Al Gore's Renewable Energy Proposal

Investment banker Jerome a Paris has written an excellent analysis of Al Gore's proposal that the U.S. obtain all of its electricity from renewable or zero-carbon sources within 10 years. Check it out.

Regards,
Tom

Wind Power Tops 40% of Supply in Spain, Briefly

... according to Agence France Presse. It's symbolic of how far Spain has come--the country has been duking it out with the U.S. for several years for the #2 position in wind capacity installed, behind world leader Germany. Detailed statistics here.

Regards,
Tom

New York Sees Renewables Progress

The summary of a report on New York's Renewable Electricity Standard (RES) makes for some interesting reading. Some highlights:

Two solicitations for renewable energy have resulted in contracts for approximately 3 billion kilowatt hours (MWh) of renewable energy from 26 projects, totaling more than 800 megawatts (MW), or enough clean energy to supply approximately 400,000 average-size homes.

The New York State Energy Research and Development Authority (NYSERDA) estimates that more than $1.9 billion will be invested to build the New York-based renewable generation facilities awarded contracts under the RES. NYSERDA estimates that these investments have the potential to yield more than $720 million of in-state economic benefits over a 20-year period.

In addition to the significant economic benefits, the facilities awarded contracts under the RES could result in potential reductions of 2,000 tons of nitrogen oxides, 4,400 tons of sulfur oxides, and 1.3 million tons of carbon dioxide per year.

NYSERDA is planning a third solicitation this fall, and says, "Considering the large number of wind projects under development, a significant number of potential bidders are expected, and consequently, reasonably priced bids are anticipated."

What is happening in New York is a good example of what can happen with strong leadership at the state level. Former Gov. George Pataki (R) and current Gov. Elliott Spitzer (D) deserve enormous credit for pushing this effort forward.

Regards,
Tom

PennFuture Prize: Clean Wind Energy for Year

Citizens for Pennsylvania's Future (PennFuture), an environmental nonprofit, has launched a year-long contest for Pennsylvania residents in which it will give away six compact fluorescent bulbs each month to a monthly winner and a grand prize of one year's supply of clean wind energy. (Enter here.)

Perhaps more importantly, every entrant in the contest will receive a free copy of a PennFuture brochure, "Ten Quick Actions to Help Stop Global Warming."

Great idea, great to see.

Regards,
Tom

Burbank Mulls Wind Buy

The City of Burbank, Calif., is scheduled this evening to consider buying wind power from the Milford wind project in Utah. If the purchase goes through, it will move Burbank closer to an already-established goal of obtaining 33% of its energy from renewable energy sources by 2020.

Regards,
Tom

Duke Energy Sees Wind Potential

Seeking Alpha, a financial analysis Web site, provides a transcript of a presentation by Keith Trent, Group Executive and Chief Strategy, Policy and Regulatory Officer of Duke Energy, one of America's leading utilities, before the Wall Street Analyst Forum August 16. Here are Mr. Trent's remarks on wind--interesting reading.

Regards,
Tom

Let me talk specifically about wind now. Wind energy is very much part of our strategy. We believe that the growing U.S. wind market presents an attractive opportunity for us. That market is projected to grow from approximately 12 gigawatts to approximately 50 gigawatts by 2015, as it continues to receive significant support from Federal and State regulatory bodies.

Our wind strategy is straightforward. We plan to develop a standalone portfolio within one of our commercial businesses Duke Energy generation services acquiring a foothold in developing expertise there. As they execute our strategy, our focus will be on projects with favorable and steady cash flows.

We took a major step in this regard in executing this strategy in late May, when we acquired the wind development assets of Tierra Energy, which was a leading wind power development company located in Austin, Texas. Three of the development projects, which totaled approximately 240 megawatts are located in Texas and Wyoming and are anticipated to be on-line in late 2008 or early 2009.

We expect to spend approximately $400 million in CapEx through 2009 to complete these projects. The projects will be underpinned by long-term contracts and favorable tax benefits. As a result, we expect to begin seeing earnings from these wind assets in 2009.

