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Hybrid Energy Innovations 2015

AWEA: Wind Gains
From EPA Rule

Renewable energy technologies, such as wind and solar, stand to benefit from the Environmental Protection Agency’s (EPA) sweeping proposal to limit carbon dioxide pollution from existing power plants under Section 111 (d) under the Clean Air Act.

Under the EPA’s proposed Clean Power Plan, the agency seeks to cut carbon emissions from the power sector by 30% below 2005 levels. Although few hard numbers were available immediately following the EPA’s 1,000-plus-page proposal, Tom Vinson, the American Wind Energy Association’s (AWEA) vice president for federal regulatory affairs, says the EPA plan could be the third largest driver of wind-powered generation behind state renewable portfolio standards (RPS) and the federal production tax credit (PTC).

Stricter power plant regulations could mean less coal, which could open up a big opportunity for wind power. Last year, AWEA did a study that estimated the retirement of U.S. coal plants could lead to an increase of up to 17 GW of wind capacity – roughly 28% of the current installed U.S. wind generation.

Just the same, the likely raising of electricity rates caused by the proposed regulations on existing power plants would also bring wind and solar generation closer to grid parity – an opportunity not lost on the wind and solar developers contacted by NAW.

“We know from firsthand experience that building more wind and solar power facilities [has] proven to be the fastest, cleanest and cheapest way to replace dirty power plants and combat climate change,” says Paul Gaynor, CEO of Boston-based wind and solar developer First Wind, adding the cost for wind power, for example, has dropped 42% since 2009.

“We hope that these new EPA rules underscore that we have a chance right now to make long-term decisions to lock in affordable power with clean, renewable energy for decades to come.”

Gabriel Alonso, CEO of EDP Renewables North America, says, “Wind energy has been a proven, cost-­competitive and stable source of carbon-free electricity that has driven and continues to drive billions of dollars of investment nationwide, creating jobs and supporting rural economies while contributing to substantial reductions in U.S. greenhouse gas emissions. This rule will help accelerate that trend.”

 

Compliance

According to the EPA, its draft legislation will be implemented through a state-federal partnership under which states will identify a path forward using either current or new electricity production and pollution control policies.

As opposed to shutting down the power plants immediately, the EPA plan allows states to tailor a method to comply over a specified period of time. States can choose a mix of energy efficiency, demand-side management and state/regional policies to meet the program’s goals.

While the notion of ratcheting up emission standards at U.S. power plants is not new – nine Northeast and Mid-Atlantic states comprise the Regional Greenhouse Gas Initiative (RGGI), the U.S.’ first market-based regulatory program to reduce carbon dioxide – critics contend that such a mandate to limit carbon reductions is complex and arbitrary.

“Some have suggested that the 30 percent target is more reasonable than anticipated,” says Scot Segal, executive director at the Electric Reliability Coordinating Council, a coalition of power companies working on clean air issues.

“But the truth is that the most cost-effective reductions since 2005 – perhaps the first 10 percent – have already been undertaken. What is left on the road to 2030 is increasingly more expensive and less tested alternatives.”

Segal also cautions that if the economy grows, so, too, will energy demand, “which will complicate the glide path the EPA anticipates.”

Just the same, RGGI maintains that the program is working. According to an RGGI spokesperson, the program has helped participating states reduce carbon dioxide emissions by approximately 40% since 2005, in conjunction with market responses and other state clean energy polices. RGGI says the program is based on emission allowances that are distributed, providing certainty that the projected emission reductions will be achieved, including reductions attributable to energy efficiency and renewable energy, such as wind and solar.

Individual states are already working to determine their level of exposure created by the EPA’s draft legislation, according to AWEA’s Vinson. In fact, he says, some forward-looking states are looking to New York, an RGGI member, for information on how to comply.

The EPA plan will also likely have a profound effect for the 29 states plus the District of Columbia that feature an RPS, says Tom Wood, a partner at Stoel Rives. He says the EPA plan will likely stimulate “regulatory and market-based actions” to acquire additional wind and solar generation. Conversely, Wood says non-RPS states have already indicated that they consider any “outside the fence line” options to be illegal and subject to extensive legal and legislative challenges.

Wood says states must submit CO2 reduction plans to the EPA for approval by June 30, 2016. These plans can be single state or multi-state. States preparing single-state plans can get an extension to June 30, 2017; states joining a multi-state plan can get a two-year extension.

