National Clean Energy Summit

Look at the heavyweights! Clinton, Gore, Chu, Reid, Pelosi, Union and grassroots and New Energy industry leaders…All advocating New Energy and a national green energy transmission system. Despite the hype, it really was a landmark gathering. From pickensplan via YouTube.

History Happening Now – Capitol Climate Action March 2

Here’s the exhilarating breaking news: Senate Majority Leader Harry Reid and Speaker of the House of Representatives Nancy Pelosi, on February 27, instructed the Architect of the Capitol to work out a plan to shift the Capitol Building power plant from coal to natural gas. This is the moment. The tide has turned. The leaders are listening. Now is the time to work on. From AmericanNewsProject via YouTube

Climate Crock Of The Week

Peter Sinclair exposes the lie that current global climate change is merely a 1500-year fluctuation and he exposes the men behind the lie, men who have in the past argued that organic food is dangerous and cigarette smoking is safe. From greenman3610 via YouTube.

CAPITOL STEPS TO NEW ENERGY

President Obama reiterated his commitment to doubling U.S. New Energy capacity within 3 years in his speech to the joint session of Congress.

To facilitate accomplishing that, Congress will need to expand on the important short-term New Energy provisions in the stimulus package just passed.

A national mandatory cap on greenhouse gas emissions (GhGs) with a marketplace – in which companies can buy credits to emit above their caps and companies that have adopted effective Energy Efficiency methods or acquired New Energy sources can sell unneeded credits for supplementary revenues – will be near the top of the agenda.

The specifics of this legislation remain in serious contention and lobbying is furious over the parameters of the caps and the trading. (See yesterday’s THE CLIMATE CHANGE BUSINESS) Though climate change is an urgent matter, the deadline for the legislation is not until the December 2009 Copenhagen world summit, where a successor agreement to the Kyoto treaty will define a new international cap-and-trade system. It is therefore likely Democratic leaders will postpone finalizing U.S. climate bill details until later in the year.

Another high priority item that will require legislative attention is a national mandatory Renewable Electricity Standard (RES) requiring all U.S. utilities to obtain a specific portion of their power from New Energy sources by a date certain. The White House has consistently said it will seek an RES (sometimes called a Renewable Portfolio Standard, RPS) of 10% New Energy sources by 2012 and 25% by 2025. In the Senate, this legislation is being worked out by the Energy and Natural Resources Committee chaired by Senator Jeff Bingaman (D-NM).

Senate Majority Leader Reid recently said he would start with the RES.

Senator Reid: "We all agree: Let's start with Bingaman's committee and come up with something dealing with renewable portfolio standards, some real good conservation measures in buildings and things of that nature…"

After these 2 pieces of legislation, there is a roster of possibilities.

A recent conference of New Energy heavyweights - headed by former President Bill Clinton, former Vice President, Nobel laureate and climate hero Al Gore and Obama Secretary of Energy and Nobel laureate Steven Chu - added their prestigious voices to a joint call from the American Wind Energy Association (AWEA) and the Solar Energy Industries Association (SEIA) for an upgrade to the national electricity transmission system to ready it for delivering New Energy-generated electricity from the remote areas where New Energy is abundant to the population centers where electricity is high in demand.

Senator Reid said the "…highway to transmit electricity to where it's needed…" and the implementation of a “smart grid” are likely to be next on the schedule.

Senator Reid announces New Energy transmission. From SenatorReid via YouTube.

Senator Reid believes it will be easier to pass climate change legislation after the RES mandating New Energy and the transmission to carry New Energy are in place. Meanwhile, he will allow details of the national cap-and-trade system to work their way through the Senate Environment and Public Works Committee chaired by Senator Barbara Boxer (D-Calif.).

Senator Reid: "It will make it so much easier to do that to get rid of the energy stuff -- so-called low-hanging fruit -- to get something done with transmission…[then we] will be able to move expeditiously to get [the climate change bill] done..As far as getting you a definite time, I can't do that…Our goal is to get that done this year."

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Congressman Ed Markey (D-Mass) is pushing legislation for "decoupling," a somewhat wonky provision that would separate (decouple) utility profits from ratepayer consumption. In place of the present arrangement in which utilities profit only from selling more and more electricity, decoupling substitutes rewards to utilities for increasing ratepayer efficiencies and saving power. As Chairman of the House Energy and Environment Subcommittee (of the Energy and Commerce Committee), Markey is expected to be instrumental in driving Obama administration policy, in service to House Energy and Commerce Committee Chairman Henry Waxman (D-Calif).

A policy as technical as decoupling might in the past have been an unlikely part of administration agenda. President Obama, however, has a thorough understanding of the factors necessary to drive New Energy and Energy Efficiency, understands the importance of decoupling, and brought it onto the national stage with remarks he made during a recent town hall session in Indiana. (See DECOUPLING WASTE FROM GREED, COUPLING EFFICIENCY WITH NEW ENERGY)

Markey raised the decoupling issue while clarifying a provision in the recently passed stimulus bill that provides $3 billion in Department of Energy grants to utilites for what amounts to decoupling, though the word "decoupling" is not included in the bill. The National Association of Regulatory Utility Commissioners (NARUC) and other decoupling critics pushed to get the term removed from the stimulus bill.

The stimulus bill allows governors to allot DOE grant money to utilities if state regulators will implement rate policies that encourage utilites to help customers "…use energy more efficiently and that provide timely cost recovery and a timely earning opportunity for utilities associated with cost-effective measurable and verifiable efficiency savings, in a way that sustains or enhances utility customers' incentives to use energy more efficiently."

That’s decoupling, in a lot more syllables.

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Making the wording more general gave more authority to state regulators. The authority of states will also be at issue in the RES and transmission legislation. Congress will need to establish a federal RES that respects individual states’ New Energy capacities. In creating siting policies for the national transmission system, Congress must write a law that allows the Federal Energy Regulatory Commission (FERC) to facilitate new wires without stepping on state regulators’ rights to designate where their wires go.

Winning NARUC endorsement of the final stimulus bill, despite its dissatisfaction with individual provisions, may be a template for winning similar legislative fights.

While enthusiastic about improved effeciency, Republicans remain united in oppositon to the “decoupling” language in the stimulus bill, saying it reduces potential efficiency gains.

House Energy and Environment Subcommittee Ranking Member Congressman Fred Upton (R-Mich.): "With decoupling in states, you don't actually see the savings…It just takes away the incentive for folks, businesses or homeowners that are going to actually install the devices that save energy."

Actually, California – where decoupling has been a policy for 3 decades – has overtly and unequivocably demonstrated remarkable savings clear to ratepayers and policy makers. While the rest of the country’s energy consumption has increased 50%, California’s consumption has remained the same as it was in 1978. While 40% of U.S. GhGs come from electricity generation, only 20% of California’s GhGs come from electricity generation.

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Not much more incentive than savings like those.

The common ground of incentivizing efficieny, in spite of devisive squabbles over language, is what Markey and other Democrats must find if they intend to successfully take the steps to New Energy Senator Reid seeks.

In pursuit of common ground, Congressman Markey has introduced a bill (H.R. 889) to create an efficiency standard. It sets national goals for electricity and natural gas savings through utility efficiency programs, building codes, efficient appliances and other efficiency measures.

Industry opposes Markey’s bill, just as it tends to oppose the RES that will force it to invest in New Energy and climate change legislation that will cap its emissions. Industry no doubt feels the world closing in.

