Germany is the unquestioned world leader in renewable energy. By mid-2011, the European nation generated over 20 percent of its electricity from wind and solar power alone, and had created over 400,000 jobs in the industry. The sweet German success is no accident, however, and the following pie chart illustrates the results of a carefully… Continue reading
Viewing the local ownership tag archive Page 4 of 9
This is a presentation by John Farrell to the MDV-SEIA Solar Energy Focus conference in Washington, DC. In it, I discuss the transformation in the electricity system being wrought by clean energy sources, the winning economies of local solar power, how the drawbacks of solar are technically surmountable, and how public policy must change to… Continue reading
By a razor-thin margin, Boulder citizens gave the city a victory for energy self-reliance on Tuesday, approving two ballot measures to let the city form a municipal utility. If the city moves ahead, it would capture nearly $100 million currently spent on electricity imports and instead create up to $350 million in local economic development by dramatically increasing local clean energy production.
The stage was set over several years, as the city’s multiple pleas for more clean energy were given short shrift by the incumbent electric utility, Xcel Energy. Instead of meeting local demands for more wind and solar power, Xcel instead financed a new coal power plant and told Boulder that it could have more wind power only if it paid extra, and paid when the wind didn’t blow. In response, the city authorized two measures for the Nov. 1 ballot to allow the city to pursue municipal clean energy production.
The campaign was enormously lopsided. Xcel dumped nearly $1 million into a vote ‘no’ campaign, outspending local clean energy supporters by a 10-to-1 margin and spending nearly $77 for each no vote. On the flip side, nearly every local business or newspaper endorsement (and nearly 1000 individual citizen endorsements) supported a ‘yes’ vote. Despite the financial disadvantage, the local grassroots groups won, though their margin of victory was less than 3%.
The victory margin was small, but the clean energy and economic opportunity is enormous. According to a citizen-led and peer reviewed study, the city could increase renewable energy production by 40 percent from multiple, local sources without increasing rates. In contrast to the $100 million in revenue sent to Xcel under the current arrangement, the economic value of local energy production and ownership could multiply within the city’s economy to as much as $350 million a year, according to research by the National Renewable Energy Laboratory.
If the city uses its new authority to become a utility, future generations may look back at 11/1/11 as the shot heard round the world – a shot fired for clean, local energy – and ask why more Americans didn’t “go Boulder” sooner.
In just three weeks, citizens of Boulder, CO, will vote on whether to begin a big, formal process to unplug from Xcel Energy’s system and plug into local energy self-reliance. The vote to form a municipal electric utility could set a precedent for communities across the United States to keep millions of dollars local instead of sending them to remote electric utilities each year.
The vote on ballot measures 2B and 2C is the culmination of a multi-year struggle by the city of Boulder meet the Kyoto greenhouse gas emission targets by getting less coal power and more renewable energy from its investor-owned utility.
At every turn, the utility has stalled local efforts.
When the city first considered municipalization, Xcel offered to finance and build a local smart grid but has since been allowed by the state’s public utility commission to charge Coloradans for significant cost overruns. When the city asked Xcel to bring in more clean energy, the utility offered to build a new wind plant and import its power from across the state only if Boulder citizens agreed to pay more when the wind blew and pay when it didn’t, too. Despite the ill nature of the offer, the city offered to put it on the ballot along with a vote to municipalize, but Xcel refused, demanding that the city also offer citizens a separate “status quo” measure.
In contrast, a Boulder-owned utility offers enormous clean energy and economic opportunity without having to beg a big, private company. The city could increase renewable energy production by 40% from multiple, local sources without increasing rates, according to a citizen-led peer reviewed study. The economic value of local energy ownership would multiply within the city’s economy to as much as $350 million a year, according to research by the National Renewable Energy Laboratory.
But with $100 million a year in revenues from Boulder ratepayers on the line, Xcel’s fight is getting as dirty as its nearby Cherokee coal plant. Xcel has dumped over $450,000 into a vote no campaign, 10 times the expenditures of the grassroots groups supporting the municipalization ballot measure. The utility’s front group has flogged a web advertisement that falsely asserts that electricity will be unreliable if the city has control, even though 1 in 7 Americans gets their (reliable) electricity from municipal utilities. Xcel has posted job notices on light poles offering residents up to $12 an hour to work as “grassroots” utility flaks. And in a purely spiteful move, Xcel also succeeded in banning Boulder resident Leslie Glustrom from participating at the Public Utilities Commission, where she had asked tough questions about Xcel’s new coal power plants and proposed rate increases.
