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NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on climate change makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

The challenge now: To make every day Earth Day.

YESTERDAY

  • TODAY’S STUDY: The Economic Impacts Of New England’s Carbon Trading Market
  • QUICK NEWS, April 23: “Letter From A Teenage Girl Who Has Had Enough”; The Many Values Of Ocean Wind; Solar For All
  • THE DAY BEFORE

  • Weekend Video: Earth Day 2018
  • Weekend Video: A Daily Show Take On Earth Day
  • Weekend Video: First U.S. Ocean Wind
  • THE DAY BEFORE THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-Human Population And Global Weirding
  • FRIDAY WORLD HEADLINE-Global Wind Still Focused On Big Markets
  • FRIDAY WORLD HEADLINE-New Energy-Powered High Seas Shipping From Japan
  • FRIDAY WORLD HEADLINE-World’s Biggest Wave Energy For Bali
  • THE DAY BEFORE THAT

    THINGS-TO-THINK-ABOUT THURSDAY, April 19:

  • TTTA Thursday-Study Shows A Carbon Tax Can Work
  • TTTA Thursday-Wind Power Was 6.3% Of U.S. Power In 2017
  • TTTA Thursday-Global Solar Boom To Get Bigger In 2018
  • TTTA Thursday-U.S. Cities Are Getting More Efficient
  • THE LAST DAY UP HERE

  • ORIGINAL REPORTING: Utility Pilot Projects Could Soothe Contentious Regulatory Proceedings
  • ORIGINAL REPORTING: Utility Success With Corporate Renewables Moves On Existing Load
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    Founding Editor Herman K. Trabish

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • TODAY AT NewEnergyNews, April 24:

  • TODAY’S STUDY: The Value Of Offshore Wind
  • QUICK NEWS, April 24: Another ‘This Is It’ Moment For Climate Change; Here’s Why Wind Is A Winner; Solar For The Heartlands

    Tuesday, April 24, 2018

    TODAY’S STUDY: The Value Of Offshore Wind

    Estimating the Value of Offshore Wind Along the United States’ Eastern Coast

    Andrew D. Mills, Dev Millstein, Seongeun Jeong, Luke Lavin, Ryan Wiser, Mark Bolinger, April 2018 (Lawrence Berkeley National Laboratory)

    Executive Summary

    Overview

    Development of offshore wind in the United States has been limited to date despite a recent acceleration in global deployments and indications of steep cost reductions in European tenders for offshore wind energy. In part, limited US growth is due to an unclear understanding of the economic value that offshore wind provides within local or regional electricity markets. One reason for this lack of clarity is due to the fact that offshore projects can be developed in many different locations, and that diurnal and seasonal wind resource profiles vary by project location. Differences in location and location-specific generation profiles can affect the value of wind power in terms of which other generators wind displaces (and hence both the type and quantity fuels and emissions that wind power reduces), wind’s contribution to meeting peak demand, and the local price of electricity and renewable energy credits (RECs) that wind earns.

    With these and other value components in mind, this project explores a hypothetical question: What would the marginal economic value of offshore wind projects along the east coast of the United States have been from 2007-2016, had any such projects been operating during that time period? Using historical weather data at thousands of potential offshore wind sites, combined with historical wholesale market outcomes and REC prices at hundreds of possible interconnection nodes, we develop a rigorous method to answer this question, focusing mostly on the marginal economic value but also including environmental impacts. We consider energy, capacity and REC value, avoided air emissions, the wholesale price ‘merit-order’ effect, and natural gas price suppression. In addition to assessing each value component, and how value has varied geographically and over time, we also evaluate value differences between offshore and onshore wind, the ‘sea-breeze’ effect, the capacity credit of offshore wind, the value of interconnecting at and selling to different locations, the incremental value of storage, and the impact of larger rotors and taller towers. We then go on to discuss, at a high level, various factors that might drive these value components higher or lower in the future, as offshore wind deployment commences.

    This work builds on and complements recent and ongoing research by NREL, and is informed by a comprehensive review of the available offshore wind energy valuation literature. Although the historical nature of this analysis limits its applicability going forward, knowing how the historical value of offshore wind has varied both geographically and over time, and what has driven that variation, can nevertheless provide important insights to a variety of stakeholders, including wind developers, purchasers and energy system decision-makers. In addition, focusing on market value may help to inform the U.S. DOE on its offshore wind technology cost targets, as well as the early-stage R&D investments necessary to reach them…

    Key Findings

    Summary

    We find that the average historical market value of offshore wind from 2007-2016—considering energy, capacity, and RECs—varies significantly by project location, from $40/MWh to more than $110/MWh, and is highest for sites off of New York, Connecticut, Rhode Island, and Massachusetts. As energy and REC prices have fallen in recent years, so too has the market value of offshore wind. The historical value of offshore wind is found to exceed that of onshore wind, due to offshore wind sites being located more favorably in terms of constrained pricing points, and also due to a more-favorable temporal profile of electricity production. Finally, we explore multiple ways to enhance the value proposition for offshore wind, including strategies associated with interconnecting to higher-priced locations and the addition of electrical storage. Whether any of these strategies, and offshore wind more generally, is economically attractive will depend on tradeoffs between value and cost. Cost reductions that approximate those witnessed recently in Europe may be needed for offshore wind to offer a credible economic value proposition on a widespread basis along the eastern seaboard.

    The market value of offshore wind between 2007-2016 varies significantly by project location, and is highest for sites off of New York, Connecticut, Rhode Island, and Massachusetts. Figure 1 shows that the total market value (i.e., energy, capacity, and REC value combined) of offshore wind is highest for sites off of New York, Connecticut, Rhode Island, and Massachusetts; lower for projects off of Maine; and lowest elsewhere along the coast. When averaged over the entire 2007-2016 period (left half of Figure 1), the median marginal value for sites interconnecting to ISO-NE is roughly $110/MWh, compared to $100/MWh for sites interconnecting to NYISO, $70/MWh for sites in PJM, and closer to $55/MWh for sites in the non-ISO region south of PJM. When focusing on just 2016 (right half of Figure 1), the corresponding marginal values are much lower (for reasons explained later), but the relative differences across states and regions is still similar. The median value for sites in ISO-NE is $70/MWh in 2016, and for NYISO is nearly $65/MWh. The median value of sites in PJM is $45/MWh, while it is less than $40/MWh for sites in the Non-ISO region south of PJM. Of course, just as the market value of offshore wind varies spatially, so too does the levelized cost of offshore wind energy (LCOE), affected by wind speed, ocean depth, distance from shore, and many other considerations. Comparing LCOE estimates with value estimates, we find that the most attractive sites from this perspective are located near southeastern Massachusetts and Rhode Island, while the least attractive are far offshore of Florida and Georgia.

