TODAY’S STUDY, 9-30: THE INCREDIBLE VALUE OF WIND OFF THE EAST COAST

Untapped Wealth: Offshore Wind Can Deliver Cleaner, More Affordable Energy and More Jobs Than Offshore Oil
Simon Mahan, Isaac Pearlman. Jacqueline Savitz, September 2010 (Oceana)

Executive Summary

Interest in offshore drilling—and the public’s perspective on it—has ebbed and flooded like the tides over the years. In 2008, with long-standing moratoria on new offshore drilling in place, public and political interest seemed at an all-time low. High gasoline prices later that year led to a public demand to “drill, baby, drill”, and those long-term protections were ended in the fervor of heated elections. Oil fever seemed to persist until April, 2010, when the tides turned again, following what has become known as the worst environmental disaster in U.S. history. In the wake of the Deepwater drilling disaster and its images of oiled beaches and struggling Gulf of Mexico wildlife, public opinion has returned to a stronger-than-over opposition to offshore drilling.

It is past time for a close examination of the role our offshore areas play in providing us with the energy we need. Do we continue to expand offshore drilling, in spite of its now-undeniable risks, or are there better options?

This report looks closely at that question, especially as it pertains to the Atlantic Coast. The moratoria that once protected this coast no longer do so, and President Obama has spotlighted the Mid and South Atlantic for oil and gas exploration. Our analysis shows clearly that focusing our investments on clean energy—specifically offshore wind energy—would be more cost effective, more beneficial in job creation, and better for the environment in a variety of ways than offshore oil exploration and development.

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Findings

Offshore Wind Potential

- A small fraction of U.S. renewable energy resources1 is enough to power the country several times over. This could be done in a cost-effective way that minimizes carbon dioxide emissions which drive climate change and threaten our oceans.

- A modest investment in offshore wind could supply almost half the current electricity generation on the East Coast.

- Delaware, Massachusetts and North Carolina could generate enough electricity from offshore wind to equal current electricity generation, entirely eliminating the need for fossil fuel based electric generation.

- New Jersey, Virginia and South Carolina could supply 92%, 83% and 64% of their current electricity generation with offshore wind, respectively. In all these states, wind could provide more energy than the states currently get from fossil fuels.

- Offshore wind power offers more environmental benefits and fewer impacts than traditional fuels such as nuclear power, natural gas, coal and oil.

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Offshore Wind vs. OffshOre Oil

For the East Coast, we found that offshore wind would provide much greater potential than offshore oil and gas combined. This includes potential to power home heating, power generation or transportation.

Based on conservative assumptions for offshore wind and generous assumptions for offshore oil and natural gas, this study found that by investing in offshore wind on the East Coast, rather than offshore oil and gas, Americans would get more energy for less money. We show in this report that offshore wind can generate at least 127 GW of power conservatively. This would equal current electricity generation in states where it is located, almost as much as is generated using fossil fuels in those states. The assumptions and methodology are described in the Oceana Technical Notes.

- On the Atlantic Coast, offshore wind could generate about 30 percent more electricity than could be generated by the technically available offshore oil and gas.

- The Atlantic Coast’s offshore wind energy potential could generate enough electricity to heat more homes than exist in that region. In fact, the Atlantic Coast’s offshore wind potential is so great, that it could supply enough electricity to heat every home in the country, and then some.

- Offshore wind from the Atlantic could power nearly twice as many vehicles as new offshore oil and gas from the same area. The Atlantic Coast’s offshore wind energy potential is so great that it could power more cars than exist in the region. More than 112.5 million electric cars could be powered by wind, which is about half of all the cars and trucks on the road in the entire country. Accelerating both the wind transition and vehicle electrification now could allow vehicles to begin to use the offshore wind power as soon as it becomes available on the grid.

- On the Atlantic Coast alone, the United States could install at least 127 gigawatts of wind power, an amount roughly equivalent to European projections for that continent by 2030.

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- Developing 127 gigawatts offshore wind energy capacity over 20 years would provide energy at a cost of about $36 billion less than the production of economically recoverable new offshore oil and natural gas.

- Clean energy production creates three times more jobs per dollar invested than fossil fuel production.

- Offshore wind development off the Atlantic coast could create between 133,000 and 212,000 jobs annually in the United States – more than three times as many jobs than new offshore oil and natural gas development is expected to create.

- In the South Atlantic, offshore wind could heat more homes than offshore oil and natural gas resources combined for less than half of the price. Electricity from offshore wind could displace an amount equivalent to the electricity generated by 100% of the oil and nearly 75% of the natural gas in the South Atlantic states.

- In the Mid-Atlantic, offshore wind could provide an amount of electricity equivalent to the electricity generated by all fossil fuels used in that region. Wind from offshore could heat about seven times more homes, produce three times more power, or power four times more cars as the new offshore oil and gas resources combined.

- In the North-Atlantic, offshore wind could provide an amount of electricity equivalent to the electricity generated by oil and natural gas as well as some of coal powered generation. The wind from offshore could heat four times more homes than offshore oil and gas resources combined. Offshore wind energy in the North Atlantic could power more cars or generate more electricity than new offshore oil and gas resources combined.

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Based on MMS estimates of undiscovered, economically recoverable oil and gas resource at $110/barrel, $11.74/mcf, and DOE estimates for offshore wind costs ranging from 10.6 – 13.1 ¢/kWh. Heating based on DOE data for average homes and primary space heating fuels.

Electrifying based on 10,810 BTU per kWh from oil and gas and 11,020 kWh consumed per home annually. Car estimates based on 31.5 MPG gasoline, 121.5 cubic feet natural gas per gallon equivalent, 2.9 miles per kilowatt hour and 12,000 miles driven annually per car. See Oceana Technical Notes for methodology.

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Offshore Wind – Doing the Work of Oil and Natural Gas Better, for Less

General Findings

- Offshore wind power is located near population centers where electricity demand is highest. Coastal states account for more than three-quarters of U.S. electricity consumption. Other renewable energy is further from these high-demand areas.

- Offshore wind power is less expensive than many alternatives. In some cases, offshore wind could actually lower electric bills.

- Offshore wind creates more jobs than offshore drilling. Long-term jobs would be created to support offshore wind development for skilled workers and scientists, including electricians, meteorologists, welders, and turbine operators just to name a few.

- Offshore wind technology can help build the U.S. economy. While the U.S. has not yet installed any offshore wind farms, Europe has been doing so for 20 years and has become the leading supplier of offshore wind turbines. Building our own domestic manufacturing base would strengthen our economy, allow U.S. expenditures to remain here at home, and allow the U.S. to become an offshore wind technology exporter.

- Offshore wind projects should be designed to minimize environmental impacts by using new techniques and technology in the construction, operation and decommissioning process, and by protecting the environment in the siting process.

- Choosing wind instead of oil and gas, rather than taking an “all-of-the-above” approach, will increase efficiency and lower costs for power production overall.

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State By State Highlights

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Delaware
Delaware could generate more electricity from offshore wind energy than the state currently generates from all other sources. Offshore wind from the state’s waters could power approximately 937,000 average homes annually. At least 2.8 GW of offshore wind potential is available in Delaware waters. That’s enough energy to meet the current household energy generation of Delaware and Rhode Island combined with an energy surplus. While there is an initial investment cost for installation of offshore wind farms, eliminating fossil fuel consumption for electricity generation in Delaware would save the state $274 million annually on fuel costs.

