NewEnergyNews: 08/01/2011 - 09/01/2011/


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

The challenge now: To make every day Earth Day.



  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And The New Energy Boom
  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And the EV Revolution

  • Weekend Video: Coming Ocean Current Collapse Could Up Climate Crisis
  • Weekend Video: Impacts Of The Atlantic Meridional Overturning Current Collapse
  • Weekend Video: More Facts On The AMOC

    WEEKEND VIDEOS, July 15-16:

  • Weekend Video: The Truth About China And The Climate Crisis
  • Weekend Video: Florida Insurance At The Climate Crisis Storm’s Eye
  • Weekend Video: The 9-1-1 On Rooftop Solar

    WEEKEND VIDEOS, July 8-9:

  • Weekend Video: Bill Nye Science Guy On The Climate Crisis
  • Weekend Video: The Changes Causing The Crisis
  • Weekend Video: A “Massive Global Solar Boom” Now

    WEEKEND VIDEOS, July 1-2:

  • The Global New Energy Boom Accelerates
  • Ukraine Faces The Climate Crisis While Fighting To Survive
  • Texas Heat And Politics Of Denial
  • --------------------------


    Founding Editor Herman K. Trabish



    WEEKEND VIDEOS, June 17-18

  • Fixing The Power System
  • The Energy Storage Solution
  • New Energy Equity With Community Solar
  • Weekend Video: The Way Wind Can Help Win Wars
  • Weekend Video: New Support For Hydropower
  • Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart




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


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

  • ---------------
  • WEEKEND VIDEOS, August 24-26:
  • Happy One-Year Birthday, Inflation Reduction Act
  • The Virtual Power Plant Boom, Part 1
  • The Virtual Power Plant Boom, Part 2

    Wednesday, August 31, 2011

    Fire at First Solar’s Solar Ranch One; Was it negligence?

    Fire at First Solar’s Solar Ranch One; Was it negligence? And will attacks from locals drive First Solar to negotiate before major investors scatter?
    Herman K. Trabish, July 7, 2011 (Greentech Media)

    In response to a fire at First Solar's proposed 230-megawatt photovoltaic (PV) Solar Ranch One site, where construction on the world's biggest PV power plant was supposed to begin July 5, the developer is about to see more hostility from the community of Fairmont, its Antelope Valley neighbor.

    Fairmont Town Council Secretary David Jefferies, also an attorney, called the July 2 fire "negligence" and possible "reckless disregard" by First Solar (FSLR: NASDAQ). The fire burned over 70 acres before a 90-minute response from County firefighters suppressed it. LA County Fire Department Battalion Chief Clifford Meridth said it was the “accidental” result of a truck driving across the property.

    "If you drive a vehicle with a hot engine through three-foot-tall, bone-dry grass, you're either ignorant or negligent," Jefferies insisted. “The company claims it wants to be a good neighbor,” Jefferies said, "but good neighbors don't start fires, especially at this time of the year.”

    Jefferies also raised questions about possible First Solar operational safety violations, including failing to have fire suppression equipment on site, failing to have water trucks on site and failing to have a fire safety officer present. He claimed First Solar could be held responsible for fire-fighting costs. Fairmont's apparent intention to pursue legal remedies is an indication of the hostility between the community and the company.

    “First Solar is investigating the incident and has spoken to local fire officials,” said company spokesman Alan Bernheimer. He pointed out that it was officially ruled accidental, but added that First Solar “will ensure that if any neighbors suffered damages from the fire, they will be fairly compensated.”

    click to enlarge

    Bernheimer confirmed the cause of the fire. “The truck belonged to a technical consulting firm doing survey work on the project for upcoming site soils testing,” he reported. When construction starts later this month, “First Solar will have a fire safety plan in place,” Bernheimer promised. “Active First Solar construction sites always have safety personnel present.”

    When First Solar set out to develop Solar Ranch One in 2008, it was directed to the nearby Antelope Acres Town Council. Following over 100 stakeholder meetings, the company conformed to all federal, state and local guidelines in obtaining the project’s permit. It also paid $140,000 in financial considerations to Antelope Acres, which is roughly 12 miles from the project site.

    Fairmont, an agricultural community founded in the nineteenth century that is literally across the street from Solar Ranch One, constituted a Town Council in November 2010, after FSLR’s preparations were complete. Fairmont’s subsequent attempts to get the developer to recognize it and negotiate considerations went unanswered.
    Jefferies said Fairmont is prepared to take further legal action. It may seek an injunction to delay construction. “We are not against renewable energy,” he insisted, but “we have five attorneys with hundreds of years of [accumulated] legal experience in our group,” Jeffries said, and “First Solar is unreasonably threatening our way of life. 'Unreasonably' is the important word."

    Fairmont’s people are adamant about on-the-ground matters, including fences that will surround the installation, desert recreation area access, dust coming off the cleared and leveled land, and wildlife that may be displaced to nearby yards.

    They are even more concerned with how much water Solar Ranch One operations will require, who will administer desert lands purchased to mitigate the project’s impacts, who will get the jobs at Solar Ranch One, and what public benefits First Solar will offer the community. Water concerns might be overblown -- First Solar does not wash the panels, according to the firm.

    click to enlarge

    First Solar said its cadmium telluride (CdTe) PV project will use no more water on the 4,000-acre site than would be used by 12 houses. Fences will be set back to limit aesthetic objections and placed off the ground to accommodate wildlife. Dust will be kept in check during construction by water and solvents and during operation by re-vegetation. There will be recreational access to the site. Three hundred construction and 20 permanent jobs will go to locals -- if Fairmont does not block Solar Ranch One.

    “We will continue to meet with the parties concerned to reach a mutually acceptable resolution,” Bernheimer promised.

    First Solar Development Director Jack Pigott said at a June 27 Fairmont Town Council meeting that construction would begin July 5. It did not. If work on the project does not get significantly started by September 30, it stands to lose hundreds of millions of dollars in federal financial provisions, including a $680 million DOE loan guarantee awarded just last week.

    And there is evidence of another potentially serious problem for First Solar. Investors in the solar energy industry’s premier stock seem jumpy. Two separate sources reported that as many as 10 major financial institutions have been making inquiries locally about the project’s impeded progress. Emails obtained by Greentech Media show that international banking giant Credit Suisse as well as Greenlight Capital and Maxim Group are among them.

    First Solar’s Bernheimer declined to comment on this.

    Fairmont only wants, Jefferies said, for First Solar “to do the best job they are capable of doing.” But, he went on, “the fire is symptomatic of their attitude.”
    Fairmont’s people, Jefferies said, "are aware that we need to free ourselves from dependence on foreign oil. We are aware that U.S. nuclear capacity will likely not expand. We are aware there are serious questions about coal. And we are aware that the Western Antelope Valley is the place for solar and clearly the place for wind.”
    But, Jefferies said of First Solar, “They think we don’t exist.”

    Was the First Solar Fire at Solar Ranch One a Blessing in Disguise?

    Was the First Solar Fire at Solar Ranch One a Blessing in Disguise? Could There Be Peace in the Valley?
    Herman K. Trabish, July 11, 2011 (Greentech Media)

    The July 2 fire at the site of First Solar’s 230-megawatt Solar Ranch One, where construction is imminent on the world’s biggest photovoltaic (PV) solar power plant, drew furor from the project’s Antelope Valley neighbors. But the fire may have been a blessing in disguise.

    The burning enmity between First Solar (FSLR: NASDAQ), the project owner-developer, and Fairmont, the immediately adjacent community, was fanned to flames by the 71-acre blaze that required four helicopters, twelve fire vehicles, and dozens of County firefighters to control.

    First Solar reacted aggressively to charges by Fairmont Town Council officers that the fire represented “negligence” and “reckless disregard,” calling a spin control meeting in nearby Lancaster. Barely had First Solar construction director Tony Perrino begun his power point presentation with diplomatic non-apologies like “we recognize there were some errors made” when Fairmont residents exploded.

    “You’ve got thousands of acres of gunpowder out there and you set a match to it,” Fairmont resident Pat Kennedy told Perrino, FSLR Development Director Jack Pigott and Solar Ranch One Construction Manager Gary Baumeister. “I’ll put up with snakes and coyotes but I will not put up with fire.”

    The fire was ignited by engine heat from a truck stopped in dry desert grasses by people doing soil sampling for First Solar. Los Angeles County Fire Department Battalion Chief Clifford Meridth ruled it “accidental.”

    Desert-savvy locals think otherwise. Fairmont Town Council Secretary David Jefferies called it “either ignorant or negligent.” The ignorance, locals say, was the result of the company failing to consult them and led to negligence.

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    Development Director Pigott’s previous efforts to reach out to Fairmont leaders at June 27 and June 30 meetings only worsened the tension between the company and the community.

