“I have known Roy Phillips, founder of REP Energy, Inc., for over eight years. Roy demonstrates a consistent and excellent knowledge of the solar and construction industries, and always operates with integrity and quality on every project.”
– Dave Metcalf, Regional Manager, Kyocera Solar, Inc.
Over the next 25 years, the new power system is expected to save 300,000 tons of carbon emissions, the equivalent of planting three million trees
Cochin International Airport in the southern Indian state of Kerala becamethe world’s first entirely solar-powered airport on Tuesday, unveiling a new system that will make the airport “absolutely power neutral,” according to a statement released by the parent company.
The airport’s solar power plant, which is comprised of more than 46,000 solar panels arrayed across 45 acres of land, will produce 48,000 units of energy per day, the Economic Times reports.
Portland, 4 August (Argus) — California, Oregon and Washington could face a relatively easy path to compliance with new federal rules for CO2 emissions from the power sector.
The three states could end up over-complying with their targets under the federal Clean Power Plan, potentially giving their leaders leverage in trying to convince inland neighbors to create a regional compliance plan for the regulations.
All three Pacific coast governors praised the final rule issued yesterday and said they would quickly begin work on figuring out how to comply. If the three joined a common trading program and kept their emissions in line with the US Environmental Protection Agency’s (EPA) projections for 2020, they would run a surplus of about 67mn short tons of CO2 by 2030, based on the tonnage targets the agency assigned each state. EPA also assigned CO2 rate targets for states to meet from 2022-2030, allowing the states to choose between the two.
That stands in stark contrast to the inland portions of the 11-state western grid. The other eight states plus tribal areas would need to cut a cumulative 336.1mn st of CO2 from 2022-30. If the states banded together for a regional compliance plan, the surpluses run by the coastal states could help ease the shortfalls in the other states.
The western US electric grid is characterized by inland power plants serving electric demand in the coastal states. Some of the highest-emitting units along the Rocky Mountains are partially owned or have power purchase agreements with electric utilities in California, Oregon and Washington.
California’s economy-wide cap-and-trade program will complicate efforts to create a regional or national market under the Clean Power Plan. The state would likely have to separate its power sector from the current cap-and-trade program. The state is committed to its economy-wide program and has been working to find more trading partners after linking with Quebec.
The state will need to cut power sector emissions by about 35mn st from 2022-2030 under the Clean Power Plan, but should be well-positioned to comply because of its existing trading program and a host of related policies. The state legislature is poised to approve raising the state’s renewable energy mandate to 50pc by 2030 and set more aggressive energy efficiency targets. Those policies would allow the state to exceed its federal obligations.
Oregon and Washington benefited from significant changes to how EPA calculated their 2012 baselines, leading to significantly higher 2030 targets than in the proposed rule. The targets are also higher than the states’ projected emissions for 2020. But direct comparisons between the proposed and final targets are difficult because of changes in EPA’s methodology.
EPA adjusted Washington state’s baseline for coal and gas generation and emissions by 207pc to account for 2012 being an unusually wet year, with a warm winter that led to significantly lower demand for fossil fuel-fired generation. EPA raised Oregon’s baseline by 118pc. The states have some of the cleanest power sectors in the US because of an abundance of hydropower. Idaho and Montana received similar adjustments as well.
Washington, 4 August (Argus) — Congressional Republicans are vowing to block new CO2 regulations for power plants, but their efforts face long odds given the high vote tally needed to overcome a presidential veto.
As the US Environmental Protection Agency (EPA) finalized its Clean Power Plan yesterday, Republican leaders were promising to resume their efforts to prevent the regulations from ever taking effect, or at least to delay them for several years.
The US Senate Environment and Public Works Committee tomorrow will take up legislation to extend the Clean Power Plan’s compliance deadlines until after the courts have a chance to review the program. The bill by senator Shelley Moore Capito (R-West Virginia) would also give governors the authority to opt-out of the Clean Power Plan if they determine that complying would harm their state’s ratepayers or over grid reliability concerns alone. The House of Representatives passed a similar bill in May.
“Now that this rule is finalized, the need for congressional action is even more apparent,” Capito said.
But these efforts face high hurdles. The Republican-controlled House can easily pass any legislation with little or no Democratic support. But Republicans, who hold 54 seats in the Senate, would need to win significant backing from across the aisle to clear the 60 votes needed to avoid a filibuster or the 67 votes to override a certain veto from President Barack Obama. At least three Democrats, senators Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana, have expressed varying degrees of opposition to the regulations over the past year. Manchin is the lone Democratic co-sponsor of the Capito bill.
If enacted, either bill could push back compliance by three or more years as the DC Circuit Court of Appeals, which has jurisdiction over challenges to EPA regulations, and then possibly the US Supreme Court, review the regulations. More than a dozen states have already said they intend to file suits in the DC Circuit. Those suits would likely be filed once the Clean Power Plan is published in the Federal Register.
The plan requires states to meet CO2 emissions targets by 2030, with reductions to start in 2022. States must submit final compliance plans to EPA by September 2018, with initial plans due in September 2016.
The Capito legislation is just one option available to congressional opponents of the regulations. Republicans have also included restrictions in fiscal year 2016 spending bills that have yet to clear Congress. And the formal publication of the rules will give Republicans another legislative tool, a little-used law called the Congressional Review Act. It essentially allows Congress to veto new executive branch regulations.
But it has been successfully employed only once, despite more than 40 previous attempts under the act to block various regulations since 1996, according to the Government Accountability Office. One of those failed efforts occurred in 2010, when the Senate defeated a resolution to overturn EPA’s first steps to regulate greenhouse gas emissions.
