01/29/2010

Exciting news from my home town: U.S. Windblade of Bath, Maine is unveiling the first composite underwater turbines built in the U.S. Designed by Portland-based Ocean Renewable Power, two turbines are linked to a 60 kW generator. These first turbines will be installed in downeast Maine (Cobscook Bay) to demonstrate and evaluate the potential for tide/current generation.

Massachusetts has issued its triennial plan for energy efficiency measures. The plans set an electric energy savings target of 2.4 percent of sales in 2012 -- several times more than the 0.8 percent savings through previous measures, and on the opposite side of zero from the about 1% annual load growth of recent years. If Massachusetts utilities pull it off, they anticipate saving 2,600 gigawatt-hours of electricity. Massachusetts anticipates that it could meet nearly 30 percent of its electricity needs by 2020 through energy efficiency measures alone. On the gas side, the plans set a savings target of 1.15 percent of natural gas sales in 2012.

Meanwhile, is cap-and-trade going down in flames? Reports from the World Economic Forum in Davos indicate a business-leader consensus that stimulus, not cap-and-trade, is the more efficient way to change behavior.

And from the Bangor Daily news:

1/27/2010

US federal climate change legislation continues to brew on a back burner, although with last week's change to the Senate balance, the focus should be on enacting realistic measures that will provide a benefit but are politically viable. In addition to Martha Coakley, other losers may include the notion of a cap-and-trade mechanism, which even the lopsided Senate hinted it could not pass. We are more likely to end up with a watered-down bill that offers more carrots for good behavior than sticks raising the cost of "bad" behavior. (Think of increased incentives for efficiency upgrades, but not increased taxes on the rest of us who don't change our wicked ways.) Remember that in the meantime, EPA continues to move forward with its own administrative regulation of carbon emissions, which many consider likely to be more costly than any congressional action.

Following on yesterday's news of lackluster demand for wind turbines, Michigan (with 143 MW of installed wind capacity) and Minnesota (with 1,809 MW of wind) both report declines in the rate of new wind capacity being developed. (Meanwhile, China installed 12,000 MW of wind in 2009, nearly doubling its total wind capacity. The US added 9,000 MW in total.)

1/26/2010

Imagine a medium-sized electricity consumer who does everything that the state efficiency program asks of it: the business pays to install more efficient equipment, in order to reduce electricity consumption and reap the savings... but then the business finds its electric bill has gone up! Apparently utilities have been targeting consumers who implement efficiency measures and bumping them down to the next smallest rate class. This might have been justified under the letter of the law, but feels like punishment for installing efficiency measures. The Maine PUC just addressed this situation, approving the use of a so-called "best-rate option" to ensure that efficiency upgrades don't result in higher bills.

Remember when Quoddy Bay LLC wanted to build a liquefied natural gas terminal on the Passamaquoddy Indian reservation in eastern Maine? They've just been sued for over $1 million. Plaintiff TRC Environmental Corp. sued for the ten months of services it provided in 2007 and 2008 for which Quoddy Bay allegedly never paid.

Also in Maine news, this headline: "Winds, squirrel and beaver challenge CMP". I'll leave it at that.

Nationally, wind turbine manufacturers are feeling the pinch just like all manufacturers. Two articles (USA Today and NYT Greenwire) today note a lack of expansion of wind-related manufacturing, and even layoffs. Apparently no manufacturer is immune from the times.

1/25/2010

A trio of Maine news stories, all surrounding offshore wind. First, a report of noise complaints from the three turbines installed this fall on the island of Vinalhaven.

Next, proposed legislation by Sen. (and Gov.-candidate) Peter Mills would create a standard "benefits package" of annual payments of $8,000 or $14,000 per megawatt of installed wind energy capacity to hosting municipalities. Existing wind developments pay either full taxes, or a negotiated rate. For example, the town of Mars Hill is projected to receive $9.8 million from First Wind over 20 year -- about $487,000 a year or $11,600 per MW of capacity; NRCM projects that the town of Oakfield, where Maine DEP has approved the siting of a 34-turbine facility, would receive roughly $11.8 million over 20 years, or $588,300 a year and $16,400 per MW. The wind industry and supporting players are concerned about raising the cost of doing business in Maine even higher, which would drive away investment. To give a sense of the value to the Maine economy of promoting wind development, John Cooney of Maine-based construction company Reed & Reed -- which itself is transitioning to wind from its traditional bridge- and road-building, estimated that his company has spent $288,000 in wages per MW of wind energy installed on Kibby Mountain, more than 95 percent of which went to Maine residents earning an average hourly wage of $31. Not bad, green-collar economy!