    With three-quarters of a billion dollars in federal loan guarantees that will be lost if construction on Solar Ranch One is not significantly underway by September 30, First Solar has an enormous stake in coming to terms with Fairmont. Emails obtained by Greentech Media also suggest a settlement with Fairmont might calm major institutional investors who, though not direct stakeholders in Solar Ranch One, can reasonably be assumed to be among those who trade in the solar energy sector’s premier stock.

    With 33 solar projects proposed for the western Antelope Valley and thirteen already on the drawing boards, locals are determined to manage the development in their faces. “If you come off as an arrogant city dweller, you’re not going to make it in Fairmont,” Town Council President David Kerr said of Pigott’s efforts.

    “He just doesn’t get it,” Town Council member Barbara Rogers added.

    Among Fairmont’s concerns are the visual impact of fences at Solar Ranch One and the environmental impacts of leveling the ground, especially as it affects dust and wildlife.

    According fire witnesses, First Solar was potentially guilty of significant safety violations including failing to have fire suppression equipment on site, failing to have water trucks on site and failing to have a fire safety officer present.

    Even more grievously, it emerged that the geotechnical specialists hired to do the soil sampling were from Long Beach, though Pigott had promised Solar Ranch One jobs would go to locals. “We want jobs for this valley!” raged a local.

    click to enlarge

    Mel Lane, President of the Greater Antelope Valley Economic Alliance, stood to defend First Solar but was shouted down. Declaring Lane a resident of Lancaster, a half-hour from the remote First Solar project, Richard Skaggs shouted, “Get them to build it in your back yard and then you can talk!”

    As the confrontation worsened, Fairmont’s Kennedy looked directly at First Solar’s Pigott and forcefully suggested he join with other developers to fund an LA County Fire Department substation near the projects. “You know who will benefit most?” Kennedy asked Pigott. “You guys!”

    Pigott looked suddenly interested.

    John Sakers, First Solar’s Director of Environment and Safety, then introduced himself. It was immediately apparent he had the ability Pigott lacked to communicate with Fairmont residents. “There is no knowledge like local knowledge,” Sakers told them. “I hear the need for communication. I’d like to offer myself as a liason.”
    Baumeister added a promise to stop all further hiring until he learned more about the local workforce from Fairmont leaders.

    Shutting down his uncompleted power point presentation, Perrino said he needed to add a last bullet point reading “talk to locals.”

    A half-hour later at a previously scheduled Fairmont Town Council meeting, First Solar’s Sakers – who had hustled over – quieted an even more hostile and larger group of Fairmont residents by telling them he considered the fire to be the result of “an abysmal failure” by his company. “It was a completely unsatisfactory event,” he said. “Nothing about it was good. We will fix it.”

    Fairmont’s Jefferies seemed interested. “You’ve got a deadline,” he told Sakers. “But your dollars are our dollars.”

    At the end of the Town Council meeting, Fairmont voted to send a letter to the County Planning Commission asking for a review of the Solar Ranch One permit. But the meeting of minds in the two meetings suggested the possibility had finally emerged for a settlement similar to the one Fairmont reached this past spring with NRG Solar, heavy on considerations for the quality of life in Fairmont along with financial considerations for the community at large.

    Tuesday, August 30, 2011

    Can Developers and Locals Agree on Renewables in California?

    Can Developers and Locals Agree on Renewables in California? Will flowers block Element Power’s first-ever solar-wind combo project in the Antelope Valley?
    Herman K. Trabish, June 27, 2011 (Greentech Media)

    Generating renewable energy in California’s Antelope Valley will be easy. As Nat Parker, project manager for Element Power’s Wildflower Green Energy farm, explained, “The wind blows there like a coal plant.” The solar resource? They call it high desert.

    The hard part will be making the development deal with the locals. To do so, Element Power, which wants to build a first-of-its-kind combination wind and solar project, opened an Antelope Valley office. Parker, previously with the Sierra Club, has been working the region for the last year.

    Element plans to build a wind farm of approximately 50 turbines with a capacity of 100 to 150 megawatts and a solar photovoltaic array with a similar capacity. “We’re talking between 250 and 300 megawatts of renewable energy,” Parker said. “The panels would be on the flatter area,” he explained, “and there would be wind turbines in and among the panels.” The design accommodates the lay of the land. “There are a number of hills and topographic features where solar would be less desirable. In those areas, we would emphasize just wind.”

    The land is a former horse ranch where cattle still graze. But it is on the Valley floor, adjacent to the photogenic Antelope Valley poppy reserve, a world-famous home to California’s state flower. The location has brought challenges but also offers huge opportunities, Parker said.

    “In our business, you’re looking for land with limited environmental constraints, access to markets and access to high voltage transmission,” he explained.

    Because the land is privately owned and previously occupied, there are large parcels of contiguous sites with “a low incidence of serious environmental constraints” that can be carefully but readily mitigated. There are no military or radar constraints.

    click to enlarge

    It is only five miles from the high capacity Southern California Edison Antelope substation, which can deliver electricity to the Los Angeles market 70 miles away or to other California utilities via the state grid. It is also only 1.2 miles from an LA Department of Water and Power line.

    But “probably the single most unique feature,” Parker said, “is that it boasts one of the most impressive on-peak late afternoon wind resources in the state. Winds pick up between four and seven in the western Antelope Valley,” he explained. “Right when the grid needs power most, Wildflower is peaking in its generation.”

    “You can do a lot of good with these projects,” Parker said, but “utility-scale renewable energy projects will have impacts. We recognize that.” Element will avoid impacts if possible, he said, minimize impacts that can’t be avoided and mitigate all impacts. From a thorough study of the site, Parker explained, Element will measure impacts and deal with them. “We’re trying to create a project that is mitigated by its very design,” he said.

    Finding the best mitigation methods, Parker said, means “maintaining a constant dialogue with local town councils and with environmental stakeholders and building their concerns and requests into how we design and manage this project.”

    He takes nothing for granted. “We are out there pounding dirt and really reaching out to folks in a proactive way,” Parker said. The “classic not-in-my-backyard sentiment,” he added, is “something that you ignore at your peril.”

    Interviews with residents, who declined to be identified, revealed serious concerns about Element Power’s project. The first and most problematic issue is the location. “The fact that the site is next to the poppy reserve is not lost on us,” Parker said in reply. “The project is called Wildflower Green Energy farm.”

    Studies underway will quantify aesthetic, traffic, noise and other potential harms, Parker said, but he insisted Element’s project will not harm tourism, is preferable to the nearby NextEra Energy Portal Ridge proposal, and will generate clean, renewable energy year-round, whereas the poppy reserve is only an attraction for a span of a few weeks each spring.

    click to enlarge

    Valley residents complain that developers have been getting access to approvals by making under-the-table deals with local desert and mountain conservancy groups. “There is emotion,” Parker noted, over “who will administer mitigation programs or monies.”
    But, he added, “Element Power has not made any agreement with any conservancy whatsoever.” However, he did acknowledge holding meetings with the groups “to solicit their input.”

    There are even uglier allegations of energy company involvement in strong-arming land-owners for access. Parker said Element Power is not involved. “It’s unacceptable,” he said. “I think it’s a damn shame.”

    A big concern of Valley residents is who will get the project’s economic benefits.
    “At a time when unemployment is over 17 percent in the western Antelope Valley, we’re looking at up to 300 construction jobs over the course of 12 months and probably 12 to 20 permanent, good-paying local jobs,” Parker said, as well as “four to six million dollars in property tax revenues.”

    But locals fear Element will bring in trained outsiders to fill the jobs. And, because Antelope Valley is part of LA County, property tax revenues will be spread far and wide.

    Parker said he understood the doubts, but insisted that “if Antelope Acres and Fairmont will host the Wildflower project for 30 years, you better believe we’re going to be a good partner.” That partnership, he added, would include “a community investment that benefits public interest programs” with transparently agreed-to funding from Element for things like local services and community centers. In fact, Parker added, “we are in discussions with the town councils and the supervisor’s office about what that could look like.”

    Is the World’s Biggest PV Project About to Get Stopped Cold?

    Is the World’s Biggest PV Project About to Get Stopped Cold? First Solar’s 230-megawatt AV Solar Ranch One is unexpectedly knocking heads with some irate neighbors
    Herman K. Trabish, June 29, 2011 (Greentech Media)

    First Solar is scheduled to begin construction on AV Solar Ranch One, the world’s biggest solar photovoltaic project, on July 5 in Antelope Valley. But Development Director Jack Pigott has just begun facing off with residents of Fairmont, the nearby community.

    Fairmont’s people are adamant about on-the-ground issues, like fences that will surround the 230-megawatt installation, the effect of fenced-off desert on hiking, horseback riding and other recreation, the impact of dust coming off the cleared and leveled land, and of wildlife displaced to their yards in the process.

    They are even more concerned with how much water Solar Ranch One will require, who will administer desert lands purchased by First Solar to mitigate the project’s impacts, who will get the jobs at Solar Ranch One, and what public benefits First Solar will offer Fairmont in return for permanently altering the community.

