The nine states participating in the Regional Greenhouse Gas Initiative have announced consensus on proposed revisions to that program that would provide a further 30% reduction in the regional limit on emissions by 2030, relative to 2020 levels. The proposed regional program changes are now available for stakeholder comment, after which each participating state will follow its own specific statutory and regulatory processes to propose updates to their own carbon dioxide budget trading programs.
Nine Northeast and Mid-Atlantic
states -- Connecticut, Delaware,
Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont -- currently participate in RGGI, the first mandatory market-based regulatory program in the U.S. to reduce greenhouse gas
emissions. RGGI is composed of individual CO2
budget trading programs in each state, based on each state’s
independent legal authority. The program imposes an annual aggregate cap on greenhouse emissions from covered sources like fossil-fueled power plants in participating states. For 2017, the cap is 84.3 million short tons (62.5 million short tons adjusted for banked allowances); it declines 2.5 percent each year
until 2020. Since 2008, participating states have reduced power sector carbon emissions by nearly 50
percent, while generating more than $2.7 billion in allowance auction proceeds for reinvestment in programs to benefit consumers.
RGGI participating states periodically conduct a "program review". Following their 2012 Program Review, the RGGI states implemented a new 2014 RGGI cap of 91 million short tons -- 45 % below the prior 2014 cap of 165 million short tons. At that time, the participating states decided to commence the next program review no later than 2016.
RGGI's 2016 Program Review is ongoing. According to an August 23, 2017 announcement, the participating states have reached consensus on proposed changes to the program design. Proposed changes include a regional cap of
75,147,784
tons in 2021, which will decline by 2.275 million
tons per year thereafter,
resulting in a total
30% reduction in
the regional cap
from 2020 to 2030. The proposed changes also include modifications to the existing Cost Containment Reserve and implementation of a new Emissions Containment Reserve which would add some flexibility to the cap size.
On behalf of participating states, RGGI, Inc. has announced a meeting on September 25 to gather stakeholder input. According to the announcement, after reviewing stakeholder comments, conducting additional economic analysis, and updating materials, each participating state is expected to execute its own statutory and regulatory process to update its own carbon budget trading program.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label Maryland. Show all posts
Showing posts with label Maryland. Show all posts
Deepwater Wind proposes offshore wind, battery storage for MA RFP
Friday, August 4, 2017
Massachusetts energy regulators are reviewing bids to supply clean energy from new sources -- including a combined offshore wind and energy storage project proposed by developer Deepwater Wind.
Rhode Island-based Deepwater Wind is the developer of America's first commercial offshore wind project, the 30 MW Block Island Wind Farm which began commercial operations in December 2016. Other projects in early-stage development by the company include the 90 MW South Fork Wind Farm serving Long Island and the 120 MW Skipjack Wind Farm serving Maryland.
Earlier this year, prompted by 2016 state legislation, the Massachusetts electric distribution companies, in coordination with the Massachusetts Department of Energy Resources, issued a Request for Proposals for Long-term Contracts for Clean Energy Projects pursuant to Section 83D. Through the RFP, the Massachusetts utilities solicited proposals for clean energy generation in an amount roughly equal to 9,450,000 MWh.
According to Deepwater Wind, it responded to the Massachusetts clean energy RFP by proposing the Revolution Wind farm, paired with a battery storage system. The company's prime proposal features 144 MW of wind generation, coupled with a 40 MWh battery system, which it says will "help to defer the need to construct costly new peaking generating facilities and controversial transmission lines." The project would be sited on the Outer Continental Shelf off Massachusetts, about 30 miles from the mainland and about 12 miles off Martha's Vineyard, under a lease from the federal government. It would be adjacent to Deepwater Wind’s South Fork Wind Farm. Emphasizing flexibility and scalability, as well as the ability to complete construction in one season, alternative bids submitted by the company envisioned a larger 288 MW version of Revolution Wind and a smaller 96 MW version.
Deepwater Wind says it also intends to submit an offshore wind proposal under a separate solicitation process under way in under Section 83C of Massachusetts law, with bids due by December 2018.
Rhode Island-based Deepwater Wind is the developer of America's first commercial offshore wind project, the 30 MW Block Island Wind Farm which began commercial operations in December 2016. Other projects in early-stage development by the company include the 90 MW South Fork Wind Farm serving Long Island and the 120 MW Skipjack Wind Farm serving Maryland.
Earlier this year, prompted by 2016 state legislation, the Massachusetts electric distribution companies, in coordination with the Massachusetts Department of Energy Resources, issued a Request for Proposals for Long-term Contracts for Clean Energy Projects pursuant to Section 83D. Through the RFP, the Massachusetts utilities solicited proposals for clean energy generation in an amount roughly equal to 9,450,000 MWh.
According to Deepwater Wind, it responded to the Massachusetts clean energy RFP by proposing the Revolution Wind farm, paired with a battery storage system. The company's prime proposal features 144 MW of wind generation, coupled with a 40 MWh battery system, which it says will "help to defer the need to construct costly new peaking generating facilities and controversial transmission lines." The project would be sited on the Outer Continental Shelf off Massachusetts, about 30 miles from the mainland and about 12 miles off Martha's Vineyard, under a lease from the federal government. It would be adjacent to Deepwater Wind’s South Fork Wind Farm. Emphasizing flexibility and scalability, as well as the ability to complete construction in one season, alternative bids submitted by the company envisioned a larger 288 MW version of Revolution Wind and a smaller 96 MW version.
Deepwater Wind says it also intends to submit an offshore wind proposal under a separate solicitation process under way in under Section 83C of Massachusetts law, with bids due by December 2018.
Maryland considers offshore wind applications
Tuesday, December 6, 2016
Maryland moves closer to offshore wind development, as the state Public Service Commission reviews two applications for offshore wind projects.
The Maryland Offshore Energy Act of 2013 contains a number of provisions that would benefit a “qualified offshore wind project” that
On November 22, the Commission's consultant announced that two offshore wind project applications were submitted, found to be administratively complete, and found to have met the minimum threshold criteria. The applicants are (i) US Wind, Inc., a subsidiary of Toto Holding SpA, and (ii) Skipjack Offshore Wind, LLC, a subsidiary of Deepwater Wind Holdings, LLC.
The Commission then opened a docketed proceeding (Case Number 9431) to conduct a multi-part review to evaluate and compare the proposed offshore wind project applications submitted by US Wind and Skipjack. Petitions to intervene in that proceeding are due by Monday, December 12, 2016.
The Maryland Offshore Energy Act of 2013 contains a number of provisions that would benefit a “qualified offshore wind project” that
- is located on the outer continental shelf, between 10 and 30 miles off the Maryland coast, in an area that is designated for leasing by the Bureau of Ocean Energy Management within the U.S. Department of the Interior,
- interconnects to the PJM Interconnection grid at a point located on the Delmarva peninsula, and
- is approved by the Public Service Commission.
On November 22, the Commission's consultant announced that two offshore wind project applications were submitted, found to be administratively complete, and found to have met the minimum threshold criteria. The applicants are (i) US Wind, Inc., a subsidiary of Toto Holding SpA, and (ii) Skipjack Offshore Wind, LLC, a subsidiary of Deepwater Wind Holdings, LLC.
The Commission then opened a docketed proceeding (Case Number 9431) to conduct a multi-part review to evaluate and compare the proposed offshore wind project applications submitted by US Wind and Skipjack. Petitions to intervene in that proceeding are due by Monday, December 12, 2016.
Supreme Court rules on state energy incentives
Tuesday, April 19, 2016
The U.S. Supreme Court has released its ruling on a case affecting how states may provide incentives for electric power generation. In Hughes v. Talen Energy Marketing, LLC, the Court upheld a lower court's ruling invalidating a Maryland program to subsidize construction of new power plants. The ruling provides important insight into how the Court views the boundary between federal and state jurisdiction over energy matters.
The Hughes case involved a new Maryland program to encourage in-state generation capacity, and its relationship to federally blessed capacity market. Under the Federal Power Act, the Federal Energy Regulatory Commission has exclusive jurisdiction over wholesale sales of electricity in the interstate market, while States regulate retail electricity sales.
