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Friday, January 31, 2014

Biomass Energy Can Blunt Future Propane Price Spikes

Biomass fuel as pellets or cord wood can assist more than 250,000 propane customers in Wisconsin, reducing the impact of propane supply shortages and price spikes. Propane users predominantly live in rural areas not served by natural gas. These are the same areas where wood and other biomass products are available in large quantity in Wisconsin. RENEW Wisconsin and the Heating the Midwest organization both advocate for increased usage of this local, renewable fuel to reduce dependence on imported propane.

Click here for the RENEW’s full Biomass Press Release

Time to scrap the shale gas “game-changer” myth

A commentary by Michael Vickerman

As this latest blast of arctic air slides away from the Upper Midwest, now is a good time to take stock of the conventional wisdom that grips natural gas markets today.

The Energy Information Administration (EIA) last week reported another large weekly withdrawal of natural gas–230 billion cubic feet (bcf)–from underground inventories. While this is a big number, it is well short of the record-setting 287 bcf withdrawal reported two weeks earlier. This week’s report may eclipse that number.

The heavy demand for natural gas this winter leaves inventories at their lowest levels for this time of year since 2004.  Even if temperatures returned to normal this February and March, we could finish the heating season with only one-third the volume in storage back in early November.


Remember the extraordinary surplus that accumulated in the winter of 2011-2012? It’s ancient history now. Without a moment’s thought to what was happening, we managed to Hoover through every last cubic foot of ballooning inventories that in 2012 sent gas prices plunging down to levels not seen since 2002. One month into 2014, the pendulum has clearly swung over to the deficit side of the supply-demand equilibrium.

The problem is less a shortage of supply—domestic extraction volumes have risen nearly 50 percent in a mere eight years—than an accelerating “longage” of demand.  Notwithstanding the sluggish economy, baseline consumption is rising, stoked by low commodity prices that discourage conservation efforts and a growing supply of residences and businesses to heat.  Even though power companies scaled back their use of natural gas in 2013, overall gas consumption rose 2 percent from 2012 levels, according to EIA estimates.

Stir into that dynamic the coldest winter in the Upper Midwest this century and spice it with slowing production growth reported last year, and you have all but one of the ingredients needed for a dramatic upward re-pricing of this precious energy resource.

What is the missing ingredient here? A new narrative to combat the “shale gas miracle” myth that has been drummed into every adult American’s brain and belief system, courtesy of a well-financed and expertly orchestrated public relations campaign sponsored by the fossil energy industry.

Most Americans now believe that there is enough recoverable natural gas lurking under our feet to heat and power this country well into the next century. A fairy tale to be sure, but as long as it is one we believe to be true, we will have trouble recognizing the signals that tell us that the supply-demand picture is tightening.

Let’s focus on the supply picture for a moment. Did anyone notice that natural gas extraction volumes rose by only 1 percent in 2013? This was “the lowest annual growth since 2005,” the EIA wrote, noting also that “this production growth was essentially flat when compared to the 5 percent growth in 2012 and the 7 percent growth in 2011.” That modest bump failed to keep pace with EIA’s estimate for increased gas usage last year.

In spite of the recent record-setting withdrawals, the price of natural gas, now around $5.00 per MMBtu, is substantially below the $8.00 threshold that it sold for in January 2008, even though the amount of gas in storage then was 13 percent higher than today’s volumes.

One market analyst who clearly hasn’t noticed the changing picture told Bloomberg reporter Christine Buurma earlier this week that “the U.S. market remains awash in gas,” and dismissed the recent price rally as “transitory and not sustainable.”  This analyst believes that prices could drop back to $4.00, a level widely thought several months ago to represent the price ceiling for this commodity.

Not to be outdone, another market analyst predicted a retreat to $3.00 prices by 2016. How this resurgence of supply can be accomplished when prices are dropping is not explained.
Here we see the power of the shale gas “game-changer” myth. Output growth is slackening and weather-related demand is spiking, yet energy analysts and market commentators still expect 2014’s prices to conform to the pattern set several years ago, when we were truly awash in gas.

While the rock bottom prices of 2012 proved very effective in working supplies back down to normal levels, they have also motivated energy companies to conserve cash, cut their exploration budgets, and squeeze as much product as possible from known reserves.  Having operated in survival mode since the great gas bubble of 2012, these firms are too cash-strapped to ramp up exploration and extraction activity. What they would need to make that happen is, first and foremost, a return to 2008-level prices.

