A proposal from Madison Gas & Electric to establish a renewable
electricity service for larger customers has garnered strong support from RENEW
Wisconsin as well as from the Wisconsin Industrial Energy Group and individual
companies such as Target and Airgas. After introducing the Renewable Energy
Rider in its 2016 rate case, MGE submitted a revised version to the Public
Service Commission this year, which triggered comments from various
stakeholders.
In our comments, RENEW highlighted the growing number of companies
who desire a robust renewable energy service from utilities that serve their
facilities. Sixty-five of these companies adopted a set of principles to maximize the value of these purchases, both in terms of achieving their internal sustainability goals
and locking in future cost savings.
As stated in our comments, “these
companies are increasingly deciding
where to locate their facilities based on whether the utility is willing and
able to provide them with significant levels of renewable energy. We believe
these tariffs offer an economic development opportunity in the service
territories where they exist, and we want Wisconsin to be a place where these
corporations prefer to locate.”
The Public Service
Commission will issue a final ruling on MGE’s Renewable Energy Rider in the
coming weeks.
On May 14th, Racine, WI-based SC Johnson was honored by the World
Environment Center as the recipient of the 2015 Gold Medal for International
Corporate Achievement in Sustainable Development.
This is a major award amongst large multi-national
companies, and only one company is recognized each year. SC Johnson became the second company to win
the award twice, after first receiving the award in 1994. Recipients from
recent years include Volkswagon Group, Unilever, IBM, and Wal-Mart Stores.
SC Johnson’s global renewable energy initiatives poster
With financial support from SC Johnson, I attended the event
in Washington, DC to help honor the company.
RENEW’s relationship with SC Johnson started about four years ago, when our
Program and Policy Director Michael Vickerman advised the company as it was
pursuing the installation of two wind turbines to help power Waxdale, one of
its major factories in Mt. Pleasant, Wisconsin, near Racine.
CEO Fisk Johnson proudly supporting clean energy
Fisk Johnson, the 5th generation CEO of the family-owned
company, was on hand to receive the award.
“Reaching for that ideal of trust and goodwill is what motivates us at
SC Johnson, and it’s where we find our best answers and greatest
successes. This recognition today, which
I accept with great pride on behalf of all of the people in our company,
inspires us on even more.”
U.S. Representative Paul Ryan presented the award to Fisk
Johnson, and he highlighted their investment in renewable energy resources
including landfill gas and wind turbines. Ryan said, “If you drive by Waxdale,
you see a capped landfill with the methane running into the generators, along
with the two windmills, making sure that they are purely 100% sustainable for
their factory producing these wonderful products. That just shows you how committed this family
is, and this company is, to this mission.
It’s really impressive.”
To view (most of) Paul Ryan’s remarks, check out this video:
According to SC
Johnson, Waxdale produces an average of 100 percent of its electrical energy
onsite each year. Glade®,
Windex®, Pledge®, Scrubbing Bubbles®, Shout®, Raid® and OFF!®
are all among the trusted household products made at Waxdale.
“If you’ve managed to survive even one brutal Wisconsin winter (or unseasonably hot summer), you know that looming utility bills can often creep into your daydreams and nightmares on a moment’s notice, eating away at your peace of mind well before they have your kids’ college fund for lunch.
If you’re a small business owner who pays his or her own heat or electricity, you’ve got double trouble, and in addition to unpredictable weather, unforeseen rate increases can be the difference between shivering in the dark and avoiding a deep freeze.
So imagine if your utility bills ran into the hundreds of thousands every month instead of the hundreds. Well, there are plenty of Wisconsin ratepayers — big manufacturers and other commercial energy consumers — who don’t have to imagine. They live that reality. And they are skittish about a recent proposal to beef up Wisconsin’s renewable energy mandate from its current 10% threshold to 20% by 2020 and 30% by 2030 — a move that, many believe, would spike energy prices that are already high in comparison to other states.”
1. Renewable energy is cost effective with conventional fossil and nuclear fuels
The price of renewable energy continues to decline, while the price of conventional energy (with the recent exception of natural gas) continues to increase. Customer-sited solar electric is now equal to or less than the retail cost of grid electricity in many areas of Wisconsin. Dairyland Power Cooperative and Vernon Electric Cooperative will begin purchases of power from two large solar arrays under long term contracts. Biogas to electricity is competitive or less than retail electricity for farms and solid biomass fuels out compete propane and oil in rural areas. Renewable fuels have stable, zero, or low fuel costs, that do not fluctuate like fossil fuels.
2. Fossil and nuclear industries have received more subsidies from government than renewables
All energy production in the U.S. receives significant federal support, dating back to the first oil subsidies in early 20thcentury. In cumulative dollar amounts, the oil, coal, gas and nuclear industries have received approximately $630 billion in U.S. government subsidies, while wind, solar, biofuels and other renewable sectors have received a total of roughly $50 billion in government funding.
Wisconsin consistently receives enough solar energy to supply significant amounts of electricity used in Wisconsin households and businesses from their rooftops and properties. Wisconsin receives 20 percent more solar energy than the world’s leader in solar development, Germany, and similar amounts as New Jersey, a solar energy installation’s leader in the US. A number of studies imply that solar could supply 100 percent of Wisconsin’s electricity during peak hours by installing panels on existing roofs with solar access (http://www.ecotopia.com/apollo2/photovoltaics/PVMktPotentialCostBreakthruNavigant200409.pdf).
4. Renewable energy provides energy at critical times and locations and is matched well with other resources to maintain reliability
Solar energy output peaks in the summer when demand on the electricity system is highest due to air conditioning use. Wind power can also match high electrical demands when summer and winter winds bring in heat and cold. Biomass and hydropower are forms of stored solar energy that can be used to fill in supply gaps from intermittent sources. Natural gas plants can be quickly started as an adequate and clean back up source of power. Renewable energy systems can be installed at weak voltage locations in the transmission grid to boast power. Installation of incremental amounts of renewable energy to meet growing local demand can occur in months rather than in the years it takes for fossil fuel plants to be installed.
