Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Climate

A Power Crunch Looms for PJM

On capacity markets, hydrogen, and Hungarian camels.

A Power Crunch Looms for PJM
Heatmap Illustration/Getty Images

Current conditions: July was China’s hottest month since official record-keeping began in 1961 • Chile also experienced a month for the books as its capital, Santiago, had its first rainless July since records began in the 1950s • One death has been reported as multiple fires blaze in central and northern Colorado.

THE TOP FIVE

1. Sky-high PJM capacity prices highlight a halting energy transition

Recent retirements of coal- and gas-fired plants have left a gap in the generating fleet for PJM — the country’s largest regional transmission organization, spanning 13 states and Washington, D.C. — that wind and solar plants (many stuck in permitting and interconnection delays) have yet to fill. Add to that a projected 2% increase in peak demand, analysts say, and you’ve got a recipe for high prices.

To that end, PJM will offer record-high payments to power plant operators for the capacity they agree to maintain next delivery year. Producers across the region can expect to earn $269.92 per megawatt if they commit to being available during predetermined times, with prices in certain locations reaching as high as $466.35 per megawatt-day. Grid operators hope this will encourage the construction of new generating assets.

PJM’s quagmire is also a warning to other transmission organizations and independent system operators navigating a clean energy transition in the face of rising electricity demand. The bottom line? “PJM didn’t prepare for an energy transition we all saw coming,” said Jon Gordon, the director of clean energy trade group Advanced Energy United.

2. Home efficiency rebates roll out in Wisconsin

Starting today, Badger State residents can officially take advantage of federal rebates to make their homes less dependent on fossil fuels. Wisconsin is the second state after New York to launch a program to fund home energy improvements with money from the Inflation Reduction Act. To participate, residents will first have to get an energy audit by an approved contractor, who will then model potential energy savings from different courses of action, like new insulation, windows, doors, or even a new heating and cooling system. Depending on their income level and how much energy they save from the project, Wisconsinites will be eligible for up to $10,000 in rebates. But the program may see a slow start — there are currently only 13 approved contractors in the entire state.

The IRA’s home energy rebates programs are among those that are likely to be targeted first by a potential Trump administration. To date, the Department of Energy has provided funding to launch rebate programs in just approved applications from 10 of the 22 states that have applied.

3. Hydrogen has a long way to go, according to a new report

“Hydrogen-ready” has become a popular moniker for utilities and developers constructing new natural gas plants in an era of climate concern. A new report by the Institute for Energy Economics and Financial Analysis suggests that the term — meant to convey the infrastructure’s capability to transition to carbon-free hydrogen when the fuel becomes more available — may be little more than hot air. It identifies three major barriers: a lack of hydrogen supply, a lack of hydrogen-capable pipelines, and a lack of storage capacity. The authors highlight Duke Energy’s plan to build a “hydrogen-ready” gas turbine at an existing coal plant in Roxboro, North Carolina — a plan that wouldn’t introduce hydrogen into the pipeline until 2035, and even then would start with a mix of just 1% hydrogen to 99% methane.

Claims of hydrogen readiness, the report concludes, are “little more than marketing designed to obscure the myriad shortcomings and unanswered questions associated with using hydrogen in methane-fired turbines.”

4. A new financing tool aims to accelerate coal retirements

On the back of a record year for coal consumption driven by demand in Asia, climate advocates are searching for new ways to hasten the decline of the carbon-intensive fuel. One problem that has long bedeviled effort: Shutting down a coal plant prematurely means forfeiting years of profit. This amounts to a premium of $310 million for a five-year premature retirement, according to one estimate.

A group of financial institutions led by the Monetary Authority of Singapore is exploring a new financial tool to get around that barrier. The idea is to allow people and companies to purchase “transition credits” like they purchase carbon offsets. The money from these purchases would reimburse coal plant operators for the money they stand to lose by shutting down their plants. Some big banks see transition credits as a growth market. “We would also like to see how these can be traded, as creating a liquid secondary market should help support the primary markets too,” Patrick Lee, Standard Chartered’s chief executive officer for Singapore and ASEAN, told Bloomberg.

5. A booming business for undersea cables

Offshore wind is driving a surge in demand for undersea cables, with backlogs reaching up to 12 years. That’s bad news for utilities but good news for Europe’s three biggest manufacturers — Nexan, Prysmian, and NKT — which have all seen their stock more than triple in the past five years. A single kilometer of one of these cables can, according to Bloomberg, weigh as much as 50 Ford F-150 trucks, and cost more than $1.1 million. The specialized equipment required to produce such an item is a hurdle to any new companies trying to enter the market.

European regulators have long suspected the manufacturers of cartel behavior, and both the German and French governments are currently investigating them for price-fixing. Meanwhile, a Japanese manufacturer has begun construction on a new assembly plant in Scotland, which is slated to start production in 2026.

THE KICKER

Residents of Budapest were treated to an unusual sight on Thursday, as around 60 farmers paraded camels through the Hungarian capital to raise awareness about the impacts of climate change on agriculture. A drought cost the country’s agricultural sector $2.7 billion in 2022, according to Hungary’s farm ministry.“

Yellow

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Climate 101

Welcome to Climate 101

Your guide to the key technologies of the energy transition.

Welcome to Climate 101
Heatmap illustration/Getty images

Here at Heatmap, we write a lot about decarbonization — that is, the process of transitioning the global economy away from fossil fuels and toward long-term sustainable technologies for generating energy. What we don’t usually write about is what those technologies actually do. Sure, solar panels convert energy from the sun into electricity — but how, exactly? Why do wind turbines have to be that tall? What’s the difference between carbon capture, carbon offsets, and carbon removal, and why does it matter?

So today, we’re bringing you Climate 101, a primer on some of the key technologies of the energy transition. In this series, we’ll cover everything from what makes silicon a perfect material for solar panels (and computer chips), to what’s going on inside a lithium-ion battery, to the difference between advanced and enhanced geothermal.

There’s something here for everyone, whether you’re already an industry expert or merely climate curious. For instance, did you know that contemporary 17th century readers might have understood Don Quixote’s famous “tilting at windmills” to be an expression of NIMYBism? I sure didn’t! But I do now that I’ve read Jeva Lange’s 101 guide to wind energy.

That said, I’d like to extend an especial welcome to those who’ve come here feeling lost in the climate conversation and looking for a way to make sense of it. All of us at Heatmap have been there at some point or another, and we know how confusing — even scary — it can be. The constant drumbeat of news about heatwaves and floods and net-zero this and parts per million that is a lot to take in. We hope this information will help you start to see the bigger picture — because the sooner you do, the sooner you can join the transition, yourself.

Keep reading...Show less
Green
Climate 101

What Goes on Inside a Solar Panel?

The basics on the world’s fastest-growing source of renewable energy.

What Goes on Inside a Solar Panel?
Heatmap illustration/Getty Images

Solar power is already the backbone of the energy transition. But while the basic technology has been around for decades, in more recent years, installations have proceeded at a record pace. In the United States, solar capacity has grown at an average annual rate of 28% over the past decade. Over a longer timeline, the growth is even more extraordinary — from an stalled capacity base of under 1 gigawatt with virtually no utility-scale solar in 2010, to over 60 gigawatts of utility-scale solar in 2020, and almost 175 gigawatts today. Solar is the fastest-growing source of renewable energy in both the U.S. and the world.

Keep reading...Show less
Yellow
Climate 101

The Ins and Outs of Wind Energy

The country’s largest source of renewable energy has a long history.

The Ins and Outs of Wind Energy
Heatmap illustration/Getty Images

Was Don Quixote a NIMBY?

Keep reading...Show less
Green