Dr. Sue Tierney, former Massachusetts state regulator and Department of Energy official, is set on waking up some in the power industry from a sluggish state. Tierney’s mission is to show the industry that compliance with U.S. Environmental Protection Agency (EPA) regulations should not be delayed.
Tierney is also lead author of a reliability report, Ensuring a Clean, Modern Electric Generating Fleet while Maintaining Electric System Reliability, a gathering of information on the industry’s readiness for compliance.
According to two July 2010 studies by the Energy Information Administration, the combination of low energy prices and EPA air regulations could result in the retirements of between 25 to 40 GW of the nation’s 1,030 GW of electric generating capacity. Although some plants may be retired, Tierney’s report found that approximately half of the nation’s coal-fired generating capacity (150 GW) has already installed SO2 scrubbers, another 55 GW plan to install scrubbers and a significant number of coal units have already announced plans to retire. That necessitates one-fourth of the nation’s coal-fired generation to add pollution controls, switch to a cleaner fuel or retire.
Despite all of the changes needed to be made on units in the next few years as a result of the air, coal ash rules and water rules, Tierney is confident that the electric industry is prepared to meet the challenge. Her reliability report found that each North American Electric Reliability Corporation (NERC) reliability region has excess capacity, totaling over 100 GW of excess capacity nationwide. In fact, between 2001 and 2003, the electric industry built over 160 GW of new generation – about four times what analysts project will retire over the next five years. Therefore, even if projected retirement scenarios prove accurate, the likelihood of capacity shortages is slim, Tierney said.
Tierney’s platform is that the electric industry is well-positioned to respond to emissions regulations, with commercially available NOx, SO2, mercury and acid gas control technologies. Many coal plants have already been fitted with scrubbers: Between 2008 to 2010, approximately 60 GW of coal capacity was installed with scrubbers, with the industry completing more than 50 scrubber retrofits each year, the report found. Tierney said those in the industry who are delaying do so out of an impression that tarrying will be to their financial benefit.
“The friends of delay could create the very problem they’re saying they don’t want to have happen by getting everyone on the delay bandwagon. Then people won’t start to make decisions and figuring out how they’re going to comply soon enough,” Tierney said.
Among the many rules that EPA is addressing, the transport rule for SOx and NOx and the hazardous air rules for mercury are under court order under existing law for power plants to implement necessary changes, Tierney said. “I think debating whether that is worthy of considered delay is a tactic which would have unfortunate consequences.”
However, the EPA has much more discretion over the water rules, which will determine what kind of cooling system changes if any need to be made at existing plants. Tierney said those rules may be worthy of considering delay.
Tierney said emissions regulations are just one set of the many rules that the industry has responded to over the last 30 years. “Simultaneously we’ve been able to afford keeping the lights on and providing relatively affordable electricity supply.”
While Tierney is confident that the emissions adjustments are doable, some in the industry argue that time and money spent on control technology implementation are time and money taken away from research and development. Tierney, however, said she has witnessed many experiences in which government requirements have stimulated problem solving and innovation in response to compliance requirements. In addition, “From an industry point of view, the folks who work on R&D are not the folks who work on the engineering of solutions.”
Tierney’s standpoint is that the electric sector is well-positioned to respond to EPA’s mission to “help millions of Americans breathe easier and live healthier” without threatening electric reliability. “With economic costs, there will also be economic benefits related to health as well as investment/construction stimulus.”
She said that industry studies that raise the spotlight on reliability issues do not typically incorporate assumptions about how the market will respond and therefore are not necessarily sound pictures of what will occur. Existing substantial excess capacity, the electric industry’s proven track record to timely construct new generation and to efficiently coordinate the scheduling of planned outages, together with transmission enhancements, smart grid investments, fuel conversions, relatively low gas prices and demand-side actions should mitigate reliability and cost concerns, Tierney said.
“As a final backstop, existing statutory, market and regulatory safeguards will facilitate the retirement of inefficient units, and an orderly transition to cleaner, more efficient generation.”
Click here to read the entire report (PDF) co-authored by Dr. Tierney.
