JouleBlog

The wind energy industry in the U.S. had a record-breaking year in 2009, installing 10,000 megawatts of new generating power, enough to serve 2.4 million homes, according to the American Wind Energy Association in its fourth quarter report released today. Yet the industry is still plagued by a lack of manufacturing investment, and job creation still lags. Here is a PDF of the report.

The AWEA credits the American Reinvestment and Recovery Act as the impetus for the growth. During the last quarter the wind added 4000 megawatts of new capacity, together with new construction, operations and management jobs. Texas, the top wind-producing state, added 2292 megawatts in new wind capacity, more than twice that of Indiana, which ranked No. 2, with 905 megawatts added. Arizona opened its first utility scale wind project in 2009.

Yet wind power’s prospects for long-term growth are far from a sure bet. Total investment in manufacturing actually dropped compared to 2008; there were one-third fewer wind power manufacturing facilities in 2009 compared to the year before. This resulted in a net loss of manufacturing jobs, which was compounded by low orders and high inventory.

The weak manufacturing outlook caused AWEA CEO Denise Bode to sound a warning: “U.S. wind turbine manufacturing – the canary in the mine — is down compared to last year’s levels, and needs long-term policy certainty and market pull in order to grow.  We need to set hard targets, in the form of a national Renewable Electricity Standard, in order to provide the necessary stability for manufacturers to expand their U.S. operations and to seize the historic opportunity we have today to build up a thriving renewable energy industry.”

In another development, Detroit Edison and Michigan-based Heritage Sustainable Energy have started commercial operation of a wind farm that will supply the utility’s customers with enough electricity to power about 2,000 homes. The wind farm is the first constructed and operated in Michigan under the state’s energy reform law that will have 10 percent of the utility’s power  generation come from renewable sources such as wind and solar by 2015. The wind farm was built after the utility signed a 20-year agreement to purchase wind power and renewable energy credits from Heritage.

Proponents of energy reform got a one-two punch this week and woke up to a harsh new reality: getting an agenda passed that supports clean energy sources  just got a lot tougher. On Tuesday the Republican underdog candidate Scott Brown scored a major upset to become the next senator-elect from Massachusetts, filling the seat long held by the late Edward M. Kennedy.  Two days later the Supreme Court removed the ban on corporations to spend directly on political campaigns.

Brown’s victory puts an end to the Democrats’ filibuster-proof hold on the Senate. He opposes cap-and-trade to reduce carbon emissions and has shown only qualified support for renewable energy. But it’s the Supreme Court ruling that really damages the prospects for a robust clean energy industry in the United States. Corporations can now spend as freely as they see fit to influence political campaigns. That means deep-pocketed oil and coal interests can throw as much money as they want to support their candidates and defeat their opponents.

President Obama called the decision “a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.”

Writing in the Huffington Post, Gene Karpinski, president of the League of Conservation Voters, gave a hint of what may be in store now that corporations no longer have to work through restrictive federal political action committees. “Exxon Mobil’s federal PAC spent just over $800,000 in the 2007-2008 election cycle. During the same time period, the oil giant spent more than $45 million on lobbying at the federal level, an advocacy area where there are no limits on how much can be spent. Even a small diversion of these funds from lobbying to elections would drastically increase the spending imbalance between Big Oil and those of us fighting for a cleaner, healthier planet.”

The Supreme Court majority supported its decision in the name of the First Amendment right to free speech. Well, money talks, and with this decision we’ll be hearing a lot of it from special interests.

Regardless of the setbacks, the reasons to pass a climate bill remain, according to an editorial in today’s New York Times. Greenhouse gas emissions are trending upward. In Copenhagen Obama pledged that the U.S. would meet emission reduction targets. And China is already moving aggressively to create clean energy jobs, and has a strong and growing presence in wind and solar power.

Can the U.S. do the same?

Brazilian electric plant runs on ethanol. Source: Petrobras

On Tuesday Brazil’s federal energy company Petrobras started up what it claims is the world’s first utility to use sugarcane-based ethanol in a gas-turbine engine to produce electricity on a full commercial scale.

Located about 110 miles north of Rio de Janeiro, the Juiz de Fora Power Plant has two GE LM6000 gas turbines, one of whose combustors has been modified by GE to enable the use of ethanol, making it dual-fuel, ethanol and natural gas, providing an alternative fuel source for the power plant that previously had only one available fuel. Brazil has 35-year, large-scale experience in sugarcane-based ethanol use, producing about 7.3 billion gallons in 2008. Petrobras says ethanol’s combustion reduces emissions, particularly nitrogen oxides.