5. Net metering adds value to the grid and all customers
Net metering uses the electric transmission grid to absorb extra renewable electricity from distributed producers and provides a similar amount of electricity back when electric demand exceeds renewable supply. Net metering adds value when produced during peak electrical demand hours, reduces the need for transmission and distribution infrastructure, reduces environmental emissions, enhances energy security, and hedges the variable nature of fossil fuels prices. Although all customers pay for the electrical grid, studies have shown that the extra value from the renewable production is greater than the cost.
6. Wind power provides local energy, improved environmental & economic impact
Wisconsin has thirteen wind farms varying in size from 1.3 MW to 162 MW with a total of 647 MW. This represents about half of all wind energy used in Wisconsin, the rest coming from neighbors Iowa and Minnesota. This power is local, has no emissions, and is now one of, if not the, lowest sources of electricity in Wisconsin and the Midwest (http://www.awea.org/Resources/Content.aspx?ItemNumber=5547).
7. Biogas takes pollution and converts it to rural energy, jobs, and environmental improvements
Wisconsin’s 1.3 million dairy cows produce a great deal of manure: 16 billion gallons per year. For years this manure was spread on pasture land in the summer and winter. Unfortunately, some of the nutrients, pathogens, and smell polluted the local water and air sheds. Wisconsin’s 40-50 farm and food bio digesters take manure and high organic content food wastes and convert these pollutants to local energy, fertilizer, high value bedding, while reducing pathogens and smell by over 95 percent (http://www.epa.gov/agstar/documents/gordondale_report_final.pdf). In addition, the remaining digestate, which is the liquid left over from the digesters, can be stored and used in irrigation systems to add water and nutrients to crops at optimal times.
8. Biomass energy reduces greenhouse gas and other emissions, and can be grown sustainably
Biomass is “young” stored solar energy. Through photosynthesis, water is combined with carbon dioxide to form hydro-carbon compounds. Depending on the biomass, the stored carbon is one to 100 years old. In a natural system of growth and decay, all of the biomass would eventually go back to the atmosphere as carbon dioxide or methane as the biomass oxidizes (rots), if not used. Converting the biomass for productive energy reduces the total carbon emissions because it replaces old (fossil) carbon that has been stored in fossil fuels for millions of years. In addition, half of a tree’s mass is in the roots and some of the carbon is taken up by surrounding soils and stored there.
The vast majority of modern biomass combustion units are labeled, highly efficient, and are regulated for air emissions. This includes residential wood stoves. Most biomass energy processes only use wastes from non-energy forest or crop applications. Smaller branches, twigs, and leaves are not taken for energy use and contain most of the nutrients, which are recycled into the soils on the forest floor. Residual ash from the combustion process, which contains valuable nutrients, can be reapplied to the land.
9. Renewable energy is becoming more mainstream everyday
In 2012 and 2013 solar and wind supplied 51% and 37%, respectively, of all new electric generation capacity in the US (wind power additions fell in 2013 as a result of the expiration of the production tax credit).
Renewable energy now produces more power than nuclear energy in the US.
Solar energy grew at a 40% rate in 2013 from 2012. Wind energy has over 60,000 Megawatts of installed capacity, a ten-fold increase from 10 years ago.
10.The vast majority of Wisconsin citizens want more renewable energy
Surveys consistently show that Wisconsin citizens prefer renewable energy over fossil fuels. Over 83% of Wisconsin voters support solar, wind, and hydro as their energy source vs about 50 percent for coal and nuclear (Source: Voter attitudes towards Energy Issues in Wisconsin, 2012).
Note: This update follows my commentary posted last week documenting emerging changes in the U.S. natural gas market picture and discussing whether the altered picture will occasion additional repricing upward to balance supply with expected demand increases.
–Michael Vickerman
On February 6th, EIA reported that natural gas storage volumes were 270 billion cubic feet (bcf) under last week’s withdrawal numbers. That number reflects data submitted to EIA on January 31st.
Going into February this year, the quantity of natural gas in storage (1.923 bcf) is half of what it was at the start of the current heating season (3,834 bcf). The heating season generally ends around April 1.
I expect the next EIA report (February 13) to easily surpass the 200 bcf threshold.
In the previous 10 years, the largest amount of gas withdrawn from inventories during the entire heating season was 2,311 bcf. That occurred during the winter of 2007-2008. Thus far this season, a total of 1,911 bcf has been taken out of storage. If the next two reported withdrawals (Feb. 13th and 20th) exceed a combined total of 400 bcf, this winter’s withdrawals will exceed that total, and that will happen before the end of February.
Though this is shaping up to be the coldest winter in 20 years, the price of natural gas still remains below $5.00. How many more weeks of below-average temperatures will it take to move the floor price of natural gas to $5.00 and higher? The game-changer narrative is still hanging tough.
Over the weekend, I checked Chicago and Madison weather forecasts for the week of February 10th. To the extent there is a warm-up in sight, it will happen Thursday and Friday. This respite will bring temperatures back to seasonal levels, but don’t expect it to last. The weather forecast in Madison for the Valentine’s Day/President Day weekend heralds a return to below-normal temperatures.
The cold weather is also taking a bite out of current extraction volumes, as evidenced in the highlighted passage of the Bloomberg News article below. While pace of extraction will definitely pick up as winter gives way to spring, the question going forward is whether supply can increase by a record-setting 2.7 trillion tcf between the end of the current heating season and the beginning of the next. We’re starting to enter uncharted territory.
