OFFSHORE DRILLING IS SAFE UNTIL IT ISN’T

Oil spill could have broad impact on Gulf Coast
Rick Jervis and Brian Winter (w/David Jackson), April 29, 2010 (USA Today)

[John Tesvich, eth generation oyster farmer, Louisiana Gulf Coast:] "It's just like what we saw with Hurricane Katrina…At first, it was just another storm, just like this was just another oil spill. But by the time they realize how bad it really is, it's too late…Why is the response taking so long? Why can't they stop this?"

"More than a week after the oil rig Deepwater Horizon exploded off the Louisiana coast, the Delaware-sized oil slick could make landfall [anytime and]…the oil eventually could affect a wide stretch of coastline from Texas to Florida…The spill threatens to have far-reaching consequences."

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"It could cause widespread damage to wildlife in an area of highly sensitive marshes, wetlands and estuaries that produce one-quarter of the seafood consumed in the USA…[B]illions of dollars' worth of coastal restoration projects undertaken after hurricanes Katrina and Rita hit in 2005 are at risk. The disaster also could affect a pillar of [President] Obama's energy plan — an initiative announced a month ago that could open up new areas off the Atlantic Coast and elsewhere to offshore drilling…

"The growing magnitude of the disaster prompted comparisons with…the 1989 accident involving the Exxon Valdez oil tanker, which spilled almost 11 million gallons of crude into Alaska's Prince William Sound, killing at least 250,000 sea birds and leaving many others bathed in thick, black sludge…For now, the Gulf spill is smaller — spewing an estimated 210,000 gallons a day…Yet BP says it still has not determined the cause of the April 20 explosion — which means BP and government officials are uncertain how to plug the leaks that are nearly a mile underwater and out of reach of most equipment…BP officials initially underestimated the size of the spill, saying earlier…the leak was releasing about 42,000 gallons a day…[U]nless the leaks are plugged within the next two to four weeks, the amount of oil spilled could equal that of the Valdez."

From kumarwarren via YouTube

"In Venice, La., near the mouth of the Mississippi River, workers were unfurling hundreds of feet of oil-catching booms and loading them into supply boats, which motored to nearby bayous and barrier islands. Cleanup materials, such as giant ‘socks’ that soak up oil and skimming drums, were being brought to local staging areas, Coast Guard Chief Petty Officer Robert Birdwell said…Sally Brice-O'Hara, a Coast Guard rear admiral, said in Washington that officials were mobilizing to prevent ‘an Exxon Valdez-type of case.’

"Sen. Bill Nelson, D-Fla., sent Obama a letter saying he would file legislation calling for a temporary halt to the president's plans to expand offshore drilling...Obama says that more drilling is part of a comprehensive plan to reduce America's dependence on foreign oil. He also has announced investments in renewable energies…power and tougher emissions standards for cars…Offshore drilling in the USA accounts for about 7% of what the nation consumes each day — which is why environmental advocates…say it's not worth the environmental risks…However, about 60% of the undiscovered oil within the USA is thought to be offshore…"

Bonus Video: Burn the oil or beach it - the choices that come from offshore oil drilling. From Newsydotcom via YouTube

NJ LAUNCHES OFFSHORE WIND EXPLORER

Cape May wind-energy firm launches data buoy off Atlantic City
Michael Miller, April 29, 2010 (Press of Atlantic City)

"Fishermen's Energy launched a weather and whale buoy…three miles off the coast in the race to build New Jersey's first offshore wind farm…Anchored in 40 feet of water…[it] will spend the next two years gathering weather data such as wind speed and barometric pressure…

"Fishermen's Energy…has a head start on its competition, Garden State Offshore Wind and Bluewater Wind [to build the first offshore project], because Fishermen's Energy is building a 20-megawatt demonstration project in state waters where there is less red tape."

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"This smaller project 2.8 miles off Atlantic City will help determine the viability of Fishermen's Energy's larger 350-megawatt project planned for 10 miles off the coast. The buoy will record the sounds of passing whales, dolphins, birds and bats. Studies have shown that bats are especially vulnerable to windmills, which create areas of low pressure between their spinning blades that can kill the small flying mammals.

"The four to eight windmills just off the coast will be just as prominent to beach and Boardwalk visitors as the five turbines spinning at the Atlantic County Utilities Authority…[and] should bring more jobs to Atlantic County…"

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"The state Board of Public Utilities has invested $12 million to help the three companies erect meteorological towers along the Continental Shelf. BPU President Lee A. Solomon said it is too early to tell how much more public money may be spent bringing this alternate energy to New Jersey electricity customers…[O]ffshore wind farms need to be big to be economical…But the steady breezes off New Jersey should provide a reliable source of power.

"The state's energy master plan calls for providing 3,000 megawatts from offshore wind by 2020. The projects proposed by the three companies represent just one-third of that goal…[ The New Jersey chapter of the Sierra Club, Environment New Jersey and Clean Ocean Action] applauded [the] buoy launch…[and] endorsed the wind projects."

NEW ENERGY CHANGE – TOO MUCH FOR SOME & NOT ENOUGH FOR OTHERS

The Clean Energy & Environmental Accomplishments of Senate Democrats in the 110th & 111th Congress
Congressional Desk, April 29, 2010 (American Chronicle)

"Senate Democrats have been…[pushing for New Energy and Energy Efficiency] since regaining the majority in 2006…This Fact Sheet details the many legislative clean energy and environmental accomplishments Senate Democrats have achieved during the 110th and 111th Congresses.

"The American Recovery and Reinvestment Act (Recovery Act) enacted a number of important energy and environmental provisions aimed at creating jobs while simultaneously improving the environment. The most significant of these provisions is the historic investment in clean energy. The law provided $66.8 billion…[in] tax incentives, federal funding, and loan guarantees providing for a significant expansion of clean energy deployment, job creation, and a better environment…[The Recovery Act, ARRA, is accelerating] the development of clean energy technologies…"

Boosted by Recovery Act funds (click to enlarge)

"Wind. In 2009, the United States broke all previous records by installing over 10,000 megawatts (MW) of new wind energy…[increasing] the nation´s total wind energy generating capacity by 40 percent (25,000 MW to 35,000 MW)…Solar…[T]he nation´s total solar energy electrical capacity surpassed 2,100 MW and total thermal capacity reached nearly 24,000 megawatts-thermal. The 481 MW increase in the nation´s solar electricity generation represents a 37 percent increase…Geothermal…[An installed capacity] increase of 176 MW…surpassed the combined total of newly installed geothermal from the previous three years (2006, 2007, and 2008). Even more promising, another 161 MW of geothermal were in the final stages of development…and more than 7,000 MW are in earlier phases…

"Going forward, [the Recovery Act] is projected to continue to spur growth in clean energy deployment…[T]he nation is expected to deploy 10,000 more megawatts of electricity from renewable energy resources in 2010 than it would have had the legislation not been passed. Further, the Outlook anticipates that, by 2020, the United States will generate 37,000 more megawatts of electricity from renewable energy resources than it would have…"

Boosted by Recovery Act funds (click to enlarge)

"In terms of job creation…Wind. In 2009, the number of people employed in the wind energy industry reached 85,000…an increase from 50,000 two years ago…[W]ind manufacturing facilities also increased by 39 and the United States now has over 200 facilities…Solar…[T]he number of people directly employed by the solar industry rose to approximately 25,000, an increase of approximately 25 percent from 2008 levels…[With an additional 7,000 induced jobs, solar’s impact was 17,000 new jobs.] Going forward…the total number of jobs in the solar industry or supported by its supply chain [should reach] 60,000 by 2010…Geothermal…[T]he7,000 MW of geothermal energy under development will create 29,750 permanent jobs…

"In terms of the environment, the EIA has projected that the American Recovery and Reinvestment Act will avert the energy-related emission of approximately 225 million metric tons of carbon dioxide equivalent between 2011 and 2013."

