Energy Exchange

El Paso Electric Inks Solar Deal That Is Cheaper Than Coal

By / Published: February 7, 2013

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.

Posted in Renewable Energy / Comments are closed

Experts Unveil Plan To Double U.S. Energy Productivity By 2030

By Elgie Holstein / Published: February 7, 2013

Achieving Goal Could Cut Carbon Pollution By One-Third And Save $327 Billion Annually

The Alliance Commission on National Energy Efficiency Policy released a report today with recommendations that would put the U.S. on a path towards doubling its energy productivity by 2030. The Commission, which is chaired by U.S. Senator Mark Warner (D-Va.) and National Grid U.S. President Tom King, is a diverse coalition of energy leaders that includes representatives from energy utilities, academia, industry and environmental groups. Fred Krupp, President of Environmental Defense Fund (EDF), serves on the Commission.

The Commission found that a doubling of energy productivity (or obtaining twice as much output from the energy we use) would reduce U.S. carbon dioxide pollution down to four billion tons per year by 2030, which is 33 percent below 2005 levels. The full report is available at energy2030.org.

“The Alliance Commission’s recommendations are an innovative approach to greatly increasing our nation’s use of energy efficiency, which represents a huge – and largely untapped – opportunity,” said Fred Krupp, President of EDF. “Reducing wasted energy through efficiency is a true win-win solution that cuts harmful pollution and saves people money on their energy bills.”

The Commission’s recommendations are wide-ranging, covering multiple sectors of the economy. The recommendations include: increased stringency of energy efficiency standards for buildings and appliances, creation of financing mechanisms that bring down the cost of energy efficiency projects, reform of utility regulatory policies to enable full use of cost-effective energy efficiency and greater support for research and development.

Achieving the Commission’s goal of doubling energy productivity by 2030 would:

Add 1.3 million jobs;
Cut average household energy costs by more than $1,000 a year;
Save American businesses $169 billion a year;
Increase gross domestic product (GDP) by up to 2 percent;
Decrease energy imports by more than $100 billion a year; and
Reduce CO2 emissions by one-third.

Source: www.energy2030.org

EDF is particularly encouraged by the Commission’s recommendations related to energy efficiency finance and smart grid policies, which are a high priority for EDF. The Commission recommends that state and local governments work with utilities to create financing mechanisms, such as On-Bill Repayment (OBR) programs. OBR provides a new route to funding clean energy investments at attractive terms, relying solely on private third-party financing.

OBR programs offer an opportunity for residential and commercial utility customers to finance energy efficiency projects with loans repaid through their utility bills and financed at no additional cost to ratepayers. The Commission also recommends reforms to state utility regulatory policies that would break down barriers to utility investment in energy efficiency and enable greater use of advanced new technologies that create a smarter and cleaner electric power grid.

Though the U.S. currently lags behind other nations on energy productivity, the Commission believes there are more than $1 trillion in energy-saving opportunities with the right federal, state and local government support, and private-sector buy-in.

The Alliance Commission’s goal of doubling energy productivity by 2030 is ambitious, yet attainable, and it goes well beyond capturing the well-known, low-hanging fruit. I am confident that the solutions proposed by the Commission will drive innovation and technological advancements, which will modernize U.S. manufacturing and help us to compete globally.

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

Super Bowl, NOT Super Coal

By Marita Mirzatuny / Published: February 6, 2013

Was it the duel between two brothers coaching opposing teams? The awesome performance by Beyonce’ and the reunion of Destiny’s Child? Ray Lewis’ last game? No. What everyone was talking about post Super Bowl 2013 was the power outage!

Let’s get this straight: With over 108 million people watching the most important football game of the year — the third most watched TV program ever — yielding hundreds of millions of dollars in advertising revenues, the power in the stadium just happens to go out for over 30 minutes?

The first thought I had was, “Is someone trying to spare the 49ers from suffering a Super Bowl blowout? The second was, “Do I have time to run out and get more snacks?” The third was, “Who’s to blame for this power fumble…the NFL? The City of New Orleans? Beyoncé?” Well, the fossil fuel industry seems to think they have the answer, jumping at the opportunity to remind us of the need for more coal.

