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Corporate direct purchases of renewable energy at new high

Corporate direct purchases of renewable energy at new high

Corporate customers purchased a record 6,430 MW of shares of off-site renewable power in the US in
2018 as of December 14, more than double the 2,780 MW purchased in 2017. The Business Renewables
Center recently published this result of its latest market update. These figures do not count the
installation of renewable generation sources directly on commercial and industrial sites, which are not
reported publicly. The various types of corporate renewable transactions include off-site power
purchase agreements (PPAs), purchase of Renewable Energy Credits (RECs), green tariffs, other utility
solutions, as well as outright corporate investment in projects. By far the largest of such purchasers was
Facebook with 1,894.5 MW, followed by AT&T with 820 MW and Walmart with 533 MW. The survey
showed that there were 70 companies doing such purchases from more than 60 sellers. One projection
is that these kinds of purchases could top 60,000 MW by 2025. This is a healthy, booming market not to
be overlooked. Take a look at the report for more details.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

Global Clean Energy Investment Stayed Strong in 2018

Global Clean Energy Investment Stayed Strong in 2018

Total global clean energy investment was $332.1 billion in 2018 according to the latest survey by Bloomberg New Energy Finance just released.  That was down 8% from the record $361.7 billion in 2017, with much of the difference attributed to (1) the continued reduction in solar PV panel costs and (2) government-imposed restraints on the construction of new solar projects in China.  These figures include all project financing, public share offerings, corporate investments and venture capital.

Global venture capital and private equity investment in clean energy jumped 127% to $9.2 billion, the highest since 2010, with a big shift toward electric vehicle-related deals.  There were 8 such deals in China alone.

Total US clean energy investment hit a new record high of 64.2 million in 2018, up from %57.6 billion last year.  The prior peak was in 2011 at 62.3 billion, with a slump to $44.6 billion in 2013.

China was once again the leader in total investment with $100.1 billion but that was down 32% due to the drop in value of the solar project commitments.  

You can read a summary of the new report here or download a copy of the full report for more details.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

PG&E Bankruptcy Could Affect Clean Energy Investment

PG&E Bankruptcy Could Affect Clean Energy Investment

While the drama around the fate of PG&E, who is faced with enormous claims for liability for wildfire losses, unfolds, the implications for clean energy investment have gotten little attention. If the company does enter bankruptcy, all of its contracts, including those with clean energy suppliers, could be subject to modification or cancellation. A bankruptcy judge wields enormous power in reshaping a company’s business in order to emerge from protection. The judge can decide who will and who won’t get paid, and which, if any, contracts are honored, almost without regard to what any state or federal regulators desire as an outcome. It is a perilous process. It doesn’t necessarily mean the outcome will be negative for clean energy. It is just a cause for concern.

The top priority of the judge is to protect creditors, but that doesn’t mean all creditors will be treated equally. A judge will decide which claims are first to be dealt with and how much of each claim will be paid. That creates a situation where creditors will be fighting among themselves to get to the front of the line. And ratepayers will oppose solving the problem by raising rates.  All manner of arguments will be made about the validity of claims. Here are some pitfalls about which to be aware:

  1. Some Power Purchasing Agreements (PPAs) may be repriced or cancelled. Arguments likely will come up that purchases of clean power are overpriced or even unneeded as a way to make more money available to pay other claims. If Community Choice Aggregators (CCAs) purchase more power for their customers and displace the need for power which PG&E had already agreed to purchase, it could create an oversupply situation. This could jeopardize the existing PPAs from things like big solar farms and wind parks as well as biomass and other power generators that got favored pricing of 10 cents/kWh or more in the past. In PG&E’s prior bankruptcy, this didn’t happen, but at that time PG&E was short on power and the clean power was essential. The PPAs were largely untouched. It’s a different story now.  

  2. Net metering prices may drop. PG&E as well as other utilities have argued that paying full retail prices for power provided by users from installations such as rooftop solar (“net energy metering”) was too generous, since only the energy portion of a retail customer’s bill and not the fixed costs of poles and wires would be avoided. A judge could adopt that argument and lower the payments, to the point that the savings from customers adding on-site generation would disappear.

  3. The impact on CCAs could go either way. CCAs have been much more favorably inclined to buy only clean power, one of the attractions communities like. The turmoil could make more communities eager to take their power purchasing into their own hands this way–or it could raise the prices CCAs are charged by the surviving utility to the point that CCAs make little economic sense. CCAs buy power directly and pay the utility for the use of its poles and wires to deliver it to customers in their communities.  Some have speculated that PG&E could become just the steward of power delivery for a collection of CCAs that would serve all areas in the service territory. But if a judge imposed a huge “exit fee” for customers to switch to a CCA, the economics could become untenable.

  4. More communities may wish to buy out PG&E completely. CCAs are a partial step to “municipalization.” The full step has been very controversial. There was an unsuccessful attempt nearly 15 years ago by SMUD to extend its service area by annexing West Sacramento, Woodland and Davis in Yolo County. PG&E made the claim that doing so would make rates increase for all existing SMUD customers and save little for the new Yolo customers. Things may be different now, especially if a judge is looking for ways to raise cash. In a municipalization, PG&E would be paid for the assets the new utility acquired. A SMUD expansion might also get clean power purchasing back on track locally sooner than other options, given the relative financial strength of the District.

  5. Clean power purchasing could slow down. Enacting SB100 was supposed to accelerate the transition to 100% renewable power, but a PG&E bankruptcy would muddy the waters on who would be purchasing the power and how much they might be willing to pay. A bankruptcy judge would have a say in any new contracts entered into during the time a company remains in protection. It may take years for the bankruptcy to be settled, a considerable time for uncertainty clouding the power purchasing process.