FIRST SOLAR GETTING FIRSTER

First Solar Buys Solar Developer NextLight for $285M
Camille Ricketts, April 29, 2010 (VentureBeat via NY Times)

"First Solar, the largest solar company in the world…will be acquiring NextLight Renewable Power, a developer of solar power projects, for about $285 million. The deal will add 1.1-gigawatts worth of solar panel arrays to the larger company’s 1.4-gigawatt pipeline.

"But for First Solar, the move isn’t about capacity — it’s about relationships. Between its Agua Caliente and AV Solar Ranch developments, NextLight has power purchase agreements for more than 520 megawatts with [Northern California’s] Pacific Gas & Electric, one of the largest and most strategically positioned utilities in the U.S…"

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"First Solar is hoping to become a formidable force in California, which last year mandated that a third of its power be generated from renewable sources of energy by 2020. It already has connections with Southern California Edison, but lacked a strong bond with PG&E — until now. NextLight, based in San Francisco, could give the company a serious boost.

"The deal also marks the continuation of First Solar’s acquisition strategy. Not content to develop projects as fast as it can on its own, the company has been gobbling up other companies…In the last year, it absorbed both Optisolar and Edison Mission Group…After the deal with NextLight closes next quarter, First Solar can claim to have a development pipeline seven times the size of its next biggest competitor, public company SunPower…SunPower isn’t backing down, running an acquisition game of its own. In February, it bought European Sunray Renewable Energy for $277 million to expand its core business beyond panel manufacturing into utility-scale solar development."

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"Dwarfing domestic rivals, First Solar is now protecting its empire against Chinese competitors like SunTech and JA Solar, which have been growing steadily and initiating more projects everywhere, including the U.S. Benefiting from low-cost manufacturing and a lax regulatory environment, these companies pose a real and serious threat to First Solar…[which] posted strong first quarter earnings, including an unexpected rise in profit that bumped up its stock price 6.5 percent to $136.78. Driven by sales in Europe, where government subsidies for the solar industry will be cut later this year, the company saw a profit of $172.3 million and revenues of $568 million (an increase of 36 percent) for the quarter.

"…First Solar will also be adding manufacturing capacity, announcing the construction of a new plant to churn out its solar thin film, to be completed by the end of next year. The material is produced at a lower cost, but is also said to be less efficient than that churned out by competitors."

U.S. WIND STILL GROWING, BUT SLOWER

U.S. Wind Energy Industry Installs 539 MW In First Quarter; Industry Calls for Strong Renewable Electricity Standard to Create Jobs, Retain America’s Competitiveness
April 29, 2010 (American Wind Energy Association)

"…[T]he U.S. wind industry installed 539 megawatts (MW) in the first quarter of 2010, the lowest first quarter figure since 2007. While the industry worked diligently to accelerate shovel-ready projects in 2009 and installed over 10,000 MW, continued lack of long-term market signals, combined with low power demand and price, has allowed the pipeline for advanced projects to slow over the past 18 months. AWEA has called on Congress to put in place a strong national renewable electricity standard (RES) as part of comprehensive climate and energy legislation to provide the hard targets needed to stabilize the industry…"

[Denise Bode, CEO, AWEA:] "Financing wind projects is an 18 month process and the struggles in 2009 to raise new capital, combined with lack of new demand from utilities, are now surfacing in the market and reflected in project installations…Minimal new installations and current announcements for project delays or downgrades in 2010 are the consequences of inaction to provide a serious market signal. With swift action today, wind project development can be nimble and ramp up quickly, creating new domestic manufacturing orders."

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"The U.S. wind energy industry is calling on Congress to enact a national RES to send the long-term signal the industry needs to invest and grow in a steady, sustained fashion, and to attract wind turbine manufacturing investment on a large scale. According to a recent national poll…an RES is also politically popular among American voters with support seen across party lines with 65% of Republican voters, 69% of Independents and 92% of Democrats favoring the legislation…"

[Denise Bode, CEO, AWEA:] “Wind works for America. That is why voters want Congress to pass a strong national RES…Americans understand that an RES will mean new manufacturing jobs, less dependence on imported energy, and more pure, clean, affordable energy for our country. Wind energy is readily available today to revitalize our economy and yet Congress, by not acting, is allowing this bright spot in our economy to dim….67% of Americans believe Congress is focusing too little on increasing renewable energy sources such as wind.”

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"The cycle of wind capacity installations over the past few years…has created a poor environment for long-term investment decisions, particularly in wind manufacturing. Dozens of manufacturing companies have already made commitments to build and upgrade U.S. facilities, despite the market’s booms and busts. These companies have created the foundation for renewing the American manufacturing sector and the U.S. could see explosive growth the instant there is a sign of market stability and U.S. commitment to long term policy."

[Denise Bode, CEO, AWEA:] “Policy drives young energy industries as well as established ones, and depending on the policies put in place now we could be hiring or firing by the end of the year and in the years to come…Stimulus funding successfully saved thousands of megawatts of shovel ready wind projects and over 40,000 jobs in 2009, but we are setting up a vacuum if we don’t drive stable demand with a national renewable electricity standard.”

From April 8, 2010: COAST ENERGY

On the occasion of Secretary of the Interior Salazar’s announcement that Cape Wind, the first U.S. offshore wind project, is being green lighted after 9 years of thorough evaluation, NewEnergyNews is revisiting Secretary Salazar’s early work, beginning about this time last year, to get a fresh take on ocean energy. A fresh and far-seeing look it turns out to have been.

Salazar: Wind power can replace 3,000 coal plants
Wayne Parry, April 6, 2009 (AP)

SUMMARY
In conjunction with the publication of Survey of Available Data on OCS Resources and Identification of Data Gaps, Secretary of the Interior Ken Salazar attended the first of 4 public hearings on offshore energy and continued to talk up offshore wind while also promising access to oil and gas reserves.

The Outer Continental Shelf (OCS) is 1.7 billion acres under federal jurisdiction beginning ~3 miles off the coast and extending at least 200 nautical miles. 27% of U.S. oil production and 14% of U.S. natural gas production came from the OCS in 2007. It is also where most of the development of U.S. offshore wind and ocean energies will take place.

Secretary Salazar announced in February a 4-part strategy for developing the energy resources of the OCS: (1) A public comment period of 180 days, to September 21, 2009, on the Draft 5-Year Oil and Gas Leasing Program proposal from the Bush administration; (2) A new report by Department of the Interior (DOI) Minerals Management Service (MMS) and the U.S. Geological Survey (USGS) on conventional and New Energy offshore resources; (3) 4 regional meetings (Atlantic Coast, Gulf of Mexico, Pacific Coast, and Alaska) in April to review the USGS/MMS report and get further input; (4) Expediting of DOI rulemaking for the OCS as required by the 2005 energy bill but not done by the Bush administration.

Speaking at the Atlantic City event, the Secretary explained that his enthusiasm for offshore wind comes from its potential to generate 1 million megawatts of power, about the output of 3,000 coal plants.

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From the report: “Offshore wind resources have substantial potential to supply a large portion of the Nation's electricity demand…According to estimates by the NREL, developing shallow water (typically 0-30 meters) wind resources, which are the most likely to be technically and commercially feasible at this time, could provide at least 20 percent of the electricity needs of almost all coastal States…”

Senator Robert Menendez (D-NJ) strongly voiced the environmentalists’ position against allowing drilling in the OCS on the grounds that it risks environmental disaster and continues U.S. dependence on fossil fuels.

Petroleum geologist Skip Hobbs expressed the standard oil and gas industry response to environmentalists, saying that modern drilling has the most minimal risks of accidents and the U.S. will, despite the best intentions of environmentalists and the Obama administration, remain dependent on oil for decades. Backing up Hobbs, Congressman Rob Bishop (R-Utah) pointed out that refusing to drill has increased U.S. dependence on imported sources.

Governor Don Carcieri (R-Rhode Island) parted company with Congressman Bishop, a fellow Republican, and pointed out the transition to New Energy has a bipartisan urgency it has never had before.

