January Cleantech Roundup
We’re starting the year off hot — a lot of energy policy news happened in January! First, the most important regulatory body you’ve never heard of, FERC, unanimously rejected the Trump Administration’s proposal to subsidize coal and nuclear plants in the name of resiliency — a proposal which had been advanced by U.S. Energy Secretary Rick Perry.
FERC Parries Perry
While this is a welcome and sensible decision, expect much more discussion about how our markets plan for and incent the right amount of generation supplied to the grid (and at the right times). Ironically, while these recent policy prescriptions have intended to ensure we support baseload power (resources that are always available and always running), it’s really flexible generating capacity (ie resources that can be called on, as needed, fairly quickly) that will be needed in greater and greater magnitudes as we continue to shift to a grid that is more distributed and that contains more renewable energy on it. As Shayle Kann and others at Greentech Media have explained, flexibility is the new ‘coin of the realm.’
But wait, there’s more! The administration also announced tariffs on imported solar cells (and industrial washing machines).
Federal Policy can be Tariff-iying
While this tariff will absolutely increase prices on solar, these penalties are lighter than the industry feared and will not cripple the sector. While solar may grow 10–15% less had been otherwise expected over the next several years, the industry is still expected to grow in 2018 and beyond and continue adding jobs. Since this tariff process has been in the works for a while, solar companies have been preparing for this decision for months by renegotiating contracts and stockpiling supplied of solar cells (to which the tariff won’t apply).
Also, we should expect to see a larger impact on utility-scale solar (experts suggest price increases of around 10%) relative to residential rooftop solar (where prices will rise 3 or 4%). This is because the solar cell is a much larger portion of the overall cost of a utility-scale system (approximately 30% of costs — about 30 cents of a 1 dollar per watt system) than a residential system (closer to 10% of costs — about 30 cents of 3 dollar per watt system).
Finally, some news on next generation of power generation technology: the Nuclear Regulatory Commission recently approved a key safety aspect of the design for a small modular reactor nuclear generator design — namely that is is a passively safe system that does not require backup power supplies.
It’s Pronounced Nu-cular
If successful, NuScale could be the first business to market with a 4th generation reactor, known as a small modular reactor. While full NRC review is not expected until at least 2020, this could be a really big deal for several reasons.
First, because of the passively safe design, the system eliminates many concerns regarding the safety of current nuclear plants, which will melt down if abandoned or if their backup power systems fail (as occurred at the Fukushima plants in Japan in March 2011 after a tsunami struck and flooded the backup generators).
Second, instead of building each plant in an entirely bespoke fashion on-site, these reactors would primarily be manufactured in a factory and shipped to the site — this is expected to significantly decrease both construction costs and the complexity of permitting a site.
And third, these smaller reactors are likely to be a much better fit for the increasingly decentralized grid — instead of a gigantic 2 GW (ie 2,000 MW) multi-reactor plant (many nuclear reactors today are a 1,000 MW size, and they are frequently built several to a site in order to spread the costs of infrastructure and operations), these modules can be as small as 50 MW, and then can be packaged together to create a larger power plant as needed. Because of their small size and ability to run 24/7, they can also be a potential solution for islands, large microgrids, and communities which currently rely on shipping in their fuel supply for their power plants.
Now, these plants don’t solve nuclear waste and storage issues, so are certain to still engender some opposition. But, at the end of the day, we need more carbon-free resources on our grid — specifically those that can have higher capacity factors. I for one am excited about a grid that has lots of wind, solar, battery storage and, yes, small modular nuclear reactors on it in the future.
For Further Reading:
These publications and newsletters are great sources for cleantech and investing news.
- GreenTech Media — Good source for news and analysis on all kinds of clean energy.
- Axios’ Generate — Daily energy news roundup, with coverage that includes (but is not limited to) federal goings-on
- Midwest Energy News — Provides both a midwest and national daily newsletter