     

The result of PG&E entering bankruptcy may not be all bad for clean energy. A judge willing to consider the longer-term savings of “going green” could preserve much of the benefits for clean energy companies. Or the judge could narrow the scope of the proceeding and put modifications to clean energy contracts out of bounds. On January 14, Governor Newsom put his chief of staff Ann O’Leary in charge of a “strike force” of state energy policy agencies to provide information that could steer the process in a positive direction. For clean tech companies, there will be peril but maybe some opportunity as well for those that understand what will likely be happening.

To find out more on this topic and related issues, come to our April Workshop on the Future of the Utility Business. Watch for an announcement soon on the date and time.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

Solar Surprise: Three great companies speak at MeetUp

Solar Surprise: Three great companies speak at MeetUp

So often people are surprised what high-impact clean tech companies we have in the region and last night (Jan. 24) it happened again.  Three great companies that few ever heard of addressed a packed crowd at our MeetUp held at Valley Vision in Oak Park. Leigh Zanone showed how 8minute Energy Renewables in El Dorado Hills was one of the larger solar developers in the state.  Particularly of interest was how they were ahead of the pack in understanding how quickly solar panel prices would drop. They bid the lowest prices anyone had heard of, but yet were very profitable as actual panel prices fell faster than expected.  One of their latest projects in Nevada won with a bid under $25/MWh. They now have over 10 GW of projects under development and 1100 MW in operation, and are making storage an added feature of their projects. They have been growing rapidly as they focus more and more on projects elsewhere than California.  

Becca Russell of Grid Alternatives, a nonprofit organization, explained their program of targeting low income homes for installation of solar paid entirely from fundraising and grants. From a modest start in North Natomas in 2004, they now reach across the country with an office in Colorado opened five years ago and beyond with projects in Nepal, Mexico and Nicaragua.  They not only install systems, but also train a workforce of local installers and manage teams of volunteers. They have programs for native American tribes. And clean mobility is a new area for them, helping people get access to electric vehicles and charging equipment through partnerships with others. Their next move, Becca said, was into multi-family structures. The focus to date has been on owner-occupied single family homes.

Scott Barrington of Trimark Associates in Folsom wrapped up the night explaining now they are the world’s leading independent provider of metering and plant status data on solar PV generation and now are expanding to provide that service for all forms of generation and storage worldwide, including microgrids.  Over 70% of all power in California is now metered through Trimark equipment.  Their main innovation is a Remote Intelligence Gateway (RIG) that is certified to provide real time data to the market and to schedulers like Cal ISO.  Now they have expanded far beyond data acquisition to add control and system management functions.

Surprised?  The audience certainly was.  Frankly, so were we. And that’s exactly what we want to happen.  The discussion was very lively and it was hard to get people to leave at the end.  So many connections were made.

Here’s a final surprise.  We recorded the event. If you want to see what happened, check our website.  It’s all there. It should convince you that you are missing a big opportunity to learn about our clean tech cluster through these MeetUps.  Plan to come in the future.

Our next MeetUp will be February 28 at the Sac State Alumni Center off College Town Drive.  It will occur in conjunction with the expo of faculty research from the College of Engineering and Computer Science, and the College of Natural Sciences and Mathematics.  Lots of exhibits to see in addition to our usual discussions. Come nerd-out with us.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

Cool Cruising In Sacramento

Cool Cruising In Sacramento

Recently, we got to reconnect with a local CleanTech company Glide Cruisers, USA.  Glide makes “adult sized” electric scooters or as they refer to them “electric stand-up” cycles that are an excellent short-range transportation solution and are super fun to ride! The company was founded by Christopher Wiggins who envisioned a personal transit option that combined performance with fun and excitement. Having competed in downhill skiing and waterskiing, Chris wanted to build a machine that mimicked the G-forces you feel while going fast in a standing position! While visiting his plant in Rancho Cordova, I got to test one of the FAT tire cruisers and can say with authority, THEY ARE EXCITING! It would have been great for me at Burning Man, where I did actually see a number of Glides transversing the Playa.

Recently he has connected with new partners who have helped him simplify manufacturing and supported his ability to expand production. He has also added additional sales support to expand his customer base especially in the Police / Public Safety Markets. Glide Patrol (division of Glide Cruisers) is working to provide police departments with Electric Patrol Cruisers and has recruited a team to help PD departments fund them through private and government grants. We could be seeing local officers riding around on locally built Glide transportation! Glide is an example of a local company growing smart and manufacturing quality products right here in our region.

Chris wants to grow the company and is looking to bring Glide products to more exciting sport markets including off-road single track for those of you who are downhill mountain bikers.  While they are keeping their actual development goals underwraps it closely connected with Chis’s need for speed and downhill skiing background!

Glide keeps it exciting by participating in local events like Bike Party with LED illuminated bikes and works closely with the art community with his personal art project Circle of Friends.  If you want to learn more about Glide check them out here! We are hoping to bring them out to a Cleantech meetup this Spring / Summer. Demo rides then or feel free to reach out to Chris to schedule one. www.glidecruisers.com.

ABOUT THE AUTHOR

Thomas is the Executive Director of CleanStart. Thomas has a strong background in supporting small businesses, leadership, financial management and is proficient in working with nonprofits. He has a BS in Finance and a BA in Economics from California State University, Chico. Thomas has a passion for sustainability and a commitment to supporting non-profits in the region.

CleanStart Sponsors

Weintraub | Tobin, EYBlueTech Valley, GT Law

Moss AdamsPowerSoft.biz, Revrnt, Momentum

College of Engineering & Computer Science at Sacramento State


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