    The first time Pigott -- or anybody from First Solar -- faced the people of Fairmont, neither side was happy.

    “When you’re this giant corporation,” David Kerr, President of the Fairmont Town Council, told Pigott, “and your project is deep in our area and you don’t respond to our requests for a meeting, it can only mean one of two things: laziness or that’s your policy.”

    It was neither, according to Pigott. Since First Solar took on the project, he explained, the company has had over 100 meetings with 40 different groups, listening to and addressing concerns. At that time, he said, there was no Fairmont Town Council.
    The company was told Antelope Acres was the governing community.

    That was true then, Kerr acknowledged. In November 2010, after a long struggle to free itself from what residents consider the dictates of Antelope Acres, Fairmont -- which was established as a farming district in the nineteenth century -- created its own town council. Kerr began requesting meetings with First Solar that December. His requests went unanswered.

    Pigott said there was no response because the company was on Christmas season hiatus. “By December 2010,” Pigott said, “the plan for our project was done and mitigation measures were in place.” The only answers he had to the community’s concerns, he said, were those in the project’s environmental impact study (EIS), which was done publicly and transparently according to state and county guidelines.

    By the time Pigott appeared at Fairmont’s Town Council, Kerr and his fellow citizens suspected the worst. “If you had been talking to us three or four months ago,” Kerr told Pigott, “you might have our answers.”

    Pigott wearily but patiently listened to questions and explained the mitigations detailed in the thoroughly vetted EIS.

    As a photovoltaic project, Solar Ranch One will use no more water on its 4,000-acre site than would be used by 12 houses, according to Pigott. Fences will be set back and off the ground to accommodate wildlife. Dust will be kept in check during construction by water and solvents and during operation by re-vegetation. Hiking and riding trails and recreational access will be available.

    First Solar’s construction manager, Pigott said, will be living in the community during the 2.5 years of building. Both construction and permanent jobs will go to locals.

    The contentious meeting concluded with Fairmont’s officers voting to hold further action, pending a follow-up meeting.

    At that second meeting, it was reported that Antelope Acres, some twelve miles from the Solar Ranch One location, was granted $100,000 for its town council, $10,000 for its 4H Club and $10,000 for a community center, among other considerations. First Solar also donated mitigation lands to Antelope Acres’ chosen desert conservancy.

    click to enlarge

    Fairmont, whose residents live within 500 feet of the site, has been granted nothing.
    When First Solar’s Pigott told Fairmont’s residents he considered them to be part of the Antelope Acres settlement, the room erupted, according to an attendee.

    Fairmont residents insisted they were not involved in the First Solar-Antelope Acres planning process. First Solar claimed they have Fairmont Town Council members’ names on planning meeting sign-in sheets.

    At the end of the second meeting, differences remained unresolved. One attendee said she thought First Solar felt ambushed. “If they did,” she added, “they deserved it. We’re for green energy and we have the perfect location for it but they’re not taking our lives into consideration.”

    “We’re not trying to stop them,” another resident said angrily, “but they’re giving so much to Antelope Acres and ignoring us.”

    Fairmont’s Town Council voted to send a letter detailing its grievances to the Los Angeles County Planning Commission and request an emergency hearing. It tabled legal action, pending the Planning Commission’s response. And it formed committees to formally describe the mitigation measures that it seeks.

    Alan Bernheimer, First Solar’s corporate spokesperson, said the circumstances are “regrettable” and the company is “trying to make up lost ground.”

    More importantly, Bernstein added, “we intend to keep meeting and working with them to resolve this. I understand they feel their point of view has not yet been taken into account. We will try to address that.”

    Solar Ranch One construction may proceed as scheduled July 5 because Fairmont does not have funds for swift legal action. But Fairmont counts experienced attorneys among its residents and allies. First Solar could soon be faced with an injunction and a potentially costly disruption of plans.

    “People are mad as hell,” a longtime Fairmont resident said, “and they’re not going to take it anymore.”

    8-30-2011 update: While First Solar and the Fairmont Town Council continue to negotiate, pre-construction activities have begun at the site of Solar Ranch One, which is now the world's second biggest PV power plant.

    Monday, August 29, 2011

    Can California Renewables Survive Democracy?

    Can California Renewables Survive Democracy? California’s Tehachapi-Mohave Region is rich in renewable potential—but is it richer in NIMBYism and BANANAism?
    Herman K. Trabish, June 21, 2011 (Greentech Media)

    There is more renewable energy potential in the Tehachapi-Mojave region than anyplace else in California. Developing that potential is crucial because California is committed to doubling its renewable capacity by 2020.

    But development will not happen until the people of the Antelope Valley -- who will have to live with what developers build -- have their say.

    To do so, an overflow crowd of stakeholders turned out for a Los Angeles County Planning Commission meeting at the Lancaster Public Library Saturday. Two hundred were admitted; as many more were turned away. It was a display of grassroots democracy that did the Antelope Valley proud.

    After the history, goals and process of utility-scale renewables development were explained by the Planning Commission’s Thuy Hua, the meeting broke into groups. Attending stakeholders immediately set to work recording their concerns onto forms provided by the Commission until group discussions led by Commission facilitators began.

    Passions and ideas were expressed, though too often with the logic of a person who interprets the heat from his burning house as a sign he must conserve water.
    Renewable energy was not unpopular. In at least two groups, coal and nuclear met a unanimity of rejection otherwise reserved only for anything preceded by the word big, as in big turbines, big solar, big utilities or big transmission projects. The populist disenchantment with big government and big spending clearly infected anything utility-scale. Global, as in global climate change, mostly went unmentioned.

    Several groups talked enthusiastically about distributed renewables. Apparently unaware of the state’s many renewables initiatives, many said California’s investment in utility-scale development should go to taxpayers for rooftop solar, solar water heating and other distributed generation. “Don’t give money to utilities,” one man said, “give it to us. It’s our money.”

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    There were proponents of building-integrated photovoltaics and space-based solar power plants. Unmentioned was the fact that Antelope Valley utility-scale renewables are ready to scale now, while the alternatives proposed are not.

    Lack of knowledge is a predisposing factor to fear. A woman told another that backyard-scale wind is not like big turbines. “But how do you get the electricity to come to your house?” the listener replied, worried the electricity would go to the big utilities. A contractor said the dangers of big turbines are associated with huge underground vaults at the towers’ bases (though, in fact, turbine towers are planted in solid concrete foundations).

    Several people talked about the potential dangers of turbine malfunctions. One attendee described the breaking apart of a test turbine in 2004. “Had anybody been near it,” he said, “they would have been dead.” Seven years is about three lifetimes in turbine technology yet there was no mention of newer, safer machines, nor were the words 'Fukushima disaster' or 'BP oil spill' heard in answer.

    Someone insisted that land cleared for utility-scale solar would cause dust as problematic as smoke from the region’s chronic wildfires, but there was no mention of how renewables will mitigate the climate change that is worsening the wildfires.

    For almost every group, a priority was protecting the Antelope Valley’s world-famous poppy reserve, home to California’s state flower. NextEra Energy and Element Power want to build turbines that will interfere with views of the poppies. One resident said she does not want a turbine between her and the flowers. Someone answered there might be a compromise. “Have you been to the poppy reserve?” was the heated reply.
    Most groups were also passionately concerned for the region’s birds and its avian habitat. An attempt to explain how contemporary wind farms and modern turbines minimize avian harm was answered only with a very skeptical look.

    At its heart, the message was that Antelope Valley’s people see the world they know
    changing too fast and they are going to do everything they can to slow the change.
    “We’re not willing to sacrifice our way of life,” someone said.

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    After much writing and talking, each group’s facilitator summarized what had been said on a poster-sized list of complaints and recommendations. Often a group member would try to add the spice back as the passionate rants were listed and neutralized, but a list can ultimately only place-hold the passion.

    At the end of the group sessions, the ten facilitators each read their list to the entire room. The two-hour meeting was 40 minutes behind schedule. The facilitators were asked to read quickly. More passion dissipated.

    There was a lot of NIMBY (Not In My Back Yard) and even some BANANA (Build Absolutely Nothing Anywhere Near Anything), but the sincerest sentiment was that there must be a better way to build renewables.

    There is. They were taking part in it. It is a process in which the public’s will and the public good are reconciled in the most practical way possible. It foregoes the ideal, but hopefully avoids the taking up of arms.

    To the county’s admission that development permits are being processed under the old rules, even as new ones are being drafted, one passionate man declared that something is being “lost forever” and called for a permitting moratorium. “They said they don’t have the answers,” he said. “Don’t move until we do.” Developers and renewables advocates, however, say progress is too slow to meet the state’s renewable energy goals.

    The County’s final plan will likely not satisfy all of the people who attended the meeting, nor will it allow every developer to build, but with luck, the public good will be served.

    Is This the New California Gold Rush?

