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This article was originally published by Stateline, an initiative of The Pew Charitable Trusts.
Automakers are planning to put nearly 1 million new electric vehicles on American roads in 2022. Lawmakers are trying to make sure their states are ready.
“We will see a lot more emphasis on electric vehicles in 2022 and 2023,” said Dylan McDowell, deputy director of the National Caucus of Environmental Legislators, a collaborative forum for state lawmakers. “This is the start of a really big turning point.”
Across the country, legislatures in blue and red states are considering bills to bolster charging infrastructure, expand consumer incentives, electrify state fleets or mandate charging stations in new buildings. States also will be tasked with deploying billions in new federal funds for charging stations approved in the new infrastructure law, and some legislators say they plan to take an active role in that strategy.
“Every state is involved,” said Marc Geller, a board member and spokesperson for the Electric Vehicle Association, an advocacy group that promotes the adoption of such vehicles. “This is being taken seriously in a way it hasn’t been before, because the trajectory is very clear.”
In the United States, the transportation sector is the largest source of greenhouse gas emissions, making up nearly 30% of the national total. While many states have plans to switch to renewable electricity sources, reducing vehicle emissions — with millions of drivers making personal buying choices about their cars — is much more complicated. But as the private-sector market for electric vehicles matures, many lawmakers see an opportunity.
Electric vehicle sales in the United States doubled in 2021 compared with 2020, and car buyers in 2022 will have twice as many electric models from which to choose. As the market grows quickly, state lawmakers say they’re focused on making sure infrastructure keeps up, and — in what is perhaps the greater challenge — ensuring that electric vehicle benefits aren’t just enjoyed by their wealthiest residents.
State leaders of all political stripes say they want to ensure their states are ready for the electric vehicle transition. Democratic-led states have typically been more aggressive about that transition through government regulation and mandates, such as the stringent emissions standards set out in California’s Advanced Clean Cars Program. Many Republican states have invested in other efforts such as charging infrastructure and conversion of state vehicle fleets.
Still, some Republicans argue that market forces, rather than public investments or mandates, should be left to work. Some GOP-led states have introduced or passed bills to block their local governments from requiring charging stations in certain locations.
Hawaii ranks No. 2 in the nation behind California for electric vehicle adoption, and lawmakers there are especially active in pushing a suite of proposals to strengthen that transition.
“We’re just at the inflection point where we’re about to take off in a huge way,” said Hawaii state Sen. Chris Lee, the Democrat who chairs the Transportation Committee. “Our charging capacity has been greatly outstripped by the number of EVs out there. We need a lot more capacity, and quickly.”
Hawaii legislators are looking to build more charging stations for rental cars, which make up a significant portion of the tourism-heavy state’s electric vehicles. They’re planning to use federal funds to create charging hubs. Other proposals would put in place a requirement for charging stations in public parking lots and a new consumer rebate for electric vehicle purchases, with a focus on lower-income communities.
Meanwhile, Republican lawmakers in both Indiana and Wisconsin are backing bills that would allow the owners of charging stations to sell electricity by the kilowatt-hour, rather than by the minute—an allowance previously reserved for regulated utilities. That would benefit drivers of slower-charging vehicles. Sponsors say the bills would allow businesses to play a greater role in providing charging infrastructure.
Democratic lawmakers in Vermont also are considering a broad swath of electric vehicle policies, packaged together in the Transportation Innovation Act. The proposal would increase funding for the state’s consumer incentive programs, create a grant program to fund electric school and transit buses, accelerate timelines for electrifying the state fleet, fund grants for charging stations and require large employers to provide charging stations for their workers.
“Our goal is to show our priorities, and we have a lot of different pieces around EVs,” said state Rep. Rebecca White, a Democrat who helped craft the measure. “It might feel like we’re throwing the kitchen sink at it.”
White said the bill’s 60 cosponsors offered it as their “opening salvo” on a transportation package ahead of negotiations with Republican Gov. Phil Scott. Scott’s office did not respond to an inquiry about his stance on the electric vehicle policies.
Many Democratic governors also have put forward electric vehicle proposals as key elements of their 2022 agenda.
Washington Gov. Jay Inslee, a Democrat, has proposed $100 million in funding for a rebate program to help drivers afford electric vehicles. The program would provide a $7,500 rebate for new vehicle purchases, with an additional $5,000 for low-income residents. Used vehicles would qualify for a $5,000 rebate. The program would be capped to exclude residents making more than $250,000, and it would not apply to expensive car models.
“A real focus for the governor is making sure we’re increasing access to electric vehicles and not just subsidizing purchases for people who were already inclined to buy electric vehicles,” said Anna Lising, Inslee’s senior energy adviser.
Inslee’s budget also proposes $23 million to build out charging infrastructure and $33 million to help transit agencies switch to “clean alternative fuel” buses.
“I haven’t seen as much engagement [on electric vehicle policies] as I have this year,” Lising said. “We’re starting to see it shift significantly.”
In California, Democratic Gov. Gavin Newsom is proposing more than $6 billion in investments to speed up electric vehicle adoption. More than $250 million would be targeted to assist low-income consumers, with another $900 million to build chargers in underserved neighborhoods.
“The [state electric vehicle rebate program] has traditionally been more subscribed [to] by wealthier Californians,” Jared Blumenfeld, secretary of the California Environmental Protection Agency, said in a press call. “In this clean transportation revolution, the next phase is making sure that low-income communities and communities of color are able to take advantage.”
Newsom’s budget also proposes nearly $4 billion to electrify heavy-duty trucks, transit and school buses.
Some Republican governors also are seeking to invest in electric vehicles. Maryland Gov. Larry Hogan, for example, has promoted investments in electric vehicles and charging stations. The state’s tax credit for electric vehicle purchases expired last year during the pandemic, and state leaders are considering incentive plans to replace it.
“We have to continue to dramatically accelerate the adoption of EVs,” said Ben Grumbles, the state secretary of the environment. “The focus right now is the range of incentives that we can put in place.”
Grumbles said the Hogan administration also is looking to speed up electrification of the state vehicle fleet, as well as school buses.
Maryland Del. David Fraser-Hidalgo, a Democrat, has long advocated for electric vehicle adoption, and he thinks his colleagues are increasingly on board.
“There’s a critical mass building of more and more EV bills,” he said.
Fraser-Hidalgo plans to introduce an incentive program, likely a tax credit, to encourage consumers to buy electric vehicles. Another bill would allow school districts to partner with utilities to acquire electric school buses.
“It’s not just climate change, it’s public health,” he said. “We’re taking our kids and sticking them in a cube and filling that cube with diesel fumes.”
Other Republican governors have made efforts to ready their states for the electric vehicle transition, but still think government should play a limited role.
Florida Gov. Ron DeSantis, for example, signed a bill in 2020 requiring the state to craft a master plan for electric vehicle charging infrastructure. In 2021, though, he signed legislation that blocks local governments from requiring their gas stations to add charging stations.
The federal infrastructure package Congress passed last year includes $7.5 billion for electric vehicle charging stations, with $5 billion given directly to the states. Some Republicans oppose the use of government funds to support electric vehicle adoption.
“The vast majority of this bill is brimming with wasteful spending that advances radical Green New Deal policies, including billions of dollars for carbon capture programs, federally subsidized electric vehicle charging stations, and zero-emission bus grants for intercity transit,” U.S. Rep. Andrew Clyde, a Georgia Republican, wrote in a news release after the bill passed in the House.
