Advanced Energy Perspectives

The 7th Circuit Court of Appeals recently handed down a decision on a challenge to the FERC's authority to distribute the costs of high-capacity transmission to support wind investments (“multi-value projects”) across the Midwest Independent System Operator (MISO) region.  One sentence in the decision has attracted a great deal of interest – the statement that Michigan’s in-state requirement for their RPS is a violation of the Commerce Clause of the U.S. Constitution. While some see this language as trouble for the RPS in Michigan and possibly elsewhere, in my view, the decision is a victory for FERC and for advanced energy.

The U.S. is set to lead the world in renewable energy mergers and acquisitions, according to a new report from CohnReznick LLP. This will be the second year in a row the U.S. has come out on top in M&A for these advanced energy resources. Solar power, biomass, and onshore wind account for the largest markets targeted by investors, in part because those projects are “stable assets providing predictable returns,” according to Anton Cohen, a partner with CohnReznick. “They know there is only room to increase the installed capacity in the U.S.,” he said in an interview with Bloomberg.

The global advanced energy market has been valued at $1 trillion, and in the U.S. is experiencing rapid growth. The U.S. is well positioned to lead the advanced energy industry.

Citing the critical importance of a modern grid to the deployment of advanced energy and U.S. energy security, President Obama last week called upon executive agencies to further refine the federal review, siting and permitting process for transmission projects. The call came in the form of a Presidential Memorandum focused on guidelines for the designation of energy corridors and other general provisions for integrated project planning. It also stipulates that the the Secretary of Energy should prepare a Transmission Corridor Assessment Report, delivered in two parts starting December 2013, separately addressing energy corridors for Western and all other states. In March 2012, the Administration issued its first Executive Order related to transmission planning which established an interagency rapid response team to improve the efficiency and effectiveness of the siting process.  

This week saw further moves toward offshore wind. As expected, the U.S. Interior Department will auction off offshore wind-energy rights in federal waters off Massachusetts and Rhode Island. This week the Department set the date for the auction: the end of July. The department estimates that offshore wind power could supply roughly 1 million homes with electricity.  The Wind Energy Area up for auction will be sold in two blocks, spans 164,750 acres, and is located 9.2 miles south of Rhode Island coast. The department noted that combined electricity generation from both blocks could net 3,400 MW.

AEE spearheaded a successful effort in the Colorado legislature this year to expand energy performance contracting for public agencies to fleet vehicles – a concept that could serve as a model for other states.  The legislation was conceived and drafted in cooperation with McKinstry and Schneider Electric, two companies actively engaged in energy performance contracts throughout the country.