The US Remains the Market to Beat for Corporate Renewable Purchases

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This year is on track to be another record-setter for corporate renewables purchases, and while the U.S. is still the engine driving the market’s growth, China is now on the horizon.

So far in 2019 companies have signed deals for 8.6 gigawatts of clean energy globally, according to the latest numbers from Bloomberg New Energy Finance. That outpaces last year when, at this time, companies had signed agreements for 7.2 gigawatts of wind and solar. Corporations purchased over 13 gigawatts in total last year.

The U.S. made up the majority of last year’s deals, accounting for 8.5 gigawatts of the global total. That trend holds this year, with companies in the U.S. signing up for nearly 6 gigawatts, or 70 percent of deals worldwide.

Texas accounts for 40 percent of U.S. activity this year, thanks to its rich wind and solar resources and deregulated electricity market. While wind has dominated the corporate renewables market in years past, solar is beginning to catch up, as Greentech Media has covered.

Of the various types of corporate deals, virtual power purchase agreements remain the default choice for many customers, allowing them to circumvent utilities and the green tariff programs they offer. BloombergNEF analyst Kyle Harrison said the U.S. has reached “triple digits when it comes to virtual PPAs.”

“There’s more of a blueprint for signing them,” said Harrison. “There’s [also] a lot of advisory companies in the market that are very experienced at holding company’s hands through these deals.”

Virtual PPAs also allow corporations to dodge the “animosity” that’s pervaded the utility-customer relationship in some regions, where companies are looking to buy more renewables than the utility can manage.

Harrison pointed to conflicts in Nevada, where NV Energy opposed retail choice, and in Virginia, where Dominion has faced corporate pressure to move towards a more renewable-heavy energy mix and recently proposed a green tariff program that would undercut competitive service providers.

“That animosity has led to a little bit of apprehension on the buyer’s side,” said Harrison.

The view from China

Despite those tensions, the U.S. market for corporations is significantly more flexible than other national markets.

“A lot of the markets in Asia, like China and Japan, are so rigid when it comes to options for buying clean energy from a corporate standpoint,” said Harrison. “It’s very limiting.”

By contrast, U.S. corporations can freely pursue virtual power purchase agreements in any of the U.S.’s deregulated markets. In regulated markets, Harrison said, over 15 utilities offer green tariffs. Many offer more than one.

The U.S. also dominates the RE100 list, a group of corporations committed to 100 percent renewables. Though Japan has 20 companies on that list, Harrison said many of them have pushed renewables commitments out to mid-century because of a lack of options.

“Companies are acknowledging that right now in the short-term there’s no easy way for them to buy clean energy in their domestic market,” said Harrison. “They’re going to take a wait and see approach.”

That should soon change, at least in China. The country is working to implement two new policies that have the potential to markedly increase corporate-led renewables deployment.

First, companies will have to meet a renewable portfolio standard — similar to initiatives being announced by U.S. utilities, said Harrison — and get a certain portion of their electricity from renewables.

The Chinese government is also piloting a 1.5 gigawatt “prosumer” program across 26 cities, which encourages onsite renewables. What companies don’t use they can export to the grid.

While Harrison recognizes those initiatives aren’t necessarily “going to transform the market,” in comparison to the U.S.’s big-time deals, they could significantly grow activity in China. They should also push policymakers to widen buying opportunities so companies can meet the targets.

But, Harrison said, “it still remains to be seen how much of a true gamechanger it will be.”

Source:: The US Remains the Market to Beat for Corporate Renewable Purchases


WoodMac: Natural Disasters No Big Catalyst for Microgrid Deployment

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After Hurricane Irma and then Hurricane Maria tore through Puerto Rico and ripped out its electricity infrastructure, renewables developers quickly descended on the island to offer clean energy and resilient solutions such as battery storage, residential solar and microgrids. Leading industry names like Tesla, Sunrun and Siemens all angled to get a slice of what was seen as a growing market.

Though that rush has left the island with more clean energy infrastructure, that’s not always the result of large-scale disasters, according to new research on microgrids from Wood Mackenzie Power & Renewables.

Of all the microgrids installed in the U.S. since 2012, only a quarter of the systems and 14 percent of capacity were built after large hurricanes or wildfires, WoodMac says.

“The majority of microgrid installations are not built after disasters,” writes the report’s author, Isaac Maze-Rothstein. “The microgrid market is not significantly impacted by these individual crises, even if some systems are installed.”

WoodMac notes that its analysis likely “underestimates the total number of systems that will ultimately be built” after the disasters it examined, because three of those events happened in the last year. The development window for microgrid projects can stretch beyond 12 months.

With that caveat, WoodMac’s data shows that of U.S. microgrids deployed post-disaster, only 1 percent used multiple distributed energy resources like solar-plus-storage. Instead, customers generally favor small, modular systems that run on diesel or natural gas and can be deployed quickly.

Puerto Rico is the exception here. The island saw a swell of small commercial solar-plus-storage systems installed after Maria and Irma. But consumers there still favored modular microgrids with speedy installations, and for obvious reasons: Many on the island went without power for months.

The time it takes to design and install bespoke systems remains a lasting damper on the microgrid market. Maze-Rothstein suggests an attenuated installation timeline could help advanced microgrids (defined as those that include multiple distributed energy resources) compete with the basic microgrids most often chosen in areas impacted by disaster.

The biggest opportunity for growth lies in areas with repeated disasters or consistent power inaccessibility, as opposed to one-off horrific storms, Maze-Rothstein said.

As climate change worsens, scientists believe natural disasters will become increasingly intense and frequent, meaning the number of viable regions for microgrid deployments will likely grow.

For now, Maze-Rothstein points to states such as California and New York as among the ripest for increased deployment. These states combine repeated extreme weather events with policy support for new projects, which could equate to more installations in the name of resiliency.

California is already proving that example. During the extreme 2017 wildfires — which were quickly outranked in size by last year’s wildfires — a microgrid located at a Northern California vineyard survived, raking in media coverage and a state award. One of the state’s investor-owned utilities, San Diego Gas & Electric, has proposed the installation of 100 megawatts of microgrids with battery storage to prepare for wildfires.

Companies such as SimpliPhi* and Scale Microgrid Solutions have created products specifically catering to the California market, Maze-Rothstein said.

“Public power safety shutoffs,” a tool used by the state’s investor-owned utilities to cut power during high wildfire conditions, will likely only increase the value proposition for customers as some go without power for hours or even days when winds and temperature are high.

*Correction: this name has been corrected. It was originally spelled incorrectly as Simplify.

Source:: WoodMac: Natural Disasters No Big Catalyst for Microgrid Deployment