Society can use a number of different energy resources to generate electricity. We typically rely on a portfolio of multiple fuels to meet our needs, but the composition of this energy resource mix can affect the reliability, cost and environmental impacts of electricity generation. Through most of the twentieth century, in most regions of the United States, coal dominated the mix. Today, new resources like natural gas and nuclear power play major roles. The resource mix continues to evolve, with significant changes since 2000 alone.
New England provides a prime example of these shifts. According to regional grid operator ISO New England's 2013 Regional Energy Outlook (48-page PDF), in 2000 the largest share of power generated in the region came from nuclear power (31%). Nuclear power continued to provide a similar share of our electricity in 2012, but it has been bypassed by natural gas-fired generation as the largest source of our power. While natural gas contributed just 15% of regional electricity in 2000, last year it provided more than half (52%) of all electricity in New England. The growth of natural gas comes as the result of several trends, including the availability of relatively low-cost gas as well as natural gas's favorable emissions and environmental impacts compared to oil and coal.
Indeed, the amount of power generated by burning oil and coal in New England has fallen sharply. While oil-fired generation provided 22% of our needs in 2000, last year less than 1% of our power came from oil. The high cost of oil, combined with the availability of extensive capacity to generate electricity from natural gas, drove this marked decrease in the electric power sector's use of oil. Likewise, coal-fueled power has declined from 18% in 2000 to just 3% in 2012. Tighter federal air emissions standards and pollution control requirements, combined with the age of the coal-powered fleet and the availability of low-cost natural gas, have made coal-fired power largely uneconomic in New England.
According to the numbers, natural gas's ascendancy has not come at the expense of renewable power. The share of regional electricity produced from hydropower and other renewable energy resources held steady at 13% from 2000 to 2012.
What are the implications of this shift in New England's portfolio of energy resources? Lower average wholesale energy prices are one result. As electricity produced from oil and coal became more expensive, the cost of electricity produced from natural gas fell. Combined with the shift in the resource mix, these changes have led to relatively lower prices for electricity. This price decrease has been partially offset by increases in the cost of utility transmission and distribution service, but most consumers see lower electricity prices today than they did in 2000.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Maine funds available for anaerobic digestion
Monday, April 29, 2013
The state of Maine has announced funds available to help farmers reduce their agricultural impacts to water quality. State agencies have made up to $3 million available to enable low-interest loans to support eligible projects. These projects may include developing anaerobic digesters, as well as improved roof runoff structures, water and sediment control basins, composting facilities, and irrigation system water conservation.
Anaerobic digesters enable the conversion of organic materials such as manure and other agricultural wastes into biogas. Biogas, largely composed of methane, can be used as a fuel source comparable to natural gas. For example, it can be used to power an electric generator and thus to produce renewable electricity – all while making efficient use of manure and agricultural wastes that could otherwise harm water quality.
Under the program, farmers will be able to borrow up to $450,000 at a fixed interest rate of 2 percent for up to 20 years to develop qualifying projects. The opportunity represents a partnership between the Maine Departments of Environmental Protection and Agriculture, Conservation and Forestry, the Finance Authority of Maine and the Maine Municipal Bond Bank. The initial seed money comes from the DEP-administered Clean Water State Revolving Fund. Since 1989, that fund has provided over $650 million in low-interest loans for water quality projects, primarily hosted by publicly owned wastewater treatment facilities. For the newly-announced program, the fund will transfer up to $3 million to FAME, which will finance the loans.
For more information on the opportunity, contact either participating department, or consult a professional experienced with anaerobic digestion and state-funded incentive programs. The Preti Flaherty team advises clients on both the development of anaerobic digestion facilities and participation in government-backed loan programs. For more information, please contact Todd Griset at 207-623-5300.
Anaerobic digesters enable the conversion of organic materials such as manure and other agricultural wastes into biogas. Biogas, largely composed of methane, can be used as a fuel source comparable to natural gas. For example, it can be used to power an electric generator and thus to produce renewable electricity – all while making efficient use of manure and agricultural wastes that could otherwise harm water quality.
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| Two anaerobic digesters at Stonyvale Farm in Exeter, Maine. |
Under the program, farmers will be able to borrow up to $450,000 at a fixed interest rate of 2 percent for up to 20 years to develop qualifying projects. The opportunity represents a partnership between the Maine Departments of Environmental Protection and Agriculture, Conservation and Forestry, the Finance Authority of Maine and the Maine Municipal Bond Bank. The initial seed money comes from the DEP-administered Clean Water State Revolving Fund. Since 1989, that fund has provided over $650 million in low-interest loans for water quality projects, primarily hosted by publicly owned wastewater treatment facilities. For the newly-announced program, the fund will transfer up to $3 million to FAME, which will finance the loans.
