by jboullion | Jul 20, 2009 | Uncategorized
From the direct testimony of Michael Vickerman on behalf of RENEW Wisconsin:
Q. What is the purpose of your testimony?
A. The purpose of my testimony is to communicate our organization’s support for the installation of a biomass gasification system that would produce biomass-derived synthetic gas (“syngas”) for serving Northern States Power’s Bay Front Unit #5.
Q. Why does RENEW support this particular application?
A. We note the following public policy objectives that would be advanced if the proposal submitted by Northern States Power Corporation (“NSPW”) were approved. These objectives include:
1) Meeting Wisconsin’s current Renewable Energy Standard;
2) Eliminating a source of coal-fired power from its system;
3) Using a locally available renewable energy resource;
4) Reducing carbon dioxide emissions and other gaseous pollutants;
5) Maintaining a strong generation source in northern Wisconsin; and
6) Investing Wisconsin capital in a renewable energy generating facility power plant within its borders.
by jboullion | Jul 13, 2009 | Uncategorized
IMMEDIATE RELEASE
July 12, 2009 (Updated August 24, 2009)
MORE INFORMATION
Michael Vickerman, Executive Director
608.255.4044
mvickerman@renewwisconsin.org
It’s Time to Bring Renewable Energy Home
by Michael Vickerman, RENEW Wisconsin
July 12, 2009
In a unanimous vote, the Public Service Commission (PSC) recently cleared the way for Alliant Energy’s Wisconsin utility to construct a 200 megawatt (MW) windpower plant project in southern Minnesota. Once operational, the Bent Tree project, costing upwards of $450 million, will be a productive source of renewable energy that will provide lasting benefits to Minnesota’s economy and environment. Since it will be Alliant’s Wisconsin customers who foot the bill, however, it is reasonable to inquire whether the current utility practice of outsourcing renewable energy production to other states is a good thing for Wisconsin’s economy.
Because we can’t see it, taste it, hear it or smell it, we tend to lose sight of the fact that electricity is a manufactured product. To make it, capital is amassed and expended on machinery that convert raw resources like coal, flowing water, and wind into this highly useful form of energy. The electricity is then transported via networks of wires to power factories, illuminate residences and streets, propel commuter trains, and energize the complex communications systems that allows to store vast quantities of instantly retrievable information. It is hard to name a manufactured product that adds more value to an industrialized society than electricity.
Yet electricity’s impact on the economy is not defined solely by the activities it supports. There is as well the intense amount of economic activity that goes into building the power plants themselves. In the case of Bent Tree, the capital used to manufacture, transport and erect 122 wind turbines will unleash a year-long burst of construction work in Freeborn County employing hundreds of skilled laborers and technicians. The work will also ripple through nearby component manufacturers involved with the project, as well as ports and other transfer points where components are unloaded and loaded onto special vehicles and hauled to the project zone.
But the economic stimulus doesn’t end there. The Bent Tree turbines, once operational, will produce a stream of revenues to local governments over the life of the project. These dollars will be used to support police and fire protection, recycling and emergency medical services in the host communities. Area landowners will also receive payments that will supplement their existing income. In times of distress, these payments enable farmers to stay current on their taxes and keep their farms going. Last, the turbines will also support a crew of technicians and windsmiths to operate the facility and maintain it over a minimum of three decades.
There is no question that this project will energize Freeborn County’s economy for many years to come. But it also begs the question: how much of Bent Tree’s first-order and second-order economic benefits will trickle into Wisconsin? Answer: Virtually none.
Alliant’s decision to invest in a Minnesota wind project comes at a time when Wisconsin is struggling to keep its manufacturing sector intact. In light of the ongoing economic contraction, now would not be a propitious time to outsource energy production to neighboring states and export Wisconsin capital and skilled labor to build valuable infrastructure that could easily be located in our own state.
Imagine, if you will, the uproar that would surely erupt if citizens learned that federal stimulus dollars were going over into Canada to build factories owned by U.S. companies. However, what Alliant received permission to do–dedicate nearly $500 million in Wisconsin ratepayer dollars to build a brand-new windpower plant in Minnesota–is, at bottom, no different.
Granted, Bent Tree is the not the first wind project owned by a Wisconsin utility to be located in another state. This trend began with Madison Gas & Electric’s 30 MW Top of Iowa facility, costing $62 million, which started operation in early 2008. Also in Iowa, construction is underway on Wisconsin Public Service’s 99 MW Crane Creek project, which is expected to tally about $250 million when completed. But with the approval of Bent Tree, what started out as a trickle has turned into an outright flood of utility capital flowing out-of-state. Keep in mind too that Bent Tree will be three times the size of Cedar Ridge, the only Alliant-owned windpower facility in Wisconsin.
It is true that windpower projects in Iowa and Minnesota are lower-cost sources of electricity than those in Wisconsin. But shouldn’t there be more to the decision calculus than just the unit price of electricity? For example, locating a Bent Tree-sized facility in Wisconsin would generate $800,000 a year in local government revenues and about $600,000 a year in lease payments to landowners. Building it here would also create hundreds of jobs for operating engineers, ironworkers, electricians, specialty haulers, wind energy technicians, and other skilled laborers. What is the basis for giving these impacts so little weight in a power plant proceeding?
