February 28, 2011 - dam removal costs and values

Monday, February 28, 2011

Dam removal can bring environmental benefits, but comes with costs.  These costs can include not only the expense of physically breaching the dam and removing its remains, but also costs associated with sampling and remediating contaminated sediments trapped behind the dam.  Here's a quick look at two case studies, providing updates on stories I've noted before.

Last November, I looked at what's trapped behind dams on South Carolina's Twelve Mile Creek near Clemson.  Polychlorinated biphenyls (PCBs) and other chemical contaminants from electronics manufacturing operations have become trapped in sediments behind several dams slated for removal.  Removal of the dams is expected to allow cleaner sediments to flow down into Lake Hartwell where they are hoped to be able to cap the PCB-contaminated lake bottom.  Work on a sediment storage area is now ongoing along Twelve Mile Creek, funded through the $9 million settlement in the enforcement lawsuit against the manufacturer.

Just over a year ago, I noted that a settlement agreement would lead to the removal of four hydro-electric dams on the Klamath River in California and Oregon.  There, utility PacifiCorp has agreed to undertake the dam removal, which is projected to commence in 2020.  Overall, the Klamath Basin Restoration Agreement and Klamath Hydroelectric Settlement Agreement contemplate a dam removal cost of $450 million, with another $1 billion in environmental restoration activities.  How will dam removal be paid for?  At least part of the funds (albeit a relatively small share) will likely come from PacifiCorp's ratepayers.  A California administrative law judge has recommended that the California Public Utilities Commission approve a nine-year 2 percent rate increase to raise $13.8 million for dam removal.   Where the rest of the money will come from, as well as whether U.S. Secretary of the Interior Ken Salazar decides to support dam removal, remains to be seen.

February 24, 2011 - Maine offshore wind research

Thursday, February 24, 2011

Collaboration between academia and industry is key to tackling the significant technical and legal challenges associated with the development of offshore wind potential.  This symposium held this week by the University of Maine and the DeepCWind Consortium gives project developers the research results they will need to make more informed bids for offshore wind development in the Gulf of Maine.

The report gives key data useful to any developer of a successful offshore wind project in the Gulf of Maine: data on "met-ocean conditions" (wind and wave data, weather information), the results of seabed characterization studies, electric interconnection and grid data, and information about the impacts of a given project on both the physical environment and stakeholder interests.  The compilation of this information entailed a massive undertaking, performed by the University and its research partners through a federal Department of Energy-funded grant.

This report dovetails with the Maine Public Utilities Commission’s request for proposals for long term contracts for deep water offshore wind energy pilot projects.  That RFP calls for initial responses from interested developers by May 1, 2011. The RFP solicits proposals to sell renewable energy, capacity, and RECs from one or more floating deepwater offshore wind energy pilot projects, with a possible carveout for tidal projects.  Last year's Ocean Energy Task Force bill gives the Maine PUC authority to approve one or more long term contracts for up to 30 megawatts of installed capacity and associated renewable energy and renewable energy credits from such projects.

Who will bid in response to the RFP?  Will there be a truly competitive process?  What will the responsive projects cost?  Will the incentives for developing these pilot projects be sufficient to attract concrete proposals?

February 17, 2011 - Texas blackout aftermath

Thursday, February 17, 2011

When Texas experienced rolling blackouts earlier this month due to severe weather and disruptions to generation and the electric grid, over one million customers lost power intermittently.  Imposing rolling blackouts on customers is an extraordinary measure rarely seen in U.S. power markets.  Typically, utilities and regional transmission organizations will do everything they can to ensure adequate electric supply for all customers.  So what went wrong in Texas?

That question has been on the minds of electricity customers, and is now drawing increased attention by regulatory agencies.  On February 7, less than a week after these outages, the nation’s electric reliability organization North American Electric Reliability Corporation (NERC) announced a joint investigation in coordination with Texas Reliability Entity, Inc. and the Western Electricity Coordinating Council, to understand exactly what happened and what can be done in the future to prevent such electricity curtailment.  In its announcement of its investigation, NERC noted that it will examine whether the recent shift towards greater reliance on natural gas to produce electricity played any role in the outages.