For years, Mid-Atlantic regional grid operator PJM Interconnection has held capacity auctions to identify need for new generation and compensate generators for development. PJM's auctions have been approved by the Federal Energy Regulatory Commission under the Federal Power Act. But due to concern that the PJM auction was failing to encourage development of sufficient new in-state generation, Maryland enacted its own regulatory program. Under that state program, Maryland held a competitive process to select a developer for a new power plant, and required load-serving entities to enter into a 20-year pricing contract (called a "contract for differences") with the developer. The developer would still sell its capacity to PJM, but would receive extra money under the state program to make up the difference between the PJM market price and the contract price.
But incumbent generators challenged the new Maryland program; a federal district court issued a declaratory judgment holding that Maryland's program improperly sets the rate the developer receives for interstate wholesale capacity sales to PJM. On appeal, the Fourth Circuit affirmed, finding that Maryland's program was preempted because it impermissibly conflicts with FERC policies. The case then came to the Supreme Court of the United States.
The Supreme Court's April 19, 2016 decision affirms the lower courts' rulings. The Court agreed with the Fourth Circuit's judgment "that Maryland's program sets an interstate wholesale rate, contravening the FPA's division of authority between state and federal regulators." In the majority opinion's words, "States may not seek to achieve ends, however legitimate, through regulatory means that intrude on FERC's authority over interstate wholesale rates, as Maryland has done here."
The Hughes ruling sheds light on how the Court might view other state programs to incentivize new or clean generation. That said, the Court emphasized that its holding in Hughes is limited -- that it rejected Maryland's program "only because it disregards an interstate wholesale rate required by FERC." The Court explicitly said it would not address "the permissibility of various other measures States might employ to encourage development of new or clean generation," such as tax incentives, land grants, direct subsidies, construction of state-owned generation facilities, or re-regulation of the energy sector.
The majority opinion concludes with a reminder that "[s]o long as a State does not condition payment of funds on capacity clearing the auction, the State's program would not suffer from the fatal defect that renders Maryland's program unacceptable." This suggests one potential path for permissible state incentives for electric power generation.
 |
| The Supreme Court of the United States. |
The Hughes case involved a new Maryland program to encourage in-state generation capacity, and its relationship to federally blessed capacity market. Under the Federal Power Act, the Federal Energy Regulatory Commission has exclusive jurisdiction over wholesale sales of electricity in the interstate market, while States regulate retail electricity sales.
For years, Mid-Atlantic regional grid operator PJM Interconnection has held capacity auctions to identify need for new generation and compensate generators for development. PJM's auctions have been approved by the Federal Energy Regulatory Commission under the Federal Power Act. But due to concern that the PJM auction was failing to encourage development of sufficient new in-state generation, Maryland enacted its own regulatory program. Under that state program, Maryland held a competitive process to select a developer for a new power plant, and required load-serving entities to enter into a 20-year pricing contract (called a "contract for differences") with the developer. The developer would still sell its capacity to PJM, but would receive extra money under the state program to make up the difference between the PJM market price and the contract price.
But incumbent generators challenged the new Maryland program; a federal district court issued a declaratory judgment holding that Maryland's program improperly sets the rate the developer receives for interstate wholesale capacity sales to PJM. On appeal, the Fourth Circuit affirmed, finding that Maryland's program was preempted because it impermissibly conflicts with FERC policies. The case then came to the Supreme Court of the United States.
The Supreme Court's April 19, 2016 decision affirms the lower courts' rulings. The Court agreed with the Fourth Circuit's judgment "that Maryland's program sets an interstate wholesale rate, contravening the FPA's division of authority between state and federal regulators." In the majority opinion's words, "States may not seek to achieve ends, however legitimate, through regulatory means that intrude on FERC's authority over interstate wholesale rates, as Maryland has done here."
The Hughes ruling sheds light on how the Court might view other state programs to incentivize new or clean generation. That said, the Court emphasized that its holding in Hughes is limited -- that it rejected Maryland's program "only because it disregards an interstate wholesale rate required by FERC." The Court explicitly said it would not address "the permissibility of various other measures States might employ to encourage development of new or clean generation," such as tax incentives, land grants, direct subsidies, construction of state-owned generation facilities, or re-regulation of the energy sector.
The majority opinion concludes with a reminder that "[s]o long as a State does not condition payment of funds on capacity clearing the auction, the State's program would not suffer from the fatal defect that renders Maryland's program unacceptable." This suggests one potential path for permissible state incentives for electric power generation.
Report: solar panels add home appraisal value
Tuesday, November 17, 2015
"How will putting rooftop solar panels on my home affect its value?" is a common question among those considering residential-sited solar energy projects.
It will help, according to a report recently released by the Lawrence Berkeley National Laboratory, finding solar photovoltaic systems add value to homes in a variety of markets under traditional appraisal methodology as well as statistical analysis.
Intuition and previous studies have shown a "price premium" effect for solar photovoltaic systems in some markets. Where a price premium applies, a home with a solar PV system can command a higher price than a comparable home without one.
A 2013 study of California using statistical analysis found "clear support that a premium exists in the marketplace; thus, PV systems have value, and their contribution to home values must be assessed." That study found a strong correlation between premiums and PV system size, and a weak negative correlation with PV system age. Essentially, "larger systems garner larger premiums and older systems garner smaller premiums," with each 1-kilowatt increase in size estimated as commanding a $5,911 higher premium, while each year of system age yields a $2,411 lower premium.
A similar 2014 study of eight states found "PV consistently adds value across a variety of states, housing and PV markets, and home types." Notably, these studies relied heavily on hedonic or regression pricing models to account for characteristics specific to each property (home type, site, neighborhood, market). While such large-scale statistical analysis is commonly performed in economics, home buying more commonly relies on the appraisal process to support both price formation and financing. Few previous studies were written by experienced real estate appraisers using paired-sales techniques or other standard appraisal methods.
The Lawrence Berkeley National Laboratory has released a report designed to bridge this gap, featuring a comparison of statistically derived PV premiums and analysis performed by experienced home appraisers. That report, "Appraising into the Sun: Six-State Solar Home Paired-Sales Analysis", examined 43 pairs of comparable homes that sold with and without PV across seven areas in six state (California, Oregon, Florida, Maryland, North Carolina, and Pennsylvania). It compared traditional real estate appraisal analysis of these homes to contributory-value estimates based on gross cost, net cost, and income. Overall, it found that under either statistical or appraisal based analysis, PV systems added premiums of $2.68/W to $4.31/W across states, averaging $3.78/W or about $14,000 for an "average-size" system sold in 2011 (3.8 kW).
The study did identify some difficulty in conducting comparable-sales analysis on homes with solar panels. (It also includes a section titled "Warning to Users of this Study", noting the analysis was limited to specific times and places, only considered host-owned systems with crystalline-silicon panels, and does not address potential sales price implications related to the location of the PV systems.) However, it found that appraised premiums are in agreement with the hedonic modeling results as well. Practically speaking, this means cost- and income-based statistical estimates of PV premiums could be reliable when paired-sales analysis is impossible.
Further information about the Lawrence Berkeley National Laboratory report on appraisal value of residential solar PV systems can be found in a November 12, 2015 presentation hosted on its website.
It will help, according to a report recently released by the Lawrence Berkeley National Laboratory, finding solar photovoltaic systems add value to homes in a variety of markets under traditional appraisal methodology as well as statistical analysis.
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| A residential rooftop solar project in Massachusetts. |
Intuition and previous studies have shown a "price premium" effect for solar photovoltaic systems in some markets. Where a price premium applies, a home with a solar PV system can command a higher price than a comparable home without one.
A 2013 study of California using statistical analysis found "clear support that a premium exists in the marketplace; thus, PV systems have value, and their contribution to home values must be assessed." That study found a strong correlation between premiums and PV system size, and a weak negative correlation with PV system age. Essentially, "larger systems garner larger premiums and older systems garner smaller premiums," with each 1-kilowatt increase in size estimated as commanding a $5,911 higher premium, while each year of system age yields a $2,411 lower premium.
A similar 2014 study of eight states found "PV consistently adds value across a variety of states, housing and PV markets, and home types." Notably, these studies relied heavily on hedonic or regression pricing models to account for characteristics specific to each property (home type, site, neighborhood, market). While such large-scale statistical analysis is commonly performed in economics, home buying more commonly relies on the appraisal process to support both price formation and financing. Few previous studies were written by experienced real estate appraisers using paired-sales techniques or other standard appraisal methods.