For more information on the opportunity, contact either participating department, or consult a professional experienced with anaerobic digestion and state-funded incentive programs. The Preti Flaherty team advises clients on both the development of anaerobic digestion facilities and participation in government-backed loan programs. For more information, please contact Todd Griset at 207-623-5300.
Master Limited Partnerships for clean renewable energy
Thursday, April 25, 2013
An organizational structure called Master Limited Partnerships has the potential to increase private-sector investment in clean energy. Master Limited Partnerships, or MLPs, benefit from a tax structure under which investors are taxed as partners but can trade their ownership stakes on securities exchanges much like corporate stock. Newly proposed federal legislation could extend this treatment to clean energy technologies.
MLPs offer their investors an attractive combination of tax advantages and liquidity. Profit from most publicly traded corporations is taxed twice, at both the corporate level and the shareholder level. By contrast, income from MLPs is taxed only at the shareholder level because it is treated as a partnership for tax purposes. Like Real Estate Investment Trusts or REITs, MLPs thus combine the tax benefits of a limited partnership with the liquidity of publicly traded securities.
Under federal law, MLP treatment is limited to enterprises generating at least 90 percent of their income from qualifying sources. These generally involve the use of natural resources, such as the production, processing or transportation of petroleum, natural gas, coal, timber, and other minerals. Since 1981, the use of the MLP structure has grown; estimates suggest that over 100 MLPs are currently being traded on major exchanges, with a total market valuation of about $445 billion.
Yesterday Congress introduced proposed bipartisan legislation that would extend this tax structure to clean energy technologies. The Master Limited Partnerships Parity Act, formally known as S.795: A bill to amend the Internal Revenue Code of 1986 to extend the publicly traded partnership ownership structure to energy power generation projects and transportation fuels, and for other purposes, is sponsored by Sen. Chris Coons, D-Del., along with co-sponsors Sens. Jerry Moran; R-Kan., Debbie Stabenow, D-Mich.; and Lisa Murkowski, R-Alaska. It has been referred to the Senate Committee on Finance.
The Master Limited Partnerships Parity Act would significantly broaden the scope of projects eligible for MLP treatment to include clean energy resources and infrastructure projects. These projects would include any energy technologies that qualify for the federal production tax credit or investment tax credit, such as wind, closed and open loop biomass, geothermal, solar, municipal solid waste, hydropower, marine and hydrokinetic, fuel cells, and combined heat and power. The bill would also open the MLP structure to advanced transportation fuels such as cellulosic, ethanol, biodiesel, and algae-based fuels, as well as energy-efficient buildings, electricity storage, carbon capture and storage, renewable chemicals, and waste-heat-to-power technologies.
Proponents hope that the act would stimulate investment in clean energy projects much as it has worked for other extractive natural resource infrastructure. At the same time, concern over the federal budget calls for serious consideration of measures that would reduce federal tax revenues. So far, the bill seems to have broad support and little outspoken opposition. If enacted, it could lead to an influx of investment capital into renewable and clean energy technologies.
MLPs offer their investors an attractive combination of tax advantages and liquidity. Profit from most publicly traded corporations is taxed twice, at both the corporate level and the shareholder level. By contrast, income from MLPs is taxed only at the shareholder level because it is treated as a partnership for tax purposes. Like Real Estate Investment Trusts or REITs, MLPs thus combine the tax benefits of a limited partnership with the liquidity of publicly traded securities.
Under federal law, MLP treatment is limited to enterprises generating at least 90 percent of their income from qualifying sources. These generally involve the use of natural resources, such as the production, processing or transportation of petroleum, natural gas, coal, timber, and other minerals. Since 1981, the use of the MLP structure has grown; estimates suggest that over 100 MLPs are currently being traded on major exchanges, with a total market valuation of about $445 billion.
Yesterday Congress introduced proposed bipartisan legislation that would extend this tax structure to clean energy technologies. The Master Limited Partnerships Parity Act, formally known as S.795: A bill to amend the Internal Revenue Code of 1986 to extend the publicly traded partnership ownership structure to energy power generation projects and transportation fuels, and for other purposes, is sponsored by Sen. Chris Coons, D-Del., along with co-sponsors Sens. Jerry Moran; R-Kan., Debbie Stabenow, D-Mich.; and Lisa Murkowski, R-Alaska. It has been referred to the Senate Committee on Finance.