Massachusetts
Massachusetts has the third highest electricity rates on the East Coast. The state could generate more electricity from offshore wind power than its total current power generation. Massachusetts’ coastline would allow for the development of 13.8 gigawatts of offshore wind power. This offshore wind power could generate at least 130 percent of Massachusetts’ current electricity generation, powering approximately 5 million average homes annually. With approximately 2.5 million homes, offshore wind power would be enough to supply Massachusetts with double the amount of energy needed to power all of its households. The offshore wind potential off the coast of Massachusetts could eliminate fossil fuel consumption for electricity generation in the state. While there is an initial investment cost for installation of offshore wind farms, eliminating the use of fossil fuel consumption would save about $2.1 billion annually on fuel costs. In addition, offshore wind could displace about 77 million metric tons of carbon dioxide.

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North Carolina
North Carolina ranks first on the East Coast for offshore wind energy potential with at least 38 GW of potential offshore wind energy waiting to be developed. The federal waters off the state’s coast represent nearly 22 percent of the East Coast’s offshore wind generating capacity, and could supply nearly 12.7 million homes with clean, offshore wind power—or all the homes in North Carolina, South Carolina, Georgia and Virginia combined. Offshore wind power off North Carolina waters could generate more electricity than is currently generated in the entire state from all fuels combined. By investing in this resource the state could move away from coal, oil and natural gas altogether and save $2.6 billion annually on fuel costs.

New Jersey
New Jersey has the third best offshore wind resource on the East Coast based on total energy potential with at least 16 GW of wind energy. The state could generate 92 percent of its electricity from offshore wind—which would eliminate its fossil fuel consumption for electricity generation. In addition, offshore wind would create enough energy to power approximately 5.3 million average homes annually, almost twice the number of households currently in the state, and could displace about 81.4 million metric tons of carbon dioxide.

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Virginia
Offshore wind from Virginia’s coast could generate enough electricity to eliminate the need for all of the state’s fossil fuel power plants. Virginia’s 16 GW could generate at least 83 percent of the state’s current electricity generation, enough to power approximately 5.5 million average homes annually, almost twice the number of households currently in the state.

South Carolina
South Carolina ranks second on the East Coast for offshore wind potential. Enough electricity could be generated by offshore wind off South Carolina to eliminate all of its fossil fuel power plants. South Carolina’s coastline would allow for the development of 19.2 gigawatts of offshore wind power, approximately 64 percent of the state’s current electricity generation, and enough to power about 5.9 million average homes annually—five times the number of households currently in the state. In addition, offshore wind could displace about 46.9 million metric tons of carbon dioxide.

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Rhode Island
Rhode Island has the fourth highest electricity rates on the East Coast and the state gets 97 percent of its electricity from natural gas. Even the small amount of area available for offshore wind development could supply 700 megawatts of power, at least 38 percent of Rhode Island’s electricity, and enough to power approximately253,000 average homes annually. With a about 400,000 households as of 2000, offshore wind energy could provide enough power to supply at least half of Rhode Island homes. In addition, offshore wind power could displace about 1.1 million metric tons of carbon dioxide.

Maryland
Maryland could generate more than a third of its electricity from offshore wind power. This would be enough to eliminate the use of oil and natural gas for power generation in the state. Maryland’s coastline would allow for the development of 4.7 awatts of offshore wind power. This offshore wind power could generate at least 36 percent of Maryland’s current electricity generation, enough to meet the electricity generation of all the homes in the state. In addition, offshore wind power would displace about 23.7 million metric tons of carbon dioxide.

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Florida
Offshore wind power could supply more than 10 GW, or enough energy to more than replace petroleum use in Florida’s electric industry. Florida spends nearly $1.5 billion annually on oil for electricity generation, and consumes more oil for electricity generation than any other state in the country. Florida’s Atlantic coastline would allow for the development of at least 10.3 gigawatts of offshore wind energy, enough to power approximately 3.1 million average homes annually, about half the number of homes in the state. In addition, offshore wind power could replace about 24.7 million metric tons of carbon dioxide.

New York
In New York, more than $658 million is spent annually on petroleum for electricity generation—the second highest amount on the East Coast. Offshore wind could more than eliminate New York’s petroleum-based electricity generation. New York’s coastline would allow for the development of 4.7 gigawatts of offshore wind power in economically recoverable areas of the Atlantic Ocean. This offshore wind power could generate at least 12 percent of New York’s current electricity generation, displace about 23.6 million metric tons of carbon dioxide and power approximately 1.5 million average homes annually.

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Recommendations

Offshore oil and gas drilling poses major risks to diverse economies, such as fishing and tourism, as well as to marine ecosystems, and it does so in exchange for few benefits. While the risks of spills are tremendous as we have seen in the Gulf of Mexico, the benefits of offshore oil and gas are small in comparison to lower risk alternatives such as offshore wind. Investing in offshore wind is therefore a more truly cost-effective approach to generating energy from the oceans. Since developing “all of the above” only increases the costs and delivery times for both wind and oil and gas, we recommend that the United States begin the transition away from offshore fossil fuel development by taking the following steps:

- Eliminate federal subsidies for fossil fuels and redirect these funds to renewable energies and energy efficiency programs.

- Stop all new offshore oil and gas drilling to prevent future spills and minimize competition for resources and expertise that will slow the development of offshore wind energy.

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- Require leasing of installation vessels for offshore wind turbine construction be given priority so that it is not impeded by offshore oil and natural gas development.

Renewable energy projects and manufacturers are more likely to proceed if there are consistent, predictable signals from governments and private markets to stimulate investments. Over the past several decades, onshore wind energy in the United States has periodically had access to tax benefits. Unfortunately, these have been short-term commitments, renewed annually, which provide inadequate assurance to those considering long-term investments. When these renewals end, the industry will likely constrict. As a result, fewer planned projects have been completed than what might otherwise occur with a more consistent signal from the government.3 This boom-and-bust, year-to-year uncertainty harms the onshore wind industry and must not be allowed to extend offshore.

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In order to create a consistent and predictable environment for offshore wind
energy, the United States must:

- Increase and make permanent the tax credit for investment in advanced energy property outlined in the American Recovery and Reinvestment Tax Act of 2009. This legislation extends the 30 percent credit for investment in qualified property used in a qualified advanced energy manufacturing project, but ends in 2012.4 In addition, these tax credits should be extended to manufacturers of offshore wind turbine components and turbine installation vessels.

- Increase and make permanent the Innovative Technology Loan Guarantee Program for opening, expanding or modernizing facilities to manufacture offshore wind turbine components and extend this program to turbine installation vessel manufacturing.

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- Use policy mechanisms that increase the long-term demand for and supply of renewable energies, such as a robust Renewable Electricity Standard or Feed-in Tariffs, Production and Investment Tax Credits, Loan Guarantee programs for renewable energy projects and technology manufacturers and training programs.

- Accelerate the electrification of the transportation fleet through incentives to automobile manufacturers and purchasers and by building the needed infrastructure such as charging stations to allow maximal use of this new technology.