John Anderson, President, industry association Electricity Consumers Resource Council: "Most large industrial facilities are beyond the point where substantial savings can be achieved with plug-and-play measures such as high-efficiency light bulbs, insulation or motors…The next levels are achieved when entire industrial processes are retooled, rebuilt ... these are big ticket items requiring very large outlays of capital. Further complicating this problem is the current credit crunch."

Some industry players can see the handwriting on the wall without recoiling. Rich Wells, vice president of energy at the Dow Chemical Corp., is on record as supportive of Markey’s efforts.

The New Energy economy is on the verge of emerging. It has majorities in both houses of Congress and a staunch ally in the White House. It lacks only a filibuster-proof 60 votes in the Senate to win an RES, new transmission and emissions caps.

Like the stimulus bill, New Energy legislation must find the few Republican votes it needs from those who see efforts like Congressman Markey’s as sensible and goals like Senator Reid’s as inevitable. From common ground, those political leaders can march up the Captiol steps to the New Energy economy.

Congressman Markey gives a great speech about energy efficiency. From RepMarkey via YouTube.

Senate leader outlines 3 steps to meeting Obama's energy goals
Alex Kaplun, February 25, 2009 (NY Times)
and
Stimulus does not require 'decoupling' – Markey
Katherine Ling, February 24, 2009 (E&E News)

WHO
Senate Majority Leader Harry Reid (D-Nev); Speaker of the House of Representatives Nancy Pelosi (D-Calif); Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) and Ranking Member Senator Lisa Murkowski (R-Ala); Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.); House Energy and Environment Subcommittee (of the Energy and Commerce Committee) Chairman Ed Markey (D-Mass.) and Ranking Member Congressman Fred Upton (R-Mich.); National Association of Regulatory Utility Commissioners (NARUC); Energy and Commerce Chairman Henry Waxman (D-Calif.)

WHAT
With the stimulus bill done, New Energy now faces fights for an energy bill and a climate change bill with incentives and provisions to drive growth that will achieve the President’s goal of doubled capacity in 3 years.

In the end, this is the only real question and the only real answer about climate change legislation. (click to enlarge)

WHEN
- Leaders in both the House and the Senate expect to handle energy and climate change legislation before December of this year.
- The world summit to finalize international plans for the post-Kyoto Protocol fight against global climate change will be in December.
- The Obama RES calls for 10% New Energy sources by 2012 and 25% by 2025.

WHERE
- Legislation must pass both houses of Congress before going to the President.
- California’s decoupling program has held that state’s demand constant while the rest of the country’s demand rose 50%.

click to enlarge

WHY
- Bingaman and Murkowski are presently working on a Senate RES and may bring it to the floor before the Spring recess.
- Boxer has already begun working on the details of the climate change legislation but it is expected to be a complicated bill.
- Democrats in the Senate are attempting to use President Obama’s popularity to urge their Republican colleagues to support the energy and climate change legislation.
- Decoupling improved ratepayer energy efficiency from a loss of utility revenues is widely seen as the key to big decreases in energy consumption.
- The stimulus bill rewards state regulators’ efforts to impose decoupling policies but does not use the word decoupling.
- Markey’s H.R. 889 would steadily up efficiency in electricity and natural gas consumption from 1% (electricity demand) and 0.75% (natural gas demand) in 2012 to 15% and 10% by 2020. It would also allow companies to sell efficiency savings to meet the efficiency improvement requirments.
- Waxman has indicated he will bring climate change legislation by Memorial Day.

“America needs an oil change.” From RepMarkey via YouTube.

QUOTES
- Senator Chuck Schumer (D-N.Y.): "We're playing on the same team with the president. We know that his agenda is the agenda that will move America forward…Our Republican colleagues tried to act like they're cheering for the quarterback and then nitpick his play-calling…President Obama and his agenda are one and the same…You can't separate the man from his agenda."
- Congressman John Shimkus (R-Ill.): "[The stimulus language] strongly implies for governors to move to a decoupling regime…There is no confusion that decoupling is a major issue…"
- Congressman Michael Burgess (R-Texas): "Energy efficiency is the type of issue we can work together on…"
- Congressman Markey: "We support an RES; we support a climate bill, and we will try and figure out the best way to get them both done this year…"

MORE NEWS, 2-27 (WIND WILL DRIVE MICHIGAN; A CAR NEEDS A PLUG; UTILITY TO BUILD 500 MW OF SUN; GAMING OIL PRICES)

WIND WILL DRIVE MICHIGAN
Two Ann Arbor startups advance wind energy as viable energy option
Nathan Bomey, February 26, 2009 (Ann Arbor Business Review via MLive)

"Bolstered by concerns that existing wind energy technology isn't sufficient to meet renewable energy needs, two Ann Arbor startup companies are developing new solutions that could turn wind into a dramatically more viable energy option.

"One of the firms, Accio Energy, is developing a stationary "aerovoltaic" device that would be installed on rooftops, harvest wind and turn it into electricity - without the moving parts associated with wind turbines. Put simply, it would resemble a wind version of a solar panel…"

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"The second startup company, WindSight, is a spinoff of Ann Arbor-based Michigan Aerospace, an engineering firm that has gradually diversified its technology portfolio in recent years. WindSight, led by Michigan Aerospace CEO Peter Tchoryk, is set to commercialize a wind-farm site assessment technology solution.

"Together the two companies, albeit officially unrelated, underscore the Ann Arbor region's budding wind energy technology arsenal."

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"Accio President Dawn White, who founded successful Ann Arbor defense tech startup Solidica, said Accio aims to create a wind energy device that would generate double the electricity per square meter of traditional photovoltaic solar panels…[and] could ultimately present a way to harvest wind energy in locations where wind turbines aren't practical…

"WindSight, meanwhile, is in the midst of raising funds, but Michigan Aerospace CEO Peter Tchoryk said the firm expects to have its system in beta testing by this summer. WindSight's customers would be wind farm developers seeking site analysis tools and ways to optimize turbine performance…"


A CAR NEEDS A PLUG
A car without a plug is no car at all
Ken Bensinger, February 26, 2009 (LA Times)

"An increasing amount of attention has been paid of late to electric and plug-in hybrid cars…Much less scrutiny, however, has been given to a topic that's arguably far more critical to the future of electrified transportation: Where the heck will we plug these things in? …[T]hey need a wide-ranging network of places where they can be recharged. Charging at night in the family garage isn't enough…many people don't have garages to begin with, charging stations are necessary…

"But developing that infrastructure is a huge challenge, one that would likely cost billions of dollars and require careful planning and standardization. How that issue is confronted, as much as perfecting the chemistry and costs of high-energy-density batteries, is likely to dictate whether electrons will ever truly replace carbon molecules when it comes time to get from point A to point B."

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"…Announced this week by the Rocky Mountain Institute, a sustainability-focused think tank based in Snowmass, Colo., [Project Get Ready is] an initiative designed to coordinate, develop and promote efforts to prepare for a plug-in infrastructure…Among the group's concerns: Who will pay for the installation? How do drivers get billed for charging? And how do we make sure that every car will be able to charge at the same locations?

"…Project Get Ready [believes]…this matter is best dealt with on a local level…To that end, Project Get Ready has enlisted three cities -- Portland, Ore., Indianapolis and Raleigh, N.C. -- as original members. The cities will keep the group abreast of the work they do to prepare for the arrival of electrified vehicles, and will contribute business plans and other developments to databases on the Project Get Ready site."

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"The goal of the organization is to get at least 20 cities to join up, using their collective efforts to develop a benchmark or other certification program…The overriding point here is clearly that local governments must play a role in developing the infrastructure…private industry can and perhaps ought to play a role as well…Portland General Electric, the city's power company…[and] General Motors [are] collaborating…[A]utomakers need proof of a real market for their vehicles before they can truly commit…local governments can [also] play a role -- by pledging to buy plug-in vehicles for their fleets.

