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North America Clean Energy Plan Could Boost Canadian Hydropower

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Shawinigan hydropower complex, in Quebec, has generated electricity for more than 100 years. The North American Clean Energy Plan, announced on June 29, 2016, could boost Canadian hydropower production. Photo © ShutterstockShawinigan hydropower complex, in Quebec, has generated electricity for more than 100 years. The North American Clean Energy Plan, announced on June 29, 2016, could boost Canadian hydropower production. Photo © Shutterstock

Leaders pledge more use of low-carbon fuels.

Shawinigan hydropower complex, in Quebec, has generated electricity for more than 100 years. The North American Clean Energy Plan, announced on June 29, 2016, could boost Canadian hydropower production. Photo © Shutterstock

Shawinigan hydropower complex, in Quebec, has generated electricity for more than 100 years. The North American Clean Energy Plan, announced on June 29, 2016, could boost Canadian hydropower production. Photo © Shutterstock

By Brett Walton, Circle of Blue

At a summit in Ottawa today, the leaders of Canada, Mexico, and the United States agreed to accelerate North America’s development of low-carbon energy sources, pledging that half of their combined electricity use will come from “clean” fuel sources by 2025.

“We recognize that our highly integrated economies and energy systems afford a tremendous opportunity to harness growth in our continuing transition to a clean energy economy,” Justin Trudeau of Canada, Enrique Peña Nieto of Mexico, and Barack Obama of the United States said in a statement from the North American Leaders Summit.

The agreement defines “clean” as renewables such as solar, wind, and hydropower, nuclear energy, fossil fuel plants that capture carbon, and energy efficiency projects that reduce demand.

The deal, not legally binding, seems grander than it is. Non-carbon sources account for 37 percent of electricity today in the three countries. Projections based on current trends and policies indicate that the total in 2025 will be 46 percent, according to Doug Vine, energy fellow with the Center for Climate and Energy Solutions. Achieving the target will require more effort but not much, he says.

Nonetheless, analysts say the deal along with national and regional renewable energy plans could invigorate U.S. interest in Canadian hydropower, particularly for states looking to reduce carbon emissions to comply with state mandates or with the federal government’s clean power plan. The clean power plan, currently on hold after a Supreme Court decision in February, requires U.S. carbon emissions from power plants to decline 32 percent from 2005 levels by 2030.

“I think it’s a huge opportunity for Canadian hydropower,” Philip Gass, an energy researcher with the International Institute for Sustainable Development. Canada gets three-fifths of its electricity from flowing water and its provinces are looking to sell more to their southern neighbors. In 2011, Manitoba Hydro, a Canadian generator, and Minnesota Power, a U.S. utility, signed a 15-year power purchase agreement for 250 megawatts.

“There’s more opportunity and appetite in the U.S. for Canadian hydropower,” Gass said, noting that more such deals should be expected.
Getting the power across the border, however, will be another challenge.


A number of transmission lines already connect Canada and the United States. At least six high-voltage lines with the capacity to deliver 5,000 megawatts across the border are currently under review. Many smaller lines in Quebec, Ontario, and Manitoba, the provinces with the highest electricity exports, are also being built to move energy southward.

The clean energy agreement signed today affirms federal support for cross-border transmission lines. Energy grid operators also support increased integration because drawing electricity from a greater variety of sources helps to incorporate more intermittent renewables such as wind energy into the power mix.

The energy links require partnerships on both sides of the border. Manitoba Hydro is building the Manitoba-Minnesota transmission line, which will increase the province’s export capacity by 40 percent and double its import capacity. In April, Minnesota Public Utilities Commission approved the route for the Great Northern transmission line, which will connect to Manitoba’s segment. Once completed, the connection will allow the power purchase agreement signed in 2011 to be fulfilled.

Quebec, meanwhile, wants to send electricity to New England. The New England Clean Power Link is a 1,000 megawatt, $US 1.2 billion high-voltage line across Vermont. It won federal approval in October 2015 and state approval in January. It would feed electricity into a highly integrated New England grid.