Friday, November 19, 2010
Monday, November 15, 2010
What Lame Ducks May Do for Power
Congress started lame-duck sessions this week, will take next week off for Thanksgiving and reconvene on Nov. 29. The final date of adjournment will be determined by how much Majority Leader Harry Reid and Speaker Nancy Pelosi attempt to accomplish, and how willing Republicans are to pass legislation.
What is expected to happen during lame-duck that will leave its mark on energy? The renewable electricity standard (RES), which was originally included in the broad energy bill that passed out of the Energy Committee last summer, was once believed to become part of the Senate climate bill this year. But when those talks failed last summer, Energy and Natural Resources Chairman Jeff Bingaman and Kansas GOP Sen. Sam Brownback introduced the RES measure as a stand-alone bill. Since then, they have been working to obtain the 60 votes needed to move it to the floor. So far, 31 additional co-sponsors have signed on.
Even if Bingaman and Brownback find 60 supporters, politics of the lame-duck legislative session may keep the measure off the floor. “We do know energy does not top the to-do list,” Bingaman spokesman Bill Wicker told The New York Times.
Of course the renewable energy industry holds on to the hope that the Treasury Grant Program (1603) will be extended beyond Dec. 31, 2010 and that the extension will be established during lame duck. An Oct. 25 memo from White House climate adviser Carol Browner, National Economic Council Director Larry Summers and Vice President Joe Biden’s chief of staff Ron Klain suggests that stimulus money for the renewable energy loan guarantee program be moved into the 1603 program.
“A 2-year extension of the 1603 grant program through the sunset of the associated tax credits has a $2.5 billion tax score. The Administration could work with Congress during the lame duck on the tax extenders bill to reprogram the 1705 funds to pay for the 1603 extensions” or other “clean energy priorities,” the memo said.
But does taking away from the renewable energy loan guarantee program and moving it into 1603 funding equate to taking a cookie away from a child and giving him a Snickers bar instead? Is “musical chairs” funding the answer? Or will the renewable energy industry develop best when faced with consistency in terms of government funding and incentives?
What happens during lame duck in the next two weeks could change things for the power industry, but mostly in moderation.
What is expected to happen during lame-duck that will leave its mark on energy? The renewable electricity standard (RES), which was originally included in the broad energy bill that passed out of the Energy Committee last summer, was once believed to become part of the Senate climate bill this year. But when those talks failed last summer, Energy and Natural Resources Chairman Jeff Bingaman and Kansas GOP Sen. Sam Brownback introduced the RES measure as a stand-alone bill. Since then, they have been working to obtain the 60 votes needed to move it to the floor. So far, 31 additional co-sponsors have signed on.
Even if Bingaman and Brownback find 60 supporters, politics of the lame-duck legislative session may keep the measure off the floor. “We do know energy does not top the to-do list,” Bingaman spokesman Bill Wicker told The New York Times.
Of course the renewable energy industry holds on to the hope that the Treasury Grant Program (1603) will be extended beyond Dec. 31, 2010 and that the extension will be established during lame duck. An Oct. 25 memo from White House climate adviser Carol Browner, National Economic Council Director Larry Summers and Vice President Joe Biden’s chief of staff Ron Klain suggests that stimulus money for the renewable energy loan guarantee program be moved into the 1603 program.
“A 2-year extension of the 1603 grant program through the sunset of the associated tax credits has a $2.5 billion tax score. The Administration could work with Congress during the lame duck on the tax extenders bill to reprogram the 1705 funds to pay for the 1603 extensions” or other “clean energy priorities,” the memo said.
But does taking away from the renewable energy loan guarantee program and moving it into 1603 funding equate to taking a cookie away from a child and giving him a Snickers bar instead? Is “musical chairs” funding the answer? Or will the renewable energy industry develop best when faced with consistency in terms of government funding and incentives?
What happens during lame duck in the next two weeks could change things for the power industry, but mostly in moderation.
