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Community Choice Aggregators on the Rise as an Alternative Electricity Provider

Community choice aggregators (CCAs) are growing in popularity as an alternative electricity provider for communities that want more local control over their energy mix. And so, financiers, CCAs and other business leaders must assess what this growth means for the electric grid, utility business models and project finance. While there’s a primary focus on California, increasing energy loads being served by CCAs and other non-utility suppliers have been trending across the country.

The recent American Council on Renewable Energy (ACORE) Forum united dealmakers, policymakers and systems experts to confront the business opportunities, policy and regulatory issues, and technology challenges associated with integrating high-penetration renewable electricity on the grid. The goal of ACORE’s 2019 forum was to advance efforts for a modernized grid that values flexibility, reliability and resilience. One important session was Community Choice Aggregation: Impacts on Project Finance and Grid Management, which was moderated by Ed Zaelke of McDermott Will & Emery and included panelists Nick Chaset of East Bay Community Energy, Daniela Shapiro of ENGIE, N.A. and Britta von Oesen of CohnReznick Capital.

A Brief History

The first CCA formed in 2010 in Marin County, CA, and since then, the CCA movement has grown very quickly to 19 agencies (19 of California’s 58 counties). Notably, CCAs serve over 10 million Californians today. Helping local governments accelerate climate action is foundational to CCAs, with many seeing CCAs as a positive catalyst in promoting climate action, cleaner energy and finding ways to make the necessary energy investments to actuate transportation electrification and building electrification.

In a nutshell? They want to offer lower-cost energy that is cleaner and find ways to invest in local communities. (more…)




U.S. Pledges Support for Investments in Sub-Saharan African Power Projects

by Ari Peskoe

Last week President Obama announced a package of programs that aim to increase electricity generation and transmission in Ghana, Kenya, Liberia, Nigeria and Tanzania.  Headlined by $7 billion in U.S. government support and $9 billion in commitments from the private sector to invest in new generation projects, Obama’s initiative aims to “double access to power in Sub-Saharan Africa.” Although details are still forthcoming, the initiative is evidence of the enormous demand in Sub-Saharan Africa for new generation.  New supply supported by the President’s initiative is likely to primarily be large-scale natural gas-fired and hydro generation, and it is not clear how such projects will “double access.”    

Less than a third of people living in Sub-Saharan Africa have access to electricity.  Excluding South Africa, Sub-Saharan Africa has only 28 gigawatts (GW) of generation capacity for a population of approximately 850 million people.  (For context, the Netherlands has 26 GW of capacity for a population of less than 17 million).  With the exception of Nigeria, the five target countries have very low population densities and lower than average urban populations as a percent of the total population.  In other words, dispersed populations either have no electric grid at all or have access to a grid with only meager capacity.

New large-scale generation located near urban centers and industrial zones can be helpful in supplying stressed grids, and such projects are also likely to be the most feasible.  The more daunting task, however, is to provide electricity to dispersed rural populations, 85 percent of whom in Sub-Saharan Africa have no access to electricity.  Obama’s initiative includes $2 million in grants to African-owned and operated enterprises “to develop or expand the use of proven technologies for off-grid electricity benefitting rural and marginal populations.”  The initiative’s private sector commitments also include “installation of 200 decentralized biomass-based mini power plants in Tanzania.”  Such small-scale projects demonstrate that sub-Saharan Africa presents a range of opportunities, but that Obama’s initiative is focused on large-scale projects rather than reaching rural populations with decentralized alternatives.

Of the $9 billion in private sector commitments, just over $1 billion is for wind generation; fuel source for the balance has yet to be specified.  Natural gas and hydro projects, however, are well-positioned to receive the bulk of the support.   According to the most recent statistics (which are a bit out of date and incomplete), the five target countries currently get the majority of their power from natural gas and hydro, and oil is the third most common fuel, providing almost twenty percent of the countries’ electricity.  New investments may include some oil-fired generation, but that fuel is generally more valuable for transportation than power generation.

Coal-fired generation is also unlikely to see major support from Obama’s initiative.  Coal is used for electricity generation only in Tanzania, which is otherwise dominated by hydro and natural gas generation.  Furthermore, in his recent Climate Action Plan, Obama committed to “end to U.S. government support for public financing of new [...]

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Obama’s Climate Plan Provides Timeline to Reduce Carbon Emissions at New and Existing Power Plants

by Bethany K. Hatef

Following up on his Inaugural Address promise to prioritize climate change, President Obama unveiled yesterday a Climate Action Plan (Plan), which includes details about what steps the Administration will take to reduce carbon emissions from power plants.The White House also released a Presidential Memorandum that provides the U.S. Environmental Protection Agency (EPA) with specific deadlines for future rulemakings concerning new and existing power plants but few details on what the eventual requirements for existing facilities will look like.

In the Plan, President Obama aims to reduce carbon emissions nationwide by encouraging the use and development of clean energy, bringing up-to-date the transportation sector, reducing energy waste and cutting emissions of other greenhouse gases, including hydrofluorocarbons.  With regard to power plant emissions, the Plan notes that there are currently no federal standards in place to reduce carbon pollution from power plants.  Although EPA issued proposed standards for new power plants over a year ago, it received more than two million comments and never issued a final rule.  The Plan refers to a Presidential Memorandum (Memorandum), issued yesterday, that directs EPA to develop and finalize carbon emissions limits for both new and existing power plants.

Under the Memorandum’s timeline, a revised proposed rule for new facilities is due September 20, 2013, with a final rulemaking to follow “in a timely fashion.”  With respect to existing power plants, the memorandum notably does not require EPA to issue a formal rulemaking setting standards for carbon emissions from such facilities.  Instead, President Obama directs EPA to use its power under Sections 111(b) and 111(d) of the Clean Air Act to issue “standards, regulations, or guidelines, as appropriate” concerning carbon emissions from “modified, reconstructed, and existing power plants” (emphasis added).  EPA must issue a proposal by June 1, 2014, and the final rule (or guidelines) must be promulgated by June 1, 2015.  State implementation plans will be due to EPA by June 30, 2016.  Regardless of the substance of the rules for new and existing power plants, the Memorandum’s timeline leaves little room for delay before the end of Obama’s Presidency.




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