    Is This the New California Gold Rush? How big can the rush for Tehachapi-Mojave’s golden sun and rich wind get?
    Herman K. Trabish, July 1, 2011 (Greentech Media)

    There is a rush for renewable energy in southeastern California. Tehachapi-Mojave has enormous gifts of rich wind and golden sun, as well as other unique characteristics, that has the region at the edge of something as extraordinary as 1849’s Gold Rush.

    Right now, the Tehachapi Mountains host the state’s biggest circumscribed installed wind capacity and the Mojave Desert is home to the state’s only solar power plants, a set of trough facilities from Kramer Junction to the border and a solar power tower in Lancaster.

    But those installations are mere gestures at what will eventually fill a region that has what has been called “one of the greatest insolations in the world,” “the state’s biggest wind potential” and “wind that peaks during peak electricity demand.”

    The California Energy Commission (CEC) is in the process of defining the region’s real potential as the state prepares its march toward obtaining 33 percent of its power from renewables by 2020 and much more in subsequent decades.

    “Thirty-three percent is an initial or interim goal,” Michael Valentine, the Assistant Director of the CEC’s Desert Renewable Energy Conservation Plan (DRECP), and Roger Johnson, CEC’s Transmission Corridor Designation Manager, explained, adding: “The desert is a big part of California’s renewable energy future.”

    The Tehachapi-Mojave region has roughly 1,000 megawatts (MW) of installed solar and wind capacity, according to Valentine and Johnson. There are 410 MW of solar, over 350 MW in the nine NextEra-operated Solar Energy Generating System (SEGS) trough facilities, 5 MW in the eSolar power tower and the rest in smaller, county-approved installations that are harder for CEC to track.

    click to enlarge

    Tehachapi’s Alta Wind Energy Center (AWEC) and the other projects adjacent to it probably have, according to CEC numbers, some 550 to 600 MW in actual operation, though the developers say it is closer to 710 MW -- but that installed capacity is merely the proof of product.

    Already approved and at some stage of construction, Valentine and Johnson reported, are seven solar projects representing 1300 MW of peak capacity and 6 large wind projects with an installed nameplate capacity of 1700 MW. Those 13 developments, though, were only the ones out in front of the Gold Rush.

    The hardcore rush may best be represented by the projects now in the permitting process.

    “In permitting in 2011,” Valentine and Johnson reported, are “61 solar projects for 3,340 megawatts and 20 wind projects that amount to 2500 megawatts.”

    Valentine and Johnson insisted these numbers should be considered estimates because so many factors are at play, ranging from Governor Brown’s drive for development to the region’s unabashedly vocal NIMBYs (Not In My Backyard) and BANANAs (Build Absolutely Nothing Anywhere Near Anything) who could get in the governor’s way (unless they get their fair share of the gold).

    Johnson and Valentine compared their permitting process numbers with those of the California Independent System Operator (Cal-ISO), the state’s grid operator, to whom developers must apply for transmission interconnection. The ISO has applications, Johnson and Valentine reported, for 67 solar projects representing about 5,870 MW and 29 wind projects representing roughly 6,400 MW.

    The higher numbers from the ISO may be an indication of just how much the Gold Rush mentality is taking hold. Despite the newly instituted high cost for an interconnection application, developers not yet ready to apply for CEC permitting seem nevertheless to be paying the Cal-ISO fee.

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    “The ISO list undoubtedly includes projects that will never be permitted or built,” Valentine and Johnson agreed. But they could very well be projects sparked by some version of the Gold Rush mentality, they also agreed.

    The CEC is working on the complicated question of the region’s full potential. Valentine and Johnson said the state’s report on Competitive Renewable Energy Zones (CREZs) and its updated 2010 Renewable Energy Transmission Initiative (RETI), a plan for the transmission necessary to service the CREZs, together represent the best current estimate. As represented on the RETI bubble chart, Tehachapi-Mojave holds California’s biggest renewables potential.

    A major thrust of the CEC’s current work, Valentine and Johnson said, is the DRECP. It will identify renewable sites and more precisely define their potential. An RPS calculator will describe available acreage and its likely load capacity. The DRECP planning process will close at the end of July 2011. A draft plan should be available by January 2012 and California’s overall, long-term development picture should be defined by the first quarter of 2013.

    Low parcelization and an agricultural past may, the CEC representatives said, be a key strength of the Tehachapi-Mojave region. There are still large, uninterrupted, but previously degraded parcels available to developers, unlike the large but preserved Bureau of Land Management (BLM) lands farther east and south.

    “If you’re trying to assemble a 1,000-acre site, it’s a lot easier to deal with one landowner than 100,” Valentine said.

    “That’s one of the strengths of the West Mojave area,” Johnson said. There are still sites comprised of ten or fewer contiguous parcels that constitute two square miles. Plus, “They could be developed without overwhelming habitat or biological impacts,” Valentine added.

    And they will be. “After 33% is achieved, California and the country will continue to have the need to transfer the generation of electricity to renewable sources,” Johnson and Valentine said. They are looking out to 2040 or 2050. How much renewable capacity can California build in that time period? “That’s a question we’ll have to answer in the next year or so.”

    Sunday, August 28, 2011


    Energy Efficient Sector M&A Scheduled to Accelerate In Second Half of Year
    July 201 (Cascadia Capital LLC)

    "In Q2 2011 equity financing and M&A were down from Q1 2011. This is partly due to Q1 being a very strong bounce back quarter as deals that were expected to close in Q4 2010 slipped in to Q1 2011. The other reason for the downturn is that Q2 2011 saw rotation in the sector as money left the capital intensive biomaterials/biofuels and solar sectors and moved into the more capital efficient energy efficiency sector…[E]nergy efficiency was the top sector in cleantech Q2 2011 with the largest amount of investment dollars ($428 million) and the largest number of deals (38).

    "…[The Energy Efficiency] sector will explode with M&A transactions in Q3 2011 and Q4 2011. The Schneider Electric purchase of Summit Energy Services for $268 million was priced at approximately 4X revenue. Summit Energy offers a real time energy management solution that enables users to save energy…In addition to software margins, Summit also has a subscription based business model that pays on a monthly basis making it very attractive from a margin and visibility standpoint. Wall Street likes the Summit business model and puts a premium valuation on it."

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    "…[T]he transaction signaled that the energy efficiency sector has come of age and put pressure on other large corporations in the energy services sector to strategically respond. The companies which have developed the product/technology are having a hard time accessing the large corporate clients that are buyers of their product…[Clients of large energy services companies] want real-time energy management products…[L]arge energy services companies [are expected] to gain…[that] capability through acquisitions.

    "Cascadia…[has] spoken to approximately 60 potential target companies and more than 50 of those have been contacted by other potential buyers regarding a sale process. This leads…to the conclusion that the real-time demand management sector will see massive consolidation…"


    Japan parliament passes key renewable energy reform
    Sugita Katyal, August 26, 2011 (Reuters)

    "Laws to promote renewable energy in Japan passed a final hurdle...with the upper house of parliament formally approving a scheme that investors hope will ramp up spending on solar, wind and other green energy.

    "The country is struggling to overhaul its energy policies after the March quake and tsunami triggered a nuclear disaster that shattered the public's confidence in the safety of the atomic industry and delayed the restart of idled plants. Costly oil and gas imports have soared."

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    "Lawmakers say a national scheme starting next year that rewards green energy investments is part of the solution to replace lost power generation capacity and move the country away from new nuclear investment...The laws will require utilities to buy any amount of electricity generated from solar, wind, biomass, geothermal and small-sized hydro power plants at preset rates for up to 20 years.

    "The [Kan] government...said it wants the feed-in tariff scheme to boost capacity of the five renewable energy types by more than 30,000 megawatts (MW) over a decade...But the bill leaves key details unresolved that could ultimately dilute its impact...[including] the price to be paid by utilities for each type of green energy...[With the bill passed, Prime Minister Naoto Kan] confirmed he would step down."


    Centrica, Siemens Seek Loans for 1 Billion-Pound U.K. Wind Deal
    Sally Bakewell, August 19, 2011 (Bloomberg News)

    "Centrica Plc (CNA), Siemens AG (SIE) and Dong Energy A/S invited commercial banks to join a 1 billion-pound ($1.7 billion) financing plan to build an offshore U.K. wind farm, the first deal of its kind in the country…The figure includes a 550 million-pound term loan and a 250 million-pound facility to pay for a link to bring the power to shore…

    "The companies’ use of commercial loans and their own funds, instead of state financing, to construct the 270-megawatt Lincs project off east England sets a precedent…It would be the first time banks provided project finance loans to build a U.K. offshore farm…"

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    "Centrica will offer a total of 333.3 million pounds for the funding facilities and Dong Energy 166.7 million pounds, while Siemens plans to contribute 75 million pounds through its Siemens Financial Services Ltd. arm. The companies invited banks to provide the balance of the financing for the project, which will power 200,000 U.K. homes a year…

    "With the companies acting as “sponsor lenders,” the wind farm won’t need to use funds from the European Investment Bank or a guarantee facility from the EKF, Denmark’s export credit agency…Offshore wind projects, among the most expensive of the renewable-energy technologies, are typically the domain of utilities with balance sheets able to bear the cost…"


    Spain will have 61 concentrated solar thermal power plants in 2014
    August 18, 2011 (Regulacion Eolica con Vehiculos Electricos)

    "…The Ministry of Industry has granted permission for the construction of 61 solar thermal power plants in eleven provinces, mostly in the southern half of the country. Of this amount, there are 21 currently operational, with an installed capacity of 852.4 MW…

    "…[U]nder construction there are twenty-seven, with a capacity of 1302.5 MW, and pre-assigned and pending construction, thirteen, with an output of 370.4 MW. When in 2014 they are all connected to the network, Spain will have 2525.30 MW of concentrated solar thermal spread between six different technologies."

