Currents - Energy Industry Insights, V 9, Issue 3, March 2025

Hikmat Al-Chami, Stephanie Eaton, James Elliott, Carrie Grundmann, Mark Heath, Steven Lee, Nicholas Muto, Barry Naum, Derrick Price Williamson, David Yaussy
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Volume 9, Issue 3

● Welcome

Again, thank you for reading!

Power Plays and Fueling Tension: Trade War Ripples Through North American Energy Markets

By Hikmat N. Al-Chami

President Trump's pursuit of U.S. energy dominance, coupled with Canada's response to proposed tariffs, has thrown North American energy markets into uncertainty. With diplomatic and economic tensions mounting between the two nations, industry stakeholders are assessing the potential long-term implications for continental energy strategies and partnerships that have defined the region for decades.

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US Considers Emergency Powers to Restart Closed Coal Plants

"Burgum, who also serves as the chair of the White House’s National Energy Dominance Council, said Biden-era policies were threatening the US power grid, necessitating emergency action."

Why this is important: Earlier this month, Doug Burgum, the Secretary of the Interior and chair of the White House's National Energy Dominance Council, announced that the U.S. is considering emergency authority to bring back coal-fired plants that have closed and stop others from shutting down. Burgum believes that closing coal plants threatens the U.S. power grid.

The proposal to restart and preserve coal plants is not supported by all. According to the article, the Sierra Club believes that many of the coal plants that have closed were uneconomic. As such, the Sierra Club believes that restarting those plants would increase electricity rates. While Burgum and the current administration are considering emergency action, no concrete steps have been taken to restart coal plants or prevent active ones from closing. The ramifications of those actions, if taken, however, would impact both grid reliability and electricity rates for consumers. --- Steven W. Lee

Microsoft is Open to Using Natural Gas to Power AI Data Centers to Keep Up with Demand

“Chevron and Exxon recently announced they are developing natural gas solutions for data centers.”

Why this is important: This article reflects Microsoft’s recognition that renewable energy is not able to meet the extremely high energy needs associated with data centers and AI technology. While the title of the article suggests that Microsoft would be willing to use natural gas to power data centers, the body of the article clarifies that Microsoft is seeking to couple any natural gas with carbon capture and sequestration, consistent with their stated goal to be carbon-free by 2030. Of course, they also want such technology to be cost-competitive. Today, viable carbon capture and sequestration technologies are predominantly in development stages, thus it remains to be seen whether viable and cost-competitive technologies can be developed in the near term. --- Carrie H. Grundmann

U.S. LNG's Kingmaker Status has an Expiration Date

“Rising costs, environmental concerns, and potential shifts toward renewables pose challenges to long-term demand for U.S. LNG.”

Why this is important: New developments in the transportation and use of liquified natural gas (LNG) are giving a welcome boost to our domestic natural gas industry. The easing of certain restrictions by the EPA will lead to additional permits for LNG export terminals. In addition, the DOE has issued an order that removes barriers to the use of LNG as a marine fuel for vessels which creates a promising new market for natural gas. These advances in the use of LNG will produce greater demand for low-cost Appalachian shale gas as a cleaner burning fuel for use in maritime transportation as well as in the foreign markets of our international trading partners. --- William M. Herlihy

Will China’s New Renewable Energy Pricing Speed Up Coal’s Exit?

“A shift to competitive auctions could accelerate the move to renewables, but much depends on how the policy is designed and implemented.”

Why this is important: China is looking at changing the system it uses to set pricing for newly constructed renewables like wind and solar. The proposed new auction system for wind and solar would set a sales price for generation coming online after June 2025. After a set bid price, the government pays the producer when the market price goes below the market price set in the contract and the producer pays back funds when the price is above what was bid. The new system makes solar and wind more profitable to build and provides steady revenue from power production. --- Mark E. Heath

EPA Head Says He'll Roll Back Dozens of Environmental Regulations, Including Rules on Climate Change

“In what he called the ‘most consequential day of deregulation in American history,’ the head of the Environmental Protection Agency announced a series of actions to roll back landmark environmental regulations, including rules on pollution from coal-fired power plants, climate change and electric vehicles.”