Friday, November 5, 2010
The Big ?: The Future of Wind Energy
Denise Bode, CEO of the American Wind Energy Association (AWEA), said during a Nov. 5 webcast that the main issues for wind energy development in 2011 will be the extension of Section 1603, or the Treasury Grant Program (TGP) and the creation of a federal Renewable Electricity Standard (RES).
As a result of the TGP, 40,000 U.S. wind energy jobs were saved and 10,000 MW of new wind power came onto the grid in 2009, Bode said. However, wind energy progress could be imperiled through the potential Dec. 31, 2010 TGP start date expiration.
“The Treasury Grant Program has been successful at keeping American jobs from going overseas,” Bode said. “Policies like these are exactly what the industry needs in order to keep wind growing and to regain our position as a global leader.”
Bode said she is hopeful at the prospect of an extension after hearing of an internal White House memo circulated on Nov. 4, 2010 in which administration officials discussed the program’s extension.
While 2009 was a year of growth for wind energy, 2010 has told a different story. Installations for the first three quarters of 2010 are down 72 percent from last year. U.S. power plant developers added 395 megawatts of wind power in the third quarter, the slowest growth since 2007.
Elizabeth Salerno, director of industry data and analysis for AWEA, said 5,000 MW of total wind installations are expected by year end 2010. This number is dependent largely on whether the TGP start date is extended through the end of 2012. If it is, then many project start dates are expected to be pushed back to 2011 or 2012. If it is not extended, then developers will likely rush to start projects in the fourth quarter of 2010.
In 2010, Oregon added the most wind capacity of any state, and Delaware made it on the list of 37 states with wind generation. The top three wind producing states are Texas, Iowa and California.
Bode said AWEA looks forward to working with Congress and Senate to progress policies for renewables, citing Sen. Michael Bennet of Colorado, Sen. Mark Kirk of Illinois, Rep. Jerry Moran of Kansas, Sen. Chris Coons of Delaware and Sen. Richard Blumenthal of Connecticut as some of the key proponents for wind energy. Bode said a RES is a key to the growth of the wind energy industry, but it may be molded into a clean energy standard, combining renewables with fossil fuel generation.
“If you include those other resources and turn it into a clean energy standard, you have to make sure the renewables are highlighted and diversified,” Bode said.
To date in 2010, 40 percent of new generation has come from coal and only 13 percent from wind. In contrast, wind made up 39 percent of new generation in 2009, almost matching the growth of natural gas, and coal took 13 percent.
While policy will be the key player for U.S. wind growth in 2011, technology developers continue to move forward, with internal manufacturing efforts increasing. Bode said wind is the fastest growing manufacturing sector in the country, having increased domestic content from 25 to 50 percent in the last few years.
In addition, wind energy technologies are branching into offshore developments. In October, Secretary of the Interior Ken Salazar signed the first lease for commercial offshore wind energy, which would make Cape Wind on Nantucket Sound the first wind farm on the Outer Continental Shelf. Another handful of offshore wind projects are being considered off the coasts of Delaware, Rhode Island, New Jersey, Maine, and even Ohio, in Lake Erie.
Bode said the signing of the first offshore lease was historic when taking into consideration how profitable offshore oil and gas leases have been for decades.
What will happen with wind energy in 2011? That question continues to loom over the renewable energy industry.
“The post-2010 world of wind energy is filled with question marks because we don’t know where the economy or policies are going to land,” Salerno said. “All of these factors really push around the growth in wind.”
As a result of the TGP, 40,000 U.S. wind energy jobs were saved and 10,000 MW of new wind power came onto the grid in 2009, Bode said. However, wind energy progress could be imperiled through the potential Dec. 31, 2010 TGP start date expiration.
“The Treasury Grant Program has been successful at keeping American jobs from going overseas,” Bode said. “Policies like these are exactly what the industry needs in order to keep wind growing and to regain our position as a global leader.”
Bode said she is hopeful at the prospect of an extension after hearing of an internal White House memo circulated on Nov. 4, 2010 in which administration officials discussed the program’s extension.
While 2009 was a year of growth for wind energy, 2010 has told a different story. Installations for the first three quarters of 2010 are down 72 percent from last year. U.S. power plant developers added 395 megawatts of wind power in the third quarter, the slowest growth since 2007.