 

Opinion: Why Wind
Went Wrong In Ohio

(Editor’s note: On June 13, Gov. John Kasich, R-Ohio, signed S.B.310 into law. The legislation not only freezes Ohio’s 25% by 2025 Alternative Energy Portfolio Standard (AEPS) for two years, but it also makes Ohio the first U.S. state to roll back its renewable energy mandate. Making matters worse, Kasich also let stand an onerous wind turbine setback provision that further weakens wind development in the state. Jereme Kent, general manager at Ohio-based wind power services provider One Energy, critiques how the wind industry handled the situation. Following Kent’s passage, Christy Omohundro, director of eastern state policy at the American Wind Energy Association (AWEA), weighs in with the group’s response.)

What just happened in Ohio?

For those unfamiliar, I am talking about Ohio Senate Bill 310, the legislation that Gov. Kasich recently signed into law. Among other things, S.B.310 freezes Ohio’s AEPS in place for two years and permanently removes the requirement that half of the AEPS be met with in-state resources.

S.B.310 marks the first time in the U.S. that an RPS has been successfully attacked. And the wind industry needs to quickly learn from this mistake. Otherwise, the same methods are going to be used again in other states.

RPS attacks are not new, but in the case of S.B.310, the tactics were different. The opposition flanked us. This time, a few anti-renewable legislators were smarter than we were.

They realized that they could not beat renewables alone. By itself, the RPS is very difficult to attack. However, there are much bigger issues than an RPS. And, when legislators attack an RPS while fixing another “real” issue, the RPS becomes a casualty of another war. This time, S.B.310 targeted a problem with the AEPS’ energy efficiency standards. I will concede it was a legitimate problem.

In short, there were issues with what was being counted toward the energy efficiency standards in the state. Ohio was not counting process-based energy efficiency, which disproportionately affected large industrial electric consumers who still had to pay for the standards but could not count their efforts toward them. This created an expensive problem for large electric consumers.

Big companies had a legitimate problem that was costing them money, and that gets legislators interested. And for Sen. Bill Seitz, R-Cincinnati, chairman of the Senate Public Utility Committee, this was his opportunity. (It should be noted that Seitz sits on the American Legislative Exchange Council’s board and had tried multiple times unsuccessfully to attack renewables.)

S.B.310 combined an RPS freeze with a correction to a broken energy efficiency problem, and that got the support of huge Ohio employers who were not against the RPS but were really against the energy efficiency issues.

However, there was still a missing piece. Seitz still did not have the top-tier support necessary to pull the whole thing together – he needed a major player on his side. Ohio Sen. President Keith Faber, R-Celina, was that major player. Faber also happened to be the senator for a district that had a late-stage wind development and was experiencing some public relations issues.

Faber attended one of those opposition meetings (which he should have) and got torn apart by his constituents. That set him off. That put him on the side of the anti-renewable agenda, and that is our fault.

If Faber had a long-standing relationship with wind developers, he could have called them and demanded a sit-down. He could have worked the issue out directly and gotten results for his constituents. But Faber was not well educated on wind, and he did not have a long-standing relationship with the developers, so the wind industry lost him.

Once Faber was on board, S.B.310 was fast-tracked. All of the lobbying and public relations efforts we put into place after the facts were not enough to stop the freight train. All we were able to accomplish regarding S.B.310 was establishing an automatic restart after the freeze, and that will not mean much in the context of two years of intensive lobbying.

We were able to get the media and the public on our side, and we were able to get other major employers on our side, but it was too late. We could not stop the well-designed attack against renewables because the media and the public did not have a vote in the Senate. Nonetheless, this was not where the wind industry failed.

Rather, the industry failed in all the moments that led up to the introduction of S.B.310. The wind industry – the better, faster, cheaper and safer industry – forgot to communicate.

We forgot to tell the public, the legislators and the media what we were doing for their state and their energy future.

That made us weak, and that made everything we said after the fact sound like damage control and spin. If we wait until we are attacked to tell the truth, no one will believe us.

When I first testified in the Senate against S.B.58, the unsuccessful predecessor to S.B.310, the Senate Public Utility Commission chairman and I got into an energetic discussion about the facts about wind energy. He admitted that project financials I showed him were the first he had ever seen. Think about that: The head of the Senate Public Utility Commission had never seen financials from a wind project. Furthermore, no one had ever shown him the production history from a wind farm. No one had ever given him any real information.

He had also never visited a wind project. He had never talked to a community that benefited from the investment and money that a wind project brings. And the same was true about all but one of the committee’s senators.

