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Tuesday, December 18, 2007

Trempealeau County sharply limits wind energy

Immediate release
December 18, 2007

More information
RENEW Wisconsin
Ed Blume
608.819.0748

Clean Wisconsin
Ryan Schryver
608.251.7020, ext. 25

Trempealeau County sharply limits wind energy

Calling it an effective ban on commercial wind generators, Wisconsin clean energy advocates blasted Trempealeau County’s new wind ordinance, which was adopted Monday night on a vote of ten to six.

The county’s wind ordinance requires developers to place wind turbines at least one mile from neighboring residences, schools, hospitals, and businesses. This is the longest set back distance imposed to date by a local government in Wisconsin.

Speaking to the county board, RENEW Wisconsin Executive Director Michael Vickerman said that the ordinance “steers Trempealeau County toward a head-on collision with state energy policies, which designate wind power as a preferred energy source.”

RENEW Wisconsin, a statewide nonprofit organization, advocates for public policies and private initiatives to support renewable energy.
State policy favors wind power, because “it has shown itself to be a clean, safe and affordable energy option that helps reduce our dependence on fossil fuels and reduce global warming emissions,” according to Ryan Schryver of Clean Wisconsin, an advocacy organization for clean water, air, and energy.

“Local governments, as well as the state, should be looking at ways to eliminate the barriers to renewable energy production instead of creating new obstacles for siting wind developments, as this ordinance does,” continued Schryber.

“This ordinance – all 16 pages of it – could have been boiled down to one sentence: No wind energy system greater than 150 feet in height will be permitted in Trempealeau County,” Vickerman told the county board.

“If every county were to adopt a wind ordinance as arbitrarily restrictive as the one before you, renewable energy development in Wisconsin would slow to a stand still,” Vickerman added.

Presenting an oversized map of Trempealeau County, Jim Naleid, representing Holmen-based AgWind Energy Partners, said that “There is not one square inch of land where a commercial wind turbine can be legally sited under this ordinance.”
AgWind Energy Partners, a wind farm developer, recently installed a meteorological tower in the county to measure wind speeds.
END

Clean Wisconsin, an environmental advocacy organization, protects Wisconsin's clean water and air and advocates for clean energy by being an effective voice in the state legislature and by holding elected officials and corporations accountable. Founded in 1970 as Wisconsin's Environmental Decade, Clean Wisconsin exposes corporate polluters, makes sure existing environmental laws are enforced, and educates citizens and businesses. Phone: 608-251-7020, Fax: 608-251-1655, Email: info@cleanwisconsin.org, Website: www.cleanwisconsin.org.

RENEW Wisconsin is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. More information on RENEW’s Web site at www.renewwisconsin.org.

Thursday, November 1, 2007

Michael Vickerman

Michael Vickerman
Executive Director
RENEW Wisconsin

Sunday, October 21, 2007

Anatomy of a State Renewable Energy Purchase

In a presentation prepared for the 12th Annual National Renewable Energy Marketing Conference, Oct. 21-24, in Philadelphia, RENEW's Executive Director Michael Vickerman reviews the requirements for the State of Wisconsin's purchase of renewable electricity:

+ 10% content by 2007; 20% content by 2011
+ Covers agencies, UW campuses, prisons
+ Can purchase from utilities or generate on-site
+ State’s electric load -- @ 900 million kWh/year

Anatomy of a State Renewable Energy Purchase

In a presentation prepared for the 12th Annual National Renewable Energy Marketing Conference, Oct. 21-24, in Philadelphia, RENEW's Executive Director Michael Vickerman reviews the requirements for the State of Wisconsin's purchase of renewable electricity:

+ 10% content by 2007; 20% content by 2011
+ Covers agencies, UW campuses, prisons
+ Can purchase from utilities or generate on-site
+ State’s electric load -- @ 900 million kWh/year

Complete presentation here.

Friday, July 27, 2007

A Federal Energy Policy: Can It Happen Here?

Petroleum and Natural Gas Watch
by Michael Vickerman, RENEW Wisconsin
July 27, 2007, Vol. 6, Number 9

Of all the issue areas that Congress dives into from time to time, none reveals the inability of our legislative branch to fashion an internally consistent national policy quite like energy. The usual items in an energy bill--tax credit extensions, fuel subsidies, fresh regulatory requirements (and loopholes), new rules on offshore drilling, etc.—are designed to reward specific industries and influential constituencies. This year’s energy bill promises to follow that timeworn path left by Congresses of yesteryear.

