Ch11 - Renewable Energy
Taylor Noland
22 Oct2010
In addition to the questions Grant has already posed, Luke, Zach, and I wanted to provide an informal write-up for the reading in case you need to freshen up before class. Zach discusses Section B, Luke discusses the majority of Section C, and I finish up Section C and cover Section D. Again, please jump in at the beginning of class if there are any topics/issues/questions you would like for use to touch on during our discussion.
Section A:
The Chapter provides us with a basic overview of renewable energy types, and differentiates them by "cool" and "hot" sources. The three primary types of cool sources (those which are non-combustible) are Solar, Wind, and Geothermal. The reading also discusses to a lesser extent hot sources, those which require combustion or burning. The most promising is Biomass technology (biofuel, biochemical, thermochemical). We have already discussed quit a bit of these topics in class, but if any of the technologies are confusing enough to you, then lets definitely discuss them. I think the key issue to think about in this section is this: What types of renewable energy should be included in U.S. policy? Do we want to label things like Nuclear and Wood-burning as "Renewables", or which sources of green technology do we wish to promote?
Section B
Besides Tenn v. 889 Associates, the theme to my reading was discombobulation. To begin with, who has regulatory control over renewable energy projects? The Federal Government or state municipalities or no is there no regulation at all? The vague regulation system becomes exploitable by groups of people who want to change the law for personal gain, rather than public benefit. Second, once a state does have regulatory power, renewable energy projects then must deal with each individual land ordinance that a municipality might have. Such discombobulation will continue to inhibit the development of renewable energy. I believe the Federal Government needs to recreate policy on how to deal with the emerging industry. This is no small task because the restructuring will inevitably lead to an encroachment of federalism.
853-856
· New energy resources often fall into no-man’s land when it comes to government regulation. The projects are in regulatory gaps caused by inadequate, overlapping, or inconsistent regulations. Opponents of renewable energy projects have been able to use this uncertainty to halt progress on the projects. The multiple agency approach leads to uncertainty and a resulting lack of regulatory leadership creating logical incentives for lack of political investment in regulatory solutions.
Cape Wind Project 856
· Regulatory problems-Several different federal agencies are involved with the project. The turbines were planned to be located in waters over which the federal government has jurisdiction, transmission cables and other equipment would cross state waters, tidal areas and lands, and nine different Massachusetts state agencies have jurisdiction over part of the project.
· It seems like there needs to be a national ocean policy as suggested by the U.S. Commission on Ocean Policy. At the moment, eleven cabinet-level departments and four independent agencies have responsibilities for ocean and coastal policy and management
State and Local Restrictions on Solar and Windpower
· States have jurisdiction over the siting of power plants and have refused to allow construction of renewable energy resources. In Tallahassee, Florida, environmental justice has been cited to prevent a biomass development.
Local Land Use Restrictions
· Local zoning laws can have a great effect on renewable energy resources. Different municipalities in the same state may have opposite zoning ordinances. For example, New Jersey has municipalities that expressly allow wind turbines, and others that completely ban it.
· The book suggests that states or federal government must enact policy to protect the development of renewable energy. The ordinances controlling the construction, installation, and siting of these systems must be structured in such a way as to protect against legitimate concerns of local governments while at the same time creating incentives and policies promoting the utilization of renewable energy systems.
· Since most wind power development takes place on non-federal land, the state and local governments maintain primary responsibility for siting regulation. States have typically chosen between a centralized form of review of renewable energy facilities, or left review up to localities.
Tenn v. 889 Associates, Ltd
· Is the law of private nuisance broad enough to comprehend a claim of interference with light and air?
· The court held that the law of private nuisance provides the appropriate standard for passing on a property owner’s claim of interferences with interests in light and air.
Section C (pgs 905-929)
"Feed-In Tariffs" = This is a very promising alternative to Renewable Portfolio Standards. The method has been implemented in Germany, which has realized a great deal of success. Essentially, a FIT is a way for the government to subsidize renewable energy systems, and is more reliable in assuring that renewable energy finds its way onto the electrical grid and secures its footing in the energy marketplace.
Here are the basic characteristics of a Feed-In Tariff: (1) Guaranteed Interconnection with the Electric Grid; (2) Paid a rate above market value which is locked in over a fixed term of years. The rate is usually the "cost of the production + a reasonable rate of return on investment based on profit expectations. This rate is typically around 10%. However, the rate can be fixed, or it can be a % over the wholesale price. One major difference is that a FIT is open to anyone, whereas PURPA is only open to Qualifying Facilities.
