Monthly Archives: February 2013

Results Are In: Auction Continues California’s Winning Streak to Fight Climate Change

Three months ago California officially opened its world class cap-and-trade program for greenhouse gas pollution – establishing the first ever carbon price in the Golden State and leading the nation on a path toward true climate change action.

Earlier this week, California’s march toward meeting emissions reduction goals was bolstered with a second auction of carbon allowances in the cap-and-trade program, and just today, the results of that auction were released. All signs point to marked success for the program in the second auction, and suggest California is on its way toward fully realizing the goals of the Global Warming Solutions Act of 2006 (AB 32).

As shown by the results released at noon today, overall participation in the February 19, 2013 auction was high, with almost 2 ½ times more credits bid on than were sold. Initial reports show this has beaten all market expectations, and the clearing price of $13.62 suggests a strong belief in the longevity of the overall program.

By selling more than 7 million state-controlled carbon allowances, California’s second auction also raised about $83.5 million – money that will be used to advance the goals of AB 32. Furthermore, since recent legislation was passed in 2012 that requires at least 25% of the auction proceeds to benefit disadvantaged communities, this auction will inspire more than $20 million in investments that can benefit Californians in need.

With respect to who participated in the auction, market statistics show there was approximately a 25% increase in the number of qualified auction participants as compared to the last auction. This increased participation was no doubt partly responsible for the fact that 2013 credits were purchased by a diverse array of bidders (as opposed to credit purchases being concentrated in a few entities). This diversity of participation, coupled with the strong regulatory oversight being used by state agencies and expert market monitors is an important guard against market manipulation and is yet another example of how this market looks to be strong and diverse, a good sign moving forward.

In addition to auctioning off credits that can be used for emissions obligations in 2013, California’s second auction also offered advance vintage credits that can be used for compliance starting in three years (2016). Based on the sales volume of these credits (greater than 4.4 million sold), there continues to be moderate demand going forward for future vintage credits, another indication of the belief of the programs longevity.

A California carbon price opens the door for cleaner energy and clean air, as the State finally has an ongoing cost that can be attributed to carbon pollution. California’s next auction will occur in 3 months, though investments made now can be assured their carbon reduction value can be both calculated and counted on. As shown by today’s auction results, while much of the nation has waited to take concrete action against climate change, California’s train is out of the station and picking up steam every day.

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Bipartisan Consensus: Wasting Energy Is Senseless

In his State of the Union address, President Obama announced the goal of cutting energy waste in buildings and homes in half over the next 20 years.  House Speaker John Boehner clapped approvingly.  U.S. buildings and homes waste so much energy that a 50% reduction of such energy waste would save businesses and individuals billions of dollars, would deliver healthier air to all Americans and would put us on the path of energy independence.  Most of our energy comes from burning fossil fuels; so, consuming less fossil fuel will reduce toxic emissions and improve air quality.  Cleaner air will save lives.  Studies estimate that over 35,000 Americans die every year due to air pollution related illnesses.

Cutting energy waste in half won’t just happen on its own, though, and it won’t be easy.  We need to identify the opportunities where we can eliminate energy waste, and then invest in the types of technologies that lead to more energy efficient buildings and homes. The good news is that these modern, cost-effective technologies are available now.

Clearly, opening windows when a building is overheated is not the solution. For example, building owners will need to invest in control technologies that cut overheating and turn off lights and equipment when not needed. These are smart energy efficiency investments with typically short pay-back periods. And, in reducing the energy we waste, we improve our quality of life with more money in our pockets and fresher air in our lungs.

Finally, let’s not forget about the environmental impacts of energy exploration, which is another reason why we shouldn’t waste the energy that was so hard to get out of the ground in the first place.  The actual extraction of fossil fuels is the second biggest source of U.S. greenhouse gas emissions, and – if developed irresponsibly – can pollute our water, air and oceans — jeopardizing our health, livelihoods and quality of life.  When you consider the whole range of health and environmental impacts involved with using, and (of course) wasting, energy –it is blatantly obvious that wasting energy is already coming back to hurt us.

