Energy & Environment — California cuts incentives for rooftop solar

by Rachel Frazin and Zack Budryk - 12/16/22 6:15 PM ET

California OK’ed plans to reduce incentives for rooftop solar installation. Meanwhile, the Energy Department announced it will buy back up to 3 million barrels of oil for the Strategic Petroleum Reserve.

Plus: The Energy Department has vacated a decades-old decision surrounding “the father of the atomic bomb.”

This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Someone forward you this newsletter? Sign up here or in the box below.

California approves residential solar overhaul

Californians who install rooftop solar systems will soon receive less payback for the electricity they sell to the grid, following a contentious Thursday hearing at the state’s utilities commission.

The California Public Utilities Commission (CPUC) voted unanimously to approve the proposed plans.

The decision will revamp the state’s “net energy metering” solar policy, which has allowed Californian households to get credit on their electricity bills at retail rates and offset monthly energy expenses.

Existing solar producers will be able to maintain their current arrangements for
20 years. But future customers would face stricter terms, which industry experts say could reduce net metering credit by anywhere between 75 and 80 percent.

New customers will be subject to rates that are tied to how much electricity is worth at a given time of day. They’ll also need to pay a fixed monthly fee.

Why’d they do it?

By approving the proposal on Thursday, the CPUC is axing a net metering system that “disproportionately harms low-income ratepayers, and is not cost-effective,” wrote Administrative Law Judge Kelly Hymes, in the introduction of the revised decision.
The new tariff structure, according to Hymes, must therefore “promote equity, inclusion, electrification, and the adoption of solar paired with storage systems,” while establishing a “glide path” so that “industry can sustainably transition” to these new terms.

The other side: Many environmental groups opposed the changes, arguing that these measures would slow California’s clean energy transition.

Read more about the decision here, from The Hill’s Sharon Udasin.

Biden officials announce first SPR oil buybacks

The Department of Energy will purchase up to 3 million barrels of oil to replace withdrawals from the Strategic Petroleum Reserve (SPR) amid high energy prices, it announced Friday.

The Biden administration presented the purchase, which follows a bidding process that began in October, as an opportunity to buy the oil at a fixed price and repurchase it for less than the average of $96 per barrel it sold for.

“Relative to conventional purchase contracts that expose producers to volatile crude prices, this new approach, when used at scale, can give producers the assurance to make investments today, knowing that the price they receive when they sell to the SPR will be locked in place,” the Energy Department said in a statement. “Today’s notice will pilot this new approach by starting with a purchase of up to 3 million barrels of crude oil.”

After oil prices soared earlier this year following Russia’s invasion of Ukraine, the Biden administration withdrew a record 180 million barrels from the SPR. The administration announced a plan in May to solicit bids to buy back about one-third of the barrels withdrawn.

Fusion to boost investments, but hurdles linger

The dramatic and historic breakthrough on fusion energy at the Lawrence Livermore National Laboratory is expected to bring an injection of cash into the clean energy source — even though it’s still many years away from becoming a mainstream power source.

“I think that this will encourage a lot of people who realize that fusion is a very, very important part of the future,” said Chris Gadomski, head of nuclear research at BloombergNEF when asked about the potential for putting more money in.

The background:

The Energy Department announced on Tuesday that for the first time, a federal laboratory was able to get more energy out of a fusion reaction than scientists put into it.
Nuclear fusion refers to the process of fusing atoms together to produce energy. The type of nuclear power that is used commercially today does the opposite, getting its energy from splitting atoms apart.
Both are carbon-free energy sources, but nuclear fusion is not expected to generate the same challenges related to storing hazardous waste. As a result, the Biden administration and others touted the breakthrough as a huge development in the search for cleaner forms of energy for the future.

The news has sparked chatter about investments in the technology, and speculation over how long it will take to bring it to the market.

The announcement also generated enthusiasm from the private sector, including from investors.

“We’ve been pretty bullish on fusion for a few years now … but I think for other investors, it’s just also getting them kind of interested, especially with all the media attention,” said Phil Larochelle, who leads fusion investments at Breakthrough Energy Ventures.

Mike Farrell, vice president for inertial fusion technologies at defense and technology company General Atomics described the announcement as “providing the impetus” for both government and private investment.

Others, however, voiced skepticism that the breakthrough would quickly lead to fusion becoming a reliable form of energy. Some suggested it could take decades.
Gadomski said that while the latest development may stimulate capital flow, after listening to a technical panel on the specifics of the experiment, he thought the announcement overall would do “very little” to advance commercial fusion
“This doesn’t seem like it’s got any hope for being a replicable technology that can be commercialized,” Gadomski said of the Energy Department’s experiment. He said that the size of the machine used in the Energy Department’s experiment makes it difficult to repeat.

An uncertain timeline: During the press conference, Granholm highlighted the administration’s goal of commercial fusion within a decade, but Kim Budil, director of the Livermore laboratory, said it could be multiple decades away.

Industry estimates also vary, with some echoing the Biden administration’s take that it could take a decade, and others including Farrell saying even prototypes could be
30 years away.

“We probably moved the timeline in by one, maybe two decades, but the engineering challenge is still quite large,” Farrell said.

THE HILL SCOOP

‘Father of the bomb’ clearance decision nixed

The Biden administration is vacating a decadesold decision to revoke the security clearance of World War II-era scientist J. Robert Oppenheimer, who is known today as the “father of the atomic bomb.”

In a written statement first shared with The Hill, Energy Secretary Jennifer Granholm said the 1954 decision barring Oppenheimer’s clearance went through a “flawed process” and noted that there was evidence of bias.

“In 1954, the Atomic Energy Commission revoked Dr. Oppenheimer’s security clearance through a flawed process that violated the Commission’s own regulations. As time has passed, more evidence has come to light of the bias and unfairness of the process that Dr. Oppenheimer was subjected to while the evidence of his loyalty and love of country have only been further affirmed,” Granholm said.
“I am pleased to announce the Department of Energy has vacated the Atomic Energy Commission’s 1954 decision In the Matter of J. Robert Oppenheimer,” she added.

Oppenheimer directed the Manhattan Project’s Los Alamos National Laboratory when the atomic bomb was developed during World War II.

His security clearance was later revoked by the Atomic Energy Commission, a federal agency that predated the Energy Department, with commissioners arguing he was a “security risk” amid allegations that he was disloyal to the U.S.

Oppenheimer’s past connections with communism and communists also played a role. His hearing before the commission in 1954 occurred during the Red Scare, a time where U.S. politics was dominated by anti-communist sentiment.

Documents from his hearing that were declassified in 2014 raised doubts about the disloyalty accusations, suggesting, for example, that his opposition to the hydrogen bomb project was for technical and military reasons rather than pro-Soviet sentiments.

The move from the Energy Department comes ahead of the release of an eponymous movie about Oppenheimer from director Christopher Nolan. The film is slated for release this coming summer.