QUICK NEWS, 9-30: SMALL SUN CAN BE BIG; TEXAS OIL PRAISES EV, DISSES RES; MONEY INTO THE OCEANS; THE HOPE OF STORAGE

SMALL SUN CAN BE BIG
DOE: Big Utilities Can Get Reliable Power from Small Solar PV Arrays
Sara Stroud, September 28, 2010 (SolveClimate via Reuters)

"Massive utility-scale solar projects under development in the deserts of California and the Southwest have been in the spotlight in recent months as they win slow approval from state and federal regulators. But a study released in September by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory found that smaller solar photovoltaic (PV) installations may collectively offer similar promise for increasing the amount of renewable power on the grid.

"Traditionally, the reliability of small PV systems’ power output has been a concern for utilities, project developers and grid operators, since all it takes is a few clouds to disrupt the power flow of a small array. But [ Implications of Wide-Area Geographic Diversity for Short-Term Variability of Solar Power by Andrew Mills and Ryan Wiser] suggests that when PV plant arrays are spread out over a geographic area, the variability in power output is largely eliminated…This means that for utilities, the distributed generation of small PV arrays could mean increased efficiency, reduced costs and a quicker path to a cleaner energy portfolio."

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"…The power output of a PV plant can fluctuate more than 70 percent in less than 10 minutes on a partly cloudy day, according to the report. That makes it difficult for grid operators to maintain a balance between power generation and demands…Following the model set by wind energy…the LBL study looked at synchronized solar data from 23 sites in Oklahoma and Kansas located between 20 kilometers and 440 km apart. It found that variability of solar output [for sites 20 km apart] was six times less than that of a single site…[and at] sites that were 50 km apart, the variability of solar was virtually identical to that of wind over time scales of five minutes to 15 minutes…"

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"The report’s findings could also have implications for the cost of managing the integration of more solar power into utility grids by lessening the need for energy storage…Geographic diversity reduces [variability and] costs of generation…For utilities, especially those that are required to meet state renewable portfolio standards, figuring out how to integrate renewable power into the grid…and understanding how siting projects will affect output is critical…

"In California, where utilities are required to get 33 percent of their power from renewables by 2020, a lot of PV growth has come from utility programs…While many of those are large-scale centralized projects, two of the state’s biggest utilities have launched widespread distributed generation initiatives that are expected to produce more than 1,000 megawatts (MW) through rooftop and ground-mounted PV arrays…[I]n early 2010 the New York Power Authority launched an initiative to deploy 100 MW worth of rooftop and ground-mounted solar installations across the state…"


TEXAS OIL PRAISES EV, DISSES RES
Study: Reduced CO2 Emissions Should Start With Electric Cars
Gabriel Perna, September 28, 2010 (International Business Times)

"A comprehensive study has concluded the best way to reduce U.S. oil demand and carbon emissions would be an aggressive push towards electric vehicles.

"…[Energy Market Consequences of Emerging Renewable Energy and Carbon Dioxide Abatement Policies…] from the Baker Institute Energy Forum was comprised of several academic papers on a variety of topics pertaining to reduction of carbon emissions. Among them were carbon pricing, the wind industry, global U.S. carbon and energy strategies, and renewable energy research and development…"

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"Among the studies there were none that addressed electric cars specifically; what the researchers did was look at the greatest carbon reductions and try different methods of getting there. Electric cars were found to be the most effective way to reduce carbon emissions in the shortest time. The study found if there were a mandate requiring 30 percent of all vehicles to be electric by 2050, it would reduce U.S. oil use by 2.5 million barrels a day.

"This would be in addition to the three million barrels-per-day savings already expected from new corporate standards for average fuel efficiency. The switch to using that many electric cars would cut emissions seven percent, while the proposed renewable portfolio standard for other kinds of energy use would only cut it by four percent…"

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"…James Coan…[of the Baker Institute said researchers] are eager to see whether the Chevrolet Volt and Nissan Leaf, two newer electric cars on the market, sell well. There are two factors holding back widespread adoption of electric cars: cost of ownserhip and infrastructure.

"…Coan said if manufacturers can figure out a way to design the electric car with lower costs then it should become more attractive to consumers. He said regulatory policies that favor electric vehicles from the Environmental Protection Agency and the National Highway Traffic Safety Administration will also help…"


MONEY INTO THE OCEANS
Marine renewable energy research gets $1.5M in funding
Beth Perdue, September n24, 2010 (New England Business Bulletin)

"…[Massachusett’s] Marine Renewable Energy Center [MREC] has received $1.5 million in federal funding to continue its research into wind, tidal and wave energy sources. The grants, from the Bureau of Ocean Energy Management, include $750,000 for annual operations and $750,000 for studying advanced techniques for assessing offshore wind and hydrokinetic energy.

"The research project, a combined effort of four universities and the Woods Hole Oceanographic Institute [WHOI], has identified a new test site for wave and wind research in addition to an already targeted tidal test site…[T]he National Offshore Renewable Energy Innovation Zone, the new site is located about 30 miles south of Muskeget Channel…"

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"MREC partners, in addition to WHOI, are UMass Dartmouth, UMass Amherst, the University of Hawaii and the University of Washington. Dr. Eugene Terray, from WHOI, is the project's technical leader.

"MREC is also working to create new training programs for repairing offshore wind turbines, learning from its European counterparts the importance of this position…Although some turbine manufacturing companies already train technicians, working on offshore wind farms [several hundred feet in the air over open ocean] has special requirements…"

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"…MREC is working with the state, community colleges, Massachusetts Maritme Academy, and the Greater New Bedford Workforce Investment Board to create training programs [for work that could be an employment alternative for out-of-work fishermen]…[but has not yet obtained] funding for developing coursework…

"…MREC recently moved its headquarters from the Advanced Technology Manufacturing Center in Fall River to the Quest Center in New Bedford…New Bedford's geographic location and port capabilities…[make it a] logical place for deployment of offshore wind industry products and services such as those related to the Cape Wind project…[T]he economic impact on the city could be significant…Bremerhaven [on the German coast] is a city of similar size and background to New Bedford that, once it became the deployment site for German wind projects, saw its jobs grow by 700 in a three-year period…"


THE HOPE OF STORAGE
The Challenge of Storing Energy on a Large Scale
Erica Gies, September 29, 2010 (NY Times)

"Renewable energy sources like solar power and wind have been in the spotlight lately, as have ways to improve control of the power distribution system through information technology…[Now] incentives from the Energy Department, increased interest from venture capitalists and policy shifts at the state level, where utilities are regulated, are laying the groundwork for bringing energy storage capability to the electricity grid… [G]rid-scale storage technologies…include pumped hydroelectric energy; air compression systems; flywheels; and even superlarge batteries…

"Grid operators must keep power flowing reliably to users, a task known as frequency regulation…[That is complicated by] solar and wind power…[which] can change output rapidly if external conditions shift: a cloud crossing the sun or a drop in the wind…Aside from these minute-to-minute changes…the sun does not shine at night, and in many places, wind is calm during the day…"

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"Utilities have generally used the more controllable output from fossil fuel power plants to compensate for intermittency. But if renewable sources are to contribute a greater share of the energy mix — California has a target of 33 percent by 2020 — the declining proportion of fossil fuel power available to smooth out the peaks and troughs of output will make storage technology essential… Recent research suggests that storage technology could respond faster to supply and demand shifts than fossil fuel plants…

"…Utilities must also build systems capable of meeting peak demand, which arises at different times of the day, week and year. For this purpose, utilities have traditionally relied on bringing additional fossil fuel generating plants into action…But fossil fuel plants run most efficiently at full power. And the marginal plants turned on to meet peak demand are often less efficient and more polluting than the power generators that run around the clock…Using stored energy to meet peak demand could eliminate the need to switch on dirtier, more expensive plants."