What is not sustainable for much longer is $4.00 natural gas, especially in light of certain physical and economic realities, such as:

  • Steep decline rates in the output from wells tapping into shale gas released by hydraulic fracturing (“fracking”);
  • Continuing expansion of gas-fired generating capacity substituting for coal and nuclear power plants now being retired; and
  • Accelerating investments in infrastructure to liquefy domestically produced natural gas for export to Europe and Asia, which would bring to bear global pricing pressures on a commodity currently enjoying a substantial discount relative to overseas markets.
On the last point, for a taste of what global pricing pressure can do to a formerly low-cost energy source, observe the supply-demand-pricing dynamic that is now sending Midwest propane markets into gyrations. True, a number of unforeseeable events, some of them weather-related, converged to elevate propane use over the last six months, but in a globalized market, the people who can pay the most for a valuable commodity are often not the ones who need it the most.
Anyone who has ever watched a football game in January knows that subzero temperatures can be a game-changer, too. Perhaps this remarkable stretch of winter weather will be just the thing to pierce through the veil of wishful thinking and comforting fairy tales that undermine our collective ability to face our uncertain energy future, and to make all necessary preparations.

Heating Season
Start Volume
Remaining volume after 4th week of year
Difference
2013-2014
3834
2193
1641
2012-2013
3929
2996
  933
2011-2012
3805
3098
  717
2010-2011
3833
2542
1291
2009-2010
3837
2521
1316
2008-2009
3488
2374
1114
2007-2008
3545
2536
1009
2006-2007
3461
2757
  704
2005-2006
3282
2494
  788
2004-2005
3327
2270
 1057
2003-2004
3167
2063
 1104
Source: AmericanOilman.com

Michael Vickerman is program and policy director of RENEW Wisconsin, an independent, 501(c)(3) nonprofit that leads and represents businesses, organizations and individuals who seek more clean, renewable energy in Wisconsin.  More information on RENEW’s Web site at www.renewwisconsin.org.


Thursday, January 30, 2014

Midwest faces propane shortage, increase in prices

A recent propane shortage in the Midwest has led to a fivefold increase in prices. The Midwest has the nation’s highest share of propane users, many of which are in rural areas. Responding to this volatile situation, the governors of Illinois, Minnesota, Ohio, and Wisconsin have declared state of emergencies.

One explanation being offered for the shortage is exportation. While domestic propane production has actually increased over the past five years, the amount of barrels exported has grown significantly.


Click here for a further analysis of the Midwest’s propane shortage.

Wednesday, January 29, 2014

GreenWhey Energy converts waste water into electricity

Every day at cheese factories in northwestern Wisconsin, tanker trucks haul away thousands of gallons of waste-water. Much of it is taken to nearby farms, where it is sprayed across the fields as fertilizer.


The waste is high in nutrients like phosphorus and nitrogen. If it runs off the fields into nearby lakes and rivers, it can cause unhealthy amounts of algae in the water.


GreenWhey Energy, a new company in Turtle Lake, is now taking some of that waste, removing much of the harmful material, and using it to generate electricity.


Read more in the article by Greg Seitz' at St. Croix 360, "New 'Whey Forward for Clean Water"

Thursday, January 23, 2014

Power Purchase Agreements in Iowa


RENEW Wisconsin's Michael Vickerman comments in the Des Moines Register regarding power purchase agreements in Iowa and the regional implications of a case being heard at the Iowa Supreme Court today.

Thursday, January 16, 2014

Statement of Opposition to AB 596

Below is RENEW's statement on AB 596, a bill to expand the universe of renewable energy credits that utilities can use to comply with Wisconsin's Renewable Electricity Standard. The bill would allow utilities to apply renewable energy credits from certified generators toward their renewable electricity requirements, irrespective of when the generator was placed in service. The current PSC rule on renewable energy credits permits utilities to apply renewable energy credits created by qualifying generators only if they were placed in service in 2010 or after.



Statement of RENEW Wisconsin in Opposition to AB596
Assembly Committee on Energy and Utilities
January 9, 2014

RENEW Wisconsin leads and represents businesses, organizations, and individuals who seek more clean renewable energy in Wisconsin. RENEW Wisconsin has been advancing a sustainable energy future for Wisconsin since 1991. Of our 300+ members, more than 60 are companies headquartered in Wisconsin.