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COMMENTARY
In the spirit of "bipartisanship," Secretary Salazar’s rhetoric mimics the “all-of-the-above” 2008 Republican campaign slogan although, like the slogan, the secretary's details remain undefined. In the spirit of President Obama’s deep and so far unwavering commitment to New Energy, Secretary Salazar frequently emphasizes that New Energy is the way to break U.S. dependence on fossil fuels and that there are few places with greater New Energy riches than the U.S. OCS.

Much of the electoral base that supports President Obama advocates restoring the ban on OCS drilling for petroleum resources that expired last fall and upping access to offshore wind and ocean energies as well as other New Energies.

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The Salazar Atlantic City event was held in the Convention Center. Its rooftop solar system is the U.S.’ biggest and a tribute to New Jersey’s powerful New Energy incentives and its strong commitment to its New Energy assets. The state plans to triple its installed wind capacity to 3,000 megawatts, 13% of the state’s electricity consumption, by 2020. The Atlantic City utilities authority uses power produced by a 5-turbine, 7.5 megawatt project.

Garden State Offshore Energy, a joint venture of New Jersey utility PSE&G Renewable Generation and wind developer Deepwater Wind, was created in October 2008 to initiate a $1 billion, 345-megawatt offshore wind project 16 miles southeast of Atlantic City. Two other offshore installations were scheduled at the same time, bringing to ~1,000 megawatts the amount of wind power on hold and awaiting final DOI rules and approval.

For the next 5-to-7 years, Atlantic offshore wind resources near high-energy demand centers (like the New Jersey coast) represent greater New Energy potential than opportunities in the other OCS regions (Gulf of Mexico, Pacific, and Alaska). Potentially significant wind resources off the California, Oregon, Washington, and Hawaii coasts are in deep water where technology constraints prevent near-term development. Alaska has outstanding hydrodynamic (wave, tidal, current) ocean energy potential but harsh conditions and distance from high-demand centers make near-term development unlikely.

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Less was said in Atlantic City about hydrodynamic (wave, tidal and current) energies. The remarks in the DOI report suggest why.

The report describes wave energy as “a potentially significant OCS renewable energy resource…in the developmental stage.” Wave energy does not currently have proven technology and is not expected to have adequate installed capacity and delivery infrastructure to be a major factor in the national energy supply in “the near future.” The report says development is likely on the Pacific Northwest coast and off Hawaii.

According to the report, tidal energy technology is developing faster than wave energy because it utilizes more predictable forces in more accessible (shallow, nearshore) waters. Its faster development is also attributable to the fact that its shallow-water location puts it in state jurisdictions where less complicated regulatory procedures may apply

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Current energy is the least understood of the hydrodynamic energies and its technology is least mature. The most viable potential opportunities are in the Gulf Stream that flows along the southeast coast of Florida. There are also river currents to be considered but there is no complete national estimate of current energy potential.

The DOI survey offers lengthy assessments of all major topics pertaining to offshore energy development, including safety and environment considerations such as oil spill risks, geologic and meteorological hazards, global climate change, biological coastal and fish habitats, environmental resources for sea turtles, marine mammals, marine and coastal birds, and socioeconomics as well as data gaps.

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QUOTES
- Salazar: "We know there are some people who want us to close the door on [oil and gas drilling]… We need to look at all forms of energy as we move forward into a new energy frontier…[by buying oil from hostile countries] we have, in my opinion, been funding both sides in the war on terrorism…"
- Salazar: "There is tremendous potential with wind off the Atlantic.."
- Jeff Tittel, director, New Jersey Sierra Club: "This is a defining moment, whether we're going to have a clean energy future or continue to rely on oil drilling…Right now the government is fossil-foolish, and we need to change that."
- Senator Robert Menendez (D-NJ): "The risks are great, the rewards are less…It perpetuates our reliance on oil, Frankly, we simply just don't want it."
- Skip Hobbs, petroleum geologist: "We should recognize that as a practical matter, fossil fuel will rule for another generation…"

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- Congressman Rob Bishop (R-Utah): "[Drilling] can be done intelligently…We need to start looking at the self-inflicted energy dependence we have because we refuse to develop our domestic energy industry…"
- Governor Don Carcieri (R-Rhode Island): "There is a sense of urgency that we get this moving and get it right…There is a national emergency right now; the dependence on oil and natural gas has gone on for too long."
- From the report: “While we continue to generate a vast majority of our electricity from fossil fuels, renewable energy sources appear more attractive as we look for ways to address environmental, economic, and energy security…The experience, knowledge, and tools exist to ensure that offshore energy is developed in a comprehensive and environmentally sound manner. By obtaining stakeholder input (locally and nationally); compiling existing information and acquiring new data, where needed; conducting objective analyses using monitoring data to manage adaptively; and applying the necessary mitigations and safeguards along the way, we can achieve our national energy, economic, and environmental goals.”
- From the report: “Our National energy demands have steadily increased over the past 50 years, and fossil fuels have consistently remained the primary form of energy production, followed by nuclear and renewable energy sources. While we continue to rely heavily on oil for transportation and generate a majority of our electricity from coal, renewable energy sources will play an increasingly important role…The energy resources of the OCS, and specifically renewable energy sources, are particularly attractive options with significant resources located in close proximity to coastal population centers…”

QUICK NEWS, 4-29: A GO FOR U.S. OFFSHORE WIND; STOP THE LIES ABOUT WIND; OFFSHORE OIL IS SAFE UNTIL IT ISN’T; OIL CO BUYS GEOTHERMAL

A GO FOR U.S. OFFSHORE WIND
Cape Wind, first U.S. offshore wind farm, approved
Ros Krasny (w/ Scott DiSavin, Scott Malone and Doina Chiacu), April 28, 2010 (Reuters)

"The first U.S. offshore wind farm, a giant project 5 miles/8 km off the Massachusetts coast, was approved… after years of opposition…U.S. Interior Secretary Ken Salazar gave the green light for the historic 130-turbine, 420-megawatt Cape Wind project in Horseshoe Shoal, Nantucket Sound, in what supporters considered a huge step forward for renewable energy in the United States…

"Although small in terms of its production… its approval was encouraging to other offshore wind projects already proposed for the East Coast and Great Lakes…The turbines, more than 400 feet high, will dot an area of about 24 square miles (62 square km), larger than Manhattan, [supply enough electricity to power 400,000 houses] and be visible low on the horizon from parts of Cape Cod. The site is tucked between the mainland of the cape…the islands of Martha's Vineyard…and Nantucket."

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Jason Jones 180 - Nantucket
www.thedailyshow.com
Jason Jones investigates Cape Wind

"German conglomerate Siemens AG will provide the turbines. Construction is expected to begin before the end of the year, said Jim Gordon, president of Cape Wind Associates. Power generation could begin by 2012.

"The decision to approve Cape Wind, subject to certain conditions designed to protect offshore waters from damage and reduce visibility, is expected to face legal challenges, but Salazar said he was confident the approval would stand…Supporters say wind farms represent a giant push for renewable energy efforts and reducing dependence on foreign oil…Cape Wind was subject to years of environmental review and political maneuvering, including adamant opposition from the late Senator Edward M. Kennedy…[and] two Wampanoag Indian tribes complained that the giant turbines would disturb spiritual sun greetings and possibly ancestral artifacts and burial grounds on the seabed."

Now all this is possible. (click to enlarge)

"Opponents have deemed the project an eyesore, and raised issues ranging from a detrimental effect on property values in the popular vacation area south of Boston, to possible damage to birds, whales, fishing, aviation, and historic sites…U.S. Senator Scott Brown, the Republican elected this year to fill Kennedy's seat…said the project was a threat to regional tourism and fishing…The Advisory Council on Historic Preservation…[also recommended] the project be rejected.

