More utilities bypassing natural gas bridge and going straight to renewables

More utilities bypassing natural gas bridge and going straight to renewables

Utilities that are transitioning away from coal are starting to view the creation of a natural gas “bridge” to renewable energy as an unnecessary step.

July 1, 2020 Jean Haggerty  pv-magazine-usa.com

Utilities that are transitioning away from coal are starting to view the creation of a natural gas “bridge” to renewable energy as an unnecessary step. Last week utilities in Arizona, Colorado and Florida announced plans to close one or more of their coal plants and build renewables without adding any new gas-fired generation.

Separately, staff at the New Mexico Public Regulation Commission recommended a similar gas-free transition when assessing the future capacity needs of the Public Service Company of New Mexico (PNM).

Renewable energy economics have been challenging the competitiveness of coal for a while now, but these latest moves indicate a greater confidence that the switch from coal to renewables can be done cost effectively and reliably without the construction of new gas fired generation as an interim step.

“Up until recently, the easy option for utilities would have been to propose using gas to replace coal. But not any longer. Rising concerns about climate change and continuing reductions in wind, solar and battery storage costs coupled with improved performance have altered the playing field,” Institute for Energy Economics and Financial Analysis (IEEFA) said.

Tucson Electric Power (TEP) and Colorado Springs Utilities (CSU) both outlined their plans to skip the gas bridge as they transition away from coal in their resource plans. Meanwhile, Florida Power & Light (FPL) and Jacksonville’s municipal utility, JEA, entered into an agreement under which they will rely on existing natural gas and new solar generation to retire their jointly-owned facility, Unit 4 at Plant Scherer, the largest coal-fired plant in the US.

According to the IEEFA, to replace JEA’s share of the unit’s output, the two utilities signed a long-term, fixed-price power purchase agreement under which FPL will sell electricity to JEA from one of its exiting gas-fired generation units. Under the agreement, JEA can opt to switch to solar power at the 10-year mark.

TEP’s proposal calls for closing all of its coal-fired generation by 2031 and replacing this capacity with 2,457 MW of new wind and solar generation and 1,400 MW of battery storage. Similarly, CSU’s plan also calls for replacing coal capacity with wind, solar and storage generation. It plans to add 500 MW of new wind generation, 150 MW of new solar and 400 MW of battery capacity. To enable the early retirement of its 208 MW Martin Drake Power Plant in 2023, CSU will be installing temporary natural gas generators at the site “to ensure system reliability.” CSU said that it will remove these generators as its new renewable and storage projects are completed.

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FPL announces plan to build the world's largest solar-powered battery and drive accelerated retirement of fossil fuel generation

- Innovative modernization plan will replace a pair of aging natural gas power generating units with clean and renewable energy, saving FPL customers more than $100 million while eliminating more than 1 million tons of carbon dioxide emissions

- The FPL Manatee Energy Storage Center's battery system is projected to have four times the capacity of the world's largest battery system currently in operation

- Charged by an existing, co-located FPL solar power plant, the planned battery storage center will increase the predictability of solar - extending its benefits even when the sun is not shining

Mar 28, 2019  Excerpt.  Link to full article at the bottom.

JUNO BEACH, Fla., March 28, 2019 /PRNewswire/ -- Florida Power & Light Company, one of the nation's cleanest energy companies, today announced a plan to build the world's largest solar-powered battery system – four times the capacity of the largest battery system in operation – as part of an innovative modernization plan that will accelerate the retirement of two fossil fuel generation units.

The future FPL Manatee Energy Storage Center will have 409 megawatts of capacity – the equivalent of approximately 100 million iPhone batteries – when it begins serving customers in late 2021 and will be charged by an existing FPL solar power plant in Manatee County. By deploying energy from the batteries when there is higher demand for electricity, FPL will offset the need to run other power plants – further reducing emissions and saving customers money through avoided fuel costs.

"This is a monumental milestone in realizing the full benefits of solar power and yet another example of how FPL is working hard to position Florida as the global gold standard for clean energy," said Eric Silagy, president and CEO of FPL. "Even as we aggressively execute on our plan to install 30 million solar panels by 2030, we never lose sight of finding innovative ways to bring our customers the benefits of solar energy, even when the sun's not shining. Replacing a large, aging fossil fuel plant with a mega battery that's adjacent to a large solar plant is another world-first accomplishment and while I'm very pleased of that fact, what I'm most proud of is that our team remained committed to developing this clean energy breakthrough while saving customers money and keeping their bills among the lowest in the nation."