Elizabeth Salerno, director of industry data and analysis for AWEA, said 5,000 MW of total wind installations are expected by year end 2010. This number is dependent largely on whether the TGP start date is extended through the end of 2012. If it is, then many project start dates are expected to be pushed back to 2011 or 2012. If it is not extended, then developers will likely rush to start projects in the fourth quarter of 2010.
In 2010, Oregon added the most wind capacity of any state, and Delaware made it on the list of 37 states with wind generation. The top three wind producing states are Texas, Iowa and California.
Bode said AWEA looks forward to working with Congress and Senate to progress policies for renewables, citing Sen. Michael Bennet of Colorado, Sen. Mark Kirk of Illinois, Rep. Jerry Moran of Kansas, Sen. Chris Coons of Delaware and Sen. Richard Blumenthal of Connecticut as some of the key proponents for wind energy. Bode said a RES is a key to the growth of the wind energy industry, but it may be molded into a clean energy standard, combining renewables with fossil fuel generation.
“If you include those other resources and turn it into a clean energy standard, you have to make sure the renewables are highlighted and diversified,” Bode said.
To date in 2010, 40 percent of new generation has come from coal and only 13 percent from wind. In contrast, wind made up 39 percent of new generation in 2009, almost matching the growth of natural gas, and coal took 13 percent.
While policy will be the key player for U.S. wind growth in 2011, technology developers continue to move forward, with internal manufacturing efforts increasing. Bode said wind is the fastest growing manufacturing sector in the country, having increased domestic content from 25 to 50 percent in the last few years.
In addition, wind energy technologies are branching into offshore developments. In October, Secretary of the Interior Ken Salazar signed the first lease for commercial offshore wind energy, which would make Cape Wind on Nantucket Sound the first wind farm on the Outer Continental Shelf. Another handful of offshore wind projects are being considered off the coasts of Delaware, Rhode Island, New Jersey, Maine, and even Ohio, in Lake Erie.
Bode said the signing of the first offshore lease was historic when taking into consideration how profitable offshore oil and gas leases have been for decades.
What will happen with wind energy in 2011? That question continues to loom over the renewable energy industry.
“The post-2010 world of wind energy is filled with question marks because we don’t know where the economy or policies are going to land,” Salerno said. “All of these factors really push around the growth in wind.”
Wednesday, November 3, 2010
Californians Mark the Ballot for Renewable Energy: The Defeat of Proposition 23
In what is being considered the largest public vote on clean energy policy in U.S. history, Proposition 23 was defeated yesterday by approximately 60 percent of California voters. Proponents of climate law AB 32, which would have been suspended if Proposition 23 had passed, are saying this sends a clear message to state and federal leaders that even during a major economic downtown in a state with one of the nation’s highest unemployment rates, voters want a clean energy future.
Wade Crowfoot, West Coast political director for the Environmental Defense Fund, said the defeat of Proposition 23 is an undeniable win for renewable energy. “Californians actually recognize that the clean energy economy is expanding around them. Voters didn’t buy scare tactics that somehow clean energy costs jobs.”
Opposition to Proposition 23 came from beyond the realm of typical clean energy supporters, garnering support from Republicans, including California Gov. Arnold Schwarzenegger and former U.S. Secretary of State George Shultz, and Democrats, including President Barack Obama, California Senator Barbara Boxer and Attorney General Jerry Brown. Hundreds of businesses rallied to oppose the proposition, from Fortune 500 companies to small businesses, including the organization Small Business California. Other California organizations in opposition to Proposition 23 included the American Lung Association in California, California Professional Firefighters, AARP, California Nurses Association, the California Democratic Party, National Venture Capital Association, the California Solar Energy Industries Association and California Wind Energy Association.
“This proposition saw opposition from everyone from military leaders to religious leaders,” Crowfoot said.
While Proposition 23 was aimed at California’s unemployment rate, opponents of the proposition said it would have jeopardized the jobs of over 500,000 Californians employed in renewable energy, a rapidly growing job market. Since the implementation of AB 32, California has garnered over $9 billion of private investment capital, a market that a ‘yes’ on Proposition 23 would have been endangered, said rivals of the proposition.