But the funding has gotten the attention of even conservative states that have otherwise shown little interest in climate policy.
Missouri, for instance, will receive $99 million to expand electric vehicle charging over five years from the package. Brian Quinn, a spokesperson for the Missouri Department of Natural Resources, said the agency plans to collaborate with the Missouri Department of Transportation to deploy chargers along national highways. The state also plans to help schools apply for new federal funding for electric buses. States must provide a 20% match for the funds they receive under the federal charging program.
Michigan expects to receive $110 million of the charging funds.
“The federal resources mark a huge turning point for the state of Michigan,” Lt. Gov. Garlin Gilchrist, a Democrat, said in an interview. “This will get a lot of people over the hump in making the choice to have their next vehicle be an EV. This year is going to be the one that makes the difference.”
Lawmakers in Michigan voted last month to create a $1 billion incentive fund to attract economic investment, including the prospect of a battery plant for electric vehicles. The state has partnered with its Midwestern neighbors to form a coalition focused on a regional network of charging stations, and it also is investing in a workforce development plan to ready residents for jobs in the electric vehicles industry.
In New York, state officials expect to receive $175 million from the feds.
“As more EVs are on the road, the business case for installing charging stations gets better and better,” said Adam Ruder, assistant director for clean transportation with the New York State Energy Research and Development Authority. “We’re trying to get to that point where it becomes a self-sustaining market. This infrastructure money and the other investments we’re making can really help us get there.”
Some New York officials want mandates. State Sen. Liz Krueger, a Democrat, has sponsored a bill that would require newly constructed buildings to include wiring for electric vehicle chargers in a certain amount of their parking spaces.
“The sooner we start, the more affordable it’s going to be for everybody,” said Justin Flagg, Krueger’s director of environmental policy. “When we get ourselves to that big shift in the makeup of the vehicle fleet and suddenly realize we have to transition all these buildings, we’re going to have to figure something out.”
In Colorado, state Rep. Alex Valdez, a Democrat, is crafting similar legislation that would require a certain percentage of parking spaces in new buildings to be wired for chargers. Valdez, who lives in a Denver high-rise building and drives an electric car, said the bill is informed by his own experience.
“I found out firsthand that these buildings weren’t built with the idea that down the road cars would be powered by electricity,” he said. “This is an opportunity to make sure that we’re doing it right going forward.”
But some mandates have drawn pushback in other states.
Missouri state Rep. Jim Murphy, a Republican, has proposed a bill that would block cities and counties from requiring their businesses or buildings to install charging stations. Murphy said St. Louis County’s mandate requires any business that wants to resurface its parking lot to spend thousands of dollars on charging stations. His bill would require that governments mandating chargers also provide funds to pay for them.
“There’s no feeling that we should stop the growth of EVs, that’s the future,” Murphy said. “But you can’t put it on the backs of small businesses and churches. If we’re going to make the little guy pay for it, I’m going to champion against it.”
Many states, including those that strongly promote electric vehicles, impose extra fees on the vehicles’ drivers, who don’t pay gasoline taxes. The fees are a way to ensure road funding stays intact as more drivers switch to electric. But electric vehicles advocates are wary of plans to adopt or increase those fees.
“We need to come up with really good policies to ensure we have the revenue to keep roads maintained,” said Geller with the Electric Vehicle Association. “But early in the [transition] process is not the time to impose such additional fees that only make a prospective purchaser think twice.”
Some states are exploring a vehicle-miles-traveled fee, which would charge drivers based on mileage rather than gas consumption. California expanded a pilot program on such fees last year. Other states, including Massachusetts and Minnesota, have bills pending that would create similar programs.
As states accelerate the pace of electric vehicle adoption, their gas tax revenues will start to dwindle, and lawmakers are still trying to determine how to replace that funding. The issue likely will take on greater urgency in future legislative sessions as the transition continues.
This story was originally published on Jan. 19 by THE CITY. Sign up here to get the latest stories from THE CITY delivered to you each morning.
For Tawanna Davis, winter means hauling out an electric space heater to keep warm when her Bronx building’s heat is insufficient.
Davis, 51, has for two decades been a resident of Twin Parks Tower North West in Fordham Heights, the site of a deadly fire earlier this month that officials have said was sparked by a malfunctioning space heater.
“You get the ice on the inside [of the window] and everything,” Davis told THE CITY. “It be really, really cold in your apartment.”
While some tenants said they’d be shivering without space heaters, others said they had to open their windows in the winter when their units became unbearably warm.
That hot-and-cold situation, which many New York apartment dwellers know all too well, highlights the importance of improving energy efficiency in residential buildings.
And this can be especially true for subsidized, income-restricted complexes — aka “affordable housing” — where improved comfort and safety are immediate benefits beyond slashed greenhouse gas emissions.
But upgrading affordable housing stock at the necessary pace presents logistical and financial challenges, which the administrations of New York City Mayor Eric Adams and Gov. Kathy Hochul need to solve regardless in order to achieve their climate goals.
The Twin Park Towers, built in 1972, are part of the state’s Mitchell-Lama housing program and receive some funding through the federal Section 8 program, which helps subsidize rents for low-income tenants.
“The fact that a relatively new building by New York standards has people living in situations requiring space heaters in order to reach a level of comfort suggests the complexity of this issue,” said Jonathan Meyers, a partner at HR&A Advisors, a firm that consults on real estate strategy and policy in New York and around the country.
“It’s a very stark reminder that there’s a fine line between inefficiency, which most of us can tolerate on a day-to-day basis, and tragedy, which is intolerable,” he added.
People working on the state’s decarbonization strategy, born out of New York’s Climate Leadership and Community Protection Act of 2019, say improvements in building energy efficiency aren’t just ways to mitigate climate change and get off of fossil fuels.
The green push, they say, can also lead to immediate health benefits: Properly insulating windows, for example, can ensure consistent temperatures in all seasons, and installing electric heat pumps can also help cool air. Both are useful to combat deadly extreme heat in the summer and illness-inducing chills in the winter.
“In terms of ever-increasing incidences of extreme-weather events, energy efficiency is going to play a bigger, maybe even life-saving, role,” said Eddie Bautista, director of the New York City Environmental Justice Alliance and part of the group that advises the state’s Climate Action Council.
On Tuesday, as if to further demonstrate the myriad dangers of fossil fuels, an apparent gas explosion rocked a residential building in Longwood, just a few miles south of Twin Parks. The blast killed one person and injured several others, officials said. Adjacent buildings were ruined in the ensuing fire, and the Fire Department is still investigating the exact cause.
The incident showcases the importance of phasing off gas and oil, not only to avoid carbon emissions, but to increase safety, environmental advocates note.
Gov. Kathy Hochul included in her budget plan this week a proposal to ban gas hookups in new buildings across the state by 2027, echoing a city law signed in recent weeks. Environmentalists say the governor’s timeline is not quick enough, and some asked for more funding to electrify existing housing.
“Thousands of New Yorkers are already dying premature deaths every year because of the fossil fuels we’re burning in our homes, and every once in a while, it’s not a slow, premature death thing — your house literally explodes,” said Alex Beauchamp, northeast regional director of the nonprofit Food and Water Watch. “We have to move much faster, not only for new buildings, but for existing ones as well.”
