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While the impact so far has been light, there are some snarls to watch out for.
The American renewables industry is a global industry. While the Biden administration has devoted three-plus years and billions of dollars to building up wind and solar supply chains in the United States, many of the components of renewable energy generation — whether it’s the cells that make up solar panels or the 1,500-ton monopiles that serve as the foundation for offshore wind turbines — are manufactured overseas in from Spain to Denmark all across East and Southeast Asia.
With the members International Longshoremen Association on strike in the U.S. due to a contract dispute with the United States Maritime Alliance, shutting down ports up and down the Gulf and Atlantic Coast, one might wonder, what happens to U.S. renewables development?
The answer so far is: Not much. The closure of these ports’ cargo operations has not yet had a massive effect on the U.S. economy outside of businesses that work directly with the shipping industry, like trucking. There is no single port — or coast, even — that serves as a chokepoint for renewables-related imports. Many components from East and Southeast Asia come through west coast ports that are staffed by longshoremen in a different union, the International Longshore and Warehouse Union; shipments were being diverted there for weeks leading up to the strike.
That’s not to say the industry can simply coast through a prolonged strike. But there are some differences between different sectors, especially wind and solar.
Much of the wind industry, especially offshore, runs on foreign-manufactured equipmentthat is then processed and assembled in the United States. “Almost 70% of all wind-specific imports that are tracked through trade codes came from Mexico, Germany, Spain, and India, with the remaining imports mostly from Canada and various countries in Europe and Asia,” according to a Lawrence Berkeley National Laboratory report on the wind industry.
At least so far, much of the wind business — including the offshore wind business — appears to have largely dodged substantial issues from the strike so far.
Orsted’s work at three East Coast ports in Connecticut, Rhode Island, and New York has been unaffected, a source familiar with the situation told me. And the Portsmouth Marine Terminal in Virginia, where 70 of those monopiles have been shipped, is continuing to operate normally, according to the Port of Virginia. (Virginia's offshore wind industry is still vulnernable to vagaries of international trade — last year, Siemens Gamesa cancelled a plan to build a blade manufacturing facility in Virginia, where Dominion Energy is working on an offshore wind project.)
While the East Coast is an active hub of offshore wind activity, if the greater wind industry were to be affected by a prolonged strike, it would likely happen in Texas, which is both a major importer of wind equipment and has the country’s largest wind power sector.
Texas is “the dominant entry point” for wind equipment, according to the Lawrence Berkeley report, with almost $1 billion in annual wind imports.
At least one of those ports is still operating. The Port of Galveston is so-far unaffected by the strike, a port spokesperson told me. The port has become a major importer of wind turbines. In June, the port said that 400 wind turbine components had come through the port just since April, and that another 300 or so would flow through “over the coming months.” So far this year, some 25,742 tons of turbine pieces have come through the port, largely from Spain, Denmark, and other countries in Europe.
Neighboring Port Houston, however, is being picketed and “not handling container operations at this time,” the Houston Chronicle reported. In the run-up to the strike, Port Houston said that imports of wind power equipment had “increased notably” in August. In 2020, the port imported some 19,000 tons of wind power equipment.
The Houston area also has a number of recently opened solar manufacturing facilities, where cells, often imported from Asia, are assembled into panels. Proximity to the port was one reason why the manufacturers set up in shop in the area, according to the Houston Chronicle. “When you look at Houston specifically, you have one of the best ports in the country,” SEG Solar chief executive Jim Wood said in a company release when the facility opened. (SEG Solar has said it plans to start manufacturing cells domestically, though it currently makes them in Indonesia.)
Sophie Karp, an analyst at KeyBanc, forecast in a note to clients that some renewables manufacturers could be “disproportionately affected” by the strike. U.S. manufacturer First Solar “is the top importer at the Port of Houston,” Karp wrote, importing the equivalent of 17,200 shipping containers in the last year. The Korean solar company Qcells, meanwhile, which has made massive investments in Georgia, is a major customer of the Port of Savannah, which has been shut down due to the strike and has imported 31,400 container equivalents, according to KeyBanc. Karp also speculated that companies like the inverter manufacturer Enphase or the solar tracking company Array “are likely to have some exposure through their supply chains as well.”
“If the strike continues for an extended period, supply disruptions in the U.S. solar market are likely,” Karp wrote — especially for solar companies “that do not have ample inventory cushion on the ground.”
Trade disruptions are nothing new for the solar industry, which saw imports slow in 2022after the passage of a law meant to ban companies from subsidizing forced labor in Xinjiang in Western China, where much of the raw material for the world’s polysilicon is mined. Just this week, fresh tariffs were slapped on solar cells from manufacturers in Southeast Asia, which officials say function as cover for Chinese solar businesses. In fact, the California Chamber of Commerce specifically warned of congestion in the state’s ports as solar companies hurried up their purchases of panels ahead of the new duty.