The FPL Manatee Energy Storage Center is part of an innovative modernization plan to accelerate the retirement of two, 1970s-era natural gas generating units at FPL's neighboring power plant, and replace them with clean and renewable energy. In addition to the energy storage system in Manatee County, FPL is planning smaller battery installations across the state, numerous solar power plants and efficiency upgrades to existing combustion turbines at other power plants to replace the 1,638 megawatts of generating capacity. The project will save customers more than $100 million and eliminate more than 1 million tons of carbon dioxide emissions.

"FPL is pioneering a clean energy revolution for our state that's come full circle for our community," said Stephen Jonsson, chairman of the board of County Commissioners in Manatee County. "It seems like just yesterday that FPL kicked off its massive solar expansion in 2016 by opening a solar power plant in Parrish. Fast forward a few years, and our hometown solar power plant is on the verge of powering the world's largest solar-powered battery system. This modernization plan is truly an incredible feat and consistent with our commitment as leaders to keep sustainability at the forefront of every project that takes place in Manatee County. It's why we continue to stand shoulder-to-shoulder with FPL to help do our part to shape Florida's clean energy future."

http://newsroom.fpl.com/2019-03-28-FPL-announces-plan-to-build-the-...

Everyone needs to read the full article.  409MW is the energy draw, not the capacity. The capacity is 900MW Hours.  If you draw power at 409MW the batteries will last a little over 2 hours. 

FPL is is 15% more expensive than my co-op in Texas (10 cents vs 8.5 cents/kwh).

And more than my SWEPCO service.  That's not the proper comparison.  What is the comparable cost in the area of FL to be served?

The article above is sourced from a link in this article from gtm:  A Wood Mackenzie Business.

NextEra Looks to Add Batteries to Its Existing Solar Fleet

More hybrid renewable energy plants are on the way for North America’s reigning renewables powerhouse, CEO Jim Robo says.

Karl-Erik Stromsta January 24, 2020

NextEra added 2.7 gigawatts of new renewables to its fleet in 2019.

NextEra Energy, North America’s leading wind and solar generator, is combing through its base of existing solar facilities with an eye to retroactively adding batteries, as it adopts a more “aggressive” view on the falling cost of energy storage.

“We increasingly see storage as an important standalone business in its own right,” CEO Jim Robo said Friday on an earnings call. The company is reviewing “a number of opportunities to add storage to our existing solar sites to take advantage of the [Investment Tax Credit] and enhance the value of our existing projects for customers.”

NextEra has already set a precedent for this approach: In 2018 it added a 10-megawatt battery facility to its existing Babcock Ranch solar farm in Florida. Last March things got much more interesting when its Florida Power & Light unit announced plans to build a 409-megawatt/900-megawatt-hour battery project known as the Manatee Energy Storage Center, to be charged by an existing solar facility.

In Robo’s telling, more such deals may soon be on the way.

A small but growing number of other utilities, including Arizona Public Service, are taking a similar approach to adding storage at existing solar plants. In doing so, they can claim the ITC, tap additional revenue streams and maximize the existing grid infrastructure.

The ITC used by the solar industry also applies to grid-scale storage facilities that derive most of their charging from solar generation. The industry failed to get a standalone energy storage ITC passed in 2019 but will continue to push for one.

The U.S. added about 430 megawatts of storage capacity last year, a figure which should more than triple in 2020, according to Wood Mackenzie. In hindsight, 2019 looks like an inflection point for the way utilities view batteries as part of their long-term planning processes, new WoodMac research shows.

"Near-firm" renewable power

NextEra’s success in the renewables market played a large role in it becoming America’s most valuable investor-owned utility, its $128 billion market capitalization now nearly double that of major peers like Duke Energy.

NextEra built 2.7 gigawatts of renewables in 2019, mostly through its unregulated Energy Resources arm — with more than 40 percent of that capacity coming from repowering existing wind farms.

These days NextEra spends a lot of time talking about energy storage and what Robo calls “the next phase of renewables development,” with batteries allowing for the supply of “near-firm” renewable power.

NextEra has previously signaled its plan to build as much as 1,250 megawatts of storage capacity in 2021-2022, most of it linked to solar. Beyond its growing stable of solar-plus-storage facilities, the company is now working on more than 2 gigawatts of “trifecta” projects, combining wind, solar and batteries, Robo said.

