sources on the Prairies, your mind may go to the wind farms in southern Alberta, or even the Travers Solar Project, southeast of Calgary.

Most of the conversation around renewable energy in the province is dominated by advancements in solar and wind power, amid Alberta's renewable energy surge that continues to attract attention. 

But what about Canada's main source of electricity — hydro power?

More than half of Canada's electricity is generated from hydro sources, with 632.2 terawatt-hours produced as of 2019. That makes it the fourth largest installed capacity of hydropower in the world. 

But in Alberta, it's a different story. 

Currently, hydro power contributes between three and five per cent of Alberta's energy mix, while fossil fuels make up about 89 per cent.

According to Canada's Energy Future report from the Canada Energy Regulator, by 2050 it will make up two per cent of the province's electricity generation shares.

So why is it that a province so rich in mountains and rivers has so little hydro power?

Hydro's history in Alberta
Hydro power didn't always make up such a small sliver of Alberta's electricity generation. Hydro installations began in the early 20th century as the province's population exploded. 

Grant Berg looks after engineering for hydro for TransAlta, Alberta's largest producer of hydro power with 17 facilities across the province.

"Our first plant was Horseshoe, which started in 1911 that we formed as Calgary Power," he said. 

"It was really in response to the City of Calgary growing and having some power needs."

Berg said in 1913, TransAlta's second installation, the Kananaskis Plant, started as Calgary continued to grow.

A historical photo of a hydro-electric dam in Kananaskis Alta. taken in 1914.
Hydro power plant in Kananaskis as seen in 1914. (Glenbow Archives)
Some bigger installations were built in the 1920s, including Ghost reservoir, but by mid-century population growth increased.

"Quite a large build out really, I think in response to the growth in Alberta following the war. So through the 1950s really quite a large build out of hydro from there."

By the 1950s, around half of the province's installed capacity was hydro power.

"Definitely Calgary power was all hydro until the 1950s," said Berg. 

Hydro potential in the province 
Despite the current low numbers in hydroelectricity, Alberta does have potential. 

According to a 2010 study, there is approximately 42,000 gigawatt-hours per year of remaining developable hydroelectric energy potential at identified sites. 

An average home in Alberta uses around 7,200 kilowatt-hours of electricity per year, meaning that the hydro potential could power 5.8 million homes each year. 

"This volume of energy could be sufficient to serve a significant amount of Alberta's load and therefore play a meaningful role in the decarbonization of the province's electric system," the Alberta Electric System Operator said in its 2022 Pathways to Net-Zero Emissions report.

Much of that potential lies in northern Alberta, in the Athabasca, Peace and Slave River basins.

The AESO report says that despite the large resource potential, Alberta's energy-only market framework has attracted limited investment in hydroelectric generation. 

Hydro power was once a big deal in Alberta, but investment in the industry has been in decline since the 1950s. Climate change reporter Christy Climenhaga explains why.
So why does Alberta leave out such a large resource potential on the path to net zero?

The government of Alberta responded to that question in a statement. 

"Hydro facilities, particularly large scale ones involving dams, are associated with high costs and logistical demands," said the Ministry of Affordability and Utilities. 

"Downstream water rights for other uses, such as irrigation, further complicate the development of hydro projects."

The ministry went on to say that wind and solar projects have increased far more rapidly because they can be developed at relatively lower cost and shorter timelines, and with fewer logistical demands.

"Sources from wind power and solar are increasingly more competitive," said Jean-Denis Charlebois, chief economist with the Canadian Energy Regulator. 

Hydro on the path to net zero
Hydro power is incredibly important to Canada's grid, and will remain so, despite growth in wind and solar power across the province.

Charlebois said that across Canada, the energy make-up will depend on the province. 

"Canadian provinces will generate electricity in very different ways from coast to coast. The major drivers are essentially geography," he said. 

Charlebois says that in British Columbia, Manitoba, Quebec and Newfoundland and Labrador, hydropower generation will continue to make up the majority of the grid.

"In Alberta and Saskatchewan, we see a fair bit of potential for wind and solar expansion in the region, which is not necessarily the case on Canada's coastlines," he said.

And although hydro is renewable, it does bring its adverse effects to the environment — land use changes, changes in flow patterns, fish populations and ecosystems, which will have to be continually monitored. 

"You want to be able to manage downstream effects; make sure that you're doing all the proper things for the environment," said Ryan Braden, director of mining and hydro at TransAlta.

Braden said hydro power still has a part to play in Alberta, even with its smaller contributions to the future grid. 

"It's one of those things that, you know, the wind doesn't blow or the sun doesn't shine, this is here. The way we manage it, we can really support that supply and demand," he said.

Related News

• Electricity Forum News

• Renewable Energy News

Idaho Power Valmy Settlement outlines early closure of the North Valmy coal-fired plant in Nevada, accelerated depreciation recovery, a 1.17% base-rate increase, and impacts for customers, NV Energy co-ownership, and Idaho Public Utilities Commission review.

Key Points

A proposed agreement to close North Valmy early, recover costs via a 1.17% rate hike, and seek PUC approval.

✅ Unit 1 closes 2019; Unit 2 closes 2025 in Nevada.

✅ 1.17% base-rate hike; about $1.20 per 1,000 kWh monthly bill.

✅ Idaho PUC comment deadline May 25; NV Energy co-owner.

State regulators have set a May 25 deadline for public comment on a proposed settlement related to the early closure of a coal-fired plant co-owned by Idaho Power, even as some utilities plan to keep a U.S. coal plant running indefinitely in other jurisdictions.