The Lawrence Berkeley National Laboratory has released a report designed to bridge this gap, featuring a comparison of statistically derived PV premiums and analysis performed by experienced home appraisers. That report, "Appraising into the Sun: Six-State Solar Home Paired-Sales Analysis", examined 43 pairs of comparable homes that sold with and without PV across seven areas in six state (California, Oregon, Florida, Maryland, North Carolina, and Pennsylvania). It compared traditional real estate appraisal analysis of these homes to contributory-value estimates based on gross cost, net cost, and income. Overall, it found that under either statistical or appraisal based analysis, PV systems added premiums of $2.68/W to $4.31/W across states, averaging $3.78/W or about $14,000 for an "average-size" system sold in 2011 (3.8 kW).
The study did identify some difficulty in conducting comparable-sales analysis on homes with solar panels. (It also includes a section titled "Warning to Users of this Study", noting the analysis was limited to specific times and places, only considered host-owned systems with crystalline-silicon panels, and does not address potential sales price implications related to the location of the PV systems.) However, it found that appraised premiums are in agreement with the hedonic modeling results as well. Practically speaking, this means cost- and income-based statistical estimates of PV premiums could be reliable when paired-sales analysis is impossible.
Further information about the Lawrence Berkeley National Laboratory report on appraisal value of residential solar PV systems can be found in a November 12, 2015 presentation hosted on its website.
US auctions NJ offshore wind sites
Tuesday, November 10, 2015
The U.S. Department of the Interior has auctioned the rights to lease nearly 344,000 acres offshore New Jersey for potential offshore wind energy development.
Under federal law, the Department of the Interior's Bureau of Ocean Energy Management is responsible for leasing marine sites on the Outer Continental Shelf for energy development. In addition to BOEM's oil and gas site leasing programs, the agency also operates renewable energy programs focused primarily on offshore wind and hydrokinetic resources (waves and currents). Prior to yesterday's lease sale, BOEM had awarded nine commercial offshore wind leases offshore Massachusetts, Maryland, Rhode Island, and Virginia.
In September, BOEM announced that it would auction off the rights to two designated Wind Energy Areas offshore New Jersey. That auction was held yesterday. According to BOEM, the provisional winner of lease area OCS-A 0498 (160,480 acres) was RES America Developments Inc., with a bid of $880,715. US Wind Inc. provisionally won site OCS-A 0499 (183,353 acres), with a bid of $1,006,240. Fishermen’s Energy LLC also reportedly participated in the lease sale but did not win either parcel.
Generally centered offshore of Atlantic City, the New Jersey Wind Energy Area starts about 7 nautical miles offshore and runs about 21 nautical miles seaward. The U.S. Department of Energy’s National Renewable Energy Laboratory reports that full development of the area could support about 3,400 megawatts of wind generation.
Since the Obama administration's early "Smart from the Start" program, BOEM has engaged in efforts to spur offshore wind development. President Obama's June 2013 Climate Change Action Plan features offshore wind as a tool to reduce the emission of carbon dioxide and other greenhouse gases from domestic industry.
This emphasis on the linkage between offshore wind and action on climate change is increasingly clear in the administration's messaging. Early press releases on BOEM's offshore wind programs emphasized "the Obama Administration's all-of-the-above energy strategy to continue to expand domestic energy production." By July 31, 2013, in announcing the first ever competitive lease sale for renewable energy in federal waters, BOEM described "President Obama's comprehensive plan to move our economy toward domestic clean energy sources and cut carbon pollution." Just two months later in September 2013, after the release of the Climate Action Plan, BOEM began using the phrase "President Obama's Climate Action Plan to create American jobs, develop domestic clean energy sources and cut carbon pollution." BOEM continues to use this phrase in touting its offshore wind program's consistency with the Climate Action Plan, as recently as yesterday's press release about the New Jersey lease sale.
Perhaps more tellingly, the Department of Interior press release announcing yesterday's New Jersey sale references "COP21", the upcoming 2015 Paris Climate Conference, in its brief summary. This reference to the Paris climate convention is not otherwise explained in the text of the press release. Nevertheless its inclusion here highlights the interplay between domestic and international energy policy, as well as the potential role U.S. offshore wind might play in addressing climate change.
Under federal law, the Department of the Interior's Bureau of Ocean Energy Management is responsible for leasing marine sites on the Outer Continental Shelf for energy development. In addition to BOEM's oil and gas site leasing programs, the agency also operates renewable energy programs focused primarily on offshore wind and hydrokinetic resources (waves and currents). Prior to yesterday's lease sale, BOEM had awarded nine commercial offshore wind leases offshore Massachusetts, Maryland, Rhode Island, and Virginia.
In September, BOEM announced that it would auction off the rights to two designated Wind Energy Areas offshore New Jersey. That auction was held yesterday. According to BOEM, the provisional winner of lease area OCS-A 0498 (160,480 acres) was RES America Developments Inc., with a bid of $880,715. US Wind Inc. provisionally won site OCS-A 0499 (183,353 acres), with a bid of $1,006,240. Fishermen’s Energy LLC also reportedly participated in the lease sale but did not win either parcel.
Generally centered offshore of Atlantic City, the New Jersey Wind Energy Area starts about 7 nautical miles offshore and runs about 21 nautical miles seaward. The U.S. Department of Energy’s National Renewable Energy Laboratory reports that full development of the area could support about 3,400 megawatts of wind generation.
Since the Obama administration's early "Smart from the Start" program, BOEM has engaged in efforts to spur offshore wind development. President Obama's June 2013 Climate Change Action Plan features offshore wind as a tool to reduce the emission of carbon dioxide and other greenhouse gases from domestic industry.
This emphasis on the linkage between offshore wind and action on climate change is increasingly clear in the administration's messaging. Early press releases on BOEM's offshore wind programs emphasized "the Obama Administration's all-of-the-above energy strategy to continue to expand domestic energy production." By July 31, 2013, in announcing the first ever competitive lease sale for renewable energy in federal waters, BOEM described "President Obama's comprehensive plan to move our economy toward domestic clean energy sources and cut carbon pollution." Just two months later in September 2013, after the release of the Climate Action Plan, BOEM began using the phrase "President Obama's Climate Action Plan to create American jobs, develop domestic clean energy sources and cut carbon pollution." BOEM continues to use this phrase in touting its offshore wind program's consistency with the Climate Action Plan, as recently as yesterday's press release about the New Jersey lease sale.
Perhaps more tellingly, the Department of Interior press release announcing yesterday's New Jersey sale references "COP21", the upcoming 2015 Paris Climate Conference, in its brief summary. This reference to the Paris climate convention is not otherwise explained in the text of the press release. Nevertheless its inclusion here highlights the interplay between domestic and international energy policy, as well as the potential role U.S. offshore wind might play in addressing climate change.
Federal offshore wind auction held for sites off Massachusetts
Thursday, January 29, 2015
Federal ocean energy managers have concluded an auction to lease over 350,000 acres off the Massachusetts coast to prepare for offshore wind development. Of the four parcels up for bid in today's auction, one was provisionally awarded to RES America Developments, Inc. and another to Offshore MW LLC. Two other parcels failed to attract any bids.
In today's auction conducted by the Interior Department’s Bureau
of Ocean Energy Management (BOEM), RES America Developments, Inc. provisionally won the rights to Lease OCS-A 0500 (187,523 acres) after two rounds of bidding, with a winning bid of $281,285. Offshore MW LLC provisionally won the rights to Lease OCS-A 0501 (166,886 acres) after two rounds of bidding, with a winning bid of $166,886. These winning bids are significantly below those that were required to win previous federal competitive lease sales for offshore wind sites.
While today's lease awards are a step forward for U.S. offshore wind, neither lease awarded today grants the right to construct or operate an offshore wind project. Rather, these leases have a preliminary term of one year, to allow the lessee time to prepare a Site Assessment Plan describing the installation of meteorological towers and buoys and other activities the lessee plans to perform to assess local wind resources and ocean conditions. Site Assessment Plans must be submitted to BOEM for review and approval.