I asked the American Wind Energy Association (AWEA) and several of the wind companies operating in Ohio about this. Well, the answer I got from AWEA was essentially, “We want this to be more grassroots, and we want to do what our local lobbyist tells us to do.”

How on earth can we expect to be taken seriously when we don’t take ourselves seriously? How on earth can we sit around and wait to be attacked before we start trying to educate? How on earth can we keep all of the information away from the stakeholders who make the laws that affect our industry and still look surprised when they end up on the other side?

When I called a state representative about S.B.310, he asked me why I was the one calling him and not one of the several major developers working in his district. He asked me why I was the only one taking the time to educate him. (I had brought him to my projects, which were not in his district, twice.) I did not have an answer for him.

The opposition is well funded and well organized. They are looking for any opportunity, and they have realized that if they combine their anti-renewable agenda with other issues, we will be the casualty of a bigger battle.

They have had their first success, and you better believe they are already looking for other states in which to employ the same tactic.

The only weapon we have is preemptive education.

Every single developer and operator should personally invite every legislator to their projects. If they decline, invite them again. Make appointments to see them. Share information with them. If you had a project that at one time had opposition, invite the legislators out later to show them the progress you have made. Every time you cut a tax payment for your project, issue a press release. Err on the side of over-education and over-communication.

When anti-renewable legislators try to lump us in with unrelated legislation, we need to make it clear that we are a separate issue, a major industry, and we deserve separate consideration.

If we continue to not educate, if we continue to not take ourselves seriously, if we continue to look to AWEA to lead us with whatever they think grassroots is, we are going to continue to lose.

Silence kills good industries. Just ask Ohio developers. It is time we stop being silent. It is time we take control. It is time we take ourselves seriously. It is time we tell everyone we are better, faster, cheaper and safer. We need to tell our own story.

 

AWEA’s Responseby Christy Omohundro

 

The American wind industry is working hard to encourage all Americans, whether electric consumers, the media or policymakers, about the benefits of clean, affordable and homegrown wind power.

The American Wind Energy Association showcases our success stories to state and federal legislators, regularly works with hundreds of journalists, briefs editorial writers and columnists, and mobilizes voters in Ohio and across the country. With Americans’ support for wind power consistently between 70% and 80%, the message is getting out.

However, deep-pocket opponents of clean energy and competitors of wind power regularly roll out well-funded campaigns to undermine that support. Such groups have worked hard to bring down state renewable laws across the country to protect their investments in older forms of energy – in Kansas, North Carolina, Colorado and elsewhere. And all have failed, until June 13 in Ohio.

When Gov. Kasich signed legislation that freezes for two years Ohio’s state law encouraging the growth of wind power and other renewables, that was one mistake.

Then the governor made an even bigger one. Because he failed to use his line-item veto on a punitive setback requirement for future wind farms that was snuck into the state budget bill without debate, Ohio may now lose out on $2.5 billion in private investment, toward which companies have already spent millions under the old rule.

Ohio’s leaders were lobbied hard by our opponents and deluged with misinformation from groups representing competing forms of energy. They are now slamming the door shut on thousands of well-paying jobs and hundreds of millions of dollars in land leases and payments to local governments that the state’s economy sorely needs.

Ohio’s RPS has already attracted more than $1.2 billion in new investment to the state. But together, these actions create an unfriendly business environment.

This anti-renewable energy law did not pass without the wind power industry putting up a fight. Nor did it get to this point because wind power lacked support from Ohio voters or from opinion leaders in the Ohio media. Well before the anti-­renewable energy bill arrived on the governor’s desk, polls showed nearly 75% of Ohio voters supported the state’s clean energy law.

Numerous Ohio newspaper editorials backed the renewable energy law and wind energy, in particular, and called on the governor to veto both bills. Examples include the Cleveland Plain Dealer, the Cincinnati Enquirer, the Toledo Blade and the Akron Beacon Journal.

Over 72 businesses and organizations, including Whirlpool, Honda, the Ohio Manufacturers’ Association, environmental groups and many faith-based organizations, called for the governor to veto the freeze.

Wind power developers and clean energy job-creators testified in support of the clean energy law numerous times in front of both the Ohio Senate and House – both Republicans and Democrats.

Ohio voters, neighbors, family members and friends have been mobilized repeatedly to tell their elected officials to support wind power, through emails, telephone calls, letters and social media – not just over the past few months, but over several years.

Yet, this bad-for-business and job-killing legislation passed. It wasn’t because Ohio voters support it.

The fight for clean energy jobs and investment in Ohio is not over. Our voices will be heard, the facts about wind power’s economic benefits will continue to be made clear and wind energy will rise again in Ohio.