So far, the solar and renewables industry has been quiet about the strike, in comparison to their unified voice on tariffs. Other portions of the electrical industry have been more vocal.
“The electroindustry is one of the largest manufacturing sectors of the U.S. economy, with one of the most complex international supply chains of any industry,” Debra Phillips, president of the National Electrical Manufacturers Association, said in a statement. “Over $195 million per day of electroindustry goods, representing nearly 30% of the nation’s electroindustry imports, is now stranded in unloaded cargo ships, threatening widespread disruption to our critical grid infrastructure.”
NEMA was one of more than 250 business groups that signed a letter published Wednesdaythat called on the Biden White House to “to take immediate action to resolve this situation expeditiously.” While one major clean energy group, the American Clean Power Association, signed the letter, others such as the Solar Energy Industries Association and Advanced Energy United, did not.
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A conversation with Mary King, a vice president handling venture strategy at Aligned Capital
Today’s conversation is with Mary King, a vice president handling venture strategy at Aligned Capital, which has invested in developers like Summit Ridge and Brightnight. I reached out to Mary as a part of the broader range of conversations I’ve had with industry professionals since it has become clear Republicans in Congress will be taking a chainsaw to the Inflation Reduction Act. I wanted to ask her about investment philosophies in this trying time and how the landscape for putting capital into renewable energy has shifted. But Mary’s quite open with her view: these technologies aren’t going anywhere.
The following conversation has been lightly edited and abridged for clarity.
How do you approach working in this field given all the macro uncertainties?
It’s a really fair question. One, macro uncertainties aside, when you look at the levelized cost of energy report Lazard releases it is clear that there are forms of clean energy that are by far the cheapest to deploy. There are all kinds of reasons to do decarbonizing projects that aren’t clean energy generation: storage, resiliency, energy efficiency – this is massively cost saving. Like, a lot of the methane industry [exists] because there’s value in not leaking methane. There’s all sorts of stuff you can do that you don’t need policy incentives for.
That said, the policy questions are unavoidable. You can’t really ignore them and I don’t want to say they don’t matter to the industry – they do. It’s just, my belief in this being an investable asset class and incredibly important from a humanity perspective is unwavering. That’s the perspective I’ve been taking. This maybe isn’t going to be the most fun market, investing in decarbonizing things, but the sense of purpose and the belief in the underlying drivers of the industry outweigh that.
With respect to clean energy development, and the investment class working in development, how have things changed since January and the introduction of these bills that would pare back the IRA?
Both investors and companies are worried. There’s a lot more political and policy engagement. We’re seeing a lot of firms and organizations getting involved. I think companies are really trying to find ways to structure around the incentives. Companies and developers, I think everybody is trying to – for lack of a better term – future-proof themselves against the worst eventuality.
One of the things I’ve been personally thinking about is that the way developers generally make money is, you have a financier that’s going to buy a project from them, and the financier is going to have a certain investment rate of return, or IRR. So ITC [investment tax credit] or no ITC, that IRR is going to be the same. And the developer captures the difference.
My guess – and I’m not incredibly confident yet – but I think the industry just focuses on being less ITC dependent. Finding the projects that are juicier regardless of the ITC.
The other thing is that as drafts come out for what we’re expecting to see, it’s gone from bad to terrible to a little bit better. We’ll see what else happens as we see other iterations.
How are you evaluating companies and projects differently today, compared to how you were maybe before it was clear the IRA would be targeted?
Let’s say that we’re looking at a project developer and they have a series of projects. Right now we’re thinking about a few things. First, what assets are these? It’s not all ITC and PTC. A lot of it is other credits. Going through and asking, how at risk are these credits? And then, once we know how at risk those credits are we apply it at a project level.
This also raises a question of whether you’re going to be able to find as many projects. Is there going to be as much demand if you’re not able to get to an IRR? Is the industry going to pay that?
What gives you optimism in this moment?
I’ll just look at the levelized cost of energy and looking at the unsubsidized tables say these are the projects that make sense and will still get built. Utility-scale solar? Really attractive. Some of these next-gen geothermal projects, I think those are going to be cost effective.
The other thing is that the cost of battery storage is just declining so rapidly and it’s continuing to decline. We are as a country expected to compare the current price of these technologies in perpetuity to the current price of oil and gas, which is challenging and where the technologies have not changed materially. So we’re not going to see the cost decline we’re going to see in renewables.
And more news around renewable energy conflicts.
1. Nantucket County, Massachusetts – The SouthCoast offshore wind project will be forced to abandon its existing power purchase agreements with Massachusetts and Rhode Island if the Trump administration’s wind permitting freeze continues, according to court filings submitted last week.
2. Tippacanoe County, Indiana – This county has now passed a full solar moratorium but is looking at grandfathering one large utility-scale project: RWE and Geenex’s Rainbow Trout solar farm.
