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Good morning and happy Friday,
This week many clean energy industry members convened in Anaheim for the RE+ conference. Among other happenings related to the event, SEIA released its Q2 2024 Solar Market Insight Report, which found that the industry had a record second quarter, adding 9.4 GW of new installations.
In addition, domestic module manufacturing capacity increased by more than 10 GW in Q2 to reach 31.3 GW, “a nearly four-fold increase since the Inflation Reduction Act (IRA) became law in 2022,” and SEIA also released the results of a national survey on solar energy messaging that confirms solar’s strong popularity among voters.
And, presidential candidates Kamala Harris and Donald Trump faced off in their first debate. Although energy didn’t get a lot of air time, and fossil fuels and fracking got a bit more attention than climate change and renewables, solar stocks posted gains based on investors’ sentiment that Harris prevailed. On the other side of the coin, former President Trump gave clean energy developers pause last week by vowing to rescind any “unspent” IRA funds if elected.
Read on for more.
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Houston, We Have a Problem
On July 30, the PJM interconnection held a capacity auction for the 2025/26 delivery year, and the results shocked everyone, with costs soaring to $14.7 billion – up from just $2.2 billion in the previous auction. There’s lots of fallout to go around – here’s a sampling:
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At least one fossil-fired plant that was scheduled for retirement is back in play -- Middle River Power announced that instead of taking its 540-MW, gas-fired Elgin Energy Center in IL offline by June next year, it will continue operating the facility.
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Meanwhile, although PJM has since announced it’s considering fast-track review for shovel-ready generating projects, it’s still working through a massive backlog of interconnection requests – In 2022, PJM paused review of new requests until 2026 for this reason.
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The organization said it “expects to process about 72 GW in projects by the third quarter next year and 230 GW over the next three years;” 90% of the 72 GW are renewable and energy storage projects.
⚡️ The Takeaway
What lies ahead? Morgan Stanley predicts that the next capacity auction, which will be held in December for 2026/27 delivery year, could see prices that are even higher – potentially a price cap of $695/MW-day, up 157% from the record-high of $270/MW-day set in July. These huge price tags “almost certainly means rate increases for consumers,” who are likely to see their electricity bills increase by double-digit percentages. All the more reason to speed up clean energy interconnection!
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Farming the Sun
New survey results released this week offer valuable insights into agrivoltaics, the practice of combining solar energy production with agriculture. Conducted by the Solar and Storage Industries Institute (SI2), an independent research arm of SEIA, Here are some key findings:
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While SI2’s survey shows 70% of farmers are open to hosting large-scale solar projects if they can continue farming, 30% said they weren’t interested in leasing or selling land for solar under any conditions.
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On the developer side, although “nearly half” of the individuals surveyed “believe that solar on farmland will make up a majority of their future business opportunities,” a similar percentage say it is “somewhat or significantly harder to” combine projects with agriculture.
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As a result, a “non-trivial” percentage of developers surveyed said they were “unwilling or disinterested in adopting the solar-ag overlap that farmers want,” reflecting “widespread concern” about the permitting challenges and increased costs associated with agrivoltaics.
⚡️ The Takeaway
Try it, you’ll like it. In terms of addressing permitting issues that stem from local opposition, SI2’s senior program director Shawn Rumery suggests that “developers trying to build on farmland should consider adopting dual-use strategies and focus on community engagement and education to avoid triggering future moratoria.” And regarding the overall difficulty, “developers with experience installing agrivoltaic projects are significantly less concerned” about the associated obstacles, suggesting that familiarity breeds success.
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Bidirectional Resilience
Much of the discussion about EVs and the electrical grid has focused on how they will overtax an already-strained electrical grid – but there’s reason to believe that “emerging tech could leverage car batteries for the greater good” and actually make the grid more resilient.
As the transportation industry seeks to transition away from gas-powered vehicles to battery-powered ones, the “multibillion-dollar” question is: if managed well, can EVs be an additive resource?
To be clear, millions of EVs plugging in and rapidly charging all at once would create a big demand that could result in capacity constraints. But if EVs can instead use bidirectional charging, they can become “mobile battery storage systems” that can be used strategically to absorb excess power and discharge it later when needed, thereby helping to “improve the flexibility and resilience” of the grid.
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The practice, known as “vehicle to grid” (V2G) or V2X in instances where the stored electricity is directed elsewhere, is already being tested across the country, including by a school district in Oakland, as previously reported in the Dispatch.
With EVs expected to comprise 56% of new light-duty vehicle sales by 2032, and “hundreds of thousands of new charging stations” needed to support this transition, bidirectional charging sounds like a winner to us!
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