Regrettably, under today’s standards of review for permitting utility-owned power plants, the PSC had no choice but to approve Alliant’s application. Alliant had adequately demonstrated that it needed another source of renewable energy to comply with Wisconsin energy policy, and that Bent Tree was the least expensive option on a per-megawatt-hour basis.
It’s worth noting that there are several independently owned prospects that don’t require PSC approval could be up and running in 18 to 24 months, and two of them—Horizon’s in Lafayette County and Iberdrola’s in Columbia County–are in Alliant’s Wisconsin territory. Yet they languish for want of a power purchase agreement with an electric provider. Furthermore, given the current utility preference to own wind generating assets rather than buying wind electricity, there is no assurance that these prospects will ever get built.
True, the current economic contraction has taken a bite out of the wind industry, but that hasn’t put the brakes on wind development elsewhere in the Midwest (see table below). And while local opposition to wind energy has stalled a half-dozen proposed wind plants across the state, that doesn’t explain why fully permitted projects are not proceeding to construction.
No, there is another reason why wind development in Wisconsin is at a complete standstill, and it’s the double whammy described above—the utility preference for out-of-state wind energy coupled with their unwillingness to buy wind energy from independent developers.
In a weakening economy, we can ill-afford to let utilities continue investing Wisconsin capital in out-of-state renewable energy production while simultaneously throwing up barriers to companies seeking to situate renewable generation sources in Wisconsin. The longer utilities go on building projects that benefit the host state more than their home state, the greater the risk of seeing Wisconsin’s construction and manufacturing prowess, along with our highly skilled workforce, migrate to those states with the most viable renewable energy markets. Beyond a certain point, such utility preferences and practices will also cause harm to their customer base. How would that serve the public interest?
If Wisconsin truly desires to provide a home to a viable renewable energy economy, it will have to redefine the public interest standards that govern the expenditure of ratepayer dollars. This means giving such economic benefits as job creation, component manufacturing, workforce participation, increased tax receipts to local and state government, and reduced dependence on future transmission upgrades as much due consideration as cost per megawatt-hour. Granted, this is a form of industrial policy. However, if state policymakers don’t take steps to build a solid market structure for generating more renewable electricity here at home, Wisconsin’s ability to compete for good jobs and business opportunities could become hopelessly compromised.
++++++++++++++++++++++++++++++++++++
Snapshot
Midwest Windpower Development Activity (all figures in MW)
July 2009
Iowa
Operating capacity — 3043
Under construction — 409*
Minnesota
Operating capacity — 1937
Under construction — 40
Illinois
Operating capacity — 1016**
Under construction — 92**
Indiana
Operating capacity — 531
Under construction — 505
Wisconsin
Operating capacity — 449
Under construction — None
Michigan
Operating capacity — 129
Under construction — 14
* Total includes WPS’s 99 MW Crane Creek project
** Total includes EcoEnergy’s 100.5 MW EcoGrove project
*** Total includes Iberdrola’s 300 MW Streator Cayuga Ridge South project
Source: American Wind Energy Association, RENEW
RENEW Wisconsin (www.renewwisconsin.org) is an independent, nonprofit 501(c)(3) organization based in Madison that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives.
by jboullion | Jul 6, 2009 | Uncategorized
From an article by Tom Content in the Milwaukee Journal Sentinel:
State utility regulators are reviewing the extent of a steam-generator tube problem with the coal-fired power plant that opened last year near Wausau.
The power plant experienced unexpected shutdowns late last year and early this year, with more expected this year to address the problem, according to the state Public Service Commission.
Wisconsin Public Service Corp. opened the $773 million power plant, the first coal plant built in the state in a generation, in June 2008.
At issue is whether WPS is eligible to pass along the cost of power it had to purchase late last year when the coal plant wasn’t running.
Tim LeMonds, a spokesman for the Public Service Commission, said the steam generating tubes at the power plant have a tendency to clog, and the plant needs to take measures to keep the pipes clean to avoid future clogging.
Dennis Derricks, WPS director of electric regulatory policy, said the problem is a routine start-up issue that the company is addressing with the company that built the power plant, Babcock & Wilcox. According to Derricks, the power plant is still projected to operate 92% of the time, as the utility had projected when it proposed the plant.
The plant, one of two major coal plants built in the state, was recognized with industry awards including Plant of the Year by Power Magazine, an industry trade publication, and 2008 Best Coal-Fired Project by Power Engineering magazine.
Derricks said clogging isn’t the best way to describe the problem. The tubes have an exfoliation problem that is common across the industry and is expected to improve this year.
