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Friday, April 26, 2013

Earth Week 2013 Musings


Earth

from Michael Vickerman

In addition to unwanted snow showers, April 2013 has brought us a flurry of clean energy news stories. Taken together, these recent developments offer a revealing picture of the unique challenges we face in Wisconsin in advancing an energy future that is less reliant on fossil fuels. 

On the face of it, the announcement on Earth Day that several Wisconsin utilitie will retire a minimum of 260 MW of older coal-fired plants and spend $1.2 billion on pollution control upgrades should qualify as good news. The settlement with U.S. EPA also obligates Wisconsin Power & Light (Alliant Energy) and Madison Gas & Electric to offer up to $5.5 million to support solar PV installation in their territories.

However, if one does the math, the solar component adds up to only one-half of one percent of the total amount the utilities will spend under this settlement.  The price tag of the pollution control work even exceeds the nearly $1 billion it will cost to decommission the soon-to-be-retired Kewaunee Nuclear Power Plant. That 39-year-old plant will cease operating in May.
With a combined price tag exceeding $2 billion, these will very likely be the two most expensive electricity-related projects initiated this decade. Ratepayers will absorb the full cost of the pollution control measures undertaken by the owners of the Columbia and Edgewater power plants. 

If Kewaunee’s retirement and the planned shutdowns of Alliant’s Nelson Dewey and Edgewater 3 plants had been announced five years ago, Wisconsin would be swarming with wind and bioenergy developers right now. But utility interest in renewable energy development has diminished markedly, owing to the unfavorable political climate here for windpower development and the belief that natural gas will stay cheap for years to come.  Furthermore, electricity providers have largely fulfilled their requirements under Wisconsin’s modest Renewable Electricity Standard, and there is no successor policy in sight.

Don’t get me wrong. We are elated that up to $5.5 million will be set aside for new solar electric generating capacity. But that sum is insufficient to remedy the massive imbalance in Wisconsin’s electricity resource mix.  Even when being shuttered for good, Wisconsin’s legacy coal and nuclear plants seem destined to cast a long shadow over our energy future and draw resources away from building a less fossil-fuel-intensive energy economy.

Contrast these stories with two recent developments in Iowa. First, Facebook announced that it will locate a brand-new data center near Des Moines. There were many ingredients that led to the selection of Iowa as a data center host, not least of which is a substantial in-state wind energy portfolio that help keep Iowa electricity rates well below the national average.

The other milestone was a recent Circuit Court decision that moves Iowa tantalizingly close to the day when electricity customers can freely contract with third parties to provide them with renewable energy produced on their premises. If this becomes an explicit policy in Iowa, the solar energy market should mushroom there, as it has in states like New Jersey, California and Colorado.

Natural gas prices are just as low in Iowa as they are here, but you won’t find the utilities there using that as an argument against investing in renewables.  In the case of Facebook, ongoing renewable investments helped seal the deal. The social media giant is hungry for wind generation, and Mid-American, which has ample supplies of windpower, is hungry for new customers with large energy appetites. 

A similar dynamic could evolve in Wisconsin, but the state’s utilities need to understand how valuable clean energy is to attracting companies and industries to set up shop here.

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