The Master Limited Partnerships Parity Act would significantly broaden the scope of projects eligible for MLP treatment to include clean energy resources and infrastructure projects. These projects would include any energy technologies that qualify for the federal production tax credit or investment tax credit, such as wind, closed and open loop biomass, geothermal, solar, municipal solid waste, hydropower, marine and hydrokinetic, fuel cells, and combined heat and power. The bill would also open the MLP structure to advanced transportation fuels such as cellulosic, ethanol, biodiesel, and algae-based fuels, as well as energy-efficient buildings, electricity storage, carbon capture and storage, renewable chemicals, and waste-heat-to-power technologies.
Proponents hope that the act would stimulate investment in clean energy projects much as it has worked for other extractive natural resource infrastructure. At the same time, concern over the federal budget calls for serious consideration of measures that would reduce federal tax revenues. So far, the bill seems to have broad support and little outspoken opposition. If enacted, it could lead to an influx of investment capital into renewable and clean energy technologies.
Funding to reduce barriers to marine, hydrokinetic energy
Tuesday, April 2, 2013
The U.S. Department of Energy has announced a competitive funding opportunity designed to support the growing marine hydrokinetic energy industry. $1.9 million is available for projects that will improve the collection and analysis of environmental monitoring and experimental data from marine hydrokinetic devices.
Marine hydrokinetic energy technologies capture the energy embodied in moving ocean water such as tides, currents, and waves. While the marine hydrokinetic industry is relatively young, at least one project has been licensed by the Federal Energy Regulatory Commission and built off the Maine coast. Research and development efforts are ongoing regarding a variety of marine hydrokinetic technologies and devices, and their environmental impacts continue to be studied.
The recently-announced federal funding aims to support that environmental evaluation. Working with the National Oceanographic Partnership Program, the Department of Energy's Office of Energy Efficiency and Renewable Energy Wind and Water Power Technologies Office has issued a Funding Opportunity Announcement entitled “Marine and Hydrokinetic (MHK) Environmental Effects Assessment and Monitoring.”
Under that Funding Opportunity Announcement, the Department of Energy offers $1.9 million in funding to be split by up to 11 recipients. Specific project areas include studies of fish behavior and mortality around hydrokinetic turbines, improved environmental monitoring of marine hydrokinetic projects, and predictive modeling of marine hydrokinetic projects' environmental impacts based on surrogate technologies with stressors and receptors similar to those expected from marine hydrokinetic technologies.
Under the competitive solicitation, the Department of Energy requested Letters of Intent to be submitted by 11:59 Eastern Time on April 18, 2013. Full applications, which must include specified documents, must be submitted by 5:00 PM ET on May 16, 2013. For more information, visit the Department of Energy's official Funding Opportunity Announcement website or contact Todd Griset at Preti Flaherty.
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| Looking east from Griffith Head, Reid State Park, Maine. Damariscove Island, a proposed offshore wind site, sits on the right horizon. |
Marine hydrokinetic energy technologies capture the energy embodied in moving ocean water such as tides, currents, and waves. While the marine hydrokinetic industry is relatively young, at least one project has been licensed by the Federal Energy Regulatory Commission and built off the Maine coast. Research and development efforts are ongoing regarding a variety of marine hydrokinetic technologies and devices, and their environmental impacts continue to be studied.
The recently-announced federal funding aims to support that environmental evaluation. Working with the National Oceanographic Partnership Program, the Department of Energy's Office of Energy Efficiency and Renewable Energy Wind and Water Power Technologies Office has issued a Funding Opportunity Announcement entitled “Marine and Hydrokinetic (MHK) Environmental Effects Assessment and Monitoring.”
Under that Funding Opportunity Announcement, the Department of Energy offers $1.9 million in funding to be split by up to 11 recipients. Specific project areas include studies of fish behavior and mortality around hydrokinetic turbines, improved environmental monitoring of marine hydrokinetic projects, and predictive modeling of marine hydrokinetic projects' environmental impacts based on surrogate technologies with stressors and receptors similar to those expected from marine hydrokinetic technologies.
Under the competitive solicitation, the Department of Energy requested Letters of Intent to be submitted by 11:59 Eastern Time on April 18, 2013. Full applications, which must include specified documents, must be submitted by 5:00 PM ET on May 16, 2013. For more information, visit the Department of Energy's official Funding Opportunity Announcement website or contact Todd Griset at Preti Flaherty.
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