Energy Update: Week of August 3

Energy Update - August 03, 2020

Friends,

While hockey and basketball were both back this weekend (I did watch portions of 6 NHL games, an NBA game, Yankees/Red Sox and some of the FedEx St. Jude PGA event), I really was most focused on Hurricane/TS Isaias. While it skirted my in-laws and friends in Florida, it looks like in will crash into the Carolinas today and carry right through DC/MD/VA tomorrow on its way to Maine. While it is always a little nerve-racking, we definitely could use a little rain (and sounds like we are going to get it).

COVID relief negotiations remained stalled over the weekend with only some minor progress made. The clock is ticking on completing a deal if they want to be able to get out of town this week. The House is actually out subject to a 24-hour call of the Chair. The Senate is in this week and starts right away with a procedural vote this evening on Deputy Energy Secretary Mark Menezes. Final vote expected tomorrow.

As for the COVID Legislation, look for more movement this week as Congress attempts to head for the election-year August district work period. Josh and Liam are on the case and we will report as necessary.

Tomorrow, the President will sign The Great American Outdoors Act which increases funding levels for the National Park Service and conservation in a White House ceremony. Then, Wednesday, Senate Energy holds a hearing on cybersecurity in the energy sector while Senate Environment takes up Chairman Barrasso’s nuclear legislation.

Finally, while there were some rumors that Dem nominee and former VP Biden might pick his own VP as early as this week, our insights tell us it is unlikely to happen until next week. The virtual Democratic Convention kicks off August 17, so look for it just before then. The GOP follows on August 20^th.

Well, it is August and that usually means we do not have weekly updates until September unless there is something interesting to report. Given the COVID legislation potential, I have not ruled out an update next week but we will see how things progress.

The Caps start their run for the 2020 Stanley Cup today at 4:00 p.m. from the bubble in Toronto. Meanwhile, it is crazy to say this in August, but the PGA’s first major is this week in San Francisco at the TPC Harding Park. Finally, our friends at Axios Sports report that 168 years ago today-Aug 3 1852, intercollegiate athletics were born when Harvard and Yale’s crew teams competed in the first-ever sports event between colleges, racing along the waters of New Hampshire's Lake Winnipesaukee. (Harvard won.)

Call with questions, stay safe & healthy. Stay tuned here for our latest COVID-19 Updates.

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

FRANKLY SPOKEN

The EIA said domestic energy use dropped 14% year over year in April due to the economic shutdown during the pandemic, marking a record fall since the EIA has been collecting data since 1973.

ON THE PODCAST

PA Think Tank Expert Hammers AG over NatGas Report – In a recent episode of IER’s Plugged In podcasts, Pennsylvania’s Commonwealth Foundation Senior Fellow Gordon Tomb joined the show to discuss a recent report released by PA’s Attorney General which sought to cast the state’s energy producers in a negative light as well as undercut the history of natural gas development in the state.

FUN OPINIONS

Bloomberg: Hire Oil, Gas workers to Stop Methane– In an op-ed in Bloomberg Opinion, Michael Bloomberg writes as Congress debates how to address the economic slowdown, we can put people to work by addressing climate needs such as hiring laid-off oil and gas workers to help stop methane leaks at abandon wells around the country. Plugging a single abandoned well can cut its methane emissions by 99%, according to the EPA, and the work requires skills that oil and gas workers already possess. With a significant number of abandoned wells still unplugged, a federal program could create as many as 120,000 well-paying jobs, while preventing hundreds of thousands of tons of greenhouse gases from escaping into the atmosphere. Bloomberg adds it’s an idea that appeals to environmental groups, fossil fuel dependent states, and even some fossil-fuel industry leaders.

FROG BLOG

AEI: Attacks on Nordhaus Don’t Hold Water – In a recent blog post for the American Enterprise Institute, energy expert Benjamin Zycher writes that William Nordhaus, the 2018 winner of the Nobel Prize in economics for his integrated assessment model of the science and economics of climate policies, now is under attack from the environmental left, almost certainly because that model does not support the policy preferences of the climate activists. Zycher says Nordhaus’ absolute honesty and rigorous approach to economic analysis are beyond reproach. Nordhaus—by no stretch of the imagination a climate policy skeptic—is under attack more centrally because his model has not provided answers consistent with the ideological demands of the climate alarmists, and Nordhaus has refused to bend to the political winds.