"The governors of six eastern U.S. states shot back in a letter to Salazar, arguing that other offshore projects will likely be abandoned if the Cape Wind project was rejected…Less than 2 percent of wind energy is offshore, but turbine makers see it as an area of huge growth potential…Siemens rival General Electric Co expects to increase its offshore business to generate $3 billion to $5 billion a year over the next few years…"


STOP THE LIES ABOUT WIND
…Actually, Wind Power has Reduced Denmark’s CO2 Emissions a Lot
Matt Wasson, April 27, 2010 (Huffington Post)

"…[C]limate change denier and long time fossil fuel cheerleader Robert Bryce…doesn't know much about renewable energy. Relying on bad science like the Nature Conservancy's "Energy Sprawl" study and thoroughly discredited white papers like "The Case of Denmark" from Bjorn Lomborg's Institute for Energy Studies, Bryce deftly turns common sense on its head to convince his readers that burning more fossil fuels is really the best path to a green energy future.

"…Bryce begins his [Wasington Post] argument with what has become the new favorite talking point of renewable energy detractors and climate change deniers: "solar and wind technologies require huge amounts of land to deliver relatively small amounts of energy, disrupting natural habitats." …In the [Energy Sprawl] study, wind power was presumed to impact an area as much as 300-400 times greater than the actual footprint of the turbines on the land, while the impacts of coal power, for instance, were assumed to go no farther than the footprint of mine permits, leaving aside…habitat fragmentation and wildlife disturbance…the acreage consumed by actual coal-fired power plants, the infrastructure for processing coal and disposing of processing wastes, the rail and barge infrastructure for transporting coal to power plants, or the fills and impoundments used for disposing of coal combustion waste."

Wind's land use is hundreds of times smaller than oil propagandist Bryce claims. (click to enlarge)

"While it should strain the credulity of even the most entrenched climate change denier that a single wind turbine would impact more than 100 football fields worth of land, at least the "Energy Sprawl" study makes clear that only 2-5% of the area is cleared for access roads and a buffer around each turbine. Bryce makes it sound like they're referring to the actual footprint of the turbine, which is about 1/3rd of an acre for a 2MW turbine (or about 1/300th of the land impact estimate cited by Bryce). If a fair comparison were made, wind would produce 10 to 20 times as many watts per square meter as Bryce's hypothetical natural gas well.

"But where Bryce really goes off the deep end is when he states: "Nor does wind energy substantially reduce CO2 emissions. Since the wind doesn't always blow, utilities must use gas or coal-fired generators to offset wind's unreliability. The result is minimal -- or no -- carbon dioxide reduction."

"…[I]t's true that there is not necessarily a one-to-one relationship when it comes to displacement of coal or natural gas by wind. Because of its intermittency, wind requires a certain level of "firming" with conventional or other renewable technologies like biomass and hydro to ensure there is sufficient electricity supply when wind resources are low. That's an issue that could be intelligently discussed and built into energy plans were it not for people like Bryce that use it as an opportunity to confuse the public and mislead them into believing intermittency makes wind an unreliable source of power."

U.S. CO2 will go down dramatically as its wind grows. (click to enlarge)

"More apalling, however, is Bryce's extraordinary claim that wind power results in little or no CO2 reduction. As evidence, he cites the 2007 annual environmental report from Energinet.dk, the largest operator of Denmark's electricity grids…[though Bryce] doesn't appear to have read it[:]…"CO2 emissions vary considerably from year to year, depending on electricity trading. Adjusting for imports and exports resulted in an overall emissions reduction of 23% in the 1990-2007 period. The primary reason is a conversion of Danish electricity and heat generation to less CO2 intensive fuels such as natural gas, coupled with increased use of renewable energy sources"

"So what's the disconnect between Bryce's analysis and reality? As with many small European countries, Denmark's electric grid is integrated into larger grids of neighboring countries…What Bryce has done is compare 1990, a year when Denmark imported a huge proportion of its electricity from other Scandanavian countries, with 2007, a year it was a net exporter of electricity…[The analysis] is based on the bizarre assumption that wind-generated electricity exported to Germany simply disappears from the grid, rather than viewing Denmarks's energy production in the context of a multi-nation integrated grid."

Denmark's CO2 has gone down and will continue going down as it builds more wind. (click to enlarge)

"But the point where Bryce's analysis goes from misleading (or ignorant) to downright dishonest is when he attributes Denmark's success in controlling CO2 emissions to a low population growth rate, while touting the United States' success in decreasing per capita emissions by 2.5% between 1980 and 2006. Keeping with the 1990-2008 time frame from the most recent Energinet.dk report, the US has done somewhat better than that, decreasing per-capita CO2 emissions by about 4.5%. But over that same time period, the Danes have decreased their per capita CO2 emissions by 21%.

"A final piece of distorted analysis provided by Bryce is when he states: '... Through 2017, the Danes foresee no decrease in carbon dioxide emissions from electricity generation.'"

Denmark's SO2 has gone down, too. (click to enlarge)

"On the surface, that is true, the Danes project no decrease in carbon dioxide emissions from ELECTRICITY GENERATION over the next decade, but that is because they plan to replace inefficient old oil heaters with heat pumps and transition to far more efficient electric vehicles. The net effect will be an enormous decrease in OVERALL CO2 emissions over that time period. The remarkable thing is that the projected 1.2% annual increases in electricity demand resulting mostly from transitioning to more efficient electric vehicles (10% by 2020) and heat pumps will be met entirely with renewable energy sources, primarily wind. In fact, increasing wind generation up to 20% of their electricity generation has been such a success that the Danes plan to expand their wind generation up to 36% of their electricity mix by 2020.

"On a final note, Bryce ignored the many other environmental benefits Denmark has enjoyed from its rapid transition to renewable energy sources. For instance, sulfur dioxide emissions, which decreased in the US by about 50% between 1990 and 2008, were reduced by 94% in Denmark over the same period…[S]ulfur dioxide emissions are the primary cause of acid rain which, back in the early 90s, was found to be responsible for massive reproductive failure in some species of birds nesting in Northern European forests. The benefits of these reductions for bird populations absolutely dwarfs the impacts of the small number of birds killed by wind turbines…"


OFFSHORE OIL IS SAFE UNTIL IT ISN’T
Oil spill burned in Gulf of Mexico, in hope of saving coast
Steven Mufson, April 29, 2010 (Washington Post)

Rear Adm. Mary Landry, U.S. Coast Guard: "It's premature to say this is catastrophic…I will say that this is very serious."

"The Coast Guard and BP set fire to a portion of the crude oil floating in the Gulf of Mexico on Wednesday in a bid to limit the impact of a widening slick, which federal officials said could touch shore in parts of the Louisiana delta as early as Friday evening.

"With BP unable to stop the flow of oil from a deepwater exploration well that blew up last week, attention was turning to the gulf's coastlines, where the spill could threaten wildlife, tourism and the livelihoods of fishermen…[BP] corralled the thickest areas of the oil slick inside fireproof booms, lighted it and burned it…[which] could limit damage to coastal areas…[A] burn off U.S. shores and the prospect of oil landing on the gulf coastline could become powerful symbols of the perils of offshore drilling…"

Latest reports say the spill may be five times bigger than the oil folks say. (click to enlarge)

"The crisis in the gulf is likely to get worse before it gets better. It began April 20, when an oil and gas discovery blew upward, setting the Deepwater Horizon drilling rig on fire. The rig, owned by Transocean and leased to BP, later sank, and 11 of its workers are missing and presumed dead…[O]il could be pouring out of the ground at a rate of up to 5,000 barrels per day…At that rate, this spill may already have surpassed the size of the 1969 Santa Barbara spill that helped lead to the far-reaching moratorium on oil and gas drilling off the Pacific and Atlantic coasts, a ban that Obama recently said he wants to modify…

"BP said Wednesday that it has continued to try, in vain, to use submarine robotic vehicles to activate a malfunctioning blowout-preventer at the site of the well…[F]ederal inquiries into the cause of the accident [will] have to focus on Transocean's preventer…the "failsafe mechanism of the industry"…

"…[BP is] fabricating a 100-ton steel dome the company hopes to lower over the oil leak…but it would take two to four weeks to put it in place, if that can be done at all. The dome would funnel oil, natural gas and seawater into a pipe leading to a floating processing and storage facility. The technique has been used in shallow waters around 350 feet deep…but the current spill is leaking from pipes lying 5,000 feet deep…BP will [also] begin drilling a new well to intercept the leaking one…[but] it will take weeks…"

Coming soon to Gulf Coast beaches. (click to enlarge)

"With that timetable looming, attention was turning to coastlines…Government agencies and BP have set up 100,000 feet of booms to protect sensitive coastal areas. BP has also hired a firm that specializes in rescuing birds…[A] forecast for the spill showed it touching land for the first time this weekend…BP and the Coast Guard are also using chemicals to disperse the oil, which for the most part is spread in a thin sheen…more than 150 miles long and about 30 miles wide.