But an energy bill has to be more than the sum of its subsidies to constitute effective policy. This is especially true as we enter a time of growing resource and environmental limits that threaten to bite us in the collective behind if we don’t curb our profligate consumption of energy.

Now is not the time to continue subsidizing every form of energy that can be produced in the United States, as the current Congress seems intent on doing. In previous bills, Congress has taken great pains to make sure that every energy constituency—coal, oil, nuclear or renewables--gets its fair share of the federal pie, regardless of need or environmental impact. This is the cheap energy paradigm at work—promoting economic growth by artificially lowering energy prices.

But while this paradigm may have been defensible before U.S. oil output reached its maximum in 1970, it has no place in today’s energy-constrained world. Artificially lowering the cost of all energy sources will not only encourage waste and overconsumption, it will hasten the arrival of that traumatic day when the flow of cheap oil and natural gas cannot meet the demands of a hypermobile society.

It’s no secret that Congress lacks the stomach for offending powerful energy lobbies like Big Coal. But it’s simply not possible to institute policy changes, especially those intended to reduce carbon dioxide discharges into the atmosphere, without picking a fight with the coal industry, the electric utilities, and what’s left of the U.S. automotive industry. Therefore, if Big Coal pronounces itself satisfied with the energy bill’s contents when it is passed, you can be certain that Congress declined to incorporate any provisions that would cause coal’s share of the energy pie to shrink, such as a carbon tax or renewable feed-in tariffs.

What makes the United States singularly incapable of producing a coherent energy policy aimed at cutting energy consumption and using low-carbon alternatives to fossil fuels? I believe there are three factors explaining this lamentable state of affairs. The first is that your average American citizen has the energy IQ of beach sand, and, in this regard, your average Member of Congress is the mirror image of his or her constituents. For proof, I would direct your attention to Sen. Chuck Schumer of New York, who regularly appears on news programs to suggest that gasoline is overpriced at $3.00 per gallon and that motorists are being fleeced by dastardly oil companies.

Actually, at that price gasoline is a steal, and it would be so even at $4.00—the amount Canadians pay--or $5.00. Packing 125,000 Btu’s of energy, a gallon of gas will power the average car 25 miles, yet it costs less on a volumetric basis than milk, apple juice, Evian, coffee from Starbucks, Mountain Dew, Listerine, and Red Bull. Try getting that performance with a gallon of Gatorade in your tank. It will set you back $10 and you still wouldn’t be able to back your car out of the garage.

It should be noted that retail gasoline prices in Germany are the equivalent of $7.00 per gallon, yet its economy remains healthy. Why is that? Because Germany, unlike the underachieving U.S., has a national energy policy designed to transition the nation smoothly into a post-fossil fuel energy environment. By taxing fossil energy and providing long-term price support for wind and solar electricity production, the Germans are plowing today’s wealth into building up a sustainable energy system that can withstand the future economic dislocations resulting from Peak Oil and climate change.

Indeed, no other country has made as much progress as Germany in building up a renewable energy infrastructure for delivering low-carbon electricity to homes, businesses, and rail networks. But other countries that lack domestic supplies of fossil energy, like Spain, the Netherlands and Denmark, are also moving aggressively to harness their renewable resource base. They too are light years ahead of the United States in this regard.

A second problem confronting policymakers is the unequal distribution of energy resources across this vast country of ours. A handful of coal-producing states—West Virginia and Wyoming come to mind--are net fossil energy exporters, and will view with hostility any policy proposal that will place limits on energy extraction within their borders. Their power is magnified by the markets they serve, which include large swaths of the Midwest and South.

On the other side of the coin are the West Coast states, Florida and New England, which are populous regions that which have no domestic coal interests to protect. Nor does the automotive industry have a big presence in these states. Not having to appease Big Coal or Big Auto enables state governments in these regions to plot a more aggressive course toward achieving emissions reductions and fuel diversity goals, as is being done in California and Florida.

One would expect members of Congress to promote the principal energy industries in their region. This predisposes them to enter into strategic alliances with other members representing different energy interests, usually of the “I’ll watch your back if you’ll watch mine” variety. Though these alliances are necessary for lubricating the deal-cutting and building support for the entire package, often it comes at the expense of public policy objectives.

