Category Archives: Renewable Energy

New ERCOT Report Shows That Texas Wind And Solar Are Highly Competitive With Natural Gas

By | Bio | Published: January 28, 2013

An interesting fact seemed to go unnoticed in all the press around the Electric Reliability Council of Texas’s (ERCOT) Long Term System Assessment, a biennial report submitted to the Texas Legislature on "the need for increased transmission and generation capacity throughout the state of Texas." ERCOT found that if you use updated wind and solar power characteristics like cost and actual output to reflect real world conditions, rather than the previously used 2006 assumed characteristics, wind and solar are more competitive than natural gas over the next 20 years.  This might seem a bit strange since we've been told for years by renewable energy skeptics that wind and solar power can't compete with low natural gas prices. Let me back up a second and explain what's going on here, and what it means for both the energy crunch and Texas' ongoing drought.

Every two years since 2005, ERCOT has used a series of complex energy system models to model and estimate future conditions on the Texas electric grid.  This serves a critical function for legislators, utilities and regulators and others who need to prepare for changes as our electric use continues to expand and evolve.  As with any model of this kind, the assumptions are critical: everything from the price of natural gas, to the cost to build power plants and transmission lines. Facing an acute energy crunch and given that solar and wind costs have come down a great deal since the first study in 2006, ERCOT dug a little deeper into their historical assumptions and developed a version of the model that used current, real-world cost and performance data for wind and solar power.

What they found was astounding: without these real-world data points, ERCOT found that 20,000 MW of natural gas will be built over the next 20 years, along with a little bit of demand response and nothing else.  Once they updated their assumptions to reflect a real-world scenario (which they call “BAU with Updated Wind Shapes”) ERCOT found that about 17,000 MWs of wind units, along with 10,000 MW of solar power, will be built in future years.

In addition to demonstrating the economic viability of renewable energy, these results show two drastically different futures: one in which we rely overwhelmingly on natural gas for our electricity, and one in which we have a diverse portfolio of comparable amounts of renewable energy (which does not use water) and natural gas.  All of this is crucial to keep in mind as the Legislature, the Public Utility Commission and ERCOT evaluate proposals to address resource adequacy concerns and the impacts of a continuing drought on our state’s energy supply.

Finally, one ERCOT statement in particular stands out from this analysis, in direct contradiction to renewable energy opponents who say that renewable energy is too expensive: “the added renewable generation in this sensitivity results in lower market prices in many hours [of the year].”  This means that when real-world assumptions are used for our various sources of power, wind and solar are highly competitive with natural gas. In turn, that competition from renewables results in lower power prices and lower water use for Texas.

As state leaders look for ways to encourage new capacity in the midst of a drought, it’s important to realize that renewable energy is now competitive over the long term with conventional resources.  The fact that renewable energy resources can reduce our water dependency while hedging against higher long-term prices means that however state leaders decide to address the energy crunch, renewables need to be part of the plan.

Also posted in Demand Response, Natural Gas, Solar, Texas, Texas Energy Crunch, Wind | Tagged , , | Comments closed

Weathering The Storm Next Time: Gov. Cuomo’s NYS 2100 Panel Offers Smart Plan To Keep The Lights On, Emissions Down

By | Bio | Published: January 10, 2013

Extreme weather and aging infrastructure came together with a vengeance in Sandy, showing the fragility of the basic systems that sustain this vibrant city and region. Like so many others, my family lost power, heat and water during Superstorm Sandy, and I watched out my window as a giant flash marked the moment that waters crested a 12-foot retaining wall at the 14th Street ConEd plant.

New Yorkers are all too familiar with the devastation that followed, and the disruption that spread far beyond the water’s reach. As the immediate crises are resolved, our attention is now on the complex challenge of long-term resilience.

One big step: The NYS 2100 Commission, a panel of experts assembled by New York Gov. Andrew Cuomo back in November, just two weeks after the storm. EDF President Fred Krupp served on the commission, and our energy team prepared extensive recommendations on how to make our energy system more robust, resilient and adaptable. In yesterday’s State of the State address, he talked about the results.

As it turns out, some important solutions were right under our noses.