Later today at the White House, President Obama and Environmental Protection Agency Administrator Gina McCarthy will officially release the final Clean Power Plan, carbon pollution guidance for the nation that is also a historic step in efforts to meet and constrain climate change. Briefly stated, it shows how the US can reduce greenhouse gas emissions without losing money.
Today’s release constitutes the final Clean Power Plan, which has been in the works for years. The Clean Power Plan establishes the first-ever national standards to limit atmospheric carbon pollution from power plants, the largest source of carbon emissions in the United States. It follows on from other successful public health measures by reducing soot and other toxic emissions, aiming to reap continuing and increased benefits from the landmark bipartisan Clean Air Act the United States enacted over 45 years ago.
EPA received 4 million comments that public and private individuals and corporations submitted in response to the draft. The final plan reduces carbon dioxide emissions by 32% from 2005 levels by 2030. In line with recent findings that point to faster and more destructive climate events than those estimated before, the final plan constitutes a full 9% more reductions than the proposal.
States, cities, companies, and individuals have already begun to move to cleaner sources of energy. So far, these state efforts have given the CPP a good head start:
All 50 states have demand-side energy efficiency programs.
37 states have renewable portfolio standards or goals.
10 states have already implemented market-based greenhouse gas reduction programs.
Half the nation (25 states) has energy efficiency standards or goals in place.
More details about state actions under the final Clean Power Plan:
CPP lets states choose how to meet carbon standards.
CPP provides states more time and stronger incentives to deploy clean energy immediately
CPP sets state targets fairly and in a way that directly includes input from states, utilities, business, other stakeholders, and the public.
In addition, the plan has gained strength from the facts that solar electricity generation has increased more than 20-fold in the past seven years, and electricity from wind has more than tripled.
The White House characterizes today’s final plan as “a fair, flexible program that will strengthen the fast-growing trend toward cleaner and lower-polluting American energy.” It ensures long-term clean energy investment, continued reliability of electric infrastructure, affordable and clean energy for all Americans, and climate action that places the United States among important world leaders.
It does not stop at merely stating principles. The measure also includes a proposed federal implementation plan. From the White House news release:
“We have a moral obligation to leave our children a planet that’s not polluted or damaged. The effects of climate change are already being felt across the nation. In the past three decades, the percentage of Americans with asthma has more than doubled, and climate change is putting those Americans at greater risk of landing in the hospital. Extreme weather events – from more severe droughts and wildfires in the West to record heat waves – and sea level rise are hitting communities across the country…. The most vulnerable among us–including children, older adults, people with heart or lung disease, and people living in poverty – are most at risk from the impacts of climate change. Taking action now is critical.”
Stay with CleanTechnica for more about the Clean Power Plan, including exclusive in-depth interviews, technical detail, analysis, and further developments over the next days and weeks to come.
Roy Phillips is owner of REP Energy of San Rafael, which is building a 1.5-megawatt solar project at the abandoned Cooley Quarry near Novato. The project is among several local energy projects benefiting from long-term energy purchase agreements with Marin Clean Energy. Frankie Frost — Marin Independent Journal
Workers for Synapse Electric of Mill Valley install solar panels at the San Rafael Airport in 2012 for Marin Clean Energy, which has contracted to purchase electricity produced by the 1-megawatt project for 20 years. Robert tong — Marin Independent Journal
Marin clean energy: What is it?
Marin Clean Energy was created five years ago with the objective of making it possible for every person in the county who pays an electric bill to also help in the monumental battle against global climate change.
It was the first successful attempt in California to launch a public model for providing electricity to residents.
The joint power authority’s birth was made possible by a “community choice aggregation” law passed in 2002, which allows local governments to aggregate (or cluster) electricity demand within their jurisdictions to buy and sell renewable energy while maintaining the existing electricity provider for transmission and distribution services.
When Marin Clean Energy flipped the switch in May 2010, it had 6,000 customers. Today, it has some 170,000 customers and its membership spans all of Marin County, unincorporated Napa County and the cities of Benicia, El Cerrito, Richmond and San Pablo.
Marin Clean Energy’s standard Light Green energy was 56 percent renewable in 2014 compared with Pacific Gas and Electric’s electricity, which was 27 percent renewable.
Marin Clean Energy customers paid slightly less than PG&E’s. The average monthly bill for a typical residential customer using about 473 kilowatt-hours was $99.45 for Light Green customers and $100.92 for PG&E customers. The Marin agency’s Deep Green residential customers, who get 100 percent renewable electricity, paid an average of $104.18 per month in 2014.
Half of the premium that Deep Green customers pay goes into Marin Clean Energy’s fund for developing local energy projects.
The agency’s operating budget for the 2015-16 fiscal year is $145.9 million and it has 30 employees.
— Richard Halstead
A union representing Pacific Gas and Electric Co. workers and a San Francisco consumer group are taking aim at the common use of energy credits by groups including Marin Clean Energy.
They’re pushing an initiative in San Francisco and new state legislation designed to curb such practices.
Their contention: Marin Clean Energy and other purchasers of those credits, such as the city of Palo Alto, Cisco Systems Inc. and the Sacramento Municipal Utility District, are using paper certificates to “greenwash” their energy.
What’s a rec?
A renewable energy certificate (REC) is a tradable environmental commodity used in North America to represent proof that 1 megawatt-hour of electricity was generated by an eligible renewable energy resource such as solar, wind, geothermal, biomass, hydroelectric and tidal power.
During the 1990s, states began requiring that utilities acquire a specific percentage of their electricity from renewable sources. To facilitate the sale of renewable electricity nationally, a system was developed that separates renewable electricity generation into two parts: the electrical energy produced by the renewable generator and the renewable “attributes” of that generation.
The electricity associated with a REC may be sold separately and used by another party or it may remain bundled with the REC. If the energy is sold separately it is no longer considered renewable and cannot be used by utilities to meet their state-mandated goals for renewable energy use. The unbundled REC now carries all of the renewable attributes and can be sold separately.