In his state of the commonwealth speech in January, Massachusetts Gov. Charlie Baker called for increasing hydropower imports from Canada. His plan would source roughly one-third of the state’s electricity from Canada through 15-year to 25-year contracts.

Other New England transmission lines under review include the $US 2 billion Northeast Energy Link and the $US 2.2 billion Champlain Hudson Power Express. The $US 8 billion Romaine hydropower project, being developed in stages in Quebec, will add 1,500 megawatts of generating capacity.

“If we want more Canadian renewables, we will need more transmission lines from Canada,” Vine told Circle of Blue.

The question that state officials, grid regulators, environmental advocates, and consumer groups are now asking is: Do we want more Canadian electricity? And at what cost?


Not everyone is thrilled with a potential increase in Canadian hydropower. Green groups point out that reservoirs built in boreal forests such as in Canada do release carbon dioxide and methane into the atmosphere, albeit much less than the most efficient natural gas power plants. Emissions from new reservoirs peak three to five years after construction and then decline to resemble a natural lake, according to Hydro-Quebec measurements. A seven-year study of Eastmain-1, a large hydropower complex in Quebec, found more carbon emissions from the reservoir site than from an undeveloped landscape.

In addition, construction of new reservoirs in Quebec met resistance from First Nations, whose traditional lands the dams often flood. Members of the Nutashkuan Innu blocked the Romaine 3 construction site last July, protesting the effects on salmon. Mercury levels spike in boreal reservoirs immediately after construction, a concern for people who consume a lot of fish.

In the United States, one branch of opposition centers on the plowing of forests to build the transmission lines. The New England Clean Power Link, which receives passing marks from green groups, will run on the bed of Lake Champlain and underground, but Northern Pass, one of the most controversial proposals, will stand above ground in New Hampshire for 212 kilometers (132 miles).

Even with the siting challenges, an open public process can alleviate most transmission concerns, said Greg Cunningham, director of clean energy and climate change program at the Conservation Law Foundation, which is deeply involved in New England energy issues.

“It doesn’t mean no impacts,” Cunningham told Circle of Blue. “It means mitigating impacts. Transmission is complicated but surmountable. It’s about finding appropriate locations.”

Another branch of criticism is economic. Critics claim that the length of the contracts and the price locks the region into a single power source at a time when the market is rapidly evolving and low-cost solar and wind are coming online. The cost of the transmission lines is another disadvantage.

Gov. Baker’s hydropower plan would “undermine an economically as well as environmentally sustainable environment for the electric industry in Massachusetts,” concluded Susan Tierney, an energy analyst in Boston and a former assistant secretary for policy at the U.S. Department of Energy. The state Legislature is now debating how much emphasis a new energy bill should give to wind power versus imported hydropower.

Whether Canada, Mexico, and the United States met the 2025 clean energy target largely depends on what happens in the United States, which is by far the largest electricity consumer. If nuclear power plant closures keep increasing, the clean energy gap will be widened, Vine said. More nuclear retirements could hand hydropower proponents another argument.

The post North America Clean Energy Plan Could Boost Canadian Hydropower appeared first on Circle of Blue.


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The Stream, June 29: Pollutants, Agriculture, And Expanding Populations Stress Water Reserves


The Global Rundown

Pollutants continue to taint vital groundwater supplies in the United States and India, even as informed government agencies fail to act. Swedish scientists say they are one step closer to cracking cost-effective hydrogen energy. Water ATMs may prove an innovative solution to Kenya’s water crisis. Meanwhile, reimagining agricultural practices in Asia and the Caribbean could hold the key to surviving unprecedented droughts. However in Karachi, Pakistan’s largest city and the sixth most water-stressed in the world, solutions will need to come even faster, as a rapidly expanding population causes dire water shortages.

