Monthly Archives: November 2012

ALEC & Heartland: Freedom Fighters?

As we approach a new Congress, and a new Legislative Session here in Texas, the Heartland Institute and their pal the American Legislative Exchange Council (ALEC) are gearing up to reverse state renewable energy mandates across the country.

This comes as no surprise as ALEC has a reputation for supporting unpopular agendas, like current legislation it is pushing around the country that would mandate the teaching of climate change denial in public school systems. So while many Americans from differing political affiliations support an increase in renewables – a nearly unanimous 92% of voters, including 84% of Republicans – it seems fitting that ALEC would be on the opposing side.

While the American Wind Energy Association (AWEA) and the Solar Energy Industry Association (SEIA) are both members of ALEC, I wonder if they will join the ranks of Proctor & Gamble, Coca-Cola, Kraft Foods and a whole host of companies who have since parted ways with the “shadowy right-wing front group.”

And it’s not just ALEC that runs off its members. As we wrote back in April, GM announced they were pulling their funding from the Heartland Institute, citing Heartland’s climate change denial. Of course, weeks later Heartland doubled down on their denial with a series of billboards comparing climate change admitters to the likes of Ted Kaczynski, Charles Manson and Osama bin Laden.

So this ALEC-Heartland partnership is truly a match made in…well…

Adding to ALEC’s list of anti-environmental goals – including promoting legislation to kill climate policies and providing the framework for legislation that would prevent the Environmental Protection Agency from regulating toxic coal ash – it now has its sights set on the 29 states that have renewable portfolio standards (RPS) and mandates in place.

And in typical Orwellian fashion this fight is dubbed the “Electricity Freedom Act,” as they deem state standards requiring utilities to get a portion of their electricity from renewable power “essentially a tax on consumers of electricity.” James Taylor, the Heartland Institute’s senior fellow for environmental policy, said he was able to persuade most of ALEC’s state legislators and corporate members to push for a repeal of laws requiring more solar and wind power use on the basis of economics, claiming that, “renewable power mandates are very costly to consumers throughout the 50 states, and that alternative energy, renewable energy, is more expensive than conventional energy.”

But whose freedom are they really protecting and whose freedom are they hindering?

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Posted in Climate, Washington, DC / Tagged , | Read 2 Responses

EDF Energy Innovation Series Feature #15: Building Efficiency Financing Model From SCIenergy

Throughout 2012, EDF’s Energy Innovation Series will highlight around 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.

For more information on this featured innovation, please view this video on SCIenergy’s Managed Energy Services Agreement here.

In our feature on Honest Buildings, we noted that the building sector is responsible for nearly half of CO2 emissions (transportation is a third) and that 75 percent of the electricity produced in the U.S. is used to operate buildings. However, the economics of making buildings more efficient can be tricky. Improvements often require significant capital, and since the tenants – not the building owners – pay the energy bills and reap the savings from efficiency upgrades, building owners often lack the incentive to invest in energy-saving measures.

Enter Managed Energy Services Agreement (MESA), the innovative financing structure from Dallas-based SCIenergy, which provides building owners and managers a way to cut their energy usage without incurring high up-front costs. It does so by allowing an investor to agree to provide energy to a building at a price based on the building’s historical costs. The investor pays for energy efficiency upgrades and then uses the savings to provide a return on their investment.

“We think about intelligence as a source of energy, just like we think of coal, nuclear, oil, and renewables as sources of energy,” said Woolsey McKernon, managing director of SCIenergy. “Building operators are leaving billions of kilowatt-hours, and therefore millions of dollars, on the table because the expense is short-term and the payoff is long-term. We flip that model.”

Credit: SCIenergy

Tackling the energy challenge from the economic side of things is tough, because in many cases, saving energy dollars long-term requires up-front capital. Services like SCIenergy’s MESA remove that cost barrier and allow customers to reduce their energy use and cost.

Making this approach work requires a unique business model. Customers agree to purchase their electricity and gas from SCIenergy at a monthly cost based on their historical usage. SCIenergy then makes investments in system automation, energy management tools and other building improvements that are expected to save energy. SCIenergy uses the savings to finance their upfront investment at no cost to the property owner. If the savings are less than expected, SCIenergy absorbs the risk.

One SCIenergy customer, Corporate Office Properties Trust, is a real estate investment trust (REIT) that owns more than 20 million square feet of rentable office space, primarily in the Washington, D.C. area. SCIenergy applied its services and made $16 million in improvements to 26 office buildings, resulting in a 25 percent reduction in annual energy costs and more than an 11,000-ton reduction in energy-related CO2 emissions.  In addition, there was an added benefit to tenants as well:  the number of calls to building managers complaining about an office being too hot or too cold dropped 95 percent.

