I just got a copy of a utility bill for a Minnesota business that has a 40 kilowatt (kW) solar PV array. I’d hoped to get a sense for how quickly he’d pay off his array with the net metering … Read More
Yet another Canadian province is showing a serious commitment to the economic benefits of renewable energy development. Ontario’s “buy local” energy policy has the promise of 43,000 local jobs from 5,000 MW of new renewable energy. Now Nova Scotia is completing rulemaking for a provincial goal of 40% renewable power by 2020 that includes a 100 megawatt (MW) set-aside for community-owned distributed generation projects. The policy promises to increase the economic activity from its renewable energy goal by $50 to $240 million. … Read More
The use of tax credits as the primary federal incentive for renewable energy has often stymied cities, counties, and cooperatives from constructing and owning their own wind farm. But the temporary cash grant in lieu of the tax credit (expiring this December) has opened the door for one South Dakota cooperative and over 600 local investors:
The Crow Lake Wind Project, built by electric cooperative Basin Electric subsidiary PrairieWinds SD 1, Inc., is located just east of Chamberlain, S.D. With 150 MW of the project’s 162 MW owned by Basin Electric subsidiary PrairieWinds SD1, Inc., the facility has taken over the title of being the largest wind project in the U.S. owned solely by a cooperative, according to Basin Electric. [emphasis added]
The project is also distinguished for having local investors in addition to ownership by the local cooperative:
The entire project consists of 108 GE 1.5-MW turbines, 100 of which are owned and operated by PrairieWinds. A group of local community investors called the South Dakota Wind Partners owns seven of the turbines, and one turbine has been sold to the Mitchell Technical Institute (MTI), to be used as part of the school’s wind turbine technology program, which launched in 2009. PrairieWinds, which constructed the seven turbines now owned by the South Dakota Wind Partners, will also operate them. [emphasis added]
The key to success was the limited-time opportunity for the cooperative to access the federal incentive for wind power:
The opportunity became viable following passage of 2009’s American Recovery and Reinvestment Act, which created a tax grant option allowing small investors to access government incentives and tax benefits, making public wind ownership possible. Creating the Wind Partners for that purpose were Basin Electric member East River Electric Power Cooperative, the South Dakota Farm Bureau Federation, the South Dakota Farmers Union and the South Dakota Corn Utilization Council…
“This development model created opportunity for small local investors to have direct local ownership in wind energy and access the tax benefits previously reserved for large equity investors,” said Jeff Nelson, general manager at East River Electric. “It offers a model for others to participate in community-based wind projects.”
The South Dakota Wind Partners consist of over 600 South Dakota investors, some who host the project’s 7 turbines and many who do not. Investors bought shares in increments of $15,000 (combinations of debt and equity). Brian Minish, who manages the project for the South Dakota Wind Partners, hopes to see future opportunities for this kind of development. “There’s a lot of political benefit in letting local people become investors in the project,” Minish said in an interview this afternoon, “local ownership can help reduce opposition to wind power projects.”
Photo credit: Flickr user tinney
A new article in the journal Energy Policy supports the notion that local ownership is key to overcoming local resistance to renewable energy. The article summarizes a survey conducted of two towns in Germany, both with local wind projects, but only one that was locally owned. The results are summarized in this chart:
Guess which town has the locally owned project?
If you guessed Zschadraß, you win. With local ownership of the wind project, 45% of residents had a positive view toward more wind energy. In the town with an absentee-owned project (Nossen), only 16% of residents had a positive view of expanding wind power; a majority had a negative view.
Ownership matters, and U.S. renewable energy policy typically makes local ownership more difficult.
After 10 years of battling incumbent utilities, Marin Clean Energy became California’s first operational community choice aggregation authority in 2010. Already, local ratepayers can opt to get 100 percent of their electricity from renewable resources.
Community choice aggregation (CCA) offers an option for cities, counties, and collaborations to opt out of the traditional role of energy consumers. Instead, they can become the local retail utility, buying electricity in bulk and selecting their power providers on behalf of their citizens in order to find lower prices or cleaner energy (or even reduce energy demand). Marin Clean Energy started operations last year:
“When it launched last fall, Marin Energy Authority’s goal was to offer 20% renewable energy to its customers,” said Ms.Weisz. “We were able to offer 27.5% compared to the state-mandated 20%.” The state recently increased the mandate to one third. PG&E has about 17% under contract, according to Ms. Weisz.