    The market value of offshore wind can be approximated by the value of a flat block of power; the locational variation in the market value of offshore wind is driven primarily by differences in average energy (and REC) prices across pricing nodes, states and regions, rather than by differences in diurnal and seasonal wind generation profiles across project sites. This insight is revealed by comparing a site’s total market value based on wind resource availability (i.e. the left panel of Figure 1) to a hypothetical value created at each site by calculating the simple average energy, capacity, and REC prices across all hours (a 24x7 ‘flat block’ of power). 1 In other words, Figure 2 compares the marginal revenue earned by each offshore wind project to the amount of revenue it would have earned if generating the same total amount of annual energy but with no temporal variation in output. The resulting ‘normalized’ market value (total, energy, and capacity, respectively, from left to right) of offshore wind shown in Figure 2 indicates whether offshore wind is more or less valuable than a 24x7 flat block of power; variation in this metric across sites solely reflects differences in diurnal and seasonal generation profiles.

    As shown, the normalized total market value of offshore wind (left pane) ranges from 95%-105%, with somewhat larger ratios found in NYISO, ISO-NE, and off the coast of North Carolina. The energy value component (middle pane) tells a similar story, and with a similarly modest range (98%-108%). In contrast, the normalized capacity value component (right pane) varies more significantly, from 50%-120% (capacity value is explored further in the next key finding). The rather modest ranges for both total and energy value indicate that variability in wind generation profiles across sites is not a strong determinant of offshore wind market value along the East Coast; instead, the significant variation in market value seen in Figure 1 is driven much more by local energy (and REC) prices. The market value of offshore wind is roughly similar to that of a similarly located flat block of power, at least on a marginal basis for the first offshore wind plants.

    Diurnal and seasonal generation profiles do matter, but mostly for capacity value, which is a small component of overall value. The relatively wide range (50%-120%) in normalized capacity value shown in the right pane of Figure 2 solely reflects differences in wind generation profiles across sites (as well as the rules by which wind plants earn capacity payments), with sites off of Rhode Island and Massachusetts having the most advantageous profiles in terms of aligning with capacity measurement periods. Similarly, winter capacity credits are highest for the areas off of Rhode Island and Massachusetts (see Figure 3). Figure 3 also shows the distribution of summer capacity credit along the entire east coast. Note that winter capacity credits are shown for NYISO and ISO-NE sites only, as PJM does not assess capacity credits in the winter (we assume that PJM capacity market rules apply to all states south of PJM). The capacity credit of offshore wind in the NYISO and ISO-NE markets is significantly higher in winter than in summer; offshore wind in these regions benefits from having capacity credit assessed in both seasons. While there is significant variation in capacity credit (Figure 3) and normalized capacity value (Figure 2) across sites, capacity value is a relatively minor component of the total market value of offshore wind, as shown in Figure 4.

    In addition to varying geographically, the market value of offshore wind also varies significantly from year to year, driven primarily by changes to energy and REC prices; the market value of offshore wind is lowest in the most recent year evaluated—2016. This interyear variation was first seen in Figure 1, where the total market value of offshore wind in 2016 was significantly lower than the value averaged over 2007-2016. Figure 4 shows that this significant decline in total market value is attributable primarily to lower electricity prices in 2016, which reduced the median energy value of offshore wind to ~$30/MWh across all four regions. Figure 4 also confirms that the capacity value of offshore wind is only a small component of total value. Variability in total market value over time has been driven by both electricity and REC prices (with the former heavily influenced by natural gas prices). The total market value is highest in ISO-NE, in part due to higher REC prices. The energy and capacity value is higher for NYISO, particularly for the Long Island region.

    The energy and capacity value of offshore wind in all three ISOs exceeds the value of onshore wind. Figure 5 shows that, in 2016, the total marginal energy and capacity value of offshore wind would have exceeded the value of existing onshore wind by $6/MWh in ISO-NE (21% higher), $6/MWh in PJM (24% higher), and by more than $20/MWh in NYISO (112% higher). The differences in energy and capacity value between onshore and offshore wind is due to differences in location and differences in hourly output profiles: location appears to play a somewhat larger role than output profile, in most cases. The estimated summer and winter capacity credit for offshore wind in the three ISOs is roughly double that for onshore wind.

    Offshore wind reduces air emissions that are harmful to human health and the environment, yet the avoided emissions rate for pollutants like SO2 has declined over time. Figure 5 shows that avoided emissions attributable to offshore wind vary by region—highest in the Mid-Atlantic, lower in the Southeast, and lowest in the Northeast2—and have generally declined over time, as the emissions rate of the marginal generator has improved. The decline has been particularly steep for SO2 (top left graph), as coal plants have either retired or installed pollution control equipment. Although avoided emissions is a measurable benefit of offshore wind, the economic value of avoided emissions is not necessarily additive to the energy, capacity, and REC value discussed earlier; this value is already embedded in energy value to some degree, since pollution permit prices are reflected in locational marginal prices (LMPs). One could argue that REC value similarly reflects the benefits of avoided emissions. That being said, studies have found that recent air quality benefits from wind power in these regions ranges from $26/MWh to >$100/MWh, depending on the location of the wind project; at the upper end, these values exceed the value reflected in RECs.

    Wholesale electricity and natural gas price reductions attributable to offshore wind can be substantial, though these price reductions represent a wealth transfer between producers and consumers. When the marginal generation unit displaced by offshore wind is a gas-fired generator, offshore wind not only avoids emissions but also reduces the consumption of natural gas. Because natural gas supply is relatively inelastic in the short term, reductions in natural gas demand can lead to price reductions, resulting in flow-through consumer benefits in the form or lower natural gas expenditures throughout the economy. For example, we estimate that natural gas price savings nationwide could have an equivalent value per-MWh of offshore wind of $30-$80/MWh of offshore wind averaged over 2007–2016, depending on in which region the offshore wind is located. Local regional price savings in the region in which the offshore wind plant interconnects are significantly lower, but still significant, at less than $6/MWh of offshore wind (Figure 6). Similarly, low-marginalcost offshore wind also reduces wholesale electricity prices by displacing the highest-cost marginal generating units from the bid stack. When translated to an equivalent consumer benefit per-MWh of offshore wind, we estimate this ‘merit order effect’ to be more than $25/MWh averaged over 2007– 2016 in all three ISO regions, and significantly lower in the states south of the PJM region (Figure 6). The natural gas and wholesale electricity price suppression effects are lowest in 2016.

    These natural gas and wholesale price reductions, however, represent a transfer of wealth from natural gas producers and electricity generators to gas and electricity consumers, respectively. While some decision-makers are interested in natural gas and wholesale price reductions, not all consider them to be net societal benefits. Moreover, these price suppressing effects would be anticipated to decline over time, as supply adjusts to the new demand conditions.

    Outside of the confines of our base-case analysis, we explored—and found—several other ways to enhance the value of offshore wind. Interconnecting to a more-distant but higher-priced node can increase the value of offshore wind by as much as $25/MWh, particularly when switching from PJM or ISO-NE nodes to NYISO nodes around Long Island. Even better, having more than one interconnection point and arbitraging between them can increase value by $40/MWh-wind in some cases. Selling RECs into a different state than the one in which the project interconnects can add up to $20/MWh of value beyond our base-case assumptions, depending on the location. Adding battery storage sized (in MWh terms) at roughly one fourth of the offshore wind project capacity can increase value by up to $3/MWh-wind, with still-greater incremental value as battery size increases. Finally, wind turbine design is found to have a minor effect on market value, at least for the first offshore wind projects installed in a region.