Wisconsin’s renewable electricity standard (RES), which requires electricity providers to increase their renewable energy supplies by six percentage points, has been the primary mechanism for expanding renewable energy’s share of the state’s electric energy resource mix. I say “has been” because the utilities are now effectively in full compliance with the law’s 2015 target, according to the Public Service Commission. Without a change in the 10% target, We Energies’ 50 MW biomass generation plant at Rothschild, which was placed in service in late 2013, shapes up to be the last utility-owned renewable power plant leveraged by the RES. As of this moment, none of the electric providers subject to Wisconsin’s RES has publicly announced plans to expand their renewable generation portfolio.

The aim of AB 596 is to allow renewable energy credits created by qualifying renewable facilities older than 2010 to be applied to Wisconsin’s RES. Because these facilities are already producing renewable electricity today, the adoption of this bill would not add new kilowatt-hours to the state’s renewable energy supplies. Moreover, as noted above, Wisconsin’s electricity providers are already in compliance with the state’s Renewable Electricity Standard. Therefore, they have no need for the renewable energy credits (REC’s) that would be created through the adoption of AB 596.

RENEW does not object in principle to policy changes that allow electricity providers to acquire RECs created by older generators for the purpose of satisfying their renewable energy requirements, provided that there is a need for this additional supply of RECs. But that need would be created by raising our 10% standard, which AB 596 does not do. Absent any provision to increase the RES above its current levels, this legislation would have no practical effect on utility resource decisions if adopted.

This legislation begs the question: what is the logic behind creating new REC’s without creating a rationale for electric utilities to use them?

We would support the provision proposed here if it were grounded in legislation to expand the current RES. Sadly, no growth in the RES is contemplated in this bill, which is why we oppose it.

Why is an expanded RES off the table?

Surely it can’t be the experience of neighboring states. Wisconsin’s electricity rates are at the high end among Upper Midwest states, yet it has less installed wind power per capita than its neighboring states.

In 1999, Wisconsin was the first Midwest state to adopt a Renewable Electricity Standard. In 2006 the Legislature strengthened the standard, from 2.2% by 2011 to 10% by 2015. Between that time and today, it has been a highly effective mechanism for creating jobs, spurring demand for locally manufactured equipment, and increasing the flow of tax revenues and supplemental income into rural landowners and businesses. All the economic and environmental objectives that can be achieved with a 10% standard have been achieved. But the current RES has no capacity left to leverage new supplies of renewable electricity, and the only way to continue reaping the benefits of a cleaner, healthier and less financially risky energy mix is to expand and extend this policy tool.  Such a move would not be rash or radical; indeed, Wisconsin has done it before. 

Other states are not sitting still. By the end of 2014, renewable energy is expected to account for more than 30% of Iowa’s electricity. By 2020, Minnesota will become the regional powerhouse for solar. By every economic measure, those two states are outpacing Wisconsin, and their cleaner, lower-cost energy mix is a significant element in their ability to attract and sustain new investments. If Wisconsin is serious about competing with Iowa and Minnesota for new jobs and business opportunities, it needs to put itself back on a growth track for renewables, and a higher RES is the best vehicle for accomplishing that.  The current policy drift on energy is not going to get the job done.

Respectfully submitted,

Don Wichert
RENEW Wisconsin Board member

Summary of RENEW's 2014 "We Mean Business!" Summit



2014 RENEW Wisconsin Energy Policy Summit
We Mean Business
Summary

RENEW Wisconsin hosted its third annual Energy Policy Summit, We Mean Business, on Friday, January 10, 2014, at the Pyle Center on the UW-Madison campus.  Although our previous summits pulled in large audiences and sparked many lively discussions, by all accounts RENEW’s We Mean Business summit topped them all.

By the numbers:
  • 241 registered
  • 211 attended
  • 3 standout keynote talks
  • 3 renewable energy business and policy panel sessions
  • 6 interactive breakout group discussions, each supported by its own policy brief
  • 6 clean energy projects inducted to the Million Watt Club
  • 7 people and/or organizations recognized as Renewable Energy Leaders
  • One gala social with beer, chicken skewers, and veggies

The purpose of the Summit was to inform, engage, and inspire those in attendance with the vast potential of renewable energy to invigorate Wisconsin’s economy and help it compete for new business ventures, while stimulating job growth and protecting the environment.  The vast majority of attendees received those themes in mega doses. 