For example, electricity generated at the Mountain Air Projects in Idaho, 60 wind turbines with a capacity of 138 megawatts, is sold to Idaho Power, the investor-owned state utility. Idaho does not require Idaho Power to buy any minimum amount of renewable energy, so the utility has no incentive to pay the extra cost associated with renewable energy. Idaho Power pays about the same price for the electricity as it would for power generated using natural gas. The owners of the project sell the unbundled RECs to Marin Clean Energy and other entities, who then take possession of the “renewable attributes” associated with the power.
— Richard Halstead
At issue is something known as an “unbundled, renewable energy certificate” — a credit that, when purchased, allows the buyer to legally claim ownership of 1 megawatt hour of renewable electricity. It has been “unbundled” from the actual renewable electricity that was generated.
The International Brotherhood of Electrical Workers, Local 1245, which represents PG&E’s electrical workers, is collecting signatures for a ballot measure that would bar San Francisco from promoting its electricity as clean or green if it uses unbundled RECs.
“RECs have been dismissed by many experts as an accounting gimmick that do nothing to reduce greenhouse gas emissions or create more clean power,” said Hunter Stern, a spokesman for Local 1245. “We introduced this measure to require that San Francisco disclose the sources of the power they sell, so they cannot sell brown power as green.”
But Dawn Weisz, Marin Clean Energy’s executive officer, said Local 1245’s ballot initiative is attempting to rewrite the definition of renewable energy so that no out-of-state supply would qualify as renewable. Most unbundled RECs come from projects outside California.
“The IBEW wishes to promote California sources of renewable energy because it wishes to promote jobs for its members,” Weisz said. “While this is valuable, it should be presented in a clear way, not by relying on confusing information about RECs, and should be considered together with the other goals of a power portfolio.”
A second offensive is being mounted against the use of unbundled RECs in the state Legislature.
Assemblyman Phil Ting, D-San Francisco, has introduced AB 1110, which would prohibit an adjustment in the calculation of emissions of greenhouse gases through the application of unbundled RECs. The legislation was sponsored by The Utility Reform Network, a consumer advocacy organization based in San Francisco.
“What we’re looking for here is an apples-to-apples comparison and full disclosure by all about exactly what the product is they’re selling to customers,” said Mindy Spatt, a TURN spokeswoman. “Customers want to know whether it is actual clean energy or RECs.”
RECS ARE ‘VALUABLE’
But James Critchfield, director of the U.S. Environmental Protection Agency’s Green Power Partnership, said unbundled RECs are an important part of the national system that developed after many states began requiring utilities to get a certain percentage of their electrical power from renewable sources: solar, wind, geothermal, biogas, biomass and low-impact small hydroelectric resources.
“The EPA, the Federal Trade Commission, and the National Association of Attorneys General have all recognized the REC as the instrument through which renewable energy usage claims are substantiated,” Critchfield said. “It’s a market-based approach that is valuable to growing the market.”
Local 1245 began raising the issue of Marin Clean Energy’s use of unbundled, renewable energy certificates about a year ago. It was the Oakland-based Local Clean Energy Alliance, however, that first questioned their efficacy with a report it issued in October 2013.
‘WHAT THE HECK IS A REC’
Al Weinrub, co-author of the report, “What the Heck is a REC,” and coordinator of the alliance, said the concern at the time was a PG&E proposal for using RECs.
“PG&E said they were going to offer a 100 percent green option. It turned out the way they were going to do that was to buy the cheapest unbundled RECs they could find on the market,” Weinrub said.
He said PG&E dropped the plan after meeting opposition.
In the paper, Weinrub and co-author Dan Pinkel wrote that the short-term purchase of unbundled RECs “while generally making renewable generation more profitable, makes only a questionable contribution to increasing renewable energy generating capacity.”
The paper went on to say that “unless the purchase transaction actually enables the development of new renewable generation that would not otherwise have occurred, there is scant legitimacy to the claim of displacing fossil fuels or reducing greenhouse gas emissions.”
Weinrub said the two major problems with unbundled RECs is that they are underpriced and typically not purchased under long-term contracts.
Weisz said Marin Clean Energy pays $1 to $2 for its unbundled RECs, about a tenth of what it pays for RECs that come bundled with their original electricity.
According to a 2011 report by the National Renewable Energy Laboratory, long-term contracts for RECs need to be encouraged because they “can offer the security and certainty that many projects need to obtain financing.” Most of Marin Clean Energy’s unbundled REC contracts are for a single year, although some are for two or three years.
RELYING ON RECS
Beginning in 2012, unbundled RECs have accounted for nearly a third of Marin Clean Energy’s total electricity purchases. In calendar year 2012 unbundled RECs made up more than 35 percent of the agency’s power purchases; in 2013 the number dropped to 31 percent, and in 2014 it inched down to 30 percent. Weisz said that this year the number will be cut in half to 15 percent as more California generation projects come online.
Local 1245 asserts that Marin Clean Energy uses unbundled RECs to make it seem that its electricity is cleaner than it really is.
Marin Clean Energy computes the greenhouse gas emission rate of the electricity it sells per megawatt hour by dividing its estimated emissions by the total amount of electricity it buys and sells. Using this method, Marin Clean Energy calculated its 2013 emissions rate as 364 pounds per megawatt hour, 17 percent lower than PG&E’s reported 2013 emission factor of 427 pounds per megawatt hour.
Local 1245 says that procedure is unfair because 345,000 megawatt hours of Marin Clean Energy’s 1.1 million megawatt total in 2013 came through the purchase of unbundled RECs.