    Future Outlook

    This analysis is backward-looking, focused on historical wind patterns and market outcomes from 2007-2016 in order to estimate the hypothetical marginal value of offshore wind along the U.S. east coast (i.e., had any such projects been operating during this time period). Though this marginal, historical perspective is instructive in terms of identifying key value drivers, the decision to build offshore wind going forward will depend on expectations of future benefits, which may differ from recent historical experience. With that in mind, we conclude by qualitatively assessing the outlook for some of the value drivers identified in this paper; many of these outlooks remain highly uncertain.

    • Energy value—the largest value component within our analysis—will partly depend on the future direction of natural gas prices, which is highly uncertain. For example, the Energy Information Administration (EIA) projects gas prices to drift higher over time, while NYMEX natural gas futures suggest medium-term price reductions. Several projections of electricity prices in the ISO-NE, NYISO, and PJM areas show significant variation across forecasts, but a general upward trend. Finally, increasing wind penetration over time could drive down wind’s energy value in the future, as the market becomes saturated with low marginal-cost wind power during windy times; such a value decline has been observed in high-penetration wind markets internationally.

    • REC prices—another significant contributor to offshore wind’s value—will depend in part on the cost and value of alternative means of complying with state RPS requirements. As the cost of wind and solar power continues to decline, one might expect to see declining REC prices as well. On the other hand, some states have established, or could establish, specific offshore wind obligations, which could boost the value of offshore wind RECs.

    • Offshore wind’s capacity value depends on capacity prices, the rules for how capacity credit is determined, and whether offshore wind is eligible to participate. Capacity prices are generally expected to increase in the future, but several proposed or pending market reforms may make it more difficult for offshore wind to participate in capacity markets.

    • Avoided emissions should remain around recent levels, barring either regulatory rollback or implementation of new and more-stringent emissions targets. Higher natural gas prices, however, could potentially shift the dispatch towards more coal-fired generation, potentially increasing avoided emissions. On the other hand, such a shift in the supply curve might lead to more gas-fired generation on the margin, which would reduce offshore wind’s avoided emissions, thus it is hard to predict the exact effect on avoided emissions due to any future increase in gas prices.

    • The degree to which offshore wind suppresses natural gas and wholesale electricity prices will depend in large part on the level of natural gas and wholesale electricity prices going forward— both of these have been discussed already above. This analysis focused on first-year or shortterm effects. The effects are generally expected to decline over time, as supply adjusts to the new demand conditions.

    Some of these and other issues will be assessed in forthcoming work from NREL3, which will model several offshore wind scenarios in a future U.S. power system (years 2024 and 2038) within the NYISO and ISO-NE market regions, focusing on performance metrics including reliability, capacity value, transmission needs, production cost savings, wholesale price suppression, curtailment levels, and system ramping needs.

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    QUICK NEWS, April 24: Another ‘This Is It’ Moment For Climate Change; Here’s Why Wind Is A Winner; Solar For The Heartlands

    Another ‘This Is It’ Moment For Climate Change One of the most worrisome predictions about climate change may be coming true

    Chris Mooney, April 23, 2018 (Washington Post)

    “Two years ago, former NASA climate scientist James Hansen and a number of colleagues laid out a dire [computer simulation-based] scenario in which gigantic pulses of fresh water from melting glaciers could upend the circulation of the oceans, leading to a world of fast-rising seas and even superstorms…[A new oceanographic study] appears to have confirmed one aspect of this picture — in its early stages…[Ocean measurements off the coast of East Antarctica show] that melting Antarctic glaciers are indeed freshening the ocean around them. And this, in turn, is blocking a process in which cold and salty ocean water sinks below the sea surface in winter, forming ‘the densest water on the Earth’…[on] the West Antarctic coast and the coast around the enormous Totten glacier in East Antarctica…[T]he melting of Antarctica’s glaciers appears to be triggering a ‘feedback’ loop in which that melting, through its effect on the oceans, triggers still more melting…not to mention rising seas as glaciers lose mass…” click here for more

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    Here’s Why Wind Is A Winner Wind energy’s swift growth, explained

    John Hall, April 23. 2018 (The Conversation)

    “…[T]he total amount of U.S. electricity generated by wind turbines nearly doubled between 2011 and 2017…Wind turbines, which convert moving air into electrical power, currently produce 6.3 percent of the electricity the U.S. consumes. Texas leads the nation overall in terms of the amount of power it gets from wind. Iowa gets a higher share of its electricity from wind turbines than any other state – 37 percent…The U.S. still lags other nations, particularly those in Europe, with offshore wind production…[But the first commercial offshore wind farm] began operating in 2016. New York state plans to build a much larger offshore farm. And California may soon establish floating offshore wind farms…[Recent improvements in energy storage technology and turbine efficiency] are lowering costs…[and] market forces coupled with widespread concerns over climate change, continue to propel the wind industry…[Corporate giants, such as Apple and Google,] are proactively seeking to rely on wind energy, rather than fossil fuels…And this wind rush is creating jobs in manufacturing, services and science. With total generating capacity projected to increase from about 89 gigawatts to more than 400 gigawatts over the next 30 years, the Energy Department says the industry may eventually employ 600,000 American workers.” click here for more

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    Solar For The Heartlands Solar farms set to sprout across Illinois

    Robert Channick, April 22, 2018 (Chicago Tribune)

    “Anew crop is ready to sprout on Illinois farms, with gleaming solar panels supplanting rows of corn and soybeans…[Drawn by new incentives and the Future Energy Jobs Act requiring Illinois utilities to get 25 percent of their retail power from renewable sources like solar and wind by 2025], renewable energy developers are staking out turf on the rural fringes of the Chicago area and beyond, looking to build dozens of solar farms to feed the electric grids of Commonwealth Edison and other utilities…It’s a potential sea change in the Illinois energy landscape that proponents say is long overdue and will provide customers with a green power alternative. But the rise of solar power also has generated opposition from some residents…” click here for more

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    Monday, April 23, 2018

    TODAY’S STUDY: The Economic Impacts Of New England’s Carbon Trading Market

    The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States; Review of RGGI’s Third Three-Year Compliance Period (2015-2017)

    Paul J. Hibbard, Susan F. Tierney, Pavel G. Darling, Sarah Cullinan, April 17, 2018 (Analysis Group)

    Executive Summary

    Overview and Context

    In 2009, ten Northeastern and Mid-Atlantic states launched the Regional Greenhouse Gas Initiative (“RGGI”), the country’s first market-based program to reduce emissions of carbon dioxide (“CO2”) from existing and new power plants.1 The scope of RGGI is significant: the current set of RGGI states account for more than one-eighth of the population in the U.S. and more than one-seventh of the nation’s gross domestic product. It is thus important to evaluate and understand the program’s performance and outcomes. Through their development and implementation of the RGGI program, these states have gained first-mover policy experience and have collaborated to form a multi-state emission-control policy that has reduced CO2 emissions from the power sector and operated seamlessly with well-functioning and reliable electricity markets.

