Welcome to Grid Brief! Here’s what we’re looking at today: the US grid faces a new challenge in electric trucking fleets, Oregon dives head first into heat pumps, Japan wants a global natural gas reserve, and more.

Is the Grid Ready for Electric Big Rigs?

The big roll out of electric trucks is already running into a problem: the grid isn’t ready for them.

“As fleets add trucks they may need to draw an additional 6 to 8 megawatts of power or more,” reports the Wall Street Journal.

“That’s about 1,000 homes,” Steve Powell, CEO of Southern California Edison told WSJ. “We may need a new substation or something like that and a line to be built.” Powell estimates that could take four to five years.

The pressure is particularly hard on California. On the one hand, the state has the most aggressive vehicle roll out in the country. On the other, it has perhaps the least prepared grid to handle such ambitions.

Pacific Gas & Electric has told charging firm FreeWire Technologies that one of FreeWire’s customers with a larger fleet would have to forgo charging its vehicles during hot summer afternoons, though it would not be restricted in cooler seasons, according to the WSJ. Powell said that he’s seen EV fleet owners using diesel generators to charge their trucks when the grid can’t provide. PG&E said that capacity upgrades arrive until 2026.

But California isn’t the only region that will struggle. “One or two trucks, everybody’s got. It’s when they try to do their fleets,” Exelon CEO Calvin Butler told the WSJ. Exelon’s footprint stretches into five eastern states including Washington, D.C. and overlaps with the PJM power market. Recently, PJM has warned that its reserve margins are shrinking as coal retires faster than it can be replaced by equally reliable, dispatchable power sources.

Oregon Wants Half a Million Heat Pumps

Oregon is going big on heat pumps.

“House Bill 3409 declares a state goal of installing at least 500,000 new heat pumps by 2030, and directs the state to create programs to support buying and installing this technology,” reports Utility Dive. “It also emphasizes the need to make sure that these programs prioritize environmental justice communities, and people who live in homes that don’t have adequate heating and cooling systems.”

It will be a tall order installing such a large amount of heat pumps. In 2017, only 15% of households in the Northwest had them. A second challenge will be finding the workforce to tackle the installations. To that effect, the legislation features improvements in technical assistance for contractors and the broader workforce.

“Residential and commercial buildings’ energy needs accounted for 34% of Oregon’s greenhouse gas emissions in 2021, according to the state’s Department of Environmental Quality,” reports Utility Dive. “Space and water heating, meanwhile, represent 64% of an average residential building’s energy consumption.”

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Japan to Propose Global Nat Gas Reserve

Japan aims to propose a global natural gas reserve to avoid shortages and price spikes.

“The nation’s government will suggest that the International Energy Agency should create a gas stockpiling framework for member nations, according to people familiar with the details,” reports Bloomberg. “The proposal will be set out during a conference in Tokyo on Tuesday, said one of the people, who asked not to be named as the details are private.”

The Japanese government expects its proposal to be added to the IEA’s February ministerial meeting. The IEA already requires a 90-day net import equivalent reserve for member nations. Japan would like something similar for natural gas as the global LNG market continues to grow.

Conversation Starters

• Shell and Morocco go in on LNG. “Shell will supply Morocco with an annual 0.5 billion cubic meters (Bcm) of LNG under a 12-year deal, the North African country's energy ministry said on Friday. The deal was signed by electricity and water utility ONEE and Shell, a ministry statement said without disclosing financial terms of the transaction,” reports Pipeline & Gas Journal. “The gas will be transported from Spanish ports initially, using a gas pipeline that links the two countries, until Morocco builds its own LNG terminals, the ministry said. The LNG will help ONEE operate two power stations in northern and eastern Morocco that used to operate on Algerian gas sent through the same pipeline.”

• More trials ahead for Texas. “Demand for power in Texas will likely hit more record highs this week as homes and business keep their air conditioners cranked up to escape another heatwave,” reports Reuters. “The Electric Reliability Council of Texas (ERCOT), which operates the grid for more than 26 million customers representing about 90% of the state's power load, has said it has enough resources available to meet soaring demand. Texas residents have worried about extreme weather since a deadly storm in February 2021 left millions without power, water and heat for days as ERCOT struggled to prevent a grid collapse after the closure of an unusually large amount of generation.”

• The Canadian wildfires may jack up US lumber prices. “The Canadian provinces of Alberta in the west and Quebec in the east have been hardest hit thus far, with roughly 3.8 million acres and more than 3.5 million acres burnt, respectively, according to CIFFC data. Together, they represent more than 40% of Canada’s annual softwood lumber shipments,” reports Supply Chain Dive. “That’s a massive hit on Canada’s softwood lumber production, softwood lumber shipments and timber harvest volume, said David Logan, senior economist at the National Association of Home Builders.”

Crom’s Blessing

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