Brittany McKannay, a spokeswoman for PG&E, said unbundled RECs accounted for 0.13 percent of PG&E’s total electricity purchases in 2013, which amounts to about 106,000 megawatt hours. In 2013, more than half of PG&E’s electricity came from sources that emit no greenhouse gases; but 32 percent of them — nuclear, 22 percent and large hydroelectric, 10 percent — don’t qualify as being renewable.
Weisz said using unbundled RECs to calculate Marin Clean Energy’s emission factor “conforms to every regulation and voluntary reporting paradigm that exists.”
“We are buying those volumes,” Weisz said, “so they are part of our mix.”
RECS ARE ‘VALID’
The Climate Registry, a nonprofit registry of greenhouse gas emissions for North America that certifies PG&E’s emission factor, sanctions the use of unbundled RECs in calculating emission factors.
Peggy Kelley, director of policy at The Climate Registry, said, “Our position is that RECs represent the environmental attributes of green power whether they are bundled or unbundled. It’s as valid a claim to the greenhouse gas totals as anything else.”
Weinrub and Pinkel concluded their paper with a caveat. They said that because nascent community choice programs — such as Marin Clean Energy — must compete for survival against investor-owned utilities, procurement of unbundled RECs may be justified if it makes it possible for the community choice program to invest in the development of new local renewable energy resources.
Marin Clean Energy has committed nearly $516 million to 195 megawatts of new California renewable energy projects. Those include a 10.5-megawatt solar project in Richmond, a 4-megawatt landfill waste-to-energy project in Novato, a 1.5-megawatt solar project in Novato’s Cooley Quarry, a 1-megawatt solar project at San Rafael Airport and a 1-megawatt project at the Buck Institute for Research on Aging in Novato.
Weisz said Marin Clean Energy had no idea how many customers would stick with its program in the early years, and the unbundled, short-term RECs gave it the flexibility it needed.
SONOMA NOT BUYING RECS
Sonoma Clean Power, a community choice aggregator like Marin Clean Energy that began serving about 6,000 residential customers in the North Bay last year, has ceased its purchase of unbundled RECs.
“Back in 2013, before we started serving customers, we did make some purchases of unbundled RECs, thinking we would use them more than we did,” said Geof Syphers, CEO of Sonoma Clean Power. “We haven’t sold any of those, but we haven’t bought any more.
“Our decision was made based on a concern that RECs might be double-counted in their value, but we have subsequently been unable to find any evidence that has occurred in California,” Syphers said.
Marin Clean Energy’s REC purchases are certified by Green-e, a program of the Center for Resource Solutions in San Francisco, which ensures that unbundled RECs aren’t double-counted.
“California has robust systems in place to prevent double-counting from happening,” said Jennifer Martin, the Center for Resource Solutions’ executive director. “For years now, California has been using RECs as the sole basis to demonstrate ownership of renewable energy attributes. It’s enforced by regulation and the California Public Utilities Commission.”
GROUP BACKS AB 1110
Kelly Foley, who has worked as legal counsel to both PG&E and Sonoma Clean Power and now serves as director of regulatory affairs at California Clean Power, said community choice programs should avoid using unbundled RECs in their marketing.
“You can’t say your paper certificates are sucking carbon out of the air, because they’re not,” Foley said.
California Clean Power, a Santa Rosa-based startup that is substituting a for-profit business model for the nonprofit, public power approach pioneered by Marin Clean Energy, is an active supporter of Assemblyman Ting’s AB 1110.
Foley said that often unbundled RECs come from renewable energy projects that were created long ago or that required no special financial incentive to get built. She said the sale of the unbundled RECs from such projects is just gravy for builders.
A report on the role of RECs in developing new renewable energy projects written in June 2011 by the National Renewable Energy Laboratory stated, “there are situations in which REC revenues are essential to project economics, as well as some where REC revenues may have little impact.”
DEPENDS ON PERSPECTIVE
The report added that the importance of RECs often depends on one’s perspective.
“Project developers and owners welcome all revenue, large or small, because they wish to maximize profit, and they may not know for sure how profitable the project will be until its useful life is at an end,” the report stated.
“Certainly from our perspective as a renewable energy project developer, we’re counting on those revenues from REC sales going forward,” said Bill Eddie, president of One Energy Inc., which also buys and sells RECs.
One Energy has assisted Marin Clean Energy with some of its REC purchases. Eddie said prices for unbundled RECs fluctuate with demand.
“I’ve seen prices for unbundled RECs in California go as high as $20, although not for long,” Eddie said.
The California Public Utilities Commission (CPUC) is currently working on a proceeding to develop a successor tariff for net energy metering (NEM), which allows utility customers with solar PV systems or other distributed generation technologies to receive credit for the excess energy that they supply to the grid.
Assembly Bill (AB) 327 requires California’s three investor-owned utilities to offer NEM until either July 1, 2017, or the date at which the utility reaches a 5% NEM program cap, whichever is earliest. The cap represents 5% of total peak customer demand within the utility service territory.
This is the progress of each utility toward reaching the 5% NEM cap as of May 2015. Information on progress toward the cap is reported to the CPUC monthly and can be found on each utility’s website.
Customers who install a solar generating facility before the utility reaches its NEM cap or July 1, 2017, will be grandfathered into the current NEM tariff for a period of 20 years from their interconnection date. As indicated, SDG&E is closest to reaching the 5% cap but is not expected to do so until mid-2016. Customers should keep this in mind when considering whether to install solar PV this year. However, future changes to NEM should not be used to justify high-pressure sales situations.
AB 327 also directs the CPUC to develop a NEM successor tariff for eligible customer generators no later than December 31, 2015. The CPUC is currently reviewing proposals from industry and utility stakeholders. To find more information about the status of this proceeding and to join the conversation, visit AB 327: NEM Successor Tariff Workshops or contact Shannon O’Rourke at Shannon.O’Rourke@cpuc.ca.gov or (415) 703-5574.