Christy Omohundro can be reached at (202) 341-6501 or comohundro@awea.org.

(Editor’s note: For more background on wind in Ohio, read “Battleground Ohio: State Confronts RPS Freeze” in the June 2014 issue of NAW.)

 

Liberals Prevail
In Ontario

The ruling Liberal Party prevailed in Ontario following an election on June 12 – a victory that could keep wind energy positioned for further growth in the province.

Ontario Premier Kathleen Wynne, a supporter of wind power, beat New Democratic Party leader Andrea Horwath and Progressive Conservative Party leader Tim Hudak. The latter challenger, who ran on an anti-wind platform, has announced his intention to resign his position. A new party leader will be selected in the coming months.

Wynne’s re-election means that the Liberal Party rules by majority government going forward. Prior to the election, the Liberal Party ruled by minority government, meaning that the party had to rely on one of the other political parties to pass legislation.

The Canadian Wind Energy Association (CanWEA) congratulated Wynne on her victory and says the group stands ready to work to ensure that the wind industry plays an important part in Ontario. With more than 2.75 GW of installed capacity, the province is the country’s wind power leader and has about 2 GW of more wind projects in its pipeline.

 

In Suit, Wind Has
Unlikely Ally

Has the wind power sector found an unlikely ally in the oil and gas industry? The Permian Basin Petroleum Association contends it is standing up for both fossil fuel production and wind power development, having teamed up with four New Mexico counties to sue the federal government over a recent bird protection decision.

The lawsuit alleges that the U.S. Department of the Interior and the U.S. Fish and Wildlife Service (FWS) violated federal law in listing the lesser-­prairie chicken as threatened under the Endangered Species Act.

The FWS listed the species as threatened in March, and because the chickens reside in the wind-rich states of New Mexico, Colorado, Kansas, Oklahoma and Texas, the decision will likely impact wind developers. The Permian Basin, which includes western Texas and eastern New Mexico, is also a prolific oil-producing region.

Filed in Midland, Texas, the lawsuit alleges violations of the Administrative Procedure Act and accuses the government of failing to fairly consider the expected benefits of conservation efforts already undertaken across the affected five states to improve habitat for and diminish threats to the chicken.

The lawsuit contends that government data indicate the chicken population has increased during the past decade and its occupied range has tripled in the last 30 years. The lawsuit further argues that conservation plans require participating companies to pay enrollment fees, promise to follow practices meant to minimize impacts, and pay for unavoidable damages and habitat restoration, including the five-state Rangewide Conservation Plan.

The Permian Basin Petroleum Association says that as of June 3, 160 oil and gas, pipeline, electric transmission, and wind energy companies had enrolled about 9 million acres in the Rangewide Conservation Plan and provided approximately $43 million for habitat conservation.

“The federal government’s listing decision further burdens not only the region’s oil and gas industry, but also ranchers, wind farmers and landowners,” comments Ben Shepperd, president of the Permian Basin Petroleum Association. “The public and private sectors had already designed and undertaken sensible conservation efforts that protect both the lesser-prairie chicken and vital regional industries and landowners. These efforts were working before the Obama administration imposed unnecessary new regulations on the region.”

Joining the Permian Basin Petroleum Association as co-plaintiffs in the lawsuit are Chaves, Eddy, Lea and Roosevelt counties in eastern New Mexico. The association says the counties contain significant portions of lesser-prairie chicken range and significant amounts of oil and natural gas development, agriculture and farming.

 

McAuliffe Council
Updates Va. Plan

Gov. Terry McAuliffe, D-Va., has signed an executive order establishing the Virginia Energy Council, which will make recommendations for the development and implementation of an updated Virginia Energy Plan.

Secretary of Commerce and Trade Maurice Jones will chair the new 25-member council, and the updated plan is to be submitted to the General Assembly by Oct. 1. The council will be tasked with meeting various objectives, including developing strategies to promote a diverse energy mix and ways to accelerate the development and use of renewable energy sources, such as solar and offshore wind. McAuliffe is an outspoken supporter of offshore wind development, having recently announced related research grants and declaring the state is “open for business.”

Speaking about the new executive order, the governor says, “Virginia must develop an aggressive strategy to protect existing jobs in our energy industries while positioning the commonwealth to be a leader in new energy technologies.

The council will receive and evaluate input offered by Virginia’s residents and businesses. w

Policy Watch

AWEA: Wind Gains From EPA Rule

 

 

 

 

 

 

 

 

 

 

 

 

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