Scout Clean Energy’s new CDO discusses pipeline growth and project hurdles

In an interview with NPM, Scout Clean Energy’s new Chief Development Officer Kris Cheney discussed the company’s plans for growth across the main areas of wind, solar and storage as well as some of the major project hurdles that challenge development in the current landscape.

Cheney joined the Scout team late last month, ending his 15-year tenure at EDPR where he most recently served as Executive VP of Central, Western and Mexico Regions and Environmental Affairs at the firm. Cheney drew parallels between EDPR’s size when he joined 15 years ago with Scout Clean Energy’s size today, which he said contributed to his interest in making the move.

Cheney says Scout is “well-positioned” to expand its own pipeline and is currently “in the planning stages for a long-term refresh” of its pipeline strategy. Cheney says the company plans to expand greenfield development as well as M&A activity across a pretty wide swath of the country including markets like WECC, CAISO, ERCOT, MISO, SPP and PJM. Cheney notes that his own familiarity with PJM compared to the central and western markets is more limited and so Scout’s own local experts in the east are getting him up to speed there.

On the solar side, Cheney notes the company is getting ready to complete its first solar project in ERCOT 161 MW Markum Solar, this year and says the company anticipates adding more to its solar pipeline through greenfield development and M&A.

On the storage side, Cheney said the company is also looking to expand in terms of both co-located projects with wind and solar as well as, in a new step for Scout, standalone storage development. Most opportunities are focused in ERCOT as well as in CAISO, but he says Arizona stands out as the next most viable market with further expansion into WECC and MISO on the horizon.

“I’ve seen and heard from utilities interested in exploring pilot projects, including long duration, than I’ve seen the last few years,” Cheney said. “So there’s definitely interest. How that coalesces into action for us is a question we have to answer.”

Cheney also predicts state mandates or programs in a similar vein to Michigan’s storage mandate may accelerate storage development in some key areas across MISO as other states look to follow Michigan’s lead.

“Typically states follow each other,” Cheney said. “My expectation with the law in Michigan is you may have other states try to replicate with a similar mandate.” I don’t know if they will be widespread, but it’s something we’re tracking.”

On the wind side, Cheney noted Scout’s history with greenfield wind projects and said that, combined with an overall lack of wind projects available in the M&A market, will require the company to continue to bolster its greenfield wind development.

“There’s a lot more solar and storage in the M&A market than there is wind, so it will have to remain a greenfield effort,” Cheney said. “A lot of us who are more senior started in the wind industry so that gives us an advantage. Not just anybody can jump into the wind industry; the barrier to entry is much higher.”

Project hurdles

Cheney also discussed ongoing project hurdles as he looks to grow Scout Clean Energy’s pipeline, with two key challenges identified as queue timelines and growing cases of local opposition. Even in markets like ERCOT where projects have traditionally been able to move through relatively quickly, Cheney says he is seeing delays related to high voltage equipment, “particularly on the utility side.” Meanwhile, he says projects in MISO are having to plan ahead for as far as a decade thanks to a combination of project delays and the amount of time it takes for cluster studies to complete.

“Projects in the MISO 2023 queue cluster are probably looking at the end of the decade, realistically,” Cheney said. “You’re also seeing delays, so those projects could slip even further into 2031 or 2032.”

While Cheney notes that queue reforms may help things move along a bit quicker in MISO than they are currently, he also fears the ISO’s upcoming cap proposal could result in other issues if implemented.

“Anytime you make changes to the queue and add new rules, there’s an adjustment period,” Cheney said. “The cap may limit the queue, but that’s not necessarily what you need. The key challenge is getting through projects to meet the significant demand that’s there. You need real projects that can be built quickly to get some sort of precedence.”

MISO’s LRTP projects are a step in the right direction and will open up multiple GWs of capacity across the region. However, Cheney notes the timelines for those projects range from 5 to 10 years for Tranche 1 alone. He says this also contributes to his predicted growth in the storage industry to help open up the market for more renewable capacity as those projects are being built.

“You’ve got to find ways to work with the queue that you have to meet demand now,” Cheney said. “Battery storage will accommodate some of the short-term transmission issues. That alone, I think, will drive the buildout of battery storage in MISO. Utilities are going to want it.”

In addition to queue challenges, Cheney says the “frequency and organization of local opposition” to project development is also on the rise, which he attributes in part to the rise of social media as a tool for opposition to organize. Once opposition is in place, there’s really no way to make it go away, so Cheney says the best move is to be proactive with community outreach in an effort to prevent it before it crops up.

On the whole, though, Cheney says he supports the move some states in the Midwest are making to standardize permitting at the state level to “create an even playing field, even if you still have to work through local jurisdictions.”

“I like that model,” Cheney said. “It makes sense to have states opine on permitting because many of the power needs are statewide.”

*This story was originally published exclusively for NPM subscribers last month.

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