"A BP official said controlled burns can get rid of 50 to 99 percent of oil within a limited area, but Robert Bea, a professor of civil and environmental engineering at the University of California at Berkeley who worked on controlling the damage of the Santa Barbara spill, warned that in open seas, companies have generally captured less than 10 percent of oil spilled."


OIL CO BUYS GEOTHERMAL
Schlumberger's Geothermal Signpost
Dave Forest, April 28, 2010 (Pierce Points Daily Newsletter via Before It’s News)

"…[Signpost events] are happenings, often small in and of themselves, which suggest a larger change rippling through the ether of a business, industry or nation.

"There have been a number of signpost events in the geothermal sector recently…[like] the emerging trend of advanced-stage geothermal projects being bought by major players in the sector such as Ormat."

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"Yesterday… came another…[with] oil-field services major Schlumberger buying out California-based GeothermEx… one of the top groups in the geothermal space doing project feasibility assessments. They have written reports on most of the major geothermal projects in the U.S. and abroad. The group will now become a wholly-owned subsidiary of Schlumberger."

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"The acquisition is an aggressive move by Schlumberger into the geothermal space. The company sees something they like…and they want to be a big part of it.

"This is just one more indication that the geothermal business is 'ready for prime time'. Profitability in the sector is increasing, in large part due to recent tax incentives introduced by the U.S. government…Increased profitability always drives an industry forward…[T]he drive is definitely on for geothermal…"

LOVE, POKER & THE ECONOMICS OF SOLAR POWER PLANT ENERGY STORAGE

The Value of Concentrating Solar Power and Thermal Energy Storage
Ramteen Sioshansi and Paul Denholm, February 2010 (National Renewable Energy Laboratory)

THE POINT
In poker, love and energy, what is apparently true usually is. But isn’t, necessarily.

Case in point: Almost anybody who knows anything about operational or planned solar power plants (SPPs) incorporating concentrating solar power (CSP) technology will likely say that one of their big advantages is the potential to capture and store heat for use in generating electricity at the plant when the sun disappears behind a cloud cover or goes down at the end of the day.

Like the assumptions that the guy isn’t calling because he’s just not that into the girl and the poker player with the biggest pile of chips is the smartest bettor at the table, hard analysis shows this intuitively apparent assumption about SPPs to be true enough. The Value of Concentrating Solar Power and Thermal Energy Storage, from Ramteen Sioshansi of Ohio State University and Paul Denholm of the National Renewable Energy Laboratory, shows that energy storage usually adds value to SPPs.

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An SPP has 3 “independent but interrelated” parts: (1) the power block (the turbine), (2) the solar field (the mirrors), and (3) the thermal storage tank (that holds the heat). Sizing each effectively is crucial to making the plant profitable.

Unlike the solar photovoltaic (PV) technology commonly seen on rooftops that turn the sun’s light into electricity, SPPs capture the sun’s heat and use it to boil water and create steam that drives turbines. This generates electricity in the same way that electricity is generated by steam-driven turbines at plants that use heat from nuclear energy or the burning of coal and natural gas to boil water and create steam - without radioactive waste, greenhouse gas emissions or toxic byproducts.

The energy captured for storage at SPPs is therefore heat energy and the storage of it is called thermal energy storage (TES). Confirming the intuitively obvious, the paper concludes that TES adds value to SPPs (1) by allowing more thermal energy from an SPP’s solar field to be used, (2) by allowing an SPP to put a larger solar field to work, and (3) by allowing SSP generation to be shifted to times of use when energy prices are higher.

The study of SPPs in four states in the U.S. Southwest looks at how TES impacts SPP operations in a variety of ways and even reports that, though it is as counter intuitive as the possibility that the guy IS just too busy to call the girl or the poker player IS just lucky, there are ways that the expense of TES in the wrong circumstances can be too much of a burden on SPP economics to pay off.

Generally speaking, the cost of SPP technologies without storage is too high to be profitable in most electricity markets but adding TES makes them profitable by allowing for the production of more energy for longer hours. On the other hand, where the price of electricity is low and the value of additional energy sales does not boost revenues adequately, the cost of TES makes the technology inequitable.

Schematic of thermal energy storager (TES) (click to enlarge)

THE DETAILS
A big part of the renewed interest in solar power plants (SPPs) that utilize concentrating solar technology (CSP) comes from breakthroughs in thermal energy storage (TES). Without storage, the economics of SPPs are more tentative.

CSP is a method of using mirrors to concentrate the heat of the sun on a focal point. At the focal point, liquid is heated. Although some SPP concepts heat water directly, the 2 SPP concepts now most widely in use pipe molten salts to the focal point and carry them away to where the heat is transferred to boil water and generate steam.

Either the steam, heated water or hot molten salts can be stored for use when there is no sun. Molten salts are more commonly used as a heat-transfer fluid (HTF) because they more efficiently carry and hold the heat.

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With TES, SPPs can (1) hold their electricity for sale at the times of highest demand and highest prices, (2) more effectively replace conventional power sources instead of just being a peak demand supplement, and (3) serve as reserves quickly brought on line at times of fluctuating demand.

An SPP has 3 “independent but interrelated” parts: (1) the power block, (2) the solar field, and (3) the thermal storage tank.

The power block is essentially the turbine of the SPP.

The input of the power block is measured in megawatts of thermal energy (MW-t) and the output of the power block is measured in megawatts of electric energy (MW-e).

The solar field is essentially the mirrors of the SPP.

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The size of the solar field determines the MW-t that goes to the power block for any given area’s amount of solar energy per measured area (insolation or solar irradiance).

The size of the solar field and the potential of the power block set the SPP’s capacity. Matching them prevents under use of the turbine or the waste of reflected heat.

TES allows an SPP to have a larger solar field because if the power block does not use the heat the field generates, it can be stored.

The size of storage can be measured in MWh-t or simply in hours of stored operational capacity. The roundtrip efficiency of the best TES technologies is 98.5%, meaning only 1.5% of stored heat is lost as it comes back from storage to boil water to generate steam to drive the turbine (power block).

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The right combination of the 3 elements hinges on pricing in the electricity markets into which the SPP is selling. Where even the peak demand price of electricity is low, there is no marginal value to incurring the capital costs of building TES. There are electricity markets where the price is so low that the 1.5% loss from storage eliminates the profit margin from adding TES to an SPP.

The marginal value of SPPs with and without TES is also significantly affected by (1) anticipated improving technology and integrating its capabilities into the grid(optimization), (2) varying availability of sun, (3) the accuracy of energy price forecasting, (4) the ability of SPPs with TES to provide more value to the grid as spinning and/or back-up reserves, and (5) the impact on SPP operastional costs of saving water through dry cooling of the power block. Assessments of all these variables are included in the paper.

The 4 SPP locations used to make cost and profit estimates: (1) Gila Bend, Arizona, (2) Daggett, California, (3) Southern New Mexico, and (4) Western Texas. These 4 locations incorporate 4 separate electricity managers: (1) the Arizona Public Service (APS) utility, (2) the California Independent System Operator (CAISO), (2) PNM Resources, the New Mexico utility, and (4) the Electric Reliability Council of Texas (ERCOT).

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The paper goes into break-even and return on investment numbers for SPPs with and without TES in a variety of scenarios at the 4 locations.

