New England colleges form solar buying partnership

A coalition of New England colleges has formed to purchase electricity from a solar farm in Farmington, Maine. The New England College Renewable Partnership describes itself as the first collaborative purchase of solar electricity in New England higher education.

The New England College Renewable Partnership includes Amherst, Bowdoin, Hampshire, Smith and Williams Colleges. According to an announcement by Amherst, Mount Holyoke and UMass Amherst had also participated in earlier discussions about the project, but later abandoned the project, while Bowdoin joined the group. 

The partnership is collaborating to purchase power from a 25-megawatt solar array under development by a subsidiary of NextEra Energy Resources. Its predicted annual output is about 46,000 megawatt-hours, under a 20-year contract.

Each of the participating colleges describes environmental, financial, and educational benefits from the project. For example, the power purchase agreement reportedly requires that all involved colleges and their student bodies be allowed access to the project site and its data. Initial power deliveries are expected in late 2019. The colleges also cite other benefits from the project, including advancement of their sustainability and climate action initiatives.

Interest in cooperative or collaborative procurement of energy products or projects is rising. By collaborating as purchasers of solar energy, the colleges may have achieved some advantages over their options if going alone. The New England College Renewable Partnership cites its model as providing "market access that would not have been available to individual institutions, offering a scalable model that other colleges and universities can follow."Amherst's announcement explained that while each school has small energy demands, by "increasing the number of schools in the partnership, the group was able to raise the total demand for renewable energy."

Will other institutions follow this model of collaborative procurement of renewable energy?

Controversy over renewable energy claims

If an electric utility generates power from renewable resources and sells renewable energy certificates representing the renewable attributes of that energy, can it still call the underlying power "renewable"? No, according to the U.S. Federal Trade Commission.

Solar panels in the Utah desert.

While this question may seem metaphysical, it arises from the structure of most U.S. renewable energy markets.  Most states have adopted renewable portfolio standards, which require utilities and competitive electricity suppliers to source some of their power from renewable resources.  In most cases, utilities and suppliers can satisfy this requirement by using renewable energy certificates or credits known as RECs.  While each state's program differs, these RECs typically represent the renewable attributes of electric energy -- the right to claim that energy is renewable -- but are distinct from that underlying energy.  As a result, a renewable generator can sell RECs to one buyer and the underlying energy to another.

Vermont utility Green Mountain Power Corporation recently found itself at the center of controversy over its claims regarding renewable energy.  The utility owns and is involved with a variety of renewable energy generation projects in Vermont, including wind and solar projects.  It sells energy produced from these projects to Vermont customers, while simultaneously selling some of the RECs generated by these sources to out of state utilities.

In 2014, concerns over "double counting" of renewable energy attributes led Connecticut to ban the use of RECs from renewable generation that also is counted toward another state’s renewable goals for meeting Connecticut's requirements, and REC marketer NextEra Energy to notify New England market participants that it would no longer buy Vermont RECs.

On September 15, 2014, a group of petitioners asked the Federal Trade Commission to investigate Vermont utility Green Mountain Power Corporation's claims that it is providing its customers with electricity from renewable sources such as commercial wind and solar projects, given its separate sale of the RECs to out of state utilities.  The Federal Trade Commission regulates claims about the environmental impacts of commerce under Section 5 of the Federal Trade Commission Act, including claims regarding the production, sale, and use of renewable energy.  In their complaint, the petitioners claimed that "Vermont customers are being misled into thinking that they are buying 'renewable energy,' when in fact what they are getting is 'null' electricity consisting of a mix of fossil fuel, nuclear, gas and other 'brown' sources of electricity from the regional grid."

The FTC responded to this petition in February 2015 by issuing a letter to Green Mountain Power's counsel expressing concern that the utility might have created confusion for its customers about the renewable attributes of the power they purchased by not “clearly and consistently communicating” that it sells RECs for most of its renewable energy-generating facilities to entities outside Vermont.  In the letter, the FTC said that it had not found that any Green Mountain Power statements violated the Federal Trade Commission Act.  However, the Commission urged Green Mountain Power in the future to prevent any confusion by clearly communicating the implications of its REC sales for Vermont customers and REC purchasers.