For example, amid the darkness and devastation, there were dozens of homes, businesses, even whole communities that kept their lights on and the water because they were designed to isolate breakdowns, heal quicker, and work with natural systems rather than against them.

Success stories were located across our region: 

  • Lights stayed on for sixty thousand residents of Co-op City in the Bronx thanks to a combined heat and power plant that can operate independent of the grid. Ditto the office tower at One Penn Plaza, an apartment building at 11 Fifth Avenue, and large parts of the campuses at Princeton and NYU. 
  • In Bayonne, NJ, the Midtown Community School used a combination of solar panels and a generator to offer a safe, warm place to stay for over 50 residents during the storm. 
  • On Long Island, the Villani family kept their lights on thanks to a 4.8 kw solar array that happens to have a battery bank. “We had friends and neighbors coming over to charge phones and batteries,” Stephanie Villani said. 
  • In lower Manhattan, the community group Solar one used solar panels to offer residents of Stuyvesant Town, the sprawling 35-building apartment complex, a place to charge their phones and computers.

Exceptions like these should be the rule next time. Unfortunately, today’s utility grid is set up to discourage more of these success stories – which are also cleaner and more efficient.

Source: Reuters

In fact, many buildings outfitted with fresh new solar arrays stayed dark thanks to cumbersome, outdated rules and regulations. Ironically, the solar panels were not making electricity when the grid was down, precisely because they were permanently connected to the grid and had to be shut down, rather than simply unhook when the larger system failed. So instead of sunshine, they were running on diesel power – if they were running at all.

Building a smarter grid, and encouraging clean, efficient ‘microgrids’ that provide islands of heat and light means fewer outages and faster recovery. A smarter grid would also have the intelligence needed to pinpoint outages, cordon off damage, and reroute power.

Clearing out the legal cobwebs and requiring utilities to unlock their grids more easily would make their systems stronger and more resilient in a crisis, and open the door for more efficient, renewable energy solutions. It would also open up opportunities for new ways to finance the upgrades needed to take full advantage of efficiency and renewables in today’s buildings.

(You can read EDF’s blueprint for a smarter, more robust grid here.)

Climate change means that higher sea levels and more extreme storms are the new normal. Unfortunately, some of this is already locked in. But we still have an opportunity to prevent the worst, most costly consequences by working together to reduce heat-trapping pollution. Superstorm Sandy reminded us of the need to prepare for a more challenging future. We need to make sure the steps not only protect against the impacts we can’t avoid, but also help prevent those we can.

Yes, we will have to fortify our buildings and infrastructure, change building codes and keep generators on hand in the face of extreme weather. But a lot of the steps we can take to keep the lights on during a crisis are also steps we can take to cut the pollution that is linked to climate change and extreme weather in the first place.

As we invest federal emergency dollars to rebuild, as we get ready for the next time – let’s make sure we’re taking every step that solves for both safety and less pollution at the same time. Efficiency, a smart grid, transparent information, renewables. Unlocking multiple benefits like these can help us rebuild better, faster and stronger. And lead the way for the world’s great cities, many of which are on the coast and in harm’s way just like New York.

My kids and I were lucky to weather the storm with just inconvenience. But as I think about how might live in a future New York City, I’d like to be sure that we’re doing everything we can now to run this town on safe, clean energy. The Cuomo commission report takes a big step in that direction: let’s join the Governor and the members of this commission in making its recommendations a reality. This is an opportunity that business, political and community leaders must not miss.

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Clean Energy And Economic Development Are Birds Of A Feather

By | Bio | Published: January 10, 2013

Our new Clean Energy Economic Development Series highlights the successful creation of clean energy clusters in Ohio, Iowa and Colorado.  Some report highlights: 

  • Ohio experienced record investment and merger and acquisition deals in clean energy in 2010 and 2011.  Ohio also significantly increased patents in batteries, fuel cells and wind technologies, moving up in national rankings in all three areas.
  • The Metro Denver region alone had about 1500 companies and 18,000 workers in the cleantech sector in 2011, and achieved a 35 percent increase in direct employment growth since 2006.
  • Iowa leads with the second-highest installed wind capacity in the nation, and is one of only two states that receive over 20 percent of electricity from wind power.  According to the American Wind Energy Association, Iowa has attracted more major wind industry manufacturers than any other state.