Posted in Energy Efficiency, Energy Innovation / Comments are closed

Wind Makes Up 26% Of ERCOT Load In November, New Record

Source: Environmental Law Institute

Despite having escaped this summer without rolling blackouts and the kind of heat we experienced last year, Texas is still dealing with the energy crunch issue. Luckily, our state is home to the nation’s largest wind power industry and it contains about a fifth of the country’s wind turbines.  The Electric Reliability Grid of Texas (ERCOT), the Texas grid operator, announced that earlier this month wind throughout the state contributed 26 percent of the load on the grid, setting a new record.  On November 10, a total of 8, 521 MW was produced, beating the previous July 19 record.  For the first eight months of this year, wind accounted for 8.7 percent of the grid’s energy.

This is in addition to wind helping Texas avoid blackouts in February of last year, when a cold front proved too much for many traditional power plants. On February 2, 2011, wind energy played a critical role in limiting the severity of the blackouts, providing enough electricity to keep the power on for about three million typical households. ERCOT confirmed that wind provided between 3,500 and 4,000 MW of electricity (about seven percent of ERCOT demand at that time), roughly what it was forecasted and scheduled to provide. Texas wind provided this electricity during the critical 5 to 7 a.m. window when the grid needed power the most.

As an E&E ClimateWire article points out, wind farms in west Texas contributed about 7,000 MW to the system on Nov. 10 when the record was hit. Coastal towers and turbines, which were key to avoiding power shortages last year, contributed about 1,100 MW of supply. Texas holds more than 10,000 MW of wind power capacity overall.

This is all welcomed news for an industry holding its breath as Congress debates the renewal of the expiring Production Tax Credit (PTC) for renewables, which provides a 2.2 cent per kilowatt-hour tax credit for the first ten years of electricity production from utility-scale turbines.

With Texas being a major manufacturer of wind equipment in addition to relying on it for power, many jobs hang in the balance.  According to a Sierra Club report,  “a typical new 250 megawatt wind farm will create 1,079 jobs – manufacturing jobs, construction jobs, engineering jobs and management jobs.” Another report by NRDC estimates that from a 250 MW project, “non-construction businesses would account for 557 jobs — 432 in manufacturing, 80 in planning and development, 18 in sales and distribution and 27 in operations and maintenance. Construction would check in with another 522 jobs, doing things like buildings roads and foundations, installing turbines and wiring and connecting the power plant to the grid.”

In Texas, the expiration of the PTC could not only mean stunting job growth but would also likely create layoffs. According to Walt Hornaday, president of Cielo Wind Power, an Austin-based wind farm developer, “We haven’t had the industry come to a stop like this before in a long, long time.” His company is pursuing work in other countries, but otherwise, he said, “we would definitely be looking at very large layoffs.”  Even Governors Perry’s own report cites a Mitchell Foundation analysis that the expanding wind and solar energy industries are projected to add 6,000 jobs in Texas per year through 2020 and, as of last year, over 1,300 Texas companies employ nearly 100,000 workers in industries directly and indirectly related to renewable energy.

And for those that now claim energy subsidies must end, despite being proponents for fossil fuel dollars, let us not forget what it has taken and continues to take to support the fossil fuel industry. First, the largest subsidies to fossil fuels were written into the U.S. Tax Code as permanent provisions.  Furthermore, the largest break, the Foreign Tax Credit, provides around $2.2 billion annually and applies to the overseas production of oil through an obscure provision of the Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial tax treatment. In an analysis conducted from 2002 to 2008, by the Environmental Law Institute, fossil fuel subsidies accounted for $72 billion over that span of seven years. On the renewable side, over half of the $29 billion subsidy amount supports corn ethanol. For traditional renewables like wind and solar, the total amount received was $12.2 billion, amounting to $1.74 billion annually.

Given Texas’ resource adequacy problems, it makes no sense to divest from a clean resource that provides up to 26 percent of our power while growing the economy.

As we mentioned in August, please contact your elected officials and ask them to renew the PTC before the end of the year. It’s good for Texas, the nation, and the environment.

Posted in Texas / Read 1 Response

California Cap-and-Trade Auction Success

The results of California’s first ever auction for greenhouse gas (GHG) emissions allowances are public, marking the start of a new era for stimulating innovative solutions to combat climate change. Coincidentally, earlier today new atmospheric data was released by NOAA showing that 2012 is on pace to be the warmest year, eclipsing the mark set only two years ago.

