Weekly Wrap Up — March 14, 2022

Listen in as Dan Catchpole and Jason Fordney discuss highlights from the energy industry on the northwest and west coast. This episode was recorded on March 14.

What is People in Power – A NewsData Podcast?

NewsData's "People in Power" is an exciting new biweekly podcast that explores issues in the energy industry, featuring expert guests from a wide range of backgrounds. Hosted by veteran energy journalists Jason Fordney and Abigail Sawyer of California Energy Markets and including appearances by writers from sister publication Clearing Up, People in Power will explore trends such as development of a Western wholesale electricity trading market, the transition to a more electrified world of new infrastructure and transportation, renewables integration and reliability, wildfire response and mitigation, and many other topics. "People in Power" draws from an unprecedented pool of expertise and insight in a way never seen before! It's available on all major podcast platforms as well as at www.newsdata.com.

Intro:
Welcome to NewsData's Energy West.

A podcast about the energy industry today and where it's going
tomorrow.

Dan Catchpole:
Welcome everybody, and thanks for joining us.

I'm Dan Catchpole with NewsData's Clearing Up, joined by my
co-host, California Energy Market editor,

Jason Fordney.

And we're here to help inform everybody, get everybody a little
caught up and help make people a little bit more informed

about what's going on in the energy industry in the West.

We're recording this March 14th, so things might have changed by
the time you hear this.

Jason, how are you doing today?

Jason Fordney:
I'm great, Dan. How's it going?

Dan Catchpole:
Pretty good, had a little rough time getting up and getting the
kids out to school today with daylight savings.

I appreciate the, you know, additional sunlight, but those first
few days...

Jason Fordney:
It's crazy how much that one an hour makes a difference, isn't
it?

Dan Catchpole:
It is. And then they want to make it permanent.

You know, so I'm up here in Seattle University of Washington
professor, there was an article in The Seattle Times the other

day you, UW professors says, you know, that making it permanent
actually would be really detrimental to our

health. We need that early sunlight in the winter, in those dark
winter months.

Jason Fordney:
Wow. Yeah.

There's similar efforts in California.

I think so.

Dan Catchpole:
Well, the Sunshine Bill, if the White House is backing would make
it federal, I suppose.

So, we'll see.

Jason Fordney:
Does that mean states like Arizona have to start doing it?

Dan Catchpole:
I, yeah, there's a slow states, which isn't it like Arizona and
Kentucky, maybe.

I don't know. I'll have to look that up.

But in the meantime, we have energy needs to talk about.

Jason Fordney:
All right.

Dan Catchpole:
Although, you know, there's definitely an energy angle, you
know, daylight savings, permanent or not affects

demand. And you know what it means for peak demand loads
anyways.

But on to what's going on now.

So last week, the Washington Legislature passed a huge clean
transportation bill.

They plan to spend nearly $17 billion over 16 years.

They are moving through a whole bunch of stuff they've been
wanting to do in recent years, including strengthening a mandate

that all car sales will have to be electric vehicles by 2030 for
passenger vehicles.

Some of the other investments that are includes $5.4 billion
towards carbon reduction and expanding

multimodal transportation.

$3 billion for public transportation.

Almost $2.5 billion for fish passage barrier removals.

So, it's not just human transportation, but fish transportation,
too.

Jason Fordney:
It's got it all.

Dan Catchpole:
Yeah, exactly.

And then, you know, to help things move around, actually, this
is going to try to do a segue there with batteries, but

I've got some batteries to talk about, but their utility scale
batteries, not car batteries.

So I'm going to bag that segue.

The Pacific Northwest National Laboratory is looking for
partners in research, a private industry partner

for research into vanadium redox flow batteries.

PNNL is confident that it can slash the costs of vanadium redox
flow batteries, which

offer long duration storage and don't have the safety issues
like catching on fire that lithium ion

does. You know, they did a detailed analysis last year about
2020, about cost

projections for a 100 megawatt, 10-hour battery system.

And they found right now vanadium redox flow, batteries are just
a little bit more expensive than lithium ion, and

they are hopeful that they can significantly drop the costs.

