President Obama Calls for Carbon Cap, More Clean Energy Investment
Naming energy as one of the three areas of investment "that are absolutely critical to our economic future," President Barack Obama called last night for a greater investment in clean energy technologies and a cap on carbon emissions. "We have known for decades that our survival depends on finding new sources of energy, yet we import more oil today than ever before," noted the president in his address to Congress. He said the American Recovery and Reinvestment Act (ARRA) provides a key investment that will save or create 3.5 million jobs, including jobs "constructing wind turbines and solar panels … and expanding mass transit." He also noted that the ARRA will double the U.S. supply of renewable energy in the next three years. Claiming that "the country that harnesses the power of clean, renewable energy will lead the 21st century," President Obama declared that "it is time for America to lead again."
"We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country," he said, "and we will put Americans to work making our homes and buildings more efficient, so that we can save billions of dollars on our energy bills. But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest $15 billion a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America."
President Obama also pointed out the example of Greensburg, Kansas, "a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community-how it can bring jobs and businesses to a place where piles of bricks and rubble once lay." DOE, by the way, was heavily involved in the effort to rebuild Greensburg using renewable energy and green building principles. See the text of President Obama’s address to Congress and the article on DOE’s efforts in Greensburg from the May 2, 2008, edition of this newsletter.
DOE to Expedite Disbursement of Funds Received via Stimulus Act
Energy Secretary Steven Chu has announced a sweeping restructuring of DOE’s processes for issuing direct loans, loan guarantees, and other funds to expedite the disbursement of the DOE funds received via the American Recovery and Reinvestment Act (ARRA). DOE will streamline and simplify loan application forms and other paperwork and will begin reviewing applications as they are received, rather than waiting until an application deadline. DOE will also add additional staff and resources to process the applications, allowing the agency to begin offering loan guarantees under the existing DOE Loan Guarantee Program by late April or early May. DOE will begin offering loan guarantees established by the ARRA by early summer and plans to disburse 70% of the ARRA funds by the end of 2010.
DOE is also taking several actions to make the direct loans and loan guarantees more inviting. To reduce the up-front costs of the loans, DOE will offer applicants the opportunity to pay the fees at closing and will also restructure credit subsidies so that they are paid over the life of the loan. DOE will also draw on outside partners to accelerate loan underwriting. To make the whole process work well, the agency will work with industry to attract good projects into the loan guarantee program and will help applicants navigate the application process. While most of the changes are within the Secretary Chu’s authority, some will require the approval of Congress, and DOE will work quickly to obtain the necessary statutory changes. DOE will also establish a Web site to increase transparency in both the process and the results. The Obama administration has also established the Recovery.gov Web site to track the overall spending of the ARRA funds. See the DOE press release.
DOE’s Bonneville Power Administration (BPA) is already charging ahead with a major infrastructure project, thanks to the ARRA. The economic stimulus act gave BPA an additional $3.25 billion in borrowing authority from the U.S. Treasury, allowing the organization to build a major new transmission project: a 500-kilovolt transmission line that will carry more than 870 megawatts of power, providing service to more than 700 megawatts of new wind power capacity. Work on the McNary-John Day transmission project will begin this spring, and at its peak, the construction project will support 700 jobs. See the BPA press release.
Northwest Food Processors Aim to Reduce Energy Intensity by 25%
DOE and the Northwest Food Processors Association (NWFPA) signed a Memorandum of Understanding (MOU) last week that set an industry-wide target of reducing energy intensity by 25% over the next decade. The MOU outlines opportunities for energy efficiency in the food processing industry and at all manufacturing plants in the region. DOE’s Pacific Northwest National Laboratory and Idaho National Laboratory, along with the Northwest Energy Alliance and other regional organizations, will work with the NWFPA to meet the energy intensity goal. The MOU directly supports Save Energy Now, an initiative of DOE’s Industrial Technologies Program that promotes and supports reductions in energy intensity and carbon emissions in industries throughout the United States. See the DOE press release, the Save Energy Now Web site, and the NWFPA’s Energy Portal.
Interior Department to Develop Plan for Offshore Renewable Energy
Interior Secretary Ken Salazar announced in early February that his agency will develop an offshore energy plan that includes both conventional and renewable resources. The Interior Department plans to assemble a detailed report on conventional and renewable offshore energy resources, with contributions from the U.S. Geological Survey, the Minerals Management Service, and other scientists within the department. The report will assess offshore energy resources and the potential impacts of developing those resources, and it will be due by the end of March.
Based on that report, the Interior Department will determine what information is lacking and will create a plan for gathering that information. That plan will be vetted in four regional meetings, allowing public input on how the Interior Department should move ahead to formulate a comprehensive offshore energy plan. The Interior Department oversees more than 1.7 billion acres on the Outer Continental Shelf (OCS), an area roughly as large as three-quarters of the United States.