"… Project Get Ready hopes that a million electric and plug-in hybrid cars will be on the road by 2015…To date Tesla has sold about 100 of its electric cars -- the only electricity-powered, highway-legal production vehicle on the market today. Only 999,900 to go!"


UTILITY TO BUILD 500 MW OF SUN
PG&E To Own, Contract For 500 MW Of Solar Power
Cassandra Sweet,February 24, 2009 (Dow Jones Newswires via CNN Money)

"California utility-holding company PG&E Corp…. plans to develop 500 megawatts of solar power, both through projects the utility would own and through power-purchase agreements...PG&E plans to spend about $1.4 billion to develop 250 megawatts of solar-panel generation that the utility would own and sign contracts with independent developers for the remaining 250 megawatts, all within five years…

"Utilities are becoming increasingly active in developing renewable power, prompted by incentives such as a 30% renewable-investment tax credit recently granted by Congress. In addition, expected federal legislation would require greater use of clean-energy sources like wind and solar, and cuts in emissions of carbon dioxide and other heat-trapping gases blamed for climate change. California utilities are required to use renewable sources for 20% of their retail power by 2010, with pending rules boosting that amount to 33% by 2020."

PG&E is moving up. (click to enlarge)

"…the economic crisis has put added pressure on utilities to help move renewable projects forward, as project financing has largely dried up and smaller companies have had difficulty raising money in the capital markets…[A]t some point in the future, PG&E would be interested in providing financing to renewable-power developers to enable them to build new projects. Such financing might include convertible debt, in which PG&E would make a loan with the option to convert the debt repayment into equity…

"PG&E's solar program will focus on projects from 1 to 20 megawatts in size, with solar panels mounted on the ground or on rooftops, within the service territory of PG&E utility Pacific Gas & Electric Co. The utility will strive to develop projects on land it already owns, near transmission infrastructure to cut costs and delays associated with hooking up to the state's power grid."

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"PG&E has signed renewable-power purchase agreements that represent more than 20% of the utility's future power deliveries…

"Due in part to inadequate transmission capacity, PG&E is unlikely to take actual physical renewable power deliveries worth 20% of its total portfolio by the 2010 deadline. But with state regulations that allow for "flexible compliance" and pending rules that would allow utilities to purchase renewable- energy credits to comply with part of their obligation, PG&E is unlikely to violate any state rules…"


GAMING OIL PRICES
CFTC Probing United States Oil Fund in Crude Trades
Matthew Leising, February 26, 2009 (Bloomberg News)

"The U.S. Commodity Futures Trading Commission said it is investigating the involvement of United States Oil Fund LP and other investors regarding an increase in the price difference between two oil contracts this month…The investigation announced today is part of the CFTC’s larger national oil-market probe…

"The agency is investigating whether the United States Oil Fund and other investors affected the price of (West Texas Intermediate (WTI)] oil on Feb. 6.
To maintain its holdings in oil futures, the exchange-traded fund sells, or “rolls,” its front-month contracts and buys second-month futures on four predetermined days every month…"

How do you win in this market? Cheat. (click to enlarge)

"The United States Oil Fund’s size means the rolls can cause the front-month prices to decline relative to second-month contracts, widening the so-called contango…Market participants can predict this effect and potentially profit by making the same trade before the fund does…

"WTI prices on Feb. 6 for March, the contract closest to delivery, fell $1, or 2.5 percent, to $40.17 a barrel on the New York exchange, while the April contract rose 39 cents, or 0.9 percent, to close at $46.15. The front-month contract also fell, while the second month rose, on Feb. 4.

"A call to United States Commodity Fund was not immediately returned."

THE CLIMATE CHANGE BUSINESS

This is going to fuel the fires of those who believe cap-and-trade is nothing more than a big business scam to profit on climate change. But it’s probably not going to give them much satisfaction.

Investigative reporter Marianne Lavelle took a good hard look at who’s involved in the action around anticipated climate change legislation. Her exceptionally valuable work revealed that shaping how the U.S. will cut greenhouse gas emissions (GhGs) is turning into quite a lucrative business.

From Lavelle's extraordinary investigative piece. (click to enlarge)

U.S. emissions caps and the trading designed to facilitate emissions reductions are still voluntary. But they will not be for much longer if the President and Congressional leaders get their way.

After the November election, President Obama announced new American leadership in the fight to cut GhGs and reverse global climate change and said his administration would develop a mandatory national cap-and-trade system. In his recent address to the joint session of Congress, he reaffirmed this commitment to emissions caps and an emissions trading marketplace.

White House Press Secretary Robert Gibbs said, the same day, the Obama administration expects cap-and-trade system-derived revenues in the federal budget by 2012.

A cap-and-trade system will apply the return-maximizing drive of the free market to the problem of cutting emissions.

Emitting industries such as power producers, utilities and heavy manufacturers will have their GhGs will be capped at restrictive levels. Each industry will be allowed to purchase credits for marginally higher emissions. Those emitters who find ways, through using Energy Efficiency methods and New Energy sources of power, to do their business below capped levels can sell their credits to heavier emitters in the cap-and-trade marketplace.

Lavelle: “The idea is that the permits would become a valuable commodity, and companies that can cut emissions quickly can profit by selling their permits to companies that are having a hard time. It’s a way of giving businesses flexibility, while creating incentives for innovators to figure out the lowest-cost solutions.”

The effectiveness of the limited 1990s sulfur dioxide emissions market in reducing acid rain inclines cap-and-trade boosters to believe such a market-based system will work against GhGs. Many are dubious. There are many GhGs and the main one, carbon dioxide (CO2), comes from lots of sources. Acid rain came only from coal plant sulfur dioxide (SO2) emissions and was therefore much simpler to monitor and eliminate.

From envirodefensefund via YouTube.

Many expect global emissions trading to be in the trillions of dollars. Such a system will involve, as Lavelle says, “project developers, financers, verifiers, registries, and consultants…” All of them will be playing for big money and, it is safe to assume, looking for angles.

The European Union (EU) Emissions Trading Scheme (ETS) has grown dramatically in each of its 4 years. It has stumbled and learned from its mistakes. As early mistakes were eliminated, players found new ways to game the system.

Initially, the EU ETS gave its emitting industries, like power plants and utilities, free credits. Too many free credits. That made generating GhGs too cheap. With the market’s most recent phase, beginning last year, caps were tightened, more industries were capped and credits were auctioned. But the global financial crisis slowed business, the emitters were less active, they needed fewer credits, they dumped their credits for short-term returns and credit value again fell.

More damning to the cap-and-trade concept still, European emissions have yet to significantly drop.

It is likely the EU ETS failings are but growing pains. The system is less than 5 years old and has not been supported by the world’s most important economies (like the U.S., China and India). The failings nevertheless beg the question of how the U.S. can better design a cap-and-trade market.

Climate change lobbyists looking to influence the parameters of the U.S. cap and trade system are springing up on Capitol Hill like weeds. Financial institutions alone, which had almost no lobbyists working on climate change and emissions trading in 2003, now have upwards of 150.

Lavelle: “…the special interests that seek to derail, blunt, or tailor any new climate policy to their narrow agendas have already gathered in staggering numbers. A Center for Public Integrity analysis…shows that more than 770 companies and interest groups hired an estimated 2,340 lobbyists to influence federal policy on climate change in the past year…That’s an increase of more than 300 percent in the number of lobbyists on climate change in just five years…Washington can now boast more than four climate lobbyists for every member of Congress….15 percent of all Washington lobbyists spent at least some of their time on global warming in 2008…”

There are 9 environmental groups actively lobbying.