Researchers over at the University of Warwick in Great Britain,
they've got an approach for hybrid

vanadium redox flow cells that they think they can in the next
few years slash the cost by 1/10 of what they are

today, which would just I mean, it's mind boggling.

So hopefully, you know, we'll make some big breakthroughs there
because that is obviously long duration storage is critical for

moving to renewable intermittent resources.

And let's see what else we have going on in the northwest.

Federal Court says Montana has to redraw its districts for the
Public Service Commission,

which regulates utilities.

The map that the federal court handed down in the interim until
the state

legislature comes in and draws its own map, it isn't likely to
change the outcome in two

commission races this year, but it could give Democrats a little
boost in one of the races PSCs district

5 in 2024.

The last time a democrat, was elected to the Public Service
Commission in Montana was

2008. So it's been all red for a while.

And then in just a few weeks here, the northwest, the Federal
Columbia

River Power System, is going to start its highest spill program
yet.

So spill programs for listeners who aren't familiar, it's an
agreement over mitigating the hydropower

system to increase survival of salmon and steelhead, endangered
fish species.

And so they're hoping they're going to spill a lot more water
over the dams, hoping that it will help juvenile fish

pass over the dams faster and not run into the turbines and
increase survivability, boost the

struggling salmon and steelhead populations.

The Public Power Council, though, wants several federal agencies
to do some very rigorous studies to actually see what the effects

are, because there are concerns that the more you spill, the
less water you have to go through, you know,

for hydropower generation just in terms of overall amount.

But then also you can hold less water for when you need and when
you want to generate.

So there's some, you know, the can be a trade off.

Hopefully, we can find a happy medium to balance the two.

That's what we've got going on in the northwest.

Jason, how are things down in California?

Jason Fordney:
They're good. A lot happening as usual.

Last week, the California Energy Commission was — Commission on
Gas and Decarbonization and Distributed

Generation after approving the final volume of its 2021
Integrated Energy Policy Report.

This volume approved by the CEC at March 9th meeting focused on
vacation interdependence with the

electric system and issues such as improving analytics and
modeling to support building electrification and aligning rate

structures to reflect the state's clean energy goals.

Boy, that's a mouthful. The CEC on February 16th had adopted
previous sections of this report, including an

aggressive plan to install millions of electric heat pumps in
the state's buildings this decade.

Commission member Andrew McAlister noted that the CEC is
shifting how it refers to different gas based fuels, which is

most obvious in this latest volume of the IEP (inaudible) saying
the (inaudible) has turned natural

from use when referring to natural gas, and now we'll call it
fossil gas.

A more specific term for different fuels.

This change supports "the rigor with which we think", McAllister
said.

So new definition of gas here in California.

Dan Catchpole:
Interesting Is there going to be like a lot of follow on effects
from that, you think or?

Jason Fordney:
The name change?

Dan Catchpole:
Yeah, I mean, it's a long term.

How much does this change the landscape, or is this?

Jason Fordney:
I don't know.

You know, it's something I've heard environmental groups talk
about before that we should stop calling it natural gas.

I mean, it's like everything has a little bit of politics mixed
in it, will probably irritate somebody.

But I don't know how controversial that will be.

Dan Catchpole:
Yeah, I'm just wondering, you know, if it changes perceptions,
maybe long term?

Yeah, hey, we're writers.

Language is important, right?

And it's all things.

Look at clean energy, how much people objected to that from the
fossil fuel industry.

And now that's just become the standard.

Jason Fordney:
True. Yeah, but we'll see.

Yeah, I'll keep an eye on that.

Also, I read up a report from the U.S.

Energy Information Administration.

It's actually a national level report.

Jim DiPeso covered it in "Potomac," in terms of the overall
report, I focused on California.

What the report said that utility scale electric generation
output in California grew slightly last year, compared with 2020,

while the total number of customers that were served dropped and
prices increased.

Total utility scale generation grew by 1.9% in 2021 from the
previous year to 1.97

million megawatt hours.

That includes electric utilities, independent power producers
and utility scale commercial and industrial facilities.