The truth is that officials are just starting to figure out what caused the power outage, according to a recent article by The Times-Picayune. What is clear is that the stadium had reliability problems which were identified in October 2012 – including decayed feeder lines – and that officials quickly tried to fix them in the months before the game. Somewhere along the line, something failed – and the new switchgear did its job, shutting down the stadium to save it from a longer blackout.

The bottom line is that no amount of coal would have solved the problem – unless, of course, more charcoal would have meant better tailgate parties while attendees waited for the electrical system to be restored.

In fact, an article in The Washington Post notes that stadiums across the country have avoided blackouts through advanced technology that allows grid operators to identify problems more rapidly and fix the system in real time. While the Superdome’s electrical system did not seem to have that level of advanced technology, perhaps its game-day tale is a win – without the new switchgear, the blackout may have in total, lasted much longer, and signaled the end of the game. Only time will tell. In the meantime, we say “well played” to New Orleans for working diligently to upgrade the stadium in the short time that it had.

Fortunately, while upgrades to the larger electricity system must happen to ensure reliability and reduce pollution, we have the time to thoroughly and thoughtfully upgrade our electricity system – and EDF is quarterbacking the issue to make sure it is done right. The same smart technology used successfully by football stadiums across the county can be applied on a neighborhood, region, and national scale, avoiding and reducing blackouts, minimizing air pollution, and incorporating cleaner technologies. The benefits from these investments nationwide are potentially huge – in the trillions of dollars – three times their cost. With interest rates on savings accounts currently well below 1 percent, this kind of payback is certainly worth the investment in our nation’s economy, health, and –well -football.

Posted in Grid Modernization / Comments are closed

Hawaii Making Waves In Financing Clean Energy

By / Published: February 5, 2013

Public Utility Commission orders on-bill program to finance clean energy

Last Friday evening, February 1, the Hawaii Public Utilities Commission (PUC) issued a landmark decision and order to create an on-bill program, very much in line with EDF’s recommendations for on-bill repayment (OBR), that will provide access to low-cost financing for solar and energy efficiency projects for homeowners and small businesses. This decision comes 18 months after the State passed legislation directing the PUC to investigate an on-bill program and authorized the Commission to implement the program (by decision and order or by rules) if the on-bill program was found to be viable.

The PUC decision determined that a statewide on-bill program is viable, and specified program design criteria that the Commission deems necessary to achieve viability. EDF has been working to shape the proposal with key stakeholders including environmental groups, lenders and the Hawaii State Energy Office.

The specified criteria include the following components that EDF believes are critical for achieving both success and scale:

bill neutrality (project savings exceed financing payment obligations)
tariff-based obligation
tariff is tied to the utility meter and therefore transferable
standard collection procedures, including disconnection for non-payment of OBR obligation
pro-rata allocation of partial payments

Since the terminology can be confusing, it is worth noting that this is not a typical ratepayer-funded on-bill finance program, despite having the same designation. The Hawaii program leverages private capital, and the PUC supports participation by multiple sources of capital rather than a single financing entity. EDF believes both of these elements are critical to scaling the program and meeting the needs of a diverse set of property owners.

Posted in Energy Efficiency, On-bill repayment, Renewable Energy / Tagged Hawaii PUC, OBR, On Bill Finance, On Bill Repayment | Read 3 Responses

Learn More About How YOU Have ‘Power Over Energy’

By EDF Blogs / Published: January 30, 2013

Did you know that 40% of the electricity used to power home electronics is consumed while they are turned off? And did you know the electricity it takes to power a single 100-watt light bulb for one year is generated by 713 pounds of coal?

With electricity outlets in every building and gas stations on every street corner, our dependency on energy is undeniable. Still, very few consumers are aware of effective ways to prevent waste and use energy efficiently. To educate consumers, several leading energy and environmental groups have united to create PowerOverEnergy.org, a warehouse of information about energy generation, consumption, impact and conservation.