Once BOEM approves a Site Assessment Plan, the lessee will then have up to five years in which to prepare and submit to BOEM a Construction and Operations Plan (COP) providing detailed information for the construction and operation of a wind energy project on the lease. After BOEM receives a Construction and Operations Plan from a lessee, BOEM will conduct an environmental review of and public comment period for the proposed project. If BOEM approves a Construction and Operations Plan, the lessee will have an operations term of 25 years.
Lease OCS-A 0502 (248,015 acres) and Lease OCS-A 0503 (140,554 acres) did not receive bids in today's auction. As shown on a BOEM nautical chart of the Massachusetts Wind Energy Area, these lease areas are generally farther from the Massachusetts coast than the areas awarded through today's auction.
BOEM touts its offshore wind leasing program as part of President Obama’s Climate Action Plan. The auction held today by BOEM represents the nation’s fourth competitive lease sale for renewable energy sites in federal waters. Including this auction, competitive lease sales have generated more than $14.5 million in high bids for more than 700,000 acres in federal waters. Previous auctions covered sites off Rhode Island and Massachusetts, Virginia, and Maryland. BOEM expects to hold another competitive lease sale offshore the New Jersey coast in 2015.
 |
| Onshore wind turbines near the Massachusetts coast. |
While today's lease awards are a step forward for U.S. offshore wind, neither lease awarded today grants the right to construct or operate an offshore wind project. Rather, these leases have a preliminary term of one year, to allow the lessee time to prepare a Site Assessment Plan describing the installation of meteorological towers and buoys and other activities the lessee plans to perform to assess local wind resources and ocean conditions. Site Assessment Plans must be submitted to BOEM for review and approval.
Once BOEM approves a Site Assessment Plan, the lessee will then have up to five years in which to prepare and submit to BOEM a Construction and Operations Plan (COP) providing detailed information for the construction and operation of a wind energy project on the lease. After BOEM receives a Construction and Operations Plan from a lessee, BOEM will conduct an environmental review of and public comment period for the proposed project. If BOEM approves a Construction and Operations Plan, the lessee will have an operations term of 25 years.
Lease OCS-A 0502 (248,015 acres) and Lease OCS-A 0503 (140,554 acres) did not receive bids in today's auction. As shown on a BOEM nautical chart of the Massachusetts Wind Energy Area, these lease areas are generally farther from the Massachusetts coast than the areas awarded through today's auction.
BOEM touts its offshore wind leasing program as part of President Obama’s Climate Action Plan. The auction held today by BOEM represents the nation’s fourth competitive lease sale for renewable energy sites in federal waters. Including this auction, competitive lease sales have generated more than $14.5 million in high bids for more than 700,000 acres in federal waters. Previous auctions covered sites off Rhode Island and Massachusetts, Virginia, and Maryland. BOEM expects to hold another competitive lease sale offshore the New Jersey coast in 2015.
US to auction Massachusetts offshore wind sites
Wednesday, December 3, 2014
The U.S. Department of the Interior has announced plans to auction more than 742,000 acres offshore Massachusetts for commercial wind energy development.
On January 29, 2015, the Department's Bureau of Ocean Energy Management will hold a competitive commercial lease sale for the rights to site offshore wind facilities in the federally designated Massachusetts Wind Energy Area. Generally located south of the islands of Martha's Vineyard and Nantucket, the area will be auctioned as four leases. It starts about 12 nautical miles offshore Massachusetts; from its northern boundary, the area extends 33 nautical miles southward and runs about 47 nautical miles from east to west. The Massachusetts Wind Energy Area is significantly larger than previously auctioned areas off Massachusetts, Rhode Island, Virginia, and Maryland. The U.S. Department of Energy’s National Renewable Energy Laboratory has estimated that fully developing the Massachusetts area could support between 4 and 5 gigawatts of commercial wind generation.
BOEM has found twelve companies to be legally, technically and financially qualified to participate in the auction for the Massachusetts Wind Energy Area:
The Massachusetts auction will be the fourth competitive lease sale for renewable energy on the Outer Continental Shelf, following previous auctions for sites off Massachusetts-Rhode Island, Virginia and Maryland. Bidders winning previous auctions have committed over $14 million in bids to secure over 357,500 acres in federal waters. BOEM expects to hold another lease auction for sites offshore New Jersey in 2015.
On January 29, 2015, the Department's Bureau of Ocean Energy Management will hold a competitive commercial lease sale for the rights to site offshore wind facilities in the federally designated Massachusetts Wind Energy Area. Generally located south of the islands of Martha's Vineyard and Nantucket, the area will be auctioned as four leases. It starts about 12 nautical miles offshore Massachusetts; from its northern boundary, the area extends 33 nautical miles southward and runs about 47 nautical miles from east to west. The Massachusetts Wind Energy Area is significantly larger than previously auctioned areas off Massachusetts, Rhode Island, Virginia, and Maryland. The U.S. Department of Energy’s National Renewable Energy Laboratory has estimated that fully developing the Massachusetts area could support between 4 and 5 gigawatts of commercial wind generation.
BOEM has found twelve companies to be legally, technically and financially qualified to participate in the auction for the Massachusetts Wind Energy Area:
- Deepwater Wind New England, LLC
- EDF Renewable Development, Inc.
- Energy Management, Inc.
- Fishermen’s Energy, LLC
- Green Sail Energy, LLC
- IBERDROLA RENEWABLES, Inc.
- NRG Bluewater Wind Massachusetts, LLC
- OffshoreMW, LLC
- RES America Developments, Inc.
- Sea Breeze Energy, LLC
- US Mainstream Renewable Power (Offshore), Inc.
- U.S. Wind, Inc.
The Massachusetts auction will be the fourth competitive lease sale for renewable energy on the Outer Continental Shelf, following previous auctions for sites off Massachusetts-Rhode Island, Virginia and Maryland. Bidders winning previous auctions have committed over $14 million in bids to secure over 357,500 acres in federal waters. BOEM expects to hold another lease auction for sites offshore New Jersey in 2015.
Navy objects to Maryland offshore wind project
Friday, November 7, 2014
An offshore wind energy project proposed off the Maryland coast has drawn opposition from the U.S. Department of Defense over fears that the project would disrupt the nearby Patuxent River Naval Air Station's radar facilities.
The Great Bay Wind Energy Center is a proposed wind farm project off Somerset County in Maryland's portion of the Delmarva Peninsula. The $200 million project could produce up to 150 megawatts of power, and is currently under development by Pioneer Green Energy, LLC.
Naval Air Station Patuxent River is a U.S. naval air station located on the Chesapeake Bay near the mouth of the Patuxent River. It operates and tests a variety of radar systems considered by the Navy to be critical to national security. At several points through the Great Bay wind project's development process, Navy officials have said that their radar systems could be affected by signals bouncing back from the offshore turbines, compromising the Navy facility's mission and effectiveness. The developer had offered mitigation measures, such as disabling the turbines during Navy testing.
In the latest development, Congressman Steny Hoyer has released a Department of Defense letter objecting to the proposed Great Bay Wind project. Part of a Federal Aviation Administration process to evaluate whether it can find the project poses “no hazard", the letter to the Department of Transportation lodges the Defense Department's formal objection to the "Great Bay Energy Center project" under regulations codified as 32 C.F.R. 211. It states that "the proposed project, even if mitigated as offered by the applicant, would constitute an unacceptable risk to the national security of the United States... because it would significantly impair or degrade the capability of the Department of Defense to conduct research, development, testing and evaluation of the Department's advanced airborne weapons systems and would ultimately place our nation's armed forces at greater risk when they go in harm's way."
Congressman Hoyer said in his accompanying statement that although he supports renewable energy, he agreed that the threats this project poses to the Pax River naval facility -- a critical national security asset -- and the 22,000 jobs it supports were too great to allow the project to proceed.
What the letter means for the project remains to be seen. Clearly, national security is of crucial importance. Is this the Department of Defense's final answer? Can the developer find another way to resolve this impasse? Will another branch of government sweep in to broker a compromise? Or will the Department of Defense's concerns effectively end the Great Bay offshore wind project?
The Great Bay Wind Energy Center is a proposed wind farm project off Somerset County in Maryland's portion of the Delmarva Peninsula. The $200 million project could produce up to 150 megawatts of power, and is currently under development by Pioneer Green Energy, LLC.