In my opinion, this seems like the best method out there. Why? This is the best at spurring a "grassroots" movement towards the development of renewable energy systems. I think the more widespread "green" energy becomes at the most basic levels of our society, the more visible the technology becomes which leads to consumer/citizen awareness, and ultimately a fundamental change in our society's beliefs about renewable energy is developed. However, there is certainly an "anti-competitive" aspect of the Feed-In Tariff.
In Europe, there has been widespread success with FITs. Especially in the development of Offshore Wind technology. In Germany, the leader of FITs, their rates are dependent on the size of the project and the type of energy source. The plan in Germany is for rates to be very attractive early on, and decrease annually. Germany has experienced a minimal increased cost to the consumer. The program has nearly doubled the supply of renewable energy in Germany, and even more astonishing is that Germany reached its 2010 goals in 2007 by using FITs. So not only did Germany implement a Green Energy plan which found success, it realized actual success in a short time span. This is what we are looking for right? Actual change, visible change, and instant gratification. I just think the model fits the profile of what we thrive off of in America.
In the US, Vermont, California, and Washington are the only states to implement a Feed-In Tariff System. The Federal Government has proposed a "Renewable Energy Payment" system with: (1) guaranteed interconnection to the grid, (2) 20yr fixed term of mandatory purchase, (3) rate recovery of cost + 10% roi which is differentiated based on size, type, and time implemented. Utilities could used the REP to meet its RPS requirements & would also be reimbursed for any increased costs in operations, administration, or upgrades. However, there would be a "tax" or "Benefits Charge" to the customers to fund the program (however, in Germany this was very small).
In Europe, the EU aims for 21% renewable energy sources by 2010 (but different targets for each nation). The most common method is the Feed-In Tariff, however other methods like the REC certificates are used. As previously stated, Europe's program has realized a major boom in Offshore Wind Power, something the U.S. has been hesitant in adopting. This really contrasts how different our legal systems are, not only in that nations are treated differently, but that regulation has not presented barriers to realizing renewable energy production.
In China, there have been LOFTY goals set, and there has been some realized success. China is 2nd in the World in Renewable Energy Funding. China is 4th in the word in Windpower production. China even has 1 in 10 households using solar water heaters. China adopts a new Renewable Energy Plan every 5 years. The most recent in 2006. China's goal was to have 10% renewable energy by 2010, and 20% by 2020. This applied to all cool sources, but not to firewood and nuclear energy. The upcoming China Plan in 2011 will increase the government oversight, increase funding, and require minimum project targets for the grid. However, just like in the U.S. China faces the challenge of getting renewables in rural areas to the power grid in urban areas, because such a task requires extensive costs and upgrades in transmission.
The reading next focuses on other U.S. federal incentives.
- Production Tax Credit = producer gets a tax credit per kWh of renewable power produced, but uncertainty in its regulation and implementation has rendered this ineffective
- Consumer Tax Incentive = Homeowners received a tax credit up until 1985, which was re-instated in EPAct of 2005. 30% credit for expenditures on renewable energy system + no cap on credit amounts.
- Energy Efficient Mortgage = purchasing a home with a renewable energy system, or one to where improvements will be made. Lenders are allowed to increase borrowing amount by the amount of estimated energy savings. The USDA also has a similar program for farmers.
- Increase Research and Development Funding = ACES calls for $90 billion in funding by 2025, not sure if that is enough. Renewables get smaller r&d funding than both Coal & Nuclear power.
Section D
"Distributed Generation" = this section is about renewable energy power generated on a customer's premises. (ex: Solar Cells, Wind Turbines, Fuel Cells). As new technologies have become more accessible and affordable, DG interest has become more attractive. This is especially true along the grassroots level, for small business owners and even individual homeowners. Events like the northeast blackout, Hurricanes, and 9/11 have increased interest as well. Most interestingly, Duke Energy in 2009 set out a plan to install DG solar "PV" panels on the roofs of homes, schools, office buildings, shopping malls, etc.
The Department of Energy released a report in 2007 on the potential impact of Distributed Generation. The report points out that while consumers realize most of the benefits, its bad business for the utility. Thus, Utilities have not been encouraged to invest in DG. Also, there is an obvious lack of familiarity with the technology (how many of us have experience operating our own Solar Panel of Wind Turbine?). However, there are opportunities for the utilities to realize benefits of DG. Especially in electric planning/operations during peak load times, improve power quality, and provide voltage support. DG also lends to the U.S.'s broad goal of energy security, and terrorism threats are reduced the more we spread out the production of electricity. The reading concludes by pointing out that (1) siting laws, (2) grid interconnection, and (3) state electric rates are some potential barriers to implementing DG programs.