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    "The 61 solar thermal plants…will be in service in 2014 [and] will occupy 112 km2…and will generate 7298.25 GWh / year, enough to power 1,824,562 homes…[I]f all electricity generated in Spain in 2010 (280 TWh) was induced in concentrated solar thermal power plants…[they would] occupy 4293 km2…[or about] 0.85% of Spanish territory…[When all 61 plants] are operating in 2014 [they] will prevent the emission to the atmosphere of 3.4 million tons of CO2.

    "…[C]oncentrated solar energy or CSP…[has the capability for] storable energy…Gemasolar recently became the first solar thermal power plant in the world who shed solar electricity to the grid for twenty-four consecutive hours without interruption…[C]oncentrating solar thermal power plants…[also create jobs]…Each plant of 50 MW creates jobs during all phases (design, component manufacturing and installation) to an average of 2500 [fulltime] job equivalents / year [and 80 % are domestic]..."


    24 August 2011 (Windpower Monthly)

    "Finavera Renewable Energy has signed a memorandum of understanding (MOU) with the McLeod Lake Indian Band in British Columbia for the development of four wind projects...This is Finavera’s second [MOU]…Last year, it signed an MOU with Halfway River First Nation…

    "…[Five First Nation Indian groups [are] required to support the wind farms.] The projects – Tumbler Ridge (45MW), Wildmare (77MW), Meikle (117MW) and Bullmoose (60MW) — will have a total capacity of [301] MW."

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    "According to Finavera, the First Nation groups will have a financial stake in the projects. Other benefits will include job opportunities and training…Other groups to be brought into the project are West Moberly First Nation, Doig River First Nation and Saulteau First Nations. Negotiations are ongoing.

    "In May last year, Finavera has secured up to C$7.5 million from GE Energy to further the development of four wind-energy projects that also won power-purchase contracts in the BC Hydro call…The loan will tide Finavera through the final development stages of the projects to financial close. It will be paid back…at the close of each project. GE would also be the preferred wind-turbine supplier…"

    Saturday, August 27, 2011

    The Wind Project For Climate Justice

    This is one of the coolest ideas ever: Obtain donations to build a utility-scale wind turbine to produce income from New Energy-generated electricity to fund care for refugees created by climate change. From EnvironmentalJustice via YouTube

    Thinking About The Future

    It can’t be the way it was but how does it have to be? From IcarusFilmsNY via YouTube

    Solar Energy Enlists

    As Tom Friedman likes to say, Green is Red, White and Blue. The implication of this piece, however, goes far beyond any slogan. What the military has realized, though recalcitrants in Congress have yet to catch up, is that solar is more than GREEN energy, it is REAL energy, a practical and dependable alternative that is already worth the price for those on the front lines and is rapidly becoming market-competitive. From TheSolarIndustry via YouTube

    Friday, August 26, 2011


    Stop Keystone XL Pipeline – Day 5 – Nation’s Largest Environmental Organizations Stand Together To Oppose Oil Pipeline
    August 24, 2011 (EcoWatch Ohio)

    "The heads of the nation’s largest environmental organizations—often at odds on the best strategy for combating climate change—released a letter on Aug. 24 calling on President Obama to block the Keystone XL oil pipeline, which would span from the tar sands of Alberta to the Gulf of Mexico…[as] another 56 people headed to jail...[To date, 275 people have been arrested at the White House protesting the Keystone XL pipeline]…in the largest civil disobedience protests in the environmental movement’s recent history...[scheduled to continue through September 3]…"

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    Dear President Obama:

    Many of the organizations we head do not engage in civil disobedience; some do.
    Regardless, speaking as individuals, we want to let you know that there is not an inch of daylight between our policy position on the Keystone Pipeline and those of the very civil protesters being arrested daily outside the White House. This is a terrible project–many of the country’s leading climate scientists have explained why in their letter last month to you. It risks many of our national treasures to leaks and spills. And it reduces incentives to make the transition to job-creating clean fuels.

    You have a clear shot to deny the permit, without any interference from Congress. It’s perhaps the biggest climate test you face between now and the election. If you block it, you will trigger a surge of enthusiasm from the green base that supported you so strongly in the last election. We expect nothing less.

    Fred Krupp, Environmental Defense Fund
    Michael Brune, Sierra Club
    Frances Beinecke, Natural Resources Defense Council
    Phil Radford, Greenpeace
    Larry Schweiger, National Wildlife Federation
    Erich Pica, Friends of the Earth
    Rebecca Tarbotton, Rainforest Action Network
    May Boeve,
    Gene Karpinski, League of Conservation Voters
    Margie Alt, Environment America


    Green Scissors 2011; Green Scissors 2011 identifies wasteful government subsidies that are damaging to the environment and could end up costing taxpayers more than $380 billion.
    August 24, 2011 (Friends of the Earth, Taxpayers for Common Sense, Public Citizen and The Heartland Institute via Green Scissors)

    "…[Green Scissors; Cutting Wasteful and Environmentally Harmful Spending] builds on last year’s report by advancing cuts that could potentially save taxpayers $380 billion or more over five years…[The] federal government can help protect our natural resources, reduce the growth of government spending, and make a significant dent in the national debt by eliminating harmful spending.

    "The Green Scissors report finds cuts in energy, agriculture, transportation, and land and water projects. Targets include massive giveaways of publicly-owned resources such as timber, oil and natural gas and minerals, poorly conceived road projects and a bevy of questionable Army Corps of Engineers water projects…"

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    "[Ending] the following programs [could] save the United States…[1] $72,000,000,000 for general revenue transfers to the Highway Trust Fund…[2] $30,000,000,000 for crop insurance, and…[3]$4, 820,000,000 for Oil and Gas Royalty relief.

    "Friends of the Earth… Taxpayers for Common Sense…Public Citizen…and The Heartland Institute… have different missions and different views about the role of government, but Green Scissors represents some key areas where we all can agree."


    Electric Vehicle Charging Equipment; Level 1 and Level 2, DC Fast Charging (CHAdeMO), and Wireless EVSE: Market Analysis and Forecasts
    John Gartner and Clint Wheelock, 3Q 2011 (Pike Research)

    "…It is no longer a question of if the electric vehicle (EV) is making a comeback; it is only a question of how many plug-in electric vehicles (PEVs) that tap into the grid for power will be driving alongside their internal combustion engine (ICE) counterparts…[so] manufacturers of electric vehicle supply equipment (EVSE) are soliciting fleets, retailers, civic leaders, and citizens to invest now in charging equipment…

    "By 2013, more than 80 different models of PEVs will be found on roadways across the globe, and at least as many models of charging equipment for residential and commercial customers will be available…By 2017, more than 5.1 million PEVs will be sold globally…During that time, nearly 7.7 million EVSE sales will support those vehicles…"

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    "Vehicle charging is likely to have little impact on grid operators’ ability to generate and distribute sufficient power to meet the additional load. In some areas, peak demand could be increased or the peak hours extended later into the evening if customers are not incentivized to charge off-peak. The impact of power delivered through EVSE could shorten the lifespan of some neighborhood distribution equipment…

    "…[U]tilities are offering less expensive EV charging rates and time of use (TOU) pricing with power purchased overnight costing a fraction of the peak power price. The benefits of off-peak charging will encourage nearly all equipment purchases to be smart EVSE…Utilities are beginning to invest in information technology (IT)… [and that will grow] after 2013…Trials are currently underway of vehicle to grid (V2G) systems that enable PEVs to respond to a grid signal by decreasing load or…return power from the vehicle to the grid…"


    Nano Gold Rush: Researchers use tiny gold particles to boost organic solar cell efficiency; Plasmonic technique helps enhance power conversion by up to 20 percent.
    22 August 2011 (World of Renewables)

    "In the world of solar energy, organic photovoltaic solar cells have a wide range of potential applications, but they are still considered an upstart. While these carbon-based cells, which use organic polymers or small molecules as semiconductors, are much thinner and less expensive to produce than conventional solar cells made with inorganic silicon wafers, they still lag behind in their ability to efficiently convert sunlight into electricity.