“The outages going forward are to manage the amount of material that flakes off,” he said. “The tubes are expected to season themselves and develop a coating over them” that helps address the problem, according to Derricks.
by jboullion | Jun 5, 2009 | Uncategorized
In a presentation to the Wisconsin Public Utility Institute, RENEW Wisconsin’s executive director Michael Vickerman reviewed wind generation’s role in baseload planning. He also reviewed the perspective on baseload of the American Wind Energy Association (AWEA):
+ Baseload power is an obsolete concept
+ Both baseload plants and windpower are primarily energy resources
+ From a flexibility perspective, wind is superior
+ Curtailing windpower to allow inflexible baseload plants to keep operating is inefficient, wasteful and damaging to the environment.
by jboullion | Jun 3, 2009 | Uncategorized
Commentary by
Michael Vickerman
Executive Director, RENEW Wisconsin
June 2, 2009
Much to no one’s surprise, energy-related carbon dioxide emissions fell sharply in 2008 from previous year levels. The U.S. Energy Information Agency (EIA), which has been tracking greenhouse gas emissions since 1990, attributes the 2.8% decline to a combination of high energy prices in spring 2008 and the global economic contraction that picked up strength during the second half of the year.
This was certainly the largest year-over-year decline ever reported by the agency. However, even with 2008’s substantial decline, greenhouse gas emissions from U.S. sources have risen 16.9% since 2000. The results, which are preliminary and are likely to be adjusted this fall, can be viewed at http://www.eia.doe.gov/oiaf/1605/flash/flash.html.
The most dramatic reductions occurred in the transportation sector, which fell by more than 5%. Jet fuel consumption is down 9.1%, from this time last year, while demand for diesel fuel consumption is off by 9.9%, reflecting a substantial reduction in truck traffic and rail tonnage. Though it seems like ancient history, the price of diesel fuel on Memorial Day 2008 was $4.72 per gallon, $2.45 higher than current prices.
Even the electric power sector, one of the faster-growing sources of emissions in recent years, was not spared from this trend. According to EIA, about half of the 2.1% reduction in CO2 emissions in the electric power sector can be attributed to declining electricity output. But another contributing factor was the extraordinary growth in installed wind generation capacity last year. A record-shattering 8,500 MW of new wind projects was placed in service in 2008, capping a four-year boom that has nearly quadrupled total installed capacity in the United States.
Bucking the downturn, wind project construction has been one of the very few bright spots in the domestic economy. Nowhere was the pace of activity more feverish than in Iowa, now the No. 2 state in installed wind capacity, trailing only Texas. More than 900 utility-scale turbines started operation in 2008, doubling the state’s wind generating capacity. This year, the Iowa Policy Project expects wind energy to account for 15% of the state’s total generation. In no other state has wind energy penetration even reached double-digit figures.
Last year’s frenetic construction pace is starting to ebb, however, as wholesale electric prices sink to historic lows. As declining demand for electricity exerts downward pressure on coal and natural gas prices, wind energy developers will struggle to attract financing for their projects. Right now, the signals from the power markets strongly discourage new plant construction of any type, be it wind, coal or natural gas.
The pain administered by the economic downdraft has been especially acute at Alliant Energy, whose Wisconsin subsidiary is located in Madison. Having lost two very large customers due to plant closures, including the mammoth General Motors plant in Janesville, Alliant is aggressively cutting costs to prepare for a forecasted 10% decline in sales to industrial customers. These measures include a suspension of contributions to employee 401(k) plans, layoffs affecting all management levels, the closure of redundant power stations and the postponement of planned power plant upgrades.
Ironically, even though it is scaling back operations elsewhere, Alliant’s Wisconsin subsidiary is moving forward with a 200 MW (133 turbine) wind project in southern Minnesota called Bent Tree. If approved, Bent Tree would be the largest wind project owned by a Wisconsin utility.
Alliant’s desire to build Bent Tree is a direct consequence of Wisconsin’s energy policy, the centerpiece of which is a requirement on utilities to increase the renewable energy content of electricity sold to their customers. Between now and 2015, Alliant must acquire additional sources of renewable energy to satisfy that mandate. Given where the economy is headed, Wisconsin’s renewable electricity standard may be the only thing that’s keeping Alliant in the power plant building business.
If Alliant’s windpower plans stay on track, the utility will meet its 2015 target several years in advance. Last December, Alliant commenced operations at its 68 MW (41 turbine) Cedar Ridge plant southeast of Fond du Lac, in the heart of Wisconsin’s wind belt.
Between the nasty economic weather out there and the state’s pro-renewable energy policy, I expect greenhouse gas emissions here to fall even more dramatically in 2009.
Sources:
“Alliant eliminates 60 jobs in state” (May 28, 2009)
“Beloit power plant to shut down by year-end” (May 26, 2009)
“Alliant decisions on plants on hold” (May 24, 2009)
“Like economy, greenhouse has emissions fell in ‘08” (May 22, 2009)
“Rate watch: CEO calls rate hikes ‘most unwelcome’ (May 14, 2009)
http://www.jsonline.com/blogs/business/pluggedin.html (Tom Content’s blog for the Milwaukee Journal Sentinel)
Michael Vickerman is the executive director of RENEW Wisconsin, a sustainable energy advocacy organization headquartered in Madison. For more information on what Wisconsin is doing to advance sustainable energy, visit RENEW’s web site at: www.renewwisconsin.org and RENEW’s blog at: http://renewwisconsinblog.org. RENEW also operates Madison Peak Oil Group’s blog: http://www.madisonpeakoil-blog.blogspot.com