“There’s nothing here. We don’t even have enough water to wash up for prayer, do our laundry or wash our dishes.”– Farzana Khatoun, one of Karachi’s 20 million residents. With a 4.5 percent growth rate, the city continues to expand by nearly a million new residents each year. Experts predict that by 2025 the country will have depleted its available water supply. (The Guardian)

By The Numbers

17.6 million Number of Americans who receive drinking water from the more than 5,300 United States water systems currently in violation of the Environmental Protection Agency’s lead and copper rule. The Natural Resources Defense Council, an environmental advocacy organization, alleges that the EPA, while aware of many of these violations, is failing to take action.  CNN

130 million Number of Indians living in areas where groundwater supplies are contaminated with at least one dangerous pollutant, including arsenic and nitrate. With expensive water purifiers out of reach for many affected citizens, even the much awaited monsoon rains may not quench their thirst. 

1,200 Number of “ATM water dispensers” slated to pop up around Nairobi as part of a $300,000 plan to edge out small-scale, exploitative water dealers. These pay-for-water stations are also expected to curtail cholera and other waterborne diseases. The Star

Science, Studies, And Reports

Swedish scientists at the KTH Royal Institute of Technology in Stockholm report they have come one step closer to cost-effectively creating hydrogen energy from water, a long sought renewable alternative to traditional fuels. Those involved are optimistic that their new electrocatalytic water splitting technique, which employs abundant, non-precious materials, could eventually lead to a hydrogen-fuel economy.

On The Radar

Everything from divining rods to dams to crop diversification is being used to stave off the effects of drought in Southeast Asia’s Mekong region. Experts are struggling to balance effective but often invasive tactics across a continent that uses up to 80 percent of its water for agriculture. Some low-impact solutions include fish farming and involving more female farmers. Newsweek

Alterations to Cuba’s irrigation strategy could help alleviate the worst drought the island nation has seen in 115 years. If more methodical agricultural methods are successful, they could serve as a model throughout the Caribbean region, which includes seven of the world’s top 36 water-stressed countries.  Inter Press Service

The post The Stream, June 29: Pollutants, Agriculture, And Expanding Populations Stress Water Reserves appeared first on Circle of Blue.


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Chile’s Impressive Renewables Growth May Soon Come to an End

Chile has long been the leader of Latin America’s renewable energy market. But growth is now threatened by a number of challenges that quickly need to be overcome, according to industry players and authorities.

The South American country ranked 10th worldwide in terms of renewables growth in 2015, according to the most recent Renewables 2016 Global Status Report released in June. 

According to the report, Chile’s growth ranks behind its neighbors Brazil (the world’s third-largest renewables generator behind the U.S. and China) and Mexico. But Chile’s investment in the sector outpaces all Latin American countries by far.

According to the renewables status report, Latin America was the world’s fastest-growing region for renewable energy in 2015, during a year when global investment in the sector reached record levels and added 147 gigawatts of capacity.

A shrinking pipeline

Chile’s growth is set to continue in the short term, with a slew of projects in the pipeline that will strengthen the country’s position as Latin America’s second-largest wind market after Brazil. 

In May, the country’s environment watchdog approved the 105-megawatt El Camarones solar thermal plant planned by Spanish firm Elecnor in the northern Arica region. Another Spanish developer, Grenergy, plans to build two large PV parks in Chile, and received financing last December from the Inter-American Investment Corporation to develop projects in the country’s Coquimbo region, also in the north.

Those announcements followed 10 renewables projects approved in April worth a total of well over $1 billion. And there are around 10 more wind farm projects in Chile currently subject to environmental evaluation, including the $930 million Loa and $860 million Camarico farms. 

But a slowdown may be inevitable.

New project announcements in the last quarter of 2015 and first quarter of 2016 totaled just one-third of the total during the same period of 2014/2015. PV capacity additions in the past two years have led to an oversupply of electricity that has pushed down prices and impacted the viability of many projects in the pipeline.