Also included in the purchase is the option to develop approximately 1000 megawatts of additional wind projects that are in the various stages of development in the western and southwestern United States. We will continue to review additional late-stage projects as part of our strategy for this growing business.

Anti-Wind Site Uses Fuzzy Math

When will they get the basic math right?

From an anti-wind blog comes this excerpt:

Dominion and Shell WindEnergy Inc (owners of the company, NedPower Mount Storm LLC) have announced the first phase of their project - 82 turbines producing 164 megawatts, or enough electricity for 41,000 homes - is under construction at a site near Dominion's Mount Storm Power Station. It is scheduled to begin operation in the fourth quarter of 2007 (see - http://www.dom.com/news/elec2007/pr0731.jsp).

Notice this a [sic] "nameplate" capacity rating - and typically wind turbines produce only 25% of rating - so that means 10,000 homes in reality - at a cost of 82 turbines @ $2M each = $164M, which is $16,400 per home.

Well, oops, no, that's wrong. The company already allowed for the difference between nameplate rating and average production in calculating the number of homes.

The math goes like this: 164 MW = 164,000 kilowatts (kW). Reasonably expectable average production is actually more like 33%, not 25%. 164,000 kW x 8760 hours in a year X .33 = 474 million kWh (caveat: this is my estimate, not an official projection from Shell WindEnergy). The average household uses a little over 10,000 kWh annually, so a figure of 41,000 homes seems reasonable.

(I'm told that this sort of distortion has also been quite popular in the Palm Springs, Calif., area, where anti-wind groups insist that the statement by wind developers that one megawatt of wind generates electricity equivalent to that used by 250-300 homes should be further reduced by two-thirds. Wrong.)

Regards,
Tom

Caledonian-Record Blows It on Wind

The recent approval of a 40-megawatt (MW) wind project in Sheffield, Vt., occasioned this
outburst from the Newport, Vt., Caledonian-Record. Now, I have nothing against folks who dislike wind--well, OK, maybe I do have a little something against them--but everyone is entitled to their own opinion, no matter how misguided. But I do take exception when that opinion is published in print and is obviously based on falsehood, which is unfortunately the case here.

I'll set aside several questionable statements and quote just one outstanding passage:

Next, the wind towers will produce power for only about 11 percent of the time. The rest of the time, the wind isn't there, and the power that isn't produced by them will have to be replaced by current, allegedly inefficient, global-warming plants. Net benefit to energy efficiency? None.

First, 11% just ain't so, and any reporter or editor worth her or his salt would be able to find that out. A wind project at a Vermont site should be producing electricity 50-80% of the time, which is consistent with the wind developer's projected production for the Sheffield wind farm (115 million kilowatt-hours annually). (To be more specific, generating 115 million kWh would require the wind farm to operate a minimum of 33% of the time. Since it will often be operating at less than full power, it will have to run a higher percentage of the time to achieve that output.)

Second, when the wind turbines generate, fossil-fueled power plants will throttle back and use less fuel, emitting less global warming pollution. If the wind turbines were not there, the same plants would be running more and emitting more CO2. This is a straightforward concept that shouldn't be hard to grasp.

The Caledonian-Record, not surprisingly, declares its determination to stand behind a local anti-wind group in efforts to block the project. It's a good thing that the Vermont Public Service Board, which approved the Sheffield wind farm, is more open to the facts in this case.

Regards,
Tom

Jobs in Renewable Energy

Ned Sullivan provides some basic, but strategic, thoughts on "green collar" careers in a recent commentary on The Daily Green. He's right--one of the great unreported news stories about renewable energy is the difficulty wind companies are having in finding qualified people. For more information on finding employment in this booming industry, try the American Wind Energy Association's Careers in Wind Job Board.

Regards,
Tom

End Energy Subsidies: Wind Proponent

David Weiss of New York Farmers' Windpower, LLC, provides a thoughtful perspective on energy subsidies in a letter to the Albany Times-Union. Says Weiss, in part:

Renewable energy needs no subsidies at all. What it does need is a level playing field -- government policies that remove all subsidies from nuclear power and fossil fuels, forcing them to compete fairly and openly with wind, solar, biomass, increased efficiency and all the other renewable energy that can carry its weight in this country.