While the road map to economic growth differs somewhat for each region or state, these road maps share a formula for success where policy and economic development actions work together across three fronts: (1) stimulating demand for clean energy products and services, (2) seeding innovation in clean energy solutions and (3) recruiting and supporting new firms, jobs, and workforce skills in clean energy. 

But the work is just starting, not just for Ohio, Iowa and Colorado, but for all states.  Every state needs to look to expanding clean energy policy and actions, for example:

Stimulating Demand: The American Taxpayers Relief Act (ATRA) provides critical federal support for wind energy through a production tax credit (PTC), as well as extending energy efficiency tax credits for residences and businesses.  (Under current law, the solar investment tax credit remains in effect through December 31, 2016.)  The wind tax credit helps create customers for the nearly 500 wind manufacturing facilities across the country.  Renewable Portfolio Standards (RPSs) should be strengthened (and certainly not weakened as in Michigan).  Utilities need incentives to invest in smart grid, energy efficiency and other demand-side management programs.   New policies, such as on-bill repayment (OBR), should be passed to create customers for energy efficiency while saving consumers and businesses money.

Innovation: As spending debates loom, we need to maintain investments of federal dollars in clean energy research and development (R&D).  States need to create local programs, such as Ohio’s Third Frontier which promotes technology commercialization.  Third Frontier has helped take the fuel cell industry in Ohio to a new level (measured by higher patent rankings in fuel cells and batteries). 

Recruiting & Workforce Development:  Smart grid investments create modern infrastructure and resilience that is valuable to companies.   Other recruitment tools include easy siting — Iowa City created a Wind Energy Supply Chain Campus that is “shovel-ready” for wind-related companies – and the availability of skilled labor.  Iowa Lakes Community College trains 200 students a year in construction, operations and maintenance of wind turbines using five training labs at the college.   

Clean energy policy and economic development go hand-in-hand because America needs growth sectors to reduce unemployment.  A Brookings Study of clean economy jobs found that between 2003 and 2010, the newer, “cleantech” sub-sector related to energy efficiency and renewable energy grew at a “torrid pace” across the nation.  (Wind: 14.9%, Solar Thermal: 18.4%, Solar PV: 10.7%, Fuel Cells: 10.3%)  As Ohio, Iowa and Colorado have shown, clean energy can deliver economic growth.

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Wind Update: The PTC And A Christmas Day Record

By | Published: January 9, 2013

This commentary was originally posted on EDF's Texas Clean Air Matters blog.

Source: Houston Chronicle

Good news came out of the fiscal cliff ordeal last week when Congress voted to extend the Production Tax Credit (PTC) for renewables, which had expired on January 1. While the 2.2 cent-per-kilowatt-hour credit has only been extended through 2013, it provides some certainty to an industry that was holding its breath. As we’ve discussed previously, while the tax breaks for the oil and gas industry are written into the permanent tax code, the credits for wind and other renewables are not. Created under the Energy Policy Act of 1992, the PTC income tax credit is allowed for the production of electricity from utility-scale wind turbines, geothermal, solar, hydropower, biomass and marine and hydrokinetic renewable energy plants.

While this extension through the year does not appear to provide a great deal of long-term certainty, my colleague Colin Meehan points out that “an important distinction with this extension is that prior to 2013, the tax credits were awarded to facilities operational by the end of 2012. The extension now applies to facilities for which construction begins by the end of 2013. As a result, this is more like a two-year extension.” Cameron Fredkin, director of project development at Cross Texas, further emphasizes the point by highlighting that “the key provision in the extension is the requirement to begin construction in 2013 versus previous one-year extensions that required wind developers to complete construction and begin operations in 2013. Wind developers in the Panhandle region in the interconnection study process would have had difficulty achieving commercial operations in 2013.”

