Sunday, May 1, 2022

Geopolitics Undermine Energy Authority’s Solar Project

Posted By on Sun, May 1, 2022 at 9:04 AM

click to enlarge When projecting its path to decarbonization by 2030, Redwood Coast Energy Authority's plans depended heavily on Sandrini Solar, a project now derailed by geopolitical forces. - RCEA
  • RCEA
  • When projecting its path to decarbonization by 2030, Redwood Coast Energy Authority's plans depended heavily on Sandrini Solar, a project now derailed by geopolitical forces.
When local politics nixed Terra-Gen’s wind farm energy project near Rio Dell in 2019, regional electricity aggregator Redwood Coast Energy Authority (RCEA) turned to a solar project hundreds of miles away to meet its renewable energy goals. Now, world politics have botched up that second choice, according to Jaclyn Harr, client specialist manager with an outside energy procurement consultant, The Energy Authority. If RCEA loses this solar project, it would set the electricity provider back 50 percent of what it projected for its renewable energy supplies toward its goal of full decarbonization by 2030.

Harr told the RCEA board April 28 that a federal Commerce Department investigation into potentially illegal Chinese solar panel imports, as well as supply chain issues, nullified its contract for the Sandrini Sol 1 plant. RCEA had a deal to buy 100 MW for 15 years from the renewable energy development for more than $100 million. The contract is no longer valid because the project is delayed for more than six months. There are no allegations that Sandrini’s developers are involved in illicit imports. Instead, its delay and resultant contract delay appear to be victims of political forces. Sandrini, near Bakersfield, was supposed to begin supplying energy to PG&E’s transmission grid this year. While the Sandrini solar farm still might proceed, Harr told the board that its power wouldn’t be connected until late next year.

While Humboldt may be an island, electricity-wise, it’s not isolated from world economics. Both Chinese solar exports and global demand for Russian natural gas have effects behind the Redwood Curtain.

The U.S. Department of Commerce imposed extra taxes on Chinese solar panels eight years ago to prevent the dumping of too many cheap panels into the domestic market, fearing it would undermine U.S. solar panel production. But domestic solar manufacturers insist the Chinese panels are still getting though via other South Asian countries to circumvent the tariffs. The department kicked off an investigation April 25 into potential solar panel sales through these new, allegedly illicit, routes. The U.S. manufacturers want the Commerce Department to determine whether another round of tariffs — up to 240 percent, according to the solar industry — are warranted to prevent illegal imports.

Existing and new tariffs, as well as pandemic- and resource-related, supply slowdowns made RCEA’s Sandrini development slow to such a crawl that its terms with energy authority couldn’t be met.

A renegotiated solar deal may be a good thing for RCEA’s 60,000 customers. Or, a bad one. The contract for Sandrini is being renegotiated with its developer, EDP Renewables North America, said Jocelyn Gwynn, RCEA senior resources power manager.

“We’re still figuring out how that affects the cost,” she said.

RCEA staff and board members noted that while the loss of the current contract frees up money otherwise dedicated to Sandrini to purchase other renewable electricity at more favorable terms, those favorable terms may just be a figment of imagination due to steepening natural gas costs.

While tariffs on Chinese-made solar panels is one geopolitical policy with local economic fallout, the war in Ukraine is another. Choking off the natural gas supply from Russia to aid Ukraine is causing the price of natural gas “futures” contracts, used to secure supplies for electric generators like PG&E’s at King Salmon, to far exceed other inflation prices. That pressure is likely to make renewables more expensive because the raw costs of manufacturing and transportation are increasing along with the cost of gas. Renewables developers can also demand higher profits for their power because, compared to natural gas, any alternative is looking cheap.

Even if the Sandrini project does get built, we’ll still be stuck with fossil-fueled electricity here in Humboldt County. The dynamic of the state’s electric grid makes actual access to renewable electricity from it beyond Humboldt’s reach.

Sandrini’s output — all the way over in Bakersfield — would be fed into the electron soup of PG&E’s big transmission lines. The California Independent System Operator, which operates PG&E’s grid, as well as all the other utilities’ big power transmission lines, would send Sandrini’s electrons where they’re most effectively needed. Most likely, not a single solar electron would ever make it over the mountains east of Bridgeville into Humboldt because the transmission lines are unable to carry much volume at that point. But, RCEA’s purchased solar power from Sandrini would have displaced other fossil-fueled sources of power fed from the main stem of transmission in other parts of the state. And by displacing carbon-intensive power, RCEA would be contributing to the state’s, as well as its own, renewable energy requirements.

RCEA doesn’t own the transmission, so it’s stuck with the limits of PG&E’s constraints. As an electricity aggregator, it buys electricity on behalf of consumers, but it piggybacks on the big private utility’s infrastructure. RCEA pledges 100 percent local renewable energy by 2030. If the Terra-Gen wind farm had been built, that promised to add 155 MW toward that goal. Without the wind farm, and without Sandrini solar, it appears that only about 40 percent of electricity supplies are coming from renewables and, according to RCEA’s Gwynn, “25 percent of our 2030 energy needs [are expected to be] met through executed local renewable contracts.”

If the massive wind turbines that are in development for offshore installation are built, they are expected to cover local electric demand into the future.
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J.A. Savage

J.A. Savage

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J.A. Savage is an environmental and economics journalist specializing in energy.

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