Utilities in Colorado and Hawaii Pursue Clean Energy
The largest utilities in Colorado and Hawaii are now seriously pursuing clean energy. In late September, the Colorado Public Utilities Commission (PUC) approved a long-term energy resource plan for Xcel Energy that calls for demand-side management programs to reduce electricity use by 1,744 gigawatt-hours by 2015, while cutting peak electricity demand by 421 megawatts (MW), equivalent to two medium-size power plants.
The plan also calls for at least 200 MW of solar power with energy storage, such as a concentrating solar power plant, and up to 850 MW of intermittent renewable power. And to help reduce its carbon dioxide emissions, Xcel Energy will close two of its older, coal-fired power plants-one in Denver and another in Grand Junction. See the Colorado PUC press release and full decision (PDF 577 KB).
In Hawaii, the state reached an agreement with Hawaiian Electric Company to pursue several actions that will increase the state’s use of renewable energy. The agreement includes a commitment to integrate as much as 1,100 MW of renewable energy into the power grid, with 700 MW of renewable energy to be implemented within the next five years. In addition, an undersea cable will connect Maui, Molokai, and Lanai to allow an additional 400 MW of wind power capacity to be built in Maui, with the wind power transmitted to Oahu.
The utility will also establish a "feed-in tariff" that would pay a standard rate for power fed into the grid from renewable energy systems, and the utility will eliminate caps on the use of "net metering," which credits customers for power fed back into the electrical grid. All of those actions will help Hawaiian Electric Company to draw on renewable resources for 40% of its electricity by 2030, double the percentage required by the state’s Renewable Portfolio Standard.
Hawaii Electric Company will also reduce its carbon emissions through a prohibition on the construction of new coal-fired power plants and a commitment to retire older fossil-fueled power plants as new renewable energy sources become available. The utility will also shift some fossil-fueled power plants to burn biomass or biofuels.
To encourage energy savings, the utility will pursue the deployment of "smart" meters that allow customers to save money by shifting their electricity use to off-peak times, and the utility’s earnings will no longer be proportional to its electricity sales. The utility will also expand its program to finance solar water heating systems for its customers, with the investment repaid through a portion of the energy savings. In addition, the state and the utility will develop incentives to encourage the adoption of electric vehicles in the state.
The agreement is part of the Hawaii Clean Energy Initiative, in which the state and DOE agreed to move Hawaii toward having 70% of its energy come from clean energy sources by 2030. See the press release from Hawaii Governor Linda Lingle.
Researchers Seek to Reduce Bat Deaths from Wind Turbines
The Bats and Wind Energy Cooperative (BWEC) announced in mid-October that it has begun testing a procedure to stop wind turbines during low-wind conditions to avoid killing bats. Bat deaths from wind turbines are a relatively recently discovered phenomenon, and although they are not fully understood, recent studies have suggested that most bat deaths occur on low-wind nights when the turbines are producing low amounts of power, but may be rotating near their maximum speed.
Based on that finding, Iberdrola Renewables has agreed to shut down the turbines at its Casselman Wind Power Project in Pennsylvania during low-wind conditions. The experiment will provide information on how the new operating procedure will effect both bat deaths and power production at the 34.5-megawatt facility, which is located southeast of Pittsburgh.
The BWEC is a unique alliance of Bat Conservation International, the American Wind Energy Association (AWEA), the U.S. Fish and Wildlife Service (FWS), and DOE’s National Renewable Energy Laboratory. See the BWEC press release (PDF 90 KB) and Web site.
Iberdrola Renewables isn’t just helping out the BWEC experiment; the company has also committed to responsibly developing wind power while addressing wildlife concerns. Last week, Iberdrola released a company-wide Avian and Bat Protection Plan, modeled on a similar plan to address the impacts of power lines on birds.
Prepared in consultation with the FWS, the plan establishes a process for contact with government agencies and non-governmental organizations early in the site assessment stage of new wind power projects. It also includes policies for pre- and post-construction monitoring and other measures to reduce and mitigate bird and bat deaths. See the Iberdrola Renewables press release and plan (PDF 2.9 MB).
While bat deaths remain poorly understood, a recent study by the University of Calgary suggests that it’s not an actual impact with wind blades that kills bats, but rather the effects of the pressure drop caused by the moving blades. Large numbers of migratory bats are being killed by some of the turbines in southern Alberta’s wind facilities, and a study of the dead bats at one of those sites found that the bats suffered severe injuries to their respiratory systems consistent with a sudden drop in air pressure, a condition known as barotrauma. While only half of the dead bats showed signs of being struck by wind turbine blades, 90% had injuries consistent with barotrauma. The study was published in the August 26 online edition of Current Biology. See the University of Calgary press release.