According to the American Wind Energy Association, “America's 75,000 workers in wind energy are celebrating over the continuation of policies expected to save up to 37,000 jobs and create far more over time, and to revive business at nearly 500 manufacturing facilities across the country. Half the American jobs in wind energy – 37,000 out of 75,000 – and hundreds of U.S. factories in the supply chain would have been at stake had the PTC been allowed to expire, according to a study by Navigant Consulting.”

As I wrote back in November, many of those projects and jobs that were on the line while Congress delayed are here in Texas. In Amarillo, Walt Hornaday, president of Ceilo Wind Energy, said the tax credit helped “dust off projects [they] had put on the shelf.” Hornaday says he is “impressed wind was in the bill with big-ticket items like Medicaid and the Farm Bill. It used to be wind wouldn’t have a chance to be included. I thought we’d be left out in the cold.” According to The Hill, “The wind industry has floated a phase-out plan for the credit as a way to cement some stability and avoid annual battles to extend the credit. Securing the extension now sets the table for those discussions.”

Andy Geissbuehler, head of Alstom’s North American wind business, a manufacturer of wind turbine equipment, believes that “the extension of the Production Tax Credit for wind power is a positive development for our company, our customers, and the many workers across the country employed directly and indirectly by the wind power industry. As an equipment supplier, we stand ready to provide the equipment that can be manufactured in our Amarillo facility to project developers across North America. We remain optimistic about the long-term market for wind power market in North America, especially now that the U.S. Production Tax Credit has been extended another year.”

One possible casualty of Congress’ stalling is the $5 million, 80,000-square-foot facility left behind by Zarges Aluminum Systems. The German company planned to produce wind tower components, such as ladders and platforms. A spokesman at the time blamed the recession and uncertainty regarding the tax credits as well as low natural gas prices for putting pressure on its customers and the company itself.

This extension comes at a time when wind set a new record in 2012 by installing 44 percent of all new electrical generating capacity in America, according to the Energy Information Administration, leading the electric sector compared with 30 percent for natural gas, and lesser amounts for coal and other sources. Here in Texas, wind set another record, providing 8,638 megawatts (MW) of power on Christmas Day, with 6,600 MW coming from West Texas wind farms and 1,600 MW coming from the Texas coast. This adds up to nearly 26 percent of the system load, which is 117 MW higher than the previous record set in November 2012.

As Kent Saathoff, vice president of grid operations and system planning at the Electric Reliability Grid of Texas (ERCOT), points out, "Unlike traditional power plants, wind power output can vary dramatically over the course of a single day, and even more so over time. With new tools and experience, our operators have learned how to harness every megawatt of power they can when the wind is blowing at high levels like this."

Those new tools and experience are exactly why the PTC is an important component of this emerging energy sector’s ability to grow and innovate, especially as ERCOT reviews an additional 20,000 MW of wind power capacity. This is in addition to the more than 10,000 MW it already has installed, which is the highest amount in the nation.

Also posted in Texas, Wind | Tagged | Comments closed

Don’t Walk Away From Clean Energy Research & Development

By | Bio | Published: December 20, 2012

“The changing energy landscape and the resulting trade opportunities it affords will continue to provide consumers with more choices, more value, more wealth and more good jobs.” – ExxonMobil Energy Outlook, 12/12/12

I agree with Exxon.

We are moving closer to energy independence. But, even as the U.S. is facing a boom in natural gas, the only way we’ll reach our goal is if we don’t shortchange alternative energy research and development.  Changing the energy landscape must include rapid advances in zero carbon energy technologies, for very good reasons that are in danger of being overlooked in the fiscal cliff negotiations.

First, despite its great promise, we should remember that important questions remain about the health and environmental impacts of natural gas operations. The extraction and distribution of natural gas can result in the release of methane – the main ingredient in natural gas and a greenhouse gas many times more potent than carbon dioxide.  Due to the many possible escape routes for methane into the atmosphere, the true carbon footprint of natural gas is uncertain right now, and we need to diversify our energy portfolio and avoid getting locked into an over-reliance on one energy source.

Second, micro-grids will be increasingly important in a world with more storms, flooding, and other “weird weather.” We must be prepared for that scenario. Alternative energy and smart grid solutions can be more resilient, if designed properly. The current model of a large, centralized energy plant is increasingly problematic.