Why this is important: This is important because it arguably represents the most aggressive effort ever by the Executive Branch to rein in the EPA. Perhaps the most ambitious action is to repeal/revise the 2009 “endangerment finding” that allowed EPA to regulate greenhouse gases as a pollutant. A number of regulations impacting various industries would be undercut/eliminated if the endangerment finding is withdrawn/revised. Equally important and impactful changes have been proposed by the Trump administration, but at this point the details are thin. The more comprehensive the proposed changes, the longer the process will take and the more complicated the ensuing litigation will be. --- James D. Elliott

NC Lawmakers Gave Duke Energy New Climate Goals 4 Years Ago. Now They Want to Undo Them

"The bill would also let Duke and other utilities start charging customers for new natural gas or nuclear plants while they’re still under construction, through a financing mechanism known as Construction Work in Progress.”

Why this is important: Several years ago, North Carolina passed HB 951, which sought to make North Carolina and its electricity carbon-free by 2050. That same law set an interim target of a 70 percent carbon reduction by 2030. The North Carolina Utilities Commission was empowered to ensure compliance with HB 951. The article claims that this new legislation undoes the goals of HB 951; however, that is not entirely accurate. The bill only seeks to eliminate the 2030 interim compliance date. In 2024, this date (as applicable to Duke Energy) was de facto delayed by several years when the Commission issued an order indicating that it was not feasible to meet the interim target. Moreover, the Commission was empowered by HB 951 to make adjustments to the interim target, compliance date, thus, it is unclear how much this new legislation actually changes the current landscape with respect to the carbon reduction targets of HB 951.

More troubling, however, is the legislation’s proposal to allow the utility to recover costs while it constructs new generation (known as construction work in progress or CWIP) rather than recovering those costs of construction after the asset is in service and providing power to customers. As the article notes, this runs the risk that customers pay for an asset that may never become fully operational.

Utilities prefer this process because it shifts risk from the shareholders to customers. This risk shifting mechanism was used to recover billions from ratepayers to construct the now-abandoned V.C. Summer nuclear plant in South Carolina. --- Carrie H. Grundmann

Ohio Cities Embrace Solar Energy with Dayton's First Utility-Scale Array

“The five-megawatt solar array in Dayton will be built on a brownfield site, which is also a repurposing project for land that had been burned and has limited use because of contamination.”

Why this is important: Ohio is looking at adding more solar to Brownfield sites. Dayton is building a 5MW solar farm on a contaminated Brownfield site. When completed, it will provide 38 percent of the power needed for Dayton’s water treatment plant. The plant provides water to 1.5 million people. Ohio is looking to build more such solar projects as a way into increase renewables in the state. --- Mark E. Heath

DOE will Prioritize Fossil Fuels, but It Still Expects Strong Growth from Storage, Solar, Wright Says

"'There is simply no physical way that wind, solar and batteries could replace the myriad uses of natural gas,’ Energy Secretary Chris Wright said at S&P Global’s CERAWeek.”

Why this is important: Since President Trump took office, there has been a significant shift in the United States’ energy policy. Energy Secretary Chris Wright stressed the need to boost domestic fossil fuel production, with a focus on natural gas. Wright mentioned in a keynote address that there is no way that renewable energy options like wind, solar, and batteries could replace the myriad uses of natural gas. This statement is in line with the current administration’s continued emphasis on natural gas over renewable energy sources.

Even with this push towards natural gas, there is still optimism for renewable energy sources. The U.S. Energy Information Administration's Short-Term Energy Outlook projects that wind, solar, hydropower, and nuclear will maintain around 45 percent of the U.S. generation mix through 2026, with natural gas slightly declining from 42 percent in 2024 to 40 percent in 2026. This outlook has renewable energy sources continuing to be a factor in the country's energy industry. The electric power sector is planning to increase the solar generating capacity in 2025 by adding 32 gigawatts. The increased capacity will increase solar generation by 33 percent this year.

Wright also clarified the administration’s stance on electric vehicles (EVs). He spoke out against mandates that would limit consumer choice and in turn, lead to higher prices. He also mentioned that there are fans of EVs in the administration and encouraged businesses to build, sell, and innovate EVs.

While the Trump administration prioritizes domestic fossil fuel production, particularly natural gas, renewable energy sources continue to play a significant role in the U.S. energy landscape. Projections indicate that wind, solar, hydropower, and nuclear will maintain a strong presence, with substantial growth in solar capacity planned for the coming years. Additionally, the administration's stance on electric vehicles reflects a preference for market-driven adoption rather than government mandates. Despite the policy shift favoring fossil fuels, the renewable energy sector remains poised for continued expansion and innovation. --- Nicholas A. Muto

Duke Energy Considers Building Nuclear Plant in Stokes County; Plant could Generate Power to Most of NC

“County leaders say it’s a win-win because nuclear power produces nearly no greenhouse gas emissions and could have the county seeing green.”