A few quotes from e-mails received shortly after the event:

·        ”What an honor to be part of such a class production! Thank you so much.”
·        “What a great summit! It did so much of what I look for in an event like that with all the great info updates, various incredible contexts for all amazing initiatives and progress, and plenty of inspiration during a tough sledding season.”
·        “Just wanted to say thank you and congratulations.  The Summit always gets better.  You all did a great job with the speakers.”
·        “Great job with this year’s conference.  In my humble opinion, this was by far the best one you guys have put on yet, and it may be hard to top in 2015.  Great, engaging speakers throughout the day, and good panels too.”

There were three major themes that reverberated throughout the day:
1        A major transformation is occurring in the energy sector, driven by distributed applications of energy efficiency and renewable energy, which is rendering the traditional energy production business model increasingly obsolete.
2        Wisconsin is lagging behind the Midwest, much of the US, and the world in adopting and adapting to this new business model, dampening the state’s prospects for sustained job growth.
3        The opportunity for Wisconsin to dramatically increase its use of clean renewables still exists, but only through strengthening its policies along the lines suggested by RENEW.

All the Energy Policy Summit speaker talks (that were electronic) are located on the RENEW Website:  http://renewwisconsin.org/2014_Summit/agenda.html

Tom Still's commentary on the Summit (linked below) was published in the Appleton Post Crescent.  Still is the Executive Director of the Wisconsin Technology Council and acted as a moderator for the Research, Jobs, & Innovation Panel during the Summit.  

http://www.postcrescent.com/article/20140118/APC03/301180307/Tom-Still-column-Striking-an-energy-generation-balance-Will-Wisconsin-late-dinner-?nclick_check=1

Monday, January 13, 2014

"As other states lead, WIS. renewable businesses aim to catch up"

This past Friday, January 10th, RENEW Wisconsin hosted its third annual Energy Policy Summit.  The Summit was a great success and RENEW would like to thank all of the sponsors, speakers, and attendees who made it possible.

Below is an article by Thomas Content of the Milwaukee Journal Sentinel that recaps the Summit's topics and speeches.

As other states lead, WIS. renewable businesses aim to catch up


Renewable energy businesses that want to develop projects in Wisconsin are having success in other states, while looking for ways to develop more projects here.
DVO, a Chilton-based company that is the state’s leading builder of waste-to-energy digesters, is actively pursuing projects in places like Serbia, Chile and Vietnam as well as Vermont and other states, said Melissa Van Ornum of DVO.
DVO is seeing less demand to build projects in Wisconsin after utilities increased the price they would pay to buy the electricity generated by the dairy farm digesterse in the state.
Wisconsin is still the nation’s leader in development of waste-to-energy digesters, but other states are catching up fast, she said.
Matt Neumann of Sunvest Solar in Pewaukee said his company has been actively installing solar projects around the country, including Missouri. Of more 212 projects the company has in the pipeline this year, just one is in Wisconsin, he said.
Wisconsin needs to open the door to more solar through allowing third-party ownership of solar projects, which enable solar developers to own the panels and homeowners and businesses to lease the panels on their rooftops, he said.
Renewable energy supporters need to find ways to reach across the aisle to find support from the Republican Party, said Neumann,
son of former Republican Rep. Mark Neumann.
“I’m a conservative, and this should not be a partisan issue,” he said.
Nationwide, 80% of new solar installations last year came in states like New Jersey, California and Arizona that have given the go-ahead to third-party ownership.
In Wisconsin, policymakers have taken a go-slow approach to expanding renewable energy over concerns about the impact on prices paid by other utility customers.
Chris Schoenherr, deputy secretary of the state Department of Administration, said the Public Service Commission is looking into the issue, but agreed a go-slow approach is prudent.
Utilities have concerns about allowing too many solar projects, and the ripple effect on other customers if large businesses and other customers shift to generate their own power. Utilities have fixed costs that need to be paid for and policymakers need to be measured to assure that utility finances aren’t upended by distributed generation, he said.
But by not pursuing renewable energy, the state is falling behind its neighboring states, speakers at the conference said. Michigan built more wind power in 2012 than Wisconsin has built over the past 15 years, he said.
Wisconsin was among the first states to implement a renewable energy target but other states have moved to enact targets that are more aggressive than Wisconsin’s.
In Minnesota and Iowa, where utility costs are less expensive than Wisconsin, utilities are well on their way to hit 25% to 30% of their power from renewable sources.
In Minnesota, Xcel Energy is moving to build more wind farms in a bid to meet the renewable energy standard as well as reduce its overall emissions of the greenhouse gas carbon dioxide, said Mike Bull of the Center for Energy and Environment in Minneapolis.
In addition, the new wind farms are projected to reduce costs for customers over time because there is no fuel price that needs to be paid when the wind blows, Sullivan said.
As a result, Xcel’s aggressive move to add wind power in 2013 represents an investment of more than $3.5 billion, said Michael Noble of Minnesota-based Fresh Energy.
“None of that was driven by mandates. None of that was driven by renewable energy standards, none of that was driven by state law,” he said. “That was all driven by economics: it’s cheaper.”
Now that Wisconsin’s utilities have largely met the state’s 2015 renewable energy standard, it may soon be time to expand that, lawmakers at the conference said.
“We must always push the bar up a little higher to see how much we can do because this is a competitive world,” said Sen. Dale Schultz, R-Richland Center.
Schoenherr, of the Department of Administration, said the time isn’t necessarily right to move forward with expanding the Wisconsin renewable standard because utility sales are flat and the state currently has enough power to meet its needs. The time to consider it would be when the state is looking to add more power plants.
But that time isn’t far off, as two state utilities announced last year they are considering building new natural gas-fueled power plants by the end of the decade.
Short of those bigger policy initiatives, the state should move first to expand funding for renewable energy projects through the state Focus on Energy program – which has suspended funding for renewables twice in recent years, said Rep. Katrina Shankland, D-Stevens Point.
“The last couple years have been a real roller coaster for renewable energy producers,” said Michael Vickerman, program and policy director for the Madison-based nonprofit group Renew Wisconsin.