Third, alternative energy offers enormous potential for economic development, exports, and even savings on energy bills. As just one example, look at the Department of Energy’s investments into fuel cells.  According to the Clean Energy Patent Growth Index, more clean energy patents are associated with fuel cell technologies than with any other clean energy technology, with over 950 fuel cell patents issued in 2011. Fuel cell durability has doubled, expensive platinum content has been reduced by a factor of five, and the cost of fuel cells has fallen 80% since 2002. With DOE support, 36 commercial technologies have entered the global market as of this past fall.

These advances can benefit communities across the country.  Tulare, California invested in molten carbonate fuel cells for its wastewater treatment plant; this plant now produces about 45% of the electricity needed to run the plant which translates into a savings of more than $1 million per year (not to mention 6,200 tons less CO2 per year).  With over 16,500 wastewater treatment plants in the U.S., communities could find enormous savings and build more resilience — if access to other fuel source is interrupted or electricity goes down, the plant can continue to partially operate and provide critical services to the community.

Talk about more choices and more value for communities, and more wealth and more good jobs for suppliers of fuel cells.

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Texas Electricity Generation Plan Focuses On Fossil Fuels Instead of Diverse Infrastructure That Includes Renewables & Efficiency

By | Bio | Published: November 15, 2012

Last week, the Public Utilities Commission of Texas (PUC) voted to approve a staged increase of wholesale offer price caps in the Texas electric market for the Electric Reliability Commission of Texas (ERCOT) in order to prop up lackluster investment interest in new power plants. This change fits well with established theories of competitive markets, but it does little to resolve current issues beyond sending a signal to investors that the PUC intends to act further to incentivize investment in new generation.

That same day, the commissioners “swatted aside” a petition to revisit the state’s goal for non-wind renewable energy without allowing any public discussion.  Given our need for new drought-proof energy and the fact that solar costs have fallen 80 percent in the last three years, this seems like an issue the PUC would be eager to take up.  In fact, when PUC Chairman Donna Nelson was pressed during a state senate hearing this spring to identify state policies that had successfully added electric drought-proof resources, she focused on both the state’s Renewable Portfolio Standard (RPS) and energy efficiency goals.

The PUC has now voted twice to raise wholesale offer price caps for electric generation, even though it voted recently to make it more difficult for the state’s energy efficiency programs to succeed by lowering their price caps.  Last week, while voting to increase price caps again, Chairman Nelson noted that the work to ensure new electric generation did not end with that vote.   I hope that’s the case because I want to make sure we can keep the lights (and air conditioning!) on too.  Since the PUC denied the petition to create a rulemaking to expand the RPS, it seems that their work on expanding electric generation is limited to non-renewable, fossil fuel power plants and not much else.  This is unfortunate given the fact that renewable energy is expected to be the world’s second largest source of power by 2015, according to the recently released World Energy Outlook.

Over the last century, Texas has dominated the international energy scene. However, as the playing field changes, we need to make sure that Texas doesn’t fall behind as a state and an international energy leader.  Recent PUC decisions may increase that risk, but their final decisions on a new market structure will likely be the ultimate decider.

Texas and its citizens deserve a competitive and diverse energy infrastructure that allows for a wide variety of characteristics in energy resources such as storage, customer-side energy resources, renewable energy, and cleaner-burning modern natural gas-fired power plants. Anything less will risk not only our state’s near term electric grid reliability, but also our long-term economic viability as well.

Also posted in Energy Efficiency, Solar, Texas, Texas Energy Crunch | Comments closed

Standing Or Elbow Room In The Energy Sector?

By | Bio | Published: October 16, 2012

GridWeek 2012 convened earlier this month in Washington D.C., and as a first time attendee, I left breathless and hopeful – yet confused – by inexplicable lingering complacency.  Unbeknownst to me, by agreeing to be a panelist in two sessions, I was setting up a comparative experiment. For the first panel, I spoke on “New Utility Business Models” to a packed room of the glimmer-eyed new energy intelligentsia, which is what makes GridWeek so exciting. In the later days of the conference, about a dozen GridWeek participants interspersed amongst a room of mostly empty seats to hear my panel presentation on “Smart Grid’s Role in New Air Quality Standards.”      