At stake: How severe will emitters be capped? How many credits will be provided for free to entice players enthusiastically into the system and how many will be auctioned, increasing the financial strain on emitters? How regulations and oversight prevent financial strains from being passsed on to utility ratepayers and consumers?

Many believe if the Congressional designers of the cap-and-trade system get it right, it will drive investment in all the right things (i.e., New Energy and Energy Efficiency technologies and infrastructure). If they get it wrong – and in the wake of the recent financial meltdown many doubt the possibility of making an abuse-proof system – the U.S. role in the fight against global climate change could be hampered beyond repair.

Dirk Forrister, managing director/lobbyist, carbon market player Natsource: “There’s a newfound concern about the role of markets in general…and I think we have to be thoughtful about what forms of market oversight need to be put in place.”

Many insist fairness must be included. (click to enlarge)

Jeff Ruch of Public Employees for Environmental Responsibility (PEER) reviewed criticisms of cap-and-trade rendered by former EPA attorneys Laurie Williams and Allan Zabel in Keeping Our Eyes on the Wrong Ball and concluded: “The broad political support for cap-and-trade scheme is rooted in its biggest flaw – that an incremental approach designed to keep prices for carbon-based energy low will be insufficient to accomplish a quick shift in energy sources.”

Williams and Zabel rejected the idea that the anti-acid rain system proved cap-and-trade’s effectiveness and chronicled examples of the system’s failures. They believe a cap-and-trade system is too complicated, too easily manipulated and – most significantly – will not shift investment to New Energy in a timely and large-scale manner.

Senate Energy Committee Chairman Jeff Bingaman (D-NM), who will be working hard to pass cap-and-trade legislation for President Obama, does not doubt that.

Bingaman: “[Offsets are] fraught with opportunities for game-playing, which will be fully exploited, I’m sure.”

Williams and Zabel advocate a carbon fee. Emitters simply pay a fee for every ton of emissions. It is in essence a carbon tax with another name. Revenues from the carbon fees would go to the development of New Energy and Energy Efficiencies.

Jeff Ruch, Executive Director, PEER: “We should pay attention to what the specialists who would have to administer a cap-and-trade have to say…A political consensus around cap-and-trade does little good if it does not work as promised – and we do not have the luxury of getting it wrong the first time.”

The Williams and Zabel “Wrong Ball” analysis assumes cap-and-trade cannot be made effective by correcting failures in past applications. It also assumes a carbon fee system is politically obtainable.

Many say the cap-and-trade concept, like the carbon fee, is merely a carbon tax by another name. To the extent that is true, it is so because most agree a price must be put on GhGs whereas overtly creating a new tax is not politically viable.

With all the players circling around climate change legislation, it is very hard to be sure what is and is not politically possible.

Chelsea Maxwell, former Senate staffer who worked on climate legislation, now a Clark Group lobbyist: “Five years ago, people saw climate change as an environmental issue, and it really goes beyond that…It’s an energy issue. It’s a national security issue. It’s a tax issue. It’s an immigration issue. It has so many facets that as those constituencies start seeing there’s likelihood of movement on the Hill, then, of course people want to make sure their interests are… represented…I don’t think [climate change legislation is] impossible…What it’s going to take is a lot of deliberation.”

Competing bills. (click to enlarge)

It is hard to overestimate how much is at stake.

James Hansen, dean of U.S. climate change scientists at NASA: “The danger is that special interests will dilute and torque government policies, causing the climate to pass tipping points, with grave consequences for all life on the planet.”

If Hansen is being an alarmist, he’s not alone.

Rajendra Pachauri, lead scientist of the Nobel Prize-winning Intergovernmental Panel on Climate Change (IPCC): “If there’s no action before 2012, that’s too late…What we do in the next two to three years will determine our future.”

Which is why it’s a pretty awful, though inevitable, time for the lobbyists to gum up the works. Though that is exactly what they are expected to do.

Frank O’Donnell, president, Clean Air Watch: “A lot of people are on a gravy train who won’t want it to go away…”

Lavelle: “No group exemplifies the sophistication of the current debate more than the American Coalition for Clean Coal Electricity — a new lobbying organization unveiled just weeks before the vote last June on the Warner-Lieberman bill [was rejected]. Representing 48 mining firms, coal-hauling railroads and coal-burning power companies, ACCCE spent $10.5 million lobbying Capitol Hill on climate in 2008 — more than any other organization solely dedicated to the issue…The big effort is not surprising, since electricity is the largest single source of U.S. greenhouse gas emissions, and the most carbon-intensive fuel, coal, provides half the nation’s power. But ACCCE’s position is that it supports a mandatory federal program to curb the emissions its own members produce — as long as the policy meets ACCCE’s set of principles for keeping electricity affordable, domestically produced, and reliable. And that means encouraging, in ACCCE’s words, ‘robust utilization of coal.’”

Also indicative of the complexity of climate change legislation is the attitude of the U.S. Climate Action Partnership (USCAP), which favors climate legislation and includes General Electric (GE), the biggest U.S. manufacturer of wind turbines, among its members.

Jeff Immelt, CEO, GE: “I didn’t come to this as an environmentalist, I come to it as an industrialist…I’m a capitalist, plain and simple.”

NASA’s Hansen sees the carbon tax as a way around the lobbyists, the special interests, the schemes that will produce “non-productive millionaires, all at public expense…” Curiously, conservatives such as Senator Bob Corker (R-Tenn) and ExxonMobil CEO Rex Tillerson, as well as the environmental group Friends of the Earth, agree with Hansen.

This strange alliance raises the question of what brings them together: Do they all advocate a carbon tax because it is the best approach and they are the smartest guys in the argument? Or do some advocate the best approach because they are idealistic and others because they are cynical enough to use the others' idealism to make the perfect the enemy of the good?

click for the full Stoft presentation

Lavelle: “But the political hurdles to climate legislation — in whatever form — are formidable. In the Senate, climate action advocates picked up only three additional likely votes in November: Senator Mark Begich of Alaska, Senator Mark Udall of Colorado, and Senator Tom Udall of New Mexico. The four other new Democratic senators replaced Republicans who supported Warner-Lieberman; the same would be true of Minnesota’s Al Franken if he wins his recount battle. So if a bill similar to Warner-Lieberman [weaker in emissions reductions than the President seeks] were before the Senate today, reaching a filibuster-proof 60 votes would be daunting.”

The certainty with which President Obama, Senators Reid, Bingaman and Boxer, and Congresspeople Pelosi, Waxman and Markey have most recently affirmed their commitment to the President’s emissions cut goals and to cap-and-trade makes it hard to imagine a shift to a carbon tax or lesser-known alternatives.

But the devil will most certainly be in the details – and that is where the lobbyists will be as well.

President Obama is for cap-and-trade. From LCVheatison via YouTube.