Read more from Journal Sentinel: http://www.jsonline.com/blogs/business/239679511.html#ixzz2qIySBZHO 
Follow us: @JournalSentinel on Twitter

Wednesday, January 8, 2014

Honors Set for Wisconsin Renewable Energy Leaders




Awards Will Recognize Innovations, Achievements, Local Pioneers

(Madison) At its third annual Energy Policy Summit this week, RENEW Wisconsin will present awards to municipalities, companies and individuals whose actions are fueling the expansion of the renewable energy marketplace in Wisconsin.

Titled We Mean Business,” RENEWs summit is set for January 10, 2014, and will take place at
The Pyle Center on the UW-Madison campus.

The people, companies and municipalities we will recognize this Friday are making a lasting impression on Wisconsins renewable energy landscape, said RENEW Wisconsin Executive Director Tyler Huebner. “As Wisconsins preeminent clean energy organization, RENEW benefits greatly from their pioneering innovations and hard work, which help prepare the ground for broader policy advances.

We at RENEW are honored to have the opportunity to work closely with these award winners and take inspiration from their ongoing commitment to advancing clean energy here, Huebner said.

Please see our previous blog post on award winners for RENEW's class of 2013 renewable projects: http://www.renewwisconsin-blog.org/2013/12/renew-to-honor-class-of-2013-renewable.html

A list of award categories and recipients appears below.
  
  
Municipal Renewable Energy Program of the Year -Milwaukee Shines (Office of Environmental Sustainability, City of Milwaukee)
For leadership in organizing neighborhood group purchases and establishing a property tax financing tool to reduce up-front installation costs of solar. 

Distinguished Public Service Award – Roger Kasper, Department of Agriculture, Trade and Consumer Protection 
Honoring his effective behind-the scenes work in building a cohesive constituency thathas made Wisconsin a national leader in farm-based renewable energy development.


Green Power Champion of the Year – Metcalfe’s Market
For its commitment to 100% Green Power by purchasing Renewable Energy Certificates created by local and independent generators.

      Innovative Renewable Energy Project of the Year City of Monona
For its commitment to energy independence by hosting third party-owned solar arrays on four rooftops totaling 156 kW and acquiring renewable energy credits created with the generation.

      Innovative Renewable Energy Developer of the Year Solar Connections
For leadership in developing innovative financial arrangements to enable residential customers and nonprofit entities to host solar electric systems on their premises.

      Innovative Renewable Energy Developer of the Year Falcon Energy Services
For innovative financial sponsorship of renewable energy projects in Wisconsin.

     Lifetime Achievement Award Lee Cullen, Cullen, Weston, Pines & Bach Outstanding service as counsel for numerous clean energy businesses and advocacy organizations, and outstanding leadership in crafting, shaping and defending Wisconsins renewable energy policy framework throughout his professional career.



To learn more about RENEW’s Energy Policy Summit, go to