The results of a new study suggest that the key to reversing the long-term trend of stagnating incomes in the U.S. lies in nurturing small, locally owned businesses and limiting further expansion and market consolidation by large corporations. Continue reading
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Commentary by Al Weinrub, August 10, 2011
Jerry Brown led off his conference of 250 high level renewable energy stakeholders July 25-26, 2011 by calling for a “more secure, more sustainable, more American” energy system. The conference was organized to help chart the path to 12,000 MW of local renewable power by 2020, as called for by the Governor.
Key to achieving the 12,000 megawatts will be overcoming significant obstacles, among them being bureaucratic approval and permitting barriers, grid integration and interconnect difficulties, and finding appropriate amounts of investment capital. And, of course, building political consensus.
The conference started off with a bang as the governor, referring to some of these obstacles, blatantly asserted that “some kind of opposition you have to crush.”
With that auspicious beginning, and after the Governor and press cameras had departed, two intensive days of deliberation began. The by-invitation-only participants consisted of about 50% renewable industry representatives and consultants, 25% government personnel (the governor’s staff, energy agency commissioners and staff, a few legislators, and county and regional agency representatives), and the remainder representing investor-owned and municipal utilities, a few unions, financial institutions, environmentalists, and a smattering of decentralized/distributed generation advocates.
There seemed to be a great deal of consensus at the conference about the need to streamline renewable energy project approvals across the plethora of government agencies that are often involved, and also about the need for utilities to be more forthcoming about technical data required by project developers. There was much less consensus, however, about what kind of projects would be developed, where, and by whom.
In fact, the main contention at the conference was between those who emphasized least cost of energy as the main criteria for decentralized generation projects and those who stressed other values, such as local economic development, jobs, equity, community health, and the like. The conflict was framed in many ways, but emerged most directly between those parties who advocated for large projects (5 – 20 MW) through a renewable auction mechanism (RAM and those who advocated for community-scale projects (0 -5 MW) promoted through a feed-in tariff mechanism.
Not surprisingly, the utilities and big developers like Recurrent Energy were pushing the least-cost criteria, calling for the 12,000 MW to be developed as larger 10 -20 MW ground-mounted solar PV projects close to transmission substations and selected through a RAM program. Surprisingly, they were joined by The Utility Reform Network (TURN), which argued that this approach would result in the least cost of energy and hence best protection of ratepayers.
The other side included the Los Angeles Business Council, the California Environmental Justice Alliance, the Clean Coalition, the Local Clean Energy Alliance, Solar Done Right, and other long-time decentralized generation advocates who called for the 12,000 MW to be developed as smaller-scale projects in urbanized areas where economic recovery, jobs, equity, and health are key goals. These parties argued for a comprehensive feed-in tariff program that would promote this type of local renewable development. They also argued against the prevailing assumption that larger scale projects are less expensive, pointing not only to rapidly declining prices for solar PV installations, but to a fuller set of socio-economic costs and benefits, which the big players conveniently ignored.
Amidst the palpable jubilation of the renewable energy industry over Brown’s commitment to local renewable energy, the Governor’s conference revealed emerging battle lines over how that 12,000 MW target will be deployed. Will California’s “local” renewable energy projects primarily represent the interests of the big industry players or the interests of local communities?
This is a question for which the stakes are high; whether California will go down the old road (simply calling it something new) or whether it will take a qualitatively different approach. If the representation of invitees at this conference is indicative of the Governor’s leanings, there is reason for concern, if not alarm. Despite Brown’s campaign platform of more democracy and more local control, there was very little community present at this conference.
A political battle over who will benefit from decentralized/distributed generation of renewable energy is shaping up. This is a battle for which our communities will need to mobilize if we are not to be first marginalized and then regarded as an opposition to be crushed.
In our 2009 report Energy Self-Reliant States, we published the following map detailing the percent of a state’s electricity that could come from in-state renewable energy resources.
Click the image for a larger version.
Tom Carlson of the Chesapeake Climate Action Network recently contacted me to let me know that a newer report substantially increases the estimated offshore wind potential for Maryland (in fact, we had found no studies at the time of publication showing any offshore potential).
A 2010 study by the University of Delaware’s Center for Carbon-free Power Integration, College of Earth, Ocean and Environment found that Maryland could in fact get two-thirds of its electricity from shallow-water offshore wind (depths of 35 meters or less).
With that update, our Energy Self-Reliant States map would show that Maryland could in fact get 107% of its electricity from in-state sources, rather than just 40%.