After flying over 5,000 miles purely on solar power, Solar Impulse landed in Honolulu. The Round the World flight mission, led by co-founders and pilots Bertrand Piccard and André Borschberg, is the first of its kind.
The nonstop trip across the Pacific Ocean—never before attempted by a zero fuel airplane—began in Nagoya, Japan and lasted 5 days and 5 nights.
A ground crew member (R) is walks near the solar-powered airplane Solar Impulse 2 at a mobile hanger at Nagoya airport in Nagoya on June 3, 2015. The record-breaking Solar Impulse 2 landed safely in Nagoya, Japan late on June 1 on an unscheduled stop caused by bad weather over the Pacific. AFP PHOTO / TOSHIFUMI KITAMURA (Photo credit should read TOSHIFUMI KITAMURA/AFP/Getty Images)
Solar Impulse is equipped with 17,000 solar cells that absorb energy during daytime to supply power to a 2,077-pound lithium battery used during the night. The flight will mark Solar Impulse’s eighth completed leg of the 13-leg journey, putting the plane on track to circumnavigate the globe this summer—another feat no solar powered plane has successfully completed.
“We want to show that clean technology and renewable energy can achieve the unthinkable,” said Bertrand Piccard, pilot and chairman of the program. “We want youth, leaders, organizations and policymakers to understand that what Solar Impulse can achieve in the air, everyone can accomplish on the ground in their everyday lives. Renewable energy can become an integral part of our lives, and together, we can help save our planet’s natural resources.”
“The drive behind the Solar Impulse mission is to demonstrate how innovation and a pioneering spirit can change the world,” said Silvio Napoli, CEO of Schindler. “That is why Schindler is a main partner in the Solar Impulse project. We share this spirit of vision and innovation for the future. As a leading global manufacturer of elevators, escalators and moving walks, Schindler is pushing the boundaries of how people view mobility in the cities of tomorrow.”
“We are so incredibly proud to be a part of this historic mission,” said Greg Ergenbright, president, Schindler Elevator Corporation USA. “This partnership is the perfect embodiment of Schindler’s ongoing investment in innovative technology for sustainable mobility. Bertrand, André and the entire Solar Impulse team continue to inspire us in our relentless pursuit of trailblazing technology that safely moves more people with less energy.”
Carbon and natural gas could soon be at odds, according to a new report by the Carbon Tracker Initiative. The report found that by 2025, there will be $283 billion of surplus liquefied natural gas (LNG), based on projects currently underway.
Map of LNG production needed and not needed 2015-2035. Credit: CarbonTracker.org
The report found that gas can continue to grow, but not at the rate the gas industry believes — due to numerous factors, including carbon-emission rules.
“We certainly don’t see any prospect of a ‘golden age of gas’, as the International Energy Agency suggested a few years ago,” said Anthony Hobley, CEO of Carbon Tracker, in a statement.
The UN target limits global warming to a 2?C target, and the report said that in order for this to happen, the energy industry needs to be more selective in gas projects.
“Gas is a complex fossil fuel,” Hobley added. “The gas industry argues that coal is the enemy and gas is part of the solution. Obviously there is a push to position it as a bridge to a low-carbon future and there is some basis for that, particularly in North America and Europe. There is some room for growth, but nowhere near as much as the gas industry would have us believe. Certainly in the LNG sector, most of the capacity that will be needed for the next 10 years has already been built.”
Natural gas is considered carbon-emitting because production results in leaked methane. Hobley explained, “Gas can be efficient, but more needs to be done, particularly on fugitive emissions. We have a very hazy understanding of these fugitive emissions in regions such as China and Russia. This is an area where the industry clearly has to work harder if gas is to be perceived as a cleaner fuel.”
However, Jake Rubin, director of public relations with the American Gas Association, told Fierce Energy that “Natural gas is clean, domestic, abundant, efficient and affordable, making it the perfect foundation fuel to help strengthen America’s economic recovery, meet our environmental challenges and improve our overall national security by reducing our dependence on foreign energy sources.”
Rubin explained that the abundance of natural gas in the United States has created a landscape that can help “address many of the challenges facing our economy and environment,” but that the regulatory environment has not yet caught up to the abundance of natural gas.
“It is critical that business models, fuel choices, regulation and energy policy be re-evaluated in light of the new opportunities presented,” Rubin told FierceEnergy. “Natural gas utilities, through their roles in communities across the nation, are already bringing the benefits of natural gas to homes and business. We are fueling the future where wise and efficient growth of natural gas consumption will help address many of our energy challenges.”
The report found that certain aspects of LNG infrastructure, including the production of US shale gas or Australian coal-bed methane, emit high levels of greenhouse gases (GHG) — and only 17 percent of LNG produced by North American Shale gas or Australian coal-bed methane is needed.
Of the planned projects that will cause a surplus, the report found $82 billion in Canada, $71 billion in the United States, and $68 billion in Australia — all in the next 10 years — due to carbon regulations.
“Many parts of the world do not have the infrastructure needed to take advantage of gas,” Hobley said, “and we are getting to the stage where renewables are becoming more viable. If we can scale renewable energy to the level needed, then there will be a jump straight from coal to renewables. If there is a breakthrough on energy storage, it will be a game-changer.”
The study also looked at the 20 largest LNG companies in the world, and found that 16 of them are looking at major future projects that are unneeded. Three — by Eni, Cheniere, and Noble — are working on projects that are needed to meet demand by 2025. Only one company, Total, is not planning on developing any new LNG projects by 2025.
“Investors should scrutinize the true potential for growth of LNG businesses over the next decade,” said James Leaton, Carbon Tracker’s head of research, in a statement. “The current oversupply of LNG means there is already a pipeline of projects waiting to come on stream. It is not clear whether these will be needed and generate value for shareholders.”