There will be five months of demonstration runs to validate the use of ethanol as an alternative fuel, as well as to ensure that emissions are within the expected limits. GE is providing the conversion technology, engineering and field support during conversion and commissioning.

Wind power has grwoth potential with infrastructure investments. Source: NREL

The contribution of wind power to the overall energy mix potentially could grow 10-fold over the next 15 years…but significant infrastructure improvements would be required to make that happen. That’s one of the assumptions underlying a report released by the Department of Energy’s National Renewable Research Laboratory yesterday. The Eastern Wind Integration and Transmission Study (EWITS) is the result of two-and-a-half years of technical research.

EWITS is one of the largest wind integration studies to date. Its purpose is to analyze the economic, operational and technical implications of shifting 20% or more of the Eastern Interconnection’s electrical load to wind energy by the year 2024. The Eastern Interconnection is the nation’s eastern power grid, which accounts for 70% of the electricity consumed in the U.S. A summary of the report is here. A PDF of the full report can be downloaded here (it’s a big file).

The report’s authors acknowledge that the goal of integrating 20% wind seems optimistic. But they maintain that it is possible. Just a few years ago, 5% wind energy penetration was a lofty goal, they note. And some countries in Europe already have achieved wind penetration rates of 10% or higher in short periods of time. So change is possible, but not without planning for that change ahead of time. One reason: building transmission capacity takes much longer than installing wind plants. The report also conveys a  sense of urgency to studying transmission, which is already starting to limit wind growth in certain areas.

“Whether we’re talking about using land-based wind in the Midwest, offshore wind in the East or any combination of wind power resources, any plausible scenario requires transmission infrastructure upgrades and we need to start planning for that immediately,” says David Corbus, NREL project manager for the study.

The EWITS project consists of three major tasks: wind plant output data development, transmission requirements analysis, and wind integration analysis. The research team constructed four high-penetration scenarios to represent different wind generation development possibilities in the Eastern Interconnection. Three delivered wind energy equivalent to 20% of the projected annual electrical energy requirements in 2024; the fourth scenario increased the amount of wind energy to 30%. The scenarios comprise a mix of land-based and offshore wind generation.

Among the key findings are:

• The integration of 20% wind energy is technically feasible, but will require significant expansion of the transmission infrastructure and system operational changes in order for it to be realized;
• Without transmission enhancements, substantial curtailment of wind generation would be required for all 20% wind scenarios studied;
• The relative cost of aggressively expanding the existing transmission grid represents only a small portion of the total annualized costs in any of the scenarios studied;
• Drawing wind energy from a larger geographic area makes it both less expensive and a more reliable energy source;
• Wind energy development is a cost-effective way to reduce carbon emissions – as more wind energy comes online, less energy from fossil-fuel burning plants is required, reducing greenhouse gas emissions;
• Carbon emissions are reduced by similar amounts in all scenarios, indicating that transmission helps to optimize the electrical system and does not result in coal power being shipped from the Midwest to New England States;
• Reduced fossil fuel expenditures more than pay for the increased costs of additional transmission in all high wind scenarios.

“Incorporating high amounts of wind power in the Eastern grid goes a long way towards clean power for the whole country,” says Corbus.  “We can bring more wind power online, but if we don’t have the proper infrastructure to move that power around, it’s like buying a hybrid car and leaving it in the garage.”

Prices of petroleum, natural gas and coal are set to increase after declines during 2009, according to the U.S. Energy Information Agency’s Short-Term Energy Outlook released yesterday. Here are some of the highlights from the report, which is the first to include monthly forecasts through December 2011. A PDF file of the complete report is here.

Global Crude: Global oil demand declined in 2009 for the second consecutive year. The world oil market demand should gradually tighten in 2010 and 2011, in line with the global economic recovery. Non-OPEC oil supply increased in 2009 due to increased production in the U.S., Brazil and the former Soviet Union. The largest source of non-OPEC growth was Brazil, the result of rising offshore and biofuels production. However, these gains were offset by declines in production in the North Sea. OPEC crude oil production will remain high, increasing to 42% of market share in 2011 from 40% last year.

