DOE and EPA Release an Energy Efficiency Action Plan for States
DOE and the U.S. Environmental Protection Agency (EPA) have released an updated version of the National Action Plan Vision for 2025: A Framework for Change, which lays out a proposed energy efficiency action plan for state policy makers.
If implemented by all states, the plan could lower energy demand across the country by 50%, achieve more than $500 billion in net savings over the next 20 years, and reduce annual greenhouse gas emissions equivalent to those from 90 million vehicles.
The report, which was released under the National Action Plan for Energy Efficiency initiative, was produced by more than 60 energy, environmental, and state policy leaders from across the country. The updated action plan encourages investment in low-cost energy efficiency programs and shows the progress that the states are making toward their goals, while identifying areas for additional progress. The report is accompanied by two technical assistance documents that offer cost-effectiveness tests for energy efficiency programs and best practices for providing data to businesses.
The National Action Plan for Energy Efficiency initiative began in 2005, and is directed by a leadership group of 30 electric and gas utilities, 20 state agencies, and 12 other organizations. The initiative provides guidance to the states to help electric and natural gas ratepayers increase energy efficiency while saving money. More than 120 organizations have endorsed the original recommendations of the action plan.
States, utilities, and other organizations are currently spending about $2 billion per year on energy efficiency programs, which have saved energy customers nearly $6 billion annually. In terms of policy, about one-third of states have established energy savings targets and addressed utility disincentives for energy efficiency, while about half have established energy efficiency programs for key classes of customers and have reviewed and undated their building codes.
See the DOE press release, the full version of the action plan (PDF 622 KB), the executive summary of the action plan (PDF 290 KB), and the National Action Plan for Energy Efficiency page on the EPA Web site.
EPA Sets Renewable Fuel Requirement of 10.21% for 2009
The EPA announced on Monday that the 2009 renewable fuel standard (RFS) will require most refiners, importers, and non-oxygenate blenders of gasoline to displace 10.21% of their gasoline with renewable fuels such as ethanol. That requirement aims to ensure that at least 11.1 billion gallons of renewable fuels will be sold in 2009, in keeping with the targets established by the Energy Independence and Security Act of 2007, which President Bush signed into law in December 2007. While the RFS requirement is increasing by about 23% – from 9 billion gallons in 2008 to 11.1 billion gallons in 2009 – the percentage requirement is increasing by nearly a third, from 7.76% in 2008 to 10.21% in 2009.
The larger relative increase in the percentage requirement reflects the fact that fuel consumption is expected to be lower in 2009, so a greater percentage of renewable fuel is needed to reach 11.1 billion gallons of renewable fuels. Based on data from DOE’s Energy Information Administration, the EPA anticipates that 138.47 billion gallons of gasoline blends will be sold in 2009 in the 48 contiguous states plus Hawaii (Alaska doesn’t participate in the program). That’s down from the 144.5 billion gallons of blended gasoline that the EPA expected to be sold in those 49 states this year. See the EPA press release and the pre-publication version of the accompanying Federal Register notice (PDF 68 KB).
The 2009 RFS is also pushing up against what is known as the "blend wall." Most gasoline sold in the U.S. contains at most 10% ethanol (a blend known as E10), but the new RFS requires a slightly greater percentage of gasoline to be displaced with renewable fuel. That extra percentage, 0.21%, equals about 300 million gallons of renewable fuel.
One way to sell greater amounts of ethanol is to sell E85, a blend of 85% ethanol and 15% gasoline, but despite rapid growth in the number of E85 pumps, there are still only about 1,800 E85 pumps in the U.S. Minnesota has about 20% of the stations, at 357, and the most recent report on sales from the Minnesota Department of Commerce suggests that at most 24 million gallons of E85 will be sold in the state this year, containing about 20.4 million gallons of ethanol.
Extrapolating that result to the entire nation yields only 100 million gallons of ethanol. To address the blend wall issue, DOE and others are studying the use of mid-range blends, such as E15 and E20, for use in standard gasoline-burning vehicles. Allowing all gasoline blends to contain up to 20% ethanol would double the potential market for ethanol.
See the National Ethanol Vehicle Coalition’s press release on the number of E85 stations, the Minnesota E85 Station Report (PDF 41 KB), and a summary from the American Coalition for Ethanol on efforts to institute mid-range ethanol blends.
California Streamlines Approvals for Renewable Energy Projects
California Governor Arnold Schwarzenegger signed an executive order on Monday to streamline the state’s approval process for renewable energy projects. Executive Order S-14-08 requires the California Resources Agency to lead a joint collaboration between the California Energy Commission (CEC) and the California Department of Fish and Game to create a "one-stop" permitting process. The collaboration, called the Renewable Energy Action Team, will allow for concurrent reviews of permit applications, and will also work with the U.S. Bureau of Land Management and the U.S. Fish and Wildlife Service to help expedite the permit process.
The new team will also identify top priority areas in California for renewable energy development and will start a planning process to allow appropriate development in those areas while protecting habitats and species. The process, called Natural Community Conservation Planning, will first be applied to the Mojave and Colorado Desert regions, where large solar power projects are under consideration.
The executive order also establishes a new renewable energy target for California, calling for all retail sellers of electricity to draw on renewable energy for 33% of their electricity supply by 2020.
Executive orders don’t have the force of law over utilities, but the order does instruct all state government agencies, such as the California Public Utilities Commission, to take all appropriate actions to implement the new target in all regulatory proceedings. That puts the wheels in motion to require utilities to meet the new target.
