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Monday, April 14, 2014

Natural Gas Mythology Faces Stiffest Test Yet


Note: This post continues our look at the U.S. natural gas market picture, which was turned upside-down by the coldest winter in a generation. It is my thesis that the “natural gas miracle” story leaves us unprepared for the day when inescapable geological and financial realities collide. --Michael Vickerman

The natural gas injection season has begun. Last week, EIA reported a net build of 4 billion cubic feet (bcf) in storage, raising inventories from 822 bcf to 826 bcf. This is the smallest amount of stored natural gas reported has dropped since 2003.

Since the heating season began last November, a record-setting three trillion cubic feet (tcf) of natural gas was pulled out of storage to keep this country from freezing over during the winter 2013-2014.  That is almost 50% larger than the 2012-2013 drawdown, which reflected a statistically average heating season.

The question arises: can injections of natural gas between now and early November bring storage volumes back to recent norms without a significant price increase? That is the question posed by Jim Hansen in his April 11, 2014, edition of Ravenna Capital Management’s Master Resource Report. While Jim’s newsletter is always worth reading, this issue in particular stands out in its comprehensive look at the dynamics affecting natural gas supplies for the remainder of this year. The opening paragraph sets up the discussion perfectly:


“Will shale gas be able ride to the rescue of natural gas storage by next fall and keep natural gas both cheap and abundant? The market for the last few weeks appears to be saying that supply will ride over the hill just in time to save the day. This week’s report looks at how likely it is the shale gas cavalry will show up and save the day.”

Jim’s superb discussion of this complex and evolving story leaves little room for embellishment or clarification. It’s worth pointing out, however, that we have already gone through three months of increased natural gas output this year, as projected by U.S. Energy Information Administration (EIA), yet still we find ourselves looking out from a three tcf hole.   Marketed output this January exceeded last year’s totals by 4%. As impressive as that increase sounds, it was more than offset by the drawdown in supply that month. Ditto February and March. Whatever increase in output that occurred in those two months was wiped away completely by the record cold.

EIA predicts that storage levels will rebound by 2.6 tcf this year, leaving us with 3.4 tcf for the next heating season. Never before have energy companies managed to inject such a large volume of gas into storage in such a short period of time. Yet Wall Street’s reaction in facing up to this herculean task remains decidedly ho-hum. Traders are content to coast along with prices averaging 4.50/MMBtu.  This is the sort of complacency that invites skeptics like myself to think about the all the unsinkable ships in history now in permanent residence on the ocean bottom. 

Monday, April 7, 2014

Vernon Electric developing Wisconsin's first Community solar farm

The pace of customers signing up to participate in this venture is impressive. In the nine days following the official roll-out, about one-third of the solar panels have been subscribed, according to Clean Energy Collective, the developer of Vernon Electric Cooperative's array.
Vernon Electric Cooperative (VEC) is bringing community-owned solar to Wisconsin. In partnership with national community solar developer Clean Energy Collective (CEC), VEC will provide any member in its service territory the opportunity to own individual panels in a new locally-sited, utility-scale solar PV array. This is the first community-owned solar facility under construction in the state of Wisconsin. 
The Vernon Electric Community Solar Farm, a 305 kW, 1001-panel clean power facility will be built at VEC’s headquarters in Westby. Through CEC’s model, any member of VEC can purchase panels from the shared farm — as few as one or enough to completely offset the energy demands of a home or business. Credit for the power produced will be provided directly on their monthly utility bills.
[READ MORE]

Tuesday, April 1, 2014

Wisconsin Senate passes 50% Renewable Energy Standard!!!

In a very surprising move on Monday, March 31st, the Wisconsin Senate took up and passed an updated “renewable energy standard” that would put Wisconsin among the top 4 states nationally. The new target is to get 50% of our state’s electricity from renewables by 2030. Wisconsin’s current renewable energy standard of 10% by 2015 is currently the lowest of any state which has such a target.

The impetus for the quick action appears to be that the Wisconsin Badgers men’s basketball team made the Final Four over the weekend. “The Badgers are in the Final Four. Not Minnesota, not Iowa, not any team from Michigan, not Illinois. I just couldn't stomach the fact that we were dead last in renewable energy standards but the among the best in basketball,” said a leading Republican Senator. “I love basketball, but renewable energy is just as important, and it takes us as legislators making good policy for our state to make this happen!”

Iowa already gets over 25% of its electricity from wind power, and Minnesota and Illinois are on track to reach 25% by 2025. The new standard would leap Wisconsin past these neighbors and into a leading position nationally. "These states can't beat us in basketball so they shouldn't beat us in renewable energy, either," said the Senator.