The Climate Change Lobby Explosion; Will Thousands of Lobbyists Imperil Action on Global Warming?
Marianne Lavelle (w/David Donald and Matthew Lewis), February 24, 2009 (Center for Public Integrity)
and
Carbon as a Commodity; Can a $2 Trillion “Cap and Trade” Market Fight Climate Change?
Marianne Lavelle, February 24, 2009 (Center for Public Integrity)
and
Why the Obama Climate Change Plan Won’t Work; Political Support for Cap & Trade Will Not Overcome Its Practical Shortcomings
Jeff Ruch, February 23, 2009 (Public Employees for Environmental Responsibility)
and
The Cap and Trade Success Story
12 February 2007 (Environmental Defense Fund)

WHO
President Barack Obama; Speaker of the House of Representatives Nancy Pelosi (D-Calif); Senate Majority Leader Harry Reid (D-Nev); House Energy and Commerce Committee Chairman Henry Waxman (D-Calif); Senate Environment and Public Works Committee Chair Barbara Boxer (D-Calif); Senate Energy Committee Chairman Jeff Bingaman (D-NM); Bart Chilton, member, Commodity Futures Trading Commission (CFTC); Public Employees for Environmental Responsibility (PEER); Laurie Williams and Allan Zabel, co-authors, Keeping Our Eyes on the Wrong Ball; Marianne Lavelle, staff writer, Center for Public Integrity

WHAT
The U.S. will, under President Obama, join the international effort to fight global climate change by creating a cap-and-trade system to reduce its GhGs. Big money is gathering to influence the rules by which the U.S. will play.

The Big Board of world emissions trading. (from Thomson Reuters Carbopn Market Community - click to enlarge)

WHEN
- Speaker Pelosi has said she intends to deal with climate change legislation by December 2009. Senator Reid says he will bring climate change legislation by the end of the summer.
- The Obama adminstration’s goals are to put the U.S. on track for a 20% reduction in GhGs from 1990 levels by 2020 and an 80% reduction by 2050.
- The SO2 cap-and-trade system began in 1990 and acid rain emissions were nearly halved by 2002.
- 2003: Almost no U.S. lobbyists working on cap-and-trade legislation in Washington, D.C.
- 2008: 130 registered lobbyists working on climate change legislation and 20 more dedicated entirely to cap-and-trade.

WHERE
- Revenues from the cap-and-trade system auction of credits are expected to go into New Energy and Energy Efficiency development and to compensate those on whom an unfair portion of the burden of the transition will fall.
- The lobbying action is on Capitol Hill.
- The EU ETS trades around the world but is mandatory for the 27 member nations.

A crude estimate of worst-case fears. (click to enlarge)

WHY
- 770 companies and interest groups hired ~2,340 lobbyists to influence federal policy on climate change in the past year. They spent $90+ million. They represented 150+ businesses and interests, 70% in electricity, coal, and oil firms and the heavy industries (auto, cement, and steel).
- 9 environmental groups are actively lobbying. Pro cap-and-trade: Environmental Defense Fund (EDF), Natural Resources Defense Council (NRDC), Pew Center on Global Climate Change
- Prominent climate change lobbyists: former House Majority Leader Richard Gephardt (D-Ms), former House Appropriations Committee Chairman Robert Livingston (R-La), Drew Maloney, former top aide to then-House Majority Whip Tom DeLay (R-Tx), Andrew Athy, former counsel to former House Energy and Commerce Committee chair John Dingell (D-Mich), Jack Quinn, White House lawyer to President Clinton, Wayne Berman, assistant commerce secretary under President George H.W. Bush.
Big name players against climate action: U.S. Chamber of Commerce, the National Association of Manufacturers.
- Big name for climate action: U.S. Climate Action Partnership (USCAP), (incl General Electric, Johnson & Johnson, Alcoa, and DuPont)
- Wall Street banks: Goldman Sachs, JP Morgan Chase
- Waxman and Boxer, whose committees will drive House and Senate legislation, have endorsed legislation along the lines proposed by the President.
- The effectiveness of the market for acid rain emissions inclines cap-and-trade boosters to believe such a market-based system will work against GhGs.
- Williams and Zabel are EPA attorneys with experience in cap-and-trade and other forms of emission trading.
- Williams and Zabel say the carbon fee system is analogous to the Montreal Protocol program that charged a fee for ozone-depleting CFC-emissions.
- Williams and Zabel say cap-and-trade problems include (1) fraudulent offsets, (2) rationing, manipulation and price volatility, (3) complex bureaucracy, unenforceability and inertia, and (4) over allocation of credits.
- Elements of a well-designed cap-and-trade system (from EDF): (1) A mandatory emissions cap limiting total emissions and providing a metric of progress and credit value; (2) A fixed number of credits for each emitter; (3) Banking and trading of credits; (4) Clear performance criteria, transparency and regular supervision of performance; (5) Flexibility in choice of how to meet caps.

Pro tax, Anti cap-and-trade. From jeffrotull via YouTube

QUOTES
- Bart Chilton, member, Commodity Futures Trading Commission (CFTC): “It’s the most important thing we have never done…I can see carbon trading being a $2 trillion market. The largest commodity market in the world.”
- Williams and Zabel: “Other Critical Measures that would be Needed to Complement Carbon Fees…1. Ban on new Coal Fired Power Plants without Safe and Permanent Sequestration…2. Energy Efficiency Standards…3. Carbon-Fee-Equivalent Tariffs on imported goods from countries without similar carbon fees…4. Job Training to help people who are transitioning…5. DC Backbone and Smart Grid…6. Forestry and Agricultural Practices that help reduce greenhouse gas emissions…7. White Roofs…8. Clean Energy Research & Development…9. Subsidies to Encourage New Industries to move to communities experiencing economic dislocation because of the transition…”
- Senator Boxer: “We want to get a bill out there that is straightforward, that doesn’t have so much weight that it sinks…”

MORE NEWS, 2-26 (CARRYING MONTANA/WYOMING WIND; SMART GRID FOR THE EV; TWO WORDS – PLASTICS & SUN; THE FALL OF ETHANOL)

CARRYING MONTANA/WYOMING WIND
TransCanada wins approval for U.S. wind power lines
Tina Seeley, February 19, 2009 (Bloomberg News via Financial Post)

"TransCanada Corp. won federal approval of its rate plan for two proposed power transmission lines that would primarily deliver wind-generated energy from Montana and Wyoming to the southwestern U.S.

"The Federal Energy Regulatory Commission in Washington [approved]…the projects -- a 1,000-mile line known as Chinook that would stretch from Montana to Nevada and a 1,100-mile line, known as Zephyr, stretching from Wyoming to Nevada. Both would end south of Las Vegas….

"The U.S. has inadequate transmission capacity to carry the electricity that wind and solar power projects could produce, according to a report [from the Solar Energy Industries Association and the American Wind Energy Association]…Wind-power projects waiting to be hooked up to transmission lines could supply 20% of the nation's electricity needs…"

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"Each of [TransCanada Corp.’s] transmission lines will be capable of carrying 3,000 megawatts of electricity and aims to serve markets in southern Nevada, Arizona and California. Chinook could be in service by late 2014…

"The regulatory commission for the first time approved a model that permits half of the capacity of the lines to be reserved by an "anchor customer," instead of having an open season for all of a line's capacity…

"The US$787-billion stimulus legislation signed this week by President Barack Obama includes at least US$14-billion in tax breaks for wind and solar electricity and establishes a grant program to help finance projects. It also devotes US$11-billion to new transmission lines and so-called smart-grid technology."


SMART GRID FOR THE EV
IBM Joins EDISON Project to Build Smart Grid for Electric Cars
February 25, 2009 (CNN Money)

"IBM (NYSE: IBM) today announced its membership in the EDISON research consortium, a Denmark-based collaborative aimed at developing an intelligent infrastructure that will make possible the large scale adoption of electric vehicles powered by sustainable energy.

"The EDISON effort (Electric Vehicles in a Distributed and Integrated Market using Sustainable Energy and Open Networks) consists of IBM, Denmark's largest energy company DONG Energy, the regional energy company of Oestkraft, Technical University of Denmark, Siemens, Eurisco and the Danish Energy Association. Due to the environmental benefits of the electric vehicle technologies, the research will be partly funded by the Danish government."