California Regulators Reject Finavera Wave Power Contract
The California Public Utilities Commission (CPUC) rejected a power purchase agreement between Pacific Gas and Electric Company (PG&E) and Finavera Renewables Inc., which had planned to develop a 2-megawatt wave power project off the coast of Humboldt County, near Eureka, California.
In its decision, issued on October 16, the CPUC noted that wave power technology is still pre-commercial and that Finavera’s prototype buoy sank after it was deployed off the Oregon coast last year. The CPUC also found that the price of power under the contract was too high. Although PG&E argued that the price was tolerable for such a small demonstration project, the CPUC rejected that argument, and suggested instead that Finavera could be supported through a proposed Emerging Renewable Resource Program. PG&E has proposed such a program and the CPUC has proposed to approve the program, but has not yet voted on it.
Left without a way to sell the power from its demonstration wave energy project, Finavera plans to focus its effort on wind power opportunities in Canada and Ireland. The company is also investigating the formation of a private consortium to carry out wave energy research and development. Both Finavera and PG&E have argued that the CPUC decision will negatively affect wave power development in California. See the CPUC decision and the Finavera press release (PDF 40 KB).
The Finavera project also spurred a jurisdictional argument between two federal agencies: the Minerals Management Service (MMS) of the U.S. Department of Interior and the Federal Energy Regulatory Commission (FERC). In late July, the MMS announced that it was moving forward with limited alternative energy leases on the Outer Continental Shelf (OCS), allowing for data collection only. Because two companies-PG&E and Marine Sciences-were interested in the wave energy resource offshore of Humboldt County, the MMS proposed to encourage the two companies to collaborate.
However, FERC had already issued a preliminary permit to PG&E, which gave PG&E priority in filing for a license to operate a wave energy project at the site. The MMS then requested a rehearing on the preliminary permit, asserting that FERC only has jurisdiction to issue licenses and preliminary permits for projects within state waters, which is usually defined as being within three miles from the shore. But FERC replied that the Federal Power Act grants it authority to license power projects in navigable waters without limitation, and also grants it authority to issue permits within U.S. "reservations," which include the OCS. As a result, FERC rejected the MMS request for a rehearing, and PG&E still holds the preliminary permit. See the MMS press release and the FERC press release and decision (PDF 161 KB).
And despite the CPUC’s assertion that wave power is pre-commercial, a commercial wave power project recently started producing power. As noted in this newsletter, project developers inaugurated a 2.25-megawatt wave power facility, located off the coast of Portugal, in late September. Ocean Power Technologies, Inc. (OPT) also deployed one of its "PowerBuoy" wave energy converters off the coast of Spain in late September, as the first step in developing a 10-buoy, 1.39-megawatt power facility.
OPT also launched a PowerBuoy device off the coast of New Jersey in mid-October, under a contract for the U.S. Navy. The device will provide power for an ocean monitoring system. Meanwhile, Oregon State University and Columbia Power Technologies successfully tested a wave power device off the coast of Newport, Oregon, in mid-October. The buoyed device includes a moving element that connects to a linear generator, converting the wave’s movement directly into electricity. In mild waves, the buoy generated up to 15 kilowatts of power. See the OPT press releases on the projects in Spain and New Jersey, the Oregon State University press release, and the Columbia Power Technologies Web site.
Corn Ethanol Producer VeraSun Files for Bankruptcy Protection
VeraSun Energy Corporation, one of the nation’s largest ethanol producers, filed for relief under Chapter 11 of the U.S. Bankruptcy Code last week. Corn ethanol producers have struggled this year to produce profits while paying record-high costs for corn, but the situation turned really ugly with the recent drop in price for all commodities, including corn and gasoline. While dropping gasoline prices have pushed ethanol prices down, many ethanol producers had locked in to high corn prices through so-called "hedging" agreements. Such agreements help to avoid price spikes when prices are going up, but they can prove to be bad investments if prices suddenly fall, as corn prices have recently.
Although VeraSun has not released its third-quarter results, the company filed an 8-K form with the U.S. Securities and Exchange Commission in mid-September, warning that third-quarter losses would be $63-$103 million. The company noted that corn prices hit $8 per bushel in July, but then dropped to $5 per bushel by mid-August. VeraSun’s hedging agreements resulted in the company paying about $7 per bushel in the third quarter, while ethanol prices had dropped to $2.35-$2.45 per gallon. See VeraSun’s 8-K filing and Chapter 11 press release.