Finally, the Rockland-based Ocean Energy Institute (a not-for-profit) is developing plans for a pilot project in Maine that would take hydrogen from seawater and nitrogen from the air to form ammonia, which then can be used as a type of fuel similar to propane. Distributed wind generation can be used to generate energy, which could then be stored as ammonia until needed (e.g. when the wind stops blowing). OEI faces technical and commercial challenges, as well as regulatory ones -- for example, ammonia is not classified as a fuel by US DOE, which would need to be changed for OEI's plans to take flight.

01/21/10

Today the U.S. Senate Committee on Energy and Natural Resources the full committee will receive testimony from U.S. Energy Secretary Chu on the research and development priorities/imperatives needed to meet the medium- and long-term challenges associated with climate change. It's live at 10:00 a.m.

The Bangor Daily News ran an editorial today in support of increased investment in wind energy in Maine. The editorial staff cites the recent federal grant to the University of Maine - $12.4 million from U.S. Department of Commerce for a new offshore wind turbine test lab, the Advanced Nanocomposites in Renewable Energy Laboratory. This, in combination with the $8 million grant from the U.S. Department of Energy to create the Maine Offshore Wind Energy Research Center, will allow Maine to become a leader in offshore wind R&D. Professor Habib Dagher was clearly psyched, and Sen. Collins said the deep-water offshore wind energy industry eventually could bring in 15,000 jobs and $20 billion in investments to Maine -- and the BDN is now on board.

NYT reports that mogul T. Boone Pickens is revising his energy investment strategy, de-emphasizing wind energy, and refocusing natural gas from light passenger vehicles to commercial vehicles like semis and buses. Sounds like his wind love affair was short lived. Will he rekindle that spark?

Wisconsin is struggling with a sweeping new energy bill, including a renewable portfolio standard, tighter emissions standards for vehicles to California's levels, and open the door for new nuclear power development. Wisconsin is dependent on coal, and there is concern that this law would drive a shift toward more costly natural gas -- troubling both manufacturers who purchase power for industrial processes, and the coal industry.

North of the border: Ontario is signing a $6 billion deal with Samsung and Korea Electric Power to build and operate a 2,500 MW wind and solar power generation complex in Ontario. David Butters, president of the Association of Power Producers of Ontario, called the deal "secret" and criticized it for a lack of transparency -- and for undermining the feed-in-tariff program. Apparently Ontario has reserved 500 MW of transmission capacity for the project, which Butters described as
more than half the available transmission (capacity) in southwest Ontario."

01/20/01

The eastern US grid can handle sourcing 20% or more of our power needs from wind. U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) released the Eastern Wind Integration and Transmission Study (EWITS). NREL analyzed the economic, operational, and technical implications of shifting 20 percent or more of the Eastern Interconnection’s electrical load to wind energy by the year 2024 -- and concluded that it's feasible. Note that in round numbers, 20% of the Eastern Interconnection means 225,000 MW of wind generation capacity in the region -- approximately ten times more wind than is online today.

WSJ reports that Germany is considering reducing the subsidies it gives solar-power providers by 15%. Why? Because the initial subsidy scheme succeeded in attracting enough photovoltaic generation -- or maybe too much? German Economics Minister Rainer Bruederle has called for a reduction in the feed-in tariff rates -- the rates that utilities are required to pay for electricity generated by distributed generation. Note that this cut is in addition to the pre-set statutory reductions that occur periodically.

What's the effect of the Massachusetts special Senate election on energy issues?

Bangor Hydro is proceeding with an $8 million investment in smart grid infrastructure, despite not winning federal stimulus funding to support the project. Bangor Hydro plans to build on the company’s existing "advanced metering infrastructure". The utility projects this may add 50 cents to the typical residential bill.