The FTC letter represents the latest salvo in efforts to regulate claims regarding the production, sale, and use of renewable energy.  To help marketers avoid making deceptive environmental claims, for over 20 years the FTC has issued "Green Guides" providing its administrative interpretation of the law. The Green Guides outline general principles that apply to all environmental marketing claims and provide guidance regarding many specific environmental benefit claims, including renewable energy claims.  The Green Guides, as well as the recent FTC letter, illustrate the importance of caution in making claims about renewable energy in business activities.

Solar, geothermal led new US capacity in January 2014

Solar and geothermal resources led the new utility-scale electric generating capacity installed in the U.S. in January 2014, according to a report by the staff of the Federal Energy Regulatory Commission.  In all, the report identified 325 megawatts of new generation placed in service in January, substantially all of which is powered by renewable resources.

Old Faithful Geyser erupts in Yellowstone National Park -- a natural geothermal feature.

Solar power contributed the largest share of new generating capacity installed in January, with 287 megawatts of solar projects placed in service.  The largest project, Exelon Corp.'s Antelope Valley Solar Phase II expansion project in Los Angeles County, California, added 130 megawatts of capacity to an existing 230 megawatt project.  The power generated is sold to Pacific Gas and Electric under long-term contract.  Other large new solar projects include MidAmerican Solar’s 61 MW Topaz Solar Farm Phase III expansion project in San Luis Obispo County, California, and two 20 MW projects (Duke Energy Corp.’s Dogwood Solar Power project in Halifax County, North Carolina, and NextEra Energy Inc.’s Mountain View Solar project in Clark County, Nevada).  All of these projects rely on long-term power purchase agreements with utilities.

Geothermal steam power was the second largest category of new electric generating capacity placed in service in January 2014, in the form of Gradient Resources Inc.’s 30 MW Patua Hot Springs Geothermal project in Lyon County, Nevada.  As with the solar projects described above, the power generated by the Patua Hot Springs project is sold to a utility -- in this case, Sacramento Municipal Utility District, under a long-term contract.

Rounding out the new capacity installations in January were 3 small biomass units with a combined capacity of 3 megawatts, and one wind project with an installed capacity of 4 megawatts -- Consolidated Edison Inc.’s 4 MW Russell Point Wind Farm project in Logan County, Ohio.

Despite this growth in solar and geothermal power resources, together these resources account for just over 1% of the nation's total installed operating generating capacity.  Yet the relative growth in solar and geothermal power over the past years has been striking, and is expected to continue for the near term.  Will these resources soon play a larger role in the nation's energy portfolio?

Will YieldCo structure change energy investments?

A relatively new way some utility companies are structuring their assets is drawing increased investment.  Dubbed the "YieldCo" model, the basic idea is that an established energy and utility companies will create a YieldCo subsidiary as a vehicle for holding investments in assets that produce sustained or increasing cash flow.  The YieldCo then pays out a relatively high percentage of its earnings to its shareholders as dividend yield.  Utility giant NRG Energy Inc. launched NRG Yield, Inc. this July, and other companies and market watchers have hinted that more YieldCo spinoffs may come in the near future.  Will the YieldCo model catch on?  How will it change the flow of money to and from energy projects?

The YieldCo model offers several kinds of benefits.  One is an answer to the question of renewable energy projects can compete during long-term periods of low power prices and reduced demand for electricity?  YieldCos are hoped to offer lower cost of capital for these projects.  Most often, they are conceived of as as holding electric generation projects whose output is fully contracted for, and older renewable and other assets that no longer qualify for special tax benefits.  The structure lets owners monetize assets without giving up control.  Meanwhile, the expected high and consistent yields can also attract capital and new investors, much as real estate investment trusts (REITs) or master limited partnership (MLPs) have done for other sectors. 

In the case of NRG Yield, its initial asset base featured a mix of conventional and distributed elcetric generation projects.  This mix included eleven utility-scale power plants and renewable projects, plus and two portfolios of distributed solar projects.  NRG Yield appears to have been a success, attracting $430 million in its initial public offering, with shares subsequently rising over 50% more in value. 

But despite NRG Yield's success since July, the structure is relatively novel as applied to electric generating infrastructure.  Downsides to the YieldCo structure include less favorable tax treatment than is available to REITs or MLPs (basically, a higher level of taxation), the cost of establishing a spinoff YieldCo, and increased exposure to interest rate risk.