By establishing a hard cap on emissions and creating a carbon price through a trading mechanism, California’s comprehensive GHG program complements, and is fine-tuned based on experiences from the world’s other climate change cap-and-trade mitigation programs. For example, lessons learned from the world’s largest cap and trade program in the European Union have shown that emissions of GHGs can actually decrease while the economy grows. Similarly, as shown by the Analysis Group’s report of the cap-and-trade program in the Northeastern United States, in addition to creating a strong signal for innovation, money generated through an auction can be invested in ways to cut GHGs even further.

Based on today’s results, California’s program is performing according to the expectations of economic experts and policy makers. The market price ($10.09) for credits that can be used in 2013 was slightly above the floor price of $10 dollars. Also, there were more bids for 2013 credits than credits sold, with 97% of allowances going to covered entities. Put simply, regulated businesses are taking this market seriously and believe they can cut greenhouse gas emissions even more cheaply than anticipated. This is a very good thing for California.

At the same time as the California carbon auction sold 23 million allowances for use starting in 2013, the market also sold 5.5 million allowances for use in 2015 and beyond. This is a clear signal that investors see this as a lasting program, and provides an important signal that the 9 billion plus dollars of clean tech investment made in California since 2006 has strong backing.

A California carbon price opens the door for cleaner energy and clean air, as we finally have an “official” cost of pollution. We are marching more resolutely than ever into an economically and environmentally sustainable future.


Posted in General / Comments are closed

EDF Energy Innovation Series Feature #14: Home Energy Management From Consert

Throughout 2012, EDF’s Energy Innovation Series will highlight around 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.

Find more information on this featured innovation here.

If innovation is where expertise and opportunity intersect, then San Antonio-based Consert Inc.(Consert) is a perfect case study.

Founded in 2008 by veterans of the telecom industry, Consert’s Virtual Peak PlantTM provides an energy management solution that gives consumers control of the highest energy-consuming electrical devices in their home or business and provides utilities with a low-cost way to tap into an unused energy source during key peak demand periods.

“We find the key is to offer a simple solution to consumers that also benefits utilities,” said Jeff Ebihara, vice president of Consert. “Our goal at Consert has always been to facilitate a mutually beneficial relationship between the consumer and their electric provider.”

The result is cutting-edge technology that connects, monitors and controls high energy-consuming devices including air conditioners, water heaters and pool pumps, which can represent over half of the total load for electric utilities during times of peak demand. The devices in a “Consert-enabled house” are linked using the wireless technology “ZigBee,” creating a Home Area Network (HAN) that can either be controlled remotely or configured to make decisions based on user preferences or outside weather conditions. Utilities may call upon this load during peak hours to reduce stress on the grid, with the consumer never losing comfort or control.

According to Consert, its home automation system can save consumers 15-20 percent on their energy use. When consolidated, these homes add up to a considerable amount of unused energy that utilities do not have to buy, sell or deliver.

Credit: Consert Inc.

This “negawatt” concept isn’t new – a megawatt of energy that is NOT used through demand response is just as helpful for a stable energy supply as a megawatt of new generation. However, the consumer appeal of Consert’s products is more personal and customizable than traditional load control measures. Customers can control their energy consumption 24/7 from any web-enabled device, such as laptop, tablet or smartphone, but most configure the system to work automatically.

The development of a consumer-friendly service that helps save money – and provides some “coolness” while requiring no sacrifice in comfort or convenience – is an important achievement as we look for new ways to reduce energy consumption and increase efficiency. Reducing electricity demand and making more efficient use of electricity is very important both environmentally and for electric grid operators. But beyond the appeal of doing the “right thing,” or the novelty of controlling appliances, there had previously been little to no incentive for consumers to make it a priority. Cutting their energy bill, Ebihara said, has proven a strong incentive.

“Of course there is a small segment of the market that wants to control every last part their energy use,” Ebihara said. “And we are happy to provide that level of control. But we are finding that most people want to “set it and forget it.” They want to save on their energy bill and they might like the convenience of remotely accessing their programs, but they don’t want to have to think about it all the time and they certainly don’t want it to be a hassle.”

Appealing to a broad market has been one of the challenges of HAN products. The industry is young, and products are either complicated or expensive. It may be obvious that Consert wants its product to be ubiquitous, but such products will have to be deployed in large numbers to make a meaningful contribution to peak demand management.

Consert’s systems are available through utility companies, most of which offer the equipment free when customers participate in conservation measures. Others sell the equipment at a deeply-subsidized price. In San Antonio, CPS Energy will deploy Consert systems in 140,000 homes at no charge to the customer, reducing peak demand by 250 megawatts.

Posted in Energy Efficiency, Energy Innovation / Comments are closed

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

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.

Posted in Energy Efficiency, Renewable Energy, Texas / Comments are closed