As part of the budget, Hochul also proposed a five-year, $25 billion housing plan that would in part cover efforts to weatherize and electrify New York’s housing stock. Her State of the State proposal earlier in the month cited projects to encourage electric, high-performance heating equipment and renovating buildings to keep temperatures consistent “to reduce the need for space heating and air conditioning,” among other reasons.
For over a decade, building owners in New York City have been required to tally their water and energy consumption data each year and submit the information to the city. Based on that, they get a grade. A 2019 law required landlords to make their efficiency grade public.
Twin Parks, for a second year in a row, earned a D in 2021, the same as about half of all buildings in the Bronx. Citywide, 39% of all buildings earned Ds.
The building, which installed new gas-powered boilers in 2015, according to city records, faces similar challenges to improving its efficiency as many other older buildings. Its residents, like many others in the city, don’t have separate thermostats to control indoor temperatures in their units.
They also don’t have individual electric meters, like many affordable housing buildings, meaning that they are not encouraged to use less power — so a resident can run a space heater all day and even open windows while doing so without thinking about the bill.
A spokesperson for the Twin Parks owners did not respond to requests for comment.
Landlords, who foot utility bills in the absence of what’s known as sub-metering, must themselves make improvements to reduce energy usage. Beyond money-saving potential, such capital upgrades focused on efficiency can result in healthier, more comfortable living quarters for residents.
Homes and Community Renewal, a state agency that develops and preserves affordable housing, considers energy efficiency for both new construction and preservation projects, a spokesperson said. It also requires private developers that work with the state to stick to efficient-design guidelines when applying for funding.
The problem lies in how to shore up enough funds to cover the scope of the efficiency-related work that must be done, while balancing the need to create and preserve affordable housing.
Housing dollars from the city, state and federal government are stretched “to the max,” said Lindsay Robbins, a senior advisor for building efficiency and decarbonization for the Natural Resources Defense Council.
Many of the investments needed to improve existing subsidized affordable housing are identified when owners seek to refinance, which happens every 15 to 20 years, according to Robbin.
The city and state in 2017 developed an “integrated physical needs assessment” for properties, a tool which considers necessary capital improvements, like a roof replacement, along with an energy efficiency audit, among other measures.
“If we don’t make the most of that opportunity and ensure that building owners have resources and financing they need to really make these properties safe and healthy and efficient and electrified, that building’s probably not going to do diddly-squat for another 15 to 20 years,” Robbins said.
“We need to fundamentally rethink the kinds of public resources that we put into this … because putting people in quality and healthy housing — there’s nothing more important than that.”
Property owners can also apply for loans and grants through the city’s Department of Housing Preservation and Development, and they may participate in a $24 million pilot run by the New York State Energy Research and Development Authority and HPD that seeks to finance electrification and energy efficiency upgrades in about 1,200 units of housing.
Another $30 million in state funds are available for income-restricted buildings that are seven stories or shorter through the RetrofitNY program.
Rep. Ritchie Torres (D-The Bronx) on Friday urged for the passage of federal legislation that would include about $150 billion for housing investments, which, he said, could be used to “create, preserve and retrofit 1.4 million units of affordable housing.”
“Part of Build Back Better must be building back safer,” he told reporters at the scene of the inferno earlier this month. “The fire in Twin Parks North West must be seen in the context of historical disinvestment from affordable housing, from places like the South Bronx, from lowest income communities of color, and the Build Back Better Act presents a historic opportunity to reverse decades of disinvestment.”
In addition to more federal funds, Robbins also wants to see more private financing, grants and investments from the New York Green Bank, a state agency with the mission to “accelerate clean energy deployment.”
The financing challenge will come to a head with new Local Law 97, which sets greenhouse gas emissions caps for buildings over 25,000 square feet. Mitchell-Lama buildings like Twin Parks have a compliance date of 2035, while most buildings must emit below the specified targets starting in 2024.
Now it’s up to Mayor Eric Adams’ administration — with the help of an advisory board — to finalize the rules that govern the new law and figure out how to help property owners finance the upgrades necessary to achieve the emissions caps.
In the meantime, state Attorney General Letitia James said she intends to use the power of her office “to get to the bottom of this fire” as environmental advocates continue to sound the alarm that energy efficiency equals safety and justice.
“We can’t achieve a climate just society without centering BIPOC [Black, Indigenous and People of Color] and low-income communities,” said Daphany Sanchez, executive director of Kinetic Communities Consulting, a firm focusing on energy equity. “The fire that you saw in The Bronx is exactly the issue: the result of people ignoring climate, the result of people ignoring Black and brown communities.”
THE CITY is an independent, nonprofit news organization dedicated to hard-hitting reporting that serves the people of New York
This article is co-published by the Energy News Network and Planet Detroit with support from the Race and Justice Reporting Initiative at the Damon J. Keith Center for Civil Rights at Wayne State University.
It’s that time of the year for reflection, whether personally or, in James Gignac’s case, on the progress Midwest states have made in pursuing clean energy goals.
Gignac is the Senior Midwest Analyst for the Climate & Energy program at the Union of Concerned Scientists. He shared with Planet Detroit some additional thoughts from his recent post about milestones reached by Michigan and its neighbors.
Q: Consumers Energy has a proposed plan that will come up for approval before the Michigan Public Service Commission in 2022. That plan includes burning natural gas. How can the MPSC hold utilities accountable for those proposed actions?
A: The utilities in Michigan, including Consumers Energy, are obligated to display ways to provide the lowest cost, cleanest and reliable energy for their consumers in the state using an Integrated Resource Plan.
While Consumers Energy has some really good features in their pending plan, including phasing out all of the coal plants by 2025 and making large investments in solar, there’s also the question of the role of methane gas, which is sometimes called natural gas.
The question is, what is the role of gas in their future resource plan? What Consumers Energy is trying to do is begin to map out how it will achieve the carbon reduction goals that it as a company has established.
While they’re not proposing to build new gas plants, they’re proposing to acquire existing gas plants. And what we and other advocates are concerned about is the transition away from coal and towards clean energy. Investing in gas resources is risky for customers because those gas plants could very quickly become uneconomic or unneeded.
And so while it’s good that the company is not wanting to build a new gas plant – which most utilities are moving away from, it’s still concerning from an economic perspective and because they still produce carbon emissions and other pollutants.
One of the facilities in particular concerns environmental justice advocates. Testimony submitted by our stakeholder coalition and others, highlights the environmental justice concerns of existing natural gas plants.
Q: What other items should we watch out for in Michigan in 2022 you’d like to highlight?
A: In 2021, especially in Michigan, we saw the increasing interest in demand from communities and customers to have greater control and greater amounts of locally-owned clean energy resources. We’re beginning to move away from the traditional model of utilities providing electricity to customers from faraway power plants.
DTE Energy will be filing an Integrated Resource Plan in the Fall of 2022, which is a year earlier than planned. The upside of that is that we will have a chance to look at DTE’s newest proposals a year earlier than expected. That’s important because we need to be moving quickly, and we need to urge utilities to continue taking rapid steps in a clean energy transition.
So looking ahead to 2022, the DTE Integrated Resource Plan and the important opportunity to review those current plans.