Meanwhile, CMP's $190 million plan to install a new automated meter system at homes and businesses -- which did win $96 million in stimulus funding -- is drawing opposition from members of the International Brotherhood of Electrical Workers Local 1837. The union laborers are concerned that the automated meters will lead to 141 layoffs, including 85 meter readers. The Maine Public Utilities Commission is holding a public hearing today in Hallowell on the plan. CMP anticipates installing the meters in 2010 and 2011.

In Canadian news, through government utility Nalcor, Newfoundland and Labrador are commencing legal action against Hydro-Quebec over the Upper Churchill power sales agreements. Under the existing long-term contract, HQ pays one quarter of one-cent per kWh, and one-fifth of one cent for the 25 years starting in 2016 -- less than 5 per cent of the power's commercial value. According to Newfoundland and Labrador Premier Danny Williams, in 2008, Hydro-Québec reaped profits of about $1.7 billion from the Upper Churchill hydro dams, while owner Newfoundland and Labrador was paid $63 million. Nalcor will also ask Quebec's Régie de l'Énergie to require HQ to provide access to its transmission system for export of power from the proposed Lower Churchill expansion project.

Also in Canadian news, there's been an odd wrinkle in the HQ acquisition of NB Power. A leaked document suggests that New Brunswick's power transmission and distribution systems are no longer for sale; NB Power would continue to operate as a New Brunswick-owned and operated Crown corporation. The revised deal is reportedly now worth $3.2 billion and would still include hydroelectric facilities and the Point Lepreau nuclear power plant near Saint John, N.B. Under the revision, the 5 year rate freeze for residentials would remain in place, but industrials face a smaller rate reduction. The revised deal was reached by the provincial Liberal government after significant criticism that it, like the Upper Churchill contract, gave too much power to Quebec.

1/11/10

Looks like despite a lack of governmental support, businesses in China are solar thermal technology -- using mirrors to concentrate light, make steam, and turn turbines to generate electricity. As usual, the story emphasizes not only the value of siting generation in China, but also the value of producing solar thermal components for sales abroad -- the classic energy/manufacturing complex that is touted for deepwater offshore wind in Maine. Commercially, up to 2,000 MW of capacity may be developed by a partnership between Californian developer eSolar and Chinese manufacturer Penglai Electric. However, the Chinese government is officially skeptical about the merits of solar thermal, on the theory that China lacks sites where there is abundant water, sun, and cheap land.

Climate change? Global warming? A number of places around the world continue to face record low temperatures, which have remained in place for weeks. NYT reports that this is the largest and most persistent Arctic high pressure system to take hold since the 1950. This Arctic high deflects the jet stream south of our latitude, bathing us in cold Canadian air.

In Maine news, we have the $9 million in RGGI grants for industrial energy efficiency projects announced last week, a $12.4 million grant for the UMaine composites lab for deepwater offshore wind research, and rebates of $1500 to $3000 to homeowners for qualifying energy audits and weatherization projects.

1/7/10

Happy New Year! It's been a busy week of 2010 so far... so who else is still writing 2009 half the time?

Efficiency Maine and the soon-to-be-former Energy and Carbon Savings Trust -- the two agencies charged with distributing the proceeds of Maine's Regional Greenhouse Gas Initiative -- have made their selections of 16 grant winners for energy efficiency and greenhouse gas reduction projects. In all, $8.9 million in funds will be awarded, leveraging over $80 million in private funds to create a total project value of $90.8 million. My firm and I were privileged to assist a number of successful applicants for these grants.

In local Maine news, Bath Iron Works has been awarded another $6.9 million contract from the Navy for engineering work on destroyers. This work will last through November. Simultaneously, BIW has sought City Council approval of an expansion to its two year-old Ultra Hall indoor fabrication facility.

In a case of the federal government stepping in on states' rights where states refuse to act, the US EPA has announced a proposal to place new strict limits on smog (NYT article). EPA suggests a range of 60 to 70 parts per billion for ground-level ozone; EPA will select a specific figure within that range later this year. This represents a reduction from previous limits (84 ppb from 1997-2008, and 75 ppb since 2008). EPA estimates this stricter limit will increase the costs of doing business from between $19 billion to $90 billion a year by 2020.