xi's moments
Home | Americas

US' green energy ambitions losing spark

By LIA ZHU in San Francisco | CHINA DAILY | Updated: 2022-07-05 07:26

Belching smoke behind the Louisiana State Capitol in Baton Rouge, a sprawling ExxonMobil refinery serves as a reminder of the urgency for the US to reduce its emissions, in this image released on Saturday. Yet the Supreme Court, in a ruling last week, acted to limit government powers to curb greenhouse gases. The ruling has angered environmental campaigners. DAVID GRUNFELD/AP

Projects for renewables and batteries tottering as supply snags combine with rising prices, tariffs to threaten climate goals

Editor's note: Clean energy projects have encountered setbacks in the United States. China Daily examines the faltering progress in the country's transition from fossil fuels.

Across the United States, big renewable energy and battery projects have been delayed or canceled due to supply chain constraints, rising prices of materials and increased tariffs on solar panels. The setbacks dealt to the country's green energy ambitions could even jeopardize its lofty climate goals, industry experts say.

The delays started in 2021 when solar installations came in at levels lower than expected. Developers have postponed 13 percent of the planned projects for 2022 by a year or more or canceled them outright, according to a report by the Solar Energy Industries Association, or SEIA, in April.

In recent months, several major battery projects meant to store power on the grid also have been reported postponed, scrapped or renegotiated.

Among them are six clean-energy projects of Central Coast Community Energy, a community-owned public agency in California. The projects, including 122 megawatts of storage, were expected to come online in 2022 and 2023, but the developers have warned of delays of between six and 12 months.

Another project, the Big Beau solar and storage project under development in California, recently wound up in court after its developer, EDF Renewables, asked to increase the price by $76.8 million, a 233 percent jump.

Early this year, Rhode Island's first utility-scale battery storage facility was scrapped by the developer. The 140-megawatt project was meant to be a key component of renewable energy sources.

In Hawaii, utility company Hawaiian Electric also is experiencing delays in solar and storage projects designed to replace the state's only coal-fired power plant. Developer Innergex Renewable Energy says it is seeking to renegotiate the terms of the deal-including price and timing-after receiving force majeure notices from its battery supplier, Tesla, according to Reuters.

Utility-scale battery storage is a necessary component for transitioning from fossil fuels to renewable energy, because renewable power such as wind and solar is intermittent and not able to continuously generate power, especially when power demand peaks in the evening after the sun sets.

Energy storage can absorb energy during abundant periods and provide power during peak hours, and the storage sources are mostly lithium-ion batteries, Gabe Murtaugh, storage sector manager at California Independent System Operator, or CAISO, told a webinar held by California Energy Storage Alliance, or CESA.

Energy storage makes up about 3 percent of operating clean energy capacity in the US and has been growing rapidly. Installations soared 170 percent in the first quarter to 758 megawatts, according to the American Clean Power Association.

CAISO has more than 3,500 megawatts of installed storage, according to Murtaugh, up from about 1,500 megawatts last year. The state government is calling for a massive buildout of storage to achieve its target of 100 percent clean electricity by 2045, he says.

California aims to have 50 percent of its power come from renewable sources by 2025, up from 33 percent in 2020, but it has not been able to match rising peak power demand in summer heat waves with new battery storage capacity.

"To get to that 2045 goal, we're going to need a very diverse mix of storage resources, and a lot of those storage resources are going to need to be long duration," Murtaugh says.

Crucial shortages

The slowdown in utility-scale battery installations is partly due to battery shortages. Prices for lithium-ion batteries have soared since last year on the back of costlier lithium and nickel, coupled with pandemic-induced disruptions to manufacturing and shipping.

"Lithium is a big deal in our world," Alex Morris, executive director of CESA, said at a workshop held by the California Energy Commission in May.

He says the lithium price changes are "significant" for developing a storage project because "there's usually a very competitive process and there are slim margins on it".

"The changes in the underlying and unhedgeable lithium carbonate costs will completely flip a project from lightly profitable to deeply unprofitable," he says. "So when you see these price spikes in lithium carbonate-like the 300 percent increase since last fall-you very quickly know that the projects will be underwater."

He says a 100-megawatt-hour battery configuration would have been priced at around $16 million last fall, but it would cost $23 million now. The 40 percent increase, excluding costs for other components and shipping, will "really much flip the project into negative returns and it's really catastrophic for the project", he says.

The industry also faces competition from electric vehicle producers that have robust demand for batteries. "The lithium-ion technology has been supported by electric vehicles over the last 10 years. We're still evolving and facing headwinds and the manufacturing base is not fully built to resist all of that," Morris says.

Aside from the battery shortage, uncertainty over potential tariffs on Asian imports has recently caused turmoil in the solar industry.

The US Department of Commerce announced in March that it would proceed with an anti-dumping circumvention investigation of solar cells from four Southeast Asian countries.

The investigation is a response to a petition by California solar company Auxin Solar, which accused solar-panel makers in Vietnam, Thailand, Cambodia and Malaysia of circumventing anti-dumping tariffs imposed on China by buying the same priced parts from China and then shipping them to skirt the duties that can range up to 250 percent.

The Commerce Department's investigation could take a year to resolve, but the industry has already felt the severe impact.

Seventy-eight percent of companies say they already had solar module orders canceled or delayed after the investigation was announced, according to a survey conducted by the SEIA on 412 firms in April.

1 2 Next   >>|
Global Edition
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349