I’m also looking forward to seeing a strong action plan from the Council on Climate Solutions. Last year, Governor Whitmer’s executive order, the Council on Climate Solutions, has been working to develop an action plan to reach the state’s carbon reduction goals. We’ll see that quickly in 2022 as a draft will be released in mid-January, and the Council will then finalize that in February and March.
We’re hopeful that the document will be a strong plan for Michigan and include immediate and near-term steps that can be taken and lay out a long-term action plan for additional policies that can be put in place.
We also will have a Consumers Energy decision on its Integrated Resource Plan. So we’re hopeful that the Public Service Commission will approve the company’s plans to retire its coal plants and pursue its solar expansion. And ideally, either postpone or not approve all of the existing gas plants for acquisitions. So if there’s an opportunity to evaluate those further or ask the company to do some additional analysis to ensure cleaner energy options could be pursued instead of those gas plants.
And in Michigan’s legislature, I think it’s important to continue focusing on and discussing clean energy legislative proposals and to build the demand for taking action at the legislative level.
Q: There was a recent major win for Illinois – anything you want to share about it?
A: The Climate and Equitable Jobs Act (CEJA) was based on building upon and expanding previous legislation, so in 2017, Illinois passed the Future Energy Jobs Act. What advocates started doing immediately after that legislation passed was starting to think about the next set of policies that can be passed in Illinois, while identifying things that needed to be improved or changed from the 2017 legislation.
CEJA was the product of many conversations and discussions amongst a broad set of stakeholders, which led to its passing in 2021.
Centering the needs of lower-income communities and making sure that clean energy investments and benefits are shared amongst all Illinois communities is a key to making them a leading national leader in the equitable pursuit of clean energy and climate action.
Q: What else should Michigan consider in 2022 related to clean energy advocacy and policymaking?
A: I would say that crafting clean energy policies centering people and lower-income, traditionally disadvantaged communities. Doing that is important, but it’s also popular. People want to see equity being a key part of clean energy and climate responses.
So I think our work in 2021 really highlighted that and we have an increasing amount of good examples to draw from, whether it’s Illinois’ efforts or programs in other states that can be applied in Michigan and elsewhere.
Q: What’s next for UCS?
A: We’re looking to follow up on our Let Communities Choose Report in partnership with Soulardarity. In Highland Park, we’re working on analyzing a microgrid for the Parker Village neighborhood in Highland Park. So that would be an additional piece showing the potential for local clean energy.
We partner with many other groups doing great work in Michigan and at the state level, advocating the Council on Climate Solutions and the Michigan Public Service Commission.
Shuttered during the pandemic, the historic Strand Theatre in Pontiac, Michigan, faced an uncertain future. But previous energy efficiency investments provided a lifeline.
The Strand was able to use C-PACE — commercial property-assessed clean energy financing — to retroactively fund and refinance those investments, essentially rolling the cost into their property taxes to be paid over time and freeing up cash for them to wait out the pandemic.
While the pandemic and worker and supply chain shortages have made the last two years rough across countless sectors, Michigan’s C-PACE program nonetheless enjoyed its best two years ever in 2020 and 2021, with 28 projects closed including the Strand.
This year at least five local jurisdictions in Michigan saw their first-ever C-PACE project, and four more are expected to do so this year or in early 2022. That’s according to Todd Williams, president and general counsel for Lean & Green Michigan, the company that administers C-PACE in the state, and recent winner of the Michigan Energy Innovation Business Council’s Business of the Year Award.
“PACE was a form of rescue capital for [the Strand]. It allowed them to refinance some loans, delay some payments, maintain the business through hopefully the end of the pandemic,” Williams said. “It was like a second mortgage on your house. You’ve already completed the projects, they’ve already been funded, and this is a method in which they were able to draw some capital back out. It was not necessarily a large project, but without it, it’s completely possible an asset in that community would have closed.”
As the Strand’s experience shows, C-PACE can be a tool not only to install solar or make energy efficiency improvements, but to provide financing in general, since it can free up capital immediately that businesses might otherwise have used on investments that qualify as clean energy or resiliency-related. This potential may be even more attractive in uncertain and rocky economic times like the current moment.
“Commercial PACE can be your financing tool to fill a financing gap and meet energy efficiency goals at the same time,” said Cliff Kellogg, executive director of the C-PACE Alliance, at a panel during the Urban Land Institute’s annual conference in Chicago in October.
Mansoor Ghori, co-founder and CEO of Petros PACE Finance, said during the panel that since many businesses didn’t know how long the economic uncertainty and recession caused by the pandemic would last, they “refinanced their equity using PACE, and used that money to make sure they had enough capital to get through however long it would take.”
“Covid for the PACE industry was actually an accelerant,” Ghori continued. “When other sources of capital seized up or pulled back, [businesses] had to find other ways to get projects done. All of a sudden PACE became much clearer in their eyes, they figured out what it does, how they can use it. We grew our business 300% during Covid.”
C-PACE is especially well-suited for businesses hard-hit by the pandemic, like hotels and entertainment venues, and indeed hospitality is the sector that has most utilized C-PACE funding thus far, followed by office and retail, according to the trade organization PACE Nation.
During the Chicago panel, Kunal Mody, CEO of Blueprint Hospitality — which works on PACE financing with hotels — noted that during the pandemic the tool “helped us move our trapped equity back out and refinance.”
Ryan Hoff, project manager at the engineering firm Bernhard, during the panel pointed to a number of hospitality projects his company has worked with nationwide, including a 60,000-square-foot hotel in Wisconsin that tapped $4 million in C-PACE financing. A Marriott hotel in Columbus, Ohio, in 2018 worked with Petros to retroactively tap $16.3 million C-PACE funding, a project that was the second-highest value C-PACE project in the country that year.
Williams noted that Treetops Resorts, “a classic golf and ski resort,” became northern Michigan’s first C-PACE project, with a retrofit that had been in the works for several years. The resort leveraged $2.9 million in C-PACE funding for a comprehensive energy efficiency overhaul projected to greatly reduce its carbon footprint and improve visitors’ experience. A Michigan Comfort Inn & Suites also tapped C-PACE for improvements last year.
Michigan also saw C-PACE used for new construction, including for The Henry, luxury townhomes near Ann Arbor that leveraged nearly $2 million in PACE financing for solar panels, LED lighting and other energy efficiency measures, in line with marketing the complex to environmentally aware young professionals. In September, construction started on a residential and commercial project in Detroit’s Greektown that, at $13 million in C-PACE financing, is the largest C-PACE project in the state. A fifth of the project’s rental units will be affordable housing, and it is seen as key in revitalizing that part of the city.
Williams said senior living facilities are especially well-suited to C-PACE funding, and Michigan has closed four such deals this year with another in the works.
“That’s become a trend nationwide where senior living projects are taking advantage of PACE,” he said. “They tend to be extremely long-term facilities; it fits well with the design of the property and how the property will be used.”
In all, Michigan has seen C-PACE support 52 projects totaling $115 million since 2015, with 17 projects this year alone. The investments included at least 13 solar installations, three EV charging stations and two green roofs, plus numerous energy efficiency and energy storage overhauls. Williams said he still sees C-PACE as in the early stages, but quickly growing.
“It’s just starting to self-perpetuate a little more. We’re not having to wave the flag quite as heavily — a lot more flags are being waved,” he said.
