An Ignoble Experiment

2. Xcel revamps MN rooftop solar program

The Federal Energy Regulatory Commission (FERC) has approved a pilot to test a two-year licensing process for hydropower development at non-powered dams and closed-loop pumped storage projects. The 5 MW project proposed by Free Flow Power Project 92 (FFP) will be located at the Kentucky River Authority's existing Lock and Dam No. 11 on the Kentucky River.

Kentucky lock and dam. Credit: Army Corps of Engineers

In compliance with the Hydropower Regulatory Efficiency Act of 2013, FERC investigated the feasibility of a two-year licensing process, developed criteria for identifying projects that may be appropriate for the process, and developed the pilot project.

In addition to approving FFP's request to test a two-year process, the approval letter issued by the Office of Energy Projects requests that the developer conduct studies relating to project hydraulics, water quality, aquatic habitat, fish entrainment and survival, cultural resources, and rare, threatened, and endangered species.

There are certain minimum criteria, as well as a process plan, for projects that may be appropriate for licensing within a two-year process. For example, the project must cause little to no change to existing surface and groundwater flows and uses, and must not adversely affect federally-listed threatened and endangered species.

Further, if the project is proposed to be located at or use a federal dam, the request to use the two-year process must include a letter from the dam owner confirming the plan is feasible. If the project would use any public park, recreation area, or wildlife refuge, the request to use the two-year process must include a letter from the managing entity giving its approval to use the site.

Finally, for a closed-loop pumped storage project, the project must not be continuously connected to a naturally flowing water feature.

For more:
- see the letter



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By Barbara Vergetis Lundin

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3. Coal, natural gas driving turbine surge

Xcel Energy is providing its Minnesota customers with more choices for rooftop solar. A redesign of the Solar Rewards program is expected to encourage greater program participation and maximize the generation produced from rooftop solar projects. The program will be funded with $5 million annually from Xcel's Renewable Development Fund.

Credit: Wikimedia Commons/Reubens G. Brewer

"New, production-based incentives will encourage participating customers to install and maintain efficient systems and will match payments to the amount of electricity generated," explained Dave Sparby, president and CEO of Northern States Power Co. -- Minnesota, an Xcel Energy company.

Under the new Solar Rewards, participants who install photovoltaic systems totaling up to 20 kilowatts on their property will receive an incentive based on the amount of energy their rooftop systems produce. Previously, the program only offered a one-time, upfront payment. In 2014, participants will receive an $0.08 incentive per kilowatt-hour. In addition, customers will receive a bill credit equivalent to the retail rate for surplus energy produced by their systems but not consumed.

Participants will receive an annual payment for 10 years, based on their system's yearly generation. In subsequent years, incentive amounts will be subject to approval by the Minnesota Public Utilities Commission.

Xcel, who is already among the top 10 U.S. utilities for solar capacity, is also pursuing plans for large-scale solar facilities to help meet the goal of providing 1.5 percent of its electricity in Minnesota from solar energy by 2020.

"Xcel Energy is applying the same dedication to solar energy that made us the nation's No. 1 wind energy provider," Sparby said. "This includes investing in large-scale projects that provide clean, affordable solar energy to all customers and offering solar options -- such as our new Solar Rewards program -- for those customers who want more."

For more:
- visit this website

Related Article:
Xcel Energy investing in low-cost solar

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By Barbara Vergetis Lundin

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4. Mega deals comprised 93 percent of Q2 utility mergers and acquisitions

Worldwide, gas turbines have seen an upswing due to the rising replacement of aging coal plants with modern gas-fired power stations and the growing availability and usage of natural gas in power generation. This is also due to a feeling of optimism driven by the expansion of the global oil and gas industry and the need for more flexible generating assets, owing to greater renewable energy generation, according to research from Frost & Sullivan.

Globally, steam turbines are experiencing a similar surge in demand due to the large coal-fired capacity additions in emerging markets such as China and India. The increase in the number of combined-cycle gas turbines (CCGT) plants, expansion of nuclear power, and upgrading of coal plants with supercritical and ultra-supercritical technology have all generated interest in steam turbines.

"Although the current profitability of gas-fired generation is low in regions such as Europe, gas turbines will be the technology of choice for future capacity additions," said Frost & Sullivan Industry Director Harald Thaler. "Gas turbines will also benefit from increasingly stringent emissions legislation and roll out of emissions trading schemes in emerging markets, as they curtail the growth of steam turbines."

The rapid expansion of renewable energy has created uncertainties regarding the future of carbon markets -- which, in turn, has affected the outlook for conventional generation. Gas turbines will focus on the small- and medium-sized gas turbine output ranges to leverage the high demand for flexible generating units, according to Frost & Sullivan.

The researchers expect China to become the leading gas turbine region, as it aggressively promotes gas turbine plants in a bid to reduce dependence on coal plants and promote fuel diversification.

With regard to steam turbines, while China's share of this the steam turbine market is forecast by Frost & Sullivan to decline over time. Although China will still remain in a dominant position, India's share will expand upon resolving coal shortage issues, Frost & Sullivan explains.

Elsewhere, the researchers predict Southeast Asia will grow strongly as it looks to coal to reduce gas dependence, while Europe remains weak amid uncertainty over future power demand growth and financially troubled utilities.

For more:
- see this report

Read more about: steam turbine, Frost & Sullivan
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By Barbara Vergetis Lundin

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5. A better metric for measuring oil field activity

In the second quarter of 2014, mergers and acquisitions (M&A) in the North American power and utilities industry increased significantly on a volume and value basis compared to the previous quarter and year-over-year, according to PwC U.S.

A combination of regulated and merchant transactions, as well as continued activity by YieldCos, pushed total deal value to the highest quarterly level since 2011, PwC research found.

There were 13 power and utilities transactions with announced deal values greater than $50 million in the second quarter of 2014, compared to seven during both the second quarter of 2013 and the first quarter of 2014. Six deals greater than $1 billion -- the highest number of mega deals in a quarter since the second quarter of 2006 -- contributed nearly 93 percent of the $34.9 billion total deal value for the quarter.

"Companies in the power and utilities industry are strategically pursuing assets, including those in close proximity to their existing geographic markets and/or with similar business models, to drive scalable growth and achieve operational synergies," said Jeremy Fago, PwC's U.S. power & utilities deals leader. "Hybrid utilities have continued to evaluate their merchant portfolios and the potential for divesting certain merchant assets, while regulated utilities and YieldCos continue to present an attractive investment for their yields and stable cash flows. Together, these types of deals have built on the power and utilities deal momentum we saw in the second quarter, and going forward, we expect the M&A environment to continue to pick up through a combination of regulated, merchant and YieldCo driven transactions."

Strategic investors accounted for 93 percent of deal value greater than $50 million announced during the second quarter of 2014 -- compared to 77 percent in the first quarter.

"Strategic investors are proactively managing their businesses to find new opportunities for growth and solidify their long term strategy in a dynamically changing industry," said Fago. "Well-positioned companies are deploying capital to acquire quality assets that can expand their geographic footprint. They are also looking inward and are making strategic investments to upgrade and secure aging infrastructure, improve operational processes and engage with employees and customers."

For more:
- see the report

Read more about: PwC, mergers and acquisitions
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By Barbara Vergetis Lundin

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