    Recently, other states have expressed interest in implementing carbon-control programs that are similar in structure to RGGI’s approach. One option for those states would be for active collaboration to allow for trading of CO2 allowances among affected sources in these states and the current RGGI states.2 Insights and observations gleaned from an analysis of RGGI’s performance could thus be valuable not only to the RGGI states as they consider future policy recommendations but also to other states and regions as they develop their own plans to reduce CO2 emissions.

    This Report analyzes the economic impacts of RGGI’s most recent three-year compliance period, which spanned 2015 through 2017. This analysis follows our two prior reports on the economic impacts of RGGI: the 2011 Report (hereafter “AG 2011 Report”) which assessed the economic impacts of RGGI’s first three-year compliance period (2009-2011), and the 2015 Report (hereafter “AG 2015 Report”) which assessed the economic impacts of RGGI’s second three-year compliance period (2012-2014).3

    There have been a number of relevant developments since our last economic review of RGGI in 2015. The electric industry has experienced changes in power-generation economics, emission-control requirements, and wholesale market structures in the RGGI region. In addition, absent federal requirements, a number of states continue to seek to address greenhouse-gas (“GHG”) emissions through an assortment of policy mechanisms. Finally, the RGGI states have undertaken a second comprehensive Program Review, completed in December 2017, which led to modified elements of the program including adopting a 30-percent reduction in the regional cap between 2020 and 2030.

    In this Report, we examine RGGI’s recent economic performance under these changing economic and regulatory realities. We hope that the results of our assessment and lessons learned are useful not only to the RGGI states but also to others that have expressed interest in establishing carbon control programs (including with the possibility of linking to or participating in the RGGI program).4

    RGGI has now been operating for over nine years. In every year, CO2 emission allowances have entered the market through coordinated (centralized) regional auctions. Owners of fossilfueled power plants have spent nearly $2.8 billion to buy CO2 allowances over the nine years. In turn, offer prices in the regional wholesale electricity markets reflect these purchases, and grid operators in these regions use these offer prices to dispatch power plants economically while maintaining system reliability.

    Since 2009, the RGGI states have received virtually all of the nearly $2.8 billion in proceeds from CO2-allowance auctions and disbursed them back into the economy in various ways, including through expenditures on: energy efficiency (“EE”) measures and programs; renewable energy (“RE”) projects; GHG-emission reduction measures; direct electricity consumer bill assistance, including for low-income households; and education and job training programs. These local investments keep more of the RGGI states’ energy dollars in their region, and reduce the amount of dollars that leave the region to pay for fossil fuel resources produced outside the RGGI states.

    Throughout the RGGI program’s implementation, power system reliability has been maintained. And as shown in Figure ES-1, CO2 emissions from power generation have decreased in the RGGI region (due to RGGI program design and implementation but also broader economic and industry factors).

    With these many insights, we address several questions in this Report: What happened to the roughly $1 billion in proceeds from the sale of CO2 allowances over the 2015-2017 period? Has the RGGI program produced net economic benefits to these states in Compliance Period 3 (as it did in the first two compliance periods)? Are there new learnings from the outcomes of the RGGI program to date beyond those identified and described in our prior reports?

    Finally, in this Report we consider the implications of our analysis for continued implementation in the RGGI states, and for states considering development of their own carbon reduction programs and/or coordination with a broader CO2 trading region.

    Results

    Over the last three years (2015-2017), the RGGI program led to $1.4 billion (net present value (“NPV”)) of net positive economic activity in the nine-state region.6 Each RGGI state’s electricity consumers and local economy also experienced net benefits from the RGGI program. When spread across the region’s population, these economic impacts amount to nearly $34 in net positive value added per capita. Figure ES-2 shows the net economic value to the nine-state RGGI region as a whole, with results also broken out by power system region (with the six New England states participating in the ISO-New England electrical region, with New York participating in the one-state NYISO system, and with Maryland and Delaware participating in the multi-state PJM power system).

    RGGI’s net positive economic outcome results in large part from the states’ decisions to sell CO2 allowances via a centralized auction and then to use the auction proceeds in various ways that address state policy objectives. This approach has been in place in all three RGGI compliance periods. As in the prior years, during the 2015-2017 period the states received and spent the roughly $1.0 billion in auction proceeds primarily on EE measures, community-based RE projects, customer bill assistance, other GHG-emission reduction measures, and on research, education and job training programs.

    These economic benefits reflect the complex ways that RGGI dollars interact within local economies.

    Compared to energy-related dollar flows that would occur in the absence of the RGGI program, energy-related expenditures with RGGI lead to more purchases of goods and services in the RGGI states’ local economies. Take the use of the auction proceeds on EE measures, for example: Such expenditures include payments for engineering services for energy audits, sales of energy-efficient equipment, dollars spent to train those installers, and state taxes collected on all of these activities. Together, these dollar flows have direct and indirect multiplier effects locally and regionally.

    The size of RGGI’s economic impacts varies by state and region, in large part because the states spent their RGGI auction proceeds differently.7 Different expenditures have different direct and indirect effects on their economies and on their electric systems. For example, a state’s use of RGGI dollars to pay for EE measures that reduce electricity consumption and to invest in RE facilities with low operating costs both served to lower electricity prices in wholesale power markets (as compared to a “without-RGGI” scenario). This in turn lowers consumers’ electricity bills over time.

    Local investment of RGGI dollars on energy efficiency and renewable energy offset the impact on electricity prices resulting from CO2 allowance costs.

    On the one hand, the inclusion of the cost of CO2 allowances in wholesale prices tends to increase wholesale electricity prices in the RGGI region at the beginning of the 2015-2017 period. But these near-term impacts are more than offset during these years and beyond, because the states invest a substantial amount of the RGGI auction proceeds on EE programs that reduce overall electricity consumption and on RE projects that reduce the use of higher-priced power plants. Consumers gain because their overall electricity bills go down. Since RGGI’s commencement in 2009, energy and dollar savings resulting from all states’ investments in EE and RE has more than offset the wholesale market price increases associated with inclusion of allowance costs in market bids.

    Energy consumers enjoy a net gain of $220 million as a result of the RGGI program (2015-2017), as their overall energy bills drop over time.

    Net benefits accrue to residential, commercial and industrial customers. Consumers of electricity save $99 million, and consumers of natural gas and heating oil save $121 million. These amounts are in addition to the economic benefits they receive as members of the local economies of the RGGI states where the allowance auction proceeds are spent.

    Power system changes that result from RGGI include: different dispatch order of power plants; plants with lower CO2 emissions having a competitive advantage; and owners of emitting power plants recovering the costs of CO2 allowances in the short run while experiencing lower output and revenues in the long run.

