December Cleantech Roundup: Oil and Gas Emissions Targets | Evolving Regulation | Developing Innovation Clusters
Clean Energy Trust’s cleantech roundup highlights interesting cleantech news and perspective, across industry, technology, policy, and investing.
Note: this month’s roundup is a bit heavy on regulatory & legislative news. I’m sorry, I don’t make the news, but if I missed any big stories please let me know!
Respol became the first oil major to establish a 2050 zero-emissions target. The Spanish oil and gas company joins Shell and Total as the only majors who have included Scope 3 emissions in their own climate targets — this means they are including the emissions from when their products are burned and consumed (i.e. the part that really impacts society). Link
A Missouri state appeals court sided with state utility regulators’ decision to approve a transmission project, the Grainbelt Express line. This project is designed to move renewable power from rural areas to more densely populated areas where the power is needed.
I first became familiar with this project in 2012, while at the U.S. Department of Energy, where I was working to streamline the transmission siting and approval process. The project has been in the works for a decade and still has a number of hurdles it must clear before it comes to fruition.
Transmission development, particularly long-distance transmission, is a mess. It is handled primarily at the state level, which made sense when the authorities were established but no longer does with today’s energy system. And, even when states are amenable to new development as has been the case in Missouri, developers face huge delays, numerous lawsuits, and the very real threat of state legislation which can derail their efforts.
While NIMBYism is often (appropriately) associated with city dwellers who don’t want new residential development, it is also very alive in rural areas when it comes to developing new transmission and renewables assets.
Streamlining transmission development is a critical medium-term challenge to decarbonization. It is not a big deal for the first 30–40% of renewables penetration, but the lack of sufficient transmission capacity and difficulty developing new transmission assets will be a significant obstacle to reaching high levels of renewables penetration on the grid cost-effectively. Link
The Federal Energy Regulatory Commission (FERC) moved to make major changes to how the nation’s largest power market prices low-carbon resources. This is really wonky stuff, but essentially this ruling undercuts state-level policies designed to support zero-carbon energy resources like wind, solar, and nuclear. I expect this ruling to be the most impactful action the Trump administration makes to support fossil fuel production.
While it is worth noting that we will need to change how our power markets operate as we incorporate more renewable resources (which have essentially zero marginal operating costs, which can complicate auction mechanisms), this ruling does not make meaningful reform and purports to solve a problem that doesn’t exist today. It just means that consumers will pay more for electricity by collectively buying much more than is needed. Indeed, one critic pointed out on Twitter that under this policy, PJM is expected to have a 70% reserve margin (15% is typical). Link
If you’re looking for more detail and context on this, Vox’s David Roberts has an in-depth piece on it (he is not a fan). Link
In California, consumers concerned about forced outages by PG&E are increasingly looking to solar plus storage solutions, helping drive quarterly residential solar deployments to a record high. Link
General Motors and LG Chem have agreed to invest more than $2 billion in a joint venture to manufacture electric vehicle battery cells as General Motors prepares for the impending growth of EVs. The plant will be in northeast Ohio, near GM’s recently closed Lordstown Plant. Link
Bloomberg’s Matt Levine recently discussed the SEC’s inquiries into ESG standards in his newsletter. This is a broader issue than just cleantech, but an important fault line here is the inclusion of companies with poor environmental or climate change records in ESG products and indexes. As quoted in the article, “Now the SEC is saying, ‘Wait, how do you know these are ESG products and that you don’t have a fossil fuel company with known, poor ESG performance in there?’” Link
In end-of-year spending authorization, Congress extended current wind tax credits for one year but did not extend solar or electric vehicle credits (and did not implement new credits for energy storage or off-shore wind). Link
A Chicago Loop hotel conversion is the first project to make use of Chicago’s new Property Assessed Clean Energy Financing (PACE) authority (legislation to clarify the authority was passed in 2018). Link
Lucid Motors broke ground on a new factory in Arizona. The company is planning to produce a luxury electric vehicle, the Lucid Air, with 400 miles of range. Link
Nick Grossman on the butter thesis. Link
Brookings is out with a new study advocating for major federal funding to support the development of innovation clusters outside of the existing coastal centers like San Francisco, Seattle, and Boston. One salient point they make here is that economists and policymakers are worrying about regional geographic divergence much more than they used to. Link