It's time we had a level playing field in energy, so we can watch the economy turn green.

Unfortunately, it's not quite that simple. The most important subsidy for fossil fuels is an invisible one: allowing fossil fuel mines, wells and power plants to emit air, water and global warming pollution into our common environment at less than the full cost of cleanup. Until that changes, as Weiss suggests, renewable energy sources will continue to face an uphill battle.

Regards,
Tom

Senate Energy Bill Running on Empty

From Newsday, this accurate and insightful editorial on the energy bill passed last week by the U.S. Senate. Glaciers may be melting around the world, but not swiftly enough to affect the glacial pace of legislation dealing with our country's energy policies.

Regards,
Tom

Renewable Energy: The Regional Debate, Part 2

We've spent some time at the American Wind Energy Association (AWEA) researching the issues raised in my recent post on the question of whether using more wind would unfairly disadvantage less windy states. Here are results from a fact sheet we are sending up to Capitol Hill, where the U.S. Senate will vote tomorrow on the Bingaman Renewable Energy Standard amendment:

WIND ENERGY:
THE MOST HOME-GROWN AMERICAN ENERGY SOURCE

Wind energy is currently produced in more states than any conventional electric power fuel source.

All states currently import and export energy sources such as coal and natural gas, to meet each state’s energy needs.

Nearly 40 states currently import natural gas and coal from other states. Under a National 15% [Renewable Energy Standard], some states may have to import renewable energy from other states. However, most states have some indigenous renewable energy sources including wind, solar, biomass and geothermal. States that do not produce sufficient renewable energy have the option of securing market credits to meet renewable energy goals.

Wind and other renewable resources are domestically produced energy sources. The U.S. currently imports 3% of our coal, 19% of our natural gas, and 80% of our uranium from foreign nations.

Four states produce uranium, 28 import it;
25 states produce coal, 39 import it;
32 states produce natural gas, 38 import it;
35 states produce wind power, 10-20 import it.

(In addition, the U.S. Department of Energy found in a 1991 study of wind resources nationwide that 9 additional states, besides the 35 currently producing some wind power, have sufficient wind resources for commercial production, making the total number of potential and actual wind producers 44 of 50 states.)

The Senate will vote tomorrow on the Bingaman amendment. If you support this first meaningful step to fight global warming, contact your Senator's office through the U.S. Capitol switchboard at 202-224-3121 and let him/her know you support the Bingaman Renewable Energy Standard. Or go to powerofwind.com.

Regards,
Tom

The Wind Power Storage Myth

It seems so intuitive, so right: everyone knows from direct experience that the wind is variable, and so it really can't be a serious energy source without some form of storage, can it?

Of all of the myths about wind power (of which anti-wind folks, with their covert allies and backers in competing energy industries, are inventing new, creative additions daily), this one is probably the oldest and most difficult to stamp out. Only today, many news sources carried a summary by Reuters energy reporter Timothy Gardner of a new book, Lights Out, by Jason Makansi. The summary includes the following quote:

Wind power won't take off unless there's more investment in how to store the energy, according to Makansi.

I suppose it all depends on what you mean by "take off." Wind power generates a bit less than 1% of U.S. electricity today (it should cross the 1% line by the end of this year), so for me, "taking off" would mean getting to 10% or 20%, in the general range that natural gas (17%) and nuclear power (20%) generate today. Maybe Makansi has something higher in mind--setting an unrealistic bar is one of the easiest ways to belittle a new technology. But anyway . . .