IN THE NEWS

ClearPath Releases New Study on Advanced Reactors – ClearPath released a newly-published LucidCatalyst study in a webinar today that derived the maximum allowable capital cost for advanced reactors by modeling their performance in four of the major power markets in the U.S. in 2034. Advanced reactors that cost less than $3,000/kW will be attractive investments, and create the most value for plant owners, the study finds. By modeling high penetrations of renewables in the mid-2030s, following National Renewable Energy Laboratory (NREL) scenarios, the study shows how advanced reactors can complement wind and solar. Together, these technologies drive down costs, reduce emissions, and improve performance in future U.S. electricity grids. In each of the markets modeled, the addition of advanced reactors lowered the overall system cost.

Key Findings:

Advanced reactor developers should aim for a CapEx of less than $3,000/kW.
Increasing or decreasing the weighted average cost of capital (WACC) by a percentage point changes the maximum allowable CapEx by around 8 – 9%.
Fuel cost and fixed O&M expenses are material considerations—as these decrease allowable CapEx increases.
Depending on specific market conditions, it may also be beneficial to co-locate thermal energy storage. A 12-hour thermal energy storage system (ESS) enables higher allowable CapEx, assuming it receives capacity payments. Across ISOs modeled, co-locating ESS makes economic sense, on average, for less than $1,126/kW. Without energy storage, a plant’s capacity factor suffers in zones with high variable renewables.
Developers should note that higher variable renewable energy penetrations reduce average energy prices and therefore also reduces allowable CapEx.
A ‘fleet’ deployment of advanced reactors (meeting these cost targets) and combined with energy storage can lower the total cost of energy delivery in the market.
Capacity price is critically important. A ‘mid-range’ capacity price of $75/kW-year, relatively consistent with today’s prices, allows for: ~$2,500/kW CapEx without storage ~$3,500/kW CapEx with storage

DOE Goes After Solar Project Loan – DOE will recover $200 million from a now-shuttered solar power plant in Nevada that received a federal loan guarantee in 2011 — and could recoup even more money later. This is of interest to me because, as you know, I worked on the Ivanpah Project, another concentrated solar thermal project in California that was attacked but has ultimately been a huge success. My friends at BrightSource that developed Ivanpah were always annoyed that they were lumped with and then watched Crescent Dunes implode (which our guys knew would happen). The $737 million loan guarantee helped fund the 110-megawatt concentrating solar power plant near Tonopah, Nev. Its unique design used thousands of mirrors across 1,600 acres to concentrate sunlight and heat molten salt, which in turn was used to generate electricity, but ultimately were flawed because of technical problems and it couldn’t fulfill its power contract. Oh wait, meanwhile, Ivanpah has paid back its DOE loan and is meeting all its contractual output requirements.

More Big Players Looking at Hydrogen – Last week, we had a flurry of items on hydrogen. Now, NextEra Energy joining the parade by investing in its first green hydrogen facility. Through its Florida Power & Light utility, NextEra will propose a $65 million pilot in Florida that will use a 20-megawatt electrolyzer to produce 100% green hydrogen from solar power. If it receives swift approval from state regulators, the project could be online as soon as 2023, and would represent the first step into green hydrogen for NextEra Energy.

Marathon to Sell Gas-Station Chain to 7-Eleven – Marathon Petroleum said it will sell its gas stations to the owners of the 7-Eleven convenience store chain for $21 billion in the largest U.S. energy-related deal of the year. Japanese retail giant Seven & i Holdings— which owns 7-Eleven and other outlets, including supermarket chain Ito-Yokado and the Sogo and Seibu department stores — says it is the largest in the company's history. Seven & i is the largest convenience store chain operator in Japan, with 21,000 stores there. It also owns nearly 9,800 stores in the United States and Canada. The company has been looking to expand overseas as its home market grows increasingly saturated. By acquiring Speedway, the Japanese retailer would pick up 4,000 stores and give its operations in North America a boost.