Falling prices, rising congestion

Chile’s renewables developers are facing falling spot prices, transmission congestion, slow access to the market for non-conventional renewable energy generators, the need for more generation flexibility to complement the current intermittency of wind and solar, and opposition among communities to renewable energy projects in their vicinities, according to Carlos Finat, executive director of the country’s renewable energy association (Acera).

“The Chilean transmission network is seriously congested,” he said.

Although a new transmission law designed to bring a long-term solution to the congestion is in the works, companies operating in the country’s northern grid still have to live with generation curtailments and difficulties in obtaining adequate connection points for their new projects.

“And while renewable energy generators have shown their competitiveness, offering lower prices to distributors in recent auctions, in many cases mining and industrial clients are still not open to considering renewable energy generators as potential suppliers,” said Finat.

To counter these challenges, Acera has actively participated in the design of the new transmission law so that it includes an expansion mechanism, allowing new transmission infrastructure to begin operating quickly.

Other measures include studies carried out by independent system operators to determine the restrictions that could affect the connection and operation of renewable energy projects, allowing for their prompt resolution, he said.

“And with respect to the acceptance of projects among local communities, the recently introduced equal tariff law rules that clients living close to power generation facilities are subject to discounts on their electricity bills, proportional to the installed capacity of the plants in the area,” said Finat.

Chile currently dominates the Latin America solar market, but it may soon relinquish its regional leadership, according to GTM Research’s Latin America PV Playbook, released earlier this month.

That report expects both Mexico and Brazil to install more PV than Chile in 2017 and eventually to surpass it in cumulative installations by 2018.

Across Latin America, PV capacity expansion has been revised down to 650 megawatts, caused by lower spot prices and a shrinkage in energy demand from mining, the report states. The drop in demand from Chile’s mining sector is expected to recover in line with copper prices, but developers are still seeking non-mining clients for power-purchase agreements. 

With the third-highest electricity prices in Latin America, behind Uruguay and Guyana, increased solar capacity after auctions and further grid expansion will help bring greater supply of solar power from the north and reduce consumer costs by up to 25 percent, the report predicts.

But falling spot prices, which are pushed down by the mining industry slump, present a big challenge to renewables developers in Chile. And because the country’s more populous central region is powered by hydroelectricity, supply increases during the summer snow melt, driving down prices further.

Chile’s spot prices are currently at a historic low. While the country’s PV market will grow by 24 percent this year, it is expected to contract by 26 percent in 2017, with prices remaining unviable until the end of 2018 when the 753-kilometer Cardones-Polpaico transmission line enters service.

Eroded incentives, project delays

Chile’s distributed generation segment also remains in the doldrums due to a lack of policy support and an unviable net-billing system that erodes incentives for customers to switch to solar. GTM Research predicts that the segment will remain dormant and expand its share of the solar market to just 6 percent by 2020, driven by industrial-scale projects.

Utility-scale projects dominate in Chile, accounting for 98 percent of the total. And despite a coming contraction, it is expected to account for 90 percent of the market going forward.

There is also a delay in project development. Neither Solarpack’s 55-megawatt project nor First Solar’s 44-megawatt project, which won an October 2015 auction, have started construction. And the next auction has been delayed to December as the government awaits the completion of transmission infrastructure.

The December auction is expected to put 13,750 megawatt-hours up for grabs, with prices expected of between $45 and $55 per megawatt-hour, GTM Research predicts.

“The power sector is experiencing some additional issues in terms of overcapacity and saturation,” said Salvatore Bernabei, head of Latin America at Enel Green Power’s global renewables division.

EGP currently has a 500-megawatt PV pipeline in Chile. In April it opened its 79-megawatt Pampa Norte PV plant in the country’s northern Antofagasta region.

The power sector needs to react quickly to accelerate the expansion of transmission lines and the implementation of new systems for grid automation and management, said Bernabei. Reducing development costs is also vital.

“The real challenge for both the solar and wind industry will be to make their technology more competitive while keeping a good product quality, producing kilowatt-hours in a stable and reliable way,” EGP’s Bernabei said.