Over at Climate Progress, Stephen Lacey recently asked why there isn’t more development of micro hydro in the U.S., given its potential to provide more than 30,000 low-cost megawatts of power to U.S. states (and bipartisan political support).
We can’t answer that question any better than Stephen, but we can provide a good illustration of that potential, replicating a map from our 2010 report Energy Self-Reliant States (click here for a larger version):
New Micro Hydro Power Potential (Percent of State Electricity Sales)
Two days after Standard and Poor’s downgraded US government bonds, David Llewellyn-Smith, writing in The Sydney Morning Herald noted, “We now face the ludicrous circumstance in which the United States government holds … a lower (credit) rating than Microsoft, despite issuing its own currency (the world’s reserve), being able to raise taxes when it chooses,… Continue reading
One of my colleagues informed me recently that my work on feed-in tariffs was cited in a recent report by the Intergovernmental Panel on Climate Change (IPCC): the Special Report on Renewable Energy Sources and Climate Change Mitigation. I can’t say I’ve read the IPCC report, but it’s an honor to have my work noticed by such a distinguished organization.
In case you haven’t seen it, the report they cited is one I published in 2009 called Feed-in Tariffs in America: Driving the Economy with Renewable Energy Policy that Works. Click through for the executive summary or to download the report.
Israel dealt with a similar debate, whether to adopt the Feed-in-Tariff method or the bidding method to promote the generation of renewable energy into the grid. While the electricity Authority (the equivalent body in Israel for NERSA) supported the REFIT process and the Ministry of National Infrastructures (the equivalent to the Department of Energy) and the Ministry of Finance preferred the Bidding process. Israel decided to publish REFIT in 2008, while issuing few tenders in the bidding process.
While the bidding based projects are not making big progress the REFIT based projects generate 100 MW of small systems today, an approved accumulated capacity of 150 MW that will be implemented soon. Quota of 300 MW for medium size plants was published, projects with the accumulated capacity of 200MW where given licenses and other are awaiting approval â out of 1.3 GW of proposals.
Tenders in the bidding process published in 2008 and no one was awarded the contract yet. There is only one participant in each one of in two tenders for CSP plants (100MW each). There is also a tender for a PV plant (30MW) but bidders didn’t submit their final proposals yet.
Advantages of the REFIT process over the bidding process:
1. Promotion of entrepreneurship and job creation: The Bidding process limits the game to few big players and excludes the small ones. The REFIT process allows to small and medium companies to participate. Israel developed an entire new renewable energy industry with close to a 100 active companies.
2. Efficiency: In bidding process the government becomes very involved and often intervenes in engineering and technological issues that is not capable to deal with. That creates delays and complications in the process.
3. Meeting the targets: Publishing tenders takes a lot of time, often much more than expected. That can result in not meeting the schedule targets. There is also a fear that companies that will lose the tenders will appeal to court and create more delays.
4. Simple rules of the game: the REFIT process puts together very simple rules that make it more transparent and easy to deal with.
5. The disadvantage of the REFIT process is that prices set at the beginning of the process do not reflect reduction in costs for the developers in the future. The solution is to publish quotas and a gradually decreasing REFIT.
All countries in Europe have decided to adopt the REFIT method. Israel found it as the most efficient way to promote renewable energy.
Dr. Ilan Suliman, former Vice chairman of the Israeli Electricity Authority has helped in putting these points together.
I received this information via email, but it’s also available here.
What would happen if the U.S. adopted the world’s flagship solar energy policy – a feed-in tariff? This policy is responsible for three-quarters of the world’s solar power capacity and offers the simplest mechanism for expanding production of solar power and other renewable energy.
Pricing CLEAN Contracts for Solar PV in the U.S. explores how such a policy (also known as CLEAN contracts) would be priced in the U.S. market, translating the world-leading German program to America. The report, authored by ILSR senior researcher John Farrell, accounts for the much greater solar resource in the U.S. and examines the price utilities would have to pay to obtain the most solar, most affordably.
The report examines what these prices would be with existing federal incentives and without, exploring the price states could pay to maximize their solar power potential.
CLEAN Rate for < 30 kW Rooftop Solar PV @ $3.50/W – ITC and depreciation
What would happen if the U.S. adopted the world’s flagship solar energy policy – a feed-in tariff? This policy is responsible for three-quarters of the world’s solar power capacity and offers the simplest mechanism for expanding production of solar power and other renewable energy. Pricing CLEAN Contracts for Solar PV in the U.S.explores how such… Continue reading