Now, the Federal Energy Regulatory Commission (FERC) has initiated a staff inquiry into the outages and the restrictions of natural gas and electricity service in Texas and other western states.  This inquiry, docketed as Docket No. AD11-9-000, focused on disruption to the bulk of power system in Texas and Arizona as well as disruptions to natural gas delivery in Texas, in Mexico and elsewhere in the southwest.  Notably, FERC’s order opening this investigation states that this will not be an enforcement investigation; rather, this investigation will identify the problems and gather facts, leaving the decision on whether to initiate enforcement proceedings to a later date.  FERC has designated a staff task force to conduct this inquiry.

Meanwhile, Texas’ main electric grid operator, the Electric Reliability Council of Texas (ERCOT) is taking a look at its own internal procedure with an eye to improving its response to situations such as this.  Over the course of the day on February 2, 82 power plants with the combined generating capacity of 11,000 megawatts went offline.  During the peak of the outage, 80,000 megawatts was offline.  Of these, 59% were powered by natural gas, 40% by coal, and 1% by wind.

We shall soon see what these inquiries find.

February 16, 2011 - Louisiana natural gas production

Wednesday, February 16, 2011

Natural gas is a key component of the U.S. energy mix.  Even here in New England, relatively far from gas production zones, gas-fired generation accounts for more than a third of the electricity produced.  Where local distribution companies operate, consumers can also use gas for heating.

Louisiana is a major source of natural gas supply in the U.S.  While the Outer Continental Shelf (OCS) offshore Louisiana provides a large part of the gas flowing out of the state, north Louisiana’s Haynesville Shale is seeing increased production.  Laid down as sediments in a shallow marine environment during the Jurassic (about 150 million years ago), the Haynesville Formation includes shale units that are now about 2 miles deep beneath northwestern Louisiana, southwestern Arkansas, and eastern Texas.

Gas production from the Haynesville Shale is booming, thanks in part to hydraulic fracturing or “fracking”.  That's the same technique of cracking open the gas-containing strata by forcing high-pressure water, chemicals, and mechanical "proppants" underground to hold the layers of rock open and let the gas flow out.  About 61% of Louisiana’s gas production came from the formation, bringing the state's total 2010 production to around 2 trillion cubic feet of natural gas.  That level of production is not only 36% above 2009 levels, but is moreover the highest level of production since 1984.

The environmental impacts of this technique are still under evaluation, but customers are already feelign one impact of fracking: low gas prices, as the nation's supply has risen significantly. According to the federal Energy Information Administration, natural gas prices are predicted to average $4.02 per thousand cubic feet in 2011, about 9% below 2010's average pricing.

Will gas continue to be produced at these levels?  Will these low prices continue?  Are any other regulations needed to protect safety and the environment?  If so, what will that mean for gas pricing?

February 15, 2011 - small non-hydro dam removal

Tuesday, February 15, 2011

From the dam removal department:

Picture a small dam stretching about 50 feet across a stream.  The Gravesleigh Dam on Sackett Brook in Pittsfield, Massachusetts was built in the 1930s by Merle Dixon Graves, a native of Bowdoinham, Maine who served in the Massachusetts House of Representatives from 1921-1924 and who owned Gravesleigh, an estate surrounding the brook just above its confluence with the Housatonic River.  Merle Graves had the dam built to create a small pond for his estate.  Over the years, the pond filled with silt, and much of the Gravesleigh estate became Massachusetts Audubon Society's Canoe Meadows Wildlife Sanctuary.

Now, Massachusetts Audubon is interested in removing the dam for reasons including improving water quality, restoring riparian wildlife habitat, and creating educational opportunities to learn about watershed health and science.  Moreover, as part of a deal to allow the Pittsfield Municipal Airport to expand, the dam site has been identified as able to offset some of the habitat lost at the airport as a condition for state water quality certification.  With the impoundment silted in, and no renewable power production at the site, these benefits may make the Gravesleigh Dam seem like a good candidate for dam removal.