And that’s a challenge for renewables in every market — not just Chile.


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There’s a Digital Revolution Underway in Solar

The solar revolution will be digitized.

In fact, it’s already happening. The digitization of the solar industry is becoming a reality as string inverters get more sophisticated.

James (Yuyu) Qiao, vice president of operations & product solutions for Huawei Smart PV Solution North America, a Chinese manufacturer of string inverters, likes to compare the evolution of inverters to computing.

“We used to have the mainframe computing system, a very big computing system shared by many people that was a centralized architecture,” he says. “Eventually, the central architecture of the data world evolved to become more of a distributed architecture of the sort used by Google and Facebook, with greatly improved reliability and service availability.”

This is an important development for solar developers interested in reliability and increased control over the performance of their investments, says Qiao.

For one thing, a distributed architecture that utilizes many string inverters instead of a few central inverters means that any technical problems are not an immediate emergency. Nor is the move from a centralized to a distributed architecture in solar a huge lift management-wise.

“In the telecom world, providers can handle hundreds of millions of smartphones,” he says. “Why not tens of thousands inverters that don’t have roaming service?”

A commitment to string inverters

As a company, Huawei is so convinced that the future of solar will be built around string inverters that it discontinued its central inverter business in 2014. The company, which has its roots in the telecommunications industry, has also significantly ramped up its investments in string inverter R&D and innovation.

In 2015, Huawei devoted $9.2 billion of its $60.8 billion in revenue to R&D. Over the last decade, Huawei has invested over $37 billion in R&D and has six R&D centers around the world devoted to developing and improving string inverters. In total, Huawei has over 800 engineers working to improve inverter design and functionality and reduce costs.

Qiao says the philosophy driving Huawei’s inverter innovations is tied directly to what the company’s customers say they need to be successful. “We are focused on the customer and their experience from end to end. We optimize our product design based on things we understand from the field,” he says. “It’s not just some technical experts creating technical ideas.”

What solar developers tell Qiao and his colleagues at Huawei they need are three things: higher yield, lower cost and improved reliability. Consequently, providing those essentials to solar power-plant developers through string inverters is also the only goal of Huawei’s engineers.

“We are not spread out resource-wise,” he says. “We have more R&D and technical resources than other players in the market, and we focus those resources strategically on string inverters and thinking only about how to improve their customer value and strengths.”

The brains of the solar plant

Not surprisingly, given Huawei’s history in telecommunications, much of the company’s innovation efforts are focused on delivering the benefits of information communications technology to string inverters.

“We believe in a fully digital world,” says Qiao. “The inverter should be able to monitor what’s happening in the field and understand the problems of the panels, the trackers, the energy generation, and environmental changes and report issues of performance back to the operation center, and people can manage everything remotely. That is the convenience brought into the picture by digitalization.”

In 2015, Huawei introduced its FusionSolar Smart PV Management System, which leverages digitization and data analytics to allow for accurate remote monitoring of a solar plant’s performance at the individual string level. This means that whenever a string of panels is not generating as much energy as it should — perhaps because of module degradation or shading — the solar plant operator can quickly identify the issue and schedule maintenance to fix the problem and return yield to where it should be.

The move toward digitization also brings significant cost savings. For example, traditional central inverters have used power electronics systems with large copper busbars and other copper components. By contrast, Huawei replaces expensive copper with lower-cost silicon chipsets — made even more economical because they’re made by Huawei subsidiary HiSilicon — whenever possible.

“We believe with advanced digitalization we can use more chipsets in every stage of power conversion while improving, optimizing and monitoring performance,” says Qiao. “Instead of working on physics to make busbars thicker or breakers larger, digitalization gives us the efficiency and manageability of silicon without the expense of copper.”

Eliminating parts and grid manageability

String inverters also reduce O&M expenses. For example, Huawei introduced its Smart PV string inverter, eliminating parts susceptible to failure and replacement, like fuses, fans, and even LCD screens, which degrade quickly in the outdoor environment. That was possible because of improved design and the lower capacity of each unit, which means the inverters produce less heat than central inverters.