Primary variables include (1) the unknowability of energy prices and solar resources over the 25-or-more year lifetime of SPPs and (2) the unknowability of future costs and capacities of SPP and TES technology.

Variables determining the marginal value of TES for SPPs: (1) 2009 cost estimates for present costs, 2015 estimates for future costs; (2) A solar field 1.5 times the capacity of the plant’s power block becomes twice the power block’s capacity with a 6- hour TES; (3) A 110 MW-e power block leads to an estimated present cost (2009) of $156.3 million for TES and a $117.6 million future cost (2015); (4) An SPP investment tax credit (ITC) could be 30% (the current credit) or 10% (a future scenario).

The break-even cost: The maximum overnight cost of TES that is justified by the increase in year-1 operating profits of the SPP.

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The return on investment (ROI): The percentage of the annual cost of the TES component recovered by the increase in year-1 operating profits. An ROI of 100% or greater means TES pays for itself by bringing in more energy revenues.

ROI variables: the SPP site, the ITC rate, and cost of TES.

SPP operating profits can be increased by selling spinning reserves and backup reserves services to the grid. By doing so, even with a 10% ITC, an SPP with TES can provide a greater than 100% ROI in markets with a moderate or above electricity price.

The research showed that locational profit differences are mainly due to differences in energy prices in the different system operator and utility systems. Differences in solar resource and longer term dispatch decisions were also found to be less significant.

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QUOTES
- From the paper on solar power plants and storage: “For a merchant CSP developer, the decision to build and the choice of the size of a CSP plant will be governed not only by the amount of solar energy available but also by the pattern (coincidence) of solar resource and by electricity prices. Clearly, high electricity prices and an abundance of solar resource are necessary for CSP to be economic, but a lack of correlation between solar availability and electricity prices can make CSP economically unattractive. TES can improve the economics by shifting generation to higher-priced hours, but this adds capital costs and some efficiency losses in the storage cycle.”

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- From the paper on solar power plants and storage: “…Using a model that optimally dispatches CSP with TES into existing electricity markets [in the Southwestern U.S.], we examine the potential operating profits (i.e., net revenues from energy sales, not accounting for fixed capital costs) that a CSP plant can earn. We show how these profits vary as a function of plant size. We also show the sensitivity of operating profits to different assumptions, including the possibility of selling ancillary services, the optimization process used, and the use dry rather than wet cooling. We show that while the current cost of CSP technologies make them uneconomic based on energy value alone, addition of TES improves the economics of CSP. We also show that when the value of ancillary services and capacity are taken into account, TES and CSP can be economic even with current technology costs.”

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- From the paper on solar power plants and storage: “The price of large-scale CSP is still highly uncertainty because of large fluctuations in commodities prices and the potential for substantial cost reductions from engineering and manufacturing improvements. Furthermore, the overall cost competitiveness of CSP will depend on changes in fuel prices and carbon policies…[T]he value of TES above its cost can help to increase the relative cost competitiveness of the entire CSP plant…[W]hether the increased revenues from TES will justify the cost of TES will be highly sensitive to the site of the CSP plant, ITC rate, and cost of the TES, but substantial cost reductions appear to be necessary to justify the addition of TES based on energy sales alone…the return on investment of the TES components, considering the ability to provide both spinning reserves sales and capacity credit…[and] only a 10% ITC…the return on investment (ROI) is greater than 100%, meaning that the value of TES is greater than its incremental capital cost. As a result, the incremental value above the cost of TES will improve the cost competitiveness of the entire CSP plant.”

QUICK NEWS, 4-28: DOES THE GRID SNUB WIND?; GA UTILITY GOES FOR MORE SUN; BIG GEOTHERMAL BUY; DR, THE RX FOR EFFICIENCY

DOES THE GRID SNUB WIND?
Do the Rules of the Nation's Electric Grid Discriminate Against Wind Power?
Peter Behr, April 27, 2010 (NY Times)

"…[C]hanges in the way the grid works -- if they occur – hinge…on what happens at the Federal Energy Regulatory Commission, where a set of central policy issues are on the table…[FERC is investigating ] whether the grid's current operating rules discriminate unduly against wind power, and if so, what should be done about it. The inquiry focuses on possible rule changes in how wind power forecasts are handled, how backup generation for wind is priced, and whether wind generation should be coordinated more widely across grid regions to dampen the impact of sudden wind shifts…[C]omments fill 2,800 pages, and the commission has set no timetable for taking action…

"…FERC [and] Chairman Jon Wellinghoff…[see] plenty of reason for concern about the prospects for wind and solar power based on the way the grid is run today…[This is] another front in the continuing, behind-the-scenes struggle between the renewable power sector and some of the electricity industry's old guard, whose historic ways of doing business are now under challenge…[T]here are fundamental disputes within the power industry over how the grid should be planned, who should pay to expand it, and how wind and solar power's climate benefits should figure in future transmission projects' costs. What FERC's staff will propose, and what its commissioners will ultimately do, on this proceeding remains unclear."

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"The wind industry has seized on FERC's invitation in the wind inquiry to level charges of discrimination against competitors and grid operators…[T]he continued growth of wind energy is threatened on many fronts -- by low natural gas prices, a patchwork of uncertain government policies, and industry bias and favoritism against wind resources…Wind power's obvious liability is its fickle nature, which requires grid operators to keep other generation reserves operating on standby. That comes at a cost…When wind ramps steeply down after a front passes, the drop is often relatively gradual and could be dealt with by calling on backup generation that can respond in 10 to 30 minutes…This is the cheapest source of standby power…Typically, however, dispatchers make up for a drop in wind power by calling on "regulation" generation reserves that can respond in minutes -- a far more expensive option…It is unfair to saddle wind generators with those higher costs…

"…Most wind generators don't offer to supply power for the following day -- the "day ahead" market featured in many competitive wholesale markets. The reason is the risk of financial penalties if they can't deliver on scheduled deliveries because the wind dies…These rules were created to accommodate coal and gas generators…More subtle discrimination involves policy-setting industry committees…More than 600 such stakeholder meetings were held in one recent year, and smaller wind generators can't afford the time or cost of attending and voting…"

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"…FERC asked whether it should require regions of the grid that schedule an hour or more in advance to move to shorter, inter-hour scheduling, since the shorter the lead time, the easier it is to forecast wind speed -- lessening the risk of penalties…Wind generators' output can vary by large amounts over an hour, but can be relatively constant when looking five or 10 minutes ahead…[S]tudies show that backup costs for wind could be cut by 80 percent by shortening hourly scheduling intervals…

"…Wind generators and their rivals also fell out on another question FERC posed -- whether it would help expand wind generation if scores of small grid dispatch regions or "balancing areas" in the southeastern and central United States were combined into a few large regional ones…To avoid blackouts, engineers running the grid must always keep power supply matched to demand…The larger the area where dispatchers can match generation with demand, the easier it is to deal with variable wind power: If the wind is still in one area, it's apt to be blowing in another in the same region…The National Renewable Energy Laboratory reported this year that the Eastern grid interconnection could rely on wind for 20 to 30 percent of its electricity supply by 2024 with a large-scale expansion of transmission…[T]he current grid operating structure, decades in the making, is embedded with rules and practices that affect reliability, planning and markets. Changing the system won't happen quickly, or without a fight…"


GA UTILITY GOES FOR MORE SUN
Georgia Power's Green Energy Program Redesigned to Include More Solar Power
April 27, 2010 (PR Newswire)

"Georgia Power received approval…from the Georgia Public Service Commission (PSC) to modify its Green Energy program, giving customers more solar options [effective June 1].

"At the request of PSC Commission Chair Lauren "Bubba" McDonald, the program has been redesigned to include…Premium Green Energy…[an option with] 50 percent solar energy at a cost of $5 per 100-kilowatt-hour (kWh) block. The option previously cost $4.50 per 100 kWh block and contained 10 percent solar energy…[T]he Standard Green Energy, Large Volume Purchase and Special Events Purchase options remain unchanged."