A Message from LEAN’s Executive DirectorHappy Summer Everyone!
We continue to monitor and support City and County investigations of CCA programs which are moving forward all over the state. Some of the big issues right now are management models, sources of upfront financing, and some regulatory nit picks that are, as always, hard to explain but could be important to CCA sustainability. See below for more information on happenings at the CPUC.
The CCA conference in Los Angeles sponsored by LEAN Energy and the Local Government Commission on May 18 was a huge success! Dozens of California communities were represented and we all got a lot of good information and ideas about CCA opportunities and risks. We hope to plan something similar in northern CA so stay tuned for later this fall.
Thanks to those of you who were able to join us for the June 12 LEAN Energy market call! This digest summarizes the topics from that call plus a few other announcements. If you are a LEAN member or considering membership, please join us for our next market call on Friday, July 10th. Please see webinar link on the right to register.
Highlights of CCA Program Developments in California
An increasingly prominent part of the CCA discussion these days is how CCA programs should be managed and by whom. A central part of the conversation focuses on proposals by California Clean Power (CCP), which has been meeting with elected officials in many jurisdictions. In the proposals that have been public, CCP agrees to manage all aspects of the program, assume market risk and provide fixed payments in trade for all program revenues. These terms are appealing to some jurisdictions, especially those that do not have expertise or easy access to capital.
LEAN Energy and others have urged local officials to make sure they get good analysis before they make any decisions to assure program sustainability and head off misunderstandings about risks, costs and relative responsibilities of this new, fully outsourced model. The County of San Mateo recently commissioned an analyses of the model as part of their technical study; the analysis points out both benefits and potential risks of the model. In addition, students at Stanford University recently studied the issue, using the city of Los Altos as a test subject. The presentation slides provide an overview of their presentation.
Many communities in California find it difficult to handle the start-up costs of CCA implementation, even though these costs are recoverable soon after program launch. LEAN has re-engaged the California Infrastructure Bank and help may be on the way!
The California Infrastructure and Economic Development Bank (iBank), a state agency, is eager to work with local communities–especially those with struggling economies–to determine whether they qualify for subsidized loans or credit guarantees for CCA start-up costs.
This is great news for municipalities concerned about financing. Contact Kim Malcolm at LEAN Energy for more information.
Wastewater Utility Finding
A California Appellate Court has just found that a city’s wastewater utility payments to the city for shared infrastructure and employee time was not an improper transfer of funds and did not violate Proposition 218. This has implications for CCAs that may share infrastructure with cities or counties (such as the model underway in Lancaster, CA), or purchase goods and services from them. Read more here.
San Francisco CCA Referendum
The IBEW Local 1245 is sponsoring legislation in San Francisco that would prohibit CCAs from referring to any energy resources as “green” unless they are “Bucket 1″ renewables products or power from the City’s Hetch Hetchy hydro-electric project. The initiative has until July 6th to garner enough signatures for the ballot.
The IBEW’s press release states a concern over the proposed contract with Shell Energy North America (SENA) and the use of unbundled RECs to improve the green attributes of portfolios. Unsurprisingly, the measure does not require similar disclosures by Pacific Gas and Electric Company, although PG&E also purchases RECs and energy supplies from SENA. Because of historic purchases, PG&E is also able to classify some of its unbundled RECs as satisfying “Bucket 1″ resource requirements, when by today’s standards they would be “Bucket 3.”
Some are predicting this local initiative is a warm-up for a statewide ballot measure.
At the CPUC… LEAN Energy, along with CCAs from Marin, Sonoma and Lancaster met in recent weeks with CPUC Commissioners Michael Picker, Liane Randolph and Michael Florio; the meetings with Commissioners Peterman and Sandoval are upcoming. We provided an overview of CCA activity around the state with a message that CCA is no longer a “local experiment” but a valuable — and so far very successful -tool for local governments to meet Climate Action Plan goals without subsidies from local taxes, all of which serve the Governor’s energy policy objectives. A similar meeting with key staff at the Governors Office was also productive in sharing that message and yielded several good ideas and follow up opportunities. We plan to meet with other public officials in the coming month with this important message.
Things move slowly at the CPUC but here are some updates:
Carlsbad Power Purchase Agreement — The CPUC approved SDG&E’s PPA for power from a new gas-fired plant to be built in the San Diego area. It is unclear how this decision may affect the prospects for CCA competitiveness, although many local groups, including the ALJ, argued that the plant is not needed and that the utility should solicit renewable resources instead.
PCIA Vintaging/ERRA(R 14-04-024) — Marin Clean Energy (MCE) and Lancaster Choice Energy (LCE) have opposed PG&E’s proposal to calculate a new “PCIA” exit fee for individual CCA customers as inconsistent with Commission CCA rules.
Residential Rate Design (R 12-06-013) — As we reported in last month’s digest, the CPUC is considering rate design changes that may reduce conservation incentives and impose hardship on customers with inelastic demand. Commissioner Florio has proposed an alternate decision that would soften the blow by developing a time-of-use pilot (rather than a wholesale change immediately) and “flatter” rate tiers than the ALJ proposes.
SCE CARE Rates/PCIA — LEAN, LCE and MCE filed protest letters to SCE’s proposal to impose the PCIA exit fee on low income.
Utility Green Tariffs — Utilities filed proposed tariffs in May for rates expected to go into effect by the end of the year. MCE filed a protest, proposing that utility bills of green tariff customers should show the PCIA as CCA customer bills do.
At the California Legislature:
SB 350 (deLeon and Leno) — The Senate passed the bill, which is expected to go to the Assembly this month. MCE’s concerns about CCA customers being billed twice for renewable capacity may have to be hashed out in CPUC proceedings.