Indeed, there’s a big difference between a 30-kilowatt string inverter and a 1-megawatt inverter when it comes to heat. “If the efficiency of both is 99 percent, then the wasted energy of the 1-megawatt inverter will be 10 kilowatts,” says Qiao. “That 10 kilowatts will be turned into heat and you have to get rid of the heat and keep the equipment cooled down and operating. Because the string inverter has a lower capacity there will be less wasted energy for each unit, and we can use natural cooling instead of fans or even air-conditioning. It improves the reliability, lowers the cost, and prolongs the life of the system.” 

There are other cost advantages with string inverters, says Qiao. Their relatively small size and weight means they can be installed and maintained without the use of a crane. It’s also much easier to manufacture string inverters in bulk on an automated production line because the components are standardized.

“For a central inverter, if you want to build one, you have intensive labor involved. For a string inverter, it’s a small standard unit and can be made through an automated production line,” says Qiao. “That means less labor, and we can support mass production of the same unit. That is one of the reasons why we can get the costs lowered down so dramatically. Today, when a central inverter is ordered, it typically takes months to get it built and delivered from the factory. Tomorrow, when string inverters are needed, you may be able to buy them off the shelf in a store like Costco or Lowe’s.”

Grid benefits and the future

Improved performance and manageability of solar plants also provides benefits to grid operators, argues Qiao. When a large solar power plant relies on a relatively small number of central inverters, the failure of just one can have an immediate impact on the quantity and quality of energy supplied to the grid. With string inverters, a single failure is of little consequence to either the overall plant or the grid. “The ups and downs of solar plants will always create problems for the grid,” he says.

Digitization and advanced communications also provide better responsiveness and visibility to grid operators. “Utility companies have stringent requirements — if anything is about to go wrong, they want to be warned in advance and be able to take actions. If anything actually does go wrong, they want to see it and know that the system will automatically take action in milliseconds to fix it,” says Qiao. “When there is a power factor change and you expect the inverter to adjust itself, our technology can do that. We can help grid owners smooth out bad things happening in remote places.”

The benefits of string inverters will only accelerate as costs continue to move downward and innovation increases.

“The majority of innovation in the coming years will be to improve system availability and environmental adaptability and to optimize end-to-end lifetime cost and management automation. Digitalization, artificial intelligence, large-scale software and management will all play a more and more important role in the solar industry,” he says.

Accurate data generation about how a solar plant operates will also continue to improve, Qiao says. “The ability to collect, analyze, visualize and utilize more accurate data will be the innovation trend for the future. It all relies on the string inverters. They can improve the efficiency of the end-to-end process for solar developers, from asset management and tracking the construction and maintenance of the solar plant, to collecting data to maximize energy yield and performance.”


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The End of the Era of Baseload Power Plants

PG&E’s plan to close the Diablo Canyon nuclear power plant — a facility that currently provides about 10 percent of California’s electricity — marks a historic transition for the electric power industry.  Not only does it signal the end of nuclear power in California, but it also ushers in a new way of thinking about the very foundations of our electric system.

Much has (rightly) been made of PG&E’s commitment to close the nuclear facility without increasing greenhouse gas emissions. This low-carbon future is now possible because the costs of solar and wind power have declined dramatically over the past five years, while the performance and reliability of these technologies have been proven, and they are attracting more and more investment.  

Less commented on is that closing Diablo Canyon, coming on top of the shutdown of the San Onofre nuclear power plant three year ago, means that California’s electric grid will be largely free of baseload power plants. Going forward, California’s electric power system will be operated in a very different manner than it has been for the last 100 years.

Since the days of Thomas Edison and George Westinghouse, the foundation of the electric grid has been power plants that run flat-out 24 hours a day for most of the year. Throughout the 20th century, these baseload power plants became ever bigger, with nuclear power plants like Diablo Canyon capable of producing thousands of megawatts. 