Why this is important: As the transition away from fossil generation to clean energy generation continues in North Carolina, one option Duke Energy is evaluating is nuclear energy. Bill Norton of Duke Energy explains that it is considering construction of a small modular reactor, or SMR, which uses the same technology that powers nuclear submarines. Notably, construction can take a decade from planning to permitting, then from construction to commissioning. Therefore, Duke Energy is preparing its permit submission to the state and federal regulators this year.

Why is this so important to North Carolina? Duke Energy currently operates a power plant at Belews Creek in Stokesdale, North Carolina, and has identified an area near the Belews Creek plant where it could construct a nuclear plant. In connection with its evaluation of the potential siting of a nuclear facility, Duke Energy officials have reached out to local residents to address health and safety concerns. The Chair of the Stokes County Commissioners, Keith Wood, expressed approval for the plan that would produce clean energy and jobs for the county. Our Energy Team will monitor Duke Energy’s progress toward bringing an SMR to operation in North Carolina. --- Stephanie U. Eaton

Utilities may Subsidize Data Center Growth by Shifting Costs to Other Ratepayers: Harvard Law Paper

"'The public faces significant risks that utilities will … profit from new data centers by making major investments and then shifting costs to their captive ratepayers,’ the report’s authors said.”

Why this is important: A report from the Harvard Electricity Law Initiative asserts that other customers may end up subsidizing costs incurred by utilities to serve data centers. Under the traditional paradigm, cost of generation resources is socialized among all customers and customer classes. With the exponential growth of the data center sector, this report questions whether traditional methods for allocating costs remain equitable. Data centers present a unique set of challenges for the grid in terms of their sheer size and energy needs. Around the country, we are simultaneously seeing requests from data centers to bring thousands of megawatts online. At the same time, we see state commissions grapple with the very issues — fair and reasonable cost allocation — raised by this report. We anticipate that issues of cost allocation related to data center growth will remain relevant for the next several years, likely through at least the end of this decade. --- Carrie Grundmann

Are EVs the Best Approach to Transportation Equity? Maybe Not, TEI Report Says

“EVs’ high costs and the need for public charging make them less viable for many low-income communities, the Transportation Energy Institute says.”

Why this is important: The Transportation Energy Institute has noted what should have been obvious long ago – disadvantaged populations are often unable, because of high prices and lack of charging options, to buy and operate electric vehicles. TEI recommends a more “holistic” approach, which involves continued use of fossil fuel-powered vehicles where those are the most affordable options, as a better approach than blanket adoption of EVs. --- David L. Yaussy

Dominion Energy Merges Solar Power and Agriculture to Create a Brighter Future

“In Virginia’s Southside region, two major solar facilities, Piney Creek Solar and Maplewood Solar, are leading the way in integrating solar energy production with sustainable agricultural practices, showcasing the potential of future collaboration.”

Why this is important: Two solar projects in Virginia are combining agriculture and solar production. The combination is known as Agrivoltics. The Piney Creek project is 780 acres with 80 MWs of power generation. The project will power 20,000 homes. Dominion’s Maplewood Solar site is 1,500 acres and its 120 MWs of solar power will power 30,000 homes. It also has 1,000 sheep grazing to keep vegetation down. These type of solar farms can graze sheep or have bee hives below the solar panels allowing agricultural production with solar power production. --- Mark E. Heath

Nanoparticle Breakthrough could Bring 'Holy Grail' of Solar Power within Reach

“Scientists have made a cheap and flexible solar cell that lasts nearly 10 times longer than others of its type, an advance that could one day help to revolutionize solar energy production.”

Why this is important: With the changing federal policies related to renewable energy, solar energy remains a strong choice for individuals, businesses and utilities to offset carbon emissions. Solar technology is relatively inexpensive compared to other renewables. There are technological changes related to solar energy generation that should continue to bolster the acceptance and selection of solar as one of the clean energy choices – and that may, in the long run, help reduce electricity demands.

One key development has been the invention of perovskite solar cells, which are lighter weight than traditional silicon-based solar cells. In printable formats, perovskite solar cells may ultimately be applied to vehicles and mobile phones, which will enable charging while the products are in use. However, thus far, perovskites have been subject to rapid degradation upon contact with moisture. Scientists hope that this problem will be alleviated by embedding nanoparticles in perovskite cells to trap leaking iodine. As set forth in the February 20, 2025 edition of EES Solar, these nanoparticle-embedded versions of perovskites is expected to last 10 times longer than the earlier versions. Improvements in perovskites could propel them to becoming a viable energy solution. --- Stephanie U. Eaton
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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