Thank you for reading our ninth issue of Currents for the year.
We want to take a moment and congratulate the 71 firm attorneys that were selected by their peers for inclusion on the 2024 Best Lawyers list, including nine selected as Best Lawyers "Lawyers of the Year," and 18 others selected as Best Lawyers "Ones to Watch." Recognition by Best Lawyers is based entirely on peer review. Its methodology is designed to capture the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. You can learn more here.
Congratulations to everyone!
We hope you enjoy this issue, and, as always, thank you for reading.
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● The Virginia Clean Energy Act, the Botetourt County Battery Power Facility and the Impact on the Commonwealth
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The Virginia Clean Energy Act (“VCEA”) mandates that Dominion Energy Virginia and Appalachian Power, the two largest electrical utilities in Virginia, move to 100 percent renewable energy by 2045 and 2050, respectively. Because they also provide much of the generation capacity used by smaller utilities such as cooperatives and municipals, this effectively means most of the electrical power in Virginia will need to be generated by renewable sources by those dates. The VCEA also provides that much of this renewable generating capacity must be located inside the Commonwealth, and that 35 percent must be privately owned and purchased by the utility, rather than utility-owned. Each utility must provide regular reports to the Virginia State Corporation Commission (“SCC”) on their progress toward these goals.
Click here to read the entire article.
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“Zip code information could help show disparities and spotlight ongoing inequities.”
Why this is important: A growing body of discourse observes that people of color may pay objectively higher electric rates, and they may also be impacted, not indirectly, by higher disconnection rates than others. The article highlights the need for better data analytics to confirm these disparate implications. This is particularly important as decarbonization and electrification policies have the effect of increasing electric rates, which in turn arguably have greater impacts on low-income, senior citizens, people of color, and other vulnerable groups. --- Derrick Price Williamson
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“In terms of fossil fuels, the main driver of climate change, the declaration agreed on ‘accelerating’ a previous agreement to work toward the ‘phasedown of unabated coal power.’”
Why this is important: At the recent G20 Summit, world leaders agreed to triple renewable energy levels by 2030. The increase in renewables is tied to an accelerated phasedown of “unabated” coal in Europe. Current U.S. renewable efforts are also getting a boost from the Inflation Reduction Act that invests heavily in renewable energy. --- Mark E. Heath
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“The administration has been working with various cabinet agencies to bolster cybersecurity in water, rail, aviation, energy and other sectors.”
Why this is important: Ever since the ransomware attack on Colonial Pipeline (May 2021) and a hacker’s attempt to poison public water in Oldsmar, Florida (February 2021), cyberattacks have brought infrastructure security to the forefront of energy discussion. A rating system for providers could be a step in the right direction, if the system is implemented correctly. Before publicly releasing a rating, providers that are determined to be on the lower end of the cybersecurity rating system should be permitted the opportunity to implement corrective measures. Otherwise, a publicly distributed low cybersecurity rating could place a hacking target on certain providers. --- Joseph C. Unger
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“The BlueOval SK campus just off Interstate 65 in Glendale is expected to employ around 5,000 people once operations begin in 2025.”
Why this is important: Construction of the largest plant in Kentucky is well underway and Kentucky Governor Andy Beshear recently toured the construction site. Fork and SK are building two battery factories in Glendale, Kentucky, about 50 miles south of Louisville. Each plant will have four million square feet under roof and the site will employ 5,000 workers with the plants beginning production in 2025 and 2026. The Governor called the site “nothing short of incredible.” Kentucky awarded some $400 million in incentives for the plant to be built and Ford plans to build 2 million electric vehicles a year beginning in 2026. A second non-Ford plant in Bowling Green, KY, is under construction to make more car batteries with a 2,000-member workforce. --- Mark E. Heath
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“'Global markets are now flooded with cheaper electric cars and their prices [are] kept artificially low by huge state subsidies,'” von der Leyen said."
Why this is important: European nations, the U.S., and states like California are pushing consumers toward electric vehicles in a number of ways – providing direct subsidies to EVs, setting tailpipe standards too low for internal combustion engines to achieve, or simply prohibiting sales of ICEs in the future. This should present an opportunity for auto makers globally, but Chinese manufacturers, who ramped up EV development earlier as a result of similar incentives, have been the fastest to take advantage of this disruption in the market. They have many unsold cars, and see the West as a great place to unload them, even at no or low profit. The result is huge pressure on legacy automakers in the U.S. and Europe, who can’t match the lower production prices. --- David L. Yaussy
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“The industry outperformed SEIA’s March forecast, which predicted the best case scenario would see 2023 installations grow to 28.4 GW.”
Why this is important: The article discusses a report issued by Solar Energy Industries Association ("SEIA") and Wood Mackenzie that details the growth of U.S. solar installations in 2023 to date and expected in the years to come. Supply chain challenges have been persisting since the pandemic, and new tariffs applied to solar cell and module imports from Southeast Asia are expected to begin in 2024. Despite these headwinds, nearly 32 GW of solar capacity is expected to come online this year and the report expects gigawatts-direct current to nearly triple in the next five years. The article explains that a major contributor to this growth is the passage of the Inflation Reduction Act. While growth is still expected, the article noted that the anticipated tariffs on solar materials will increase the cost of solar installations in the short term, which in turn will create financial pressure for consumers. --- Steven W. Lee
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“Forecast downturn still ‘nowhere near steep enough’ to limit temperature rise to 1.5C, says watchdog.”
Why this is important: The International Energy Agency believes the beginning of the end for fossil fuels is here. IEA believes coal, oil and gas use will decline this decade, peaking prior to 2030 before beginning a permanent decline. The change is primarily happening from the addition of solar panels and electric vehicles. Scientists remain concerned the decline comes too late to keep global warming below the critical 1.5C level. --- Mark E. Heath
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“The appeals to state regulators have been loudest from East Coast offshore wind developers, who are building the nation’s first-ever projects.”
Why this is important: When interest rates were low, and the cost of solar panels and wind turbine components were dropping rapidly, the sky seemed to be the limit for renewable power. Higher rates, inflation, and supply chain constraints are making many projects, particularly offshore wind development, less economically feasible. Some developers are walking away from renewable projects, while others try to negotiate a higher price for the energy they expect to generate. --- David L. Yaussy
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“President Joe Biden, a Democrat, has pledged to protect the 19.6 million-acre (7.9 million-hectare) Arctic National Wildlife Refuge for polar bears and caribou.”
Why this is important: The article details the culmination of the Biden administration’s extensive effort to thwart gas and oil development and production in the Arctic National Wildlife Refuge (“ANWR”), despite broad support within Alaska and contradictive policy from the Biden administration itself. As noted in the article, the Biden administration – after a re-opening of environmental impact review – has, among other things, reversed a Trump era auction and cancelled related ANWR leases awarded to the Alaska Industrial Development authority. In turn, this has drawn the ire of politicians and some native organizations that favor self-determination, while other native organizations and environmental interests applaud the decision. At the same time, the article highlights that – perhaps because of the 2024 election build-up and pressure to boost domestic fuel supply – the Biden administration recently approved a $7 billion ConocoPhillips drilling project also in Alaska. Needless to say, the administration’s actions reflect a troubling inconsistency in our approach to fossil fuel development policy. --- Derrick Price Williamson
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Here is a round-up of the latest statistics concerning the energy industry.
ELECTRICITY
PETROLEUM
NATURAL GAS
COAL
RENEWABLES
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