If the YieldCo structure catches on, it could attract new investment capital to the renewable and conventional electric generation sector.  Will other companies follow NRG Yield's example?  NextEra Energy Inc. (owner of Florida Power & Light) is said to be exploring the concept, and is reportedly considering a portfolio of 1,500 to 2,000 MW of operating assets and another 1,200 MW in the development pipeline for contribution to a YieldCo in the next 4 years.  How big a shift we see to YieldCos remains to be seen, but for now excitement about the possibilities remains high. 

Google grows wind power supply

Google Energy LLC, a subsidiary of internet search company Google Inc., recently informed federal regulators of a long-term power purchase agreement with a 100.8-megawatt wind-powered electric generation project in Oklahoma.

Under the deal, Google agreed to buy all of the energy output from Minco Wind II, LLC's wind project for a term of 20 years.  Minco Wind II is operated by a subsidiary of NextEra Energy Resources.  As part of the deal, Google can claim that it is powering a data center in Pryor, OK, with power from the wind project.

The Oklahoma PPA nearly doubles the amount of wind capacity under contract by Google.  In 2010, Google Energy entered into a power purchase agreement to buy 114 MW of wind from Garden Wind, LLC.  Garden Wind, also a NextEra subsidiary, owns and operates a 150 MW wind project in Iowa.  Garden Wind sold Google Energy a 76% share of the project's output for a term of 20 years.  In addition, Google indirectly owns a 20.5% interest in Peace Garden Wind, LLC, which owns and operates about 169 MW of wind generation in the central region.

This comes two months after Google announced it was scaling back its program aimed at making renewable energy cost less than coal.  Google's RE

July 15, 2011 - will Maine have a new largest dam?

Since 1954, Maine's largest-capacity hydroelectric dam has been the 85 megawatt Harris Dam on the Kennebec River - but it may soon lose its title to another project on the same river.

Water spills over the last falls on the Cathance River in Topsham, Maine.  These falls powered a sawmill as early as 1716.

Harris Dam may soon lose its title as Maine's largest dam -- but not because a new dam is being built.  Rather, dam owner FPL Energy Maine Hydro LLC -- a subsidiary of NextEra Energy Resources -- has embarked on a program to improve the efficiency of the three turbines at Wyman Dam, the next dam downstream from Harris.

Wyman Dam, currently rated at 83 megawatts capacity, was built in 1930, 24 years before the Harris Dam.  Improvements to two of the three Wyman turbine generators have already occurred, and NextEra now proposes to complete the project.

Between the recent efficiency upgrades and a closer look at older improvements, NextEra now thinks the overall licensed project capacity should increase from 83,700 kW to 88,010 kW, an increase of 4,310 kW.  NextEra has applied to the Federal Energy Regulatory Commission for a license amendment to reflect these upgrades.

Comments on this proposal are due by August 5, 2011.  If approved, Wyman Dam's newly-tallied 88 megawatts of capacity will slip past Harris Dam's 85 MW to become Maine's largest hydroelectric dam.

December 16, 2010 - a tale of two solar projects

Let's celebrate a milestone: I've now been blogging here for over a year.

Florida solar?  Setting sun over the Everglades.

Two news articles about solar power from across the country caught my eye today.  Taken alone, each describes the success of a solar power project.  Read together, the differences between the two projects are thrown into relief.

First, South Carolina utility Santee Cooper is building that state's largest solar array.  Santee Cooper's $1.3 million Grand Strand Solar Station project is under development in Myrtle Beach.  The utility is installing 1,300 solar photovoltaic panels on the roof and surrounding grounds of a warehouse it owns there.  In total, the project is expected to produce a peak of 311 kW under optimal conditions.  Adding this 311 kW will increase South Carolina's solar PV power production by 50%.

November 4, 2010 - what kinds of generation make up Maine's standard offer mix?

Today, a break from recent blog entries about dam removal in Maine, New Hampshire, and Massachusetts, for a refresher on the mix of generation resources serving the average Maine electricity consumer.  Each electricity supplier tends to source its electricity from a variety of generation assets.  In Maine, thanks to utility deregulation over the last decade, our three largest investor-owned transmission and distribution utilities don't actually generate or sell you the electrons you consume.  Rather, competitive electricity providers compete (in theory) to provide "standard offer service", meaning default electricity supply service.  Consumers are free to select other competitive providers to supply their electricity, but must make an affirmative choice to do so.  Otherwise, most consumers, particularly residential consumers, take standard offer service.