AB 674 (Mullin) — This bill, which would have reduced non-bypassablecharges applied to IOU customers who install clean renewable technologies, died in committee.
AB 802 (Williams) — Would require that cost-effectiveness tests for energy efficiency be applied to all savings, not just those realized for energy efficiency improvements beyond code requirements (MCE support).
*SB 286 (Hertzberg) — Would raise the cap for Direct Access. Recent committee redraft requires new resources to be all Category 1 renewable. Goes to Senate floor next.
If you would like more information or want to join our regulatory and legislative alliances, please contact Kim Malcolm firstname.lastname@example.org
A controversial proposal to raise electricity rates for most Californians would “give a really big break” to the state’s wealthiest communities, top utilities regulator Mike Florio said.
Southern California Edison and other utility companies are pushing major changes that would raise prices for those who use the least and lower prices for those who use the most. Critics have slammed the proposal, saying it would harm low-income households and reduce the incentive for high-income households to invest in solar and energy efficiency.
Edison, Pacific Gas & Electric and San Diego Gas & Electric have defended their proposal, arguing that current rates unfairly penalize high-usage customers. Their planhas the backing of Michael Picker, president of the California Public Utilities Commission.
Florio, who also serves on the five-member commission, sees things differently.
Under Florio’s alternate proposal, electricity rates would still rise for low-usage customers and drop for high-usage customers. But neither change would be as dramatic as utility companies have proposed.
“I see it as only a very minor difference from that which we have today,” said Russ Garwacki, Edison’s director of pricing design and research.
The Desert Sun discussed the potential changes this week with Florio and Garwacki. Here’s a breakdown of what they had to say about four of the most important issues being debated: fairness, fixed charges, time-varying rates and impacts on conservation and solar.
Edison’s residential customers currently pay for electricity in four tiers, with rates rising as energy users cross the threshold into each tier. The first block of energy doesn’t cost very much, per unit of energy; the second block is more expensive. The third block costs even more, and the fourth block costs the most.
The difference between the first and fourth tiers is stark. Under Edison’s current rates, energy use in the fourth tier costs more than twice as much as energy use in the first tier.
Utility officials say that difference is fundamentally unfair.
High-usage customers, they argue, are paying more than their fair share to maintain the electric grid, while low-usage customers are paying less than their fair share. Edison estimates that its high-usage customers are “subsidizing” its low-usage customers by more than $600 million per year.
Under commission president Picker’s proposal, the number of tiers would eventually be reduced from four to two, with a price difference of just 20 percent between the two tiers.
“When we start talking about rate fairness, I think that’s something that’s universally acknowledged as a good thing — customers should pay their fair share,” Garwacki said. “They shouldn’t pay subsidies.”
California’s current rates are a product of the 2001 energy crisis, which saw rolling blackouts cripple the state and the utility industry teeter on the brink of collapse. To keep Edison and other utility companies afloat, state officials approved huge rate increases — in such a way that high-usage customers would permanently bear the brunt of any new costs going forward.
Today, that crisis-driven rate structure is outdated, Garwacki said. Over the past 15 years, he said, high-usage customers have paid more than their fair share for grid maintenance, clean energy, and other changes that have nothing to do with the energy crisis.
“Once somebody gets a subsidy, most people don’t want to give it up,” Garwacki said. “That’s why some people will say the bill impacts are unfair as a result of this proposed decision.”
Florio agrees there’s too big a gap between what high-usage customers and low-usage customers pay. He just thinks Edison’s plan is much too extreme.
Picker’s proposal would raise rates for 85 to 90 percent of Californians, often by as much as $15 to $20 per month, Florio said. That plan wouldn’t increase the utilities’ revenue because some customers would save money. But almost all of the savings, Florio said, would go to the highest-usage customers — who also tend to be the wealthiest.
“The current rates do need to change, but this is a very dramatic shift,” Florio said. “It’s really going have a negative impact on a lot of people.”
Under Florio’s proposal, the number of tiers would drop from four to three. Electricity use in the third tier would ultimately cost about 77 percent more than electricity use in the first tier.
“We should protect small users, who tend to be lower-income,” Florio said.
Garwacki pushed back against that argument, noting that about a third of Edison’s customers are enrolled in the California Alternate Rates for Energy program, which provides discounts for low-income customers. He also said many high-usage customers are large families with little room to cut back.
“It’s no secret that as households have more occupants, that drives a lot of the electricity that they use,” Garwacki said. “It’s a bit of a misnomer to think that just because a customer is high-usage that that necessarily means they’re high-income.”
Asked to respond to that argument, Florio pointed to a well-established link between income and energy use.
“I’ve looked at where those largest users live, and it’s the rich communities around the state. It’s not the middle class, as the utilities have tried to spin it,” he said.
Conservation and solar
Critics charge that the utilities’ plan would discourage conservation, energy efficiency and rooftop solar. That’s because it would make electricity less expensive for those who use the most — in other words, critics say, the people who can most afford to invest in efficiency and solar.
Rooftop solar systems could take two to four years longer to pay for themselves under Picker’s proposed changes, according to the California Solar Energy Industries Association. Similarly, investments in energy efficiency would take longer to pay off for some customers.
Edison officials say their proposal would have little to no impact on energy efficiency and solar.
Even under Picker’s proposal, Garwacki said, California would still have some of the highest electricity rates in the nation. Rooftop solar prices, he noted, continue to drop, and Edison will still offer incentives to buy energy-efficient air conditioners, refrigerators and other appliances.
While the changes might result in slightly less incentive for high-usage customers to conserve, they would also increase the incentive for low-income customers to use less energy, Garwacki said.
“It’s important that all customers receive a fair price signal, so they can make a fair and correct energy-efficiency investment,” he said. “You have low-income customers who have no incentive to conserve.”
