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We’re back! This week, we begin with a report showing how U.S. wind energy development is increasing, turbines are getting larger, and prices are shrinking. But this building boom has an expiration date, and I’ll tell you why and when.

I’m Dan Gearino, your guide to the clean energy economy. Send me news tips and comments at dan.gearino@insideclimatenews.org, and thanks for reading.

— Dan

U.S. Wind Energy is Booming — For Now

Call me a hopeless geek, but each summer I look forward to the release of the Department of Energy’s wind technologies report, which is produced by Lawrence Berkeley National Laboratory. The authors take a top-to-bottom look at what’s driving U.S. wind energy development and explain it in plain language.
 
The new edition shows that wind energy is booming in terms of construction activity and advances in technology. Developers are rushing to get projects started before a federal incentive—the production tax credit—expires at the end of this year.
 
Urgency related to the tax credit is one of the main reasons that wind energy development was up in 2018 from the prior year, with 7,588 megawatts of new projects that went online, the report says. The wind energy came from 70 projects, ranging from the 300-turbine Rush Creek Wind Project in Colorado to several projects with one turbine each.

 
The tax credit was extended in 2015 and will phase out completely on Dec. 31. The extension led to a rush to break ground on projects in 2016, the final year developers could get the credit’s full value for 10 years.
 
Since then, the value of the credit has decreased each year. Now, in the final year of the phaseout, projects that begin construction by the end of the year can get 40 percent of the tax credit’s value for 10 years.

One condition of the tax credit is that a project must be completed within four years. This timeline is why 2019 and 2020 are set to be banner years.
 
But this party is likely going to end in 2021. Analysts say the lull likely will continue into the mid-2020s, hitting bottom in 2024, according to the report’s average of projections from five leading forecasting firms.
 
“It’s not going to be death knell in 2021, but it will be a drop off from 2020 levels no doubt,” said Mark Bolinger, a research scientist for the Lawrence Berkeley lab and co-author of the annual wind energy report since its first edition 13 years ago.

 
I asked him what he found surprising in putting together this new report. He told me that the key trends in wind energy have been clear for a few years. In other words, no surprises.
 
Here are some of those trends:
 

  • Wind turbines got larger in 2018. The average generating capacity of new turbines in the U.S. was 2.43 megawatts, up 5 percent from the prior year, and turbines also got taller. The increasing size has meant that projects can better harness energy in places with lower winds because the blades extend higher into the sky where winds are stronger.
     
  • The prices of wind energy contracts continue to decrease. It was notable in last year’s report that some wind energy contracts in the Plains states had dropped to about $20 per megawatt-hour. Now some contracts in the region are in the $10 per megawatt-hour range.

 
These trends need to end at some point. Turbines can only go so high, and the electricity can only get so cheap. Bolinger says he doesn’t see how prices in the Plains states can go much lower than the current lows.
 
One of the big factors that will shape wind energy development is competition with solar power. While wind energy development costs have steadily decreased, solar’s costs have decreased even more.
 
Solar also has the advantage of hitting its peaks during the day, when demand from the grid is also peaking. Wind farms usually hit their peaks at night.
 
This leads to a difficult dynamic for the wind energy industry, with rising competition from solar and a fast-approaching cliff in development. Times are very good right now based on leading indicators, but the people and companies in the industry have known for a while that that these would be good years, and that some bad ones likely would follow.

(Photo: Tom Williams/CQ Roll Call via Getty Images)
 

What’s a Virtual Power Plant? Hawaii and Utah Are About to Find Out

Get ready to hear the term “virtual power plant” a lot in the coming years. This is a power plant that uses the combined resources of solar panels and battery storage from many houses and businesses. The different sites work in tandem using software, and customers can sell their electricity to the grid at times of high demand, functioning like a power plant.
 
Sunrun, the solar and energy services company, said on Wednesday that it is part of an agreement to develop a virtual plant that will include 1,000 houses on the island of Oahu.

 
The project is being overseen by the utility Hawaiian Electric Company and is being co-developed by Open Access Technology International, a provider of grid software.
 
“This is a landmark moment for Sunrun, for Hawaii, and the future of energy in our country,” said Lynn Jurich, Sunrun’s CEO, in a statement. “This program is a clear demonstration that rooftop solar and batteries are driving the creation of a more locally-powered energy system, and provide important value to customers, utilities, and the broader electricity grid.”

Customers will receive bill credits for participating in addition to incentives that exist for all solar and battery customers in the state, the company said.
 
Last week, the utility Rocky Mountain Power announced a virtual power plant that will include 600 housing units in a new apartment complex near Salt Lake City, Utah.
 
This project is being led by the company sonnen, a Germany-based battery storage manufacturer.
 
“The combination of solar and long-lasting, safe, intelligent energy storage managed by the local utility is an essential component to the clean energy grid of the future,” said Blake Richetta, chairman and CEO of sonnen’s Atlanta-based U.S. subsidiary, in a statement.
 
The idea of using rooftop solar and batteries in a way that functions like a power plant is potentially revolutionary, upending the way utilities work and opening the door to a more flexible and less centralized grid.
 
The Hawaii and Utah projects are two of the largest virtual power plants in this country. I expect to see many more announcements like this, and for the projects to get even bigger.


(Photo: Sunrun)
 

Virginia Utility Wants All School Buses to Be Electric

Dominion Energy has a plan that it says would be the largest deployment of electric buses in the country. The Virginia-based utility would start with 50 buses by 2020 and then ramp up over the following years with the aim of replacing all of the state’s estimated 13,000 diesel buses with electric models by 2030.
 
Virginia Gov. Ralph Northam was there for the announcement last week with Dominion Energy CEO Thomas Farrell.
 
Dominion says it will cover the difference in costs, including charging equipment, between an electric bus and a diesel one. A diesel bus costs about $110,000, and a comparable all-electric bus costs about $120,000 more. But then an electric bus costs much less to maintain than a diesel one, Dominion says.
 
The first phase of the project, which is the initial 50 buses and other startup expenses, would cost $13.5 million, paid for through programs funded by consumers’ utility bills. The company says the costs of later phases will depend on bids that are submitted by bus manufacturers.
 
By switching to electric systems, Virginia would be cutting emissions and improving air quality for students riding the buses.
 
But Dominion has bigger plans than just the buses themselves. When the buses are not in use, the company is planning to set up systems that would allow electricity from the batteries to be used by the grid—yes, a virtual power plant.
 
On face value, this looks like a workable plan to make a much-needed transition away from diesel. Dominion is big enough to pull off something like this, and the demand from the program could help bus manufacturers to work on a larger scale and reduce their costs.
 
If other utilities do similar projects, it could accelerate a virtuous cycle in which the cost gap narrows.


(Photo: Dominion Energy)
 

Renewables Growth Quadruples, but Still Not on Pace to Meet Climate Goals

Renewable energy capacity has skyrocketed in the last decade, but it still falls short of what is needed to address climate change, according to a new report issued by the United Nations Environment Programme.

My colleague Kristoffer Tigue has the story, showing that a quadrupling of global renewable energy capacity in 10 years in both an amazing accomplishment and not enough.


“There is certainly a global shift,” said Kathy Hipple, an analyst with the Institute for Energy, Economics and Financial Analysis. “The question is, ‘Is it moving fast enough from a climate perspective?’ And arguably it’s not.”

One of the key drivers of the global transition to clean energy has been the rapid deployment and decreasing cost of solar power. Now we just need more of it, a lot more.

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