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Welcome to the ninth 2024 issue of Currents - our e-newsletter focused on energy topics.
SPILMAN EVENT
On October 4, we are hosting our 2024 North Carolina SuperVision Labor & Employment Symposium in Winston-Salem, NC. This complimentary symposium is tailored for business owners, HR professionals, and anyone who manages employees. Dive into a day of invaluable insights on topics such as remote work; workplace investigations; AI, emerging technologies, and privacy; union avoidance; workplace violence; and more. Click here to register.
INDUSTRY EVENTS
Spilman attorneys Stephanie Eaton and Steven Hemric will be participating in the NC Bar Association's September 20-21 meeting in Asheville, NC - The Art and Science of Dispute Resolution: Winning Your Construction Case. Seasoned arbitrators and mediators, skilled experts, and knowledgeable practitioners will share what they have learned from experience and explain their approach to a variety of practical issues that are frequently encountered in construction litigation and arbitration. Click here to learn more.
On September 25-26, we are sponsoring and attending the National Workers' Compensation Defense Network's Annual Conference in Denver, CO. This conference is focused on today's trends and tomorrow's solutions. Click here to learn more.
We are also sponsoring and attending the DRI Annual Meeting October 16-18 in Seattle, WA. This is a perfect event to connect with the DRI community and beyond at the flagship event of the year for civil defense practitioners, where relationships build business. Click here to learn more.
In addition, we are sponsoring the ABA's Forum on Construction Law Fall Meeting, October 23-25 in Pittsburgh, PA. Attendees will hear from the foremost experts on the details of the designer's role and responsibility in the construction process. Click here to learn more.
Thank you for reading!
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Paving the Road to EV Transition | |
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By Barry A. Naum
The proverbial road to Electric Vehicle (EV) rollout is paved with numerous challenges. Among these speedbumps is the preeminent question of how the infrastructure to support nationwide EV charging will be financed and developed. Another question, perhaps not asked as much, revolves around the unintended consequences of a concentrated race to transition away from gas-powered vehicles to EVs, however well intentioned, may cause unforeseen impacts on the economy and even the environment.
Click here to read the entire article.
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“The move comes after a federal judge lifted the hold on LNG exports but did not mandate new approvals.”
Why this is important: The U.S. District Court for the Western District of Louisiana has ruled to temporarily enjoin the ban by the Department of Energy (DOE) on exports of LNG to non-Free Trade Agreement countries. The District Court’s ruling further enjoined the DOE from continuing its moratorium on the processing of permit applications for additional LNG export terminals. This DOE’s ban on domestic LNG exports imposes monumental damages on American companies and their employees and will allow foreign suppliers of higher-cost LNG exports to fill this artificially created lack of global natural gas supply. In addition, the actions by DOE harm our Asian and European allies that depend on a reliable supply of low-cost American shale gas to support their economies. Hopefully, the U.S. Court of Appeals for the Fifth Circuit will permanently strike down the LNG ban by the DOE on appeal from the District Court’s decision in order to defend American employees and their families from this baseless regulatory action. --- William M. Herlihy
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“Permits for coal-fired power plants drop by 83% despite leading world in construction as focus turns to renewables.”
Why this is important: There are signs that China’s effort to rapidly build coal-fired electric generation plants is slowing down. In the first half of 2024, China added 41 GW of new coal-fired electric generation plants, which is 91 percent of the world’s new coal plants. The world’s largest country is now projecting to build an additional 80 GW for all of 2024. However, after 2024, new coal-fired plants are projected to decline 83 percent to approximately 9 GW. Analysts believe the price to run coal-fired generation plants in China at the moment is not economical, and China is looking to add more solar and wind generation to its energy mix. --- Mark E. Heath
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“State utility regulators signed off on $9.7 billion in net rate increases in 2023, more than double the $4.4 billion authorized in 2022.”
Why this is important: In recent years, utilities have requested higher rate increases to pay for transmission and distribution system improvements to protect against extreme weather, prepare for increased electrification, and increase reliability within their systems. Due to these investments, net rate increase approvals more than doubled from 2022 to 2023, with authorized increases going from $4.4 billion to $9.7 billion, respectively.
According to the article, this elevated rate increase approval is anticipated to continue, as the U.S. Energy Information Administration projects approximately $8.9 billion for 2024. While these rate increase approvals could mean enhanced reliability and preparation for future electrification, in the near term, they also mean significant rate increases for all utility customers. --- Steven W. Lee
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“Environmentalists and the co-ops agree on one thing: $7.3 billion in IRA funding is encouraging utilities’ transition to cleaner sources of energy.”