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"Depending on where storage is sited, it could also reduce the need for transmission lines…That would be a boon because utilities often struggle to get rights of way to build transmission lines. As a result, they usually overbuild after they get permission…Storage can also help utilities get the best price for the energy they generate, using a strategy called ‘time shifting.’ Energy managers can store lower-cost energy produced at night, then release it to the grid during peak demand when it is more valuable. With both traditional power plants and wind farms, much more energy is produced at night than can be used…

"The Energy Department is supporting a variety of storage projects…The venture capital world has taken note…The most common technology already in use for grid storage is pumped storage hydroelectricity, in which managers use electricity to pump water up into higher elevation reservoirs at night, then release it at times of peak demand…Another large storage option is compressed air…Electricity is used to force air under pressure into a cavern. To extract it, operators heat the compressed air with natural gas, then push it through turbines to generate electricity…Flywheel systems use electricity to drive a motor, which accelerates a massive disc, storing electricity in the increased momentum. When the stored power is needed, the flywheel is used to drive the motor in reverse…Batteries have not yet reached grid scale for the most part…Many experts think batteries hold the most promise because they are scalable and can be used anywhere…"

TODAY’S STUDY, 9-29: EU SUN AIMS HIGHER

Photovoltaic Observatory – Policy Recommendations
1 September 2010 (European Photovoltaic Industry Association)

Observing PV policies in Europe
Climate Change and the perspective of fossil fuel scarcity have strengthened the need for strongly promoting renewable energies. The deployment of solar photovoltaic electricity (PV) is crucial to help the EU meet its commitment to fight Climate Change and ensure security of supply, reducing Europe’s dependency on energy imports. To help tackle these important issues, the European Photovoltaic Industry Association (EPIA) advocates sustainable policies in order to keep the PV industry and market on a sustainable yet accelerated growth path.

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In the context of the fast evolution of the European PV market over recent years, the need for a permanent monitoring of market dynamics has led to the creation of the Photovoltaic Observatory. Based on the analysis of existing policies in several key countries, Photovoltaic Observatory identifies recommended conditions for market development and best practices for the sustainable development of PV. The Photovoltaic Observatory also focuses on relevant regulatory issues: financial incentives, administrative barriers and grid connection procedures.

The methodology of the PV Observatory consists of a systematic study of regulatory frameworks in European countries and their impact on market development.

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Administrative barriers analysis refers partly to the PV LEGAL project (www.pvlegal.eu) while financial schemes are analysed using, among other indicators, the Internal Rate of Return (IRR) methodology. The price evolution is also assessed in the report.

This complete analysis of the market conditions is realised, according to three main areas:

• Financial competitiveness of PV: analysis of the financial support schemes and their sustainability

• Easiness of the administrative process to install a PV system: analysis of the administrative framework

• Easiness to connect the PV system to the grid: analysis of the grid connection process More detailed information and analysis can be derived within the Photovoltaic Observatory dashboard per country. Updates are conducted on a regular basis to ensure the utmost reliability of the findings and recommendations.

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1 Implementing sustainable support mechanisms

The optimal design of support schemes is the key market driver for sustainable development.

Key Recommendation 1: Use Feed-in Tariffs
Solar electricity is bought by utilities for each kWh generated by PV systems. This scheme is called Feed-in Tariff (FiT). This uses money coming from the electricity bill of all electricity consumers, without any impact on government expenses. For many years, FiTs have proven their ability to develop the market world-wide, ensuring long-term predictability of investments. Tariffs must be guaranteed for at least 15 or 20 years, without any possibility of retroactively reducing the amounts already granted.

Key Recommendation 2: Assess the PV investment profitability on a regular basis and adapt FiT levels accordingly Sustainable market growth allows local industry players to develop and creates added value for the whole community. To ensure sustainable development, profitability must be closely managed and maintained on a par with other investments with equivalent risk levels. The figure to the right illustrates market developments under different support strategies. The green line represents a sustainable market growth. The red line shows a rapid and uncontrolled market peak, followed by a collapse due to sudden policy adjustment, while the blue line illustrates a stagnating market due to an incentive deemed insufficient.

Assessing the profitability through IRR calculations
All support scheme components (including FiT, tax rebates and investment subsidies) must be taken into account when calculating the Internal Rate of Return (IRR) of a PV investment. Its sustainability must be assessed considering all local factors that impact the relative profitability of a PV investment. Table 1 presents an estimate of average sustainable IRR levels in a standard European country.

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Key Recommendation 3: Control the market with the upgraded corridor concept
An uncontrolled market evolution tends to create “stop-and-go” policies that lower stakeholders’ confidence in PV. In that respect, it becomes necessary to foresee market condition changes and adapt FiT in order to ensure a sustainable growth path. The market corridor regulates the FiT based on market development over the previous period, thus allowing FiTs to be adapted so as to maintain growth within predefined boundaries. The FiT level is increased or decreased on a regular basis in relation to the cumulated market level over a period passing below or above a set of predefined thresholds (quarterly or bi-annually updates). In such a scenario, the changes to FiT must be well adapted to generate market response. The periodicity of review should be adjusted to follow closely the evolution of market prices while remaining compatible with investment cycles.

Key Recommendation 4: Refine FiT policies to control additional parameters
With the growing penetration of PV in many countries, support policies can be fine-tuned to control additional parameters and promote specific technologies. Direct consumption premiums, incentives for Building Integrated PV (BIPV), regional FiT variations, orientation premiums (East or West-oriented PV systems) and storage premiums are all examples of possible additional provisions.

Key Recommendation 5: Draw a national roadmap to grid parity
With the ongoing decrease in installed PV system costs and the increase in conventional electricity prices, the use of financial incentives will progressively be phased out, as competitiveness is reached. A realistic roadmap to grid parity (when photovoltaic generation costs are in competition with retail electricity prices) must be defined for every country in order to prepare the transition to full PV competitiveness.

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2 Streamlining administrative procedures

Although many countries have implemented support policies favourable to PV, when it comes to realising PV projects, bureaucratic issues and highly complex procedures and requirements (such as notification, registration or permitting) tend to significantly hold back installation processes. As a result, the cost of projects is kept artificially high, hampering PV market development or requiring unnecessarily high levels of FiT to compensate.

In order to assess the situation in a specific country and facilitate comparisons with identified best practices, EPIA, as partner of the PV LEGAL project, has participated to the collection of information on administrative frameworks by National PV associations, and system developers.