    Including a price on CO2 emissions tends to shift the power plant dispatch order and increase output of lower- and zero-carbon-emitting sources of power. Although RGGI requires owners of emitting power plants to purchase CO2 allowances, power plant owners as a group recover all of their early expenditures on CO2 allowances through the increase in wholesale electricity prices in the near term. But the net effect of the program tends to reduce the revenues of owners of plants over time as a result of RGGI expenditures on EE, which lower the demand for power. Plants with relatively high carbon emissions (e.g., coal-fired or oil-fired units) collect less revenues over time while owners of zero-carbon generating sources (e.g., nuclear, wind, solar, hydro) get the benefit of being paid higher wholesale market prices that reflect CO2 allowance costs, without having to buy allowances. Figure ES-3 shows the changes in net revenues for power plant owners as a result of the RGGI program, with results broken out by location and by power-plant fuel type. Carbon-emitting power plant owners generally lose revenue ($940 million), while owners of nuclear and renewable resources gain ($590 million). On an NPV basis, total revenues to the power-generation sector drop by nearly $350 million through our forecast period (ending in 2027), as shown in Figure ES-4.

    Compared to RGGI’s earlier two compliance periods (2009-2011 and 2012-2014), the amount of CO2 allowances sold dropped in recent years, while clearing prices were on average higher, which had a mostly offsetting effect on the relative magnitudes of economic effects experienced in Compliance Period 3.

    The RGGI states lowered the regional CO2 emissions cap by 45 percent in 2014 and further tightened it by 2.5 percent per year thereafter, during the current study period (see Figure ES-1). The current compliance period was the first that involved a significantly tightened and declining cap (see Figure ES-1). This tightening supply of CO2 allowances, in combination with other market and policy factors, initially elevated the price of allowances and, in turn, the wholesale power prices in the different parts of the RGGI region. Total auction proceeds in Compliance Period 3 ended up being only slightly lower than in each of the prior two periods (by less than ten percent), reflecting the offsetting impact of higher allowance prices and lower allowance volumes sold (as shown in Figure ES-5).

    Observations

    Based on these results as well as those in our prior assessments of the first two RGGI compliance periods, we have a number of observations that we summarize here. We hope that these provide useful information for the RGGI states as they consider how the program is performing relative to its original goals and for other states and stakeholders who are interested in carbon emission-control policies and programs.

    As in its first six years, the RGGI program’s third three-year compliance period continued to generate substantial economic benefits for the states while reducing CO2 emissions.

    Economic value added

    Our analysis of RGGI impacts over the past three years took into consideration the program’s effects on power system dispatch, costs to consumers, revenues to electric generators, and overall performance of the economies in the participating states. Even taking into account decreased revenues to the owners of emitting power plants (and to power-plant owners as a whole), we found positive macroeconomic impacts to the states due to the net benefits to electric consumers and the expenditures of the CO2 allowance proceeds. RGGI led to approximately $1.4 billion in economic value added (NPV, 2018$) as a result of program implementation in the 2015-2017 period. Thus, the RGGI program continues to generate economic value for its member states.

    Jobs

    Taking into account the gains and losses to consumers and producers, RGGI Compliance Period 3 led to overall job increases amounting to thousands of new jobs over time. Some of the RGGI job impacts may be permanent, while others may be part-time or temporary. According to our analysis, the net effect is that RGGI activity during the 2015-2017 period leads to over 14,500 new job-years, cumulative over the study period, with each of the nine states experiencing net job-year additions. Jobs that result from RGGI-related expenditures occur in many parts of the economy, with examples including workers who perform efficiency audits and who install energy efficiency measures in residences and commercial buildings, and staff performing training on energy issues.

    Fossil-fuel production and imports

    Over the past three years, RGGI helped to lower the total number of dollars (by $1.37 billion (NPV, 2018$)) its member states sent outside their region in the form of payments for fossil fuels for power generation and other purposes. Most of the RGGI states’ electricity comes from fossil fuels, even though these states produce little coal, natural gas, or oil. Because the RGGI program lowered these nine states’ total fossil-fired power production and also reduced their use of natural gas and oil for heating, RGGI reduced the total dollars sent out of state for these energy resources.

    Continuation of RGGI program benefits above and beyond the first six years

    Our findings on economic impacts of RGGI’s third three-year compliance period are consistent with the findings and observations we made with respect to the first and second three-year compliance periods. Those prior assessments revealed net economic benefits to the states participating in the program, including growth in economic output, increased jobs, reinvestment of energy dollars in local/state economic activity, long-run wholesale electricity cost reductions, and CO2 emission reductions.

    Many factors have changed in the electric industry and the economy since we completed our economic analyses of the RGGI program for Compliance Period 1 (2009-2011) and for Compliance Period 2 (2012-2014). These changes have affected the conditions (e.g., lower gas prices, generation retirements and additions) analyzed in our assessment of Compliance Period 3.

    For many reasons (such as the different vintages of each of our studies and notably the year in which we report NPV results), the results of our three studies are not directly additive. Even so, across the three studies, we have found net economic benefits to the RGGI states. Recognizing that these studies have reported outcomes in different-year dollar values, each of our assessments has found positive benefits for the participating RGGI states: $1.6 billion (NPV, in 2011$), $1.3 billion (NPV, in 2015$), and $1.4 billion (NPV, in 2018$) for Compliance Periods 1, 2, and 3 respectively.8 Our studies have also found that the RGGI-related expenditures led to job creation in each of the three compliance periods of approximately: 16,000 job-years (as of 2011); 14,200 job-years (as of 2015); and 14,500 (as of 2018), respectively.9

    Thus our modeling of the three compliance periods indicates that, its first decade, RGGI’s carbon cap-and-trade program has generated net positive economic value for the participating states’ economies on the order of $4 billion dollars.10 States’ participation in RGGI has led to tens of thousands of job-years while also helping to reduce carbon emissions in the RGGI states’ electric sector. At the same time, annual carbon-emissions have dropped nearly 50 percent since the program’s start in 2009 (for many reasons, including implementation of RGGI).

    RGGI’s first nine years (2009-2017) provide empirical evidence that carbon-control programs for the power sector can provide positive economic outcomes.

    Review of the nation’s first multi-state CO2 emission-control program provides useful information for states that are considering emission-reduction options.

    Despite a recent lack of progress at the federal level, many state policymakers continue to focus their attention on the various alternatives for reducing emissions of CO2 from the electricity sector (and other sectors). A wide range of alternatives are available including cap-and-trade programs, carbon tax/pricing approaches, energy research and development (“R&D”) funding, consumer-funded procurements of low- and zero-carbon energy sources, rate policies supporting distributed-energy resource development, and funding of energy efficiency measures. The diverse set of policy options used reflects many states’ interest in finding cost-effective and workable ways to cut CO2 emissions. Lessons learned from RGGI’s implementation can inform states as they consider their options.

    The experience of the RGGI states, including their initial efforts that began in 2003 to work together to develop a multi-state, market-based CO2 control program, through the nine years of program administration to date, provides a wealth of information. Their experience provides many lessons, most notably that states can collaborate successfully in developing programs to control CO2 emissions, and market-based CO2-allowance trading programs – combined with state-driven centralized auctions of CO2 allowances and with local reinvestment of auction proceeds – can help states meet emission-reduction targets while generating positive economic benefits.