The Housatonic Valley has a long history of industrial manufacturing, some of which resulted in PCB (polychlorinated biphenyl) contamination of the valley's soils and water.  According to EPA, "PCBs are probable human carcinogens and can also cause non-cancer health effects, such as reduced ability to fight infections, low birth weights, and learning problems."  If these chemical contaminants are trapped in the sediment impounded by the Gravesleigh Dam, the dam's removal could send the PCBs downriver into the Housatonic.  This is the same problem as found on Twelve Mile Creek in Clemson, South Carolina, where dam removal initiatives must be weighed against the risk of disturbing PCB-laden sediments.  In Pittsfield, dam removal could be paired with sediment remediation, but that would significantly add to the project's cost - already predicted to be $303,000 without sediment remediation.  This points to the importance of understanding what's trapped behind the dam.

Sampling of impounded sediments was undertaken last summer.  While most samples came back negative for PCB, one of the sediment samples did show PCB contamination.  This triggered another round of sediment testing last month.  The results of that testing have just come in, and suggest that sediment remediation will not be required for dam removal.

The Gravesleigh Dam's saga may soon be over.  In this case, chemical contaminants trapped behind the dam may not prove sufficient to prevent the dam's removal.   Each dam has its own story, and may have its own baggage that must be addressed if the dam is to be removed.  I'll keep you posted on the Sackett Brook story as it continues to flow.

February 14, 2011 - renewable energy and transmission needs

Monday, February 14, 2011

As more renewable energy projects are built around the nation, the increase in energy produced - as well as shifts in where that energy is produced - may drive the need for new transmission lines to connect green power to customers.  For example, in New England, these pressures are behind transmission projects like the Northern Pass and the Champlain-Hudson Power Express.  This kind of transmission development raises questions like who should pay for these lines, as well as whether the lines will provide any benefit to the people living in states they cross.

Utah is facing these same questions, thanks to the proposed $3 billion TransWest Express transmission line project.  If built, this 725-mile long 600 kilovolt DC transmission line would connect Sinclair, Wyoming to a substation near Boulder City, Nevada.  The line is designed to transmit energy from up to 3,000 MW of wind projects east of the Rocky Mountains to customers in southern California, Arizona, and Nevada.  Although 429 miles of the transmission line would cross Utah, the project as currently proposed would not include any offramps to connect Utah customers with that renewable power.
Utah does not have a renewable portfolio standard (RPS).  RPS programs require utilities to source certain amounts of the electricity they sell to customers from renewable power.  Utah does have a statutory renewable goal of 20% of adjusted retail sales by 2025, but utilities are required to pursue renewable energy only to the extent that it is "cost-effective" to do so.  California, Arizona, and Nevada - the states that will be served by the TransWest Express transmission line - do have RPS requirements, as do most other states in the nation.

How will Utah respond to the TransWest Express proposal?  Is there desire in the state to be able to buy the renewable power that will be winging its way westward through the transmission line?  Can the state obtain any benefits in exchange for permitting the line to cross its lands?

February 11, 2011 - Northern Maine Community College to host clean energy forum

Friday, February 11, 2011

Northern Maine Community College in Presque Isle has been selected by a national nonprofit organization to host a clean energy forum on March 9, 2011.  Since 2008, NMCC has offered an associate-degree level program to train wind power technicians, the first such program in New England.  Last year, NMCC decided to install a meteorological tower on campus to measure wind potential.  NMCC's interest in wind energy continues to grow; last month, the college’s renewable energy programs got a big boost in the form of a $1.2 million gift from donor Mary Smith; the college will use those funds to establish the Northern Maine Center for Excellence in Alternative Energy Training and Education.

Focus the Nation, a nonprofit whose mission statement focuses on “accelerat[ing] our transformation to a clean energy future by fostering connections between generations, and empowering young people through education, civic engagement, and action”, is sponsoring 22 events this winter across the country.  The organization selected NMCC to host the only one of these forums to be held in the Northeast.  The “Maine Event” will be held in the Edmunds Conference Center on the Presque Isle campus from 10 a.m. to 4 p.m. on March 9.

Former Maine Gov. Angus King will deliver the keynote address, sharing his perspective as a wind energy developer as well as insights from his political service.  U.S. Sen. Susan Collins will also speak to participants through a videotaped message.  The event will feature presentations by leaders in Maine’s alternative energy industry, as well as an interactive panel discussion on policies, technologies, and challenges for renewable power.

