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The Energy 202: January may be a make-or-break month for the U.S. solar business

Analysis by
Staff writer
January 3, 2018 at 9:18 a.m. EST

with Paulina Firozi

THE LIGHTBULB

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January is one of the coldest, darkest months of the year in the United States — especially this January, with the eastern half of the country gripped by frigid Arctic air and awaiting something being called a " bomb cyclone."

But in Washington this month, things may get really gloomy for the U.S. solar industry.

The federal government faces two deadlines in January that could have far-reaching ramifications on the U.S. solar industry if they do not go industry’s way.

By the first of the two deadlines, an independent agency needs to decide whether to accept a Trump administration proposal designed to boost coal and nuclear power plants. By the second deadline, President Trump himself will have to choose whether to slap rival nations with a set of tariffs the domestic solar industry largely opposes.

“Bad decisions in either case would have negative impacts on the U.S. solar industry,” said Abigail Ross Hopper, president and chief executive of the Solar Energy Industries Association (SEIA). 

The decisions come just as the United States is poised to capitalize on several years of growth in renewable energy sources. Wind and solar sources provided 7 percent of electricity generated in the country in 2016, up from less than a percentage point a decade ago.

First up: the Federal Energy Regulatory Commission (FERC) has until Jan. 10 to decide whether to finalize an electric grid plan that would reward facilities capable of keeping 90-day fuel supplies on hand — effectively, those plants powered by coal or uranium.  

The plan emerged from the Energy Department after its contested study examining whether the grid could withstand the retirement of aging coal-fired and nuclear power plants.

As those old plants are replaced by renewable sources like solar, which produces energy only intermittently, Energy Secretary Rick Perry and some independent experts are concerned the grid may someday no longer be able to provide power at peak hours — for instance, when the sun goes down and consumers turn on the lights at home.

But studies — including the Energy Department's own — found the loss of traditional power sources has not yet diminished the grid's reliability. Critics blasted the 90-day rule as a ham-handed attempt by Perry to play favorites with coal and nuclear — one that flies in the face of FERC policy since the 1990s to make electricity markets more competitive. Clean energy lobbyists worry the implementation of such a rule will make renewables less competitive.

"It's an extremely crude, blunt tool," said Rob Gramlich, who works for renewable energy clients through his consulting firm Grid Strategies LLC.

After initially giving the independent agency only 45 days to rule, Perry begrudgingly extended the deadline to mid-January at the request of FERC’s new chairman, Kevin McIntyre, writing that the "better course of action” would be for FERC to act sooner rather than later.

But the entire energy industry, save coal and nuclear, thought the Trump administration was asking the regulatory agency to decide too hastily, given the viability of electricity markets hung in the balance. A coalition of strange bedfellows, including the top lobbyists for the oil, solar and wind industries, insisted FERC give itself more time to reply.

In the meantime, a key Republican member of the commission, Robert Powelson, publicly praised competitive markets in an October speech. “The moment we put our thumbs on the scale," he said, "is the moment we bastardize the process."

Given that, renewable advocates are optimistic the five-member commission, with three Republicans and two Democrats, will not rubber-stamp Energy's proposal.

“Without his vote,” said Gramlich, “I don’t imagine the two Democrats, Cheryl LaFleur and Richard Glick, approving it.”

Meanwhile, coal boosters seem to be preparing for the plan to fail. The U.S. Chamber of Commerce, which initially funded a study cited by Energy when it proposed the rule, wrote in a FERC filing that the study sponsorship "should not be interpreted as support for the market interventions." And after photos emerged of coal executive Robert E. Murray giving Perry a coal "Action Plan" outlining plant payments similar to what his department ultimately proposed, Murray claimed he "never proffered" the idea.

Still, the grid resiliency issue is unlikely to go away even if FERC rejects Perry's specific proposal. Energy observers expect the commission to try to develop a  more sophisticated market for compensating electricity generators for being able to produce power reliably.

The second deadline faces the president himself — and, because of that, worries some solar lobbyists more.