At least 38 states have laws allowing commercial PACE financing. Once a state passes such enabling legislation, then local jurisdictions need to pass their own ordinances to actually carry out the program. In the Midwest, Ohio, Michigan and Minnesota have robust programs, Illinois has a nascent program and Indiana, Iowa and Kansas do not currently have C-PACE enabling legislation, though efforts are underway in Indiana, according to the C-PACE Alliance.
Wisconsin’s growing C-PACE program saw at least one major project during the pandemic, as developers of the former Oscar Mayer headquarters in Madison, Wisconsin, used $7 million in C-PACE refinancing to overhaul windows, lighting and other efficiency measures in the mixed-use OM Station, which now leases to industrial, office and “creative” tenants.
Chicago, Philadelphia and Pittsburgh are among cities that have launched their programs in recent years. The need for local legislation means the process of actually rolling out C-PACE projects is slow, but advocates hope it gains prominence and becomes more of a priority for local leaders especially given the particular potential it offers in the current economy.
“C-PACE financing involves no public dollars whatsoever,” Ghori said. “The role of the state and local government is simply to approve the availability of this kind of financing.”
The trade organization PACE Nation says on its website that in all more than $2 billion has been invested in 2,560 commercial projects nationwide, with energy efficiency making up 49% of the investment and renewable energy representing 23%. Cumulative investment has grown from just over $100 million in 2014. California led the cumulative investment tally with $625 million, followed by Ohio at $376 million. Minnesota and Michigan ranked sixth and seventh, and Wisconsin ranked 11th, though current investment totals are likely higher.
Illinois passed legislation enabling PACE in 2017 and updated it in 2019 to include resiliency as among the categories eligible for financing. In 2019, before the pandemic set in, Eric Alini, CEO of Counterpointe Energy administering C-PACE in Chicago, predicted that “2020 will be the year of PACE in Chicago.” In May 2020, a hog slaughterhouse owned by the company JBS in Illinois launched its 2.6-megawatt solar installation made possible by C-PACE financing.
Alini said that about a dozen capital providers have signed on to provide financing for Chicago C-PACE projects, environmental groups have been helping to raise awareness, and the queue for potential projects is growing.
“Commercial PACE is a strong financing option in any market because of its ability to fill a gap in a development’s capital stack or help transform a capital expense into an operating expense,” Alini said. “ In this market though, that becomes even more true as you see mortgage lenders taking a more conservative approach to their portfolios.”
“We’re now at the tipping point,” Ghori said, “where we’ve got enough states and enough programs that are live — we’re starting to grow this market exponentially.”
The experts on the Urban Land Institute panel said they hope companies think bigger in terms of the potential for C-PACE, considering it for larger operations. Ghori pointed to his company’s $90 million C-PACE deal at the high-end office building 111 Wall Street in Lower Manhattan, calling it a “seminal moment for PACE.”
And the investments that C-PACE makes possible may be more helpful than ever given climate-related goals and the difficulty of attracting and retaining commercial tenants in the post-pandemic business landscape, with many people still working from home.
“The good news is we can have our cake and eat it too with commercial PACE financing,” Kellogg said. “Having properties that are energy efficient are desirable in attracting tenants, and also from the regulatory side, it’s a demand most of us are experiencing as a must-have. In other words, we are both getting pulled into this need for energy efficiency and we’re getting pushed into it at the same time, both as good business practice and regulatory requirement.”
Elizabeth City, North Carolina, once sought to lure boaters up the Pasquotank River with free docking at its marina and welcome baskets of wine, cheese and roses.
Today, the “harbor of hospitality” is preparing a new pitch, trying to attract offshore wind manufacturers with the region’s workforce and manufacturing capacity.
“Northeastern North Carolina is a special place,” commerce secretary Machelle Sanders said at a recent summit hosted by the historically Black Elizabeth City State University. “Just as North Carolina has provided a runway for the Wright Brothers to take flight, the region is helping to develop clean energy.”
With two offshore wind farms underway off the Outer Banks and a major turbine blade facility announced just across the state border, the potential in this largely impoverished region is vast. But experts and advocates stress that extreme poverty and economic disparity won’t be erased without effort.
“We have to be strategic about it, to make sure that the communities that really, really need this are benefiting from it,” said Montravias King, an Elizabeth City State graduate and former city councilor. “And if we don’t, it’s not going to happen.”
Regional pride ran high at the conference, with Sanders, a native of tiny Belhaven on the Pungo River, delivering the keynote address. Citing the area’s ties to the Coast Guard and its tourism industry, she declared, “we do have assets in this great part of the state.”
But in many ways, northeastern North Carolina is a tale of two banks. On the Atlantic Ocean, there’s the overwhelmingly White Outer Banks, once a string of modest fishing villages that today is a multibillion-dollar tourist attraction. Dare and Currituck, the two counties that encompass most of these barrier islands, are some of the state’s wealthiest by income and property value. In the last decade, Currituck’s population grew by 19%, not far behind the Triangle and Charlotte.
Then there are the roughly 20 counties of the mainland, sometimes dubbed the “Inner Banks” by tourism promoters. With few exceptions, these communities have a higher portion of Black people than the state overall. In Bertie County, where the Chowan River empties into the Albemarle Sound, nearly two-thirds of the population is Black, the highest fraction in the state.
People of color were systematically shut out of the region’s economic opportunities for centuries, and in recent decades, textile manufacturing jobs were lost to the North American Free Trade Agreement. Today, populations here are shrinking at the fastest rates in the state, and the economic indicators rank these counties among the poorest. Property values in Dare are four and a half times that of Pasquotank County, home to Elizabeth City.
Many feel little connection to the Outer Banks, said King, who now directs clean energy campaigns for the North Carolina League of Conservation Voters in Raleigh. “It’s a different world out there.”
In her address, Sanders acknowledged these inland counties — and other rural areas of the state — had often been left behind economically, a dynamic she knows well. “I know very well what it’s like to be excluded,” she said, “because I’m Black. I’m a woman, and because I’m from Belhaven.”
But she and others at the conference said the entire region could benefit from offshore wind. In March, a report commissioned by her department found the industry was poised to invest $140 billion up and down the East Coast — manufacturing specialized wind turbine components, shipping and assembling them at sea. “We do deserve our fair share of that,” she said. “We are looking forward to that blossoming economy.”
Already, there’s economic activity underway in northeastern North Carolina because of two major offshore wind projects. Twenty-seven miles east of Virginia Beach, a Dominion Energy project is scheduled to begin delivering power in 2026. With a capacity of 2.6 gigawatts, the wind farm could create enough power for nearly 700,000 homes.
Avangrid Renewables plans a similarly sized project off the North Carolina coast, Kitty Hawk Offshore, slated for completion in 2030. (Larry Lombardi, the economic development director for Currituck County, says the wind farm is actually closer to his town, despite the name. “I have to clarify so people understand,” he told the Energy News Network, “it’s 27 miles off the coast of Corolla.”)
Power from both projects will come onshore to Virginia, and they’ll be built and staged in that state’s Tidewater region. Together, they’re expected to create upwards of 1,700 construction-related jobs annually. Once the wind farms are up and running, they’ll spur another 2,000 jobs for technicians, vessel managers, and other operations and maintenance workers.
Most of these jobs will be in Virginia, but within reach of Tar Heels across the border, many of whom already commute north for work. In Gates County, more than half of the employed work out of state, according to commerce officials.
