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Green Power Update |
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Topics in this September 2012 Green Power Update.
PJM well positioned to address EPA regs
and advance renewables In addition to the IMM quarterly report, the
Government Accountability Office (GAO) in July issued a report finding
that the EPA's regulations are not expected to create reliability problems
for the grid. The GAO report does make a recommendation for the Federal
Energy Regulatory Commission (FERC) and EPA to enhance communications around
EPA's air rules and their effect on the grid. Underscoring the impact that natural gas and
renewable generation is having on the market, the EIA in August released data
citing 165 new, mostly natural gas and renewable, generators across the U.S.
that went online in 33 states in the first six months of 2012. Wind
Energy Update Allowing the PTC to expire will diminish gains
made in domestic wind manufacturing. A relatively stable commitment to the
PTC over the past six years has helped turn wind energy into one of the
fastest-growing manufacturing sectors in the U.S., with over 500 factories in
43 states. According to the U.S. Department of Energy's (DOE) latest wind
power annual report, 67
percent of the equipment used in American wind power projects is now sourced
domestically, almost double the reported content for 2005-2006. Failing to
extend the PTC will create uncertainty, sending manufacturing jobs and plants
back overseas, where there is a more stable commitment to wind energy. Pennsylvania has much to lose if Congress allows
this important credit to expire. Gamesa alone has
invested over $175 million in Pennsylvania with two manufacturing facilities,
and employs over 800 workers in the state. Additionally, there are more than
150 companies in Pennsylvania involved in the wind industry, supporting
approximately 4,000 jobs across the state. According to the American Wind Energy
Association, U.S. wind power in August reached 50 gigawatts of installed capacity, up from only 5 gigawatts in 2003. Fifty gigawatts
of wind power is enough to power 12.8 million homes, and has the equivalent
electricity generating power of over 44 coal-fired power plants. The
tremendous growth and potential of American wind energy will be halted if the
PTC is not extended this year. Whooping it up at Mehoopany Wind Farm Progress was marked in late July at a
"signing party" where individuals, including U.S. Representative
Tom Marino (R-Lycoming County), could sign one of the 130-foot blades soon to
be hoisted into the air. John Graham, BP Wind Energy's president and chief
executive officer, alluded to the company's interest in building an even
larger wind farm in Pennsylvania, slated for 2014, if Congress can extend the
wind energy Production Tax Credit (PTC). Graham estimated the proposed wind
farm would entail a $340 million investment. In early August, the Senate Finance Committee passed a PTC
extension as part of a $250 billion tax extenders package. Senate Majority
Leader Harry Reid (D-Nev.) has expressed confidence that a PTC extension will
be in place by the end of 2012. It is unlikely, however, that anything will
happen before the November elections. China and Vietnam subject to wind manufacturing tariffs Prior to the ruling on steel towers, the U.S.
Commerce Department found China guilty of providing improper subsidies to
Chinese solar photovoltaic (PV) manufacturers as well as flooding the U.S.
with under-priced PV panels. While the rulings by the Commerce Department
will affect the wind and solar industries differently, these rulings have
exacerbated tense trade relations between the U.S. and China, and have
prompted much conversation throughout the renewable energy sector. Solar
Energy Update This project is illustrative of the increasing
popularity of third-party models in the solar industry. Tangent Energy
Solutions Inc. of Philadelphia will own the array while Eaton will buy the
generated electricity through a 20-year power purchase agreement. The project
was financed by a $5 million Commonwealth Financing Authority grant, in
addition to private backing. PennFuture is currently overseeing a Department of Energy SunShot project for southwestern Pennsylvania. According
to our program manager, Sharon Pillar, "Everyone calls us the energy
capital of the country, and solar is going to be a big part of that mix. That
Eaton is willing to invest on that scale is a testament to what is the future
of the electrical and energy industry." The state has 157 MW of
installed solar, but only 4 MW in southwestern Pennsylvania. Solar burns bright across the U.S. Highlights for 2011 include a doubling of
installed PV capacity for larger systems in the utility and commercial
sectors. While no new concentrating solar power (CSP) plants were connected
to the grid in 2011, several plants are planned for 2012. According to the report, Pennsylvania ranked
fifth in grid-connected PV capacity from installations in 2011. Ahead of
Pennsylvania were New Mexico, Arizona, New Jersey, and California.