PetraNova Project Faces Setback – NRG Energy has mothballed operations at its Petra Nova project – the world’s largest carbon-capture facility at the its Fort Bend Coal plant in May as low crude prices undercut the oil-production efforts of the project. The project used carbon capture technology to reduce carbon emissions at one unit of the W.A. Parish Generating Station south of Sugar Land by 90%, the equivalent of taking 350,000 cars off the road each day. The Parish plant has eight units — four powered by coal, four by natural gas. The project that had so recently been hailed as a game-changing solution to greenhouse gas emissions in the fossil fuel industry has officially been shelved. Like so many other economic sectors and businesses in the especially hard-hit global energy industry, Petra Nova is just one of the latest COVID-19 corporate casualties.

ON THE SCHEDULE THIS WEEK

MOST EVENTS SCHEDULED ARE NOW ONLINE WEBINARS

Forum to Look at Critical Infrastructure – Today at 2:00 p.m., the Woodrow Wilson Center holds a webcast on the evolving the security playbook for protecting America's critical infrastructure. The event will feature a fireside chat between Christopher C. Krebs, Director of the Cybersecurity and Infrastructure Security Agency at DHS, and Wilson Center Fellow Melissa Griffith.

Forum to Look at Climate, Economics – The World Resources Institute holds a webinar tomorrow with a diverse set of leaders exploring how states and businesses are making progress toward a low-carbon future and what policy interventions, corporate leadership, technology trends and other activities can accelerate this transition, while ensuring that workers aren’t left behind. The webinar will feature a brief presentation on "America’s New Climate Economy: A Comprehensive Guide to the Economic Benefits of Climate Policy in the United States". Launching on July 28, the paper explains how low-carbon investments and policies would create jobs, provide widespread public health benefits and accelerate the transition to a low-carbon economy. Among the speakers includes our friends Maryland Secretary of the Environment Ben Grumbles and BloombergNEF expert Ethan Zindler.

Forum to Look at Extreme Heat – The Atlantic Council is hosting an online event tomorrow at 10:00 a.m. About extreme heat and its impact on people worldwide. The Council will also make a major announcement on addressing extreme heat, followed by an interactive dialogue – using the power of visual storytelling and humor with cartoonists from The New Yorker – to reveal the impacts of this growing public health crisis. Our friend Jeff Goodell of Rolling Stone will be among the speakers.

Forum to Look at Latin American, Conservation – The Wilson Center's Latin American Program holds a webcast tomorrow at 11:00 a.m. on economic growth and environmental protection in Latin America's global conservation efforts. Former President of Costa Rica José María Figueres is among the speakers.

WCEE to Look at Energy Storage – The Women’s Council on Energy and the Environment (WCEE) holds a forum tomorrow at Noon to hear from energy finance and regulatory lawyers Rabeha Kamaluddin and April Kim of Greenburg Traurig about financing challenges for energy storage systems and the status of energy storage regulation. The speakers will discuss the drivers behind the boom, contract structures, construction risks, and solutions that promote bankability. They will also provide an overview of current regulation of energy storage and discuss participation of these resources in the regulated wholesale electricity markets across the United States.

Forum to Look at Nuclear Energy Cooperation – Tomorrow at 12:30 p.m., Columbia University’s Center on Global Energy Policy will host a discussion on the past, present and future of nuclear energy cooperation between the U.S. and its allies, especially in response to the urgency and challenge of climate change. Speakers will include NuScale’s Chris Colbert and Joyce Connery, a board member of the Defense Nuclear Facilities Safety Board.

Webcast to Look at Forest Carbon Solutions – GreenBiz holds a conversation tomorrow at 1:00 p.m. on the role of forests in addressing climate change and how technology can make forest carbon projects more credible. In this one-hour webcast, GreenBiz Editorial Director, Heather Clancy, will moderate a discussion with World Resources Institute, Pachama, Verra, and Microsoft on key trends in the use of technology to improve forest carbon projects.

Forum to Look at Columbus, Smart Cities Success – The Electrification Coalition and Smart Columbus will hold a web forum tomorrow at 3:00 p.m. to discuss advancing fleet electrification. As the winner of the $10 million Smart City Challenge grant awarded to Columbus by the Paul G. Allen Family Foundation, Columbus committed to adding hundreds of EVs to local public and private fleets. The event will look at innovative practices for public fleet procurement that led to the adoption of more than 300 public EVs, as well as challenges encountered in private fleet adoption and strategies to mitigate them moving forward. Speakers include Electrification Coalition National Director Ben Prochazka and Columbus city officials Bud Braughton and Kelly Reagan. The event is the first of three webinars on the topic hosted by the Electrification Coalition.