Indeed, Congress is institutionally incapable to pass a comprehensive energy bill that attempts to diversify the nation’s energy resource base and scale back its carbon footprint unless it contains elements that work in the opposite direction (e.g., gasifying coal and expanding offshore drilling).

Further complicating matters is the very nature of the U.S. Senate itself, a body organized to magnify the power of individual states to block “national interest” initiatives from changing the status quo. Each state is equally represented in the Senate, no matter how populous. And Senate tradition grants committee chairpersons enormous deference to bottle up or water down legislation that might impose unwanted changes on the states they represent.

Another Senate tradition, the right of unlimited debate, is enforced by a rule that expressly allows a minority of senators to thwart the will of the majority. To shut off debate on a measure, especially one in which powerful economic forces and regional interests are pitted against each other, bill proponents have to line up not 51 but 60 votes. Under the rule, debate continues even if 59 senators vote in favor of ending it and only one votes against the motion.

The energy bill passed by the Senate in June came tantalizingly close to incorporating a 10-year tax package that would have raised $29 billion, mostly from oil and gas companies, and redirected it toward renewable energy development. The tax package was designed to be self-supporting; that is, it would not have trigged additional borrowing to underwrite the pro-renewable energy incentives.

Would such a tax package raise prices at the pump? A little. But remember too that $29 billion equates to about nine months’ profit for Exxon Mobil alone. And, from a social equity perspective, it’s always better to base energy subsidies and incentives on a real-time transfer of wealth than to saddle future taxpayers with even greater levels of indebtedness.

Nonetheless, the oil and gas companies objected to the closing of their favored tax loopholes, and they called upon their senatorial friends in the Oil Patch states to kill off this measure. To accomplish this, these senators made common cause with their counterparts from the Southeast and Rocky Mountain states, where Big Coal is very strong. Thought this minority bloc was outvoted 57-36, they managed to prevent the tax package from being attached to the larger energy package. In any other legislative venue, losing a vote by a margin of 21 would be considered a stinging defeat, but on the floor of the U.S. Senate, it counts as a win.

In his most recent installment of Lyndon Johnson’s biography, author Robert Caro points out that there have been only a few periods in the nation’s history where the Senate lowered the floodgates and allowed legislation reflecting the popular will to come washing through its portals. Those rare instances resulted from significant political realignments that put one party with an activist agenda firmly in power.

The closest the United States came to a coherent national energy policy was during the mid-to-late 1970’s. During that period there was a prevailing sense of anxiety over the nation’s energy security, and both the legislative and the executive branches responded to the national mood with decisive actions. In a five-year period Congress passed laws creating automobile fuel efficiency standards, prohibiting new gas-fired power plants, and requiring utilities to purchase electricity generated by independent entities. By the debased standards of current governance, those were amazingly productive years.

However, once the price oil dropped in the 1980’s, the urgency of the previous decade evaporated, and successive administrations began dismantling the policy initiatives adopted in the Ford and Carter years. When the Reagan Administration lowered fuel efficiency standards in 1986, Chrysler Corporation chairman Lee Iacocca said: “We are about to put up a tombstone ‘Here lies America’s energy policy.’”

It would take nothing short of a sea change to overcome Congressional inertia and recover the ground lost in the last 25 years or so. But though the prospects for a truly coherent national energy policy are improving -- and the need has never been greater -- both the citizenry and the current Congress are far too complacent to entertain changes that might involve belt-tightening and discipline. Given the current political dynamic, it would be unrealistic to expect this Congress, with its narrow majorities, to be the one that jump-starts the federal government into meaningful action.

Yes, we will see some progress on the energy front this year and next, but they will represent the sum of state government initiatives undertaken to counter the policy vacuum that persists at the federal level.

----

Sources:

Caro, Robert A., Master of the Senate: The Years of Lyndon Johnson, 2002, Alfred A. Knopf Inc., New York.