Among those three-way hybrids is the Skeleton Creek project in Oklahoma announced last year, which will combine a 250-megawatt wind farm, a 250-megawatt solar array and 200 megawatts of battery storage. The wind farm is due for completion this year, with the solar and battery facilities to come later. Skeleton Creek’s power will be sold to Western Farmers Electric Cooperative.

The one-year extension of the federal wind Production Tax Credit that unexpectedly passed in late 2019 will support “incremental wind demand” in 2023-2024, Robo said. But NextEra has long insisted that the American renewables market will be fine without subsidies.

On the call, Robo repeated his claim that without any incentives, by the mid-2020s, “near-firm wind” will be a $20-$30 per megawatt-hour product, and “near-firm solar” will be a $30-$40 per megawatt-hour product.

In-house battery expertise

NextEra is getting a better handle on the downward price curve for batteries, CFO Rebecca Kujawa said on Friday’s call.

“Whereas two years ago we were surprised at how much faster costs were coming down, we’ve gotten more aggressive with our assumptions.”

Rather than relying on system integrators like Fluence, NextEra wants to piece together its own energy storage systems, she said. Beyond component procurement, it's focusing on what Kujawa calls the “secret sauce” of the market: “We’re designing our own management systems."

“There’s not one [revenue] stream that creates value for batteries; it’s usually a couple of different applications within the same system," she said.

“We’ve invested a lot of time and energy thinking that through, not only on Energy Resources’ deployments, but also for the deployments at [Florida Power & Light] — we’ve learned a tremendous amount.”

Stymied M&A

NextEra posted an 8.7 percent increase in its adjusted earnings per share in 2019, on strong performances from both Florida Power & Light and Energy Resources. The company has benefited from Florida's strong economic and population growth.

Among its recent wins, FPL in December secured a 20-year extension for two nuclear reactors at the Turkey Point plant along Florida’s coast, bringing their potential lifespan to an unprecedented 80 years — or out to the early 2050s. Opponents say that over that timeframe, Turkey Point faces a real threat from climate change and rising sea levels.

NextEra hasn’t been without its recent disappointments. Along with a number of other suitors, NextEra expressed interest in buying JEA, Jacksonville's municipal utility. But in late 2019, JEA pulled away from a potential deal.

"We're disappointed that the sale process has been terminated," Robo said. "We think we could have brought enormous value to the customers and the interests of the citizens of Jacksonville," which is Florida's most populous city.

"I don't think there's a utility in the country that wouldn't benefit from the application of our playbook," Robo added.

https://www.greentechmedia.com/articles/read/nextera-combing-throug...

Again the authors of these articles do not understand power.  The fourth paragraph is correct (409MW - 900MWH) but the rest of the article specifies on MW which is power draw.  In order to evaluate the project MWH (power stored) needs to be included.  Kind of like buying a battery based on cold cranking amps (power draw) but not looking at amp-hour capacity (how long can you crank it).

I'll try to remember to post on the facility again when it is operational and we can revisit your battery calculations.  There is no mention of the projected economic life of the facility but I feel sure that it is longer than the life of the batteries.  One of the advantages of batteries is they are modular - are designed to be easily replaced.  With the arc of battery technology advancement, the battery efficiency and cost has likely been reduced from the date of the first article to the second.  I think NextEra/Florida Power & Light have done their homework and know better than you and I the capacity and economics of the plant.  As much as NextEra/FPL like to boast of their renewable projects, they continue to invest in natural gas.  They leased the minerals and funded the initial wells that Comstock drilled in north Caddo pre-Jerry.  They simply brought in another operating company as partner and have drilled seven additional.  Now they are drilling in Harrison County.

Florida Public Service Commission unanimously approves FPL’s plan to lower bills for the second time this year amid COVID-19 pandemic
- Lower fuel costs are enabling FPL to issue a one-time decrease of nearly 25% for the typical residential customer bill, beginning May 1
- FPL will issue the savings through a one-time bill decrease in order to accelerate savings to customers amid the ongoing COVID-19 pandemic, rather than the standard practice of spreading out savings over the remainder of the year
- FPL previously lowered customer bills approximately 4% in January; bills remain among the lowest in Florida and the nation

JUNO BEACH, Fla. – The Florida Public Service Commission (PSC) today unanimously approved Florida Power & Light Company’s plan to significantly lower bills for the second time this year and fast-track savings to customers amid the ongoing coronavirus (COVID-19) pandemic. Due to lower fuel costs, most customers will see a one-time decrease of nearly 25% on their May bill.