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"Market introduction and investment plans in Denmark will result in upwards of 10% of the country's vehicles being all electric or hybrid electric during the coming years…To achieve this on a large scale, electric vehicles require smart technologies to control charging and billing and to ensure the stability of the overall energy system…

"The first step of the consortium is to develop smart technologies to be implemented on the Danish island of Bornholm, designed to function as a testbed. The island has 40,000 inhabitants and an energy infrastructure characterized by a large proportion of wind energy…The studies will be simulation-based…"

From IBMAdvertising via YouTube.

"… researchers from IBM Denmark and from IBM's Zurich Research Laboratory will develop smart technologies that synchronize the charging of the electric vehicles with the availability of wind in the grid…

"While various companies have announced initiatives in Denmark that will contribute to the overall adoption of an electric vehicle system, EDISON will address the entire end-to-end process to make the system possible… ensuring overall grid stability and supporting the increased use of renewable energy…IBM is working with clients in nearly 50 Smart Grid engagements … "


TWO WORDS – PLASTICS & SUN
Solar Energy Performance With Plastic Solar Cells Improved With New Method
February 25, 2009 (Science Daily)

"The University of Alberta and the National Research Council's National Institute (NINT) for Nanotechnology have engineered an approach that is leading to improved performance of plastic solar cells (hybrid organic solar cells). The development of inexpensive, mass-produced plastic solar panels is a goal of intense interest for many of the world's scientists and engineers because of the high cost and shortage of the ultra-high purity silicon and other materials normally required."

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"Plastic solar cells are made up of layers of different materials, each with a specific function, called a sandwich structure…One layer absorbs the light, another helps to generate the electricity, and others help to draw the electricity out of the device…

"After two years of research, these U of A and NINT scientists have, by only working on one part of the sandwich, seen improvements of about 30 per cent in the efficiency of the working model…

"The team estimates it will be five to seven years before plastic solar panels will be mass produced but…when it happens solar energy will be available to everyone…the next generation of solar technology belongs to plastic…"


THE FALL OF ETHANOL
Ethanol, Just Recently a Savior, Is Struggling
Clifford Krauss, February 11, 2009 (NY Times)

"Barely a year after Congress enacted an energy law meant to foster a huge national enterprise capable of converting plants and agricultural wastes into automotive fuel, the goals lawmakers set for the ethanol industry are in serious jeopardy.

"As recently as last summer, plants that make ethanol from corn were sprouting across the Midwest. But now, with motorists driving less in the economic downturn, the industry is burdened with excess capacity, and plants are shutting down virtually every week."

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"In the meantime, plans are lagging for a new generation of factories that were supposed to produce ethanol from substances like wood chips and crop waste, overcoming the drawbacks of corn ethanol. That nascent branch of the industry concedes it has virtually no chance of meeting Congressional production mandates that kick in next year.

"The decline in fortunes has been extreme…Only months ago, refiners in some regions were buying up as much corn ethanol as they could…But since the summer, oil and gasoline prices have plunged, while the price of corn, from which virtually all commercial ethanol in this country is made, has remained relatively high…

"The government’s Energy Information Administration recently projected that the industry would fall short of the targets for expanded use of ethanol and other biofuels that Congress set in a 2007 energy law…"

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"VeraSun Energy, one of the nation’s largest ethanol producers, has suspended production at 12 of its 16 plants…Renew Energy, Cascade Grain Products and Northeast Biofuels have filed for bankruptcy protection. Pacific Ethanol said it would suspend operations…

"…Congress mandated a doubling of corn ethanol use…[and]the use of an additional 21 billion gallons of ethanol and other biofuels produced from materials collectively known as biomass…it is becoming clear that even these modest targets will not be met…"

NEW ENERGY WIRES FOR OBAMA GOALS

The rage for new transmission goes on even as the controversy over the need for new transmission rages.

Many of the biggest names in New Energy advocacy (including former President Bill Clinton, Former Vice President and Nobel laureate Al Gore, Nobel laureate and Secretary of Energy Steven Chu, Speaker of the House of Representatives Nancy Pelosi, energy entrepreneur T. Boone Pickens, Senate Majority Leader Harry Reid, American Wind Energy Association (AWEA) Executive Director Denise Bode and Former Clinton Chief of Staff John Podesta) gathered at a Center for American Progress (Cap) Action Fund forum to call for the development and deployment of a new national high voltage transmission grid to facilitate the delivery of electricity generated by New Energy in remote, unpopulated areas to urban population centers.

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Secretary Chu: "We need to move with a sense of urgency…We need a very, very smart grid…"

Secretary Chu called for consistent policies and universal standards so that entrepreneurs can understand the rules of the marketplace.

Former President Clinton’s remarks were typically wide-ranging and penetrating. He talked about the national security value of a reliable and secure smart grid and pointed out that modernizing the national transmission system would facilitate the move to domestic energy supplies and boost the economy.

President Clinton: "We know this is the key to our job growth."

Mr. Gore emphasized the urgency of ending the on-again, off-again U.S. affair with New Energy and making a commitment to new transmission infrastructure as part of the nation's responsibility in the fight against climate change.

Vice President Gore: "This roller coaster is headed for a crash, and we're in the front car…"

Speaker Pelosi's remarks echoed Mr. Gore's and she expressed her determination to see legislation for new national transmission through Congress.

Speaker Pelosi: "…[T]he status quo folks will try to stop this [but]… It is our moral responsibility to preserve this planet…"

Energy entrepreneur T. Boone Pickens talked about the terrible costs to the U.S. of oil dependency and urged the New Energy transmission project as well as the building of New Energy infrastructure and the retrofitting of homes and buildings to boost energy efficiency. Liberal Massachusetts Congressman Ed Markey said that to his own surprise he agreed with everything Pickens, a conservative Texan, said.

Podesta, who as a principal at CAP was one of the conveners of the forum, said a national Green Grid is vital.

Podesta: "These are national problems; they require national solutions."

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Senator Reid reminded the gathering of the success of the federal government in creating rural electrification, the national highway system, and the Internet.

Reid: "Everyone should get off the kick that this program won't work if the government is involved in it…"

According to a Christian Science Monitor reporter, Jeffrey Nelson, President of the South Dakota Wind Energy Association, is all for such a national transmission project.

Nelson: “This state has vast resources it can’t use without building new power lines…These high-voltage lines are like farm-to-market roads, but instead of wheat, it’s electricity being transported. We need to think in those terms.”

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Joint Coordinated System Plan 2008 (JCSP), a new report on transmission in the Eastern Interconnect section of today's grid, spells out parameters and costs for the eastern half of a new system. New transmission advocates welcome the $80 billion cost and unanimously argue the improvements will pay for themselves by creating downward price pressure on electricty from competition between power generators.

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But not everybody likes the idea of new transmission. Objections come from activists and environmentalists who resent the aesthetic and wildlife habitat intrusions. They also come from veterans in the struggle against coal who believe new transmission will not be used for New Energy but will facilitate the increased delivery of “black electrons” generated by coal-fired power plants.

ITC Holding wants to build the Green Power Express, a $12 billion, 3,000 mile project for Nelson’s wind. Coincidentally, it passes by numerous major coal plants. Reassurances to environmentalists from the project developers are not exactly reassuring.

Lisa Aragon, director of strategic initiatives, ITC: “The purpose of our plan is to build the infrastructure to where the wind blows most abundantly…As an independent transmission company, we can’t favor one type of energy over another. We do favor harnessing the wind for both environmental sustainability and energy security reasons.”

Environmentalists call it the “Green-wash Express.”