Northern Maine is home to significant interest in clean energy technologies, including wind.  NMCC’s event is well-positioned to continue solidifying the college’s leading role in education and training for renewable power.

February 8, 2011 - nuclear power in Utah?

Tuesday, February 8, 2011

Nuclear power is one element in the mix of U.S. electric power generation sources.  In 2010, nuclear power from 104 plants accounted for 19% of net electric generation in the country, or about 670 terawatt-hours.  (That's 670,630,000 megawatt-hours.)  On a net electric generation basis for 2010, nuclear ranked below coal and gas, but above all other resource types.  Since 1977, no new nuclear plants have started construction, due to reasons including cost, safety concerns, and local siting opposition.

The tide against new nuclear power plants may be shifting.  In 2007, the Tennessee Valley Authority approved plans to restart construction on the Watts Bar Unit 2 plant near Spring City, TN; its sister plant was the last domestic civilian reactor to reach commercial operation, while Unit 2 has sat in a state of 80% completion since 1988.

A number of new nuclear plants are now in the planning stages around the country.  In Utah, a plant proposed by Blue Castle Holdings is proposing to build a two-unit plant near Green River. Nuclear plants need a large amount of water for cooling and steam production; Blue Castle has obtained leases for the annual use of 50,600 acre-feet of water from the San Juan and Kane County water conservancy districts.  Those leases stem from 1960s-era unused water appropriations for coal-fired generation plants that were never constructed; Blue Castle has filed to change the leases to allow for nuclear generation.  Blue Castle's project remains on the drawing board, with other key permits not yet sought (like approval from the Nuclear Regulatory Commission, which Blue Castle hopes will be obtained by 2016).  What role will Utah play in a nuclear renaissance?

February 7, 2011 - $50 million more for offshore wind

Monday, February 7, 2011

Offshore wind just got another boost.   Today Secretary of the Interior Ken Salazar and Secretary of Energy Steven Chu released a joint National Offshore Wind Strategy, which bills itself as the first-ever interagency plan on offshore wind energy.  As part of this strategy, the U.S. Department of Energy envisions 10 gigawatts of offshore wind generating capacity by 2020 and 54 gigawatts by 2030.

That's not all: the Secretaries also announced up to $50.5 million in new funding for projects that support offshore wind energy deployment.  The plan includes three solicitations, proposing to award up to $50.5 million over 5 years, to promote offshore wind R&D and eliminate market barriers.  Up to $25 million will be available for technology development for wind turbine design tools and hardware.  Up to $18 million will be available for studies and research to identify and remove market barriers.  Up to $7.5 more million will bne used to fund R&D into wind turbine drivetrains.

The announcement also includes the designation under the "Smart from the Start" program of high priority Wind Energy Areas on the Outer Continental Shelf (OCS) offshore of Delaware, Maryland, New Jersey, and Virginia.  To reduce the burden on project developers, these areas will receive advanced environmental reviews by the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).  If BOEMRE's review does not identify any significant impacts, leases could be available by the end of this year.

February 4, 2011 - Hawaii's Big Wind project

Friday, February 4, 2011

Islands hold a special place in our hearts.  The same facts of geography that lead to islands' charm can also play a role in making island energy a challenging issue.  Islands around the world face similar challenges; whether it's Martha's Vineyard energy strategy or offshore wind near the Maine islands of Damariscove or Monhegan, islanders face questions of how to power society and whether or how to interconnect with the mainland.

Due to its geographic isolation, the Hawaiian islands' energy strategy is especially interesting.  This week, hearings are being held in Hawaii on a major wind energy project and its associated undersea transmission development.  Hawaii's renewable portfolio standard requires utilities selling power to source an increasing amount of energy from renewable resources.  The renewable mandate starts from 10% of net electricity sales effective December 31, 2010, and increases to 40% by December 31, 2030.