Storage is not, repeat not, required for a significant expansion of wind power from its current level to a level 10 or 20 times as great, at which point it will be a major contributor to U.S. electricity supply. Variability of wind is best addressed by utilities in the same way they address variability in current generation and load, which is to control certain resources to match aggregate load. All existing resources occasionally shut down with no notice, and these forced outages require backup and reserves. Wind is only different in that its output changes are more gradual and can be greater in magnitude, and that is not necessarily more difficult to manage. Storage might be cost-effective for power system operators some day in the future, but is generally not cost-effective today, and is not required, either for conventional resources or for wind. As the U.S. Department of Energy puts it in an excellent short publication, Wind Energy Myths:

The utility system is . . . designed to accommodate load fluctuations, which occur continuously. This feature also facilitates accommodation of wind plant output fluctuations. In Denmark, Northern Germany, and parts of Spain, wind supplies 20% to 40% of electric loads without sacrificing reliability. When wind is added to a utility system, no new backup is required to maintain system reliability.

Ironically, Makansi's main theme is to flog something that is perfectly true: the fact that America's electricity transmission system is aging and inadequate and in desperate need of an overhaul. This is ironic because more transmission is exactly what is needed for the power system to handle more wind--the wind is always blowing somewhere, so shipping the wind-generated electricity from where it is being produced to where it can be used is key to using it as cheaply and effectively as possible.

Those who wish to dig more deeply into this topic will find an excellent collection of resources at the Utility Wind Integration Group site.

This is not to say that more storage would be bad: one of the truly exciting possibilities on the horizon is plug-in hybrid autos, which would allow wind power not just to supply electricity, but to replace a sizable chunk of the oil our nation uses for transportation. But we don't need more storage to use much more wind for electricity generation. Period.

Regards,
Tom

Renewable Energy: The Regional Debate

The U.S. Senate is currently debating a National Renewable Energy Standard. Under an amendment sponsored by Sen. Jeff Bingaman (D-N.M.), who chairs the Senate Energy and Natural Resources Committee, electric utilities would be required to obtain a growing percentage of their electricity from renewable energy sources (biomass, geothermal, new hydro, solar, wind), with the percentage reaching 15% by 2020.

Notwithstanding the fact that the Bingaman amendment would be Congress's first major action to address the growing issue of global warming, Senate Republicans are blocking it by threatening a filibuster (meaning that 60 votes would be needed to pass it rather than a majority.) During the debate, much was made of the argument that some states are not windy, and would therefore be disadvantaged by the Bingaman amendment, and that it would "shift wealth" from one region to another. For example, Sen. Pete Domenici (R-N.M.) said, "We cannot ignore the reality that some regions of the country cannot meet the [standard]. Since they cannot produce it, they’ll have to pay a fine, a pretty whopping penalty."

It's an interesting and compelling point, if true. Would a Renewable Energy Standard really introduce a sweeping change into the way that energy is currently produced and distributed in the U.S.? Consider:

Most if not all states import fuel--coal from other states; natural gas from other states, Canada and overseas; uranium, ditto; oil from overseas (yes, some imported oil is indeed used to generate electricity, mostly in New England and Hawaii).

"Importing" wind--a domestic "fuel"--from state to state (via transmission lines) will benefit the whole country (due to reduced imports of natural gas and oil from overseas), and is not a departure from current practice on behalf of other fuels.

A very preliminary (all we have had time for so far) look at state-by-state distribution of commercial energy production reveals the following:

32 states have commercial wind installations (and at least one more will soon)
32 states have natural gas production
28 states have petroleum production
25 states have coal
3 states have uranium

Thus, wind is actually one of the most widely distributed natural resources. Also, it appears that huge transfers of wealth are no problem for opponents of the Bingaman amendment, as long as they are already happening--only modest future transfers that might run in some different direction need to be stamped out.

We’ve made investments to move natural gas, coal and uranium across state lines and, in some cases (e.g., building transmission lines to so-called "mine-mouth" electric power plants that are built next to coal mines), to use the fuel on location. Likewise, wind is a resource we should encourage all states to use.

(In addition, all of the Southeastern states that have poor wind resources have excellent biomass energy potential, according to the U.S. Department of Energy--but that's another story.)