    "Now, UCLA researchers and their colleagues from China and Japan have shown that by incorporating gold nanoparticles into these organic photovoltaics — taking advantage of the plasmonic effect, by which metal helps to enhance the absorption of sunlight — they can significantly improve the cells' power conversion…"

    (from Wikipedia - click to enlarge)

    "They found that by employing the interconnecting gold-nanoparticle layer, they were able to enhance power conversion by as much as 20 percent. The gold nanoparticles create a strong electromagnetic field inside the thin organic photovoltaic layers by a plasmonic effect, which concentrates light so that much more of it can be absorbed by the subcells.

    "The team is the first to report a plasmonic-enhanced polymer tandem solar cell, having overcome the difficulties involved in incorporating metal nanostructures into the overall device structure…"


    Utilities weigh price of power with aging plants and renewable mandates
    Mark Jaffe, August 21, 2011 (Denver Post)

    "…Levelized cost analyses [of energy – all lifetime plant building and operating costs divided by dollars the plant produces for a dollars per megawatt-hour]…rely on assumptions that can make the estimates lower or higher…[F]our levelized cost studies — from government agencies, financial firms and engineering companies — …[make estimates that] vary as much as 100 percent…

    "Standard coal-fired power plants are among the least expensive forms of electricity generation...The cost among the studies ranged from a low of 7.4 cents to 13.5 cents per kilowatt-hour…[but a] 2009 study by the National Research Council titled "The Hidden Costs of Energy" estimated that the pollution impacts of coal — the most polluting of the fossil fuels — added 3.2 cents a kilowatt-hour in 2005, declining to 1.7 cents a kilowatt-hour in 2030 as more electricity comes from cleaner coal plants…[T]hat doesn't count…a cost for carbon emissions…"

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    "The least-expensive fossil fuel generation in the major cost studies is natural gas…The EIA put the average cost at 6.6 cents a kilowatt-hour in 2016 for a conventional combined-cycle gas plant…The biggest concern with natural gas has been the cost…In the past 10 years, the spot price has been as low as $1.80 per million British thermal units…and as high as $15.38…The average for the decade was $6.07…[A recent] closing price…was $3.89."

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    "The cheapest renewable-energy source, and one of the least expensive overall, is wind power, with the average cost between 4.4 cents and 11.5 cents a kilowatt-hour…The problem with wind — as with solar — is what is called the "capacity factor." A coal or natural-gas plant will run 70 to 90 percent of the time, constantly generating electricity…A wind farm runs 32 to 42 percent of the time and a solar array generates electricity 22 to 27 percent of the time…

    "Solar energy is the most expensive way to make power — more than twice as expensive as natural gas and wind…[according to] five levelized cost studies…The EIA estimates the cost of a utility-scale solar photovoltaic installation at 19 cents a kilowatt-hour…The cost of solar cells, however, has dropped by more than a quarter since 2001 and is projected to continue to decline. That could bring the levelized cost for photovoltaics to 8 or 9 cents a kilowatt-hour by 2020, according to a study by Greentech Media…"

    Thursday, August 25, 2011


    First, it is vital to understand that governments ALWAYS subsidize energy because energy is vital to governments.

    To accuse a government of ill-doing because it supports the energy it needs to make the country go makes as much sense as to accuse a car driver of ill-doing for paying for gas: If it would be better for that driver to ride a bicycle, somebody needs to make riding a bicycle the better value proposition.

    The coal industry had no problem with this principle when it was the darling of the British government in the 19th century and the oil industry had no problem with it when it was the U.S. golden child in the first half of the 20th century and the nuclear industry was pleased to be the chosen one from the 1960s to the 1980s.

    But ever since the nations of the world realized they have to count greenhouse gas emissions and they have no solution for nuclear waste and they decided it would be prudent to start supporting New Energy, the Old Energies have begun throwing fits about energy subsidies.

    Does New Energy get an inequitable slice of the federal pie? It depends on how you count.

    The report highlighted below is the result of some crafty Republicans' request that the U.S. Energy Information Administration update its 2007 take on subsidies. They realized they could play the expected results to the advantage of their Old Energy patrons if the new report used the same flawed approach it had used previously.

    In 2007, the EIA evaluated a single year’s subsidies and offered a subsidy-dollars-per-megawatt-hour-of-electricity-generated conclusion. This is not necessarily the most accurate way to count subsidy dollars. Energies that have been supported for decades may not presently need or get as much support as those that have more recently become more highly valued.

    A coal plant built in 1965 has been the beneficiary of subsidies for 45 years. A wind farm built in 2008 is collecting the bulk of its support now but will get no more federal money after 2017. Yet, by the EIA calculation, the wind farm is at present getting the bulk of the federal dollars.

    Are large current energy subsidies to New Energy inequitable? With some historical perspective, it is clear that the New Energies’ subsidies are not out of proportion with what the Old Energies have been granted over the decades.

    Furthermore, current subsidies to New Energy simply demonstrate that, going forward, governments believe it to be the better value proposition.

    The fact is that, whether the Old Energy industries and their lawmaker minions want to see it or not, what is happening is a shift in which energies are considered mature and which are considered vital. Governments all over the world have realized they must put a higher priority on the energy of the 21st century.

    This is not inappropriate.

    The coal industry would not be what it is if it had not been given a railroad system through which to operate a century and a half ago.

    The U.S. oil industry would have strangled on terminal greediness if Congress had not granted it the oil depletion allowance and the golden gimmick in the middle of the last century.

    Nobody would have built nuclear plants in the 1970s if the government hadn’t, through the Price-Anderson Act, indemnified the industry against its inevitable occasional catastrophes.

    And the New Energies, in partnership with Energy Efficiency, will not be able to rescue this good earth from the worst ravages of energy wars, pollution, radiation and climate change if the safe, ever renewable power in its sun, wind, deep heat and flowing waters is not valued highly enough to be given the support it needs to proceed with this era’s changing of the guard.

    Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010
    July 2011 (U.S. Energy Information Administration)

    Executive Summary


    This report responds to a November 2010 request to the U.S. Energy Information Administration (EIA) from U.S. Representatives Roscoe G. Bartlett, Marsha Blackburn, and Jason Chaffetz for an update to a 2008 report prepared by EIA that provided a snapshot of direct federal financial interventions and subsidies in energy markets in fiscal year (FY) 2007, focusing on subsidies to electricity production (Appendix A). As requested, this report updates the previous report using FY 2010 data and is limited to subsidies that are provided by the federal government, provide a financial benefit with an identifiable federal budget impact, and are specifically targeted at energy markets. Subsidies to federal electric utilities, in the way of financial support, are also included, as requested. These criteria do exclude some subsidies beneficial to energy sector activities (see box entitled “Not All Subsidies Impacting the Energy Sector Are Included in this Report”) and this should be kept in mind when comparing this report to other studies that may use narrower or more expansive inclusion criteria.

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    Energy subsidies and interventions discussed in this report are divided into five separate program categories:

    Direct Expenditures to Producers or Consumers. These are federal programs that involve direct cash outlays which provide a financial benefit to producers or consumers of energy.

    Tax Expenditures. These are provisions in the federal tax code that reduce the tax liability of firms or individuals who take specified actions that affect energy production, consumption, or conservation.

    Research and Development (R&D). These are federal expenditures aimed at a variety of goals, such as increasing U.S. energy supplies or improving the efficiency of various energy consumption, production, transformation, and end-use technologies. R&D expenditures generally do not directly affect current energy consumption, production, and prices, but, if successful, they could affect future consumption, production, and prices.

    Loans and Loan Guarantees. These involve federal financial support for certain energy technologies. The U.S. Department of Energy (DOE) is authorized to provide financial support for “innovative clean energy technologies that are typically unable to obtain conventional private financing due to their ‘high technology risks.’ In addition, eligible technologies must avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases." …

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    Electricity programs serving targeted categories of electricity consumers in several geographic regions of the country. Through the Tennessee Valley Authority (TVA) and the Power Marketing Administrations (PMAs), which include the Bonneville Power Administration (BPA) and three smaller PMAs, the federal government brings to market large amounts of electricity, stipulating that “preference in the sale of such power and energy shall be given to public bodies and cooperatives.” 2 The federal government also indirectly supports portions of the electricity industry through loans and loan guarantees made by the U.S. Department of Agriculture’s Rural Utilities Service (RUS) at interest rates generally below those available to investor-owned utilities.

    With the exception of the federal electricity programs and loan guarantee programs, this report measures subsidies and support on the basis of the cost of the programs to the federal budget as provided in budget documents…

    This report measures support provided by federal electricity programs by comparing the actual cost of funds made available to these entities to the cost of funds that they might otherwise have incurred. Similarly, the value of the support provided by DOE’s loan guarantee program is estimated by analyzing what the costs of financing eligible projects might be without the guarantees and the cost of the credit subsidy required for the guarantee. Uncertainties in the estimation of subsidy and support costs for federally-guaranteed loans, federal utilities, and participants in Rural Utilities Service loan programs are reflected by providing a range of subsidy estimates for selected programs in the body of the report. To facilitate exposition, the Executive Summary presents only midpoint value estimates for these programs.