Situated carefully beyond the coastal horizon, the Kitty Hawk wind turbines aren’t expected to be visible to beachgoers. But even if they were, Lombardi and others believe they could be a boost, not a bane to tourism.
“We know from the offshore wind in Europe,” he said, “they have tourism boats going out there. They have fishing boats going out there. It’s just going to add to what we’re already doing.”
These two wind farms could be just the tip of the iceberg. According to the March report, 41 gigawatts of offshore wind could be installed up and down the Eastern seaboard by 2035. Gov. Roy Cooper, a Democrat in his second term, wants a fifth of that to be off North Carolina’s coast.
With today’s technology — in which one turbine has about 6 megawatts of power capacity — those figures translate to more than 1,000 turbines off the state’s coast alone, with another 5,500 or so off the rest of the East Coast.
The structures require specialized parts, like towers 30 stories high, blades the length of football fields, and nacelles that would dwarf most office buildings. Today, all these components are made in Europe — creating an unprecedented opening for suppliers in North Carolina.
“There’s nothing else like this where you have a multibillion-dollar global industry that has zero footprint in the United States,” said Steve Kalland, the director of the North Carolina Clean Energy Technology Center and contributor to the March study. “It’s wild.”
Even when the ocean-based turbines reach the end of their useful lives, they’re likely to be refitted with the latest technology and reused. Manufacturers will need a steady workforce for decades to come. “It’s a multigenerational opportunity,” said Kalland. “We’re not just going to build wind turbines for five years and then everybody’s unemployed.”
Though the Northeast states are ahead of the Southeast ones when it comes to establishing a market for offshore wind — requiring some 20 gigawatts of the resource by 2035 — there’s still ample chance for North Carolina and its neighbors to play a leading role in the supply chain.
That’s part of why Cooper joined the governors of Maryland and Virginia last year in an agreement to work cooperatively to boost the region’s participation in the offshore wind supply chain — including through workforce training, enhancing deepwater ports, and upfitting and expanding factories.
It’s already paying off. Last month, Siemens Gamesa announced it would build the country’s first offshore wind turbine blade facility in Portsmouth, Virginia, creating an estimated 300 direct jobs.
The factory is expected to supply the entire East Coast, but another major blade maker in North Carolina is not out of the question, Kalland said. And there’s still potential for other major factories to produce towers, foundations, undersea cables, nacelles and more.
“All of these things are going to have to get sourced out here in some way, shape or form,” he said. “We really think that the opportunity for job creation — as you work your way through the parts and pieces — is huge.”
That’s especially true because North Carolina’s manufacturing sector is already the largest of the East Coast states, and many companies here already produce onshore wind turbine components. More than 40 have already expressed interest in participating in the offshore wind supply chain.
At Wilmington, Morehead City, and Southport, the state also has opportunities to enhance its ports to assemble and ship large offshore wind components. Radio Island, between Morehead City and Beaufort, is considered the best near-term option.
Jeff Andreini, the vice president of new energy for Crowley Marine Services, glowed about the site at the Elizabeth City State conference. “Radio Island is a tremendous opportunity,” he said. “It’s a direct shot out to the Atlantic Ocean.”
Andreini, whose company has a network of barges that can deliver offshore wind components to the point of construction, isn’t the only one excited about the spot, said Jaime Simmons, program manager for the Southeastern Wind Coalition. “The county commission and the economic development office are thrilled about it,” she told the Energy News Network.
And though North Carolina is a so-called right-to-work state, which allows workers to be represented by unions without having to pay dues, the state AFL-CIO is still hopeful that offshore wind could help inject more union jobs into the state’s economy. “It’s so early and it’s so new,” said Aiden Graham, campaign manager for the group, “that nothing is set in stone.”
To be sure, not all of these supply chain opportunities are in the state’s northeast corner, and it’s not the only area struggling economically. But experts and locals point to evidence that the region could get a significant boost from the industry.
First, there’s the spillover effect from Virginia. “There is a significant workforce opportunity, even if a lot of this manufacturing and construction work happens in the Hampton Roads area,” Kalland said. “There’s not enough specialized people in Hampton Roads — they’re going to be drawing people from all over the place, and northeastern North Carolina is clearly one of those places.”
Second, there’s the presence of “anchor companies,” which provide direct jobs in manufacturing major components and open the door to industries further down the supply chain. Of the five existing potential anchor companies listed in the March report, three have a major presence in northeastern North Carolina.
One is Avangrid, which also operates the state’s only land-based wind farm, just outside of Elizabeth City. Based in Virginia Beach, Ashley McLeod directs stakeholder engagement for the company’s Kitty Hawk project. At the conference, she stressed its expected boon: a $2 billion economic impact.
At the same time, the former school board member sought to assure the audience her company would protect the natural environment during siting and construction. “We’re making sure we’re doing it in the most responsible way,” she said.
Another potential anchor in the area is L.S. Cables, a New Jersey company with a facility in Tarboro, just east of Rocky Mount in Edgecombe County, the most economically distressed in the state.
The company already supplies onshore wind and solar projects in the United States, according to the March report, and the Tarboro factory could, “possibly with some modifications, play a key role to support the ocean cable needs” of offshore wind.
Perhaps most promising is Nucor Steel, the largest U.S. steel producer in the country, with headquarters in Charlotte and a sizable facility in Hertford County.
“They very much want to be part of constructing the towers,” said Amy Braswell, the economic development director of Ahoskie, the county’s largest town, population 4,659. The interest is already having a ripple effect. “We’re contacted by people who want to be in proximity to Nucor,” she said, “to work with them.”
The county’s economy could undoubtedly use more than a ripple. The 10th most economically distressed in the state, it has a median household income of $38,000 and an unemployment rate of over 6%.
“I think it’s going to be a boon for eastern North Carolina and eastern Virginia,” said Braswell of the offshore wind industry. “It’s going to be a boon for the citizens who are going to get really good jobs.”
The area’s numerous rivers and sounds could serve to transport large components by barge up to Virginia ports and down to North Carolina ones. The area also has a network of railroads and highways that ease transport.
“We are not as susceptible to storm damages and things that you have to worry about closer to the coast — yet we are an hour from anything,” Braswell said. “We think we’re ideally situated for it.”
Still, these economic opportunities could be limited if North Carolina misses its offshore wind targets set by Cooper — not an impossibility.
While the federal government is moving forward on a lease area 17 miles off the state’s southernmost shores, it will have to overcome opposition from over half a dozen local governments who oppose any turbines beachgoers might glimpse from the sand.
At the same time, a Trump-era ban on offshore wind, set to take effect next July, must be lifted by Congress for any other wind energy areas off North Carolina’s coast to come to fruition. The Build Back Better bill contains language that would do just that, but its fate is still uncertain.
Fulfilling Cooper’s targets will almost certainly require additional state-level legislation, said Simmons. Even with a new law requiring a 70% reduction in Duke Energy power plant pollution by 2030, the state probably needs specific mandates for offshore wind to draw development off its coast and supply chain jobs with it.
“This is such a new industry that we’re bound to get part of it,” she said, “but it will require a designated effort for North Carolina to capture what we know is economically possible.”
While the AFL-CIO is optimistic about the possibilities for union jobs, those odds increase if federal or state policymakers tie green energy incentives to the opportunity to be in a union.