In October, the U.S. International Trade Commission (ITC) voted to support tariffs and other import restrictions to protect domestic solar companies from an influx of cheap solar panels produced overseas.

While two U.S.-based solar-panel makers, Suniva and SolarWorld Americas, brought the original case to the commission, the broader U.S. solar industry opposes any tariff that could drive up the low price of panels, a key advantage powering the industry's growth over more costly coal and nuclear plants.

The ITC’s decision provides Trump with a much-sought opportunity to levy a tax on China and other solar exporters. In 2017, Trump slowly edged closer to a trade war with China, one of his favorite rhetorical targets on the campaign trail. Over the summer, the Commerce Department decided to tax aluminum foil coming from the country. A decision in the solar case is expected by Jan. 26.

Solar lobbyists spent the latter part of last year meeting with Trump administration officials to make their case that the United States will miss out on a multitrillion-dollar market globally with an ill-paced tariff on the industry in its early days.

“We have had several encouraging conversations with Secretary Perry and his staff,” said Hopper from SEIA,” and believe that they understand the vital role solar plays, and will increasingly play, in our nation's electricity mix.”

Greg Wetstone, president of the American Council On Renewable Energy, which represents solar investors, also has had a few meetings with administration officials in the administration, including one in December, he said. 

“There are senior officials there who understand the importance of the renewable sector, solar in particular, as a national economic driver,” Wetstone said.

But unlike the FERC decision, the choice to punish solar panel exporters will be Trump’s and Trump’s alone — for whom what Wetstone called “an instinctive political tendency toward a tariff” may come into play.

While he calls the proposal in front of FERC "very serious," Wetstone said "most immediately, the tariff is the more serious concern."

POWER PLAYS

-- Superfund site list shortened: The Environmental Protection Agency says it's made progress in cleaning up the nation's seven most toxic locations — a top priority for Scott Pruitt. While attempting to rein in the agency's legal authority in other ways, Pruitt has emphasized Superfund sites are an area where the EPA can and should regulate.

The EPA chief said the agency has taken four sites partially and three sites completely off the "National Priorities List," the Washington Examiner reported. "We have made it a priority to get these sites cleaned up faster and in the right way," Pruitt said Tuesday. "By creating a streamlined task force and making major remedy decisions that hold potentially responsible parties accountable for clean up, the Superfund program is carrying out the agency’s mission of protecting human health and the environment more every day."

-- Half of Puerto Rico is still in the dark. It’s been more than three months since Hurricane Maria made landfall on the island and updates on progress have been scattered.

Quartz’s Zoe Schlanger breaks down a few of the latest known data points: “Puerto Rico’s electrical utility says it is operating at 69% of normal capacity—but that figure doesn’t indicate how many of the island’s residents are actually receiving power. The system that monitors the extent of distribution is not working. On Dec.29, the governor put the official estimate of those in the dark at more than 660,000 people, 45% of the island’s 1.5 million electricity customers. So now, 104 days since Maria hit, the 660,000 figure is the first to come directly from the Puerto Rican government.”

OIL CHECK

-- Coal mining deaths reached their highest point in three years, The Hill’s Timothy Cama reports: “A total of 15 miners died on the job in 2017, Mine Safety and Health Administration (MSHA) data show, compared with eight in 2016. That year saw the fewest mining deaths since records began… West Virginia saw the bulk of the 2017 miner deaths, with eight.”

The report comes just after the Senate approved former coal mining executive David Zatezalo to head MSHA. Zatezalo came under scrutiny for his own safety record as a former executive at Rhino Resources, a coal-mining company that was issued two “pattern of violations” warning letters from the safety agency in 2010 and 2011.

THERMOMETER
TV reporters and social media users are testing the freezing temperatures with some old tricks. (Video: Elyse Samuels/The Washington Post)

-- A “bomb cyclone” is coming: You read that right. A massive winter storm is headed to the East Coast this week, hitting areas from Georgia to Maine with ice and snow, Capital Weather Gang’s Jason Samenow reports in a story describing weather poised to bring a "mother lode of numbing cold" from the Arctic southward.

