Danish renewable energy developer Orsted won a $680 million investment from JPMorgan in two U.S. projects as incentives from the Biden Administration’s signature climate law — the Inflation Reduction Act (IRA) — spur a clean energy boom in the U.S.
JPMorgan will provide tax equity financing for Orsted’s Eleven Mile Solar Center, a 600-megawatt solar and storage project near Coolidge, Arizona, and the 250-megawatt Sparta Solar project in Mineral, Texas.
Eleven Mile Solar, which includes more than 857,000 solar panels and 2,000 batteries from domestic manufacturers First Solar and Fluence, respectively, as well as tracking systems from Nextracker, qualifies for a one-time investment tax credit for the storage system, as well as an annual credit from a production tax credit for the solar array. Both credits were extended under the IRA.
Clean energy projects have relied on tax equity partnerships for years. Put simply, large financial institutions provide part of the financing for a renewable energy project, in exchange for the project’s tax credits. Developers themselves rarely have high enough tax bills, so a partnership allows them to monetize their credits.
But the partnerships are complex and the markets are limited. Smaller developers don’t always have the means to enter into these partnerships, and the appetite from large financial institutions to take stakes in renewable energy projects is limited.
The IRA sought to change that by adding in a provision allowing the credits to be transferred to a third party, creating a new pool of potential capital from corporations looking to offset tax bills. The project developer can either sell the credits themselves, or the tax equity partner — in this case JPMorgan — can decide to sell the credits to another party.
Prior to the IRA, the tax equity market was between $18 billion and $20 billion per year, according to the American Council on Renewable Energy. That’s “[s]till far short of what is needed in the post-IRA clean energy investment landscape,” the investment bank Evercore ISI noted. The bank estimates the potential market for tax credit transfers hitting $47 billion in 2024, and rising to more than $100 billion annually by 2030.
Aerial view of Eleven Mile Solar in Coolidge, Az.
Photo: Van Applegate
“This is the first time we’ve been able to do something like this…and it really opens the doors for a lot more corporates and companies with tax liability in the United States to come in and help support clean energy projects,” Melissa Peterson, head of onshore and origination at Orsted, told CNBC. “It’s really a unique structure that we hope to replicate over and over again.”
Construction at the $1 billion Eleven Mile Solar site began in January 2023 and, once operational later this year, it will be able to power roughly 65,000 homes. Two-thirds of the power will be used for a new Meta Platforms data center under construction nearby. Orsted is selling the power to Salt River Project — the local utility — who’s then selling it to Meta.
Boston Consulting Group estimates that between 2022 and 2030 data center electricity consumption will more than triple, requiring the same amount of power as 40 million households by the end of the decade. This comes on top of load growth from increased use of electricity, meaning U.S. power demand is now growing significantly for the first time in decades.
“We’ve been working in the United States for over 10 years, and this is probably the best time as a renewable energy developer to be working here in the U.S.,” said Orsted’s Peterson. “We see tons of opportunity with the increasing demand we’re seeing from reshoring manufacturing, big tech companies, paired with things like the Inflation Reduction Act, paired with lots of corporates who have ambitious climate targets.”
“We really see this as the pinnacle of opportunity for us,” she added.
– CNBC’s Harriet Taylor and Van Applegate contributed reporting.
Just like it says on the tin – retailers are advertising killer deals on the fun-to-drive Kia Niro EV, with one midwest auto dealer reporting more than $10,000 off the sticker price of the Niro EV Wind. That’s nearly 25% off the top line price!
The Kia Niro EV gets overshadowed by its objectively excellent EV6 and EV9 stablemates – both of which are currently available with substantial lease cash and 0% APR financing, in fact – but that doesn’t mean it’s not an excellent little electric runabout in its own right.
The last time I had a Niro EV tester, my kids loved it, I liked that it was quicker and more tossable than I expected it to be, and my wife liked the fact that “it doesn’t look electric. It looks normal.” And, with well over 200 miles of real world range (EPA-rated range is 253 miles), it was more than up to the task of commuting around Chicago and making the trip up to the Great Wolf Lodge in Gurnee and back without even needing to look for a charger.
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It’s not the primary family hauler I’d choose – but as a second car? As a primary car for a slightly smaller family (1-2 kids, instead of 3-4)? The Kia Niro EV Wind, with a $42,470 MSRP, seems like a solid, “can’t go wrong” sort of choice. You know?
