Energy Department and Biden Administration efforts to address shipping delays can ease potential future strains on energy infrastructure development, EPSA tells DOE.
By Bill Zuretti, director, Regulatory Affairs and counsel, EPSA
Competitive power suppliers continue to build new renewable and clean energy resources despite current supply chain snarls, but future difficulties and port delays could jeopardize an energy transition built on private investment and aided by competitive forces. That’s the message the Electric Power Supply Association shared with the U.S. Department of Energy (DOE) in a recent response to the DOE’s January Request for Information (RFI) seeking to better understand and address any issues impacting the energy sector supply chain. The RFI largely focused on clean energy supply chains with an eye towards meeting the Biden Administration’s ambitious carbon reduction goals.
Smooth Supply Chains Are Critical to Competitive Clean Energy Growth
As has been demonstrated over two decades of competitive wholesale power market operation, the most efficient and cost-effective way to reach the Administration’s ambitious carbon reduction goals is through the deployment of competitive markets and competitive forces wherever possible. And timely access to and affordability of materials needed to build power generation projects is of particular importance to America’s competitive power suppliers.
Unlike other energy development models or funding structures, competitive projects are not supported by captive customers who must pay increased rates to cover extensive delays or cost increases. Developers bear all the risk.
EPSA member companies have built and operate about 150,000 megawatts of electric generation resources, including an increasing number of renewable and clean energy projects. It is important to point out that EPSA members have developed these resources through competitive markets, putting billions of investor dollars to work without any financial risk to captive ratepayers. Project development and costs are assumed and borne by competitive companies focused on efficiency and wise business decisions; therefore, any delays or roadblocks impact the very viability of the project itself. Unlike other energy development models or funding structures, competitive projects are not supported by captive customers who must pay increased rates to cover extensive delays or cost increases. Developers bear all the risk.
As customer preferences continue to evolve and renewable technologies become more affordable, competitive power suppliers are likely to continue this trend of modernizing their fleets and scaling up their investment in lower emitting resources. In addition to renewable resources, over the past two years alone EPSA member companies have also developed some of the largest battery storage projects in the world. In building projects of this scale, EPSA members have regular contact with a host of critical supply chains identified by the Energy Department.
Addressing Port Delays and Ensuring Continued Momentum
To date, EPSA member companies have not had any major issues procuring equipment and component parts necessary to complete these projects. But they are certainly concerned that access to the materials needed remains unimpeded looking ahead.
While procurement has not been a serious challenge in recent months, EPSA members have experienced some minor delays related to orders being stranded and delayed on shipping containers at our nation’s ports. While this is clearly an issue being experienced across a myriad of economic sectors, if such issues were to persist over the long term, they could pose challenges to competitive electric generation – especially as power plant developers continue to ramp up their renewable and battery storage development efforts. Accordingly, any efforts that the Department or Administration can undertake to continue to ease these pressures would greatly benefit the nation’s energy transition.
EPSA and our members will continue to work with the DOE and the Administration should supply chain problems arise or appear imminent. EPSA appreciates and commends the Department’s efforts on this critical front and looks forward to working with the DOE and the Administration in the coming months and years to advance a reliable and affordable energy transition aided by the benefits of competitive forces.