U.S. Liquid Fuels: In the U.S., liquid fuels consumption declined by 4.2% in 2009, with the exception of motor gasoline, which remained the same. Petroleum consumption will rise in 2010 and 2011. Domestic production of ethanol will continue to grow to meet the volume requirements of the Renewable Fuel Standard. For consumers, pump prices for gasoline will pass $3 per gallon this spring and summer. Highway diesel fuel prices, which averaged $2.46 per gallon in 2009, will average $2.98 per gallon in 2010 and $3.14 per gallon in 2011.

Natural Gas: Natural gas usage fell by 1.5% in 2009 due to the recession. Overall natural gas use will be unchanged in 2010, and will grow in 2011 and 2011. Natural gas prices will rise in 2010.

Electricity: U.S. electricity consumption will grow by 1.9% in 2010, driven by an increase in the residential and industrial sector sales. Improving economic conditions in the industrial sector will drive electricity consumption growth in 2010 and 2011 by 2.2% and 2.5%, respectively. Wind, nuclear and coal-fired generation will supply most of this demand growth. Many utilities have made downward fuel cost adjustments recently as a result of lower fuel costs in 2009.  These adjustments have been offset somewhat by the need to increase revenues to cover the capital costs of expanding renewable energy generation.  Overall, forecast residential electricity prices fall by 0.9% in 2010 and increase by 1.4% in 2011.

Coal: Estimated coal consumption by the electric power sector fell by nearly 10% in 2009.  Lower total electricity generation combined with increases in generation from natural gas and hydropower led to the decline in coal consumption.  Anticipated increases in electricity demand and higher natural gas prices will contribute to growth in coal-fired generation in 2010 and 2011.  Forecast coal consumption in the electric power sector increases by almost 4% in 2010.

Carbon Dioxide Emissions: CO₂ emissions from fossil fuels fell by an estimated 6.1% in 2009.  Emissions from coal led the drop in 2009 CO₂ emissions, falling by nearly 11%.  Declines in energy consumption in the industrial sector, a result of the weak economy, and changes in electricity generation sources are the primary reasons for the decline in CO₂ emissions.  Looking forward, projected improvements in the economy contribute to an expected 1.5% increase in CO₂ emissions in 2010.  Increased use of coal in the electric-power sector and continued economic growth, along with the expansion of travel-related petroleum consumption, lead to a 1.7% increase in CO₂ emissions in 2011.  However, even with increases in 2010 and 2011, projected CO₂ emissions in 2011 are still expected to be lower than annual emissions from 1999 through 2008.

President Obama today announced the award of $2.3 billion in new clean manufacturing projects across the United States. The award comes on the heels of a dismal jobs report that 85,000 jobs vanished in December. Employment in manufacturing declined by 27,000, according to the Bureau of Labor Statistics. Since the beginning of the recession manufacturing employment has fallen by 2.1 million.

Today’s announcement may only put a small dent in those massive losses, but at least it is a step to build domestic manufacturing capacity for renewable energy technology. The funds will come in the form of Recovery Act Advanced Energy Manufacturing Tax Credits, which will support 183 projects in 43 states. The investment tax credits are worth up to 30% of each planned project. It’s estimated that the tax credits will leverage private capital for a total investment of $7.7 billion in high-tech manufacturing in the U.S.

The projects include:

• Itron, Inc., which manufactures a smart meter for the residential market.
• W.L. Gore & Associates,, Inc., which produces a membrane for fuel cells for buildings and vehicles.
• PPG Industries, Inc., which produces a double anti-reflective coating for glass to make solar sells more efficient.
• TPI Composites, Inc., which is building a new manufacturing facility in Nebraska to produce composite wind turbine blades.

The projects selected for the tax credit will be in service by 2014; about a third of the projects will be completed this year. The 183 projects selected today will produce solar, wind and geothermal energy equipment; fuel cells, microturbines and batteries; electric cars; electric grids to support renewable energy; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions. A full list of the selected projects is here.

The New Year brings a fresh urgency to develop alternative sources of energy. While the Copenhagen Climate talks fell short of expectations for a binding agreement, I side with those who maintain that the deal that was led by President Obama was a positive step in cutting carbon emissions. It got major carbon emitting nations to agree to cuts and provided a commitment to fund developing nations to reduce emissions. At least the U.S. embraced a leadership position in reducing carbon emissions, and, hopefully, the agreement will provide momentum to getting a bill on clean energy and climate passed in the Senate this year.