National Environmental Trust: History of Fuel Standards, One Decade of Innovation, Two Decades of Inaction. URL: http://www.net.org/documents/cafe_history.pdf

Tuesday, March 20, 2007

Fossil Fuel Watch: Solar, The No-Risk Path to Wealth Creation

Fossil Fuel Watch
Vol. 6, Number 5, March 20, 2007
by Michael Vickerman, RENEW Wisconsin

Awhile back, I wrote a column which was highly critical of using payback analysis to figure out whether installing a solar hot water system on one’s house makes economic sense. In almost every example you can imagine, the payback period for today’s solar installations ranges between long and forever. For my system, which started operating in January 2006, payback will be achieved in a mere 19 years using today’s energy prices, though by the time 2025 rolls around, half of Florida might be under water and the rest of the country out of natural gas.

What message does payback analysis convey to the average household contemplating a solar installation? It can be boiled down to this harsh assessment: the chances that you will be living in the same house when the system is fully paid off are remote, so you’re better off leaving solar off the table.

Indeed, payback analysis reinforces the popular perception that solar energy is unaffordable, and that homeowners should wait for technological improvements or cost reductions before pursuing this energy option. But from the standpoint of energy security and climate protection, every day of inaction leaves us in a deeper hole. We no longer have the luxury of waiting for external triggers -- be they painful market signals or nasty resource wars -- to spur us into doing the right thing.

But there’s no reason to let payback length rule one’s ability to invest in sustainable energy for the home or business, especially if there are other approaches to valuing important economic decisions. One way to sidestep the gloomy verdicts of payback analysis is to do what most companies do when contemplating a long-term investment like solar energy -- calculate the internal rate of return (IRR) on the invested capital. The definition of IRR is the annualized effective compounded return rate which can be earned on the invested capital, i.e. the yield on the investment.

By using this familiar capital budgeting method, I’m able to calculate an IRR of 6.1% for my solar water heater if natural gas prices rise a measly 3% per annum. That yield exceeds anything that a bank will offer you today. It will likely outperform the stock market this year, which is due for a substantial downward adjustment to reflect the slow-motion implosion of the housing market now underway. And, unless you live in a gold-rush community like Fort McMurray, Alberta, your house will do well just to hold onto its current valuation, let alone appreciate by six percent.

While all investments pose some degree of risk, the return on a solar energy system is about as safe and predictable as, well, the rising sun. Fortunately for the Earth and its varied inhabitants, the center of our solar system is situated well beyond the reach of humanity’s capacity to tamper with a good thing.

The collector system is simplicity itself; the panels just sit there gathering all that exogenous, renewable energy during daylight hours, unencumbered with moving parts that can wear out. The panels degrade slightly from one year to the next, but they shouldn’t lose more than 20% of their efficiency over a 30-year period. And, in the event of a violent weather event like a hailstorm, one’s homeowner insurance policy should cover the damage. All told, solar energy, whether used for electricity or heat, is about as close as it comes to a risk-free investment.

But what about solar’s contribution to the market value of the house it serves, which can be easily measured? A 10-year-old solar energy system should deliver 20 more years of electricity or heat, reducing that house’s energy overhead during that period. In the case of my installation, the 20 years of avoided energy purchases starting in Year 11 should exceed my entire out-of-pocket expense. One can infer from that calculation that houses that capture solar energy on-site will appreciate faster--or depreciate more slowly -- than houses that don’t.

Granted, calculating the IRR of a solar installation doesn’t capture the full range of benefits that flow to the system owner. It doesn’t, for example, factor in the possibility that, before too long, natural gas will become a rationed energy source, but that’s a political outcome whose probability and impacts are, at this point, unquantifiable. True, environmental externalities can be modeled but it’s just an academic exercise until emission offset markets like the Chicago Climate Exchange become accessible to homeowners and small business owners as well as to utilities and multinational corporations. But calculating the installation’s IRR allows system owners to see something about solar energy that is not revealed in payback analysis, which is that obtaining electricity and/or heat from the sun is a sustainable and risk-free way of creating household wealth. And if the numbers support this conclusion, then why aren’t we reinvesting every last penny of profit from our fossil fuel-based economy into creating a renewable energy platform for the future?

Sources:

http://en.wikipedia.org/wiki/Internal_rate_of_return

Petroleum and Natural Gas Watch is a RENEW Wisconsin initiative tracking the supply demand equation for these fossil fuels, and analyzing its effects on prices, consumption levels, and the development of energy conservation strategies and renewable energy alternatives. For more information on the global and national petroleum and natural gas supply picture, visit "The End of Cheap Oil" section in RENEW Wisconsin's Web site. These commentaries also posted on RENEW’s blogand Madison Peak Oil Group’s blog.