The photo above shows a recent mailing I received at my house detailing the power source mix for the current standard offer provider for customers of Central Maine Power's T&D network: NextEra Energy Power Marketing, LLC.


You can see that the largest share of power sourced by NextEra in 2009 was hydro (30.9%), with gas a close second (29.2%) and nuclear power (basically, Seabrook) at 24.5%.  In total, 33.5% of NextEra's energy supply came from sources meeting Maine's renewable portfolio standard requirements.  By contrast, the average New England mix is more heavily weighted in gas, nuclear, and coal, with renewable sources playing a much smaller role.

The generation mix is not simply an academic question; it has implications for other policy choices.  For example, we've seen in past entries how the generation mix can affect other environmental claims, like what kind of emissions are associated with electric vehicles.

Interestingly, the supply mix is slightly different from the last time I got a notice.

July 20, 2010 - China passes US as world's largest energy consumer; NextEra signs wind deal with Google

China has passed the United States as the world's largest consumer of energy. The International Energy Agency measures states' energy consumption in a unit called "oil equivalent". The most recent IEA report shows that China used 2.252 billion tons of oil equivalent, whereas the U.S. used only 2.170 billion tons of oil equivalent. This reverses the trend for more than the past 100 years, when the United States has been considered to consume more energy than any other country. While energy consumption has traditionally been viewed as directly correlated to GDP, this shift breaks that trend as well. Commentators point to China's increased industrial activity, particularly in light of the stagnant consumer-driven American economy.

Interestingly, American energy intensity remains high: the average U.S. citizen uses five times as much energy as does the average Chinese citizen. What will happen when China reaches the energy intensity of the U.S.?

NextEra's competitive energy subsidiary, NextEra Energy Resources, has entered into a power purchase agreement with Google Energy, LLC. Under the deal, Google will buy 114 megawatts of power from NextEra Energy Resources' Story II Wind Energy Center in Iowa.

June 24, 2010 - FPL's De Soto Next Generation Solar facility; Patriot Renewables and Maine wind

In past entries, I've looked at FPL's Martin Next Generation Solar Energy Center, which will combine solar thermal energy with existing steam boilers to power combined-cycle turbines.  As it turns out, FPL and its NextEra siblings already operate the largest solar photovoltaic power plant in the United States: the 25-megawatt DeSoto Next Generation Solar Energy Center. At DeSoto, over 90,500 PV panels are projected to generate about 42,000 megawatt-hours annually, enough power to serve about 3,000 homes.  Over 30 years, the DeSoto facility's generation will decrease fossil-fuel usage by approximately 7 billion cubic feet of natural gas and 277,000 barrels of oil.  This shift will displace more than 575,000 tons of greenhouse gas emissions, equivalent of removing more than 4,500 cars from the road every year for the entire life of the project.

How about costs?  The DeSoto facility cost $150 million to construct (and was $22 million under budget).  This translates roughly into a capital cost of 12 cents per kWh over the 30-year lifetime of the plant.

In Maine renewable news, the Lewiston Sun Journal reports that a petition is circulating in Dixfield that asks to leave wind siting decisions to a vote of the townspeople.  The second of two successive six-month moratorium periods will end this fall.  Dixfield wind energy isn't just a hypothetical situation; Massachusetts-based Patriot Renewables LLC has proposed developing the wind energy potential on Colonel Holman Mountain and its surrounding ridges.  Patriot Renewables also has a project proposed in nearby Carthage and Woodstock. (Woodstock and Carthage have both rejected moratoria recently.)  The area is also home to proposed projects by First Wind and Independence Wind in Rumford and Roxbury.  (Thanks to Mike Novello for straightening me out on the projects in this area of Maine.)

4/2/10

Stretching slightly beyond energy policy: the Town of Scarborough has finally acquired the parking lot at Higgins Beach. What do you get when you take the Portland area's most consistent surf beach, then ban on-street parking, then charge two arms and a leg for parking in the one private lot in the village? Angry surfers. Higgins was always my favorite break when we lived in Portland, but the parking scene -- especially in summer -- was always a nightmare. If the dirt parking lot was ever built on, it would have eliminated the one place beachgoers could have parked for miles around. The owner of the 1.5 acre lot, plus a 10 acre (presumably unbuildable) strip near the marsh, wanted nearly $1.5 million. Fortunately, a deal has been cut, using $632,145 from the Land for Maine's Future program, a matching amount from the town's bond and $7,270 from fundraising by The Trust for Public Land and the Surfrider Foundation. Thank you.