As important as international agreements are, it now seems sure bet that what came out of the meeting would never measure up to the hype and high expectations that preceded it. Better, perhaps, to get one’s own house in order first. As noted by Thomas Friedman’s column in the December 22^nd New York Times, Denmark provides a good example of how this can be done. The Danish government uses energy taxes to stimulate innovations in green power, and then recycles the revenues back to Danish industry as an incentive for the companies to invest in clean technologies.

According to Friedman, Denmark, the most energy-efficient member of the European Union, has used a mix of carbon taxes, cap-and-trade, building codes and energy labeling systems to reduce its greenhouse gas emissions by 14% during the last decade. Renewable resources account for nearly 30% of Denmark’s electricity today.

It can be done in the U.S., too — but not without the political leadership to make it happen. That’s doubtful in a nation where the political system is a mess of partisan politics, lobbies and stunts like “tea parties” that hijack any real debate on issues. Any talk of energy taxes or shared sacrifice to make the U.S. more energy independent is a non-starter for many Republicans in the Senate, to say the least. And politics is bound to get even more acrimonious with Democrats on the defensive for the upcoming mid-term elections.

That’s tragic, because investments in a green economy, with modern energy and transportation infrastructures, can do much to get the millions of unemployed in this country back to work. This U.S. needs more public investments to get it out of the huge hole it has dug for itself. It needs to set a new direction.

More farms in the U.S. are installing renewable energy, prompted by a spike in energy prices in 2008 as well as grants and tax credits handed out by state, federal and private agencies, according to an Associated Press story yesterday. The numbers of farms using renewable energy are still small: just 23,451 farms out of 2 million generated electricity or some form of energy, according to the 2007 Farm Census. But the numbers are growing. Renewable energy production rose 5% from 2007 to 2008, according to the Energy Information Administration.

The AP also reported that demand for energy grants is also up. There were $9 million worth of applications for just $2.4 million in grants authorized by the 2008 Farm Bill for farm energy audits, which are required for alternative energy grants. In fiscal 2009 USDA Rural Development funded 385 projects, up from 197 renewable energy projects the previous year.

“Clean-Tech” is coming into its own in terms of growth and job creation, according to a new report, Clean Tech Job Trends 2009, released by Clean Edge, Inc. A free copy can be downloaded here after registering. Clean Edge, a market research company focused on the clean energy sector, defines clean-tech jobs as those that result from technologies that harness renewable materials or energy sources, reduce the use of natural resources, and cut or eliminate toxic wastes.

According to Clean Edge, the top five sectors for clean-tech job activity in the U.S., based on a combination of job placements, job postings, and public and private investments, are solar; biofuels and biomaterials; conservation and efficiency; smart grid; and wind power. Typical jobs in those sectors include include solar photovoltaic system installers, wind-turbine technicians, energy-efficiency software developers, green building designers, and clean-energy marketers.

In the U.S., the hotbeds of clean-tech growth are dispersed, with no single location, industry or professional demographic controlling the sector, according to Ron Pernick, co-founder and managing director of Clean Edge. The top metro areas for clean-tech job growth are: San Francisco-Oakland-San Jose; Los Angeles-Riverside-Orange County;  New York-Northern New Jersey-Long Island; Boston-Worcester-Lawrence-Lowell-Brockton; and Washington-Baltimore. The report also lists typical jobs, salaries and companies that have been active in the sector.

The Department of Energy yesterday announced a private sector partnership aimed at accelerating renewable energy projects. The agency will provide up to $750 million in funding from the American Recovery and Reinvestment Act to cover the cost of loan guarantees which could support as much as $4 to 8 billion in lending to eligible projects. The DOE said it will invite private sector participation to accelerate the financing of these renewable energy projects.

To accelerate the loan application process the agency announced the creation of its new Financial Institution Partnership Program (FIPP), a streamlined set of standards designed to expedite DOE’s loan guarantee underwriting process and leverage private sector capital for funding of eligible projects. The first solicitation under the new program will seek loan guarantee applications for conventional renewable energy generation projects, such as wind, solar, biomass, geothermal and hydropower.

Under this first FIPP solicitation, proposed borrowers and project sponsors do not apply directly to DOE but instead work with financial institutions satisfying the qualifications of an eligible lender which may apply directly to DOE to access a loan guarantee. The FIPP solicitation is the eighth round of solicitations issued by the Department’s Loan Guarantee Program since its inception.