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Welcome to Grid Brief! Here’s what we’re looking at today: Mountain Valley Pipeline gets added to America’s debt deal, the Wall Street Journal’s editorial board warns of potential blackouts this summer, the Southwest Power Pool grows and troubles California’s access to resources, and more.

A Most Valuable Pipeline

Senator Joe Manchin tucked into the debt-limit deal a piece of legislation which aids the completion of the Mountain Valley Pipeline.

Manchin has been trying for years to help MVP finally finish construction. The 303 mile pipeline is years overdue and would provide Appalachia with vital takeaway capacity. MVP’s developers say that they are 94% finished with the pipeline, which has recently been granted permission to cross Jefferson National Park.

“The language in the debt bill would force agencies to take all necessary actions to permit the construction of the pipeline and would give the DC Circuit jurisdiction over future litigation involving the project,” reports Bloomberg. “For years, its approvals have been challenged in the Fourth Circuit Court of Appeals.”

“Last summer, I introduced legislation to complete the Mountain Valley Pipeline. I am pleased Speaker McCarthy and his leadership team see the tremendous value in completing the MVP to increase domestic energy production and drive down costs across America and especially in West Virginia,” Manchin said in a statement.

The debt deal keeps the environmental regulations that the Republicans wanted to ditch.

WSJ: A Summer of Blackouts?

The Wall Street Journal’s Editorial Board published an opinion piece on the North American Electric Reliability Corp.’s recent seasonal reliability assessment. NERC’s report, which Grid Brief covered, warns that two-thirds of the US is at an elevated risk of capacity shortfalls if we experience extreme weather this summer.

But the WSJ provided insight into how the EPA’s recent “good neighbor” emissions rule will jeopardize the grid. This new rule demands that coal plants in 22 states slash their NOx emissions. “NERC predicts power plants will comply by limiting hours of operation but warns they may need regulatory waivers in the event of a power crunch,” writes the WSJ. “The EPA claimed the rule wouldn’t jeopardize grid reliability, but then why would power plants need waivers to prevent blackouts?”

Another problem both NERC and the WSJ bring up is the difficulty solar integration poses for the grid. Solar plants rely on inverters to flip their power from DC to AC, allowing it to be transmitted over greater distances to where output is needed. A study from the National Renewable Energy Lab confirms NERC’s worries that inverter issues can cause substantial grid disruptions—a problem NERC warns will grow along with the share of solar power on the grid.

The WSJ points out that inverter problems and a lack of available coal from its eastern neighbors might leave California in the lurch if it gets too hot this summer. These threats may be here to stay, as developments in the western power market (covered below) may starve the Golden State of importable capacity in other ways.

California isn’t alone, of course; New York has pursued its own path of imprudence. “A new state regulation will force 627 megawatts of gas and oil ‘peaker’ plants—which can rapidly ramp up to provide power in a pinch—to shut down this year. That’s enough to power 470,000 homes,” writes the WSJ. “This year’s state budget requires the New York Power Authority to retire all peaker plants by 2030. New York plans to compensate by building more offshore wind farms, but they face permitting challenges and don’t provide reliable power.”

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SPP Grows Footprint, Worries California

The Southwest Power Pool (SPP), an organization that operates across 17 states, plans to push its footprint westward. But this move has some Californian energy experts spooked—if the SPP swallows up some of California’s neighbors, it may deprive the state of renewable energy resources and the power imports it has come to rely on.

Currently, California participates in the California Independent System Operator's (CAISO) real-time wholesale energy trading market, known as the Western Energy Imbalance Market (WEIM). CAISO is also setting up a voluntary extended day-ahead market (EDAM). “In addition to its Markets+ initiative, SPP is looking into expanding as a full RTO in the region and in mid-2021, its board of directors and strategic planning committee approved a framework of terms and conditions for this RTO West effort,” reports Utility Dive.

Importing energy has been an important part of California's electricity supply, especially when demand spikes. The state relies on imports for about 18% to 20% of its power supply during the summer. California can’t afford to lose its neighbors.

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• What Europe doesn’t want, Asia will buy. “Coal cargoes unwanted in Europe are heading to Asia, where utilities are stockpiling the fuel amid sweltering temperatures heading into the summer,” reports Bloomberg. “Shipments of about 7 million tons of Colombian coal will be exported to Asian countries in the next quarter, instead of ports in Europe, according to James Marshall, chief executive officer of Berge Bulk Ltd., whose fleet of ships ply those routes. Destinations for fuel used by power plants and steelmakers include China and India, he said.”

• Qatar and Bangladesh have cut an LNG deal. “QatarEnergy will sign a long-term liquefied natural gas (LNG) supply deal with Bangladesh's state-owned gas company Petrobangla on Thursday, the second Asian sales deal to be sealed for Qatar's North Field expansion project,” reports Reuters. “The agreement will be one of many to come this year as state-owned QatarEnergy secures sales for its mega expansion of North Field, a source with direct knowledge of the new contract agreement, who did not wish to be identified, said. Qatar is the world's top LNG exporter and competition for LNG has ramped up since the start of the Ukraine war, with Europe in particular needing vast amounts to help replace Russian pipeline gas that used to make up almost 40% of the continent's imports.”

• The lithium market looks tight through 2024. “The world's second-largest supplier of lithium, Chile, said it sees the battery metal remaining in tight supply this year and next, before switching to surplus in 2025,” reports Oilprice.com. “Chile's government agency Cochilco said in a Tuesday presentation that demand for lithium was set to grow at more than 16% per year on average over the next 12 years as the world shifts from ICE engines to electric vehicles. While this robust demand has led to price spikes over the last couple of years, which in turn led to increased supply activity, it will be a couple more years before that supply can come online, according to Cochiclo. The market will swing into a surplus from 2025 to 2029, the presentation showed. By 2030, supply deficits will return to the market.”

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