If Washington can agree that wasting energy is senseless, let’s keep the momentum going and support smart efforts, policies and investment tools that will help energy efficiency reach its full potential.  Cutting energy waste is a win for our wallets, our health and our children’s’ future.

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Bloomberg’s State Of The City Ideas Good For Health And The Environment

Source: CBS New York

A lot happened yesterday: Brooklyn Nets cheerleaders. Jay-z soundtrack. Kids dancing on stage. The new stadium at Barclays Center. Popcorn. Valentine’s Day. Mayor Bloomberg’s birthday? Yes. But also his last State of the City speech.

In his speech and a small briefing in advance, he identified recent environmental wins: clean heat’s 170 tons of soot per year gone so far, a 16 percent cut in GHG pollution since 2005, the monumental third water tunnel under city streets, new waterfront parks underway at Fresh Kills, Governors Island and Brooklyn Bridge Park.

Mindful of 320 days left in his term (this guy counts data), he announced some ideas that can get done now:

  • Electric vehicles. A network of charging units citywide with 30-minute charges — one third of NYC’s taxi fleet to be electric. New York City could become a great place to charge a Tesla, a Leaf or a Volt. With traffic just behind heating oil as the main reason why some neighborhoods have unusually high pollution, that’s a good idea for health and climate. It also opens a conversation about the electric grid that extends well past his term. Will those cars run on electricity created by solar, hydro, wind, nuclear, natural gas, coal? Here’s an example of how to get it right: Pecan Street Inc.
  • Recycling. Expanded recycling for plastic, including those take-out containers so familiar to New Yorkers.  And – an issue that’s getting a bit of press – ridding our city of styrofoam cups used in schools, delis and restaurants.   This reminds me of EDF’s work with McDonald’s many years ago, getting rid of the Styrofoam clamshell.
  • Third, a citywide bike share program, to launch this summer.  This could end up being one of the largest bike share programs in the world.

Equally interesting are some of the ideas not explicitly framed as “environmental,” for instance:

  • A post-Sandy commitment to “rebuilding here,” on the waterfront — but doing so sustainably, in a way that “keeps the lights on” in a storm. That will take unprecedented collaboration with state and federal policy makers, tech innovation, architecture and design and efficiency finance.  A first step is to make sure that federal dollars flowing in to the region after Sandy are spent in a way that helps local communities make fully informed choices about not just “where” to rebuild, but “how” to rebuild.
  • And an idea that could reshape the skyline for a long time: “Midtown rezoning.” Sound boring? Could be.  But imagine midtown Manhattan with buildings that are far at the forefront of resilience and clean energy – taking full advantage of the latest technologies to generate clean electricity and waste as little as possible. Could Manhattan be the next Pecan Street? This is an opportunity not yet fully-seized. Read More »
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President’s Vision Encompasses A Next-Generation Energy System

Tuesday’s State of the Union (SOTU) speech included much that was music to environmentalists’ ears.  The headline, of course, is the commitment to take serious action to address the most significant challenge our generation faces – climate change.  And, with it, the extreme weather and public health burdens that are already making life harder for vulnerable regions and people nationwide, and that stand to become so much worse as the root cause remains unaddressed. 

But some of the most exciting aspects of the SOTU message are the nuts and bolts that underlie the top-line goal.  Specifically, the President’s speech recognizes that Americans have an opportunity to achieve many of the carbon reductions we need through actions that create new business opportunities, increase national security and drive economic growth.  In fact, we already are.  As the President noted, the past four years have seen the beginnings of a revolution in American energy production and use – technological innovations have put us on track to energy independence and renewable resources constitute a growing share of electric generation capacity. 

The President’s vision, as outlined in the SOTU, encompasses a next-generation energy system – one where the system that was revolutionary in Thomas Edison’s time is finally supplanted by a system that meets the needs of our time.  Technological change can bring full-scale transformation, and government can play a role by accelerating technological development.  A future where cars and trucks no longer depend on oil can finally be imagined – and government efforts can help bring that future into the present more quickly.

Carbon-free wind and solar energy represent a growing share of our resource mix, and  they can grow to serve a larger and larger share of load.   And energy waste in buildings can be cut substantially – but doing so requires innovations in energy retrofits, building operations and finance, which government can also help to foster.