In Florida, FPL and other electric providers traditionally refund any fuel savings to customers over many months. However, given the abrupt financial challenges facing many customers due to COVID-19, FPL will instead give customers the total annual savings in a single month’s bill. For FPL’s Budget Billing customers, the savings from this reduction will be averaged out on the customers’ actual bills for the next 12 months. Business customers will also see a significant one-time decrease in May, that will vary by rate class.

The PSC approved FPL’s plan during a special agenda conference in order to expedite customer savings.

FPL’s typical monthly residential customer bill is already among the lowest in the state and nation and decreased nearly 4% in January, primarily due to lower fuel costs as a result of low natural gas prices. FPL has also invested in new, ultra-efficient natural gas power plants, large- scale solar energy facilities and a variety of cutting-edge technologies – all of which helped FPL reduce the amount of fuel it needs to provide electricity. Just like driving a new car instead of one built in the 1970s, FPL’s smart investments in modern technology have helped the company reduce operating and fuel expenses, which is why FPL is now the most cost-efficient electric utility in the United States and one of the nation’s most fuel-efficient and cleanest energy providers.

In addition, FPL’s free tools like the mobile app, personalized energy dashboard and Energy Analyzer are available to help customers manage their energy usage as hot weather and more people at home drive up bills.

Florida Power & Light Company
Florida Power & Light Company is the largest energy company in the United States as measured by retail electricity produced and sold, serving more than 5 million customer accounts or an estimated 10 million+ people across the state of Florida. FPL’s typical 1,000-kWh residential customer bill is approximately 30% lower than the latest national average and among the lowest in the U.S. FPL’s service reliability is better than 99.98%, and its highly fuel-efficient power plant fleet is one of the cleanest among all electric companies nationwide. The company was recognized in 2019 as one of the most trusted U.S. electric utilities by Escalent for the sixth consecutive year. A leading Florida employer with approximately 8,900 employees, FPL is a subsidiary of Juno Beach, Florida-based NextEra Energy, Inc. (NYSE: NEE), a clean energy company widely recognized for its efforts in sustainability, ethics and diversity, and has been ranked No. 1 in the electric and gas utilities industry in Fortune’s 2020 list of “World’s Most Admired Companies.” NextEra Energy is also the parent company of Gulf Power Company, which serves more than 470,000 customers in eight counties throughout northwest Florida, and NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun and a world leader in battery storage. For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.GulfPower.com, www.NextEraEnergyResources.com.

Skip I think you misunderstood the direction of my post.  I have no issues with batteries.  In their current development state they can provide peaking power quicker and probably cheaper that quick start turbines.  It also gives them something to do with the old batteries from the electric cars.  In several of the mills I worked in we did something similar.  We monitored power usage and cut power to parts of the plant in order to minimize monthly peaks (one of the items our power cost was based on).  Dow chemical in Freeport used to (and may still do) shut down some of its chlorine lines for a few hours when they could make more money selling power than chlorine.

My issue is with the person that writes the articles.  It is evident that they do not understand the difference between a watt - unit of power and a watt-hour - a unit of energy.  It is impossible for the reader to evaluate the project without both.  For example when I purchased a UPS for my computer systems I had to evaluate both the power requirement (number of watts) and the length of time I wanted it to run before the batteries died (watt- hours).  I actually purchased a UPS with a higher power capability (watts) in order to get the battery run time I wanted (watt-hours).

Thanks for the explanation.  I also have semi-regular qualms concerning some energy/renewable energy reporters.  When you have a reporter without sufficient grounding in the science, they can misconstrue or willfully mislead based on a preconceived view point.

I have depended on the fact that NextEra is a leader in their field and a successful/profitable proponent of adding renewable energy sources to an existing mix of electric generating capacity. FLP has been an investor in natural gas reserves for three or more decades. Therefore I expect that NextEra is well positioned to judge which is the better investment (in this particular case) - natural gas or renewable energy, in this case solar + storage.

Since my business is based upon natural gas and my clients are benefited by a scenario where natural gas is an energy player long term, I am a frequent critic of missed opportunities and ingrained prejudices within the O&G industry that have served to make natural gas vulnerable to the rise of renewables instead of a complimentary piece of the energy mix.

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