“We can remake the economy to benefit working people and the planet and to grow the labor movement,” Graham said, “but it’s not a foregone conclusion.”
The degree to which northeastern North Carolina benefits economically from offshore wind will also depend on how well prepared residents are to work in the industry. That’s why boosters say training programs at community colleges and at historically Black universities such as Elizabeth City State are critical.
“Education is important,” King said. “Don’t bring in people from outside — we want to see those dollars flow in our communities.”
The Cooper administration has already dipped its toes into these waters, working with Halifax County schools to create a pilot program for 20 high school students to work in solar and wind energy and earn course credit toward a bachelor’s degree.
“The Governor’s Office and other partners are working to expand this program to include additional school systems, companies and industries — including offshore wind,” spokesperson Jordan Monaghan told the Energy News Network in an email.
King, who with Simmons and other clean energy groups is part of a new coalition to promote offshore wind, remains cautiously optimistic.
“We’re on the cusp of a clean energy revolution,” he said. “We have the opportunity to produce some real, high-earning jobs for people, that can change people’s lives. But it doesn’t happen overnight — you have to prepare people for it.”
A tribal clean energy developer hopes an electric vehicle infrastructure grant can help two Upper Midwest reservations move forward after recent pipeline battles.
Bob Blake is executive director of the nonprofit Native Sun Community Power Development and a member of the Red Lake Band of Chippewa (Ojibwe) Indians in northwest Minnesota. His organization will share a new $6.7 million federal award with another group serving the Standing Rock Indian Reservation, a few hundred miles southwest along the North and South Dakota border.
“[Fossil fuel companies] are going to build oil pipelines, and we’re going to build an EV charging network pipeline,” Blake said. “We’re going to build the future as they build the past.”
The money, from the U.S. Department of Energy’s Vehicle Technology Office, will be used to purchase vehicles for both tribes, as well as to install more than 120 charging stations linking tribal lands, tourist byways and regional hubs.
The project brings potential economic benefits, a chance to improve energy self-sufficiency, and a “different narrative” for communities that have been consumed by pipeline protests in recent years, Blake said. Standing Rock was the site of massive 2016 protests against the Dakota Access Pipeline, and Red Lake was a focal point in this year’s fight against Enbridge’s recently completed Line 3 replacement project.
The EV infrastructure is part of a larger strategy to move to self-power the reservations with wind and solar. The Red Lake Band has several solar installations on government buildings installed by native contractors led by Blake and solar entrepreneur Ralph Jacobson. A Standing Rock entrepreneur built North Dakota’s first major solar array, and the tribe’s renewable energy authority is raising money for a 259-megawatt wind farm.
Clean energy jobs and training could help Standing Rock’s struggle with high poverty and unemployment rates, said Joe McNeil, general manager for the Standing Rock Renewable Energy Authority. Chargers at casinos would serve the growing number of visitors driving electric vehicles, he said. Standing Rock may buy electric buses to shuttle people around the reservation but will not use them to pick up casino patrons in Bismarck or Fargo because charging could cause timing issues, he said.
Native Sun and Standing Rock Renewable Energy Authority will install 59 fast chargers and 63 slower-charging Level 2 stations. Blake said he wants stations placed at popular spots on reservations and in smaller towns between destinations where charging hubs might spur other economic development.
“It’s going to be an economic force, especially in these impoverished areas,” Blake said.
The grant money will also be used to purchase 19 electric vehicles for use by tribal governments and pay for outreach that includes 52 events over the next three years. Blake said the vehicles would consist of school buses and public transit vehicles to transport tribal members to medical or other appointments within the reservation. The tribes and several partners will study how they operate in a climate that can be severely cold in winter.
ZEF Energy will build the charger network. Megan Hoye, vice president of business development, said the grant would expand Minnesota’s charging network built with money from the Volkswagen settlement. The tribes’ plan expands the state’s charging network farther north and allows cost-sharing to install faster chargers at some sites, she said.
Hoye said the inter-tribal network will invest significantly in fast chargers instead of slower and more common Level 2s in the Upper Midwest. The faster chargers, she said, will better meet consumer expectations. As Minnesota’s charging network enters a second phase, money from the tribal network could enhance existing charging hubs and make them “faster chargers or even ultra-fast chargers,” Hoye said. “There’s an opportunity for a kind of synergy.”
The inter-tribal network brings other benefits. Hoye said the network will help, especially in North or South Dakota, neither of which have well-established charging networks. The plan calls for some Level 2 chargers at government buildings in preparation for potential fleet electrification.
Lester Shen, senior research engineer at the Center for Energy and Environment, worked on the grant and will assist with data collection. The routes chosen for charging hubs connect lesser served areas that should spur greater EV adoption and match well the Biden administration’s efforts to spread transportation electrification to even remote outposts, he said.
Among the barriers to more EVs has been a lack of chargers and the distance between them, Shen said. However, the investment in chargers allows drivers more options in remote areas. “The reality is transportation drives the economy,” Shen said. He added that the investment should also spur more community college training to prepare students for jobs in the industry.
Both Blake and McNeil agree that EVs offer training and employment opportunities. They have been working with local tribal community colleges on wind and solar jobs training and have plans to ask them to add EV courses. In addition, McNeil wants a local community college involved in data collection on vehicle performance that the tribe can share with car dealerships in the region selling EVs.
Jon Hunter, senior director of clean air at the American Lung Association, also worked on the grant proposal. He said challenges remain, including a need to ensure tribal chargers will not overlap but augment the charging plans developed by Minnesota Power and Otter Tail Power. These utilities serve areas where the tribes may want to operate chargers.
The proposal also has environmental benefits. “This is a great opportunity to demonstrate the benefits that electric vehicles offer to drivers and fleets while also reducing harmful tailpipe emissions that can cause problems for people with respiratory diseases like asthma and chronic obstructive pulmonary disease, which are often more common in Indigenous Peoples,” Hunter said.
Since the Dakotas stand near the bottom in EV adoption rates and rural communities have yet to embrace EVs, outreach will be a priority for the project. Hunter said the American Lung Association would support the tribal outreach efforts as the project moves forward through ride-and-drives and other activities.
For Blake, the pipeline protests served a purpose in enlightening people to the environmental degradation and continued reliance on fossil fuels that result from pipeline construction. Now, he wants the EV project to fight climate change in a different way. “This is about jobs, workforce development and giving people opportunities they never had before,” he said. “Those tangible things, to me, are very, very important.”
PORTSMOUTH — Siemens Gamesa announced Monday that it plans to build the United States’ first offshore wind turbine blade facility at the Portsmouth Marine Terminal, notching a major win for Virginia as it strives to become a hub for the nation’s fledgling offshore wind energy industry.
The announcement was made Monday at the terminal by U.S. Energy Secretary Jennifer Granholm and Virginia Gov. Ralph Northam.
The Spanish-German wind engineering company said it plans to invest more than $200 million in the Portsmouth Marine Terminal facility, which will produce blades for offshore wind projects throughout North America, per Northam’s office.
The facility is expected to create over 300 jobs.
Virginia’s largest electric utility, Dominion Energy, previously selected Siemens Gamesa as the turbine supplier for its 2.6 gigawatt Virginia Coastal Offshore Wind project being developed 27 miles off the coast of Virginia Beach. A 12 megawatt pilot constructed by Dominion became the nation’s first offshore wind installation in federal waters and began delivering energy to customers in January 2021.