The Tesoro oil refinery in Anacortes, Washington suffered an explosion and a fire, killing 4 people and leaving 3 more missing.

More on the landslide in Winslow, Maine after the removal of the Fort Halifax dam: Maine Department of Environmental Protection has ordered (former) dam licensee NextEra to study and report on what went wrong. (A bit of pedigree is useful here, since it can be confusing: NextEra Energy Resources is the entity in question, formerly known as Florida Power & Light Energy, or sometimes known as FPLE Maine Hydro LLC.) The landslide threatens the Fort Hill Cemetery, with graves as old as the mid-1700s.

Rail issues: a Pan Am train derailed in downtown Norridgewock Wednesday.

There's a fair amount of hype going around about the weaknesses of the federal EnergyStar appliance rating program.

In Colorado, dominant utility Xcel Energy is replacing 900 MW of coal plants -- 30% of the entire Colorado coal-fueled generation -- with natural gas plants, all because the legislature enacted the Colorado Clean Air – Clean Jobs Act, which caps emissions at 1,100 pounds of carbon dioxide per megawatt-hour. Now it's a race for regulatory approval: by December, utility proposals must be approved by the Colorado Public Utilities Commission, and must be operational by 2017.

Did you know that until this week, there had only been one known tropical cyclone in the South Atlantic Ocean? Now there have been two. Today, the Geostationary Operational Environmental Satellite, GOES-12 identified Tropical Storm 90Q off the coast of Argentina.

In Los Angeles, a good editorial from the LA Times bashing the Department of Water and Power board for endorsing Mayor Villaraigosa's proposed rate hike to fund electric efficiency -- which as reported yesterday, didn't pass.

3/22/10

A small fire broke out inside a trash shredder at the Biddeford, Maine waste-to-energy plant Maine Energy Recovery Company (MERC). Perhaps the energy content of the fuel was just bursting to be set free.

Remember the battle over whether the Fort Halifax dam and its associated hydroelectric generating capacity on the Sebasticook River in Winslow, Maine should be removed? The 100-year-old dam was breached in July 2008 after lengthy debate and legal proceedings. , In essence, dam owner FPL Energy Maine Hydro (formerly Florida Power & Light, now NextEra) found itself burdened by a fish passage requirement imposed during the Edwards Dam removal proceedings. Under the Kennebec Hydro Developers Group Agreement (or the KHDG Agreement), FPL found itself either required to breach the dam or install a particular fish passage technology. FPL elected to breach the dam. Many people, including state representative Ken Fletcher of Winslow, opposed this decision, arguing that FPL's choice would have dire environmental and cost consequences, and that it was bad policy in light of the overall push for more renewable capacity. Representative Fletcher has now filed a document with the Maine DEP demonstrating costs to taxpayers of between $950,000 and $1.6 million. Key cost components include: $114,997 for the town's share of replacing a sewer line exposed after breach, $30,375 in costs for title and survey work over and above the value the town recovered by selling formerly submerged lands, $800,000 more than previously estimated to replace the Mile Brook Bridge on Garland Road due to erosion, , and $725,396 to demolish six homes on an unstable riverside slope on Dallaire Street.

The "energy corridor" bill in Maine was voted Ought to Pass as Amended by the Joint Standing Committee on Utilities and Energy. Among the issues are how Maine should regulate high-impact transmission lines connecting the massive hydroelectric capacity of Hydro-Quebec to southern New England markets, given that these lines will affect Maine's costs and strategic energy position.

The AP is covering a story about a California water district's proposed use of 47 square miles of poorly-managed farmland -- land that due to bad water use is now very salty -- for a solar photovoltaic farm of up to one gigawatt.

Who wants free money? $1.3 million in energy grants through Efficiency Maine to Northern Maine Community College in Presque Isle, Eastern Maine Community College in Bangor, Kennebec Community College in Augusta and Southern Maine Community College in South Portland. $2 million in grants for water projects too.

Wind siting: Thorndike voters approved the siting ordinance. Fort Kent votes tonight.