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Key Recommendation 1: Assess the administrative process
In order to identify the major obstacles to success in the legal-administrative process, a series of key characteristics need
to be thoroughly assessed:

• Transparency: the process must be clear and understandable; the information necessary to complete each step must be available, complete and exhaustive

• Linearity: when multiple institutions must be contacted, it is essential that each institution’s approval does not depend on the decision of the following one

• Simplicity: the number of institutions required in the process must be justifiable and reduced to a minimum; redundancies must be avoided

• Proportionality: the procedure must be proportionate, and suited to the specificities of each market segment

• Cost effectiveness: the total cost of the administrative process must not represent a consistent share of the entire cost of the project

• Reasonable duration: the time necessary to complete the whole process must not exceed a few weeks, particularly in the case of small and medium rooftop installations

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In this respect, the PV LEGAL database represents an important source of information on the legal-administrative procedures required in 12 European countries. The database illustrates the administrative procedures and also quantifies the impact of administrative barriers in terms of time and cost. For more information: www.pvlegal.eu

Key Recommendation 2: Establish a “one stop-shop” process
A long administrative delay, compiled with the need to contact multiple agencies or government bodies, increases the lead time as well as the global cost of the project. The implementation of a simplified process is required, with one single step to be completed by the project developer. All authorisations, certifications and licensing applications must be assessed anddelivered through this “one stop-shop” concept.

Key Recommendation 3: Reduce administrative lead times to a few weeks
The reduction of the lead times must be a priority, especially for small-scale systems. Any delay in the authorisation process results in a loss of profitability for the investor, reduces return and therefore the attractiveness of the project. In the absence of any form of action from the body responsible for a given installation project, within a reasonable time limit to be established, approval should be automatically given for small systems.

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Key Recommendation 4: Accompany the administrative simplification by an FiT adjustment Once the administrative process has been simplified, FiT should be adapted to take into account the cost reduction related to such a simplification. If this is not done, the overall profitability of PV projects could grow above sustainable levels.

3 Guaranteeing efficient grid connection processes

The grid connection process is often the most severe roadblock in completing a PV project, able to thus delay the project and dramatically increase its overall cost. Moreover the confidence of the investor lies in the guarantee that the electricity produced will be sold and transported; The PV Observatory provides an analysis of grid access, transmission and distribution of the electricity produced as well as some legal constraints related to the connection.

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Key Recommendation 1: Assess the grid connection process
In order to identify the major points of blockage in the grid connection process, the following elements need to be analysed:

• Transparency: transparency of the connection process is essential for developers to ensure they will be able to connect to the grid at an already known connection point and at a clear and predictable cost (connection fees)

• Information: comprehensive and necessary information must be available for new connection requests

• Appropriateness: the installation of small decentralised systems should simply require a notification to the Distribution System Operator (DSO)

• Lead time: Reasonable time to connection must be guaranteed and respected by either the DSO or the Transport System Operator (TSO)

• Cost sharing: Connection costs must be properly shared between the PV system operator and the DSO/TSO. This can be combined with network usage fees in order to provide both parties with incentives to make an efficient use of the electrical grid

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Key Recommendation 2: Reduce grid connection lead times to a few weeks
The reduction of lead times must become a priority, especially for small-scale systems. Any delay in the authorisation process results in a loss of profitability for the investor, reduces return and therefore the attractiveness of the project attractiveness. Electricians preferably accredited must be able to connect small-scale systems to the grid with only a notification to the Distribution System Operator (DSO).

Key Recommendation 3: Guarantee distribution and transmission of PV electricity
Once the connection permit has been granted, the transport and the distribution of the electricity produced by PV systems must remain guaranteed during the entire lifetime of the installation.

Key Recommendation 4: Ensure priority access to the grid
The obligation for utilities to buy PV electricity at a predefined price (FiT) must be guaranteed. This must remain valid until the end of the grant period. After this period, the market price must apply automatically.

Key Recommendation 5: Deliver grid connection permits to reliable project developers Policy announcements can be followed by a flood of grid connection requests, in such a way that virtually all existing capacity could be exhausted. To avoid such a situation, permits must only be delivered to reliable investors. To counteract speculation, the validity of permits must be limited in time, resale of the permits to a third party must be prohibited, and large project developers can be asked for guarantees to ensure they live up to their commitment.

Key Recommendation 6: Ensure the financing of network operators
The benefits that PV brings to electricity networks, especially at the distribution level, come at a cost, meaning that necessary investments must accompany the development of PV and its smooth integration on electricity networks. The lack of available financing for DSOs or TSOs can block the network capacity enhancement. Therefore EPIA recommends ensuring that operators be funded to fulfill necessary maintenance and upgrade tasks on the electricity grid.

QUICK NEWS, 9-29: PRES WANTS 2011 ENERGY BILL; THE POWER OF EASTERN WIND; IT AND THE EV; COAL WAR HEATS UP

PRES WANTS 2011 ENERGY BILL
Obama's climate push for 2011
Juliet Eilperin, September 28, 2010 (Washington Post)

"President Obama hasn't given up on climate and energy legislation altogether, according to a new Rolling Stone interview…with the magazine's editor, Jann Wenner…Obama said he would make passage of ‘an energy policy that begins to address all facets of our over-reliance on fossil fuels’ one of his ‘top priorities’ for 2011…"

[President Obama:] "We may end up having to do it in chunks, as opposed to some sort of comprehensive omnibus legislation. But we're going to stay on this because it is good for our economy, it's good for our national security, and, ultimately, it's good for our environment…We've not made as much progress as I wanted…It is very hard to make progress on these issues in the midst of a huge economic crisis."

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"While Obama has identified reducing greenhouse gases and promoting renewable energy as among his top priorities in the past, the administration failed to make a major push in the Senate on legislation after the House passed a comprehensive bill…The House bill passed on a largely party-line vote, and its backers in the Senate failed to win over any GOP support for a cap on carbon…Wenner asked Obama if he would launch a lobbying campaign similar to the one on behalf of health care last year…"

[President Obama:] "…Not only can I foresee [a similar lobbying campaign], but I am committed to making sure that we get an energy policy that makes sense for the country and that helps us grow at the same time as it deals with climate change in a serious way."


THE POWER OF EASTERN WIND
Study finds huge wind energy potential off Eastern U.S.
Scott Malone (w/Matthew Lewis), September 28, 2010 (Reuters)

"The densely populated U.S. East Coast could meet close to half its current electric demand by relying on offshore wind turbines…North Carolina, South Carolina, New Jersey and Virginia offer the most potential for easily captured wind energy, according to [Untapped Wealth: Offshore Wind Can Deliver…], which estimates that the 13 coastal states could together generate 127 gigawatts of power.

"That represents the potential for far more wind power than the United States currently generates… At the end of 2009, the nation's land-based turbines…[produced] some 35,000 megawatts of power -- enough to meet the needs of 28 million typical American homes."