Paula Maccabee, counsel, Citizens Energy Task Force: “There’s no regulatory jurisdiction over this ‘green-power’ power line, not even a fig leaf that would require it to carry wind power…It’s name is just a public relations slogan.”

Held in even more contempt that the Green Power Express is CapX 2020, a joint venture transmission project of 11 Minnesota utilities. Purportedly designed to bring Dakota wind to Minnesota, it will also admittedly carry coal-generated electricity from South Dakota’s Big Stone II coal plant. (See No CapX)

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Here’s the question: Can the promise of the President's proposed Renewable Electricity Standard (RES) - to get 10% of U.S. power from New Energy by 2012 and 25% by 2025 - be fulfilled without new transmission?

The opponents of the "green" grids who fear they will carry "black" electrons say the answer is more local New Energy, more distributed generation, a smarter grid and more energy efficiency.

Jeremy Chipps, Minnesota enviromentalist: “It really is time to deploy energy production and smart-grid systems that are much safer, more intelligent, and much more efficient…If we do this, we won’t need massive, costly networks of new transmission lines.”

A similar point is made by opponents who do not readily believe the argument that new transmission will pay for itself.

Dusty Johnson, chairman, South Dakota Public Utility Commission: “To what extent do [rate-payers] have an appetite for increasing utility bills? … There are some very significant geopolitical concerns when people start talking about multibillion [dollar] transmission projects…If it ends up being more cost effective for everyone to have small wind turbines in their backyard and solar panels on their roads, do we need these lines? … I think we do. But such investments are not without risk.”

Other experts, including system operators, have raised questions about the financial and technical viability of a major system and expressed preference for local improvements, better efficiencies and distributed generation.

Gordon van Welie, ISO New England, and Stephen Whitley, president, New York Independent System Operator: “Until additional scenarios that include the development of local resources are analyzed, we do not believe any single transmission plan can be presented as a solution to the integration of additional renewable energy resources in the United States…”

If there is to be a national transmission system, the Not-In-My-BackYard (NIMBY) objections must be overcome. Many in the energy and transmission planning communities and many on the CAP panel believe the solution must come from a federal siting policy managed by the Federal Energy Regulatory Commission (FERC) that streamlines the permitting process now in the hands of state regulators.

Aragon, ITC: “We’re advocating a streamlined process…In many states there is no defined time for how long siting can go on…If siting can’t be completed in the current [state] model, we may need to move to a federal siting process.”

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There are, of course, those who will not tolerate federal interference in state matters. This would be a good place all that Obama non-partisanship to ride to the rescue and settle contentions.

John Lamb, president, Clipper Windpower Development: “It will be critical for the federal and state government to provide some form of expedited regulatory approval, additional financial incentives and tax relief for new interstate transmission projects…”

It will not be as easy as all that, but Carol Browner, White House energy and climate coordinator, recently expressed approval for such an inter-agency siting group. There is a good reason to do the work.

Dusty Johnson, chairman, South Dakota Public Utility Commission: “We need a lot more transmission…It’s hard in Washington to divvy up money according to merit and not politics. But if they do it on merit, South Dakota is going to do very well. We’ve got the wind.”

California Governor Arnold Schwarzenegger, one of New Energy’s biggest boosters, wants to get out ahead of the process by streamlining the permitting process for transmission and New Energy installations in his state (KulleeFORneeya).

Presently involving nine different agencies, Governor Schwarzenegger wants a single state Department of Energy to handle the process. Why? Because whereas most states take 5-to-7 years to build new transmission, California takes 10-to-12 years. Why? Because of bureaucratic red tape and lawsuits.

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Lisa Page, spokeswoman for Governor Schwarzenegger: "The goal is to help California focus on energy stability and to ensure coordination across agencies…We have a very aggressive goal of 33 percent renewables by 2020 and reducing greenhouse gases, so given those aggressive goals, this will help streamline projects so we can get more renewable energy."

That's the news from the cutting edge. Stay tuned - there is sure to be more to come over the wires.

(For another extended discussion of the pros and cons of new transmission, see DOES BIG NEW ENERGY NEED BIG NEW TRANSMISSION?)

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America’s future wind web? Wind power could feed 20 percent of the US energy diet. But first, the country needs a new energy network
Mark Clayton, February 18, 2009 (Christian Science Monitor)
and
Calif. governor proposes one-stop permitting for electricity transmission
Debra Kahn, February 24, 2009 (NY Times)
and
Nation's leaders urge action on better electricity grid
February 23, 2009 (CNN)

WHO
Former President Bill Clinton, Former Vice President and Nobel laureate Al Gore, Nobel laureate and Secretary of Energy Steven Chu, Speaker of the House of Representatives Nancy Pelosi, energy entrepreneur T. Boone Pickens, Senate Majority Leader Harry Reid, American Wind Energy Association (AWEA) Executive Director Denise Bode, Former Clinton Chief of Staff John Podesta; Bracken Hendricks, author, Wired For Progress; the Midwest Independent System Operator (MISO) (John Bear, President); Jeffrey Nelson, President, South Dakota Wind Energy Association (SDWEA); Dusty Johnson, chairman, South Dakota Public Utility Commission; Lisa Aragon, director of strategic initiatives, ITC; Paula Maccabee, counsel, Citizens Energy Task Force; Gordon van Welie, ISO New England and Stephen Whitley, president, New York Independent System Operator; John Lamb, president, Clipper Windpower Development; California Governor Arnold Schwarzenegger

WHAT
Wired For Progress and Joint Coordinated System Plan 2008 (JCSP) are 2 of many proposals for the new transmission system New Energy and Smart Grid technologies require.

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WHEN
- The JCSP was released February 14.
- The Green Power Express was announced February 9.
- President Obama has repeatedly asserted he wants to double U.S. New Energy capacity in the next 3 years.
- 2004: Governor Schwarzenegger first proposed the 1-stop permitting Department of Energy agency.

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WHERE
- Wind resources are abundant on the Midwestern plains, solar energy is most abundant in the Southwestern deserts, offshore wind is most harvestable on the Great Lakes and off the Middle Atlantic coasts, wave energy is most abundant off the Pacific coast and current energy is plentiful in the Gulf Stream off Florida.
- Wind resources from Canada to nearby New England cities could obviate the need for transmission to deliver it from U.S. sources farther away.
- Boulder, CO, won praise from Secretary Chu for making expenditures to develop the first U.S. smart grid in spite of the absence of national standards and established long-term policies.
- The Dakotas are frequently called the “Saudi Arabia of wind.”
- ITC Holdings is based in Novi, Mich.

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WHY
- Secretary Chu believes entrepreneurs will invest in new transmission systems when they know there are consistent policies and specific standards in place.
- The JCSP is estimated to entail 15,000 miles of lines and a cost of $80 billion.
- The Green Power Express is an ITC Holdings-proposed 3,000 mile, $12 billion transmission plan.
- Plans call for the Titan Wind Project to have 2,000 wind turbines and generate 5,000 megawatts. The Green Power Express would theoretically carry the power it produces.
- The stimulus package directs $4 billion for Smart Grid planning and development.
- CapX is a joint project from 11 different Minnesota utilities which claims to be intended to bring Dakota wind to Minnesota’s cities but will also carry coal-generated power.
- Siting processes slow transmission development.
- The Sunrise Powerlink that will deliver solar energy-generated electricity from the California desert to the San Diego Bay area was first proposed in 2001, was recently approved and will not be built before 2012.
- One of the few known principles of the 1-stop permitting plan would be to eliminate Public Utilities Commission authority over transmission siting and renewable power projects over 50 megawatts.
- Agencies Schwarzenegger wants to eliminate from the permitting process: California Lands Commission, California Energy Commission, the California Power Authority, the Electricity Oversight Board, the California Energy Resources Scheduling Division, the Department of General Services, the Office of Planning and Research and the Office of the State Architect.

