Five Takeaways: Early Moves and Current Trends in Energy Storage

McDermott continues its dialogue with renewable industry leaders to provide the latest market updates on the disruption, challenges and opportunities COVID-19 presents to the industry. This week, we focused on the energy storage market and hosted Chris McKissack, CEO at GlidePath Power Solutions. Glidepath was an early mover in energy storage. GlidePath is now one of the largest energy storage developers and independent power producers in the US, with over 100MW of commercially operating battery projects, 445 MW of battery storage and renewable energy projects, and 2.1 GW of greenfield development pipeline of battery storage projects across the US. We had an engaging discussion spanning the benefits of being an early mover in the storage space, the current state of the dynamic energy storage market, and successful strategies you can use to approach the opportunities and challenges stemming from COVID-19. 1. Batteries Can Now Serve as “Shock Absorbers” for the...

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IRS Extends Deadline for ITC and PTC Projects

The IRS yesterday released anticipated guidance extending the placed-in-service deadline for the Investment Tax Credit (ITC) and Production Tax Credit (PTC). Under Notice 2020-41, the “Continuity Safe Harbor” was extended to five years for any project that otherwise began construction in 2016 or 2017. As background, the applicable credit rate for the ITC and PTC turns on when a project begins construction. The IRS has issued a series of Notices providing guidance on when a project begins construction for these purposes. Under the guidance, taxpayers can either satisfy the “Five Percent Safe Harbor” or “Physical Work Test”. In addition to requiring certain activities in the year construction begins, both methods include a second prong, requiring certain continuous work until the project is placed in service. The IRS has previously provided the Continuity Safe Harbor, under which a project will be treated as having met the second prong so long as it is placed...

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Five Takeaways: Navigating President Trump’s Executive Order on US Bulk Power System Electric Equipment

President Trump’s May 1, 2020 Executive Order prohibiting certain transactions involving bulk-power system electric equipment developed, manufactured or supplied by a foreign adversary could have far-reaching implications for both the renewable and conventional power industries. It has also raised a high level of uncertainty and risk while the industry awaits the actual implementation of the Executive Order. This interim period, as well as the breadth of the Executive Order, raises key questions and concerns for sponsors and developers of energy projects, construction contractors and energy project investors. Read our latest On the Subject for more in-depth information. Yesterday, after the Department of Energy's stakeholder call, we hosted a webinar that addressed important considerations as to how the Executive Order may impact your business. In particular, our hosts provided a step-by-step framework on navigating the Executive Order based on their prior US...

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Five Takeaways: An In-Depth Look at the Federal Legislative Game Plan to Support Renewables

On Thursday May 14, McDermott was joined by Gregory Wetstone, president and chief executive officer of the American Council on Renewable Energy (ACORE) to discuss the latest market updates on the severe disruption and uncertainty brought on the renewables industry by COVID-19. Five takeaways from this week’s webinar: 1. There is no clear insight yet into what a congressional relief package regarding renewable energy might look like, despite the fact that congress is discussing its fifth COVID-19-related response bill. 2. Even though the outlook was already pessimistic, clean energy job loss has been worse than expected; there has been a loss of 94,000 jobs in the renewable sector between March and April and 600,000 additional unemployment claims across the clean energy sector. 3. Renewables have a great potential to continue to be part of the nation’s economic recovery; two of the fastest growing job categories in the nation have been wind turbine technicians...

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Six Takeaways: Shifting Market Dynamics in Corporate PPAs

On Thursday, May 7, McDermott Partners Ed Zaelke and Carl Fleming were joined by Christen Blum, head of the Renewable & Analytics Advisory practices at Edison Energy, to hear her thoughts on the current effects of COVID-19 on the corporate power purchase agreement (PPA) market. Below are six takeaways from this week’s webinar: 1. Despite COVID-19, there is still a strong appetite for corporate renewable procurement: market leaders (such as tech, pharma, and food and beverage companies) have been less impacted by COVID-19 and remain interested in renewable procurement. On the other hand, companies that have been hit the hardest by COVID-19 (such as services and hospitality businesses) have traditionally demonstrated limited interest in renewables; but industrial companies have seen the largest effect of COVID-19—they remain interested in renewables, but are delaying their procurement as they focus on their core business. 2. Although the trend for...

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President Trump’s Executive Order on US Bulk Power System Electric Equipment: Questions and Analysis

President Trump’s May 1, 2020, Executive Order prohibiting certain transactions involving bulk-power system electric equipment developed, manufactured or supplied by a foreign adversary could have far-reaching implications for both the renewable and conventional power industries. The breadth of the Executive Order raises key questions and concerns for sponsors and developers of energy projects, construction contractors and energy project investors. Access the full article.

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Six Takeaways: How Utilities and IPPs Are Responding to COVID-19

On Thursday, April 30, McDermott was joined by Brett Kerr, vice president of external affairs at Calpine, Drew Murphy, senior vice president of strategy and corporate development at Edison International, and Andrew Campbell, director of regulatory support and planning at NiSource who shared their perspectives on how investor-owned utilities and independent power producers are managing the COVID-19 crisis. Below are six takeaways from this week’s webinar: 1. As businesses go back to work, it is essential that they carefully plan for a new normal, including consideration of travel restrictions, acquisition of personal protective equipment, maintaining social distancing of employees and contractors, and compliance with new rules and regulations. 2. Utilities have been and will continue to optimize their maintenance schedules to balance safety and reliability concerns considering the essential nature of electricity and risks potentially associated with deferred...

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COVID-19 and Wind Projects: A Legal and Commercial Checklist for Tax Equity, Debt Financing and Project Documentation

The Coronavirus (COVID-19) pandemic has severely disrupted the wind market’s supply chain and labor resources, resulting in significant project delay risk. This legal and commercial checklist is a comprehensive practitioner’s guide to help sponsors and borrowers review their tax equity, financing, offtake and material project documents to ensure compliance with obligations, prevent unnecessary default triggers, and manage relationships with banks, tax equity and other stakeholders. Access the full article.

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What COVID-19 Means For Renewable Projects And Financing

The world is facing a situation unprecedented in modern times with the global spread and impact of COVID-19. Its rapid spread has brought severe disruption and uncertainty to everyone’s personal lives, as well as to the wind, solar and storage industry supply chains, the renewable project financing market, and global markets at large. While the speed and complexity of the virus make it impossible to know the full effects it will ultimately have on the world, what follows is what we know today about the impact of COVID-19 on the supply chains for solar, energy storage and wind developers, as well as the project finance market. Access the full article.

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Community Solar Meets Requirements of California Solar Mandate

The California Energy Commission (CEC) has approved the first community solar program as a means of complying with California’s solar mandate. Specifically, on February 20, 2020, following a three-hour hearing with many speakers on both sides of the issue, the CEC unanimously approved the Sacramento Municipal Utility District’s (SMUD) proposal to allow homebuilders to use a community solar alternative to the California solar mandate, which went into effect on January 1, 2020. SMUD’s community solar plan is called Neighborhood SolarShares. While the intention of the California solar mandate may have been to implement solar on every roof, the 2019 Building Efficiency Standards allowed for certain exceptions to these requirements. One such exception allowed for builders to build community solar projects, so long as these projects received approval from each of the CEC and the local utility. The 2019 standards provided the following six requirements for...

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