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Renewable PPAs Keep Climbing

The average cost of North American power purchase agreements (PPAs) for renewable energy rose 6.6% in Q1 2023 according to new research from LevelTen reported on by Utility Dive. Solar PPA prices have leapt 8.5%, while wind prices have increased 4.9%.

It’s true that demand for renewable energy continues to outpace supply, but a supply/demand mismatch isn’t the only reason for the two-year trend of rising PPA prices. LevelTen’s Rob Collier, vice president of Energy Marketplace, told Utility Dive that so many factors are creating market uncertainty and supply chain bottlenecks, so it is hard to zero in on the specific causes for the sustained rise.

Could the Inflation Reduction Act ease the pain?

“The IRA’s new tax credit adders may help to relieve some of the pressure on renewable energy prices by providing direct financial relief for qualifying projects — and by potentially increasing the number of renewable energy projects on the market,” reports Utility Dive. “Negotiations for some projects may be delayed while developers wait for additional forthcoming guidance on which adders they will qualify for.”

However, negotiations for renewable energy projects are becoming more balanced and standardized, which could quicken their deployment.

Bangladesh Buys Russian Nuclear in Chinese Yuan

Bangladesh has cut a deal with Russia to use the Chinese yuan to settle payments for a nuclear power plant built by Russia’s nuclear company, Rosatom.

The construction of the two nuclear reactors, worth $12.6 billion, began in 2017 and is expected to be completed by 2025.

“Moscow finances 90% of the construction costs of the two nuclear power plants in Bangladesh through a Russian loan to be repaid within 28 years, with a grace period of up to 10 years,” reports Attaqa. “Russia was sticking to using the ruble to settle its future payments, but Bangladesh stuck to using the Chinese currency, the yuan, according to Bengali government economic relations official Uttam Kumar Karmakar.”

The use of yuan payments may help ease the country's foreign exchange reserves crisis.

Bangladesh hopes that the nuclear power plants will help the country avoid power outages. The plants would meet 9% of the its future electricity needs, which increase by 7% annually.

9th Circuit Swats Berkeley Gas Ban

A US federal appeals court has overturned Berkeley’s natural gas ban for new buildings. It was the nation’s first such ban.

“Berkeley passed the ban, which prevented builders from installing gas infrastructure in most new projects, in 2019. The California Restaurant Association sued the city soon after, claiming that the ordinance was preempted by federal law and would discourage restaurateurs from opening new businesses,” reports E&E News.

The decision from the 9th US Circuit Court of Appeals, which struck down the ordinance, could be met with appeal—a route the court left open. The court’s ruling was premised on the Energy Policy and Conservation Act, which it found to “expressly preempt” such restrictions.

The ruling has been seen as a defeat for green “electrify everything” policy, prompting debate over similar bans across the country.

Berkeley has yet to decide whether or not to appeal the decision. Several other Californian cities have already imposed gas bans.

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Conversation Starters

1. The US is going nuclear in Poland. “A project to develop small nuclear power reactors in Poland is moving forward, with Polish energy company Orlen and two U.S. government financial institutions signing an agreement Monday,” reports ABC News. “In a ceremony at the U.S. ambassador’s residence in Warsaw, the U.S. Export-Import Bank and U.S. International Development Finance Corporation signed letters of interest to lend up to $3 billion and up to $1 billion, respectively, to the Orlen Synthos Green Energy project. It's aims is to develop around 20 small BWRX-300 modular reactors designed by GE Hitachi Nuclear Energy.”

2. The North Sea is back on the menu. “Shell said on Tuesday it had restarted operations at the Pierce field in the UK Central North Sea, following an upgrade to allow gas to be produced at the location after years of it producing only oil. Pierce is a joint venture between Shell, which owns 92.5% of the venture, and Ithaca Energy which owns the rest,” reports Reuters. “Peak production at the field is expected to reach 30,000 barrels of oil equivalent per day, the energy major said in a statement, which is more than twice the production prior to redevelopment, with more gas being produced than oil.”

3. Belgians are retooling offshore wind turbine deployment. “Belgian marine contractor DEME has teamed up with Denmark-headquartered wind turbine lifting and transportation specialist Liftra to develop a new way to install the next generation of offshore wind turbine generators.

   The deal will see Liftra LT1500 crane technology with two cranes working in parallel fully integrated on board DEME’s vessels such as Orion or Green Jade on an exclusive basis,” reports Splash 247. “The solution, suitable for both bottom-fixed and floating turbines, is said to offer the possibility of erecting higher and heavier turbines using existing vessels at a lower cost, while at the same time reducing the environmental footprint on the seabed at the wind farm’s location and in port.”

Nuclear Barbarians

Crom’s Blessing