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"Investment in new wind turbines has surged in recent years…However, all the U.S. wind farms built so far are on land. Advocates of offshore wind installations, led by backers of the Cape Wind facility proposed off the Cape Cod beach area in Massachusetts, have been working for almost a decade to try to win approval to build [the nation's first offshore wind farm]…Opponents of Cape Wind argue that it could harm fisheries as well as sully views. [Developers are also working on projects off Rhode Island, Delaware and New Jersey]…

"Oceana argues that wind offers an attractive alternative to offshore oil and natural gas drilling, particularly in the wake of the April BP Plc rig explosion, which led to an undersea leak that poured oil and gas into the Gulf of Mexico for 153 days…Oceana [also] argued the electricity generated by wind off the East Coast would save $36 billion in energy costs over a 20-year period and create 133,000 to 212,000 installation and maintenance jobs a year…"

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"Hitting the 127 gigawatt number could mean installing 30,000 to 50,000 of the spinning turbines along the U.S. East Coast. That would be the equivalent of more than 200 projects the size of Cape Wind [but that estimate could well decline as turbine sizes increase from today’s 2.5 megawatts to 4 megawatts]…

"Oceana's analysis…leaves out the New England states of New Hampshire and Maine [and the West Coast], because their shorelines drop away quickly to deeper waters where it would be more difficult for developers to install turbines…"


IT AND THE EV
Electric Vehicle Information Technology Systems; Vehicle, Smart Grid, and Utility IT Systems for Data Analytics, Smart Charging Management, and Customer Information Management
John Gartner and Clint Wheelock, 3Q 2010 (Pike Research)

"…The second comeback of the electric vehicle (EV) in little more than a decade has a much greater likelihood of success and will have a transformative effect on driving habits as well as the automotive and electric power industries. Automakers are planning to produce hundreds of thousands of vehicles per year that plug in starting in 2012. By 2015, Pike Research forecasts that more than 1 million plug-in hybrid electric vehicles (PHEVs) and EVs will be sold annually around the world, and during that year, more than 3 million EVs sold to date will be plugging in to recharge their batteries.

"EVs can draw power via standard 110 V outlets, but the vast majority of charging sessions are expected to occur via electric vehicle service equipment (EVSE) that will monitor power quality and can deliver power much faster than a standard outlet when Level 2 (up to 6.7 kW) charging is utilized. Both residential and commercial EVSEs monitor power quality and contain intelligence that enables charging to be scheduled based on the time of day, grid conditions, or the cost of electricity. Investments in EVSE have begun in advance of EV sales, and are expected to be sold on a greater unit basis than the vehicles. By 2015, more than 4.7 million charge spots (residential and commercial) will be installed."

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"The majority of EVSEs will be networked and managed via IT and communications systems that aggregate power demand and enable a coordinated response to changing grid conditions…EVs will not immediately impact utilities' ability to keep up with the aggregated demand, the impact on distribution assets that deliver power to customers could be immediate in some areas…EVs are expected to be purchased in clusters around neighborhoods that have historically seen high adoption of hybrid vehicles…As thousands of EVs begin to plug in daily, peak demand at the conclusion of the work day could be increased if intelligence is not built into the charging process…

"Utilities view EV IT systems as key to maximizing the use of renewable power, such as wind energy, which is generally strongest at night when demand is low. Through a smart charging system, EVs can absorb excess renewable power, and also be used as a replacement for fossil fuel power plants for grid services…EV IT systems that enable customers to schedule charging based on price signals, allowing EV owners to reduce their cost of charging and specify the use of only renewable energy will prompt future EV sales…"

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"Investments in EV IT systems are initially focusing on collecting data and presenting it to consumers, with $125 million invested globally in 2010. By 2015, we forecast that annual investment will grow by more than tenfold as data analytics and integration with utilities' internal information systems becomes paramount. Investments in EV IT in the United States will grow to $371.9 million in 2015, representing 24.5% of the global market ($1.5 billion). The Asia-Pacific region, led by China, will be the largest market by far for EV IT…

"By 2013, utilities will begin investing in EV IT systems and services so that the aggregated load of EVs can be managed as an asset and integrated into their demand response (DR) and other energy management systems. The focus in investment will shift towards data analytics and integration applications, making up more than half of EV IT investment globally by 2015…The lack of standards today will encourage many companies to hold off on investment until interoperable products are released…The strong regulation of utilities in the United States will also slow adoption of EV IT
Systems…The understanding of the benefits of EV IT across all aspects of grid operations including load management, the use of renewable power, and being able to avoid capital investment in generation and transmission equipment, are not well known today. Greater knowledge of the lifetime value of EV IT systems including the financial benefits from reducing carbon emissions would make it easier for utilities to justify the investment…"


COAL WAR HEATS UP
Mass Arrests in DC: We Shall No Longer Be Crucified Upon the Cross of Coal
Jeff Biggers, September 27, 2010 (Huffington Post)

"Over one hundred protesters from the Appalachian coalfields were arrested in front of the White House…defiantly calling on the Obama administration to abolish mountaintop removal mining. As part of the Appalachia Rising events, the coalfield residents took part in a multi-day series of events to bring the escalating human rights, environmental and health care crisis to the nation's capitol.

"Kentuckians for the Commonwealth leaders Teri Blanton and Mickey McCoy, the first arrested in today's nonviolent act of civil disobedience, were joined by allies from around the country, including NASA climatologist James Hansen. Meanwhile, protesters led by the legendary Rev. Billy Talen staged a nearby sit-in at the office of the PNC bank, which remains one of the last major financiers of coal companies engaged in this extreme form of strip-mining in Appalachia…"

She knows why she's fighting coal. (click to enlarge)

"In a stark reminder of the national connection to the coalfields, the Obama administration officials looked on from their White House offices, as their electricity came from a coal-fired plant generated partly with coal stripmined from Appalachia.

"As a litmus test of the administration's commitment to science and the rule of law, Appalachian residents are calling on the EPA to halt any new permit on the upcoming decision over the massive Spruce mountaintop removal mine…Mountaintop removal coal only provides, in fact, less than 10 percent of all coal production."

"You shall not crucify us any longer upon a cross of coal." (click to enlarge)

"Fed up with the regulatory crisis and circumventions by outside coal companies, coalfield residents have been rising up against reckless strip-mining practices against the country, from Alaska to Alabama to Arizona…In southern Illinois, scores of black crosses were found at coal mines, strip mines, coal-fired plants, coal ash piles, and at the Southern Illinois University Coal Research Center."

"Citing Illinois as the birthplace of the coal industry, and 'ground zero in the Obama administration's plan to dangerously experiment with carbon capture and storage technologies for coal-fired plants,' a new Black Cross Alliance campaign announced plans to construct symbolic black crosses at coal mining and coal-burning landmarks in the state and across the nation to serve as a public warning [that it] is no longer acceptable for the Obama administration--and state and regional government officials---to be complicit in maintaining deadly coal mining and coal-burning communities as shameful national sacrifice areas in 2010 [and declared: You shall not crucify us any longer upon a cross of coal]…"

TODAY’S STUDY, 9-28: THE FRENCH NUCLEAR HUSTLE

Policy Challenges of Nuclear Reactor Construction: Cost Escalation and Crowding Out Alternatives; Lessons from the U.S. and France for the effort to revive the U.S. industry with loan guarantees and tax subsidies
Mark Cooper, September 2010 (Institute for Energy and the Environment/Vermont Law School)

Mark Cooper, the author of this study, is perhaps the pre-eminent academic critic of the nuclear industry. His criticism is generally based largely on the unacceptable economics of nuclear energy. (See ANOTHER NAIL IN NUCLEAR'S COFFIN) Pro-nuclear advocates repeatedly argue that France’s use of nuclear energy is a miracle of emissions-free energy generation and a model for the rest of the world. In this new paper, Cooper shows conclusively that “the French miracle” is no such thing, France’s nuclear industry only survives by massive government support and French nuclear economics are just as bad as the industry’s economics everywhere else - as described below.