Naval Air Station Patuxent River is a U.S. naval air station located on the Chesapeake Bay near the mouth of the Patuxent River. It operates and tests a variety of radar systems considered by the Navy to be critical to national security. At several points through the Great Bay wind project's development process, Navy officials have said that their radar systems could be affected by signals bouncing back from the offshore turbines, compromising the Navy facility's mission and effectiveness. The developer had offered mitigation measures, such as disabling the turbines during Navy testing.
In the latest development, Congressman Steny Hoyer has released a Department of Defense letter objecting to the proposed Great Bay Wind project. Part of a Federal Aviation Administration process to evaluate whether it can find the project poses “no hazard", the letter to the Department of Transportation lodges the Defense Department's formal objection to the "Great Bay Energy Center project" under regulations codified as 32 C.F.R. 211. It states that "the proposed project, even if mitigated as offered by the applicant, would constitute an unacceptable risk to the national security of the United States... because it would significantly impair or degrade the capability of the Department of Defense to conduct research, development, testing and evaluation of the Department's advanced airborne weapons systems and would ultimately place our nation's armed forces at greater risk when they go in harm's way."
Congressman Hoyer said in his accompanying statement that although he supports renewable energy, he agreed that the threats this project poses to the Pax River naval facility -- a critical national security asset -- and the 22,000 jobs it supports were too great to allow the project to proceed.
What the letter means for the project remains to be seen. Clearly, national security is of crucial importance. Is this the Department of Defense's final answer? Can the developer find another way to resolve this impasse? Will another branch of government sweep in to broker a compromise? Or will the Department of Defense's concerns effectively end the Great Bay offshore wind project?
FERC approves Maryland LNG project
Tuesday, September 30, 2014
A proposed Maryland natural gas liquefaction facility won a key federal approval yesterday, as the Federal Energy Regulatory Commission authorized Dominion Cove Point LNG, LP to build the Cove Point Liquefaction Project in Calvert County, Maryland, and related facilities
at an existing compressor station and at metering and regulating sites
in Virginia.
Natural gas is an important fuel used globally for electric power generation and heating. While pipelines offer the most efficient way to transport large volumes of natural gas, liquefied natural gas or LNG can more easily be transported by ship to distant markets. As US natural gas production has increased in recent years, so too has interest in building facilities to liquefy gas for export or other use.
Under Section 3 of the Natural Gas Act, the Federal Energy Regulatory Commission or FERC authorizes the siting and construction of onshore and near-shore LNG import or export facilities. Section 7 of the Natural Gas Act authorizes FERC to issue certificates of public convenience and necessity for LNG facilities engaged in interstate natural gas transportation by pipeline.
On April 1, 2013, Dominion applied to the FERC for approval under Section 3 of the Natural Gas Act to site, construct, and operate the Cove Point Liquefaction Project for the liquefaction and export of domestically-produced natural gas at Dominion’s existing LNG import terminal in Calvert County, Maryland. Dominion also requested authority under section 7(c) of the Natural Gas Act to construct and operate facilities at its existing compressor station and metering and regulating sites in Virginia. Collectively, the project will enable Dominion to transport up to 860,000 dekatherms per day of natural gas form existing pipeline interconnects near the west end of the Cove Point Pipeline to the Cove Point terminal for the export of up to 5.75 metric tons of liquefied natural gas per year.
Dominion's requests triggered a case that stretched for over two years of consideration. During this time, the FERC heard from more than 140 speakers at three public meetings related to an assessment of the project's environmental impacts, and received more than 650 comments from the public and federal, state and local agencies on the application. In the end, the FERC determined that Dominion’s proposal, as approved with 79 specific conditions required by the Commission’sauthorization, will minimize potential adverse impacts on landowners and the environment.
According to the FERC, Dominion proposes to complete construction of the liquefaction project so that facilities may start service in June 2017. Notably, the U.S. Department of Energy has already approved Dominion Cove Point’s export of gas to both Free Trade Agreement and non-Free Trade Agreement countries.
The same economic forces motivating the Dominion project support other proposed LNG export projects. Indeed, FERC has approved three other LNG export projects, all in the Gulf of Mexico -- the Sabine Pass Liquefaction Project, the Freeport LNG Project, and the Cameron LNG Project -- and 14 more LNG export proposals remain pending.
Natural gas is an important fuel used globally for electric power generation and heating. While pipelines offer the most efficient way to transport large volumes of natural gas, liquefied natural gas or LNG can more easily be transported by ship to distant markets. As US natural gas production has increased in recent years, so too has interest in building facilities to liquefy gas for export or other use.
Under Section 3 of the Natural Gas Act, the Federal Energy Regulatory Commission or FERC authorizes the siting and construction of onshore and near-shore LNG import or export facilities. Section 7 of the Natural Gas Act authorizes FERC to issue certificates of public convenience and necessity for LNG facilities engaged in interstate natural gas transportation by pipeline.
On April 1, 2013, Dominion applied to the FERC for approval under Section 3 of the Natural Gas Act to site, construct, and operate the Cove Point Liquefaction Project for the liquefaction and export of domestically-produced natural gas at Dominion’s existing LNG import terminal in Calvert County, Maryland. Dominion also requested authority under section 7(c) of the Natural Gas Act to construct and operate facilities at its existing compressor station and metering and regulating sites in Virginia. Collectively, the project will enable Dominion to transport up to 860,000 dekatherms per day of natural gas form existing pipeline interconnects near the west end of the Cove Point Pipeline to the Cove Point terminal for the export of up to 5.75 metric tons of liquefied natural gas per year.
Dominion's requests triggered a case that stretched for over two years of consideration. During this time, the FERC heard from more than 140 speakers at three public meetings related to an assessment of the project's environmental impacts, and received more than 650 comments from the public and federal, state and local agencies on the application. In the end, the FERC determined that Dominion’s proposal, as approved with 79 specific conditions required by the Commission’sauthorization, will minimize potential adverse impacts on landowners and the environment.
According to the FERC, Dominion proposes to complete construction of the liquefaction project so that facilities may start service in June 2017. Notably, the U.S. Department of Energy has already approved Dominion Cove Point’s export of gas to both Free Trade Agreement and non-Free Trade Agreement countries.
The same economic forces motivating the Dominion project support other proposed LNG export projects. Indeed, FERC has approved three other LNG export projects, all in the Gulf of Mexico -- the Sabine Pass Liquefaction Project, the Freeport LNG Project, and the Cameron LNG Project -- and 14 more LNG export proposals remain pending.
Maryland offshore wind sites auctioned
Wednesday, August 20, 2014
The U.S. Bureau of Ocean Energy Management has sold the rights to lease sites for offshore wind projects in federal waters off Maryland to US Wind Inc. for $8.7 million.
 |
| A lighthouse on an island in the Atlantic Ocean, off Maine. |
Part of the Obama administration's "Smart from the Start" offshore wind leasing program, yesterday's auction covered the rights to lease nearly 80,000 acres of the outer continental shelf. The Maryland Wind Energy Area ranges seaward from about 10 nautical miles offshore Ocean City. According to Department of Energy’s National Renewable Energy Laboratory, the area could support between 850 and 1450 megawatts of commercial wind generation.
The Maryland auction drew three bidders: US Wind Inc., Green Sail Energy LLC and SCS Maryland Energy LLC. After 19 rounds, BOEM declared US Wind Inc. the provisional winner. US Wind Inc. is a subsidiary of Italian firm Toto SpA's Renexia group.
While winning the auction is an important first step in leasing federal ocean sites for offshore wind projects, the process will likely continue to play out for several years. Following the auction results, US Wind Inc. will have one year within which to submit a Site Assessment Plan to BOEM for approval. In the Site Assessment Plan, the lessee must describe what it intends to do to assess of the wind resources and ocean conditions of its commercial lease area -- for example, installing meteorological towers and buoys. If that plan is approved, the lessee will then have up to 4½ years in which to submit a Construction and Operations Plan providing more detailed information for the construction and operation of a wind energy project on the lease. The filing of that plan triggers further public comment and environmental review; if approved, BOEM will then issue a lease with an operations term of 25 years. Notably, these leases generally require the lessee to pay ongoing rents; placing the winning bid in the auction conveys the right to pay that rent, but paying that bid does not count towards the lease payment obligation.