    RGGI’s positive impacts on state economies are additive to the purpose and expected benefits of the program.

    RGGI is not and never was meant to be an economic development program. RGGI’s purpose is to reduce CO2 emissions from power generation in order to help mitigate the economic, social, and environmental risks of climate change. As shown in Figure ES-1, RGGI has contributed to significant reductions in emissions of CO2 across the RGGI region. In our economic analysis of the RGGI program, however, we do not attempt to quantify the potential long-term benefits of reducing the risks of climate change. The focus of our analysis is specific and narrow: to review the direct impacts of program implementation on the economies of the RGGI states, in order to test the presumption that controlling emissions of CO2 will somehow lead to negative consequences for states that take action. Our results – which instead reveal positive economic impacts – should be viewed as additive to whatever other benefits flow from reducing climate-change risks.

    The RGGI model has successfully achieved CO2 reductions through a cooperative multi-state framework that preserves state authority.

    The states that comprise the RGGI region are highly diverse in many ways: their political settings and policy objectives vary widely across the states and have even changed significantly within states over time; their electric-generating portfolios differ substantially in size, technologies, fuel mix, and age; their economic bases vary; and the states have unique legal and regulatory structures that oversee energy, utility, and environmental policies. Despite these differences, however, the RGGI states’ experience confirms the possibility that states can work together, particularly when doing so is likely to lower compliance costs and generate economic benefits. The states have designed a multi-state CO2 program consistent with sound economic principles, completed the stakeholder, legislative, and regulatory steps necessary to adopt and implement the program, and smoothly administered the program and integrated it with wholesale electricity markets. In addition, over just ten years the states have completed two top-to-bottom programmatic reviews and agreed upon major changes to the framework. The RGGI states continue to implement the RGGI platform with an eye towards inclusion and a willingness to collaborate with other states outside the current nine-state region.

    Mandatory, market-based carbon-control mechanisms are functioning properly in wholesale electricity markets and have not adversely affected system reliability.

    RGGI’s nine years of experience supports a conclusion that market-based CO2 emission-control programs can produce positive economic impacts and meet emission objectives while dovetailing smoothly into the normal operation of power systems. RGGI’s implementation has not adversely affected power system reliability in New England, New York, or PJM. Further, RGGI provides an important example of how states’ public policies can be integrated into federally regulated competitive wholesale markets – an issue with which FERC, state regulators, and the courts are actively wrestling.

    The design of the CO2 market in the RGGI states has allowed for the creative use of public assets in support of diverse state energy/environmental policy and economic outcomes.

    The joint decision by the RGGI states to make their CO2 allowances available to the market through a unified auction has generated substantial revenues for public use. This approach transferred the value of emissions allowances from the public sector to the private sector at a monetary cost. Had the allowances been given away for free, the states would not have had the benefit of the auction proceeds and instead would have transferred away significant public economic value to owners of power plants (which in the RGGI region are merchant generators, not owned by electric distribution utilities). The states’ use of allowance proceeds helped them meet a wide variety of social, fiscal, and environmental policy goals, such as assisting low-income customers, achieving advanced energy policy goals, and restoring wetlands, among other things. Notably, however, auctioning of allowances is not necessary for the efficient and effective functioning of the cap-and-trade program design itself. Individual states may still determine their preferred method of moving allowances into the market, which could include auctions, direct allocation, and other mechanisms that may move allowances into the market while transferring or consigning auction value in whole or in part to other entities (such as electric distribution utilities or generating asset owners).

    How allowance proceeds are used affects their economic impacts: Use of auction proceeds to invest in energy efficiency produces the biggest economic bang per buck, in terms of net positive benefits to consumers and to the economy.

    The RGGI Memorandum of Understanding (“MOU”) fully supports the reality that states place different weights on various goals they hope to accomplish through participation in the program, and that the states will make their own decisions about how to allocate allowances to the market and how to use the proceeds from allowance auctions. But from a strictly economic perspective, some uses of proceeds clearly deliver economic returns more readily and substantially than others. For example, RGGI investment in EE leads to lower electrical demand, lower wholesale power prices, and lower consumer electricity bills. These savings remain in the pockets of electricity users, and the EE investments also produce positive macroeconomic impacts locally as more dollars stay in and contribute to the local economy. We observe that use of the RGGI dollars provides positive multiplier effects in the RGGI states’ economies, especially compared to other uses of the auction proceeds.

    The RGGI states’ experience during 2015-2017 differed along a number of dimensions relative to the first six years of the program. The RGGI program as implemented during the 2015-2017 period took place in the context of a changing industry and regulatory landscape and with significant changes adopted and implemented by RGGI states. Specifically:

    • During 2017, the RGGI states used the six years of prior program experience as they undertook a top-to-bottom review of RGGI, and made a number of changes in the program.

    • Many states adjusted how they spent RGGI auction proceeds over time, shifting the use of allowance revenues to reflect changing program and state objectives.

    • Fossil fuel prices changed significantly since the start of the program, with natural gas prices (and in turn, wholesale electricity prices) having decreased substantially.

    • Electric resources have shifted, with accelerated retirements of older and less efficient (and in most cases, higher-emitting) generating units, and with distributed and central-station renewable energy resources growing at a rapid pace in many of the RGGI states.

    Such factors have the potential to influence the administration of RGGI and associated power system and economic impacts. For example, the lower average natural gas prices in 2015-2017 relative to the prior six years led to lower electricity prices in wholesale power markets, which had the effect of reducing the economic value of RGGI-funded EE programs for electricity and heating consumers. Also, the tightening of RGGI’s CO2 emissions cap contributed to an increase in allowance prices, the operating costs of affected generating units, and impacts on wholesale electric prices. The lower number of allowances available to the market, however, was in part offset by higher allowance prices, and thus only slightly reduced auction proceeds available to RGGI states during the 2015-2017 period.

    Despite the shifting context for RGGI, the core elements of the program  including a declining CO2 emissions cap, allowance auctions, reinvestment of auction proceeds, active trading of allowances, monitoring of program administration, participation and outcomes, and cooperation among a diverse set of states and stakeholders  operate in ways that continue to produce positive economic and programmatic results for the participating states.

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    QUICK NEWS, April 23: “Letter From A Teenage Girl Who Has Had Enough”; The Many Values Of Ocean Wind; Solar For All

    “Letter From A Teenage Girl Who Has Had Enough” Dear leaders: You've failed your children on climate change

    Jamie Margolin, April 22, 2018 (CNN)

    Read this passionate letter, signed “A teenage girl who has had enough and is not alone” HERE

    “Dear leaders…You failed us…[W]hen faced with the choice of fossil fuel money for your campaigns, or the wellbeing of your children, you pick fossil fuels…[M]y generation is so done with your talk…I'm a 16-year-old sophomore in high school. I have my whole life ahead of me, and there's so much I want to do…[But] I'm growing up in the early 21st century, a time when the world and all its life systems are falling apart…When I think of the future, I can't assume stability or safety.