On the bright side, VeraSun announced on Monday that it has secured commitments for up to $215 million in financing and is in negotiations to secure another $250 million. The funds will allow the company to pay outstanding employee paychecks, to pay its suppliers for goods and services, and to keep producing ethanol.
However, on Tuesday the company announced that it is delaying indefinitely the startup of its new ethanol biorefinery in Janesville, Minnesota, which has a production capacity of 110 million gallons of ethanol per year. Construction of the plant is nearly complete, and it was scheduled to begin operating by the end of the year. The company is immediately furloughing 53 employees that worked at the facility. VeraSun will continue to run its 14 facilities that are currently operating across eight states. See the VeraSun press releases on the financing and the startup delay.
According to the Renewable Fuels Association (RFA), the current economic crisis for ethanol producers has at least one silver lining: it refutes the argument that ethanol production was responsible for record-high corn prices. While corn prices were dropping dramatically in August, ethanol production reached a record 647,000 barrels per day, a pace that would result in a record 9.9 billion gallons of ethanol production per year. And although rising grain prices were blamed for increased grocery costs, the RFA notes that retail food costs have not dropped as the grain prices have dropped.
Meanwhile, the RFA estimates that ethanol demand has reached an annualized rate of 10 billion gallons per year. The national renewable fuel standard requires that 9 billion gallons of ethanol be blended with gasoline products this year, rising to 11.1 billion gallons next year. See the RFA’s press release, ethanol industry statistics, and report on food prices (PDF 763 KB).
Chrysler Launches New Hybrids, then Cancels Production
In a sign of these strange economic times, Chrysler LLC is simultaneously preparing to launch its first hybrid vehicles and to shut down their production. As reported in this newsletter, back in June the company hyped the price benefits and performance achievements of its new hybrids, the 2009 Dodge Durango HEMI Hybrid and the 2009 Chrysler Aspen HEMI Hybrid, which were to be delivered to showrooms in August.
That never happened, but on October 16, Chrysler released the official fuel economy numbers for the two hybrids: 20 miles per gallon (mpg) in the city and 22 mpg on the highway, which are best-in-class fuel economy ratings for full-size sport utility vehicles. At that time, Chrysler said the hybrids would arrive in showrooms "later this year," and the company included a photo of the Chrysler Aspen Hybrid "after production at the Newark Assembly Plant" (note that the company dropped the "HEMI" from the name). A week later, Chrysler announced that it will close the Newark Assembly Plant in Newark, Delaware, at the end of this year, a move that will bring an end to the Dodge Durango and Chrysler Aspen in all their forms, including the new hybrids. See the Chrysler press releases on its hybrid launch and plant shutdown.
Hybrid vehicles suffered another setback last week, when a federal District Court struck down New York City’s requirement for all taxis to shift to hybrid vehicles. Mayor Michael Bloomberg was, to say the least, unhappy with the ruling, which was based on laws that prohibit states from setting their own fuel economy standards. The New York City Taxi and Limousine Commission (TLC) did not comment on the ruling, but issued a new list of approved taxi vehicles that includes the 2009 Ford Crown Victoria Stretch.
Hybrid technologies also progressed a little, as UPS announced that it has ordered seven hydraulic hybrid delivery trucks for its fleet, the first two of which will be deployed in Minneapolis, Minnesota, early next year. Developed by the U.S. Environmental Protection Agency, Eaton Corporation, and Navistar, the vehicles store braking energy as hydraulic pressure, then use that to launch the vehicle from a stop, achieving a fuel economy improvement of 45%-50%. See the press release from Mayor Bloomberg, the TLC announcement (PDF 47 KB), and the UPS press release.
European Union to Place Emissions Cap on All Flights in 2012
The European Union (EU) adopted a directive in late October that will place a cap on greenhouse gas emissions from all flights arriving at or departing from EU airports, starting in 2012. The allowable emissions will start at 97% of the annual average emissions from 2004-2006, and they will be reduced by 5% each year after that. The cap-and-trade scheme will provide 85% of the emissions credits for free and then will auction off the remaining 15%, using the proceeds to support research in low-emissions transport, but also to tackle climate change in the EU and third-world countries.
The rule includes some exemptions and some allowance for new or fast-growing airlines, but it does not exclude flights coming from other countries, such as the United States. And while the EU sees the directive as a first step toward a global agreement on aviation greenhouse gas emissions, the Air Transport Association of America (ATA) expressed harsh opposition to the directive, calling it "contrary to international law and bad policy." See the EU press release and directive (PDF 219 KB) and the ATA press release.
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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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