Moreover, this entire leasing process is just one of several aspects of the project that must move forward in parallel. At the same time, US Wind Inc. is likely considering engineering issues such as turbine selection and interconnection design as well as how to finance the project.
Will federal waters offshore Maryland soon become home to an offshore wind project?
Feds to auction Maryland offshore wind sites
Monday, August 11, 2014
On August 19, the U.S. Department of the Interior's Bureau of Ocean Energy Management will auction off rights to lease sites off the Maryland coast for offshore wind. Through the auction, which will represent the third auction for offshore wind sites in federal waters since July 2013, the Bureau hopes it will award leases to two areas covering approximately 80,000 acres about
10 nautical miles east of the Ocean City coastline.
Last year, the Department of the Interior held its first offshore wind site auction for sites off Massachusetts and Rhode Island; Deepwater Wind won that auction with a bid of $3.8 million. The second auction, held for Virginia on September 4, covered approximately 112,799 acres about 23.5 nautical miles from the Virginia Beach coastline; Dominion Virginia Power won that auction with a bid of $1.6 million.
The Maryland auction later this month will follow procedures similar to those used in the previous two auctions. Based on previous expressions of interest and qualifications, BOEM has determined that sixteen companies are eligible to bid on the Maryland sites:
Offshore wind project developers must coordinate regulatory, financial, and engineering efforts. Securing a site for a project is a major step forward, but is only one of many important steps necessary to build an operating offshore wind project -- something the U.S. still lacks. How much interest will the Maryland auction draw? Who will win the right to lease the two parcels in the Maryland wind energy area, and how much will they pay? Will the auction winners actually build offshore wind projects? Some of these questions will be answered when the auction closes on August 19.
Last year, the Department of the Interior held its first offshore wind site auction for sites off Massachusetts and Rhode Island; Deepwater Wind won that auction with a bid of $3.8 million. The second auction, held for Virginia on September 4, covered approximately 112,799 acres about 23.5 nautical miles from the Virginia Beach coastline; Dominion Virginia Power won that auction with a bid of $1.6 million.
The Maryland auction later this month will follow procedures similar to those used in the previous two auctions. Based on previous expressions of interest and qualifications, BOEM has determined that sixteen companies are eligible to bid on the Maryland sites:
- Apex Offshore Maryland, LLC
- Bluewater Wind Maryland LLC
- Convalt Energy LLC
- Dominion Wind Development, LLC
- EDF Renewable Development, Inc.
- Energy Management, Inc.
- Fishermen’s Energy, LLC
- Green Sail Energy LLC
- IBERDROLA RENEWABLES, Inc.
- Maryland Offshore Wind LLC
- Orisol Energy US, Inc.
- RES America Developments Inc.
- SCS Maryland Energy LLC
- Sea Breeze Energy LLC
- Seawind Renewable Energy Corporation LLC
- US Wind Inc.
Offshore wind project developers must coordinate regulatory, financial, and engineering efforts. Securing a site for a project is a major step forward, but is only one of many important steps necessary to build an operating offshore wind project -- something the U.S. still lacks. How much interest will the Maryland auction draw? Who will win the right to lease the two parcels in the Maryland wind energy area, and how much will they pay? Will the auction winners actually build offshore wind projects? Some of these questions will be answered when the auction closes on August 19.
Assessing Hurricane Sandy's energy impacts
Tuesday, October 30, 2012
Yesterday Hurricane Sandy made landfall in New Jersey, but the magnitude of the storm meant that heavy winds, strong rains, and a powerful coastal storm surge affected a broad swath of the mid-Atlantic and northeastern parts of the United States.
One consequence of the storm is widespread power outages. As of 8:00 AM yesterday, about 36,000 electricity customers had lost power in Connecticut, Delaware, New Jersey, New York, North Carolina, Rhode Island, and Virginia. By 2:00 PM yesterday, outages were up to over 316,000, in the states listed above as well as in Maryland, Massachusetts, New Hampshire, and Pennsylvania. At that time, New York had the most outages (105,089 customers, or about 1%), but New Hampshire was the hardest hit in terms of percentage affected (18,190 customers, or about 3%). These reported outages came six hours before the storm officially made landfall, making outage numbers much higher today -- some reports indicating 8 million customers without power.
[Update: as of 9:00 AM this morning, the Department of Energy reports 8.1 million customers without electricity, including 62% of New Jersey, 31% of Connecticut, and 23% of Rhode Island.]
In addition to these power outages, some electricity generating facilities have shut down. The U.S. Nuclear Regulatory Commission (NRC) reports three nuclear power units in the Northeastern United States had to shut down and two units reduced as a result of impacts from Hurricane Sandy. Reasons range from water pump failure to encroaching high water to problems on the external power grid.
Another consequence of the storm is disruption to oil refineries. By 1:00 PM yesterday, two mid-Atlantic refineries had closed, with four more shutting down part of their production. In total, 1.1 million barrels per day of refining capacity had been disrupted due to the storm.
Today, as the storm has moved inland, crews are working hard to recover from the storm. It is still early to assess the total damage from the storm, as well as whether its disruption to energy infrastructure will be temporary or longer-lasting.
One consequence of the storm is widespread power outages. As of 8:00 AM yesterday, about 36,000 electricity customers had lost power in Connecticut, Delaware, New Jersey, New York, North Carolina, Rhode Island, and Virginia. By 2:00 PM yesterday, outages were up to over 316,000, in the states listed above as well as in Maryland, Massachusetts, New Hampshire, and Pennsylvania. At that time, New York had the most outages (105,089 customers, or about 1%), but New Hampshire was the hardest hit in terms of percentage affected (18,190 customers, or about 3%). These reported outages came six hours before the storm officially made landfall, making outage numbers much higher today -- some reports indicating 8 million customers without power.
[Update: as of 9:00 AM this morning, the Department of Energy reports 8.1 million customers without electricity, including 62% of New Jersey, 31% of Connecticut, and 23% of Rhode Island.]
In addition to these power outages, some electricity generating facilities have shut down. The U.S. Nuclear Regulatory Commission (NRC) reports three nuclear power units in the Northeastern United States had to shut down and two units reduced as a result of impacts from Hurricane Sandy. Reasons range from water pump failure to encroaching high water to problems on the external power grid.
Another consequence of the storm is disruption to oil refineries. By 1:00 PM yesterday, two mid-Atlantic refineries had closed, with four more shutting down part of their production. In total, 1.1 million barrels per day of refining capacity had been disrupted due to the storm.
Today, as the storm has moved inland, crews are working hard to recover from the storm. It is still early to assess the total damage from the storm, as well as whether its disruption to energy infrastructure will be temporary or longer-lasting.
Marcellus shale gas drilling slows
Tuesday, July 10, 2012
Natural gas drilling activity has declined in parts of the Marcellus Shale formation under Pennsylvania and other eastern states, largely as a result of low gas prices. These prices in turn are largely the result of significant increases in the available supply of recoverable natural gas made possible by horizontal drilling techniques and hydraulic fracturing or fracking. As a consequence, many natural gas producers are focusing on areas of shale rich in both gas and natural gas liquids.
The Marcellus Shale, a layer of ancient marine sediment rich in organic material and extending beneath Pennsylvania, Ohio, West Virginia, New York, and Maryland, is believed to be one of the world's largest natural gas fields. In 2008, drilling activity in the Marcellus Shale began to increase significantly, as these newer drilling techniques and increases in the price of other fuels like oil made the shale gas economically feasible to recover. (Compare this map of Marcellus shale drilling activity in Pennsylvania from 7/25/2008 to this map of permits issued as of March 9, 2012.) As of this spring, Pennsylvania alone had issued 11,772 permits for vertical and horizontal gas wells in the Marcellus formation.
One result of the expansion of shale gas production is a significant decrease in the price of natural gas. Since 2008, natural gas prices at the Henry Hub in Louisiana (where gas as a commodity is typically priced) have fallen from over $12 per million British thermal units (MMBtu) to as low as $2 per MMBtu. Other factors have played a role in this price decline, such as a mild winter with lower-than-expected heating demand and the overall economic slowdown, but the increase in supply due to shale gas production is viewed as a major cause of the price decline.