    When I think of adulthood, I see my home being flooded, I see deathly heat waves, droughts, famine and intense, deadly storms…I see insects, allergens, and diseases spreading…countless people dying from toxic drinking water, food full of chemicals, and air thick with pollutants…millions upon millions of refugees…wars and conflict over dwindling resources…You are leaving my generation with a world that is unlivable…The first step to getting out of a hole is to stop digging…You're still in the pockets of corporations digging our destruction…Generation Z has had it…We are organizing the [Youth Climate March in Washington DC this on July 21] that you won't be able to ignore…” click here for more

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    The Many Values Of Ocean Wind New study finds that the market value of offshore wind varies significantly along the U.S. east coast

    April 16, 2018 (Lawrence Berkley National Laboratory)

    “…[T]he economic value of wind power can vary significantly by location, depending on the time-varying wind resource profile at a given site, as well as local pricing and market rules within the regional power market…[A new Berkeley Lab study] finds that the historical ‘market value’ of offshore wind (considering energy, capacity, and REC value) is highest for sites off of New York, Connecticut, Rhode Island, and Massachusetts—i.e., all areas where offshore wind is being actively pursued—and lowest for sites along the southeastern coast…[It] also finds that offshore wind can reduce air pollution emissions and wholesale electricity and natural gas prices, though effects vary in magnitude over time and across regions…The ‘market value’ of offshore wind is found to have exceeded that of land-based wind, due to offshore wind sites being located closer to major population centers and also having a time-varying profile of electricity production that is more-correlated with that of electricity demand. Yet, the cost of offshore wind is also higher than that of land-based wind, requiring important economic tradeoffs…” click here for more

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    Solar For All This Untapped Market Could Add 320 Gigawatts Of New U.S. Residential Solar Energy

    Silvio Maracacci, April 23, 2018 (Forbes)

    “Residential rooftop solar projects in the U.S. have historically been installed on wealthier, single-family households, meaning companies typically target higher-income households with their marketing efforts...[T]his focus is overlooking a massive growth opportunity: Low-to-moderate income (LMI) households…A new first-of-its-kind report from the National Renewable Energy Laboratory (NREL) finds nearly half of all U.S. residential rooftop solar technical potential is on LMI households, and LMI solar capacity could total 320 gigawatts (GW) of potential solar installations across America…[That is six times solar’s current] 53.3 GW total installed capacity...LMI solar’s growth potential extends to nearly every corner of the U.S…[but tapping] the LMI solar opportunity will require innovative approaches to solar projects and market policies described in the NREL paper]…” click here for more

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    Saturday, April 21, 2018

    Earth Day 2018

    This year’s Earth Day is dedicated to raising awareness about the state of earth’s oceans. This says it all: If nothing is done, there will be more plastic than fish in the seas by 2050. From American Museum of Natural History via YouTube

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    A Daily Show Take On Earth Day

    Ronnie Chieng has some hilarious thoughts about ridiculous solutions. From Comedy Central

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    First U.S. Ocean Wind

    It’s only 30 MW but it could lead to huge economic and environmental benefits. From U.S. Dept. of Energy via YouTube

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    Friday, April 20, 2018

    Human Population And Global Weirding

    The Unacceptable Collateral Damage of Overconsumption

    Daniel Christian Wahl, April 16, 2018 (Insurge Intelligence via Resilience)

    “…[Old structures are breaking down with the] impacts of unprecedented technological innovation and its rapid deployment in a globally expanding consumer culture. Exponential growth on a finite planet…‘The Great Acceleration’ is happening within the context of an expanding human population, profound societal and economic transformation on all continents, and — most urgent of all — a dangerous destabilization of global and local climate patterns. There is a scientific consensus that we need to take immediate action if we are to avoid catastrophic climate effects on the future of humankind, the diversity of life and the entire planet…The prolonged impact of an industrial growth society addicted to fossil fuels and the rapid extraction of non-renewable resources is pushing against planetary boundaries…

    …Rising fundamentalism and resource conflicts over oil, water and land have led to a series of wars which have caused humanitarian crises…Food, water and energy supply issues are already leading to localized scarcities, famine, and conflict…The advent of the fossil fuel age over the last couple of centuries has made available unprecedented levels of energy that humanity has harnessed to satisfy its needs: we probably expended more energy during the twentieth century than in all preceding human history…However, these gains have come at an enormous cost. The human population has grown by a factor of more than ten since the beginning of the industrial revolution in the mid-eighteenth century from around 700 million to more than 7600 million…We are currently eating into natural capital and eroding the ability of natural systems to self-regenerate…[Most of the remaining fossil fuel reserves] have to be considered unburnable carbon…” click here for more

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    Global Wind Still Focused On Big Markets

    Market concentration to continue to 2027; Wind deployment over the next decade is set to remain concentrated in 15 countries, highlighting the industry's reliance on the established markets.

    David Weston, 13 April 2018 (Windpower Monthly)

    “…[A new forecast shows global wind capacity will grow over the next 10 years at a compound annual growth rate (CAGR) of 3.3% and 82.7% of new wind] capacity (570.4GW) added between 2018 and 2027 will be added in just 15 markets: China, US, India, Germany, France, UK, Brazil, Mexico, Turkey, Japan, Netherlands, Argentina, Spain, Taiwan and Canada…[FTI Intelligence] predicts 689GW of new wind capacity will be added in these countries over the next decade, meaning less than 120GW will be installed in the rest of the world…[China is predicted to become the largest offshore market by installed capacity in 2021, surpassing the UK’s total. In the near term (2018-2022), CAGR could be as high as 5.3%, with the Chinese market remaining vital to global growth. But in the medium term (2023-2027) CAGR could fall to just 1.4%. In 2017, 89% of new capacity was] added in just ten markets…[This suggests] a slight diversification over the next decade…[But if] just one of the top 15 markets take a sharp downturn, there could be repercussions across the whole industry…” click here for more

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    New Energy-Powered High Seas Shipping From Japan

    Solar Power Could Reinvent the Shipping Industry—If We Let It

    Rachel Nuwer, 18 April 2018 (PBS-Nova)

    “…[Eco Marine Power, a Japan-based company, is creating rigid solar panel sails for use on large sea-faring vessels. The sails—which are as thin as cardboard and flexible like plastic—will harness the ample wind and solar energy of the open oceans, cutting back on fuel consumption. Ultimately, the technology could lower a vessel’s emissions by up to 10%...Around 100,000 large cargo ships regularly crisscross the world’s oceans, delivering cargo from point A to point B. In doing so, they burn through a staggering [250 million tons of fuel] annually…[T]he industry is the world’s sixth-largest source of man-made greenhouse gas emissions…[Because the shipping industry has no] mandatory emissions regulations…[it powers ships with dirty and cheap] heavy fuel oil…[But the United Nations agency that regulates shipping just adopted a strategy to lower emissions] 50 percent by the year 2050…Eco Marine Power’s system] can be outfitted on basically any ship…” click here for more

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    World’s Biggest Wave Energy For Bali

