Welcome to Grid Brief! Here’s what we’re looking at today: in 2021, US energy spending leapt by a quarter, the EPA’s new smog rule struggles to get off the ground, a long duration storage company goes belly up, and more.

US Energy Spending Jumped 25% in 2021

U.S. consumers racked up a staggering $1.3 trillion in energy expenditures in 2021, marking a 25% surge from the previous year. The rebound in petroleum consumption after the COVID-19 pandemic slump and higher energy prices fueled this energy splurge.

“Inflation-adjusted per capita U.S. energy expenditures increased by 25% in 2021 from 2020 to $3,967 per capita, on par with 2019 per capita expenditures,” reports the Energy Information Administration. “Inflation-adjusted per capita expenditures increased in every state in 2021. Per capita expenditures in Connecticut rose the least (13%), and they rose the most in Louisiana (43%).”

But the EIA reports that 2021 was the third lowest year for energy expenditures in its data, which reaches back to 1970. In 2021, US energy expenditures made for 5.6% of GDP, just under a 1% increase from 2020’s 4.8%.

EPA Smog Rule Kicks In—Kind Of

The Environmental Protecting Agency’s “good neighbor” framework has gotten off to a limping start.

The agency’s latest "good neighbor" framework implementation has been frozen for 10 out of the 23 states initially expected to cut smog-forming emissions.

“The agency is so far facing more than 60 lawsuits scattered among eight federal appellate courts, according to an official tally and other records,” reports E&E News. “The challengers include power companies, industry trade groups and Republican state officeholders; fueling the litigation in part is a little-noticed EPA move earlier this year that gave litigants a foothold for bringing cases elsewhere than the U.S. Court of Appeals for the District of Columbia Circuit, the usual venue for contesting nationwide Clean Air Act regulations.”

The "good neighbor" rules are part of a suite of regulations dating back to the late 1990s which target air pollution that moves across state borders. The EPA imposes federal measures when states fail to control emissions from industries that contribute to smog in neighboring states. The current plan aims to bring heavily populated areas like Dallas and New York City into compliance with the EPA's ozone standards.

The EPA’s crackdown on smog emissions is vital to the Biden administration's strategy to move away from coal power, which could also lead to the retirement of 13% of the nation's coal-fired generating capacity by 2030. Losing those power plants would likely exacerbate the reliability crisis the Federal Energy Regulatory Commission, the North American Electric Reliability Corp., and several grid operators have been warning about. Earlier this year, all four FERC commissioners told the Senate that the U.S. needs to retain much of its coal fleet to bolster reliability.

Though the court-ordered stays on implementation are stymying the plan in some states, the EPA expects the requirement to take hold as scheduled elsewhere. The fate of the federal plan's validity will likely rest with the D.C. Circuit court, but it may take time to sort out the complex legal challenges.

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Long Duration Storage Start Up Goes Bust

Azelio, a Swedish company trying to take on energy storage, filed for bankruptcy last month—another sign that Long Duration Energy Storage is more dream than reality.

LDES is supposed to resolve the core problem of wind and solar’s intermittency by providing robust storage that will charge when renewables “over-produce” and discharge when they flatline. Grid coordination issues and the conflation of storage and generation aside, LDES is the energy transition’s white whale.

“Azelio claimed its storage system could provide power for 13 hours, far more than the four hours delivered by the lithium-ion battery technology that’s dominant today,” reports Canary Media. “Azelio’s thermal energy storage technology aspired to store energy as heat in an aluminum alloy material, which would then be converted to electricity using a Stirling engine, a known bankruptcy-inducing technology. Azelio intended to use heliostat-based concentrated solar power, another failure magnet for startups, as part of its technology suite.”

According to a press release from Azelio, the company failed to secure crucial financing it needed to finalize negotiations with a potential strategic partner.

Conversation Starters

• Protestors oppose Petrobras drilling in the Amazon. “Environmental demonstrators protested on Sunday against plans by Brazilian state-run oil company Petrobras to drill for oil at the mouth of the Amazon river,” reports Reuters. “‘Oil-free Amazon,’ said a banner held by the group of 50 protesters outside a convention center where heads of state of Amazon nations will meet this week to discuss joining efforts to protect the rainforest. Petrobras has rights to explore a block 175 kilometers from Brazil's northeastern coast in a deepwater area, south of where Suriname is exploring for oil and where foreign companies have discovered 11 billion barrels of recoverable oil in Guyana.”

• Global food prices: 📈. “Global food prices rose for the first time in three months, as trade disruptions from India to the Black Sea and extreme weather stoke supply concerns anew,” reports Bloomberg. “The United Nations’ index of food-commodity prices gained 1.3% in July, led by vegetable oil, according to a Friday report. That marks a pickup from the two-year low reached the prior month as fresh threats emerge in the supply chain. Last month, Russia exited the Black Sea grain deal that helped usher millions of tons of Ukrainian crops abroad. On top of that, top rice exporter India banned some shipments of the staple, and extreme weather is curbing harvests in places like China and southern Europe.”

• Poland hopes to fix a Russian pipeline by Tuesday. “Polish pipeline operator PERN said it had halted pumping through a section of the Druzhba pipeline, which connects Russia to Europe, after detecting a leak in central Poland on Saturday, but it expects flows to resume on Tuesday,” reports Reuters. “PERN said there was no indication a third party had caused the leak, which follows a series of attacks on pipelines carrying Russian oil and gas since Moscow launched its invasion of Ukraine in 2022.”

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