It would seem that I, and the handful of attendees at the air quality panel, see the productive overlaps between air quality standards compliance, smart grid and new utility revenues.   There are several ways that smart grid provides a value proposition for utilities faced with increasingly stringent air quality regulations, most recently the Mercury and Air Toxics Standards (MATS) rule. Here’s a short, but by no means comprehensive, list of both synergies and potential tensions:

  • Renewable Portfolio Standards (RPS): Smart grid supports achieving higher and higher proportions of intermittent, non-dispatchable renewable electricity generation.   Achieving high levels of RPS will be expensive unless we can use new strategies to manage intermittency and power quality.  New pricing structures for utility services can provide incentives to invest on both sides of the meter, and open the door for historically hidden utility services (such as voltage regulation) to be priced and sold.  For incumbent utilities, there is an opportunity to identify and price network services that traditionally have been bundled into rates.
  • Electric Vehicles (EV):  EVs are an important new frontier for utilities, and like most frontiers, offer both promise and peril.  Overloaded distribution networks might keep the utility engineers up at night, while the emerging new customer class has utility shareholders thinking like venture capitalists.  Though still small in number, EVs are quickly driving utility planners and system operators toward a fork in the road. Do we provide safe reliable service to new and existing customers using expensive dirty methods of the past (i.e., more big power plants) or do we take a deep breath (of cleaner air) and trust in the power of the people by embracing distributed energy resources?  
  • Distributed Energy Resources (DER):  Rooftop solar, energy efficiency, and demand response, collectively known as distributed energy resources, unquestionably can provide the low cost, clean pathway towards both energy independence and a sustainable economy.  However, DER is harder to plan and dispatch, and it threatens the traditional utility business models of incumbent institutions.   In California, net energy metering policy has been an important ignition switch, fueled by the California Solar Roofs Initiative, but these successful policies need to evolve to achieve DER at larger scales.   Again, the key is precisely pricing the goods and services on both sides of the meter.  Utilities should be paid for power quality and storage services provided to owners of rooftop systems, while electricity from those rooftops should be priced fairly to provide incentive to invest.
  • Clean air standards:  Oxides of nitrogen, particulate matter, acidifying compounds and carcinogens, such as mercury, are the power sector’s long-time emissions concerns.  Across the nation, electricity generators must hold permits to pollute and tradable emissions allowances that must be acquired at nontrivial prices.   Starting in 2013, California electricity generation that emits global warming pollution will have an associated cost –carbon allowances in the state’s cap-and-trade program.  Already, polluters in Southern California must acquire emissions allowances for the RECLAIM program, and power plants nationwide must comply with the acid rain emissions allowance program established in the Federal Clean Air Act .  Similarly, the Regional Greenhouse Gas Initiative (RGGI) program puts a price on carbon emissions for nine northeastern states, and the Western Climate Initiative is endeavoring to do the same for West Coast states and Canadian provinces.  These programs use emissions allowances that are fungible and tradable, yet they represent real costs – and thus economic opportunity when avoided.  Pollution pricing is changing business models throughout North America.    But there is more to come.  For example, improved environmental performance enabled by smart grid technologies, such as increasing DER, presents new avenues to meet air quality requirements.  For the Environmental Protection Agency (EPA) and other oversight agencies, the ability to measure, verify and enforce DER is key to granting compliance credit, and such capabilities are increasingly cost-effective with smart grid deployment. 
  • Consumer empowerment:  The mobile phone revolution is a prelude to what may be possible once consumers and producers begin to see true pricing in the energy marketplace.  While load-serving entities can find new revenues through services, consumers and entrepreneurs will be motivated by new ways to make a buck, or avoid spending bucks through unnecessary energy waste. 

The new smart grid business frontier has, in fact, many frontiers.  The California Public Utilities Commission conceived of an electricity ecosystem comprised of smart consumers, smart markets and smart utilities.  Utilities are trying to find their new niche within the ever changing food web, and all ears are perked for new opportunities.  That’s why only standing room was available in the business model panel session at Gridweek.