Now, one of the effects of the price decline is a decrease in natural gas drilling activity. This decrease is particularly marked in areas where the shale produces "dry gas", or natural gas that is primarily methane and is low in so-called natural gas liquids. Natural gas liquids -- hydrocarbons other than methane that are extracted when natural gas is processed in a natural gas treatment facility -- include ethane, propane, and butanes. These natural gas liquids are important feedstocks for the production of many chemicals and plastics, and add value to the natural gas produced from "wet" shales.
Where shale gas contains significant amounts of natural gas liquids, production appears steady or increasing, while gas producers in areas with lower amounts of natural gas liquids are now saying that they are having a hard time making money off gas alone. If this trend continues, areas of dry gas like much of the known portions of the Marcellus Shale may continue to see a slowdown in drilling activity while producers focus on areas rich in natural gas liquids.
The Marcellus Shale, a layer of ancient marine sediment rich in organic material and extending beneath Pennsylvania, Ohio, West Virginia, New York, and Maryland, is believed to be one of the world's largest natural gas fields. In 2008, drilling activity in the Marcellus Shale began to increase significantly, as these newer drilling techniques and increases in the price of other fuels like oil made the shale gas economically feasible to recover. (Compare this map of Marcellus shale drilling activity in Pennsylvania from 7/25/2008 to this map of permits issued as of March 9, 2012.) As of this spring, Pennsylvania alone had issued 11,772 permits for vertical and horizontal gas wells in the Marcellus formation.
One result of the expansion of shale gas production is a significant decrease in the price of natural gas. Since 2008, natural gas prices at the Henry Hub in Louisiana (where gas as a commodity is typically priced) have fallen from over $12 per million British thermal units (MMBtu) to as low as $2 per MMBtu. Other factors have played a role in this price decline, such as a mild winter with lower-than-expected heating demand and the overall economic slowdown, but the increase in supply due to shale gas production is viewed as a major cause of the price decline.
Now, one of the effects of the price decline is a decrease in natural gas drilling activity. This decrease is particularly marked in areas where the shale produces "dry gas", or natural gas that is primarily methane and is low in so-called natural gas liquids. Natural gas liquids -- hydrocarbons other than methane that are extracted when natural gas is processed in a natural gas treatment facility -- include ethane, propane, and butanes. These natural gas liquids are important feedstocks for the production of many chemicals and plastics, and add value to the natural gas produced from "wet" shales.
Where shale gas contains significant amounts of natural gas liquids, production appears steady or increasing, while gas producers in areas with lower amounts of natural gas liquids are now saying that they are having a hard time making money off gas alone. If this trend continues, areas of dry gas like much of the known portions of the Marcellus Shale may continue to see a slowdown in drilling activity while producers focus on areas rich in natural gas liquids.
3 years of RGGI carbon market results
Wednesday, June 6, 2012
A report released this week by the Regional Greenhouse Gas Initiative
(RGGI) shows that carbon dioxide emissions from power plants in RGGI member states
fell by 23% over the program's first three years.
RGGI, the first major market-based greenhouse gas regulatory program in the United States, represents a cap-and-trade approach to reducing the emission of carbon dioxide and other greenhouse gases. Ten states - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont - originally agreed to cap and reduce the greenhouse gas emissions of their electrical energy sectors by 10% by 2018. (New Jersey subsequently withdrew from the compact effective January 1, 2012.) RGGI's first three-year compliance period ran from January 1, 2009 through December 31, 2011.
This week's report documents the performance of the RGGI member states in reducing greenhouse gas emissions from the electricity sector. According to the report, 97% of covered power plants - 206 out of 211 covered units - met program compliance obligations. (Raw data on each plant's performance is available through the RGGI CO2 Allowance Tracking System, also known as COATS.) Over the three-year period, annual CO2 emissions for the three-year period averaged 126 million short tons. This represents a 23% reduction compared to 2006-2008.
Part of the reduction may be attributed to increased state investment in energy efficiency as well as the economic slowdown. However, CO2 emissions in the region decreased nearly ten times more than electricity consumption did: according to the U.S. Energy Information Administration, three-year average electricity consumption across the ten-state region experienced only a 2.4% decrease over the same time. This points to another significant trend in northeastern electricity markets: a shift away from coal to natural gas as the combustion fuel of choice for thermal power plants.
RGGI, the first major market-based greenhouse gas regulatory program in the United States, represents a cap-and-trade approach to reducing the emission of carbon dioxide and other greenhouse gases. Ten states - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont - originally agreed to cap and reduce the greenhouse gas emissions of their electrical energy sectors by 10% by 2018. (New Jersey subsequently withdrew from the compact effective January 1, 2012.) RGGI's first three-year compliance period ran from January 1, 2009 through December 31, 2011.
This week's report documents the performance of the RGGI member states in reducing greenhouse gas emissions from the electricity sector. According to the report, 97% of covered power plants - 206 out of 211 covered units - met program compliance obligations. (Raw data on each plant's performance is available through the RGGI CO2 Allowance Tracking System, also known as COATS.) Over the three-year period, annual CO2 emissions for the three-year period averaged 126 million short tons. This represents a 23% reduction compared to 2006-2008.
Part of the reduction may be attributed to increased state investment in energy efficiency as well as the economic slowdown. However, CO2 emissions in the region decreased nearly ten times more than electricity consumption did: according to the U.S. Energy Information Administration, three-year average electricity consumption across the ten-state region experienced only a 2.4% decrease over the same time. This points to another significant trend in northeastern electricity markets: a shift away from coal to natural gas as the combustion fuel of choice for thermal power plants.
Feds ok enviro impacts of offshore wind site leasing
Thursday, February 2, 2012
Offshore wind development off the mid-Atlantic coast took a step forward today with the release of a federal assessment of the environmental impacts of leasing ocean sites for wind projects. US Secretary of the Interior Ken Salazar and Maryland Governor Martin O'Malley held a press conference in Baltimore this morning at which the document was unveiled. The Bureau of Ocean Energy Management's final environmental assessment for mid-Atlantic site leasing (366 page PDF) will allow it to move forward with granting commercial wind leases and allowing site characterization activities on the mid-Atlantic outer continental shelf. Notably, the document found that leasing sites and allowing developers to study them would not have a significant impact on the human environment.
Under the National Environmental Policy Act, federal agencies must analyze and document the environmental effects of proposed federal actions such as issuing leases for offshore wind sites. A final environmental assessment was needed before BOEM could issue more leases, whether for offshore wind generation sites or for offshore transmission facilities.
At the same time, Governor O'Malley is intent on passing legislation that he believes will make Maryland the hub of the mid-Atlantic offshore wind industry. From the Atlantic Wind Connection offshore transmission network to generation projects in federal waters off Maryland (and Maryland state waters), any offshore wind development will need site leases, and issuing an environmental assessment is needed before issuing site leases. Thus for Governor O'Malley's plan to come to fruition, he needs to show that he (and developers) will have the cooperation of the federal BOEM. Today's event may have been designed to demonstrate that federal regulators will be cooperative with mid-Atlantic offshore wind projects. This would help the industry by reducing regulatory uncertainty, and would also help Governor O'Malley promote his offshore wind program.
The draft environmental assessment released last summer was generally favorable, if not groundbreaking. Notably, it did not explicitly make a finding of no significant impact from leasing. Comments on the draft environmental assessment were due in August 2011; these public comments are available through a federal document website. Today's final environmental assessment was developed partly in response to these public comments.
A final environmental assessment is a key step in developing the offshore wind resource, but it's still one of many steps needed. The environmental assessment in question does not cover any specific projects, nor would it permit the actual construction or operation of any projects. Rather it serves as a blanket assessment to document BOEM's review of the impacts of issuing site leases generally, and of allowing developers to study sites.
Today's finding of no significant impact, or FONSI, allows BOEM to move forward with leasing without preparing a more intensive (and time-consuming) environmental impact statement. This leasing program is part of BOEM's Smart from the Start initiative. The final assessment will now allow BOEM to award of a non-competitive lease for the wind energy area off Delaware, as well as a competitive process to select developers for sites off Maryland.
Under the National Environmental Policy Act, federal agencies must analyze and document the environmental effects of proposed federal actions such as issuing leases for offshore wind sites. A final environmental assessment was needed before BOEM could issue more leases, whether for offshore wind generation sites or for offshore transmission facilities.