The Interior Department will also expedite its rulemaking for renewable energy development on the OCS. The agency is behind schedule on issuing its final rulemaking, which was required by the Energy Policy Act of 2005. The rulemaking will guide the development of offshore energy sources such as wind, wave, and tidal power. Secretary Salazar says he intends to issue a final rulemaking "in the coming months." See the Interior Department press release.
Federal Regulators Allow Transmission Lines Funded by Wind Developers
Independent companies that intend to build new transmission lines face a financing dilemma: under current federal rules, they must open all access to that transmission line to a competitive bidding process, but they need to make significant investments prior to reaching that point. In other words, they need to attract investors before they have a single customer. They also face a chicken-and-egg dilemma: power generators won’t support a transmission line unless a utility says it needs the line to supply its customers, and utilities won’t support a transmission line unless there is a power generator backing it up.
So two companies-Chinook Power Transmission, LLC and Zephyr Power Transmission, LLC, both of which are owned by TransCanada Corporation-proposed to take a new approach, entering into an agreement to provide half of the capacity on their proposed new transmission lines to wind developers. The agreement will help finance the transmission lines and convince utilities that the project is viable, while still leaving half of the transmission line capacity available for other power generators.
Last week, the Federal Energy Regulatory Commission (FERC) approved the new approach, allowing the two projects to go forward. FERC noted that it needs to show greater flexibility for such "merchant" power line projects, because the project developers assume all the market risks, and unlike electric utilities, they have no set pool of customers from which they can recover their project costs.
The two projects include a 1,100-mile transmission line running from Medicine Bow, Wyoming, to just south of Las Vegas, Nevada, and a 1,000-mile transmission line that runs from Harlowtown, Montana, to the same ending point in Nevada. Each transmission line will have a capacity of 3,000 megawatts (MW), which means that each line has an agreement with a wind power developer that plans to build 1,500 MW of wind power by the time the lines are completed in 2014. For comparison, at the end of 2008, Montana had only 272 MW of wind power capacity, while Wyoming had 676 MW of wind capacity. The companies did not name the wind power developers, although several wind developers intervened in favor of the proposal. See the FERC press release and decision (PDF 116 KB), as well as the most recent list of wind power projects from the American Wind Energy Association (AWEA).
The proposed transmission lines are significant for a number of technical reasons, as well. They will be the first transmission lines to ship large amounts of wind power from windy northern states to distant customers in the Southwest. To achieve this feat without losing too much energy, the lines will be high-voltage direct-current (HVDC) lines, operating at voltages of 500 kilovolts. Such HVDC lines can carry 3,000 MW of power on a single string of towers, while multiple towers would be needed for traditional lines using alternating current. According to TransCanada, each transmission line will cost about $3 billion, even though they follow the same path from Boise, Idaho, through Nevada.
The construction of such "green power superhighways" is advocated in a white paper that was released last week by AWEA and the Solar Energy Industries Association. Incidentally, FERC will also hold a technical conference on March 2 to examine how large amounts of renewable generation can be integrated into the U.S. electrical grid. See TransCanada’s project description, the AWEA press release and white paper (PDF 3.0 MKB), and FERC’s announcement about its technical conference, which will be webcast live at no cost.
Report Highights Need for Rapid Action to Minimize Climate Change
The world has the potential to hold global warming below 2°C, but only if there is a strong policy framework throughout the world and global commitment and action across all sectors, according to a recent report.
McKinsey & Company released its report, "Pathways to a Low-Carbon Economy," in January, updating a report that was originally released two years ago. The report charts a pathway that relies on increased energy efficiency, a shift to a low-carbon energy supply, land use changes (growing forests and changing farming practices), and behavioral changes, such as traveling less or eating less meat.
If those measures are pursued apace starting next year, the report finds that global greenhouse gas (GHG) emissions could be 35%-40% below 1990 emission levels by 2030. That would result in GHGs peaking at 480 parts per million (ppm) in Earth’s atmosphere, sufficient to keep warming below 2°C. But delaying action by even 10 years would make it difficult to hold GHG peak concentrations below 550 ppm, and doing so will be much more expensive.
The report notes that many GHG abatement methods actually have negative costs, although their capital costs may be quite high. For instance, most energy efficiency measures pay for themselves in saved energy costs, so their total cost to society is negative. Other measures, such as carbon capture and storage for fossil-fueled power plants, are much more expensive.
Rolling it all together, the total worldwide cost would equal less than 1% of the forecasted global economic activity in 2030. But that happens only if the most economically rational GHG abatement opportunities are pursued to the full potential, a possibility that the report acknowledges as clearly optimistic. See the report summary, with links to download the full report, on the McKinsey & Company Web site.
++++
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).
Loading...