Customers can also opt for the “deep green,” 100% renewable service for a 10 percent premium.
Marin Clean Energy not only contracts for a higher portion of renewable energy than PG&E, it’s trying to increase its share of local, distributed generation.
“We are filling a niche market for mid-sized renewable energy generation in the 20 to 60 MW range,” said Dawn Weisz, interim director… “When we went out to solicit renewable power offers, Pacific Gas & Electric told us we would not get any bids. We were looking for 40 MW. We were offered over 600. Almost all was solar.”
The local “utility” is also trying to maximize energy efficiency. Currently, a public benefits fund pools ratepayer dollars for energy efficiency programs run by PG&E. However, such programs tend to work against the bottom line of the utility, but not against Marin’s CCA.
Marin Clean Energy thinks it can do a better job and create more local jobs with the money.
It’s a promising start for California’s first community choice authority.
A bill in Minnesota’s state legislature would require utilities to offer a green pricing program for local, distributed wind power. The largest investor-owned utility in the state already offers Windsource, a program to buy blocks of wind power at a premium price. The law would essentially require Xcel to offer a “Local Windsource” option for ratepayers.
Under the proposed law, projects supported by “Local Windsource” would have to be 25 megawatts or smaller, located in Minnesota, and owned by Minnesota residents. Only ratepayers that opt in would financially support the program:
2.7 Subd. 2a. Local wind energy rate option. (a) Each utility shall offer its customers
2.8 one or more options allowing a customer to determine that a certain amount of electricity
2.9 generated or purchased on the customer’s behalf is from wind energy conversion systems
2.10 that meet the following criteria:
2.11 (1) have a nameplate capacity of 25 megawatts or less, as determined by the
2.12 commissioner of commerce;
2.13 (2) are owned by Minnesota residents individually or as members of a Minnesota
2.14 limited liability company organized under chapter 322B and formed for the purpose of
2.15 developing the wind energy conversion system project;
2.16 (3) the term of a power purchase agreement extends at least 20 years; and
2.17 (4) the wind energy conversion system is located entirely within Minnesota.
2.18 (b) Each utility shall file a plan with the commission by October 1, 2011, to
2.19 implement paragraph (a).
2.20 (c) Each utility offering a rate under this subdivision shall advertise the offer with
2.21 each billing to customers.
2.22 (d) Rates charged to customers for energy acquired under this subdivision must be
2.23 calculated using the utility’s cost of acquiring the energy for the customer and must be
2.24 distributed on a per-kilowatt hour basis among all customers who choose to participate
2.25 in the program.
The bill hasn’t even had a hearing, but it’s an interesting proposal for increasing the generation of local, distributed wind and its attendant economic benefits.
Photo credit: Flickr user scelis
Community solar projects (called “solar gardens” under a new Colorado law) are blooming like wildflowers in spring, reports the Solar Gardens Institute. The 2010 state law, discussed in our Community Solar Power report, creates a new legal structure for community solar projects and requires utilities to buy 6 megawatts (MW) of energy from community solar projects by the end of 2013.
The beauty of solar gardens is that they allow people without sunny roofs (e.g. renters, shade-dwellers) to go solar by subscribing as part of a group of people to a local distributed solar project. Since most estimates of rooftop solar capacity indicate that only 20 to 25 percent of roofs are suitable for solar, community solar gardens can significantly expand the constituency for solar.
The spread of projects and interest in solar gardens is impressive, and has expanded far beyond Colorado. In their recent news update, the Solar Gardens Institute published a map indicating where there is interest in solar gardens, either for hosting a solar project or interest in pursuing a solar gardens state law.
The growth of solar gardens means more potential, more capital and more public support for solar. Check out the Solar Gardens Institute or our 2010 report on Community Solar Power for more information!
When is it time to break up with your utility? Perhaps it’s when they come to ratepayers for $30 million in cost overruns on a “free” smart grid project. Or when they fail to meet deadlines to propose a new franchise agreement. Or when they cite national security in an effort to avoid sharing load information. Or when they crash your office with 9 employees to present their delayed franchise plan. Or perhaps when the propose raising rates again to keep up with rising fossil fuel prices.