This is the EIA drought pushed hydro-output notably lower over
the full year 2021 in California,

dropping by nearly 32% to 14.5 million megawatt hours.

Interestingly, hydro output in December 2021 was about flat,
with December 2020.

Excluding hydro, utility scale renewables output was up 23% in
December, compared with December 2020.

For the full year, 2021, those resources were up 10.3% to about

million megawatt hours.

Wind generation more than doubled in December 2021 compared with
the month and the previous year to 1.3 million megawatt

hours. Over the full year, wind output grew 15% to 15.6 million
megawatt

hours. Natural gas also rose by 4.8% over the full year.

And nuclear grew by 1.3%.

That's output, obviously, the capacity, nuclear capacity is
flat.

This is all output on megawatt hour basis.

Uh, let's see next.

Hydrogen production for California transportation is heating up
at Arizona.

Southern Arizona's is reliably sunny weather and proximity to
interstate trucking route that connects to Los Angeles.

Area ports appear to be inspiring a green hydrogen production
industry.

This is a report from Abigail Sawyer.

Three companies recently made public their plans to produce
hydrogen fuel in the state for use in transportation.

Two of them via electrolysis powered exclusively by renewable
energy.

Pennsylvania based air products in a March 8th news release said
it would build, own and operate a liquid hydrogen production

facility in Casa Grande on Interstate 10 between Phoenix and
Tucson.

It plans to produce 10 metric tons per day of hydrogen to be
sold for transport in California and elsewhere beginning in

2023.

We're seeing a lot of push with hydrogen, especially, you know,
for

transportation and in California, and it looks like Arizona
wants to take advantage of it.

And a lot of federal money [is] coming in too that states are
looking to compete for.

Dan Catchpole:
Interesting, I'm really curious to see how the large scale issue
of hydrogen fuel plays

out. Clean hydrogen fuel, because there's a lot of industries
that want it, and there's not that much supply, even with

projected ramp up of supply.

It's going to be available in 10, 20, 30 years.

And, you know, like fertilizer can't do fuel switching.

We'll see.

A little I think there's good reason to wonder how much is this
going to be available for

transportation, but it remains to be seen.

So stay tuned, everybody.

Jason Fordney:
Yep, stay tuned. And we need a lot more hydrogen infrastructure
filling stations if we're going to move that

technology forward.

Finally, I had some coverage from our NewsData conference,
Western Electric System Transformation

. A key question in the West is figuring out what changes are
needed in wholesale power markets to integrate large amounts of

renewables while maintaining reliability and affordability for
consumers.

This means scaling and designing a wholesale electricity market
to meet decarbonization goals and an increased

need for operational flexibility.

I focused on a presentation by Arne Olson of Energy and
Environmental Economics, otherwise known as [inaudible].

He was saying that in the absence of a federal clean energy
program, states, utilities and large corporate energy buyers have

embarked on their own clean energy plans.

The result is, "wild variety" of clean energy definitions and
credits, which is

inefficient and won't scale, according to Mr.

Olson. Universal carbon pricing would be the most efficient way
to decarbonize the grid and would allow trading between

states in a universal way, but would require federal action and
probably will not happen any time soon.

Mr. Olson said nationally, renewable energy credits range from
more than $400 in Washington, DC to

about $1 in Texas.

A lot of his report was based on Electric Power Supply
Association research.

Dan Catchpole:
That was, it was an interesting write up and interesting comments
from Olson.

I really encourage listeners to go check out the rest of it,
along with more of our content at NewsData.com,

and you guys can follow us online on Twitter.

We're @CUNewsData and

@CMNewsData. Well, I think that about wraps it up, so

we thank you everybody for tuning in for NewsData's Energy West
Podcasts.

Jason, any thing you want to add or you want to take us out?

Jason Fordney:
That's about it.

Thanks for listening, everybody.

Check us out at NewsData.com.

I'm on Twitter at @FordneyEnergy and have a great week.

Dan Catchpole:
All right. Oh yeah. And you can catch me on Twitter @DCatchpole.

And yeah, have a great week.

Thanks.

Outro:
You've been listening to NewsData's Energy West, a podcast about
the energy industry today and where it's going

tomorrow.