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QUOTES
- Chu: "What we really need is to lock these people up in a room and say, 'Come out with a standard in a few weeks.' "
- Clinton: "Every time oil dropped, people said, 'Gimme my Hummer back,'…That's not what they're saying now. "
- Pickens: "We have got to solve the problem with our own resources."
- Podesta: "We can't let this crisis go to waste…"
- John Bear, President, MISO: “This is information we believe that our leaders need to consider as they begin work under a new administration and start defining our energy future…”
- Paul Thayer, executive director, State Lands Commission: "We haven't been consulted or have any idea what's going to happen…"
- Schwarzenegger: "At a time when California families and businesses are cutting back and tightening their belts, state government must do the same -- we have a responsibility to ensure government is working efficiently with taxpayer dollars…"

MORE NEWS, 2-25 (SUN COSTS FALL; GOVS ASK PRES FOR WIND; 1,000 MW OF OCEAN ENERGY; U.S. TO MAKE CO2 $$ BY 2012)

SUN COSTS FALL
New Berkeley Lab Report Shows Significant Historical Reductions in the Installed Costs of Solar Photovoltaic Systems in the World
Alan Chen, February 19, 2009 (News Center/Lawrence Berkeley National Laboratory)

"A new study on the installed costs of solar photovoltaic (PV) power systems in the U.S. shows that the average cost of these systems declined significantly from 1998 to 2007, but remained relatively flat during the last two years of this period.

"[Ryan Wiser, Galen Barbose, and Carla Peterman] at [the Environmental Energy Technologies Division of the] Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) who conducted the study say that the overall decline in the installed cost of solar PV systems is mostly the result of decreases in nonmodule costs, such as the cost of labor, marketing, overhead, inverters, and the balance of systems…"

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"[Tracking the Sun: The Installed Cost of Photovoltaics in the U.S. from 1998–2007] examined 37,000 grid-connected PV systems installed between 1998 and 2007 in 12 states. It found that average installed costs, in terms of real 2007 dollars per installed watt, declined from $10.50 per watt in 1998 to $7.60 per watt in 2007, equivalent to an average annual reduction of 30 cents per watt or 3.5 percent per year in real dollars.

"…According to the report, this trend, along with a reduction in the number of higher-cost “outlier” installations, suggests that state and local PV-deployment policies have achieved some success in fostering competition within the industry and in spurring improvements in the cost structure and efficiency of the delivery infrastructure for solar power…"

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"Other information about differences in costs by region and by installation type emerged from the study. The cost reduction over time was largest for smaller PV systems…Also, installed costs show significant economies of scale…Installed costs were also found to vary widely across states…

"…[A]verage costs range from a low of $7.60 per watt in Arizona, followed by California and New Jersey, which had average installed costs of $8.10 per watt and $8.40 per watt respectively, to a high of $10.60 per watt in Maryland. Based on these data, and on installed-cost data from the sizable Japanese and German PV markets, the authors suggest that PV costs can be driven lower through sizable deployment programs. The study also found that the new construction market offers cost advantages for residential PV systems…"

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"…[D]irect cash incentives provided by state and local PV incentive programs declined over the 1998-2007 study period. Other sources of incentives, however, have become more significant, including federal incentive tax credits (ITCs). As a result…total after-tax incentives for commercial PV were $3.90 per watt in 2007, an all-time high…Total after-tax incentives for residential systems, on the other hand, averaged $3.1 per watt in 2007, their lowest level since 2001.

"Because incentives for residential PV systems declined…the net installed cost of residential PV has remained relatively flat…At the same time, the net installed cost of commercial PV has dropped…32 percent, thanks in large part to the federal ITC…"


GOVS ASK PRES FOR WIND
Dear Mr. President
Governor Chet Culver (D-IA) and Governor Tim Pawlenty (R-MN), February 23, 2009 (Governors Wind Energy Coalition)

"…We write today to begin a partnership with your Administration to address some of the nation’s most pressing needs — jobs, energy, and climate —through the use of domestic renewable energy resources.

"As a bipartisan group of 23 governors from diverse regions of the nation, we share a common concern that our dependence on imported energy sources too greatly risks the nation’s energy and economic security. We offer our assistance…

"Wind energy is a clean, abundant, and affordable source of energy. According to the U.S. Department of Energy, with the right policies and investments, the United States can generate 20 percent of our electricity demand through wind and other renewable sources by 2030…"

Costs & benefits of getting 20% of U.S. power from wind. (click to enlarge)

...There are a number of policy options that your new Administration and Congress should consider…including:

"[1] Adoption of a National Renewable Electricity Standard…requiring utilities to provide a minimum of 20 percent of their electricity from renewable sources…

"[2] Support for the construction of New Interstate Electric Transmission Capacity… implementation of this policy will also substantially increase the overall reliability of the nation’s power system, reducing electricity costs to consumers.

"[3] Expansion of the U.S. Department of Energy’s Work with States and the Wind Industry to Accelerate Innovation…

"[4] Adoption of a Long-Term Renewable Energy Production Tax Credit. This credit is currently the primary federal incentive for wind energy development and should be extended to provide a stable incentive…

"The Governors’ Wind Energy Coalition stands ready to work with you…"


1,000 MW OF OCEAN ENERGY
Scottish & Southern in marine energy deal
Andrew Bolger, February 24, 2009 (Financial Times)

"Airtricity, the renewable energy arm of the Scottish and Southern Energy utility group, has signed an agreement aimed at developing sites capable of hosting 1,000MW of marine energy by 2020…with Aquamarine, the only UK marine energy company developing both wave and tidal power devices simultaneously, which has secured test berths for both technologies at the European Marine Energy Centre in Orkney."

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"Both companies will enter into a 50:50 joint venture to develop wave and tidal energy sites in the UK and Republic of Ireland. They aim to deploy Aquamarine’s Oyster wave energy converter and its Neptune tidal device…

"Airtricity was acquired by SSE last year for £1bn and the combined Airtricity/SSE team has developed 40 wind farms across Europe and North America, generating more than 1,500MW."

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"Edinburgh-based Aquamarine was founded in 2005, and is currently seeking to raise more than £50m of funding …

"Aitrtricity is currently developing two of the world’s largest windfarms, a 504 MW project at Greater Gabbard, off the Suffolk coast, and a 456MW onshore wind farm, located in the Upper Clyde Valley."


U.S. TO MAKE CO2 $$ BY 2012
U.S. budget to have CO2 revenues by 2012 – White House
Jeff Mason (w/Doina Chiacu) 24 February 2009 (Reuters)

"U.S. President Barack Obama's budget accounts for revenues from an emissions trading system in 2012, White House spokesman Robert Gibbs said…when asked whether a cap-and-trade system for greenhouse gases would be in place in time for revenues to be generated by 2012…

"During his presidential campaign Obama laid out plans for a trading system that would set limits on greenhouse gases such as carbon dioxide and allow factories to trade permits to pollute more.

"The European Union is anxious for the United States to develop a trading system to hook up with its own established scheme."

November 17, 2008. From ChangeDotGov via YouTube.

"Obama has not released any details about his plans for such a system since taking office, while his administration focused on lifting the country out of recession and shoring up the banking system.

"The president has made clear, however, that investments in renewable energy would be part of the economic recovery process…

"The White House Web site says Obama plans to implement an 'economy-wide cap-and-trade program' to reduce greenhouse gas emissions 80 percent by 2050."