August 2023 Newsletter

Interconnection: Renewable Energy USA

Welcome to Megawatt Recruitment’s monthly newsletter to keep you connected to what’s going on in the renewable energy industry in the United States and provide more insight, knowledge, and connection to the people and companies who drive our industry.

What People Are Talking About

• BOEM launched on online OWF auction off the shores of Lake Charles, LA & Galveston, TX for 3 parcels totalling about 302,000 acres on August 29, 2023
• EnCap Energy Transition, based in Houston, sold Broad Reach Power, founded in 2019 and focusing on developing and operating renewables & storage, for over USD $1 billion to ENGIE
• Singapore-based Bila Solar to renovate Indianapolis manufacturing facility to produce ultralight, composite, monocrystalline modules weighing 70% less than traditional modules and with a 19.3% efficiency rating
• GP Joule EPC North America, the North America EPC division of Goldbeck Solar, a Germany-based solar solutions provider, rebranded to Goldbeck Solar. The global business has installed and constructed 2.5GW of solar
• Arizona Corporation Commission voted to cut the export rate for rooftop solar by 10%, missing a proposal to cut it by 37%, arguing non-solar customers are forced to subsidize solar producers
• Invenergy and energyRe proposed a 2.4 GW offshore wind project off the New Jersey coast called the Leading Light Wind which also includes a 253MW battery storage option
• Vistra Energy’s Moss Landing Energy Storage Facility expanded by 350MW/1,400MWh to a total capacity of 750MW/3,000MWh, becoming the world’s largest battery storage facility, also making Vistra the 2^nd largest energy storage capacity in the USA. The facility consists of 122 individual containers with more than 110,000 battery modules
• Nova East Wind, a JV between DP Energy and SBM Offshore, plans to build up to 400MW floating offshore wind farm off Goldboro, Nova Scotia, Canada
• Beginning in September, Vineyard Wind will begin installing the towers and wind turbine generators, with an estimated completion date of December 2023
• Commonwealth Wind’s termination contract was approved by Massachusetts regulators and SouthCoast Wind’s termination is pending Department of Public Utilities board approval

Recent Personnel Moves and Promotions

What the market is talking about: What went wrong in the GoM?

The Bureau of Ocean Management was optimistic that it could transition the Gulf of Mexico, currently the U.S.’s largest oil & gas producing area at a whopping 97%, into a similarly large producer of renewable energy, largely from offshore wind.

However, despite 15 eligible bidders being named in the BOEM’s Final Sale Notice, only RWE was awarded a provisional lease off the coast of Louisiana and faced competition from only one other bidder.  The other two parcels, both off the coast of Galveston, failed to receive any bids.

So, what went wrong in the Gulf of Mexico bid?

From Megawatt Recruitment’s conversations in the market, a source in one of the 15 eligible bidders who will not be named in this article explained that “considering the risks and low wind, we’re approaching this opportunity cautiously.”

We dug deeper to understand what some of the risks are and found that in the Final Sales Notice, which was published only 5 weeks before the auction, the Department of Interior added new and modified lease stipulations which are well summarized in this article by White & Case law firm including:

• Tribal engagement and semi-annual progress reports
• Furnishing a Fisheries Communication Plan
• Coordination with BOEM, National Marine Fisheries Service, and US Fish and Wildlife Service for biological surveys for endangered species
• Requirement to submit plans to build a robust supply chain
• BOEM reserving the right to access the site for “research”

Some of these requirements are quite hefty to put together or modify in just 5 weeks, and for an industry that moves at a relatively slow pace compared to other renewables such as rooftop solar, we don’t believe it messages well for the government to make last minute changes right before an auction.

On the topic of wind speeds, it might be the case that developers are choosing to wait until technology advances to a point that building in the Gulf of Mexico (GoM) becomes economical.  For comparison’s sake, general estimates are that wind turbines in the GoM will yield capacities of only 30-40%. On the other hand, Orsted’s Horns Rev 2 project is estimated by Academic Accelerator to have a capacity of 47.7%.

We also understand why Texas and Louisiana have not particularly incentivized offshore wind development to meet renewable energy production goals.  Texas currently produces the most wind power of any state in the U.S. according to Power Technology with an installed capacity of 37.422 GW, producing more electricity than the next three highest states combined.  In Texas, offshore wind will need to compete with well-established onshore wind resources in the highly prolific western half of the state, as well as cheap and abundant natural gas. Louisiana also has cheap and abundant gas and is the third largest producer behind Texas and Pennsylvania.

Also, Texas does not have any specific goals for offshore wind production. Louisiana has set a goal to develop 5GW of offshore wind by 2035 but this is less urgent than places in the Northeast that have more imminent goals such as Massachusetts that wants to be under contract for 5.6GW by 2027, Connecticut which wants to develop 2GW by 2030, or New Jersey that revised its goal from 3.5GW by 2030 to 7.5GW by 2035.

We always look forward to hearing from our readers.  Let us know your thoughts on this topic.

Talent Acquisition Insights: Planning for 2024

As summer winds to a close, we have seen the typical slump in hiring.  U.S. families are taking those final trips before sending children back to school (parents everywhere rejoice!).  Much of Europe, especially Spain and Italy, are all but shut down for summer holidays which means many renewable energy titans such as Iberdrola, Enel Group, and EDPR who operate in both Europe and the U.S. have seen lighter hiring. 

Companies that are heavily dependent on U.S. government contracts know that we will soon abut the end of the government’s fiscal year which means dwindling budgets from September onward and a likely “fiscal gap” from October 1^st until Congress passes a new budget.

However, as we exit the summer doldrums and pull ourselves up toward the trade winds, we traditionally see the strongest hiring of the year in the months from September to December.  During this period, companies tend to ramp up hiring to get in place the teams that they want to ring in the new year.

This is the time for reviewing organizational charts, leadership development planning, scheduling annual reviews, and setting next year’s operations and hiring budgets before the holiday season and end of the calendar year descend upon us.

Megawatt Recruitment can help you in your planning.  Ask us about our non-recruitment services such as salary benchmarking, compensation & benefits benchmarking, organizational structure planning, and strategic introductions to help your company retain talent and stay competitive during this upcoming season of hiring competition.

Thank you for joining us for another issue of Interconnection: Renewable Energy USA.  We hope you enjoyed it and we look forward to keeping in touch and exchanging ideas, insights, and opinions.  If you are a company considering hiring, we welcome the opportunity to present our services and capabilities. If you are a candidate, please check our jobs page or reach out to us to discuss your background, skills, and future aspirations.