Meanwhile, in the air quality session of GridWeek, there was plenty of elbow room.EPA is considering flexible strategies for meeting new emissions standards for carcinogens.  Many utilities are operating in permit constrained areas that fail to meet National Ambient Air Quality Standards.  Enlightened utilities are seeing demand-side strategies as increasingly viable with smart meter deployment, and a means to improve returns to shareholders.  Performance-based rate of return can be structured to both reduce sales of energy to customer and to improve utility earnings. 

Gridweek revealed to me that many are educating themselves about new business opportunities, but precious few have the connected the dots to air quality improvements.   If I could, I’d bet on the folks who attended both sessions.

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Chasing Red Herring On The Wind

By | Bio | Published: September 13, 2012

The saying goes that hunters used smoked red herrings to train their dogs, trying to throw them off the scent of the hunt with something that has a much stronger and tempting smell but ultimately wasn’t the real target.  This is quite similar to recent discussions about resource adequacy – now that it’s become clear that the EPA isn’t the reason for power plants shutting down, some seem more focused on finding another scapegoat rather than addressing the real problems in the market.

There was a time, not too long ago, when the low marginal costs of technologies like wind and solar power were seen as a good thing.  In 2009 the Public Utility Commission (PUC) said “renewable generation has reduced wholesale and retail energy prices during some periods and has been instrumental in moderating price increases during periods in which the cost of natural gas was increasing.”  Back then, this was seen as a good thing because there was a need for a moderating influence on high natural gas prices at the time.

Times have changed though, and lately PUC commissioners have taken to blaming wind energy for their current troubles, even when their own paid experts tell them otherwise.  In a Senate Natural Resources hearing last week, PUC Chairman Nelson stated that “the market distortions caused by renewable energy incentives are one of the primary causes, I believe, of our current resource adequacy issues.”

The problem with this claim is that it isn’t supported by the facts, and most industry experts agree that the real problem (if you want to call low energy prices a problem) is a combination of a market structure in need of reform and consistently low natural gas prices.  In the Brattle Group’s report on resource adequacy issues in ERCOT they make a pretty strong case that gas, not wind, is responsible for setting the bulk of market prices.  Perhaps the best way to look at it is this chart showing how electric rates lined up with gas prices over the last decade. Read More »

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America’s Military Renewables Plan Fast-Tracked And Mission Critical

By | Published: August 23, 2012

By: Jillian Jordan, EDF Energy Marketing & Communications Intern

This months’ announcement from the White House calling for green energy bids and its plan to fast-track wind and solar projects delivered a clear message that renewable energy is something the American military – and its government – whole-heartily believes in. The federal government’s Renewable Energy Partnership Plan (Plan), headed by the Department of Defense (DoD) and the Department of the Interior (DOI), is pushing new project development on and near numerous military installations to the tune of $7 billion dollars.

Even more compelling is the fact that clean energy is now considered part of America’s national security plan by key political figures and the DoD. The White House’s Heather Zichal, Deputy Assistant for Energy and Climate Change, has commended this strategic move towards clean energy and endorsed the Plan as “operationally necessary, financially prudent and mission critical.”

So mission critical, in fact, that the Army has planned the incorporation of renewables as a high-priority tactic for saving lives. Military convoys have long been known to be one of the most dangerous operations, costing more lives than many other career fields in the armed forces. When supplies like gasoline run out, transportation troops are assigned the duty of delivering them through hostile territory. For every 24 fuel resupply missions, one American life is lost – which constitutes one out of every eight deaths in Iraq. Using clean energy actually saves lives for today’s military. The less fossil fuel used and the less dependent we are on oil, the less convoy trips are needed for refueling and to run diesel generators that power military tents, therefore minimizing the risk for American troops. 

The alternative energy infrastructure projects under the Plan will create jobs favoring local economies, produce about 7,200 megawatts of energy and utilize millions of acres of public lands and offshore areas that are best suited for wind and solar projects, all while meeting the goals of the federal Energy Policy Act of 2005. Under the Act, the military has voluntary plans for 25% of its energy produced by clean sources by 2025.