EXECUTIVE SUMMARY

RESEARCH ISSUES AND APPROACH
Debate over the cost of building new nuclear reactors in the U.S. and abroad has returned to center stage in U.S. energy policy, as the effort to expand loans guarantees heats up in the wake of the failure to move climate change legislation forward. The French nuclear program is frequently given the spotlight because of its presumed success and because the state-owned French nuclear champion EDF has bought a large stake in a major U.S. utility and is seeking to build a new U.S. reactor with federal loan guarantees.

Missing from the current scene is information about the history and recent experience of French nuclear costs, detailed analyses of past U.S. costs or current cost projections, and a careful examination of the impact of the decision to promote nuclear reactor and central station construction on the development of alternatives.

This paper fills those gaps by analyzing these two major challenges of nuclear reactor construction -- cost escalation and crowding out alternatives -- with new data in multiple analytic approaches.

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FINDINGS: COST ESCALATION
The report finds that the claim that standardization, learning, or large increases in the number of reactors under construction will lower costs is not supported in the data.

 The increasing complexity of nuclear reactors and the site-specific nature of deployment make standardization difficult, so cost reductions have not been achieved and are not likely in the future. More recent, more complex technologies are more costly to construct.

 Building larger reactors to achieve economies of scale causes construction times to increase, offsetting the cost savings of larger reactors.

Comparing Pressurized Water Reactors, which are the main technologies used in both nations, we find that both the U.S. and French nuclear industries experienced severe cost escalation (see Exhibit ES-1).

 Measured in 2008 dollars, U.S. and French overnight costs were similar in the early 1970s, about $1,000 per kW. In the U.S. they escalated to the range of $3,000 to $4,000 by the mid- 1980s. The final reactors were generally in the $5,000 to $6,000 range.

 French costs increased to the range of $2,000-$3,000 in the mid-1980s and $3,000 to $5,000 in the 1990s.

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Cost projections in both nations have proven to be unreliable, particularly so in the U.S., where vendors compete to convince utilities to buy their designs. In France, the state-owned construction company builds reactors for the state-owned utility. In the U.S., as shown in Exhibit ES-2, cost projections by vendors have been lower than those of utilities, which have been lower than projections from independent analysts. In the past, the analysts’ projections have been closer to the actual costs.

FINDINGS: CROWDING OUT ALTERNATIVES
The commitment to nuclear reactors in France and the U.S appears to have crowded out alternatives. The French track record on efficiency and renewables is extremely poor compared to similar European nations, as is that of the U.S.

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States where utilities have not expressed an interest in getting licenses for new nuclear reactors have a better track record on efficiency and renewable and more aggressive plans for future development of efficiency and renewables, as shown in Exhibit ES-3. These states:

 had three times as much renewable energy and ten times as much non-hydro renewable energy in their 1990 generation mix and

 set RPS goals for the next decade that are 50 percent higher;

 spent three times as much on efficiency in 2006;

 saved over three times as much energy in the 1992-2006 period, and

 have much stronger utility efficiency programs in place.

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The cost and availability of alternatives play equally important roles. In both nations, nuclear reactors are substantially more costly than the alternatives. The U.S. appears to have a much greater opportunity to develop alternatives not only because the cost disadvantage of nuclear in the U.S. is greater, but also because the portfolio of potential resources is much greater in the U.S. The U.S. consumes about 50 percent more electricity per dollar of gross domestic product per capita than France, which have the highest electricity consumption among comparable Western European nations (see Exhibit ES-4).

 The U.S. has renewable opportunities that are four times as great as Europe.

 Design problems and deteriorating economic prospects have resulted in a series of setbacks for nuclear construction plans and several utilities with large nuclear generation assets who had contemplated building new reactors have shelved those plans because of the deteriorating economics of nuclear power relative to the alternatives.

POLICY IMPLICATIONS
The two challenges of nuclear reactor construction studied in this paper are linked in a number of ways. Nuclear reactors are extremely large projects that tie up managerial and financial resources and are affected by cost escalation, which demands even greater attention. The reaction to cost escalation has been to pursue larger runs of larger plants in the hope that learning and economies of scale would lower costs. In this environment, alternatives are not only neglected, they become a threat because they may reduce the need for the larger central station units.

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The policy implications of the paper are both narrow and broad.

Narrowly, the paper shows that following the French model would be a mistake since the French nuclear reactor program is far less of a success than is assumed, takes an organizational approach that is alien to the U.S., and reflects a very different endowment of resources.

Broadly the paper shows that it is highly unlikely that the problems of the nuclear industry will be solved by an infusion of federal loans guarantees and other subsidies to get the first plants in a new building cycle completed. If the industry is relaunched with massive subsidies, this analysis shows the greatest danger is not that the U.S. will import French technology, but that it will replicate the French model of nuclear socialism, since it is very likely that nuclear power will remain a ward of the state, as has been true throughout its history in France, a great burden on ratepayers, as has been the case throughout its history in the U.S., and it will retard the development of lower cost alternatives, as it has done in both the U.S. and France.

QUICK NEWS, 9-28: 1ST WIRE CONNECT FOR U.S. WAVES; CALIF GOES FOR 33% NEW ENERGY BY 2020; VIRTUAL POWER; EVER BETTER REFRIGERATORS

1ST WIRE CONNECT FOR U.S. WAVES
Ocean Power Technologies Completes First-Ever Grid Connection of a Wave Energy Device in the US
September 27, 2010 (Business Wire via MarketWatch)

"Ocean Power Technologies, Inc. [OPT]…has completed the first-ever grid connection of a wave energy device in the United States at the Marine Corps Base Hawaii [MCBH], in conjunction with the US Navy. This connection demonstrates the ability of OPT's PowerBuoy(R) systems to produce utility-grade, renewable energy that can be transmitted to the grid in a manner fully compliant with national and international standards.

"The PB40 PowerBuoy is part of OPT's ongoing program with the US Navy to develop and test [OPT]'s PowerBuoy wave energy technology. The project began as a Small Business Innovation Research (SBIR) program at the Office of Naval Research (ONR). Key program goals include demonstrating system reliability and survivability, and the successful interconnection with the grid serving MCBH."

The PowerBuoy (click to enlarge)

"The PowerBuoy was deployed on December 14, 2009 approximately three-quarters of a mile off the coast of Oahu in water depth of 100 feet…[It] has operated and produced power from over 3 million power take-off cycles and 4,400 hours of operation. The PowerBuoy grid interface was certified in 2007 by an independent laboratory, Intertek Testing Services, as compliant with national and international standards, including the safety standards UL1741 and IEEE1547, and also bears the ETL Listed mark."

How it connects (click to enlarge)

"The system has numerous on-board sensors that monitor a wide variety of system performance variables, external conditions and lifecycle parameters. Data collected by on-board computers is transmitted to a shore-based facility via a fiber optic cable embedded in the submarine power transmission cable and then transmitted via the Internet to OPT's facility in Pennington, New Jersey….[OPT] engineers have collated much of this data and compared it to…proprietary models which analyze the performance given actual in-coming wave conditions. This information has provided a strong correlation between the 'actual' and 'expected' system performance, which serves to confirm OPT's models for its higher output PowerBuoys, including the PB150.

