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Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 8, 2010

Cost of Fossil Fuels Makes Renewables a Harder Sell?

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/cost-fossil-fuels-makes-renewables-harder-sell/

This story on Sunday suggests that utilities are pulling back from investments in renewable energy over concerns about the cost. 

Invenergy…had a contract to sell [wind] power to a utility in Virginia, but state regulators rejected the deal, citing the recession and the lower prices of natural gas and other fossil fuels.

“The ratepayers of Virginia must be protected from costs for renewable energy that are unreasonably high,” the regulators said. Wind power would have increased the monthly bill of a typical residential customer by 0.2 percent.

Based on what price forecast?  The following chart illustrates the complexity of relying on fossil fuel prices when making decisions about renewable energy.  Note that wind and solar prices are relatively stable (i.e. zero).

The chart does a good job of showing the futility of predicting natural gas prices, but the timeline smooths out coal price changes, particularly by region.  Here’s a closer look at coal prices since 2007, courtesy of the federal EIA:

Utilities that are making shortsighted decisions about renewables based on current fossil fuel price trajectories are going to get burned, and so are their ratepayers. 

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 5, 2010

Provincial Feed-in Tariffs Spurring Community Power

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/provincial-feed-tariffs-spurring-community-power/

With its feed-in tariff, the Canadian province of Ontario is set to become the leading community renewable energy center in North America. 

In an Oct. 12, 2010 report, [Ontario Power Authority] said that it has signed contracts for 264 megawatts of community-owned projects, and another 120 megawatts of projects owned by Ontario’s aboriginal peoples. The contracts represent 16 percent of Ontario’s 2,500 megawatts of feed-in tariff contracts to date.

No other jurisdiction in North America has made such a concerted effort as Ontario has to guarantee that a portion of the new renewable generating capacity to be built will be owned by its own citizens and native peoples through the province’s innovative feed-in tariff program.

This is in addition to Ontario’s microFIT program (a small renewable energy project program under the umbrella of feed-in tariff programs), which assures connection for homeowners and farmers wanting to generate electricity with solar panels for sale to the grid. There are 20,000 applications for microFIT contracts.

It’s noteworthy that despite Ontario’s success, Europeans still have significant leads based on their longstanding feed-in tariff policies.

…One-half of all wind generation in Germany, or more than 12,000 megawatts, is owned by local investors. The percentage of local ownership is even higher in Denmark and the Netherlands.

But North Americans are learning.  Vermont recently adopted a feed-in tariff, and the several other U.S. states and the Canadian province of Nova Scotia are also considering it.

Nova Scotia begins hearings Nov. 8, 2010 on the province’s community feed-in tariff program. The Nova Scotia Utility and Review Board will determine feed-in tariffs for large and small wind, biomass, and tidal power that will go into effect on April 4, 2011. Projects in the 100 megawatt program are set aside for Nova Scotians.

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 4, 2010

Public Utilities Finding Smart Grid Success

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/public-utilities-finding-smart-grid-success/

While there have been prominent news stories of smart grid cost overruns and customer dissatisfaction with programs run by investor-owned utilities, municipal utility smart grid programs are enjoying success.  Earlier this week, Public Power Daily featured three municipal utilities whose smart grid efforts are paying off. 

In two cases, city-owned fiber optic broadband networks are providing crucial information and revenue to support the smart grid.  In every case, customer satisfaction ranks much higher than rate of return on investment (although every investment will pay back).

EPB, the municipal utility serving the Chattanooga [Tennessee] area, is close to completing its rollout of a fiber optic system that will make the utility the first Internet service provider in the nation to offer 1-gigabit-per-second service (see the Sept. 16 Public Power Daily)…the utility is preparing to install new reclosers on its distribution system that will use its fiber optic network to measure current and voltages, locate faults and open and close switches…The IntelliRupter reclosers and software made by S&C Electric Co. “will play a critical role in helping us reach our goal of a 40% reduction in customer outage minutes,” Wade said. Based on an Energy Department study, outages cost Chattanooga an estimated $100 million a year, he said…The information gathered by the new reclosers should help with transformer load management, cutting down on transformer maintenance and allowing the utility to replace transformers with smaller ones, Wade said.

In 2008, with the help of a consultant, the [Leesburg, FL] utility put together a smart grid business plan that projected operational savings of $900,000 for the city’s electric system and an additional $400,000 for the water system, he said. Then, in 2009, Leesburg became one of 33 public power utilities to win smart grid grants from the Department of Energy under the American Recovery and Reinvestment Act. The utility received $9.75 million (which it must match) for its smart grid project, plus a $1.4 million energy efficiency and conservation block grant…With the grants, Leesburg is installing smart meters for all of its 23,000 customers, plus more than 4,000 energy management systems that will allow customers to program when they operate their electrical appliances such as air conditioners and water heaters. With the goal of reducing peak demand, the utility will look at a variety of incentive rate plans… Leesburg plans to give its customers a guarantee that those opting for an incentive rate will not pay more than the utility’s flat rate, he said. “The folks that want to participate, we want to reward,” he said.

Ponca City has 155 miles of fiber that connects eight towers, a wireless mesh system with 500 WiFi radios, and 28,000 electric and water meters, said Technology Services Director Craige Baird. That robust communications system provides a variety of benefits. After the utility replaced all of its meters, it found a lot of losses and recouped almost $500,000 in the first year in back sales, he said.

For more on the value of publicly-owned broadband networks, see Muninetworks.org, run by our ILSR colleague Christopher Mitchell.

