Renewable Energy Investors Are Gearing Up For A Great Year – CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

---

Regardless of who occupies the White House, renewable energy will continue to push fossil power plants out of the picture next year and beyond. The Inflation Reduction Act of 2022 is part of the reason, of course. The community solar movement is also in play, and the age-old rivalry between coal producers and natural gas stakeholders is beginning to catch fire.

Renewable Energy & The Revenge Of The Coal Producers

Low-cost natural gas was already pushing coal out of the US power generation market in the early 2000s, long before the renewable energy trend began to accelerate. Well, turnabout is fair play. Former coalfields occupy huge swaths of land around the US, some of which has already been remediated and tidied up to be suitable for renewable energy projects.

Peabody is one coal producer spotting an opportunity. In 2022 the company began prepping for a renewable energy makeover at a group of former coal sites in Indiana and Illinois. Earlier this week the company hooked up with the global energy firm RWE to put the plan in motion. The initial target was 3.3 gigawatts’ worth of solar panels (that’s gigawatts, not megawatts), plus another 1.6 gigawatts of energy storage. Since then, the target has moved to 5.5 gigawatts in all.

Let’s see what the incoming Trump administration has to say about that. After all, Trump promised to save coal jobs during his first term in office and failed catastrophically. If Peabody wants to make up the difference with renewable energy jobs, that’s their business.

Besides, it’s not just Peabody. The US Department of Energy has a whole program under way to develop former mines for solar energy. In West Virginia, for example, the program will bring a 270-megawatt solar power plant to Nicholas County.

In a related development, a former coalfield in Kentucky is being converted into a giant water battery, leveraging gravity and excess renewable energy to shunt water back and forth between two reservoirs.

More Renewable Energy For Local Communities

The community solar trend is another one to watch. Community solar power plants provide ratepayers with a claim on locally produced renewable energy, even if they don’t have the opportunity to install their own rooftop solar panels.

When solar costs were high, local utilities made community solar available on a voluntary basis because participants paid higher rates for their clean kilowatts. Now that solar costs are low, an opt-out model is emerging. The solar rate applies to all, but ratepayers can opt out if they really want their electricity bill to go up.

One particularly impactful development in the community solar field cropped up earlier this week, when the leading renewable energy firm Pivot Energy announced a two-part, “transformational” financing plan for a 300-megawatt portfolio of 96 distributed renewable energy projects, aimed mainly at the community solar market.

Pivot describes the transaction as “one of the largest-ever raised for distributed generation solar.” It consists of a $450 million debt “warehouse” and a structured equity investment from the firm HA Sustainable Infrastructure Capital, Inc. The firm is no small potatoes, listing more than $12 billion in managed assets under its belt.

Apparently 96 projects is just for starters. “The shared vision with lenders is to upsize and extend annually to support growing project volumes, further enabling long-term sustainable growth,” Pivot declares.

States Step Up To The Plate

The Clean Energy States Alliance currently lists 24 states plus the District of Columbia with 100% clean energy goals. Word on the street is that many of these states, if not all of them, have been hardening their clean energy plans against unwarranted interference from the federal government.

For some states, that means ditching outdated permitting rules that have been obstructing renewable energy projects. On November 21, for example, Massachusetts Governor Maura Healey signed a sweeping permit reform bill into law, called An Act promoting a clean energy grid, advancing equity, and protecting ratepayers.

“At the core of the bill are major reforms to the process by which wind, solar, storage, and other electric infrastructure like substations and transmission are sited and permitted,” the Governor’s office explained, noting that environmental justice also underlays the provisions.

The substation and transmission elements are especially noteworthy. Massachusetts and other wind industry stakeholders have weathered partisan political storms and local opposition to start constructing wind farms offshore. Now that things are moving along, the fight turns to the location of new onshore substatation and transmission infrastructure.

The new permitting legislation should help avoid unnecessary delays, and it will also help support the wind transmission partnership between Massachusetts and other wind-rich states along the Atlantic coast, including New York and New Jersey.

The Gift That Keeps On Giving: The Inflation Reduction Act Of 2022

Of course, the 800-pound gorilla in the room is the Inflation Reduction Act of 2022, which Trump has promised to kill, somehow. That would be interesting to see. Political observers point out that Trump-voting states have received the bulk of IRA funding for new job-creating ventures in the renewable energy and clean tech fields, so it would be a little awkward to pull out the rug from under them. Why not just sit back and claim credit?

Regardless, the real point is that the IRA is a tax law, and tax laws are notoriously difficult to unwind. That was the upshot of a conversation I had in August with Carl J. Fleming, a partner in the renewable energy and project finance group of the leading firm McDermott Will & Emory, and an appointed advisor to the Secretary of Commerce and the White House on the IRA and other renewable energy matters. Notably, Fleming served during the Obama, Biden, and Trump administrations as well.

After our conversation, Fleming shared a summary of IRA activity to date, including an outline of the transformational impact on domestic and overseas financing for renewable energy and clean tech projects.

“McDermott has been a leader in the ‘grand re-think’ of the energy market after the IRA,” the outline reads, “We have helped developers, domestic investors, foreign investors, and large corporations monetize the IRA via tax credit transfers, new financing structures, joint ventures to foster foreign investment, and creating and upgrading manufacturing facilities in the U.S.”

McDermott draws particular attention to the tax credit transfer as a “historic” provision that makes investments available to investors who previously had no access to renewable energy tax credits, widening the pool of investors.

Speaking of overseas financing, keep an eye on activity in the virtual power purchase field. A VPPA is similar to the familiar power purchase agreements for renewable energy projects, except in a VPPA the purchaser is not located on the same grid as the project. VPPAs enable a climate action group in Massachusetts, for example — or even a retailer based in Sweden — to support the construction of new solar power plants in Trump-voting states, regardless of state-based politics.

Follow me via LinkTree, or @tinamcasey on Threads, LinkedIn, and Bluesky.

Image: Renewable energy stakeholders are getting an assist from coal producers, the community solar trend, overseas investors, and the IRA, too (courtesy of NREL).