The settlement calls for shuttering Unit 1 of the North Valmy Power Plant in Nevada in 2019, with Unit 2 closing in 2025, amid regional coal unit retirements debates. The units had been slated for closure in 2031 and 2035, respectively.

If approved by the Idaho Public Utilities Commission, the settlement would increase base rates by approximately $13.3 million, or 1.17 percent, in order to allow the company to recover its investment in the plant on an accelerated basis.

That equates to an additional $1.20 on the monthly bill of the typical residential customer using 1,000 kilowatt-hours of energy per month.

Idaho Power, which co-owns the plant with NV Energy, maintains that closing Valmy early rather than continuing to operate it until it is fully depreciated in 2035, will ultimately save customers $103 million in today's dollars.

The company said a significant decrease in market prices for electricity has made it uneconomic to operate the plant except during extremely cold or hot weather, when the demand for energy peaks, a trend underscored by transactions involving the San Juan Generating Station deal elsewhere. The company also said plant balances have increased by approximately $70 million since its last general rate case in 2011, due to routine maintenance and repairs, as well as investments required to meet environmental regulations.

The proposed settlement reflects a number of changes to Idaho Power's original proposal regarding Valmy, and comes in the wake of discussions with interested parties in February and April, against the backdrop of a broader energy debate over plant closures and reliability.

In its initial application, filed in October, Idaho Power proposed closing both units in 2025. The original proposal would have increased base rates by $28.5 million, or about 2.5 percent, in order to allow the company to recover its costs associated with the plant's accelerated depreciation, decommissioning and anticipated investments, with cautionary examples such as the Kemper power plant costs illustrating potential risks.

Concurrently, Idaho Power asked for commission approval to adjust depreciation rates for its other plants and equipment based on the result of a study it conducts every five years, as outlined in Case IPC-E-16-23. The adjustment would have led to a $6.7 million increase to base rates.

The two requests filed in October would have increased customer costs by a total of $35.2 million or 3.1 percent, leading to a $3.08 increase on the bills of the typical residential customer who uses 1,000 kilowatt-hours per month.

The proposed settlement submitted to the Commission on May 4 calls for $13,285,285 to be recovered from all customer classes through base rates until 2028, all related to the Valmy shutdown. That is an increase of 1.17 percent and would result in a $1.20 increase on the bills of the typical residential customer who uses 1,000 kilowatt-hours per month.

Related News

• Electricity Forum News

• Power Generation News

Europe EV Sales Slowdown signals waning incentives, economic uncertainty, and supply chain constraints, threatening climate targets and net-zero emissions goals while highlighting the need for charging infrastructure, affordable batteries, and policy support across key markets.

Key Points

Europe's early-2024 EV registrations fell as incentives waned and supply gaps persisted, putting climate targets at risk.

✅ Fewer subsidies and tax breaks cut EV affordability

✅ Inflation and recession fears dampen car purchases

✅ Supply-chain and lithium constraints limit availability

A recent slowdown in Europe's electric vehicle (EV) sales raises serious concerns about the region's ability to achieve its ambitious climate targets.  After years of steady growth, new EV registrations declined in key markets like Norway, Germany, and the U.K. in early 2024. Experts are warning that this slump jeopardizes the transition away from fossil fuels and could undermine Europe's commitment to a net-zero emissions future.

Factors Behind the Decline

Several factors are contributing to the slowdown in EV sales:

• Reduced Incentives: Many European countries have scaled back generous subsidies and tax breaks for EV purchases. While these incentives played a crucial role in driving early adoption, their reduction has made EVs less financially attractive for some consumers, with many U.K. buyers citing higher prices even after discounts.
• End of ICE Ban Support: Public support for phasing out gasoline and diesel-powered cars by 2035, a key European Union policy, appears to be waning in some areas. Without robust support for this measure, consumers may be less inclined to embrace the transition to electric vehicles.
• Economic Uncertainty: Rising inflation and fears of a recession in Europe have made consumers hesitant to invest in big-ticket purchases like new cars, regardless of fuel type. This economic uncertainty is impacting both electric and conventional vehicle sales.
• Supply Chain Constraints: Ongoing supply chain disruptions and shortages of raw materials like lithium continue to impact the availability of affordable electric vehicles. This means potential buyers face long wait times or inflated prices even when they're ready to embrace EVs.

Consequences for Europe's Green Agenda

The decline in EV sales threatens Europe's plans to reduce carbon emissions and become the first climate-neutral continent by 2050, aligning with a broader push for electricity to address the climate dilemma across Europe. The transportation sector is a major contributor to greenhouse gas emissions, and the rapid electrification of vehicles is a pillar of Europe's decarbonization strategy.

The current slump highlights the need for continued policy support for the EV market, as EVs still trail gas models in many markets today, to ensure long-term growth and affordability for consumers. Without action, experts fear that Europe may find itself locked into a dependence on fossil fuels for decades to come, making its climate targets unreachable.

A Global Concern

Europe is a leader in electric vehicle policies and technology, during a period when global EV sales climbed markedly. The recent slowdown, however, sends a worrying signal to other regions around the world aiming to accelerate their transition to electric vehicles, including the U.S. market's Q1 dip as a cautionary example. It underscores the importance of sustained government support, investment in charging infrastructure and overcoming supply chain challenges to secure a future of widespread electric vehicle use, with many forecasts suggesting mass adoption within a decade if support continues.

Related News

• Electricity Forum News

• EV Infrastructure News