Finally, President Obama referred to fostering a ‘self-healing power grid,’ which is extremely important. Modernizing our outdated, aging electric grid and how it is operated (as well as customer-side technology and practices) will help minimize problems that arise from extreme weather events and other disruptions, while also allowing for greater shares of electric demand to be served by resources whose output depends (literally) on something as fickle as the weather.

Posted in Energy Efficiency, Grid Modernization, On-bill repayment, Renewable Energy, Washington, DC / Tagged , | Comments are closed

When We Save Energy In Texas, We Also Save Water

Last week, the Texas Coalition for Water, Energy and Economic Security (TCWEES), of which EDF is a member, held a legislative briefing at the Texas Capitol titled Energy & Water, Dollars & Sense: Improving security and maximizing benefits to Texas businesses and residents. The briefing focused on the nexus of water and energy, and furthered the idea that where you save energy, you save water too. The briefing included a panel discussion and a question and answer session.

State Representative Lyle Larson from San Antonio welcomed attendees, a speaker that is well-suited to talk about water issues. Before becoming a state legislator, he served on San Antonio’s City Council, a city with one of the best water conservation programs in the country. Representative Larson started with an interesting point: In addition to the physical issues of water scarcity, we also need to resolve the psychological issues of water resources.

People simply do not think of water as a scarce resource, despite the multi-year droughts we’ve seen in Texas. Addressing water scarcity has been done in much the same way as system-wide power shortages: in a short term, reactive way, rather than a long term, proactive way. And we will never be able to meet our energy or water needs of our growing populations by being short-sighted.

Representative Larson said that water is the number one impediment to business no matter where you are in the world. Water-rich countries will take American jobs if we can’t address our scarcity, and water-rich states will take Texan jobs. We don’t deploy best management practices in this state when it comes to water. And calling for more water infrastructure is great, but conservation is going to save significantly more water than new infrastructure will. Read More »

Posted in Energy Efficiency, Energy-Water Nexus, Texas / Tagged | Comments are closed

El Paso Electric Inks Solar Deal That Is Cheaper Than Coal

On the heels of our blog post last week, showing how competitive wind and solar power have become in recent years, is news of possibly the cheapest solar deal yet in the U.S. (that we know of publicly, at least).  Even more interesting is the fact that the deal was made between Texas-based El Paso Electric and First Solar, an Arizona-based solar manufacturer.  While it’s a little sad that a Texas-based company has to go to New Mexico to build solar, it’s at least heartening that they could partner with a U.S. company to get the project done.  First Solar has been one of the leading solar manufacturers for several years, and last year their suite of projects made them the #2 solar panel supplier in the world (up from #4.) 

Marty Howell, the City of El Paso’s Director of Economic Development and Sustainability, said that “El Paso Electric’s recent solar contract with First Solar is another example of our great partnership with El Paso Electric and how El Pasoans are working together to make our community more sustainable.”

This new 50 megawatt (MW) project in New Mexico comes in at 5.79¢/kilowatt hour (kWh), which is almost half the cost of a new “advanced” coal power plant (12-14¢/kWh), according to the Energy Information Administration.  It is helpful to note that the deal did benefit from subsidies, as detailed in an article by Renewable Energy World, including the Investment Tax Credit (ITC) – which provides renewable energy projects with a tax credit equal to roughly 30 percent of a project’s costs.  If we were to remove that credit and the benefit of local incentives, the project would come in right around the cost of a new advanced coal plant, even if the coal plant lacks carbon capture and storage technology.

Time will tell whether this deal is an exception or the new rule, but growing signs of price parity for solar power, and the continued growth of competitive wind energy, consistently point to a critical shift in our energy infrastructure.  With continued declines expected in both wind and solar prices, this First Solar project seems more likely to become the norm than not.  The only question is whether utilities and regulators are ready for such rapid growth in wind and solar power. 

In New Mexico, they certainly seem to be ready.  However, in many other states, including El Paso Electric’s home state of Texas, that’s still an open question.

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