Locals are fighting back. Citizens for Boulder’s Clean Energy Future has organized a crack team of technical and financial experts to model the impact of the municipal utility and is pounding the pavement to counter Xcel’s campaign of misinformation. The coalition has received endorsements from dozens of local elected officials and businesses, two local newspapers, and nearly one thousand residents. Even President Obama’s former green jobs advisor Van Jones starred in a video endorsing Boulder’s effort for local energy self-reliance.
The battle for local control isn’t just in Boulder. Recently a number of Massachusetts towns have pursued municipal electric plants when the private electric company took too long to restore power after Hurricane Irene. And in nearby Longmont, CO, citizens may vote to use their existing fiber optic network to provide better internet broadband services (if citizens can overcome the $250,000 being spent by private providers CenturyLink and Comcast).
The stakes are high. Buying electricity from Xcel sends $100 million out of the Boulder economy each year, and helps perpetuate a centrally-controlled grid reliant on coal-fired power (and often hostile to wind power). Ratepayers across America may not have the chance to weigh in on Boulder’s vote this November, but they should watch intently (and donate if they like), because Boulder citizens may be firing the first “shot heard round the world” for local control of their clean energy future.
I gave a presentation last night to a public forum hosted by Think Again MN on maximizing the economic returns from the state’s clean energy resources. I was joined by Lynn Hinkle of the Minnesota Solar Energy Industries Association (and former union labor representative) and George Crocker from the North American Water Office (and passionate community organizer). The whole video is below, with my presentation starting around 24:00.
To view just the slide show of my presentation, click below:
A presentation I gave last Friday to the Arizona Corporation Commission.
Senior Researcher John Farrell presented on the benefits of local clean energy to a crowd in Boulder, CO, in April 2011 at the invitation of the local organization Clean Energy Action. The city of Boulder is currently considering municipalization of its utility. Continue reading
The use of tax credits as the primary federal incentive for renewable energy has often stymied cities, counties, and cooperatives from constructing and owning their own wind farm. But the temporary cash grant in lieu of the tax credit (expiring this December) has opened the door for one South Dakota cooperative and over 600 local investors:
The Crow Lake Wind Project, built by electric cooperative Basin Electric subsidiary PrairieWinds SD 1, Inc., is located just east of Chamberlain, S.D. With 150 MW of the project’s 162 MW owned by Basin Electric subsidiary PrairieWinds SD1, Inc., the facility has taken over the title of being the largest wind project in the U.S. owned solely by a cooperative, according to Basin Electric. [emphasis added]
The project is also distinguished for having local investors in addition to ownership by the local cooperative:
The entire project consists of 108 GE 1.5-MW turbines, 100 of which are owned and operated by PrairieWinds. A group of local community investors called the South Dakota Wind Partners owns seven of the turbines, and one turbine has been sold to the Mitchell Technical Institute (MTI), to be used as part of the school’s wind turbine technology program, which launched in 2009. PrairieWinds, which constructed the seven turbines now owned by the South Dakota Wind Partners, will also operate them. [emphasis added]
The key to success was the limited-time opportunity for the cooperative to access the federal incentive for wind power:
The opportunity became viable following passage of 2009’s American Recovery and Reinvestment Act, which created a tax grant option allowing small investors to access government incentives and tax benefits, making public wind ownership possible. Creating the Wind Partners for that purpose were Basin Electric member East River Electric Power Cooperative, the South Dakota Farm Bureau Federation, the South Dakota Farmers Union and the South Dakota Corn Utilization Council…
“This development model created opportunity for small local investors to have direct local ownership in wind energy and access the tax benefits previously reserved for large equity investors,” said Jeff Nelson, general manager at East River Electric. “It offers a model for others to participate in community-based wind projects.”
The South Dakota Wind Partners consist of over 600 South Dakota investors, some who host the project’s 7 turbines and many who do not. Investors bought shares in increments of $15,000 (combinations of debt and equity). Brian Minish, who manages the project for the South Dakota Wind Partners, hopes to see future opportunities for this kind of development. “There’s a lot of political benefit in letting local people become investors in the project,” Minish said in an interview this afternoon, “local ownership can help reduce opposition to wind power projects.”
Photo credit: Flickr user tinney
A new article in the journal Energy Policy supports the notion that local ownership is key to overcoming local resistance to renewable energy. The article summarizes a survey conducted of two towns in Germany, both with local wind projects, but only one that was locally owned. The results are summarized in this chart:
Guess which town has the locally owned project?
If you guessed Zschadraß, you win. With local ownership of the wind project, 45% of residents had a positive view toward more wind energy. In the town with an absentee-owned project (Nossen), only 16% of residents had a positive view of expanding wind power; a majority had a negative view.
Ownership matters, and U.S. renewable energy policy typically makes local ownership more difficult.