One option under consideration involves 400 megawatts of wind energy to be sited in Maui County, particularly on or near the islands of Lana`i and Moloka`i.  Connecting that generation to the consumers on Oahu, Hawaii's most populous island, will require underwater transmission cables.  Currently, the state of Hawaii and federal agencies are collaborating on a programmatic environmental impact statement (or EIS).  Under the federal National Environmental Policy Act (NEPA), before the government can undertake or approve actions "significantly affecting the quality of the human environment", involved agencies must draft an assessment of the positive and negative environmental effects of the proposed action.  This information is then used for multiple purposes, including helping the agency evaluate specific proposed projects, as well as helping project developers understand the impacts of their project and what they can do to address any negative impacts.

Hawaii is home to some other renewable generation, including an innovative ocean thermal energy conversion facility.  OTEC has great potential, but the cost of producing power on a commercial scale is not yet cost-competitive with other resources - not even with oil, the fuel behind about 90% of Hawaii's energy needs.  Hawaiian energy thus has been relatively expensive.  Wind has the potential to be more cost-effective, but due to visual and other impacts is facing some opposition in the islands.  Will the Hawaiian wind effort take off?

February 3, 2011 - ERCOT rolling blackouts over?

Thursday, February 3, 2011

Following on yesterday's report of rolling blackouts in Texas: grid operator ERCOT has reported that the need for intermittent power cuts may have passed, although ERCOT noted that scarcity of available generation might again lead to the need for blackouts.  As the storm moves away and life gets back to normal, we're seeing some of the impacts of the blackouts.  For example, the Houston Chronicle reports that the Houston fire department responded to 30 elevator rescues yesterday - 10 to 15 times as many as on an average day.  Rolling blackouts are unpredictable; even if you know the grid operator is imposing them, you might not know exactly when they'll strike.  ERCOT and utilities tried to avoid cutting power to key elements of social infrastructure like hospitals, but anyone who got stuck in an elevator when their building lost power probably didn't enjoy the experience.

ERCOT continues to ask consumers to reduce their consumption of electricity, particularly during times of peak demand.

February 2, 2011 - weather leads ERCOT to rolling blackouts

Wednesday, February 2, 2011

What happens when bad weather strikes the power grid?  Depending on the storm, and the region, some customers may lose power if distribution lines are damaged.  More serious cases, like when key generators are tripped offline, may lead to more serious consequences.

Groundhog Day 2011 in Texas provides an example of the more serious consequences: power prices rising to 40 times their previous level, coupled with rolling blackouts.  The Electric Reliability Council of Texas, or ERCOT, operates the electric grid and manages the deregulated market for 75 percent of the state: about 22 million customers in areas including Houston, Dallas, Fort Worth, San Antonio, Austin, Corpus Christi, Abilene and the Rio Grande Valley.

Thanks to the weather, apparently there just isn't enough power to go around.  Reports indicate that ERCOT has imposed rolling blackouts after multiple power plants were disabled by a major ice storm.   Rolling blackouts are an extraordinary measure, seen more often in other countries than in the U.S.  When the utility cuts your power, unless you're connected to distributed generation or storage, your lights will go dark.

Beyond the rolling blackouts, the price of energy may lead to other consumer impacts.  Reuters reports that hourly energy prices in ERCOT rose from $50 per megawatt-hour to $2,000 per megawatt-hour, a forty-fold increase.  (Although individual residential ratepayers may not feel that price spike directly, it would translate into paying $2.00 per kilowatt-hour if they did - and large commercial and industrial ratepayers who buy power at wholesale in the market are exposed to these prices directly.)  Sounds like a good time for demand response!

February 1, 2011 - smart meters questioned by some

Tuesday, February 1, 2011

Smart meters are being rolled out by utilities across the country.  Regulators including FERC and state PUCs have approved their installation based on perceived benefits such as improved customer service, enhanced storm restoration efforts, and reduced costs for both ratepayers and utilities.  Yet a number of challenges have been lodged against smart meter programs.  For example, after ratepayer complaints and requests for investigation, the Maine PUC has opened an investigation into one utility's implementation of smart metering.  Concerns include privacy, alleged harmful effects of electromagnetic radiation, and the loss of meter-reading jobs.

The New York Times recently ran an interesting look at some of the opposition in California and Maine, noting that some Tea Party activists are joining the fray, as well as others concerned about health effects despite several studies concluding that smart meters pose no threat to human health.

What will end up happening with smart meter programs?  Will proponents' arguments outweigh the opposition's concerns?