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…[T]he PSC also approved Georgia Power raising the solar capacity cap under its Renewable Non Renewable (RNR) tariff from 1.5 megawatts (MW) to 2.5 MW. The company will now purchase solar energy from customers through this tariff at a new price of 17 cents per kWh."

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"Georgia Power and the Commission worked together to develop a new mechanism that will automatically raise the solar capacity cap as participation in the Green Energy program grows. Under this mechanism, for every 219 blocks of Premium Green Energy that are purchased by customers, Georgia Power will purchase an additional 100 kW of solar energy through the RNR tariff…

"Electricity generated for the Green Energy program helps grow the renewable resource base in Georgia and the Southeast and expand the market for renewable energy credits (RECs). RECs are created when a renewable energy facility generates electricity or uses renewable fuel. Customers who purchase RECs through the Green Energy program are paying for the benefit of displacing other non-renewable sources from the electric grid…"


BIG GEOTHERMAL BUY
Sacramento Municipal Utility District to Buy Geothermal-sourced Clean Power from Vulcan Power Company
27 April 2010 (Business Wire via EarthTimes)

"The Sacramento Municipal Utility District (“SMUD”) has signed a 21-year contract with Patua Project, LLC, a subsidiary of Vulcan Power Company (“Vulcan”), a developer of geothermal energy projects, for the purchase of up to 132 megawatts (MW) of baseload renewable energy from the Patua geothermal plant to be constructed in northern Nevada…

"Vulcan’s Patua geothermal energy project site, located near Fernley, Nevada, will be built in three phases and is expected to be the company’s first geothermal power plant. Phase I drilling recommenced in February 2010 and construction of a 60-MW power plant is projected to begin in January 2011. The project will produce electricity around the clock with power deliveries projected to occur as early as the first quarter of 2012, continuing through 2033…"

Schematic of geothermal power plant (click to enlarge)

"The project initially will provide 500 gigawatt hours (GWh) per year, eventually ramping up to 1,000 GWh per year. These gigawatt hours will count towards SMUD’s aggressive goal of 33 percent renewable energy by 2020. Last year, renewable energy accounted for approximately 19 percent of SMUD’s power supply and will reach 20 percent by the end of 2010…

"Geothermal energy is a renewable power source by which naturally occurring hot water reservoirs are drilled, producing geothermal fluids that can be used as a clean alternative to fossil fuels burned to generate electricity. Geothermal reservoirs are replenished by injecting the produced water back into the reservoir, establishing a long-term renewable energy resource without any emissions of greenhouse gases."


DR, THE RX FOR EFFICIENCY
Demand Response; Commercial, Industrial, and Residential Applications for Peak Demand Load Management
Jevan Fox and Clint Wheelock, 2Q 2010 (Pike Research)

"The Demand Response (DR) sector is growing quickly and will experience major changes over the next few years…The National Institute of Standards and Technology (NIST) is working to determine industry standards, and the Energy Independence and Security Act of 2007 (EISA 2007) requires both FERC and NIST to have the roadmap for demand response to be defined by June 2010.

"DR reduces the need for energy from expensive peak resources…[A]t its core, DR is a function of peak demand: as peak demand increases, the need for DR increases. There are significant environmental and social benefits from reducing energy demand, yet DR’s primary goal is to decrease capital expenditures (capex) on both sides of the meter. DR cuts costs for utilities so that they will not have to build a coal-fired peaking plant for $2,500 per kWh with a 30-year return-on-investment (ROI)…[T]he utility can implement DR at a fraction of the cost. The rising costs and longer lead times in building additional sources of traditional generation are a key driver for DR…[E]nd-users can curtail energy use, thus saving capital…"

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"Demand response is inherently an energy efficiency application. It strives to shed, curtail, or eliminate energy usage through technologies, solutions, and programs that manage customer demand for electricity in response to price signals, incentives, and directions from grid operators…The U.S. Department of Energy (DOE) segments DR into two motivating programs…Price-based DR such as real-time pricing (RTP), critical-peak pricing (CPP), and time-of use (TOU) tariffs…[an] Incentive-based DR programs are triggered by a grid reliability problem or high electricity prices…

"There are a number of significant DR market growth drivers, the most significant of which is the growing demand for electricity amidst increasing energy costs, especially during periods of peak demand…[S]mart grid technologies, mainly smart meters, are a major driver for DR and will be a catalyst for DR programs…[but] Pike Research does not believe the residential market will gain significant traction in the near term…"

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"The [commercial and industrial (C&I)] sectors are the low hanging fruit of the industry. Our analysis indicates that DR vendors with deep vertical integration will continue to secure an increasing amount of megawatts (MW) under contract…Pure-play DR companies, or Curtailment Service Providers (CSPs), are presently in a good position…[and] legislation will boost revenues for CSPs with commercial and industrial solutions, as the drive to make U.S. commercial buildings more energy efficient…

"Pike Research believes that DR will become an application within a company’s energy efficiency (EE) suite…Energy Service Companies (ESCOs) will be increasingly attracted to DR because it is an energy efficiency measure they can provide in their turnkey building efficiency plan…At its essence, demand response represents a convergence of information technology (IT) with energy management…Pike Research believes that telecommunications and networking companies will increasingly strive to have a play in the energy efficiency industry…DR revenues will grow to almost $3 billion in 2015 in our “average” scenario…"

HOW TO BE A NEW ENERGY ECONOMY POWERHOUSE

A Future of Innovation and Growth: Advancing Massachusetts' Clean-Energy Leadership
April 22, 2010 (Clean Edge)

THE POINT
Take a state, any state. What would transform that state into a New Energy economy powerhouse?

Great sun? Nevada has awesome sun but doesn’t place among the top fifteen in the rankings in Clean Edge’s A Future of Innovation and Growth. Great wind? The Dakotas and most of the Midwest didn’t make the list and Texas came in fifteenth. California is at the top of the list but Massachusetts, Oregon, Colorado and New Jersey round out the top five on a Leadership Scorecard that compared the 50 states in 56 categories from regulatory and financial incentives to knowledge capital and the available workforce.

The obvious answer is that resources are good but developing them is even better. Developing them requires the right regulations, incentives and infrastructure. The right regulations, incentives and infrastructure depend on the state's resources. The Clean Edge paper says there are, however, growth-driving principles that will apply everywhere.

The first principle: Make New Energy (NE) a high priority. The entrenched political power of the Old Energies closely protect the subsidies and incentives long provided to the traditional sources of power generation. Without a slate of compensating subsidies and incentives for New Energy, setting a new agenda is pointless. If NE gets the legislative and economic emphasis that gives it a level playing field, it can thrive.

With and without the blessings of New Energy assets, the states that Clean Edge calls the leaders have three things in common beyond simply giving New Energy high priority: (1) Strong commitments to Energy Efficiency (EE), (2) a range of policies that require and drive the growth of NE and EE, and (3) university, research and development institutions committed to innovation.

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After establishing a framework for what will effectively grow a state’s New Energy economy, Clean Edge took a detailed look at Massachusetts. It is a state with modest sun, wind mainly only off its coast and undistinguished geothermal and hydrokinetic resources. Clean Edge identified Massachusetts’ strengths and weaknesses and formulated a list of nine key actions. They were sculpted to Massachusetts' unique characteristics but will, in a more generalized way, turn any state into that New Energy economy powerhouse:

(1) Establish a center that focuses on research, development and deployment of EE and get a Department of Energy (DOE) laboratory for the state.
(2) Create aggressive NE and EE financial incentives.
(3) Establish a Green Bank-like institution to make financing of NE and EE projects more readily accessible.
(4) Create routes for NE and EE R&D to be deployed and get commercialized.
(5) Make it possible for EE improvements to be reimbursed through utility bill credits.
(6) Make EE building standards and regulations more demanding.
(7) Get the permitting of NE and EE projects done more quickly and easily.
(8) Push for a national policy to cut greenhouse gas emissions (GhGs).
(9) Design all policies to enhance the state's resource strengths.