Offshore wind is increasingly becoming a critical component of both electric power producers’ plans to transition away from fossil fuels and state and federal aspirations to develop renewable energy that can replace coal and natural gas while driving economic growth.
Earlier this month, President Joseph Biden’s administration laid out an ambitious plan to develop offshore wind along much of the East Coast, West Coast and Gulf of Mexico. In March, the administration set a target of deploying 30 gigawatts of offshore wind by 2030.
Virginia has also set an aggressive goal under the 2020 Virginia Clean Economy Act of developing 5.2 gigawatts of offshore wind by 2034. Dominion’s CVOW project, which would produce half of that power, is currently being reviewed by the U.S. Bureau of Ocean and Energy Management.
But even as states race to develop wind projects, turbine components continue to be produced overseas, with major manufacturers including Siemens Gamesa telling Reuters earlier this year that they need to see a reliable pipeline of projects moving forward in the U.S. before putting down roots stateside.
Shipping turbine components across the Atlantic for U.S. projects, however, comes with special challenges.
Under the federal Jones Act, any vessel carrying goods between two points in the U.S. must be built and registered in the United States. Despite that restriction, no such vessels with the capacity to transport turbine components currently exist in the U.S. Dominion is building the first Jones Act-compliant offshore wind installation ship in Texas, which has been christened Charybdis after a sea monster in “The Odyssey” and is expected to be completed by late 2023.
Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Robert Zullo for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.
Minnesota utilities will soon use existing fossil fuel plant infrastructure to transport clean energy to Midwest’s regional electricity grid.
The workaround avoids the Midwest’s bottlenecked transmission grid managed by the Midwest Independent System Operator, Inc. (MISO), the regional transmission organization currently hamstrung by a lengthy project queue and a capacity shortage.
The process of connecting new generation to the grid in MISO’s 15-state territory takes an average of three years, according to an Americans for a Clean Energy Grid study. Meanwhile, interconnection costs have more than quadrupled in the last few years and now represent almost a quarter of a typical wind farm’s budget.
As a result, projects have been canceled or trimmed back, with 5 gigawatts of clean projects pulled in the last two years despite having signed power purchase agreements, the study reported.
The situation has sent Minnesota utilities on a search for existing, underutilized transmission capacity, often connected to aging or retired fossil fuel power plants, or “peaker” plants that only run sporadically during high-demand times for electricity.
“I think it’s a great idea because we’re in a situation where we don’t have enough transmission capacity for our evolving system to add wind and solar quickly,” said Allen Gleckner, lead director of clean electricity at Fresh Energy, which also publishes the Energy News Network. “It’s good to see utilities leveraging all the ways they can to add renewables without having to deal with difficulty through the regular interconnection process right now.”
Though transmission is critical to a clean energy transition, the sector remains mired in challenges ranging from underinvestment to siting and permitting barriers. Recent projects in the region, such as the $2 billion CapX2020, added 800 miles of transmission lines that quickly filled with new wind and solar developments. President Joe Biden’s administration plans to ramp up spending on transmission to relieve the backlog, but it will likely take years to see the impact.
“The grid is going to be the vehicle that allows Minnesota to reach its clean energy goals,” said Beth Soholt, executive director of the Clean Grid Alliance. “An enhanced grid is going to be required for getting to a higher level of electric vehicles, for electrifying buildings and for continuing to reduce carbon from the electricity sector. It’s all going to be built with the grid as the backbone.”
NextEra Energy is building two wind farms that will use Great River Energy’s peaker plants to transmit electricity. The first project is a new 259 megawatt wind farm that will be linked to the grid at Great River Energy’s Pleasant Valley Station peaker plant southwest of Rochester, Minnesota. A 300 MW wind project will interconnect at Great River Energy’s Lakefield Junction Station in south-central Minnesota. The roughly two-decade-old plants are around 30 to 40 miles from the wind farms.
Otter Tail Power plans to build a 49.9 MW solar facility at Hoot Lake, a 100-year-old western Minnesota coal plant that closed in May. The utility will use about one-third of the existing transmission capacity at the site to connect the solar to the MISO grid in 2023. Minnesota Power is also preparing three new solar installations next year, two of which will be built near existing power facilities.
On a much larger scale, Xcel Energy’s integrated resource plan calls for using interconnection rights at its Sherburne County Generating Plant (Sherco) and Allen S. King Generating Plant, both just outside the Twin Cities. The utility has rights for 2,600 megawatts and is considering ways to tap wind resources from southwest Minnesota using a new transmission line that would connect to the Sherco plant.
Last week, clean energy advocates raised concerns about two additional natural gas peaking plants in Xcel’s resource plan, Soholt said, but they applauded the approach of using Sherco and King to transport clean energy.
Zac Ruzycki, resource planning director for Great River Energy, said the utility plans to match all of its remaining peaker plants with wind farms, allowing as much as 1,400 MW of clean energy to enter the grid. The advantage of using peaker plant interconnection rights goes beyond just avoiding the MISO queue, he said.
Typically, new wind projects are studied together and assessed the cost of any required grid upgrades. By using existing interconnection rights, the wind farms avoid grid improvement costs, delays, and unexpected changes that might be required for a new grid interconnection through MISO.
Peaking plants generate power less than 5% of the year, he said, with utilities mainly initiating their use when weather or other issues threaten reliability, or when market prices surge. Great River Energy also sees peakers as a backstop to help balance variable power sources such as wind and solar.
“We think it’s a great complement because we’re utilizing the interconnection to create a more efficient and more effective solution for our members,” Ruzycki said.
Mark Lennox, project director for NextEra Energy’s Dodge County Wind, said the company will use what MISO calls a “surplus interconnection” to connect to the Pleasant Valley Station peaker plant. It allows new energy sources to join the grid at existing plants not using their full transmission capacity. NextEra pulled the project from the traditional MISO process in 2020 “because of exceedingly uneconomic costs.”
Otter Tail’s manager of renewable development, Randy Synstelien, said solar made the most sense at the utility’s Hoot Lake site, because the site had plenty of space available on site.
“We’re reusing the interconnection and reusing the land on that site,” he said.
Otter Tail sees the possibility of using other sites, potentially peaker plants, to incorporate clean energy transmission into other existing interconnections. The advantages of the Hoot Lake include an “expedited process” and lower interconnection costs, especially since in rural areas, even shared system upgrade costs for a clean energy project “can be very substantial and impact project viability,” Synstelien said.
Great River Energy’s initial attempt to build wind farms and connect them to a power plant failed. After finding no buyers, Great River Energy announced the closure of the 1,100 MW Coal Creek Station in McLean County, North Dakota, in 2020. McLean County officials passed a moratorium on wind farms after learning Great River Energy had plans to develop wind and use the plant’s grid connection to transport clean energy.
Having been rebuffed by the county, Great River Energy switched the investment it planned to make in North Dakota to Minnesota. Four Next Era Energy wind farms in Minnesota will now sell power to Great River Energy.
“The original plan was to site wind in North Dakota, and when that didn’t work out, we pivoted to alternative plans that we had in Minnesota,” Ruzycki said. “Once the Coal Creek Station interconnection was no longer in our power supply plan, we were able to leverage the interconnection of our other generators to our advantage.”
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