The citizens of Boulder, CO, have put up with a lot from Xcel Energy, the investor-owned utility that spans several states and currently provides the city’s mostly-coal-powered electricity. So it was energizing to be invited to Boulder by Clean Energy Action last week to share how the city could move forward. (my presentation below)
The city’s saga began in 2003, when it first began studying the option of municipalizing their electricity system, to have more control over the grid and increase clean energy production. The city dropped the plan in 2007 when Xcel offered to build a free smart grid network, called SmartGridCity, a program that deployed advanced meters and fiber optic cables to improve information flow on the local electricity grid. However, with a dubious cost-benefit ratio from the Xcel program and a desire for more clean energy, the city leaders are once again considering their options.
In 2010, the city of Boulder chose not to renew its franchise agreement with Xcel, essentially a monopoly charter that gives Xcel the exclusive right to serve Boulder’s customers for an annual fee. The citizens of Boulder voted to tax themselves to replace those funds for five years, giving the city time to evaluate alternatives. They’re taking it seriously.
For one, their current electricity costs keep going up, according to Anne Butterfield of the Boulder Daily Camera:
In Colorado, plunging costs for renewables are furled against the steady upward march of fossil fuels. In March, Xcel filed for an 18 percent increase in the “electric commodity adjustment” (the ECA on your bill) which allows fuel costs to get passed through to customers. This hike would increase a typical monthly bill by about $3 — with a resultant boost to the RESA of only six pennies. Every buck paid to fossils on Xcel’s system leads to two pennies sent to cost-saving renewables.
For another, they’ve already learned about options to dramatically increase the portion of electricity from renewables. At a Clean Energy Slam, one company proposed providing 50% of Boulder’s energy from renewables by 2014, up to 80% by 2025. Their planning process has also revealed new ways of thinking about the grid. Freed from the paradigm of big, centralized baseload coal power plants, they’re looking at electricity from the “top down.” They start with a load curve, throw in renewables and storage, and then see what gaps need filling, a process that prioritizes renewable energy instead of trying to shoehorn wind and solar into the gaps where fossil fuels fall short.
City officials aren’t just interested in clean, reliable electricity. They also want to learn more about the potential for generating electricity locally. While any new energy generator can add jobs and grow the economy, locally owned renewable energy creates job and economic multipliers.
Local activists are also strongly committed to changing the status quo. They’re not only looking for ways to green the local electric grid, but for ways for citizens and businesses to finance significant energy efficiency improvements as well as distributed renewable energy generation.
Boulder may end up joining the 2,000 existing municipal utilities in the United States and chart their own energy future or perhaps Xcel will finally bring them an attractive offer. But by taking the issue into their own hands, Boulder will definitely do better than before.
A great story of a city looking to – literally – take ownership of its energy future:
The Colorado Renewable Energy Standard, as amended last year by the state Legislature, requires Xcel Energy to get 30 percent of its electricity from renewable sources by 2020.
…Boulder leaders — who let the city’s 20-year franchise agreement with Xcel Energy lapse at the end of 2010 — are now considering whether they can get an energy mix for their residents with a larger percentage of renewable energy than what Xcel is offering.
…At the “Clean Energy Slam” event in February, which gave participants two minutes to pitch a vision for Boulder’s energy future, a representative of Southwest Generation told the crowd that he believed his company could provide Boulder with an energy mix of 50 percent renewables and 50 percent natural gas by 2014. And by 2025, the company could provide up to 80 percent renewable energy to the city, the representative, David Rhodes, said.
…Jonathan Koehn, the city’s regional sustainability coordinator, said adding more renewables is only part of the equation.
“We’ve heard a lot of concern that, perhaps, more clean energy is driving this analysis,” he said. “But this is about long-term economic stability. When we talk about what our portfolio might look like in the future, we don’t have a predetermined notion of a certain percentage of renewables. What we want is to be able to analyze how we can have long-term stable rates.”
It’s not just about clean energy and stable rates, however. The decision to eschew a utility franchise was also about localization, described on a city website as “taking more control in determining:
- Where the energy supply comes from – Locally produced
- What types of energy are provided – Renewables over fossil fuels
- How much we pay for it – Rate control
Local generation of renewable energy will add more to Boulder’s economy than importing clean electrons, and if those projects can also be locally owned (perhaps via a community solar project like the Clean Energy Collective is doing in Carbondale, CO) then the economic benefits multiply significantly.
Photo credit: Flickr user respres (photo is of Denver, not Boulder, but I wanted a sunrise…)