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THE DETAILS
The Top 15 New Energy economy states in the Clean Edge ranking were California (CA), Massachusetts (MA), Oregon (OR), Colorado (CO), New Jersey (NJ), Connecticut (CT), New York (NY), Maryland (MD), Washington (WA), Minnesota (MN), Arizona (AZ), Illinois (IL), Florida (FL), Pennsylvania (PA) and Texas (TX).

Despite its relatively modest New Energy (NE) assets, Massachusetts has made itself the second-ranked state.

After making NE a high priority, the state moved quickly to build Energy Efficiency (EE). It also made a serious evaluation of its strengths and weaknesses.

Massachusetts’ strengths and assets:
(1) Led by the Massachusetts Institute of Technology (MIT) and Harvard, it has academic, R&D and innovation resources second to none.
(2) It has policies that reflect a serious commitment to EE.
(3) It has a state government and state policies that are committed to NE and EE.
(4) A rich state, it has significant capabilities to make venture funding available for worthy projects.
(5) Because NE and EE have high upfront costs, they are able to compete more quickly in states like Massachusetts where high energy demand makes marginal supplies more valuable and high energy costs make the initial NE and EE costs less significant.
(6) The state’s academic institutions give it a highly educated workforce.
(7) The highly educated workforce tends to be inclined toward NE and EE.

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Massachusetts’ Weaknesses and Barriers:
(1) The state is an expensive place to live and start a business.
(2) There are gaps between innovation and commercialization in Massachusetts.
(3) Massachusetts has limited NE assets.
(4) The tradition of local administration magnifies delays in permitting and Not-In-My-BackYard (NIMBY)-ism.
(5) The financial community is especially old, established and risk-averse.
(6) There is no national energy laboratory like Colorado’s National Renewable Energy Laboratory (NREL) or Washington’s Pacific Northwest National Laboratory (PNNL).
(7) Long a post-industrial state economy, Massachusetts lacks NE and EE manufacturing infrastructure.

Innovative NE and EE businesses spawned by Massachusetts’ strong research sector: A123 Systems (advanced electric vehicle batteries), EnerNOC (EE/demand-side management), Konarka (organic PV), Beacon Power (flywheels), and General Compression (large-scale compressed air energy storage, CAES)

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Clean Edge concluded that Massachusetts’ advantages are best suited to a focus on EE, solar and energy storage.

Its advantage in EE comes from the demand for it. The state has (1) an extreme climate, (2) high energy costs, and (3) lots of old, inefficient buildings. It therefore generates lots of megawatts in its buildings sector and can generate lots of negawatts there. State policies show that Massachusetts’ insightful leaders have already been convinced of what its smart populace will quickly see: Investment in EE pays off at the rate of $2-to-$3 dollars returned for every dollar spent.

That the state should concentrate on solar is not so obvious but it is the most abundant New Energy resource and the one most ripe for lucrative innovation. Many important solar efficiency advances have alread been pioneered by Massachusetts’ high tech sector. Moreover, it only takes sunlight, not heat, to make solar PV viable. In fact, PV is more efficient in sunny but cooler weather. Finally, the population’s quick subscription to the state’s previous solar incentives demonstrates its progressive thinkers want more solar.

Advanced energy storage is sometimes referred to as a New Energy “holy grail.” There is no doubt the sector craves a major breakthrough that will make it possible to store the abundance of the sun for when it is not shining and the power of the wind for when it is not blowing. Among the most important energy storage breakthroughs to date have been made by Massachusetts companies like A123 Systems, Boston-Power, Evercel, General Compression, Premium Power, and others that evolved from academic research into business ventures. These companies form a Silicon Valley-like innovation “cluster” for storage on which Massachusetts can build.

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More on the 9 recommendations:

(1) Establish a center that focuses on research, development and deployment of EE and get a Department of Energy (DOE) laboratory for the state: Massachusetts wants one of the three Energy Efficient Building Systems Design Energy Innovation Hubs DOE announced in December 2009 it would create as the core of a $129.7 million federal Energy Regional Innovation Cluster. Such a facility dovetails perfectly with the state’s EE and braintrust strengths.

(2) Create aggressive NE and EE financial incentives: The state already added a solar carve-out to its Renewable Electricity Standard (RES) so that a specific portion of its New Energy requirement must come from solar. This also builds on a Massachusetts strength. In addition, Massachusetts could consider a smartly designed feed-in tariff and increased tax credits.

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(3) Establish a Green Bank-like institution to make financing of NE and EE projects more readily accessible. It should be modeled on the proposed Clean Energy Deployment Administration (CEDA). Such a lending mechanism is estimated to provide 10- or 20-to-1 leverage so that $10 million of Massachusetts taxpayers’ money could bring in $100 million-to-$200 million in private sector investment.

(4) Create routes for NE and EE R&D to be deployed and get commercialized: Massachusetts has so much innovation that there is difficulty getting it into the marketplace. The state has already instituted measures to streamline the process and should consider a fulltime technology transfer position to focus entirely on NE and EE innovation deployment.

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(5) Make it possible for EE improvements to be reimbursed through utility bill credits: This would make it possible for residential and business ratepayers to afford the high upfront costs for EE improvements by essentially reverse-financing them with their utility bills.

(6) Make EE building standards and regulations more demanding: California is instituting statewide energy performance scoring (EPS) that would rate buildings as they are marketed and emphasize the value of buildings with better EE. This puts teeth in more demanding EE standards and regulations. Contractors, NE and EE installers could be certified and certified work made mandatory to increase the quality of work done.

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(7) Get the permitting of NE and EE projects done more quickly and easily: This is a particularly crucial issue for wind developers. Massachusetts has already moved forward with offshore wind regulations and has onshore wind legislation pending. Utility-scale wind projects must be given the go-ahead without a degree of scrutiny, paperwork and hoop-jumping that sends developers elsewhere.

(8) Push for a national policy to cut greenhouse gas emissions (GhGs): Massachusetts is already a player in the 10-state Regional Greenhouse Gas Initiative (RGGI) that caps its voluntary members’ GhG emissions and aims to cut their emissions 10% by 2018 through an emissions trading scheme. This kind of initiative is exciting but cannot achieve the highest levels of effectiveness until the entire country participates on a mandatory basis.

(9) Design all policies to enhance the state's strengths: There is no point fighting for policies that will do no good. For Massachusetts, it’s EE, solar PV and energy storage. For Midwestern states, it’s wind. For Southwestern states, it’s utility-scale solar power plants. For Southeastern states, it’s EE.

The Clean Edge report was prepared for the Massachusetts Clean Energy Center (MassCEC).

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QUOTES
- Authority on Massachusetts to Clean Edge, describing a significant state NE and EE advantage: “We have a lot of smart people.”

- From the Clean Edge report: “…innovation doesn't only occur in university research labs or corporate conference rooms. Governments can also innovate, especially regarding relatively new sectors like clean energy, and Massachusetts' public leaders and policymakers have done that. Governor Deval Patrick, Secretary of Energy and Environmental Affairs Ian Bowles, and Department of Energy Resources Commissioner Philip Giudice all earn generally high marks for leadership…The Global Warming Solutions Act, the Green Communities Act, and the Green Jobs Act (creating the MassCEC) lead a healthy list of leading-edge, aggressive policy initiatives. The state's leadership in the Northeast states' Regional Greenhouse Gas Initiative (RGGI), arguably the most successful cap-and-trade systems for carbon emissions in the U.S., has also been exemplary…”

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- From the Clean Edge report: “Clean energy is a highly diverse industry and no one state or region can lead in all of its sectors. The best strategy is to pick your strengths and focus policies and resources on those. Massachusetts’ three key areas of focus should be energy efficiency, solar PV including thin-film, and advanced batteries/energy storage. Although the state should seek to attract and retain manufacturing where possible, it should mainly focus on extending its leadership as a hub of research breakthroughs and innovation excellence in clean-energy technologies and business models. This globally influential, innovation-centric approach will continue to create high-level scientific, technical, and business management jobs, as well as thousands of green collar jobs in installing, operating, and maintaining these technologies.”