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    Not All Subsidies Impacting the Energy Sector Are Included in this Report

    This report only includes subsidies meeting the following criteria: they are provided by the federal government, they provide a financial benefit with an identifiable FY 2010 federal budget impact, and, they are specifically targeted at energy. These criteria, particularly the energy-specific requirement, exclude some subsidies that benefit the energy sector. Some of the subsidies excluded from this analysis are discussed below.

    For example, Section 199 of the American Jobs Creation Act of 2004, referred to as the domestic manufacturing deduction, provides reductions in taxable income for American manufacturers, including domestic oil and gas producers and refiners. The value of the Section 199 deduction in FY 2010 is estimated at $13 billion and approximately 25 percent is energy-related. While domestic oil and natural gas companies utilized this provision to reduce their 2010 tax liability, other industries, including traditional manufacturing sectors and other activities such as engineering and architectural services, sound recordings, and qualified film production, also took advantage of it.

    Accelerated depreciation schedules arise from many provisions of the tax code and are widely available to energy and non-energy industries. Because the Internal Revenue Service (IRS) allows firms and individuals to deduct depreciation as an expense when computing their tax liability, accelerated depreciation front-loads deductible expenses, thereby reducing the present value of that liability. Accelerated depreciation provides a subsidy only to the extent that the amount of depreciation specified by the IRS exceeds the true economic “wear and tear” costs. Most empirical studies of economic depreciation have found evidence of some type of accelerated economic depreciation affecting various industries, though the exact pattern varied from study to study. This report includes the impacts of accelerated depreciation schedules identified as specific to the energy sector, but excludes schedules with applicability beyond the energy sector.

    Subsidized credit for energy infrastructure projects is frequently provided by export credit agencies and multilateral development banks. However, entities such as the Export-Import Bank of the United States also provide support to non-energy industries including aerospace, medical equipment, non-energy mining, and agribusiness.

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    Tax-exempt municipal bonds allow publicly-owned utilities to obtain lower interest rates than those available from either private borrowers or the U.S. Treasury. However, while they are used by energy industries such as electric utilities, the group of eligible borrowers also includes water utilities, telecommunication facilities, waste treatment plants, and other publicly-owned entities.

    The tax code allows a foreign tax credit for income taxes paid to foreign countries. If a multinational company is subject to a foreign country's levy, and it also receives a specific economic benefit from that foreign country, it is classified as a “dual-capacity taxpayer.” Dual-capacity taxpayers cannot claim a credit for any part of the foreign levy unless it is established that the amount paid under a distinct element of the foreign levy is a tax, rather than a compulsory payment for some direct or indirect economic benefit. Major oil companies are significant beneficiaries of this provision. However, this tax provision is also available to non-energy industries.

    The tax code also provides special treatment for some publicly-traded partnerships (PTP). Section 7704 of the Code generally treats a publicly-traded partnership as a corporation for federal income tax purposes. For this purpose, a PTP is any partnership that is traded on an established securities market or secondary market. However, a notable exception to Section 7704 occurs if 90 percent of the gross income of a PTP is passive-type income, such as interest, dividends, real property rents, gains from the disposition of real property, and similar income or gains. This would include gains from natural resource sales. In these cases, the PTP is exempt from corporate level taxation, thus allowing it to claim pass-through status for tax purposes.4As with many other tax provisions, the tax treatment of PTPs is not exclusive to the energy sector.

    Another potential subsidy source not addressed in this report is associated with energy-related trust funds financed by taxes and fees. Examples include the Black Lung Disability Trust Fund, the Leaking Underground Storage Tank Trust Fund, the Oil Spill Liability Trust Fund, the Pipeline Safety Fund, the Aquatic Resources Trust Fund, the Abandoned Mine Reclamation Fund, the Nuclear Waste Fund, and the Uranium Enrichment Decontamination and Decommissioning Fund. By tying trust fund collections to products and activities responsible for the damages they address, the cost of programs for remediation and prevention of those damages can be reflected in the market price of energy use and production. If the fees or taxes collected by trust funds have been set appropriately, the funds will have sufficient resources to meet their obligations with the result that no subsidy is involved. However, if the fees or taxes are set too low, energy companies are receiving an implicit subsidy. These potential subsidies are not addressed in this report because of the difficulty in determining the sufficiency of the funds to meet potential liabilities and the fact that there is no direct federal budgetary impact in FY 2010.

    This report also does not attempt to quantify the potential subsidy resulting from limits to liability in case of a nuclear accident provided by Section 170 of the Atomic Energy Act of 1954, the Price-Anderson Act. The Price-Anderson Act requires each operator of a nuclear power plant to obtain the maximum amount of primary coverage of liability insurance. Currently, the amount is about $400 million. Damages exceeding that amount would be funded with a retroactive assessment on all other firms owning commercial reactors based upon the number of reactors they own. However, Price-Anderson places a limit on the total liability to all owners of commercial reactors at about $12 billion.

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    Key Findings

    The value of direct federal financial interventions and subsidies in energy markets doubled between 2007 and 2010, growing from $17.9 billion to $37.2 billion. In broad categories, the largest increase was for conservation and end-use subsidies, followed to a lesser degree by increases in electricity-related subsidies and subsidies for fuels used outside the electricity sector (Table ES1).

    A key factor in the increased support for conservation programs, end-use technologies and renewables was the passage of several pieces of legislation responding to the recent financial crisis and subsequent economic downturn, particularly the American Recovery and Reinvestment Act of 2009 (ARRA) and the Energy Improvement and Extension Act (EIEA). Some of the ARRA-related programs that account for a large portion of the growth in subsidies and support between FY 2007 and FY 2010 (Table ES2) are temporary and the subsidies associated with them are scheduled to phase out over the next few years (see box “Energy Provisions Included in Legislation Responding to the Recent Financial Crisis”). Other recent legislation impacting energy subsidies included the Food, Conservation, and Energy Act of 2008, which provided significant new subsidies to biofuels (primarily ethanol and biodiesel) producers, and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended the sunset dates for several tax expenditure programs, as well as the grant program for qualifying renewables.

    Conservation and end-use subsidies experienced rapid growth in both absolute and percentage terms, more than tripling in real terms between FY 2007 and FY 2010. The increase in subsidies and support was led by growth in direct expenditures and tax expenditures (Table ES2). The home energy efficiency improvement tax expenditure accounts for most of the increase in conservation-related subsidies between FY 2007 and FY 2010. Conservation subsidies were almost equally divided between direct expenditures and tax expenditures, with estimated tax credits for energy efficiency improvements to existing homes totaling $3.2 billion. These tax credits funded investments in energy-efficient windows, furnaces, boilers, boiler fans, and building envelope components. End-use subsidies, nearly all of which were provided through direct expenditures of appropriated funds, were boosted by a doubling of expenditures in the Low Income Home Energy Assistance Program (LIHEAP) spending between FY 2007 and FY 2010.5

    The composition of subsidies to specific fuels and technologies in FY 2010 is significantly different than in FY 2007, reflecting the elimination of subsidies to refined coal and increases in subsidies to renewable energy due to a change in the incentive structure. The growth in subsidies for renewable fuels is primarily driven by the $4.2 billion in expenditures for grants under Section 1603 of ARRA, which went mainly to wind facilities, and by growth in federal support for biofuels. The ARRA grant program allowed investors in new qualifying facilities to choose an upfront grant in lieu of the longstanding 10-year production tax credit that was also available, but which became less attractive to developers as the market for financial instruments based on tax credit streams withered following the financial crisis. Though the two options have roughly similar value to investors and cost to the government over the life of the projects, the grant program front loads the government’s support for covered projects in the year that the grant is awarded. If the wind and solar plants that took advantage of the grant program during the financial crisis had instead utilized the production tax credit program, the subsidy value reported in FY 2010 would have been much smaller, reflecting only the credit for up to one year of generation…Tax expenditures associated with ethanol tax credits also increased significantly between FY 2007 and FY 2010 with the growth in ethanol blending activity under the Renewable Fuel Standard.

    The DOE loan program, designed to support nuclear power, energy efficiency and renewable energy projects, advanced fossil fuels, electric power transmission systems, advanced technology vehicles, and leading-edge biofuels, was only in its early stages in FY 2010. The midpoint estimate of the loan subsidies was $1.6 billion in 2010. As more projects are approved, the loan subsidies associated with this program are expected to rise over time.

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    Energy Provisions Included in Legislation Responding to the Recent Financial Crisis

    Two laws enacted in response to the financial crisis of late 2008 and early 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) and the Energy Improvement and Extension Act (EIEA), include significant energy-related provisions.