The Assembly is expected to return for a special session just to vote on this bill!

RENEW Wisconsin will keep you apprised as more details emerge on this fast-breaking news.

If you've made it this far, we appreciate your interest in renewable energy, but it's time to break the news to you....

Happy April Fools Day!

Friday, March 28, 2014

Ten Positive Facts About Renewable Energy in Wisconsin

by Don Wichert, RENEW Wisconsin

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.


(DBL Investors, http://bit.ly/uV14lf)

3. Wisconsin has plenty of solar energy

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).

Milwaukee Journal-Sentinel article featuring Gary Tauchen discussing his Clean Energy Choice legislation

A Tom Content article in the Miwaukee Journal Sentinel featured Rep. Gary Tauchen (R) discussing his and Rep. Chris Taylor's (D) new Clean Energy Choice legislation, which would open new financing mechanisms for solar and biogas in Wisconsin:
One of the biggest trends in sustainable power nationally is solar and finance companies — rather than homeowners or businesses — paying the upfront cost for solar panels. 
A bill just introduced in Madison aims to get Wisconsin on that bandwagon. The bill isn't going to pass but was introduced to get the conversation started on an issue that is strongly opposed by state utilities. 
Republican Rep. Gary Tauchen (R-Bonduel), a co-sponsor with Democratic Rep. Chris Taylor (D-Madison), said the bill is needed to help boost construction of more waste-to-energy projects on Wisconsin farms.
A quote from Rep. Tauchen:
The number of digesters in Wisconsin "has been pretty constant for the last 10 years, and so we're not really moving forward in any big way, as far as renewables," he said. "And we have a lot of potential, especially in a state with over 1.2 million dairy cows to take advantage of a resource here that we have a lot of — manure — and make methane or compressed natural gas out of it."
[READ MORE]

Tuesday, March 25, 2014

Appeals court upholds wind siting ruling

A positive state ruling on wind siting in Wisconsin:
MADISON, Wis. (AP) — A Wisconsin appeals court says state regulators didn't have to produce a report on how wind turbines affect property values when they imposed siting standards.  
The Public Service Commission implemented rules setting up uniform wind turbine construction and setback standards in 2012. The state realtors, builders and towns associations sued, arguing the rules were invalid because the commission didn't produce a report on the rules' effect on property values. 
A Brown County judge ruled last year no report was required. The 3rd District Court of Appeals agreed on Tuesday. The court said a report is needed only when rules directly affect housing. The PSC considered voluminous evidence about turbines' effect on housing and reasonably concluded they don't' hurt residential property values. 
The associations' attorney didn't immediately return a message.

Read more

Monday, March 24, 2014

Bipartisan Clean Energy Choice Bill Introduced

Legislation would allow more customer options for renewable energy


On Friday, Representatives Gary Tauchen (R-6, Bonduel) and Chris Taylor (D-76, Madison) introduced a Clean Energy Choice bill that would allow Wisconsin farms, businesses, and citizens additional financing options for sourcing renewable energy produced on their property.

The bipartisan legislation would clear up a “gray area” of Wisconsin’s public utility law, which is stifling customer efforts to access renewable energy. If adopted, the law would affirm the property rights of homeowners, farmers, businesses, and local governments to use renewable energy produced on their own property, no matter how the project is financed.

In over 23 states, renewable energy developers can install, own and operate a renewable energy system, such as a farm biodigester or a solar power system, and sell the output to the host customer. These arrangements have proven tremendously popular in those 23 states, with over $3.4 billion invested into renewable energy through these arrangements in 2013. However, very little of this investment flows to Wisconsin because of the lack of clarity in current law.

“The present situation is like walking into an automobile dealership and being told, ‘You must own the car you drive, you’re not allowed to lease it’. This is a big barrier for many customers. We are advancing Clean Energy Choice to provide common sense financing solutions for important projects that put the power in consumer hands,” said RENEW Wisconsin’s Michael Vickerman.

“This policy also helps customers lock in a fixed electricity rate from these systems today and insulate themselves from increasing electric rates,” said Vickerman. “In particular, these financial arrangements benefit school districts, local governments, houses of worship, farmers, food processors, and retailers.”

Nationally, Kohl’s Department Stores and Wal-Mart are using developer arrangements to power more than 365 of their stores with solar power, at a cost savings to the companies.

A recent national poll conducted by Zogby Analytics found that 69% of homeowners want more choices when it comes to their own energy and electricity supply. “Consistent with that finding, this bill would empower citizens to chart their own energy future. We applaud Representatives Tauchen and Taylor for reaching across the partisan divide to launch the public discussion on a policy that will prove critical for Wisconsin’s energy future,” Vickerman said.