Starting in the 1980s, solar and wind power plants, driven forward by national energy policies like the Public Utilities Regulatory Policy Act (PURPA) and state-enacted renewable portfolio standards, began to be connected to the electric grid. Early on, many utilities warned that these variable output technologies would make the grid unstable and couldn’t be counted on to provide reliable power around the clock. 

The PG&E agreement to close Diablo Canyon shows that those fears have been outpaced by innovation. It is now possible to envision an energy future where the grid will be balanced moment to moment by a combination of energy storage, responsive load and fast-ramping technologies like fuel cells. In fact, an entire section of the agreement PG&E reached with environmental groups like Friends of the Earth, Environment California and the Natural Resources Defense Council addresses the issue of grid stability and reliability through resource integration and energy storage. 

This key section of the agreement acknowledges that the removal of a large baseload unit during periods of peak solar production will reduce the need for the periodic curtailment of renewable resources. It also calls on regulators to give serious consideration to PG&E’s development of large-scale energy storage projects, including pumped hydro storage like the Helms Pumped Storage Plant located 50 miles east of Fresno.

The Helms project, which began operating in 1984, was supported by regulators because it was assumed there would be excess power at night from California’s baseload nuclear power plants. Now the opposite is occurring.  As more and more solar power gets connected to the grid both in front of and behind the meter, there is the potential for excess power being generated in the middle of the day.  The 1,212-megawatt Helms project and other sources of energy storage can be used to absorb excess solar power and dispatch it later in a flexible manner when consumers need the power. 

The success of California’s transition to a more flexible and resilient power system should be seen as a model for the rest of the country. It has become increasingly obvious over the last few years that nuclear power is an economic albatross. Utilities in the Midwest, Mid-Atlantic and Northeast can no longer economically operate many plants. Meanwhile, many coal plants have reached the end of their useful lives, and others will need to be retired early to reduce greenhouse gas emissions.  

With the plan to close Diablo Canyon and PG&E’s commitment to reach 55 percent carbon-free power by 2031, it should be increasingly clear to those responsible for electric resource planning at the state, regional and national levels that the era of baseload power is coming to an end. Utility regulators and energy policymakers across the country should take notice of what’s happening in California and set in place processes that take full advantage of the modern, low-cost clean energy options available throughout the United States.   


Ed Smeloff has over 30 years of experience in energy policy and solar business development. Before joining Vote Solar, he worked for more than eight years at SunPower as director of utility and power plant sales. He was responsible for developing more than a gigawatt of that company’s solar power plants in the United States and initiated solar business development in Mexico.


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Breaking: Sungevity Goes Public Via Merger With Easterly Acquisition, a Blank-Check Firm

Sungevity is going public on the Nasdaq via a merger with Easterly Acquisition Corp., a special-purpose acquisition company, in a deal that values the solar sales and customer-acquisition platform company at $357 million.

In the past, GTM has suggested that Sungevity might be an IPO candidate — but this was unexpected. We estimate that Sungevity has received more than $200 million in equity funding — so the bottom line is that this is not a spectacular, high-multiple venture capital exit. But it’s a way for Sungevity to gain access to public markets and to stay relevant in the volatile residential solar market.

Sungevity raised $650 million in project finance and equity funding from private equity giant Apollo Global Management last year with total investment of more than $850 million in VC and project financing from investors including BrightPath Capital Partners, home improvement store Lowe’s, Vision Ridge Partners, Oaklandimpact, Greener Capital, Firelake Capital, Craton Equity Partners and Eastern Sun Capital Partners. European utility E.ON was an investor in Sungevity’s $70 million funding round last year, along with Jetstream Ventures and GE Ventures.

The company claims it can quickly deliver a firm price quote for residential solar rooftop systems without having to pay a visit to the roof site. It aims to own the customer experience from sale though installation and operations and maintenance. Last year, Sungevity moved into the small commercial market and partnered with commercial-scale solar financier Sol Systems.