    Indonesia builds the world's largest wave energy and delivers 10 MW of clean energy to the Bali Resort

    April 15, 2018 (Energy Trends via Recharge)

    “…Indonesia will build the world's largest wave energy conversion system (WEC) in Bali. to provide clean and effective 10MW of marine green energy for the resort…[It will use Welo's Penguin wave energy device, which] floats on the water during operation and can be anchored on a 50 meter deep seabed. The kinetic energy of the waves will cause the device to spin and convert kinetic energy into electricity…[It] is an asymmetrical tipping device, such as a curved vessel, and the inner wheel rotates continuously clockwise when it is tilted…[Because it has] no submerged parts, it is protected from erosion by] seawater…[Its speed of installation makes it cost-competitive] with wind power technology and…[volume production could] cut costs by 50%...[It is expected to go online] in late 2018…” click here for more

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    Thursday, April 19, 2018

    Study Shows A Carbon Tax Can Work

    Carbon Taxes Could Make Significant Dent in Climate Change, Study Finds; Several different carbon-pricing approaches would help reduce emissions, and some would be fair as well, researchers report.

    David L. Chandler, April 18, 2018 (MIT News via The Energy Collective)

    “…[Depending on the exact mechanism chosen, a carbon tax] can be fair and not hurt low-income households…[A new study from MIT and the National Renewable Energy Laboratory] considered two different starting values ($25 and $50 per ton of carbon emissions produced), and two different rates of increase (1 percent or 5 percent per year), as well as three different approaches to dispensing the revenue: an equal rebate to every household, a tax break for individuals, or a corporate tax break…[T]he highest starting value and the highest rate of increase produced the greatest emissions reductions…[But] even the lowest taxation rates could in themselves lead to reductions sufficient to meet the U.S. near-term commitment under the 2015 Paris Agreement on climate change…[T]he most efficient way of achieving those reductions, in terms of overall impact on the economy, is to use the revenue to reduce taxes on capital — corporate profits or investment income…[T]he option of sending equal payments to everyone was found to be the least efficient for the overall economy, but also the least regressive…Individual tax breaks came in somewhere in between…” click here for more

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    Wind Power Was 6.3% Of U.S. Power In 2017

    Wind powers forward to reach 30 percent in four states; New Mexico emerges as a leader, growing wind power faster than any state

    Evan Vaughan, April 17, 2018 (American Wind Energy Association)

    “Wind power, the largest source of U.S. renewable electricity generating capacity, now supplies more than 30 percent of the electricity in four states, Iowa, Kansas, Oklahoma, and South Dakota, after strong growth in 2017…[The rapid expansion reflects wind’s] key role at the center of a transformation in the country’s electricity sector…[The U.S. Wind Industry Annual Market Report 2017 shows] the industry employs a record 105,500 men and women across all 50 states…[and] generated a record 6.3 percent of U.S. electricity in 2017…14 states generate more than 10 percent of their electricity from wind…Ranchers and farmers were paid an estimated $267 million in 2017 to lease private land for wind farm development…[and wind investment provides recession-proof career opportunities and property, state, and local tax revenue [in rural communities] to fund schools, roads and emergency services…in 70 percent of U.S. congressional districts, including 75 percent of Republican districts and 62 percent of Democratic districts.” click here for more

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    Global Solar Boom To Get Bigger In 2018

    Global Solar PV Installations to Surpass 104 GW in 2018

    April 16, 2018 (GTM Research)

    “The global solar PV market will add over 100 gigawatts of capacity for the first time in 2018…[I]nstallations will reach 104 gigawatts this year, representing 6 percent annual growth…[and] annual installations will easily exceed the 100-gigawatt milestone through at least 2022…The year-over-year growth is due in part to geographic diversification, as the top four markets are anticipated to collectively decline by 7 percent…[According to GTM Research’s Q1 2018 Global Solar Demand Monitor, installations] in China will fall from 53 gigawatts in 2017 to 48 gigawatts in 2018, though China alone will account for 47 percent of global demand this year…In 2018, Latin America and Middle East and Africa will add 5.6 gigawatts and 4.7 gigawatts respectively, representing explosive year over year growth of 61 percent and 281 percent respectively…” click here for more

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    U.S. Cities Are Getting More Efficient

    City Energy Project Participants Top ENERGY STAR Rankings

    Kimi Narita, April 12, 2018 (Natural Resources Defense Council)

    “Ten City Energy Project (CEP) cities ranked among those with the most energy efficient buildings in the country…The annual report from the U.S. Environmental Protection Agency identified the top 25 metro areas with the most ENERGY STAR certified buildings in 2018, with additional lists for top performers among mid-size and small cities…CEP cities have consistently ranked among the top performers…[In 2018, Los Angeles, Atlanta, Chicago, Houston, and Boston were top ten] CEP cities…[Several cities] have shown dramatic bounds forward…Los Angeles added nearly 200 certified buildings in this past year, for a nation-leading count of 716 buildings that represent $229 million in cost savings…Atlanta added 90 in the past year, and Chicago added 71. In total, this report shows that the 2,497 certified buildings in the ranked CEP cities in 2018 yielded $729 million of cost savings and nearly three million metric tons of avoided GHG emissions…” click here for more

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    Wednesday, April 18, 2018

    ORIGINAL REPORTING: Utility Pilot Projects Could Soothe Contentious Regulatory Proceedings

    Reporter's notebook: Utility pilot projects could soothe contentious regulatory proceedings; Utility Dive reporter Herman Trabish says utility pilot projects can bridge divides between utilities and stakeholders

    Herman K. Trabish, Sept. 21, 2017 (Utility Dive)

    Editor’s note: Work on pilots is advancing but there is an emerging push to get to full scale deployments.

    Stakeholders in utility policy proceedings across the country are learning that sometimes you don’t know what works until you try it. That’s why the trial, pilot, and demonstration projects increasingly being ordered by electric utility regulators may be a way to resolve stakeholder debates. They offer real world experience, former Xcel executive Mike Bull, policy director for Minnesota’s Center for Energy and Environment, told me. Leaders in the electric utility industry who try to manage the “significant change” within the power system by “‘doing what they have always done’” will fail customers, fail utilities’ financial interests and fail the public interest. “The only way to adapt to significant change is through innovation,” Bull said. “Trials, pilots, and demo projects are ways to test new things and keep the cost and risk of innovation low.”

    A recently-released Rocky Mountain Institute (RMI) paper on best practices defines pilots as tests of “technical feasibility” and demonstrations as tests of “business models, customer adoption, and other elements.” RMI’s paper predicted that today's pilots “will test utilities’ ability to meaningfully advance a new set of solutions." Using pilots to resolve regulatory proceeding differences is becoming an emerging trend, according to Autumn Proudlove, manager of policy research for the North Carolina Clean Energy Technology Center. At least nine new pilot program actions were brought to regulators in the first half of this year within solar policy proceedings. They are "being used mainly to test time-varying rates, residential demand charges, and community solar, and many are related to high-profile proceedings, so the impact is significant,” Proudlove said… click here for more

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