Pennsylvania had 46.5 MW of installed capacity in 2010 and an additional 78.2
MW in 2011, bringing the cumulative total to 133.1 MW at the beginning of
2012. The Pennsylvania Sunshine
Solar Rebate Program, which was funded with $100 million in state bonds,
is currently accepting applicants onto a waiting list. The 1603 Treasury
Grant Program expired at the end of 2011, with projects required to have
begun construction by the end of 2011. The federal business investment tax
credit, which provides a credit for up to 30 percent of the cost of solar
equipment investments, is open through December 31, 2016. After accounting for the federal incentive
programs, the report makes clear that 2011 solar growth is concentrated in
states with strong solar policies, the most significant being state renewable
portfolio standards, rebates, and net metering. That said, the increasing
popularity of third-party models
is helping to spur solar
throughout the U.S. PPL completes third solicitations for RECs PPL purchased the SRECS at $43.20 each, a
price that is down from $149 in the first solicitation and $107.83 in the
second solicitation. The decrease in price reflects the oversupply of SRECs
in the Pennsylvania market. While attempts were made, via HB 1580, to
correct the existing oversupply, a vote on the bill was never taken in the
House Consumer Affairs Committee. Energy
Efficiency Update Simply put, on-bill financing is a small loan
made to a utility customer. This loan allows for energy efficiency
improvements to be made to the customer’s property, and the loan is repaid
incrementally via the monthly utility bill. On-bill financing legislation and
programming exists in California, New York, and Connecticut, among other
states (New York passed the Power NY Act in 2011 authorizing residential
on-bill loans). These loans are unique for two reasons: 1)
they are tied to a utility service; and 2) the expected savings from energy
efficiency upgrades must be equal to, or exceed, the on-bill loan payments to
be eligible. For many, upfront capital is the only barrier
to making energy efficiency upgrades, and on-bill financing removes that
obstacle. However, there still remains considerable hesitation from utilities
on implementing on-bill financing. Concerns include the cost of revamping
payments systems, potential liabilities associated with loan loss, and
involvement in programmatic oversight that will bring with it a host of
responsibilities such as vetting prospective participants in the on-bill
program. In states like New York, third parties have stepped in to facilitate
the program. PennFuture
supports on-bill financing, particularly on-bill repayment, where
programs can be underwritten and financed by private, third-party capital
such as community development financial institutions (CDFI) or banks and
credit unions, thereby allowing electric distribution companies to avoid
liabilities on their balance sheet. These programs are crucial to furthering
the ability of Act 129 to penetrate hard-to-reach customer sectors like the
small-commercial class. The Pennsylvania Public Utility Commission, as
part of its final order for Phase II of Act 129, directed its Bureau of
Consumer Services and Bureau of Technical Utility Services to initiate a
working group to "investigate best practices from other states and
identify working models of on-bill financing and on-bill repayment that
address the concerns of the EDCs, consumer interest groups and other interested
stakeholders." Alternative
Transportation Update While these standards remain largely unchanged
from those proposed in November, a new incentive for natural gas vehicles has
been added to the Final Rulemaking. The incentive will be in place between
2017 and 2021, with the hope of encouraging automakers to manufacture
vehicles like the Honda Civic Natural Gas, which are primarily fueled by
natural gas. All electric, hybrid electric and fuel cell incentives
from the proposed rule are also included. The proposed standards, for which PennFuture
submitted testimony, suggested a fleet-wide standard of 54.5 miles per
gallon by 2025, resulting in a 5 percent improvement in annual fuel economy.
This is expected to result in a total savings of 4 billion barrels of
oil, and reduce oil consumption by more than 2 million barrels a day by
2025. ARPA-E says energy storage is no weird science As for state-based initiatives, clean energy
powerhouse California is moving forward with a mandate requiring utilities to
invest in energy storage systems and services. With wind and solar, as well
as other clean energy generation, comes the need for more energy storage to
keep intermittent electricity flows to a minimum and ensure grid stability.