"The wave power project at MCBH underwent an extensive environmental assessment by an independent environmental firm in accordance with the National Environment Policy Act (NEPA) that resulted in a Finding of No Significant Impact (FONSI). The FONSI is the highest rating assigned. The project has utilized local Hawaiian subcontractors…for the installation, test and servicing of the systems…"


CALIF GOES FOR 33% NEW ENERGY BY 2020
California OKs tougher renewables target
Sarah McBride (w/Carol Bishopric), September 23, 2010 (Reuters)

"California regulators voted…to boost the state's renewable energy target to 33 percent by 2020, which could provide a big boost to the alternative-energy industry in the nation's most populous state…But the goal, approved in a vote by California's Air Resources Board, faces significant challenges.

"Industry veterans say this goal is more achievable than a prior target of 20 percent by 2010, but will require faster approvals for plants and continued government help for developer financing…"

The stronger the New Energy requirement, the more the state's economy benefits. (click to enlarge)

"Hitting the increased objective - the highest in the nation - will require more investment in infrastructure and transmission, and a shorter lead time for projects…The approval process in California now takes years…Given the state of credit markets, financing for plants remains a major issue. Currently developers can tap into government help, but…developers complain about the slow pace of review for Department of Energy loan guarantees. And…[the popular] Treasury Department grant for up to 30 percent of the cost of renewable-energy projects…expires at the end of the year.

"Yet another question is whether the 33-percent regulation will even stay on the books. An initiative on November's ballot aims to overturn the law that authorizes regulators to create the 33 percent target…[And the] state's governor has the right to suspend provisions of the law, including the new target, for up to a year. Republican candidate Meg Whitman has said she would do this…"

The stronger the New Energy requirement, the more the state's economy benefits. (click to enlarge)

"Even if the regulation stands, utilities' track records on meeting their targets has been less than excellent. Pacific Gas & Electric and Southern California Edison each will end this year at 18 percent renewable energy…San Diego Gas and Electric, which was hit hard by transmission issues, will end the year at 14 percent…[To push them along,] California regulators have approved almost 2,000 megawatts of solar power…

"Problems with reaching the earlier 20-percent target included utilities signing contracts with alternative-power developers whose projects never acquired the necessary financing…Other projects turned out to be technologically impractical…or required new transmission lines that were not built. Now, the transmission issues are being resolved…"


VIRTUAL POWER
Virtual Power Plants – Demand Response, Supply-Side, Mixed Asset, and Wholesale Auction VPPs: Market Analysis and Forecasts
Peter Ausmus and Brian Davis, 3Q 2010 (Pike Research)

"…Virtual power plants (VPPs) rely upon software systems to remotely and automatically dispatch and optimize generation or demand-side (or storage) resources in a single, secure web-connected system. In the United States, VPPs not only deal with the supply side, but also help manage demand and ensure the reliability of grid functions in real time through DR and other load-shifting approaches…VPPs represent an ‘Internet of Energy,’ tapping existing grid networks to tailor electricity supply and demand services…

"Without any large-scale fundamental infrastructure upgrades, VPPs can stretch supplies from existing generators and utility demand reduction programs…When compared to the fossil fuel based central station power plants that dominate electricity markets worldwide, the primary advantages of VPPs are…[1] They can react quickly to changing customer load conditions…[2] They are dynamic…[3] They deliver value in real time..."

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"VPPs and microgrids share… an 80% commonality…Yet, there are some defining differentiators…[1] Microgrids can be grid-tied or off-grid (VPPs are always grid-tied)…[2] Microgrids can “island” themselves from the larger utility grid…[3] Microgrids typically require some level of storage…[4] Microgrids are dependent upon hardware innovations…whereas VPPs are software dependent…[5] Microgrids encompass a static set of resources in a confined geography…[6] Microgrids typically only tap generation resources at the retail distribution level…whereas VPPs…[are] a bridge to wholesale markets)…[7] Microgrids still face regulatory hurdles…

"Developing market forecasts for a nebulous technology category of “virtual power plants” is…[full of] complexity and uncertainty…The market forecasts in this report divide the VPP universe into four distinct segments…[1] DR-based VPPs: This is the largest commercial segment in the United States …[2] Supply-side VPPs: Europe, particularly Germany, has led the world in this category…[3] Mixed asset VPPs: This is the ultimate goal of the VPP. This segment brings distributed generation and DR together…[4] Wholesale auction VPPs: Unique to Europe, VPP auctions have been used in the region as a condition of mergers…"

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"Pike Research has developed market forecasts for each of these four segments. All told, the VPP capacity worldwide in 2009 was 19,428 MW. The largest segment is wholesale auctions (exclusively in Europe), which represents 51% of the total VPP market. The next largest segment is the DR-based VPPs, which dominate the North America market, with 44% of the total global capacity. The supply and mixed asset segments split the remaining 5% of the VPP market virtually equally.

"Over time, it is expected that many supply-side VPPs will morph into mixed asset VPPs as more cost-competitive storage enters the market and as DR resources continue to grow…Ultimately…the lines between the DR-based, supply-side and mixed asset VPPs profiled will blur… Pike Research estimates that the total revenue from VPPs worldwide is almost $5 billion, with the vast majority (90%) of that revenue stream captured by the wholesale auction VPP segment."


EVER BETTER REFRIGERATORS
Today’s Energy Standards for Refrigerators Reflect Consensus By Advocates, Industry to Increase Appliance Efficiency
September 27, 2010 (American Council for an Energy-Efficient Economy)

"Advocacy groups and appliance manufacturers hailed a 25 percent increase in energy efficiency for most new refrigerators, starting in 2014, thanks to new efficiency standards that the U.S. Department of Energy (DOE) announced…continuing a 40-year trend of improving energy efficiency for this essential home appliance.

"The groups said the new standards are the first step in the department’s implementation of the recommendations they proposed to DOE in July for new minimum efficiency standards, tax credits, and ENERGY STAR incentives for smart appliances affecting six major categories of home appliances…"

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"According to the proposed rule, a typical new 20-cubic-foot refrigerator with the freezer on top would use about 390 kilowatt hours (kWh) per year, down from about 900 kWh/year in 1990 and about 1,700 kWh/year in the early 1970s. On a national basis, the new standards would, over 30 years, save 4.5 quads of energy, or roughly enough to meet the total energy needs of one-fifth of all U.S. households for a year. Over the same period, the standards will save consumers about $18.5 billion. DOE will finalize the standards by year’s end, and they take effect in 2014…

"Based on the July agreement, home appliance manufacturers and efficiency, environmental and consumer advocates have agreed to jointly pursue with Congress and the Administration new standards for six categories of home appliances (refrigerators, freezers, clothes washers, clothes dryers, dishwashers and room air conditioners), a recommendation that ENERGY STAR qualification criteria incorporate credit for Smart Grid capability and a package of targeted tax credits aimed at fostering the market for super-efficient appliances…"

click thru for more info

"While DOE or Congress can act on the standards, the extension of the manufacturers’ tax credit for super-efficient appliances requires new legislation. EPA and DOE will consider the recommendation to jump start the Smart Grid through incentives for the deployment of smart appliances through the ENERGY STAR program.

"As part of the new refrigerator standards, ice maker energy consumption also will be reflected in product energy-use ratings, giving consumers a better way to gauge actual energy use when making a choice among refrigerators…Several prior refrigerator standards, including those put in place in 1993 and 2001, are also the result of joint industry/advocate agreements…"