Why this is important: President Biden last week announced $7.3 billion in funding from the Inflation Reduction Act to be used by electric co-ops to build more renewable energy. Rural electric co-ops have had some of the highest emissions from coal-fired generation because they did not have money to switch to greener alternatives. The money provided in the Inflation Reduction Act is being used to build solar, wind, and battery storage facilities to reduce the co-op shoes of electric generation. Electric co-ops produce 30 percent of their power from coal-fired generation while the rest of the industry nationally has only 20 percent coal-fired generation. The funds will cause coal-fired plants to be retired early. --- Mark E. Heath
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“But the more complicated truth is that the United States is mired in a long-running trade war with China, which is flooding the market with artificially cheap solar panels that carry an uncomfortably large carbon footprint and threaten to obliterate the domestic industry.”
Why this is important: This article discusses how the Biden administration touts solar energy as a key policy victory for its administration; however, this “victory” may hang in the balance because of a long-standing trade war with China that may overshadow the gains the U.S. has made in renewable energy. According to the article, China is saturating the U.S. market with artificially low-cost solar panels. These solar panels come with a significant carbon footprint and pose a significant threat to the viability of the domestic solar industry. According to the article, the price of solar panels has dropped by more than 50 percent over the past year, largely due to Chinese overproduction. Recently, the Biden administration announced measures to increase tariffs on Chinese products (including solar panels) worth tens of billions of dollars. Whether these new tariffs work to curb Chinese imports remains to be seen since China has historically been able to evade U.S. tariffs and trade restrictions by adeptly relocating many of the country's solar panel production facilities to other parts of Southeast Asia not embroiled in a trade war with the U.S. --- Schenley N. Kent
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“The U.S. Department of Energy estimates we’ll need about 200 GW of additional nuclear capacity by 2050 to support this demand and a good chunk of that could come from a familiar place.”
Why this is important: Studies by the U.S. Department of Energy conclude the United States needs to add 200 GW of new nuclear power by the end of 2050. The study focuses on the possibility of using retiring or recently retired nuclear sites as a way to meet the goal of zero emissions by 2050. They believe 60-95 reactors could be added to recently retired nuclear plants and produce 60 to 95 GW of power. They’ve also found approximately 17 reactors were approved but were never built, and those sites could be used for new reactors. All would be needed to add 200 GW of generation. --- Mark E. Heath
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“Utilities could save billions by tapping customers’ solar systems, EVs, and electric appliances.”
Why this is important: This article discusses the potential benefits that customers' untapped distributed energy technologies could have on the energy transition. Specifically, the article proposes that customers' existing solar systems, electric vehicles, smart thermostats, and other electric appliances could all be used to create virtual power plants (VPPs), also referred to as distributed power plants (DPPs), that could reduce the cost of the energy transition by tens of billions of dollars. If the potential of these resources is harnessed, the U.S. Department of Energy estimates that they will create the potential for 80 to 160 gigawatts of VPP capacity across the country by 2030, which could account for 10 to 20 percent of U.S. peak grid needs and save customers billions of dollars.
While the potential monetary benefits are immense, the article discusses obstacles to implementation of these VPPs. In particular, state legislators and utility regulators would need to enact policies that would allow VPPs to thrive. The upshot of this article is that, while the potential for VPP implementation savings is possible, the current landscape does not allow for full appreciation of these benefits, and there is no guarantee that these savings will be achieved. --- Steven W. Lee
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“NCSP has provided over 163 direct technical assistance engagements to organizations in 36 U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands to support this growing market.”
Why this is important: This article provides an overview of a recent announcement by the U.S. Department of Energy about expanding the National Community Solar Partnership (NCSP) into a new program now called NCSP+. This new initiative grows the program by increasing its support to assist community, residential, and commercial solar projects in disadvantaged communities. Under the new program, a coalition of industry, government, and private citizens will work together to realize the meaningful benefits of solar energy. According to the article, the program aims to educate the public on clean energy initiatives such as energy reliability and resilience, community-led economic development, and solar workforce opportunities. The program's expansion also includes consumer protection measures to protect homeowners from predatory practices in the rooftop solar industry. As reported, this project aligns with the Biden administration's focus on equitable clean energy access, supported by the Inflation Reduction Act and $8 billion in tax credits. The Partnership is open to any individual or organization interested in supporting equitable solar development in the United States. --- Schenley N. Kent
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“Oracle is designing a data center that will require more than a gigawatt of electricity, the company’s chairman said.”
Why this is important: Reports of the amount of power needed to run the new data centers that will support artificial intelligence continue to grow. Oracle has now announced it has a planned data center large enough that it will require three small modular nuclear reactors to provide power. That is approximately one gigawatt of power to one data center. Many questions remain on how future data centers will be powered. --- Mark E. Heath
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“New methods like recycling in fast neutron reactors and geological disposal in facilities like Finland's Onkalo are being explored.”
Why this is important: Nuclear energy should be the one energy source everyone agrees on. It provides reliable baseload power while emitting no greenhouse gases. Its biggest drawbacks are the cost of power plant construction and what to do with spent fuel, which remains radioactive for many years. There are several options for spent fuel, including reprocessing in special reactors to extract significantly more energy, and disposal in geologically secure facilities far underground, but the political will to implement them has been lacking. --- David L. Yaussy
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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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