The California Public Utilities Commission will make its final decision in a
year as to whether to adopt an energy storage procurement target. DEP Hosts Natural Gas Vehicle Seminars The new Natural Gas Energy
Development Program, created from impact fees generated by Act 13, will
be coordinated by DEP to facilitate and distribute competitive grant funds of
$20 million to convert or purchase eligible vehicles to natural gas. The agency is also looking to learn more about
prospective fleet projects across the state and encourages regional transit
officials and others involved in fleet management to complete a Natural Gas Vehicle
Prospective Project Survey. DEP plans to work with those who submit a
survey on pre-planning activities prior to accepting grant
applications. Also worth keeping in mind is the Alternative Fuels
Incentive Grant available to assist with costs related to the purchase of
new alternative fuel vehicles (natural gas, propane, electric, or hydrogen
fuel cells). Other
Clean Energy News Considered the "Good Neighbor"
provision of the Clean Air Act, many states which are already meeting the
rule’s provisions are reducing power plant
emissions of sulfur dioxide by 73 percent, and nitrogen oxide by 53
percent, from 2005 levels. For now, air pollution from neighboring states
will be regulated by a rule enacted
during the George W. Bush administration in 2005. Concerned groups are trying
to identify other options that explicitly give states the legal authority to
petition the EPA to require upwind states to reduce emissions. Read more about the CSAPR decision on PennFuture’s environmental law blog, A Bear in the Woods. So, how do the lights stay on? Rural clean energy innovation gets a boost from the USDA Other USDA funding opportunities include the one hundred and six
projects in 29 states that will receive funding to produce renewable
energy and make energy efficiency upgrades, monies being made available
through the USDA's Rural Energy for
American Program (REAP). Earlier this summer, Secretary Tom Vilsack announced $7.4
million in REAP funding for 450 projects nationwide, including 11 projects in
Pennsylvania. The funding represents momentum for building capacity in the
agricultural community, and the ability for rural small businesses to reduce
their energy use and costs while leveraging renewable energy opportunities.
As for the August REAP funding allocations, Pennsylvania received funding for
two projects, both to farms. Key Steer Farm and Harmony Springs Farm will
each receive $50,000 in funding to install solar photovoltaic systems. PennFuture Energy Center Blog recap The regulations at issue were adopted under
the federal Clean Air Act's "good neighbor" provision, which
requires upwind states to prevent sources within their borders from emitting
air pollutants in amounts that contribute significantly to a downwind state's
nonattainment of federal air quality standards. Its purpose is to establish a
workable approach to interstate air pollution issues that have huge public
health implications. By a vote of 2-1, the court found that the
Environmental Protection Agency had overstepped its legal authority in
developing the rule. As a result, the Court vacated the offending provisions. This ruling raises several concerns. First, it
creates uncertainty over the timing and magnitude of the emissions
restrictions that ultimately will be imposed on sources in upwind states.
Also, delays in establishing regulations and requirements to upgrade or build
cleaner generation will result in foregone emissions reductions and will fail
to send clear market signals to make investments in cleaner generation, such
as natural gas, renewable energy, and efficiency. The EPA must continue administering the
provisions of its previously-adopted Clean Air Interstate Rule pending
adoption of a valid replacement, or until the U.S. Supreme Court agrees to
review this decision and overturns it. EME Homer City Generation, L.P. v. EPA, No.
11-1302. Read more at PennFuture's
Environmental Law Blog, A Bear in the Woods. Events The nation’s best and brightest renewable
energy leaders, energy efficiency experts, policy makers, financiers, and
advocates will be on hand to address the gathering and, yet, the conference
is small enough that anyone attending will be able to network with the
speakers easily. You’ll hear from national energy leaders including former
Pennsylvania Governor Ed Rendell; current Delaware Governor Jack Markell, chair of the National Governors Association;
Kathleen McGinty, former chair of the White House
Council on Environmental Quality; and Philadelphia Mayor Michael Nutter.
We’ll kick off the conference with a private tour of the U.S.
Department of Energy’s Energy Efficient Buildings Hub at the Philadelphia
Navy Yard, and pause midway for a networking event that’s a singular
opportunity to connect with key influencers and decision makers. Don’t wait this clean energy train is leaving
the station and you need to be along for the ride. Register today,
and we’ll be there to greet you in Philadelphia next week! NGV Technical Assistance & NGEDP Introduction
Seminar: Understanding
Pennsylvania's Natural Gas Vehicle Grant Program & Information on Fleet
Conversions Please contact John Alexander at John@MidAtlanticBX.com for more
information. Social Media
Yesss RT @NRDC With U.S. hybrid sales up 63% this year,
@Toyota and @Honda are moving production to our shores. http://bit.ly/TJHyHT
#54mpg #CleanEnergyNOW RT @ClimateDesk #PHOTOS: The worst #drought in half a
century, in images. Via @TheAtlantic http://bit.ly/PMzm9J Third-party owned #solar generates $1 billion
for Calif. economy, says @Sunrun It's high noon:
time for fossil fuels to give up their windfall Could a carbon
tax help the U.S. avert the "fiscal cliff?" New #PNC Tower in
#Pgh aspires to be greenest in world--and probably will be. Read on: http://bloom.bg/TXbRuH
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Green Power Update,
produced by the PennFuture Energy Center, is a
digest about developments in technology, policy and capital and how they are
helping to move Pennsylvania toward a clean energy economy. |