Senate Energy Looks at Cybersecurity – The Senate Energy Committee is holding a hearing at 10:00 a.m. to examine efforts to improve cybersecurity for the energy sector. Witnesses include DOE’s Alexander Gates, FERC’s Joe McClelland, Siemens CEO Steve Conner and PJM CIO Tom O’Brien.

Senate Environment to Look at Barrasso Nuclear Legislation – The Senate Environment Committee is holding a hearing at 10:00 a.m. to examine a discussion draft of Legislation sponsored by Chairman Barrasso called the American Nuclear Infrastructure Act of 2020. Barrasso introduced the legislation last week which would enable U.S. international leadership, preserve America’s uranium supply chain, reduce carbon emissions, and strengthen our economic, energy, and national security.

USEA to Look at Philippine NatGas – The US Energy Association holds a webinar on Wednesday at 10:00 a.m. looking at lessons from the Philippine downstream natural gas industry investors' guide.

CQ Roll Call Forum Looks at ESG – CQ Roll Call and Fiscal Note hold a virtual discussion on Wednesday at 11:00 a.m. on Environmental Social Governance (ESG) and putting the theory into practice after COVID. A panel of experts from the world of institutional investing, climate action, and public policy will discuss.

DOE to Host Thermal Energy Storage Workshops – The U.S. Department of Energy’s Building Technologies Office is hosting a webinar series starting Wednesday at 1:00 p.m. to help catalyze further development in thermal energy storage technologies. The events will engage stakeholders to identify both potential barriers as well as research, development, and deployment needs for thermal energy storage.

Forum to Look at Native Minerals – The US Energy Association holds its Indian Energy Minerals Forum webinar on Wednesday at 1:00 p.m. The Indian Energy Minerals Forum is a continuation of the engagement that began with energy and mineral stakeholders at a seminar at the reservation economic summit in Las Vegas in March 2020. Stakeholder feedback indicated interest in a broader discussion with the tribal community. With a rich supply of coal, oil, natural gas and critical minerals in close proximity to railroads and other infrastructure, and with access to potential carbon capture utilization and storage sites, Native American tribal lands have the ability to fuel energy-based economic development and create sustainable, well-paying jobs in the rural west. This is the first in a series of webinars that will provide an outlook on strategic resources and outline an Indian Country energy future characterized by self-determination, environmental best practices, tribal-led public and private partnerships, and the development of new energy markets enabled by integrated infrastructure development. Speakers include Interior’s Stephen Manydeeds, Navajo Energy’s Steve Grey and Westmoreland Mining COO Joe Micheletti.

WaPo Panel to Look at Conservation, Sustainability – At 2:00 p.m. on Wednesday, Washington Post Live holds a webcast on conservation and sustainability, examining what is being done to address human impact on the natural environment and the disproportionate burden placed on vulnerable populations worldwide. WPL will gather global visionaries and local leaders on the frontlines to discuss how conservation and sustainability priorities have promoted innovation and changed the way cities, states and industries grow and thrive. Speakers include LA Mayor Eric Garcetti, former UN Climate Head and current World Bank President Christine Figueres and former Irish President Mary Robinson.

Forum to Look at Carbon Removal Innovations – The Aspen Institute holds its sixth installment of the “Innovators In___: A Virtual Exchange of Ideas” series on Wednesday at 2:00 p.m. to look at Carbon removal. Innovators in Carbon Removal will feature David Elenowitz, the President and Founder of Zero Carbon Partners, where he will dive into the role of carbon capture and utilization as a pathway towards mitigating global climate change.

Forum to Look at Sustainability, Equity – The US Chamber of Commerce Foundation will hold a web forum on Wednesday at 3:00 p.m. featuring a conversation with leading experts from the field on how communities, NGOs, and the private sector can work together to create a more sustainable economy that delivers environmental justice and creates opportunity for all. Featured speakers include Gina Sofola of BlackSpace Oklahoma, Google’s Aaron Berndt and Mary Kate Morley Ryan of Accenture.