“By Thursday, the exploding storm will, in many ways, resemble a winter hurricane, battering easternmost New England with potentially damaging winds in addition to blinding snow. Forecasters are expecting the storm to become a so-called ‘bomb cyclone’ because its pressure is predicted to fall so fast, an indicator of explosive strengthening. The storm could rank as the most intense over the waters east of New England in decades at this time of year.”

The sheer intensity of the storm (and the intense way Samenow described it) elicited terror on Twitter:

Bloomberg's Kim Bhasin: 

There are already extremely cold temperatures nationwide. On Tuesday, the National Weather Service issued wind-chill advisories and frost warnings from South Texas to Canada and from Montana to New England, the Associated Press reports. Warming shelters were opened across the southern United States as hard-freeze warnings were put in place for Louisiana, Mississippi and Alabama. Extreme cold has been blamed for at least nine deaths in the last week, per the AP. 

-- Study says climate accord could prevent widespread drought: A new study warns more than a quarter of people around the world could live in drought conditions by 2050 if the standards set by the Paris climate agreement are not met. The study is one of the most detailed assessments of future aridity to date, The Guardian reports. “Our research predicts that aridification would emerge over about 20 to 30% of the world’s land surface by the time the global mean temperature change reaches 2C," said Manoj Joshi, the study’s lead researcher said. "But two-thirds of the affected regions could avoid significant aridification if warming is limited to 1.5C.”

-- Mushrooms could be the answer to more energy-efficient laundry detergent. Yep: Two scientists at a Danish biotechnology company are studying fungi outside Copenhagen as they look for a more environmentally friendly way to clean clothes.

The New York Times’s Stanley Reed reports that scientists are specifically looking for mushrooms to study enzymes that speed up chemical reactions and processes like decay. “Their work is helping the company develop enzymes for laundry and dishwasher detergents that would require less water, or that would work just as effectively at lower temperatures. The energy savings could be significant. Washing machines, for instance, account for over 6 percent of household electricity use in the European Union,” Reed reports. 

DAYBOOK

Coming Up

  • The IAFOR International Conference on Sustainability, Energy and the Environment takes place in Honolulu from Jan. 4-6.
     
  • The American Petroleum Institute holds a luncheon and press conference on "The State of American Energy 2018” on Jan. 9.
     
  • The Women’s Council on Energy and the Environment holds a discussion on political appointment process in the energy and environmental fields on Jan. 9.
     
  • The Energy Department’s Office of Energy Efficiency and Renewable Energy holds a “Better Buildings peer exchange call to discuss what’s on the horizon for residential energy efficiency in 2018” on Jan. 11.
     
  • The Center for Strategic and International Studies hosts a discussion with former Energy Secretary Ernest Moniz on Jan. 11.
     
  • Politico holds an event on "Driverless Cars and the Future of Mobility" on Jan. 16.
     
  • The Bipartisan Policy Center hosts FERC commissioners Neil Chatterjee and Cheryl LaFleur for a discussion on the proposed Grid Resiliency Pricing Rule on Jan. 16.
     
  • The Women’s Council on Energy and the Environment holds its 6th annual Lunch & Learn event to decide what topics to cover in 2018 on Jan. 23.
     
  • The Center for Strategic and International Studies holds an event on Canada’s energy future on Jan. 23. 
EXTRA MILEAGE

Here's what's on the GOP agenda this year: 

The GOP is starting 2018 with a lofty legislative agenda. Here are ten of its top priorities this year. (Video: Jenny Starrs/The Washington Post)

What exactly is "cat-ice"?

Watch a tiny wombat zip around her pen: 

Gem the tiny wombat was brought back from the brink of death in June 2017, but she has blossomed at Healesville Sanctuary in Victoria, Australia. (Video: Zoos Victoria)

Watch Stephen Colbert's take on President Trump's global warming logic: 

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