"Developing renewable energy is the right thing to do for national security, as well as for the environment and our economy," Secretary of Defense Leon E. Panetta said. "Renewable energy projects built on these lands will provide reliable, local sources of power for military installations; allow for a continued energy supply if the commercial power grid gets disrupted; and will help lower utility costs.”

In addition to becoming independent from the national grid, utility costs have been upwards of $4 billion annually and the task force assigned to the Plan is determined to lower the DoD’s energy bill and curtail energy usage. But, above all, the goal is to maintain the military’s ability to remain powered during mission-critical times. Conditions of the Plan offer an added safety net in the event of a massive blackout or, for a worst-case-scenario attack on America’s power grid.

Preliminary site evaluation began with DOI’s Smart from the Start initiative under Secretary of the Interior Ken Salazar.  Pilot projects are currently underway in Arizona, California, Nevada and Wyoming, with more fast-tracked proposals to be announced in the next few weeks. The Renewable Energy Partnership Plan signed between the two agencies would allow the military to purchase power produced from homegrown, renewable energy sources, which could lead to a reduction in clean energy costs and an overall boost to the alternative energy sector.

Of the DOI’s 28 million acres, 16 million of which were designated for defense, 13 million that are rich in resources and ideal for wind, solar and geothermal power generation. “Our nation’s military lands hold great renewable energy potential, and this partnership will help ensure that we’re tapping into these resources with a smart and focused approach to power our military, reduce energy costs, and grow our nation’s energy independence,” Salazar said.

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European Power From U.S. Forests: Two New Reports Offer Pathways To Sustainability

By | Bio | Published: July 12, 2012

European utilities are using trees grown in the United States to make electricity. Well, not the whole tree. But lots of the tree is used to make the little wood pellets that are then shipped across the ocean, mostly to the Netherlands, United Kingdom, Denmark and Belgium. It is these wood pellets that are burned with coal or in stand alone biomass boilers to produce energy. This video explains the journey from forestlands to power plants.

Why is Europe able to make electricity from U.S. trees when domestic utilities are cancelling wood biomass projects? Answer: Europe has a strong renewable energy policy.

The EU Renewable Energy Directive passed in 2009 sets a target for EU member countries to collectively achieve 20% of energy from renewable sources by 2020. Many utilities are increasing the use of biomass as a low-cost means of producing renewable energy. But Europe doesn’t have enough forest or agricultural land to meet the increasing demand. To fill that gap, European utilities are importing wood pellets – a form of chipped and compressed wood – from North America and increasingly from the Southern United States. The growing demand for U.S. wood biomass is raising questions about the sustainability of the country’s forest resources.

Two reports from Environmental Defense Fund, in conjunction with colleagues at Pinchot Institute and University of Toronto, examine economic, environmental and public health impacts from the expanding wood pellet market. European Power from U.S. Forests documents how the EU policy is shaping the transatlantic trade in wood biomass. For the U.S. export market to benefit from the large potential capacity for pellet production, producers in the U.S. will need to meet or exceed EU sustainability standards. Some type of forest management or pellet supply chain is likely to be required.

Pathways to Sustainability evaluates the programs and practices that fall under the EU biomass requirements for wood pellets, concluding that few of the pathways completely meet the standards. EDF proposes a new approach to recognize the various ways landowners and biomass producers on both sides of the Atlantic can meet their environmental objectives.

Sustainability will remain a pivotal issue as EU member countries, the European Commission and various stakeholders seek to harmonize sustainability requirements. European bioenergy companies often view biomass sustainability as the largest unquantified risk in their supply chains. Developing sustainable pathways sooner, rather than later, will reduce economic risk and encourage market development for wood pellets in the U.S. and Europe.

A webinar will be held July 17, 2012 at 12 pm EST. Please join Will McDow (EDF), Brian Kittler (Pinchot Institute) and Jamie Joudrey (University of Toronto) for a discussion of E.U. policies, the growing demand for wood pellet exports and options to meet Europe's sustainability requirements.

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