Forum to Look at Free Market Clean Energy – OurEnergyPolicy is hosting a webinar Wednesday at 4:30 p.m. on free market clean energy proposals for the stimulus and beyond. Our friend Abby Smith moderates a panel with Jigar Shah and Rod Richardson, co-founder of the Clean Capitalist Leadership Council.

Forum to Look at Scaling Up Clean Energy – Climate Links and US AID-funded Climate Economic Analysis, Development, Investment, and Resilience (CEADIR) will host a webinar on Thursday at 9:00 a.m. to look at scaling up clean energy. The webinar will present highlights from the CEADIR’s Activity Climate Finance Assessment: Opportunities for Scaling Up Financing for Clean Energy, Sustainable Landscapes, and Adaptation. It will describe experiences of USAID and other development assistance organizations to expand investment from the private sector and other sources. The webinar will highlight options for improving enabling environments, strengthening information and capacity, and creating or strengthening financing mechanisms and instruments.

NHA Continues Web Series on Pumped Storage – Hydro Review is hosting a webinar Thursday at 11:00 a.m. on the future of pumped storage. Representatives of companies that own, support or are developing pumped storage plants globally will provide their perspectives on this important topic – and its future. Speakers include WindRiver Power CEO Kipp Horton, Argonne’s Vladimir Koritarov and Simon Bailey of Jacobs UK.

Forum to Look at Tech Leadership – The Hudson Institute will hold a forum on Thursday at noon to look at technology wars and how Democratic countries can maintain future leadership. The event will feature a panel of experts who will answer these and other questions about how the United States, India, and other democratic countries can work together to build a free, open, and technological future.

Climate Leadership Summit Set – The American Climate Leadership Summit 2020 will now be a 100% virtual live event each Thursday during the month of August featuring thought-and-action-provoking topics and speakers in an engaging and interactive online experience. It all starts Thursday at 2:00 p.m. with a discussion of climate progress and challenges, enviro/climate justice issues.

Forum to Look at Hydrogen in Transpo Sector – On Friday at 10:30 a.m., the Atlantic Council's EnergySource Innovation Stream holds another forum on Hydrogen fuel cell technology and infrastructure in the commercial transportation industry. The Global Energy Center will host Elizabeth Fretheim, the head of business development at Nikola Motor Company to discuss. Nikola aims manufacture zero-emission vehicles—mainly focusing on long-haul fuel cell trucks—and to develop the hydrogen infrastructure to fuel the vehicles. In her presentation, Ms. Fretheim will discuss how fuel cell electric vehicles can meet a critical need for long-haul routes and can transport heavy payloads. She will explain Nikola’s plans to generate clean energy at its hydrogen fueling facilities using electrolysis with electricity generated by solar panels or wind.

Rice Energy Event Looks at Oil in 2020 – on Friday at 5:00 p.m., Rice University’s Center for Energy Studies holds a webinar to look at the continuing saga of Petroleum in 2020. This year began with WTI crude near $65 per barrel. Following an oil price war and a pandemic-induced demand shock, prices have seen unprecedented volatility, and the energy narrative has tilted toward “new normals,” “green recoveries” and a “peak in oil demand.” However, economic and political uncertainties abound, casting long shadows over the future of the global oil market and geopolitics. At this webinar, a panel of experts from the Center for Energy Studies will discuss these uncertainties and the implications for future market balance. Speakers include CES’s Ken Medlock, Jim Krane and Mark Finley (formerly of BP).

IN THE FUTURE

WIND WEEK Set – AWEA’s 4^th annual American Wind Week will be next week, August 9-15^th. The event aims to tell wind’s American success story and highlight that “Wind Builds the Future.” Each day of the week the industry will showcase a different way wind energy is building a better, cleaner future, focusing on job creation, the post-pandemic economic recovery, wind champions, community investment, and corporate and industrial buyers.

Vet Energy Conference Set – The Atlantic Council, in partnership with many other groups like Citizens For Responsible Energy, will host a virtual conference August 10 – 13^th for Veterans Advanced Energy Week. The event is an interactive virtual learning and networking experience dedicated to veterans and military spouses working to strengthen US national security through careers in the advanced energy industry. Participants will gain insights into the technology, policy, and economic trends that are driving the global energy transition from senior leaders and experts across industry, academia, and government. Speakers will include VA Deputy Assistant Secretary Matt Zais, Sen Tammy Duckworth and Rep. Jason Crow, as well as our friend/podcaster Julia Pyper.