You won’t even have to pay that much, though. Raymond Kia in Antioch, Illinois is advertising a $42,470 Niro EV for $32,431 (that’s $10,039, or about 24% off the MSRP), and several others are advertising prices in the $33,000 range.
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Many school districts who used EPA funding to help purchase Lion Electric school buses are now stuck with broken down or unsafe vehicles – but Lion’s new Canadian investors seemingly have no plans to make things right.
“All four Lion buses that we own are currently parked and not being used,” Coleen Souza, interim transportation director of Winthrop Public Schools, told Jay Traugott over at Clean Trucking. “Two of them are in need of repairs which would cost us money which we are not willing to invest in because the buses do not run for more than a month before needing more repairs.”
As bad as the revelations of safety and drivability issues and $250 million in unresolved debt have been, it’s the objectively stupid design choices that have been the most shocking.
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“Lion built an auxiliary diesel heater to heat the bus, essentially writing the manual as they went,” explained a school superintendent in the midwest, who asked not to be named. “It was fascinating to watch but there were design flaws with the heater. For example, the intakes pointed downward and we’re driving across rural roads and the intake sucks in that dirt.”
“Using a diesel-powered heater to warm an electric bus also somewhat defeats the purpose of going 100% zero-emissions,” added Traugott.
Despite a new electric school bus rebate and a fresh cash injection from Vincent Chiara, president of Quebec real estate powerhouse Groupe MACH, and Lion director Pierre Wilkie, however, it seems like no help is coming.
It just gets worse and worse
Decommissioned Lion electric buses; via Winthrop Public Schools.
The US school districts who spent tens of millions of taxpayer dollars in the hopes that Lion buses would help decarbonize their fleets and reduce students’ exposure to harmful diesel emissions? Many of them are back to using diesel, while others are trying to get their deposits back so they can buy something else.
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Mitsubishi is partnering with Ample and Yamoto Transports to deploy an innovative new battery swap network for electric cars in its Japanese home market — but it’s not just for electric cars. Mitsubishi Fuso commercial trucks are getting in on the action, too!
Despite a number of early EV adopters with an overdeveloped concept of ownership, battery swap technology has proven to be both extremely effective and extremely positive to the overall EV ownership experience. And when you see how simple it is to add hundreds of miles of driving in just 100 seconds — quicker, in many cases, than pumping a tank of liquid fuel into an ICE-powered car — you might come around, yourself.
That seems to be what Mitsubishi thinks, anyway, and they’re hoping they’ll be your go-to choice when it’s time to electrify your regional and last-mile commercial delivery fleet(s) by launching a multi-year pilot program to deploy more than 150 battery-swappable commercial electric vehicles and 14 modular battery swapping stations across Tokyo, where the company plans to showcase its “five minute charging” tech in full view of hundreds of commercial fleets and, crucially, the executives of the companies that own and manage them.
How battery swap works for electric trucks; via Mitsubishi Fuso.
A truck like the Mitsubishi eCanter typically requires a full night of AC charging to top off its batteries, and at least an hour or two on DC charging in Japan, according to Fuso. This joint pilot by Mitsubishi, Mitsubishi Fuso Trucks, and Ample aims to circumvent this issue of forced downtime with its swappable batteries, supporting vehicle uptime by delivering a full charge within minutes. The move is meant to encourage the transport industry’s EV shift while creating a depository of stored energy that can be deployed to the grid in the event of a natural disaster — something Mitsubishi in Japan has been working on for years.
The pilot is backed by Tokyo Metropolitan Government’s “Technology Development Support Project for Promoting New Energy,” with local delivery operator Yamato Transport testing swappable EVs for delivery operations on both its eCanter light-duty trucks and Mitsubishi Minicab kei-class electric vans.
Electrek’s Take
Fuso eCanter battery swap; via Mitsubishi.
Electrifying the commercial truck fleet is a key part of decarbonizing city truck fleets – not just here in the US, but around the world. I called the eCanter, “a great product for moving stuff around densely packed city streets,” and eliminating the corporate fear of EV charging in the wild just makes it an even better product for that purpose.
Here’s hoping we see more “right size” electric solutions like this one (and more battery swapping tech) in small towns and tight urban environments stateside somewhat sooner than later.
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