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Power Plant Engineering Specialists: Utilities, Data Centers, Industrial
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☀️ Good morning, Thursday! The weekend is almost here, and so is your essential energy sector update.
This Week's Highlights
Grid Reliability: MISO capacity prices exploded to $666.50/MW-day from $30 last year as summer surplus capacity fell to 2.6GW, signaling resource adequacy concerns.
Domestic Manufacturing Push: U.S. energy storage sector pledged $100B through 2030 to build domestic battery supply chain, aiming for 100% U.S.-made batteries for storage projects.
Investment Freeze: Nearly $8B in clean energy projects canceled in Q1 amid policy uncertainty, with global solar funding dropping 41% YoY and storage company funding down 81%.
Transmission Collaboration: Nine Northeast states launching initiative to develop interregional projects between PJM, NY, and New England to address projected 4GW PJM-NY and 3GW NY-NE needs by 2040.
China’s Acceleration: While U.S. projects face headwinds, China added 59.7GW of solar in Q1 alone (+43.4% YoY), with renewable sources now providing 38% of its electricity generation.
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Regulatory & Policy Updates
Northeast States Collaborative Targets Interregional Transmission
Nine Northeast/Mid-Atlantic states will issue an RFI to identify interregional transmission projects between PJM, NYISO, and ISO-NE. The Brattle Group projects needs growing to 4GW between PJM-NY and 3GW between NY-NE by 2040.
Near-term focus: Cost allocation framework, HVDC standards, offshore wind transmission
Formed in 2023 to supplement FERC Order 1920 interregional planning requirements
Utilities Urge FERC on Gas Pipeline Reliability Measures
National Grid, Con Edison, and other utilities filed Friday requesting FERC launch an inquiry on gas pipeline reliability improvements, citing increased demand and extreme weather strains.
Requested measures include:
Annual reliability metrics reporting
Evaluation of facilities before retirement/replacement
Revised force majeure policies to rebalance risk-sharing
Enhanced communication protocols for extreme weather
IRA Funding Temporarily Reinstated
A federal judge ordered temporary reinstatement of IRA funding while litigation proceeds, following President Trump’s day-one funding freeze. Nearly $8B in clean energy projects were canceled or downsized in Q1 amid the policy uncertainty, according to E2’s industry tracking. Gordon van Welie.
IRA Funding Temporarily Reinstated
A federal judge has ordered the temporary reinstatement of Inflation Reduction Act funding while a lawsuit from six climate groups is under consideration. The ruling provides momentary relief following President Trump’s day-one freeze of IRA funding pending federal review, but long-term policy uncertainty continues to impact investment decisions across the clean energy sector.
The temporary reinstatement comes as clean energy advocacy group E2 reports nearly $8 billion in project cancellations or downsizes in Q1 2025 alone, spanning 16 projects across wind, solar, battery, and EV manufacturing. While the court decision allows some projects to resume, market analysts note that:
Funding uncertainty has prevented many financing deals from moving forward
Companies remain hesitant to pursue new developments without stable policy signals
Additional tariff concerns compound investment challenges
Some companies are pivoting strategies (e.g., Freyr Battery rebranding as T1 Energy with new focus on solar)
“If this self-inflicted and unnecessary market uncertainty continues, we’ll almost certainly see more projects paused, more construction halted, and more job opportunities disappear,” warned E2 Communications Director Michael Timberlake.
Industry Innovation Spotlight
Storage Industry Commits $100B to Domestic Manufacturing
U.S. energy storage industry announced $100B investment through 2030 to build and buy U.S.-made batteries, aiming for 100% domestic supply for storage projects. The commitment adds $85B to existing $10-15B investments.
25 factories in development (11 operational/under construction)
Key projects: Tesla (TX refinery, NV expansion), Fluence (first U.S.-made LFP batteries shipping), LG Energy Solution (16.5GWh this year, +11GWh in 2026), Form Energy (iron-air batteries with 4-day discharge)
China’s Q1 Capacity Additions
China’s NEA reports 59.71GW new solar (+43.4% YoY) and 14.62GW new wind (+17.2% YoY) in Q1, pushing total installed power capacity to 3.43TW. Wind and solar provided 18% of China’s electricity in 2024; all clean sources supplied 38%.
Market Movements
MISO Capacity Auction Results
MISO’s summer capacity prices jumped to $666.50/MW-day from $30/MW-day last year, with annual prices at $217/MW-day (North/Central) and $212/MW-day (South). The auction used a new “reliability-based demand curve” for the first time.
Summer reserve margins: 10.1% North/Central, 8.7% South
Resource changes: +5.1GW new capacity, +1.2GW increased accreditation vs. -4.9GW reduced accreditation, -3.3GW retirements, -0.9GW imports
Cleared resources: 9.1GW solar (from 4.9GW), 6GW wind (from 5.2GW), 9GW demand response (from 8.1GW)
Renewable Investment Decline
Global clean energy funding is dropping sharply according to Mercom Capital, with solar corporate funding down 41% YoY and storage funding down 81% in Q1. Public market solar funding fell 99% to just $20M.
Nearly $8B in project cancellations in Q1, including Kore Power’s $1.25B Arizona battery facility and Freyr Battery’s $2.6B Georgia factory
Private equity investors still interested in operational assets but development-stage projects struggling
Freyr Battery rebranded as T1 Energy, pivoting to $850K solar cell factory
Sustainability Corner
Interregional Transmission Collaboration
The Northeast States Collaborative aims to reduce costs and increase grid security through cross-border projects between ISO-NE, NYISO, and PJM. The initiative will advocate for improved planning processes beyond FERC Order 1920 requirements and explore equipment buying pools for transmission supply chain challenges.
Grid Reliability Case Study: Spain
Spain’s recent major blackout occurred with 53% solar, 11% wind, and 15% nuclear/gas generation. Grid operator REE denied renewable dependency caused the outage, though their May 2024 report warned about substation risks with high distributed generation. Spain plans €52B in grid upgrades through 2030, including load-shedding relays for frequency stabilization.
Resource Mix Trends
MISO: Solar nearly doubled YoY in capacity auction (9.1GW vs 4.9GW)
China: Clean electricity now 38% of generation mix (18% wind/solar)
Both regions seeing significant renewable deployment despite different policy landscapes
Operations & Maintenance Watch
Resource Adequacy Concerns
MISO’s summer surplus capacity dropped to 2.6GW from 4.6GW last year despite capacity additions. The grid operator introduced a reliability-based demand curve that better reflects capacity value as system approaches minimum thresholds. Reserve margins now stand at 10.1% North/Central and 8.7% South for summer.
Gas System Resilience
Utilities are seeking enhanced operational protocols for extreme weather events as pipeline reliability becomes a growing concern. The FERC petition focuses on standardized scheduling practices, facility evaluation before retirement, and improved weather response coordination. A FERC-state collaborative meeting on May 1 will address gas-electric coordination issues.
Grid Modernization Needs
Spain’s grid operator warned that renewable connections to substations designed for traditional generation create new operational challenges. Key requirements include load-shedding relays for frequency stabilization and sufficient dispatchable resources during intermittent generation fluctuations. Behind-the-meter resources continue growing in importance, with MISO clearing 4.3GW in its latest auction (up from 4.1GW).
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