3. Columbia County, Wisconsin – An Alliant wind farm named after this county is facing its own pushback as the developer begins the state permitting process and is seeking community buy-in through public info hearings.
4. Washington County, Arkansas – It turns out even mere exploration for a wind project out in this stretch of northwest Arkansas can get you in trouble with locals.
5. Wagoner County, Oklahoma – A large NextEra solar project has been blocked by county officials despite support from some Republican politicians in the Sooner state.
6. Skagit County, Washington – If you’re looking for a ray of developer sunshine on a cloudy day, look no further than this Washington State county that’s bucking opposition to a BESS facility.
7. Orange County, California – A progressive Democratic congressman is now opposing a large battery storage project in his district and talking about battery fire risks, the latest sign of a populist revolt in California against BESS facilities.
Permitting delays and missed deadlines are bedeviling solar developers and activist groups alike. What’s going on?
It’s no longer possible to say the Trump administration is moving solar projects along as one of the nation’s largest solar farms is being quietly delayed and even observers fighting the project aren’t sure why.
Months ago, it looked like Trump was going to start greenlighting large-scale solar with an emphasis out West. Agency spokespeople told me Trump’s 60-day pause on permitting solar projects had been lifted and then the Bureau of Land Management formally approved its first utility-scale project under this administration, Leeward Renewable Energy’s Elisabeth solar project in Arizona, and BLM also unveiled other solar projects it “reasonably” expected would be developed in the area surrounding Elisabeth.
But the biggest indicator of Trump’s thinking on solar out west was Esmeralda 7, a compilation of solar project proposals in western Nevada from NextEra, Invenergy, Arevia, ConnectGen, and other developers that would, if constructed, produce at least 6 gigawatts of power. My colleague Matthew Zeitlin was first to report that BLM officials updated the timetable for fully permitting the expansive project to say it would complete its environmental review by late April and be completely finished with the federal bureaucratic process by mid-July. BLM told Matthew that the final environmental impact statement – the official study completing the environmental review – would be published “in the coming days or week or so.”
More than two months later, it’s crickets from BLM on Esmeralda 7. BLM never released the study that its website as of today still says should’ve come out in late April. I asked BLM for comment on this and a spokesperson simply told me the agency “does not have any updates to share on this project at this time.”
This state of quiet stasis is not unique to Esmeralda; for example, Leeward has yet to receive a final environmental impact statement for its 700 mega-watt Copper Rays solar project in Nevada’s Pahrump Valley that BLM records state was to be published in early May. Earlier this month, BLM updated the project timeline for another Nevada solar project – EDF’s Bonanza – to say it would come out imminently, too, but nothing’s been released.
Delays happen in the federal government and timelines aren’t always met. But on its face, it is hard for stakeholders I speak with out in Nevada to take these months-long stutters as simply good faith bureaucratic hold-ups. And it’s even making work fighting solar for activists out in the desert much more confusing.
For Shaaron Netherton, executive director of the conservation group Friends of the Nevada Wilderness, these solar project permitting delays mean an uncertain future. Friends of the Nevada Wilderness is a volunteer group of ecology protection activists that is opposing Esmeralda 7 and filed its first lawsuit against Greenlink West, a transmission project that will connect the massive solar constellation to the energy grid. Netherton told me her group may sue against the approval of Esmeralda 7… but that the next phase of their battle against the project is a hazy unknown.
“It’s just kind of a black hole,” she told me of the Esmeralda 7 permitting process. “We will litigate Esmeralda 7 if we have to, and we were hoping that with this administration there would be a little bit of a pause. There may be. That’s still up in the air.”
I’d like to note that Netherton’s organization has different reasons for opposition than I normally write about in The Fight. Instead of concerns about property values or conspiracies about battery fires, her organization and a multitude of other desert ecosystem advocates are trying to avoid a future where large industries of any type harm or damage one of the nation’s most biodiverse and undeveloped areas.
This concern for nature has historically motivated environmental activism. But it’s also precisely the sort of advocacy that Trump officials have opposed tooth-and-nail, dating back to the president’s previous term, when advocates successfully opposed his rewrite of Endangered Species Act regulations. This reason – a motivation to hippie-punch, so to speak – is a reason why I hardly expect species protection to be enough of a concern to stop solar projects in their tracks under Trump, at least for now. There’s also the whole “energy dominance” thing, though Trump has been wishy-washy on adhering to that goal.
Patrick Donnelly, great basin director at the Center for Biological Diversity, agrees that this is a period of confusion but not necessarily an end to solar permitting on BLM land.
“[Solar] is moving a lot slower than it was six months ago, when it was coming at a breakneck pace,” said Patrick Donnelly of the Center for Biological Diversity. “How much of that is ideological versus 15-20% of the agencies taking early retirement and utter chaos inside the agencies? I’m not sure. But my feeling is it’s less ideological. I really don’t think Trump’s going to just start saying no to these energy projects.”