Solar Resilience Forum Set – The Clean Energy Group and the Resilient Power Project hold an event next Tuesday August 11^th at 1:00 p.m. to discuss ways of finding an appropriate way to determine the value of resilience in solar projects. Based on real world experience with the design and implementation of solar+storage microgrids, the nonprofit Clean Coalition has developed a standardized and straightforward methodology for valuing resilience. The event will discuss.

Chatterjee, Cruz Headline TX Oil, Gas Forum – The Texas Oil & Gas Forum 2020 will be held on August 11 and 12 at the Petroleum Club in Houston. The event will be an in-depth and off the record dialogue between U.S. Congressional and government leaders and the energy industry. Speakers include Keynoter Ted Cruz, FERC Chair Neil Chatterjee, Reps. Randy Weber, Mike McCaul, Michael Burgess, Jodey Arrington and Kelly Armstrong.

Forum to Look at US-Asia Gas Issues – On Wednesday August 12^th at 6:00 a.m. (yes that is right), the U.S. Energy Association (USEA) and the U.S. Agency for International Development (USAID) are hosting the third installment in the U.S.-Asia Gas Partnership webinar series to discuss changing terms in LNG SPAs, with focus on contracts for deliveries to emerging Asian LNG markets. The webinar will explore the key innovative features in Asian LNG SPAs such as novel pricing mechanisms, recourse to price review arbitration, and enhanced termination rights, including in the event of force majeure.

C2ES to Look at Economic Recovery, Mitigation – The Center for Climate and Energy Solutions (C2ES) holds a web forum on Wednesday August 12^th at 1:15 p.m. looking at economic recovery and climate mitigation. This webinar will feature a conversation between industry leaders in carbon reduction targets with an eye to the path forward to economic recovery and climate change mitigation. Speakers include Exelon’s Katie Ott, GM’s Cherie Wilson, Dow’s Edward Stone, Cargill’s Greg Downing and Brad Townsend of C2ES.

Event Targets Cybersecurity – Energy Central holds a PowerSessionLIVE on-line event on Wednesday, August 12^th at 2:00 p.m., focused on cybersecurity on the U.S. Power Grid. In this PowerSession, the event will address risk assessment steps you can take to ensure that your command and control software objects are trustworthy enough to install and grant access to sensitive power equipment.

IEA to Release Oil Market Report – The International Energy Agency will release its August 2020 Oil Market report on Thursday August 13^th. The IEA's monthly Oil Market Report (OMR) is the exclusive source for official government statistics from all OECD countries, as well as selected non-OECD countries, together with both historical datasets and supply-and-demand forecasts for the year ahead.

Democratic National Convention – Virtual forum set for August 17^th through 20^th

EV Forum to Look at Drivers – The second of three web forums hosted by the Electrification Coalition and Smart Columbus will be held on August 18^th at 3:00 p.m. to discuss driving consumer adoption through Public/Private Partnerships. In three years, Columbus increased electric vehicle adoption more than four-fold without supportive state policies or incentives, but through the collaboration of the public and private sectors under the $10 million Smart City Challenge grant awarded to Columbus by the Paul G. Allen Family Foundation. Discover how more than 70 Columbus companies came together to educate tens of thousands of drivers on EVs, conduct more than 12,000 EV test drives, create new corporate incentive programs, and grow consideration for EVs by more than 20%.

GOP Convention Goes Virtual – After fits, starts and moves to Florida, the GOP convention will also be virtual the Week of August 24^th to 27^th. The will likely be some closed meetings in Charlotte, but everything public will be virtual.

Forum to Address Charging Infrastructure – The final web forum hosted by the Electrification Coalition and Smart Columbus will be held on September 8^th at 3:00 p.m. to discuss fortifying regional EV charging infrastructure. More than 1,000 new EV charging ports have been installed in the Columbus Region. This explosion of charging has contributed to a more than four-fold increase in EV purchases in the last three years. The event will look at how Smart Columbus partnered with local utilities to help residents, workplaces, businesses and developers identify the right ways to install EV charging infrastructure for their current needs and for the future.

National Clean Energy Week – September 21-25