Andrew Birch, Sungevity’s CEO, has said that unlike SolarCity or Sunrun, his firm was a “disrupter platform in a world of vertically integrated solar companies.” He said that he “continues to believe that the platform wins.” The company contrasts Sungevity as “an asset-light, sustainable business model that is scalable, thrives on relatively modest levels of capital and enables a path to profitability and cash flow generation. This stands in sharp contrast to the capital-intensive, asset-driven and vertically integrated model now ubiquitously deployed in today’s downstream solar market.” (SolarCity currently finds itself on the precipice of a merger with Tesla.)

GTM spoke with Birch and the principals of Easterly Acquisition, Chairman Darrell Crate and CEO Avi Kalichstein. Easterly Acquisition Corp. is a Nasdaq-listed blank-check company formed in August of last year when it raised $200 million in an IPO looking to enter “into a merger, capital stock exchange, asset acquisition, stock purchase, or reorganization with a focus on the financial services industry.”  

Crate said, “Sungevity makes solar simple, and now will provide public investors the opportunity to gain exposure to the accelerating growth of the solar adoption curve.”

Here are some details of the deal, according to the company.

  • “All of the outstanding equity and convertible debt of Sungevity will be converted into shares of Easterly common stock.”
  • When the deal is done, Easterly will change its name to Sungevity Holdings, keeping CEO Andrew Birch along with Sungevity’s management team. The new board will be made up of members from the boards of both Easterly and Sungevity.
  • Sungevity’s current stockholders will roll over their existing equity into Sungevity Holdings and, together with Sungevity’s management, retain approximately 58.8 percent ownership.
  • “Sungevity stockholders and management will receive 35.7 million shares of Easterly common stock for implied total consideration of $357 million (which includes fees and expenses), assuming a $10.00-per-share valuation for the shares of Easterly common stock. It is estimated that the $200 million contained in Easterly’s trust account, less fees and expenses and amounts distributed upon redemption of shares of Easterly common stock, will be used following the closing by Sungevity for its business operations and will remain on its balance sheet.”
  • “The anticipated initial implied market capitalization, including fees and expenses, is estimated to be approximately $607 million, assuming no redemptions by Easterly stockholders.”

The transaction has been approved by the boards of directors of both Easterly and Sungevity, and is expected to close in the third or fourth quarter of 2016.  

Easterly Acquisition Chairman Darrell Crate sees his firm’s value as a “strong steward of public capital,” adding, “It’s really a business that invests in platform businesses and builds them. One of our most recent transactions was a company called Easterly Government properties. It trades under the ticker symbol of DEA, and there’s an analogy. We found a team of folks who had a very unique strategy, and that was investing in mission-critical government buildings — they are the largest landlord to the Drug Enforcement Administration.”

Crate said, “Enormous compliments to this management team. We believe they can execute; we have deep appreciation for the customer service experience they deliver. We also hear investors want exposure to the accelerating growth in the solar adoption curve. And we have very strong conviction in the ability for it to be welcomed and well received by public share holders.”

“The S4 will be filed in a week, Avi and I will join the board. We will also become the chief bottle washers in the [Andrew Birch Sungevity] army. And we believe that we are going to work very hard to help the company build channel partnerships and help…the company be a very strong public entity.”

“I think all of us believe that there’s this transformation in the energy industry, but [the market doesn’t] understand some of the players in this space, so simplicity, I think, will be our friend.

“But being a strong steward of public capital is what ultimately leads to enduring success. And we believe with this team we have a very long horizon for working closely with them and making that happen. We believe in the simple business model of selling systems and making a margin, and that being the moment that begins a 20-year journey with a customer with an outstanding positive experience that has enormous value,” said Crate.

There will be a shareholder vote on the merger on September 30.


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State Bulletin: Are Residential Demand Charges Becoming a Trend in the US? [GTM Squared]


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Deal done between parties on 1,105 MW South Field Energy project in Ohio

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PG&E calls State Lands Commission vote helpful to its energy plan

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