The state currently has a legislative mandate for utilities to draw on renewable energy for 20% of their electricity supply by 2010. Meanwhile, state agencies are directed to keep the 33% target in mind as they handle the siting, permitting, and procurement for renewable energy power plants and transmission lines. See the governor’s press release, which includes the full text of the executive order.
Reliability Report Warns of Transmission Needs with Wind Power Booming
The North American Electric Reliability Corporation (NERC) warned in late October that a predicted 7.5-fold increase in wind power by 2017 will require the addition of significant transmission lines to maintain grid reliability.
NERC is the official electric reliability organization for the U.S., and its latest 10-year outlook report, the 2008 Long-Term Reliability Assessment, notes that transmission lines must be sited, permitted, and built faster in the future to maintain the reliability of the U.S. power grid. The report projects that the miles of transmission lines will grow by 9.5% over the next 10 years, and it notes that it will be vital to build the major transmission lines currently planned and to build them on schedule.
On the plus side, however, the assessment projects that nearly 34,000 MW of demand reduction and 11,000 MW of energy efficiency will be in place by 2013, cutting power demand by 3.3% and offsetting nearly 80% of the growth in peak power demand. See the NERC press release and report (PDF 3.0 MB).
Examples of proposed transmission system upgrades can be found throughout the country, and many of them are intended to at least partially address renewable energy supplies. In the Mid-Atlantic region, the Federal Energy Regulatory Commission (FERC) has approved rate incentives for a 230-mile, 500-kilovolt line that will run from Virginia to New Jersey, providing access to more than 1,300 megawatts of wind power by 2013.
FERC also approved rate incentives for a massive transmission project in the West. PacifiCorp’s $6 billion Energy Gateway Transmission Expansion Project involves eight segments covering portions of Nevada, Idaho, Oregon, Utah, Washington and Wyoming, delivering up to 3,000 MW of wind power to cities in the region. The segments are expected to go online between 2010 and 2014. See the FERC press releases on the Mid-Atlantic Power Pathway project and the Energy Gateway, as well as PacifiCorp’s Energy Gateway Web page.
Smaller transmission projects are planned or underway throughout the West. In Montana, for instance, NorthWestern Energy and three other utilities are considering an upgrade to the 500-kilovolt Colstrip Transmission System. Originally built to carry power from coal-fired power plants, the system will be upgraded to deliver wind power from Montana to Oregon and Washington.
In Colorado, the Tri-State Generation and Transmission Association is teaming up with Xcel Energy to pursue transmission lines that will carry renewable energy from southern Colorado to the cities along the Front Range. And Oklahoma City will gain more access to wind power as part of Oklahoma Gas & Electric’s renewable energy program, which was approved in September. The program includes a 115-mile, 345-kilovolt transmission line running northwest of the city to Woodward. See the press releases from NorthWestern Energy, Tri-State, and Oklahoma Gas & Electric.
BLM Offers Geothermal Leases in Utah, Idaho, and Oregon
The Bureau of Land Management (BLM) announced in early November that it will hold a competitive lease sale for geothermal energy development on 61 parcels totaling nearly 200,000 acres in Utah, Oregon, and Idaho.
The lease sale will be held in Salt Lake City, Utah, on December 19 and will include 47 parcels in western and southwestern Utah, totaling 146,339 acres; 11 parcels in Oregon, totaling 41,362 acres; and 3 parcels in south central Idaho, totaling 8,676 acres. The lease sale targets three states that have significant geothermal energy resources but have seen limited development so far: to date, Utah has only two geothermal power plants, Idaho has one, and Oregon has none.
See the BLM press release and Web page on the Utah parcels, the BLM notices on the parcels in Oregon (PDF 297 KB) and Idaho (PDF 44 KB), the Geothermal Energy Association’s list of geothermal power plants, and the state profiles from DOE’s GeoPowering the West initiative.
Dropping Energy Prices Offer Good News for U.S. Consumers
It’s hard to find a silver lining in today’s economic crisis, but the downturn has at least one positive aspect: energy prices will definitely be lower than expected this winter. DOE’s Energy Information Administration (EIA) noted last week that crude oil prices have tumbled from more than $133 per barrel in July to about $77 per barrel in October, dragging down other energy prices as well. Regular-grade gasoline and diesel fuel prices were at $2.22 and $2.94 per gallon, respectively, on November 10, as both have fallen by more than $1.80 per gallon from their mid-July highs.
As a result, the EIA’s "Short-Term Energy Outlook" expects the average U.S. heating fuel costs for those using heating oil to be 13.3% lower this winter. Heating costs will also be 8.1% lower for households using propane, only 3.6% higher for those using natural gas, and 9.5% higher for those using electricity for heat.
The drop in U.S. energy demand caused by high oil prices earlier this year and a slumping economy in the fourth quarter is projected to cause a 5.4% drop in demand for petroleum products in 2008, or about 1.1 million barrels per day below the 2007 average. The decline is expected to continue in 2009, with petroleum demand dropping another 1.3%. Global oil demand will probably end up rising by only 100,000 barrels per day in 2008 and is expected to remain essentially level in 2009, with growth in developing countries offset by declines in industrialized countries. Looking again for that silver lining, the drop in petroleum demand will help reduce greenhouse gas emissions in the U.S. and other industrialized countries, and it will help to reduce our dependence on oil imports. See the EIA’s "Short-Term Energy Outlook."
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Kevin Eber is the Editor of EREE Network News, a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE).
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