“The defeat of Proposition 23 tells Congress that the largest state in the Union that represents the eighth largest economy in the world is a cornerstone of economic recovery, and that Californians view clean energy as part of the solution,” Crowfoot said.
Tom Rooney, president and CEO of SPG Solar, said California has become a “consistent, predictable market for solar,” and the passing of Proposition 23 could have derailed that stability. While Rooney was on a trip to China two months ago, he met a solar developer who was planning on building a $100 million solar facility in California after deciding that California was the most durable solar market in the U.S. and globally. Rooney said the passing of Proposition 23 would have caused global solar companies developing in the U.S. to second guess themselves about the market stability.
He said that solar is a huge bolster to economies worldwide, particularly Germany. However, countries like Spain that have dabbled in solar, only to later change renewable energy policies, “have waffled.”
The defeat of Proposition 23 shows that the average Californian is aware of the benefits spurred by renewable energy, Rooney said.
“Voters are figuring out that investing in renewable energy equals job creation, fiscal responsibility, energy independence and environmental benefits.”
While Proposition 23 may have given some California renewable developers a scare, Rooney said that in the end, it benefitted renewable energy. “Proposition 23 got people talking about renewable energy, and if the grassroots’ population is talking about an issue, enormous power comes out of that.”
Wade Crowfoot, West Coast political director for the Environmental Defense Fund, said the defeat of Proposition 23 is an undeniable win for renewable energy. “Californians actually recognize that the clean energy economy is expanding around them. Voters didn’t buy scare tactics that somehow clean energy costs jobs.”
Opposition to Proposition 23 came from beyond the realm of typical clean energy supporters, garnering support from Republicans, including California Gov. Arnold Schwarzenegger and former U.S. Secretary of State George Shultz, and Democrats, including President Barack Obama, California Senator Barbara Boxer and Attorney General Jerry Brown. Hundreds of businesses rallied to oppose the proposition, from Fortune 500 companies to small businesses, including the organization Small Business California. Other California organizations in opposition to Proposition 23 included the American Lung Association in California, California Professional Firefighters, AARP, California Nurses Association, the California Democratic Party, National Venture Capital Association, the California Solar Energy Industries Association and California Wind Energy Association.
“This proposition saw opposition from everyone from military leaders to religious leaders,” Crowfoot said.
While Proposition 23 was aimed at California’s unemployment rate, opponents of the proposition said it would have jeopardized the jobs of over 500,000 Californians employed in renewable energy, a rapidly growing job market. Since the implementation of AB 32, California has garnered over $9 billion of private investment capital, a market that a ‘yes’ on Proposition 23 would have been endangered, said rivals of the proposition.
“The defeat of Proposition 23 tells Congress that the largest state in the Union that represents the eighth largest economy in the world is a cornerstone of economic recovery, and that Californians view clean energy as part of the solution,” Crowfoot said.
Tom Rooney, president and CEO of SPG Solar, said California has become a “consistent, predictable market for solar,” and the passing of Proposition 23 could have derailed that stability. While Rooney was on a trip to China two months ago, he met a solar developer who was planning on building a $100 million solar facility in California after deciding that California was the most durable solar market in the U.S. and globally. Rooney said the passing of Proposition 23 would have caused global solar companies developing in the U.S. to second guess themselves about the market stability.
He said that solar is a huge bolster to economies worldwide, particularly Germany. However, countries like Spain that have dabbled in solar, only to later change renewable energy policies, “have waffled.”
The defeat of Proposition 23 shows that the average Californian is aware of the benefits spurred by renewable energy, Rooney said.
“Voters are figuring out that investing in renewable energy equals job creation, fiscal responsibility, energy independence and environmental benefits.”
While Proposition 23 may have given some California renewable developers a scare, Rooney said that in the end, it benefitted renewable energy. “Proposition 23 got people talking about renewable energy, and if the grassroots’ population is talking about an issue, enormous power comes out of that.”
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