    Both bills emphasize particular segments of the energy market such as use of renewable fuels in electricity production, alternative transportation fuels, clean energy facilities, upgrading the Nation’s high voltage transmission system, energy efficiency, and conservation.

    Both laws extended sunset provisions for some existing tax expenditures in addition to introducing new ones. These laws also featured provisions expanding the use of tax exempt bonds to publicly-owned energy providers. The energy-related provisions of EIEA were focused on tax expenditures. The energy-related provisions of ARRA included additional funding of existing direct expenditure, tax expenditure, and R&D programs, as well as funding for new direct expenditure, tax expenditure, and R&D programs; a new grant program available in lieu of production tax credits; and, expansion of DOE’s loan guarantee program, first established in 2005. Finally, ARRA provided the Western Area Power Administration and the Bonneville Power Administration each with $3.25 billion in new borrowing authority to expand their transmission systems to better accommodate renewable sources of electricity supply.

    ARRA created, expanded, or extended programs to increase the use of clean energy and improve energy efficiency. ARRA coupled an emphasis on promoting economic recovery and job creation with investments in energy programs. While only energy-related funds expended in FY 2010 are included in this report, ARRA included appropriations of more than $35.2 billion to the Department of Energy and provided more than $21 billion in energy tax incentives. This funding focused on energy efficiency, renewable energy, and smart grid investments. ARRA also provided $6 billion, of which $3.5 billion was subsequently rescinded, to fund a loan guarantee program administered by the U.S. DOE for eligible energy projects.

    ARRA’s Section 1603 energy grant program, which was designed as a supplement to existing energy production and investment tax credit programs directed at renewables, paid out $4.2 billion in FY 2010, targeted at wind (84 percent) and solar (11 percent) projects. ARRA also included additional spending on several existing direct expenditure programs. ARRA-related direct expenditures in FY 2010 totaled $8.5 billion… This included $1.5 billion to the Weatherization Assistance program, $682 million to the State Energy program, $409 million to smart grid investments, and $317 million to fund a program supporting advanced battery manufacturing. ARRA also provided $473 million in initial funding to the Conservation Block program (authorized by the Energy Independence and Security Act of 2007 (EISA)), to deploy economical, clean, and reliable conservation technologies.

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    At $3.2 billion, the Credit for Energy Efficiency Improvements to Existing Homes was the largest energy-specific tax expenditure in FY 2010 after the ethanol tax credit. Although established under the Energy Policy Act of 2005 (EPAct 2005), it was expanded under Section 302 of EIEA and amended under Section 1121 of ARRA. This credit is available to offset funds used for the installation of energy-efficient windows, furnaces, boilers, boiler fans, and building envelope components, such as exterior doors and any metal roof that has appropriate pigmented coatings.

    ARRA included $0.6 billion in new R&D funding. The largest target of this funding included basic science, at $159 million, followed by non-defense uranium enrichment decontamination and decommissioning, at $139 million.

    ARRA also expanded DOE’s loan guarantee authority that was first established under Section 1703 of EPAct 2005 by authorizing loan guarantees to electric power transmission systems and biofuels projects.

    EIEA and ARRA both contained provisions providing significant tax benefits to issuers and holders of certain energy-related tax-exempt bonds.8EIEA provided $800 million in additional financing for Clean Renewable Energy Bonds (CREBs) and provided a one-year extension to existing CREBs. EIEA also created two new categories of CREB-like financing: New Clean Renewable Energy Bonds (New CREBs) and Qualified Energy Conservation Bonds (QECBs). Section 1111 of ARRA increased the amount of funds available to issue New CREBS from $800 million to $2.4 billion. Section 1112 of ARRA increased the amount of funds available to finance QECBs from $800 million to $2.4 billion.

    The growth in energy-specific subsidies and support between FY 2007 and FY 2010 does not closely correspond to changes in energy consumption and production over the same time period. In fact, overall energy consumption actually fell from 101 quadrillion Btu to 98 quadrillion Btu between 2007 and 2010, reflecting economic conditions, while domestic energy production rose from 71 quadrillion Btu to 75 quadrillion Btu due to increasing domestic production of shale gas, crude oil, and renewable energy (Table ES3). While the overall amount of federal subsidies and support provided per unit of overall energy consumption or production has clearly grown, simply dividing the current value of subsidies by current consumption or production does not reflect either the long-run impact of imbedded subsidies and or the future impacts of current subsidies and support that may only be starting to impact energy markets. For example, increases in R&D expenditures are not reflected in the Nation’s energy mix unless and until the research leads to successful innovations that penetrate the market, a process that can take many years.

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    Findings Regarding Electricity-Related Subsidies and Support

    Electricity-related subsidies and support are estimated at $11.9 billion in FY 2010, up from $7.7 billion in FY 2007 (Table ES1). While fuel- and technology-related electricity subsidies grew 66 percent between FY 2007 and FY 2010, transmission and distribution system-related subsidies actually declined.

    Direct expenditures accounted for 39 percent of total electricity-related subsidies in FY 2010 (Table ES4). These expenditures were mostly the result of the ARRA Section 1603 grant program, 84-percent of which went to wind generation. As noted, the relatively high value for this program stems from the fact that the grant program places all of the costs in the year that a project is initiated, while the existing production tax credit that the grant substituted for spread the costs of the tax credit over the first 10 years of a project's operation. If developers return to using the production tax credit in the future, the first-year costs for each project will be much lower.

    Tax expenditures comprise over 28 percent of the total subsidies and support related to electricity production. Renewables accounted for 40 percent of all electricity-related tax expenditures in FY 2010, mostly due to the Sections 45 and 48 production and investment tax credits which predominantly went to wind facilities. A nuclear decommissioning–related tax credit accounted for $908 million in tax expenditures.

    Research and development accounted for 22 percent of the total subsidies and support to the electric power sector. Nuclear accounted for the highest level of R&D expenditures at $1,169 million, followed by renewables at $632 million, and coal at $575 million.

    Federal electricity support to federal utilities and participants in the Rural Utilities Service loan programs in the form of explicit and implicit loan guarantees are estimated at approximately $648 million in FY 2010. The level of this support is largely a function of the value of outstanding debt and prevailing interest rates.

    Relative to their share of total electricity generation, renewables received a large share of direct federal subsidies and support in FY 2010. For example, renewable fuels accounted for 10.3 percent of total generation, while they received 55.3 percent of federal subsidies and support (Tables ES4 and ES5). However, caution should be used when making such calculations because many factors can drive the results. For example, many of the programs that showed the largest increases in subsidies between FY 2007 and FY 2010 are supporting facilities that are still under construction, including energy equipment manufacturing facilities that may not affect energy consumption or production for several years. Furthermore, the ARRA 1603 grant program, that allows investors to choose an upfront grant instead of a 10-year production tax credit, tended to lead to much higher overall electricity subsidy estimates for renewables in FY 2010 than would have occurred had they continued to rely on the existing production tax credit program, which does not front-load subsidy costs. Focusing on a single year's data also does not capture the imbedded effects of subsidies that may have occurred over many years across all energy fuels and technologies.

    Among the specific fuels and technologies, wind plants received the largest share of direct federal subsidies and support in FY 2010, accounting for 42 percent of total electricity-related subsidies. While the share of electricity-related subsidies and support received by wind and solar technologies is disproportionate to their generation share, their generation has increased dramatically in the last decade. Wind generation in 2010 is nearly 16 times the level achieved in 2000 (Table ES5). While natural gas-fired capacity additions have dominated for most of the last 15 years, wind generating capacity additions have also ramped up substantially in recent years (Figure ES1).

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    Findings Regarding Subsidies and Support For Fuels Used Outside of the Electricity Sector

    Biofuels receive most of the subsidies and support for fuels used outside the electricity sector. Based on the subsidy categories used in this report, subsidies and support for fuels used outside the electricity sector, at $10.4 billion, accounted for 28 percent of total energy subsidies. In this category, biomass and biofuels received the largest subsidy in FY 2010, at $7.6 billion (Table ES6). Under the Volumetric Ethanol Excise Tax Credit (VEETC), blenders receive a $0.45-per gallon credit for each gallon of ethanol that is blended with gasoline for use as a motor fuel… Internal Revenue Service regulations require that blenders apply for VEETC refunds to offset gasoline excise tax payments, but they may submit a claim for payment or take a credit against other taxes if their VEETC credits exceed their gasoline excise tax liability. Based on its implementation rules, the Treasury reports VEETC as a $5.7-billion reduction in excise tax revenues for FY 2010. For purposes of this report, VEETC is classified as tax expenditure.

    Natural gas and petroleum liquids also received significant subsidies and support for fuels used outside the electricity sector. They accounted for 20.7 percent of the fuel specific subsidies and support and, together with biofuels, accounted for nearly 94 percent of the subsidies and support going to fuels not supporting electricity…