The site aims to educate, empower and motivate consumers to use energy more wisely and to play an active role in our electric grid’s modernization. America’s outdated energy system is wasteful, expensive and a huge source of pollution. Over the next two decades, utilities will have to invest up to $2 trillion to modernize our electricity grid, most of which is past the age of retirement. A more resilient, smart “green” grid will pay for itself by saving the United States around $20.4 annually by increasing efficiency by five percent, and another $49 billion each year by reducing the cost of power outages.

Environmental Defense Fund, Silver Spring Networks, Sustainable Silicon Valley, Smart Grid Consumer Collaborative, Edison Foundation’s Institute for Electric Efficiency, Global Green USA, GrideWise Alliance and Silicon Valley Leadership Group believe that knowledgeable consumers are necessary, and we’ve joined the Power Over Energy Coalition to arm people with the information they need to join the push toward a smarter, more resilient grid. Empower yourself and those around you by checking out the site and becoming an informed participant in the movement.

Posted in Grid Modernization / Comments are closed

Do We Need Breakthroughs Or A Simple “Carbon Diet?”

By Jackie Roberts / Published: January 29, 2013

Over the weekend, The New Republic published an interview with President Obama, where he noted the following: “On climate change, it’s a daunting task. But we know what releases carbon into the atmosphere, and we have tools right now that would start scaling that back, although we’d still need some big technological breakthrough.” How accurate is the call for breakthroughs and what do we really need?

First, let’s look at where we don’t need breakthroughs, but instead more deployment – energy efficiency, of course, being Exhibit A. Creative financing, such as on-bill repayment (OBR), at scale can speed up deployment here. Similarly, unlocking clean energy to reduce carbon emissions from the electricity sector hinges on affordability. Wind energy is already competitive with fossil fuels, in large part because the cost of wind energy has come down around 65 percent in the last 20 years, according to the National Renewable Energy Laboratory (yes, declining natural gas prices provide new competition, but EIA projects that natural gas prices will begin to increase in 2018, and wind power purchase agreements are signed for around 20 years at a fixed price). Residential solar is verging on the tipping point for “grid parity,” or the point at which a source of power becomes cost competitive with other sources. Bell Labs first introduced solar cells in the 1950s. Environment California’s Research & Policy Center recently reported that they expect solar to reach grid parity in mid-2014 to 2016 at the outset.

Of course, progress in lowering costs and increasing efficiency comes on the heels of many smaller innovations. For example, innovations in materials science underlie many of the most promising technology evolutions, such as the role of carbon fiber as a basic raw material for wind turbine blades or the use of Gallium Arsenide wafers to reduce manufacturing costs for solar cells. But, nonetheless, given our country’s strength in materials science (think of our leadership with companies like Dow, Dupont and 3M), such innovations seem imminently feasible and in my mind don’t require a major “breakthrough.”

We’ve also delivered numerous hardware and software innovations to transform our electric grid into a more resilient, smart, “green” grid. Even carbon capture and storage, to some a high stakes technology bet, is actually just a new configuration or application of engineering equipment we have installed and used for decades, such as heat exchangers, chillers, absorbers, pumps and compressors.

Where would I wave a wand for a breakthrough? A cheap, reliable and efficient energy storage system wouldn’t hurt, one that replaces the clunky compressed air systems or the size limitations of batteries. But, overall, the declining cost curves for clean energy solutions, due to innovations large and small, tell us an important story: solving the climate crises is not unaffordable or necessarily a drag on our recovering economy as many fear. It is certainly not infeasible nor hinging on that one great technological breakthrough.

We need non-technological breakthroughs. Like the new head of the World Bank, Dr. Jim Kim, who in Davos described wanting to make “everything the Bank does aligned with the effort to slow down climate change.” And it is certainly cheaper than repeating the $50 billion recovery price tags that we might face time and again as Superstorm Sandy becomes the new normal.

Americans love the quick technical fix. But, today we have affordable answers right in front of us, it’s the willpower we may be lacking. So, just as most of us believe that rather than wait for a dieting breakthrough, the best answer to weight loss is reduced consumption and more exercise – we need to go on a carbon diet. Our economic and environmental health depend on it.

Posted in Climate, Demand Response, Energy Efficiency, Grid Modernization, On-bill repayment, Washington, DC / Comments are closed