At the same time, Governor O'Malley is intent on passing legislation that he believes will make Maryland the hub of the mid-Atlantic offshore wind industry. From the Atlantic Wind Connection offshore transmission network to generation projects in federal waters off Maryland (and Maryland state waters), any offshore wind development will need site leases, and issuing an environmental assessment is needed before issuing site leases. Thus for Governor O'Malley's plan to come to fruition, he needs to show that he (and developers) will have the cooperation of the federal BOEM. Today's event may have been designed to demonstrate that federal regulators will be cooperative with mid-Atlantic offshore wind projects. This would help the industry by reducing regulatory uncertainty, and would also help Governor O'Malley promote his offshore wind program.
The draft environmental assessment released last summer was generally favorable, if not groundbreaking. Notably, it did not explicitly make a finding of no significant impact from leasing. Comments on the draft environmental assessment were due in August 2011; these public comments are available through a federal document website. Today's final environmental assessment was developed partly in response to these public comments.
A final environmental assessment is a key step in developing the offshore wind resource, but it's still one of many steps needed. The environmental assessment in question does not cover any specific projects, nor would it permit the actual construction or operation of any projects. Rather it serves as a blanket assessment to document BOEM's review of the impacts of issuing site leases generally, and of allowing developers to study sites.
Today's finding of no significant impact, or FONSI, allows BOEM to move forward with leasing without preparing a more intensive (and time-consuming) environmental impact statement. This leasing program is part of BOEM's Smart from the Start initiative. The final assessment will now allow BOEM to award of a non-competitive lease for the wind energy area off Delaware, as well as a competitive process to select developers for sites off Maryland.
Susquehanna River flooding threatens dam, communities
Friday, September 9, 2011
Close on Hurricane Irene’s heels, the remnants of Tropical
Storm Lee are dropping up to 10 inches of rain across the northeastern United States. As we saw when
Irene hit Vermont, storms like this can cause not only widespread flooding as
streams rise above their banks, but even risk dam failure and more
catastrophic flooding.
Now, the rains caused by Tropical Storm Lee have led
authorities from Maryland to New York to order the evacuation of nearly 100,000
people.
Flooding along the Susquehanna River is responsible for a
large portion of this risk. Arising out
of branches in upstate New York and western Pennsylvania, the 464-mile long
Susquehanna is the longest river on the east coast to drain into the Atlantic
Ocean. The river overtopped retaining
walls in Binghamton, NY earlier today, leading to road closures that
effectively isolate the city. Downstream,
deepening floods have caused the evacuation of the entire city of Wilkes-Barre,
PA.
The Susquehanna flooding has also impacted the Conowingo hydroelectric
dam about 10 miles above the river’s mouth in Maryland. With 11 turbines providing a nameplate capacity of 572 megawatts, the Conowingo dam is one of the nation's largest non-federal hydroelectric facilities. Now operated by Exelon subsidiary
Susquehanna Electric Company, the Conowingo Dam is threatened by the Susquehanna floodwaters. As a result, 50 of the dam’s 53 flood control
gates have been opened, causing authorities to evacuate people from the
downstream communities of Havre de Grace and Port Deposit. Area residents remember 1972's Hurricane Agnes, whose rains and flooding caused all 53 flood gates to be opened and the dam operator to prepare for a controlled breach of part of the dam.
As Lee’s rains move out of the area, water levels in the
Susquehanna River will peak and then recede.
Time will tell how damaging the flood waters will be.
March 8, 2011 - Maryland's long-term contracting for offshore wind
Tuesday, March 8, 2011
Offshore wind development in the mid-Atlantic states is moving forward - what will it cost? The Maryland legislature is considering a plan by Governor Martin O'Malley to kickstart offshore wind development. The Governor has said that offshore wind projects are a critical part of how Maryland can meet the state's renewable energy goal of sourcing 20 percent of its electricity from renewable sources by 2022, but without long-term contracts, it is unclear whether enough (or any) projects would be built. To get over this hurdle, Governor O'Malley's plan would require Maryland utilities to sign long-term contracts to buy offshore wind power at prices above the current market rate. Project developers view the contracts, lasting up to 25 years, as essential to getting the projects financed and built.
So how much will this cost? Figures diverge by a factor of more than sixfold. Governor O'Malley's estimates are that the plan will cost the average ratepayer $1.44 per month, but that figure has been called into question by other more recent analyses. The Maryland legislature's budget analyst's has concluded that the monthly cost to average ratepayers will be $3.61, while Maryland's Public Service Commission has predicted a range of monthly costs between $2.16 and $8.70.
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.
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.
4/6/10
Tuesday, April 6, 2010
With the tragic explosion and collapse of the Upper Big Branch Mine in West Virginia, operator Massey Energy's stock is tumbling. Coal mining has always been dangerous. Will the Big Branch disaster influence policymakers away from coal as a fuel source for electric generation? At least some financiers believe not, at least not enough to deviate from their "buy" rating. It will be interesting to see how the big coal lobby responds to the certain calls for greater government oversight of mine safety regulations.
Google and 46 other companies have asked the President for better real-time information on electricity usage. The group, including AT&T, Comcast, Hewlett-Packard, Verizon and Best Buy, wants better executive-branch support for technologies and devices that will help consumers measure their energy use in real time, and thereby to make better decisions -- the Prius effect. Beyond the social good that this would empower, no doubt Google wants to sell you the technology and interfaces to make this happen.
Premier Power Renewable Energy, Inc. has signed a Memorandum of Understanding with REgeneration Finance, LLC to fund solar PV projects ranging in size from 250kW to 2MW, in California, North Carolina, New Jersey, and Pennsylvania.
In offshore ocean energy news, a University of Delaware study concludes that it has figured out how to link offshore wind arrays to avoid the need for onshore backup power.
Maryland is pushing for a more rapid ramp-up of its solar RPS. Maryland law now requires utilities to source 2 percent of their power from solar sources by 2022, but there is a proposal afoot to accelerate deployment and increase penalties. 15-year projections suggest residential consumers might pay $2 more per month, beyond the current average monthly bill of $150 -- which some say will add to $1 billion over 15 years. Interestingly, there isn't enough solar PV in Maryland today: utility companies paid $1.2 million in penalties in 2008, and if penalties increase further, that number will rise. If the policy objective is to increase renewable deployment, you have to wonder if increasing penalties is the most effective way to get there.
Virginia Governor Bob McDonnell has signed several green energy bills passed by the General Assembly this session. Key features include: a $500 tax credit to employers per green job created; increased funding and organizational support for clean energy research; the creation of the Virginia Offshore Wind Development Authority; and bonuses for investor-owned electric utilities who use wind energy.
Google and 46 other companies have asked the President for better real-time information on electricity usage. The group, including AT&T, Comcast, Hewlett-Packard, Verizon and Best Buy, wants better executive-branch support for technologies and devices that will help consumers measure their energy use in real time, and thereby to make better decisions -- the Prius effect. Beyond the social good that this would empower, no doubt Google wants to sell you the technology and interfaces to make this happen.
Premier Power Renewable Energy, Inc. has signed a Memorandum of Understanding with REgeneration Finance, LLC to fund solar PV projects ranging in size from 250kW to 2MW, in California, North Carolina, New Jersey, and Pennsylvania.
In offshore ocean energy news, a University of Delaware study concludes that it has figured out how to link offshore wind arrays to avoid the need for onshore backup power.
Maryland is pushing for a more rapid ramp-up of its solar RPS. Maryland law now requires utilities to source 2 percent of their power from solar sources by 2022, but there is a proposal afoot to accelerate deployment and increase penalties. 15-year projections suggest residential consumers might pay $2 more per month, beyond the current average monthly bill of $150 -- which some say will add to $1 billion over 15 years. Interestingly, there isn't enough solar PV in Maryland today: utility companies paid $1.2 million in penalties in 2008, and if penalties increase further, that number will rise. If the policy objective is to increase renewable deployment, you have to wonder if increasing penalties is the most effective way to get there.
Virginia Governor Bob McDonnell has signed several green energy bills passed by the General Assembly this session. Key features include: a $500 tax credit to employers per green job created; increased funding and organizational support for clean energy research; the creation of the Virginia Offshore Wind Development Authority; and bonuses for investor-owned electric utilities who use wind energy.
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