The Bingaman amendment may come up soon for a vote in the Senate. If you support this first meaningful step to fight global warming, contact your Senator's office through the U.S. Capitol switchboard at 202-224-3121 and let him/her know you support the Bingaman Renewable Energy Standard. Or go to powerofwind.com.

Regards,
Tom

Senate Republicans Block Renewable Energy

Senate Republicans have threatened to filibuster against the Bingaman Renewable Energy Standard amendment. With the polls showing very strong, indeed overwhelming, support for clean alternative energy sources and for action against global warming, it's hard to understand this position. Nearly half of all states (24) have similar renewable energy standards already, and some have even passed new laws increasing the percentages of renewable energy required.

The Bingaman Renewable Energy Standard would:

Reduce global warming pollution from electric power plants;

Create brand new manufacturing industries with thousands of new jobs;

Revitalize rural communities through the increased tax base and payments to landowners that wind and other renewable energy projects bring;

Help meet America's steadily growing electricity demand;

Save consumers more than $100 billion through 2026.

If you support this first meaningful step to fight global warming, contact your Senator's office through the U.S. Capitol switchboard at 202-224-3121 and let him/her know you support the Bingaman Renewable Energy Standard. Or go to powerofwind.com.

Regards,
Tom

Costs of a Renewable Portfolio Standard?

Marlo Lewis of the Competitive Enterprise Institute complains that the Energy Information Administration has found that the Bingaman Renewable Portfolio Standard (RPS) would cost consumers a net of $18 billion through the year 2030.

It should be noted that a similar analysis in March by Wood Mackenzie, a respected oil & gas research firm, found that the same RPS provision would save consumers more than $100 billion through 2026. From the Wood Mackenzie press release:

According to the report, the adoption of a 15% Federal RPS will require a flood of new wind and other renewable projects well beyond current proposed projects, leading to a 500-percent increase in renewable capacity from current levels by 2026. This increase translates into an incremental construction cost of $134 billion (2006 dollars) between 2006 and 2026. The report also shows the switch to renewable energy will drive down demand and price of natural gas. "The lower fuel costs and fossil fuel consumption will lead to lower electricity costs," continued Sannicandro. "Over the next 20 years, the Federal RPS case leads to a savings of $240 billion (2006 dollars) in wholesale power costs, outweighing the higher capital investment to build the additional capacity."

Regards,
Tom

Close Vote Likely on Bingaman Renewable Energy Standard

Inside word on the Bingaman Renewable Portfolio Standard is that the vote will be very tight. If you support this concept, the time to weigh in is right now. You can reach any Senator's office through the U.S. Capitol switchboard at 202-224-3121. Further information here.

Regards,
Tom

Wind Group Asks Support for RPS

FOR IMMEDIATE RELEASE:
June 12, 2007 Contact:
Christine Real de Azua (202) 383-2508

STATEMENT BY THE AMERICAN WIND ENERGY ASSOCIATION
ON A NATIONAL RENEWABLE PORTFOLIO STANDARD (RPS)

AWEA urges Congress to enact strong Bingaman RPS,
oppose weakening Domenici Amendment

As the U.S. Congress takes up wide-ranging energy legislation, the American Wind Energy Association (AWEA) issued the following statement in support of the Renewable Portfolio Standard (RPS) proposed by the Chairman of the Senate Committee on Energy & Natural Resources, Senator Jeff Bingaman of New Mexico. Sen. Bingaman’s RPS would require that 15% of the country’s electricity come from wind, solar and other renewable energy sources by 2020.

“A strong RPS is an essential element of an effective national energy strategy: it can address the simultaneous challenges of growing electricity demand and climate change,” said AWEA Executive Director Randall Swisher.

Strike a real blow against global warming! Register your support for a strong RPS today!

“Wind energy technology is the single most cost-effective, zero-carbon energy option that we have available today. Our nation is also blessed with an abundance of solar and other renewable, zero-carbon energy sources. The Bingaman RPS provides the crucial long-term policy support that is needed for wind and all renewable energy technologies to become major contributors to electricity supply and solve the double challenge of global warming and growing electricity demand. Any attempts to weaken it should be opposed.”