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Article filed under Energy | Written by admin | No Comments | Updated on Nov 2, 2010

Portland, Maine, Borrows Money to Save Energy and Save Money

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/portland-maine-borrows-money-save-energy-and-save-money/

Unlike many cities, Portland, Maine, has forged ahead with a significant energy efficiency plan without federal stimulus dollars.  Simply borrowing money through bonding and investing in energy saving improvements, the city will – over 20 years – reduce operating costs by $700,000 per year and shrink its carbon footprint by 30 percent. Our favorite quote from the news story: "We are spending money to save money," Councilor John M. Anton told critics. "And we are borrowing at historically low interest rates. This is good fiscal management on the city’s part."  Bravo. Continue reading

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 2, 2010

Is Focus on Bigger Projects Holding Solar Back in the U.S.?

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/focus-bigger-projects-holding-solar-back-us/

An article in the New York Times last week suggested that a dearth of financing is holding back solar power in the United States. In particular, the authors note that “the country needs to build large plants covering hundreds of acres,” projects that can cost $1 billion. These large solar projects are languishing without financing, they assert, in part because of the lengthy process to claim federal government loan guarantees and because “Bankers generally prefer smaller, less risky projects and shorter-term loans than the 20-year terms solar plants typically need.” Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 1, 2010

Focus on Big Holds Solar Back in U.S.

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/focus-big-holds-solar-back-us/

An article in the New York Times last week suggested that a dearth of financing is holding back solar power in the United States. In particular, the authors note that “the country needs to build large plants covering hundreds of acres,” projects that can cost $1 billion. These large solar projects are languishing without financing,… Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 1, 2010

Largest Parts of the Electric Grid are the Most Vulnerable

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/largest-parts-electric-grid-are-most-vulnerable/

A recent study in the journal Safety Science suggested that the most vulnerable parts of the grid were the smallest, like neighborhood substations. 

“That’s a bunch of hooey,” says Seth Blumsack, Hines’s colleague at Penn State.

Hines and Blumsack’s recent study, published in the journal Chaos on Sept. 28, found just the opposite. Drawing on real-world data from the Eastern U.S. power grid and accounting for the two most important laws of physics governing the flow of electricity, they show that “the most vulnerable locations are the ones that have most flow through them,” Hines says. Think highly connected transformers and major power-generating stations. Score one point for common sense.

And score one point for distributed generation. 

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Oct 29, 2010

While Many Wait for Stimulus, One City Borrows to Save Money

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/while-many-wait-stimulus-one-city-borrows-save-money/

Unlike many cities, Portland, Maine, has forged ahead with a significant energy efficiency plan without federal stimulus dollars.  Simply borrowing money through bonding to investing in energy saving improvements, the city will – over 20 years – reduce operating costs by $700,000 per year and shrink its carbon footprint by 30 percent.

PORTLAND — The City Council agreed Monday night to borrow as much as $11 million for energy improvement projects in 30 municipal and 15 school buildings throughout Portland…Councilor David Marshall said the energy conservation measures will enable the city to reduce its carbon footprint by more than 30 percent.

…Ameresco [a Massachusetts-based consulting firm] has said that the projects will save about $700,000 a year in utility costs, and by the end of the 20-year bond period will pay back the cost of the work and interest on the bond.

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Oct 29, 2010

Homes with Solar Sell Faster, and For More

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/homes-solar-sell-faster-and-more/

In by far the most exhaustive and detailed study to date, the National Renewable Energy Laboratory (NREL) found that solar homes sold 20% faster, for 17% more than the equivalent non-solar homes, across several subdivisions built by different California builders.

The study looked at a number of housing developments where the homes were otherwise identical except for the solar energy systems. 

Also interesting was that buyers were more interested in solar when it was-preinstalled:

If solar was already on the house, and factored into the price already, buyers were more likely to pick a house with solar. But if it was just one more decision to be made at the point of purchase, the decision got shelved.

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Article filed under Energy | Written by John Farrell | 1 Comment | Updated on Oct 28, 2010

Burning $300 million on the climate battle

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/burning-300-million-climate-battle/

I heard this week that foundations collectively spent as much as $300 million in the failed attempt to pass comprehensive climate legislation during the last session in Congress. Someone sarcastically remarked that we should have just burned the money for energy instead.

But would it have been worth it? A short analysis follows:

Assume that the $300 million was dispersed in $1 bills. Each dollar bill weighs 1 gram and is 75% cotton and 25% linen. Finding the energy content of a dollar was not easy (even though many conservatives accuse government of spending money on worthless research, apparently no one is literally burning through cash). As a substitute, we used the figure of 7,500 Btu per pound for cotton linters.

Our $300 million equals 300 million grams of dollars, which is 660,800 pounds of dollars, or 330 tons.

At 7,500 Btu per pound, burning $300 million nets us 4.96 billion Btus.  And at 3,413 Btus per kilowatt-hour (generously assuming 100% conversion efficiency compared to typical power plant efficiencies of 30-35%), we get 1.45 million kilowatt-hours of electricity.  It’s net-zero carbon dioxide emissions, because during its growth, the cotton plant took up all the carbon dioxide emitted during combustion.  For comparison, 1.45 million kWhs from coal-fired electricity emits about 1,450 tons of carbon dioxide. 

So, if we burn $300 million for electricity instead of passing climate legislation…

  • …we can power 145 homes for a year (at 10,000 kWh per year)
  • …offset 1,315 tonnes of carbon dioxide (0.00002% of annual U.S. emissions)…
  • …at a cost of $228,000 per ton.

Conservatives take note: it’s far cheaper to get carbon dioxide emission reductions (under $100 per ton!) to pass comprehensive climate legislation than to burn $300 million.

Update: this analysis is not meant to imply that we shouldn’t fight for climate policy, but that the failure (like burning the money) is costly.

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