Florio doesn’t buy that argument. The utilities’ proposal, he said, “reflects their longstanding ambivalence about energy efficiency,” and is motivated in part by a fear of “solar companies taking away their business.”
It’s important to balance the need for conservation and solar with fairness for high-usage customers, Florio said. But he believes the utilities’ proposal strikes the wrong balance.
“Based on my experience, it just seemed like three tiers, each a third higher than the other, was a kind of place that was a good compromise,” Florio said. “There’s no science to that. It’s a judgment call.”
Ratepayer advocates have also criticized the utilities’ proposal to add a fixed monthly charge of $10, or $5 for low-income customers enrolled in the California Alternate Rates for Energy program.
The fixed charges, they’ve argued, would essentially be a regressive tax, hitting low-usage customers the hardest. Solar advocates, meanwhile, see the fixed charges as a thinly veiled attempt by Edison and other utilities to bring in some money from solar customers.
“If you can get people to pay you just to be your customer, that’s a pretty good deal,” Florio said. “Any business I know would love to have that.”
Utilities officials have dismissed that argument. Solar customers, they say, benefit from being connected to the grid, even though they don’t pay much for its upkeep. Hence the need for fixed charges.
“It’s important that customers who choose to install solar do so knowing what the true costs and benefits are,” Garwacki said.
Edison has estimated actual fixed costs at about $30 per month, but it’s only proposed to charge $10. All other customer classes, Garwacki noted — including businesses — pay some kind of fixed charge.
“It’s very strange that we would single out residential customers, and say that it doesn’t make sense for this group of customers,” he said.
Commission president Picker has proposed phasing in the $10 fixed charge over the next few years. Edison officials have criticized that plan, saying the charges should take effect immediately.
Florio’s proposal would reject fixed charges, instead implementing a $10 minimum bill for most customers, or $5 for California Alternate Rates for Energy customers. The fact that utilities have criticized his proposal, he said, is a sign that their intentions aren’t pure.
“If all they wanted was to collect some money from people who have no or very low usage, a minimum bill would satisfy them,” Florio said. “That’s why I think it’s pretty clear there are other motivations at work.”
Rate tiers and fixed charges are one conversation. “Time-of-use” rates are another conversation entirely.
The idea behind time-varying electricity rates is simple: The cost of electricity changes depending on the time of day and time of year, so we should pay more — or less — depending on when we use energy.
Proponents say time-varying rates would help reduce our dependence on climate-altering fossil fuels. That’s because when demand is highest, Edison and other utilities are forced to buy expensive electricity from “peaker” power plants that wouldn’t otherwise be needed. Those plants are generally inefficient, spewing more air pollutants and planet-warming greenhouse gases than most energy sources.
By charging more for electricity when demand has traditionally been highest, utilities could reduce “peak demand,” limiting the need for peaker plants, proponents say.
Time-varying rates would also give consumers “another way to save,” Florio said, allowing them to reduce their bills by moving energy-intensive activities from peak times to non-peak times.
“You can’t expect people to move everything, but there are things that people can do to save money,” he said. “If you just go ahead and build another plant to meet that peak demand, everybody’s got to pay for it.”
The Utility Reform Network, a ratepayer advocacy group, is worried default time-of-use rates would have unintended consequences. For instance, the group has argued, the new rates could make electricity much more expensive during the summer, hitting desert residents hard during air conditioning season.
Florio said he’s concerned about impacts on desert residents, which is why his proposal doesn’t implement default time-of-use rates for several years.
“I expect we’re going to be doing a lot of analysis between now and 2019,” he said. “If we see that there are going to be adverse impacts, we’ll need to deal with that.”
Southern California Edison officials are somewhat ambivalent about default time-of-use rates.
While the company supports prodding residential customers toward time-varying rates, the transition should be gradual, Garwacki said. Edison doesn’t think customers should be automatically enrolled in the new rates, although that seems like a foregone conclusion now.
What happens next?
It’s unclear how soon the public utilities commission will choose between the dueling electricity rate proposals. The five-member panel could vote as soon as its June 25 meeting in San Francisco.
While Picker’s position is clear, Florio said he doesn’t know how the other three commissioners — Carla Peterman, Liane Randolph and Catherine Sandoval — will vote. It’s possible, he said, that he or Picker will modify their proposals to win support.
“It takes three votes. I’ve said how I would do it if I were king, but I’m not,” Florio said. “I think there will be other options floated, and it’ll take some time to sort this out.”
Sammy Roth writes about energy and water for The Desert Sun. He can be reached at email@example.com, (760) 778-4622 and @Sammy_Roth.
Have an opinion?
Members of the public can tell the California Public Utilities Commission what they think of proposed rate changes by emailing the commission’s public advisor, Karen Miller, at firstname.lastname@example.org. They can also send mail to: CPUC Public Advisor, 505 Van Ness Ave., Room 2103, San Francisco, CA 94102.
Source: California Public Utilities Commission
By the numbers
Right now, Southern California Edison customers pay for electricity in four tiers. Here are the rates:
•Tier 1: 14.9 cents per kilowatt-hour
•Tier 2: 19.3 cents per kWh (30 percent higher than Tier 1)
•Tier 3: 27.9 cents per kWh (87 percent higher than Tier 1)
•Tier 4: 31.9 cents per kWh (114 percent higher than Tier 1)
Michael Picker, president of the California Public Utilities Commission, has proposed collapsing the number of tiers from four to two. Under his plan, electricity use in Tier 2 would cost 20 percent more than electricity use in Tier 1, although actual rates have yet to be determined.
Mike Florio, another member of the public utilities commission, has proposed a three-tiered rate structure. Under his plan, electricity use in Tier 2 would cost 33 percent more than electricity use in Tier 1, and electricity use in Tier 3 would cost 77 percent more than electricity use in Tier 1.