There is broad support for a strong national RPS. A coalition including Fortune 500 companies, the United Steelworkers, and major environmental groups has sent a letter to Members of Congress urging adoption of a strong RPS.

AWEA opposes a proposal by Senator Pete Domenici, Ranking Member of the Committee on Energy & Natural Resources, that would undermine the RPS and introduce several serious loopholes. AWEA has sent a letter to Senate leaders respectfully urging a vote against it. The Domenici standard would weaken the RPS and:

* Authorize the Secretary of Energy to certify any form of energy as “clean;”
* Allow states to opt out of the bill’s requirements;
* Would continue a long history of playing politics with the climate issue.

AWEA, formed in 1974, is the national trade association of the U.S. wind energy industry. The association's membership includes turbine manufacturers, wind project developers, utilities, academicians, and interested individuals. More information on wind energy is available at the AWEA web site: www.awea.org.

# # #

Natural Gas Prices Drift Higher; More Wind Needed

USA Today reports today that natural gas prices are edging higher:

The cost at the pump isn't the only high gas price nowadays.

Sparked by worries about hot weather and a busy hurricane season, natural gas prices have jumped in the last week to the highest since December. Tuesday, the price for natural gas trading in New York for delivery in July closed at $8.064 per million British thermal units. Although that was slightly lower than the previous day's close, it was 25% above the price seen a year ago.

For consumers, the higher natural gas prices mean heating costs could be elevated this winter for the most popular heating source in the USA if the gains hold. Increased natural gas prices also could lead to higher electricity costs later this summer to power air conditioners, because a large amount of electricity is generated with natural gas.

Generating electricity with wind power helps to conserve natural gas and also exerts some downward pressure on natural gas prices, according to the American Wind Energy Association. Natural gas generators can be "turned up and down" rapidly, one of the primary way utilities cope with varying customer electricity demand throughout the day, and so they are also the easiest to adjust when clean wind power is being delivered to the utility system. Also, the oldest and dirtiest gas generators are usually the most expensive to run, and the first to be turned down or off when wind power is being produced.

Regards,
Tom

Department of Interior Opposes Anti-Wind Provision of Rahall Bill

The U.S. Department of the Interior weighed in yesterday on the anti-wind-power section of legislation sponsored by House Natural Resources Committee Chairman Nick J. Rahall II and currently pending before the committee.

Said the Department's letter in part,

Subtitle D. Ensuring Safety of Wildlife With Respect to Wind Energy.

We recommend subtitle D be deleted.

Sections 231 through 235 would require the Secretary of the Interior, acting through the Fish and Wildlife Service, to promultate regulations that establish minimum standards for siting, construction, monitoring, and adaptive management that must be satisfied by all wind projects to avoid, minimize, and mitigate adverse impacts on migratory birds, bats, and other wildlife. The regulations would need to be promulgated within 180 days after enactment of H.R. 2337. We agree it is important that wind power facilities seek to minimize and mitigate adverse impacts on migratory birds, bats and other wildlife. In fact, the Endangered Species Act, the Migratory Bird Treaty Act, and other federal statutes must be complied with. However, the Department of the Interior opposes this subtitle as its enactment would be premature.

On March 13, 2007, the Secretary of the Interior announced the Formation of a Federal Advisory Committee Act (FACA) Committee, the Wind Turbine Guidelines Advisory Committee, to look at the very issues raised under Section 231. The FACA Committee consists of a broad group of representatives, including those from State and Federal agencies, environmental groups, and industry organizations. They will be carefully considering all of the issues related to wind energy facilities and making recommendations whether the guidelines can be voluntary, mandatory, or may require regulations. Therefore, we believe it is premature for Congress to legislate this process and instead we would like Congress to allow the FACA process to move forward.

If you would like to learn more about Subtitle D, which would basically stop the wind industry dead in its tracks for 6 months to as long as three years by making it a federal crime to generate clean wind energy without a permit from the federal government, go here. To take action to oppose this ill-advised legislation, go here.

Regards,
Tom