Report: Wisconsin needs an energy plan to stay competitive

Fog enshrouds the Oak Creek power plant in Wisconsin in this 2010 photo. (Photo by jonnyfixedgear via Creative Commons)

Fog enshrouds the Oak Creek Power Plant in Wisconsin in this 2010 photo. (Photo by jonnyfixedgear via Creative Commons)

A new report warns that Wisconsin’s economic competitiveness could be at risk if the state doesn’t diversify its electricity sources.

The Badger State is already burdened by the second highest electricity prices in the Midwest, with only Michigan customers paying more on average.

Those rates are likely to climb faster than inflation and prices in surrounding states in the next decade due to Wisconsin’s dependance on coal-burning power plants, according to Gary Radloff, director of Midwest policy analysis at the University of Wisconsin-Madison’s Wisconsin Energy Institute.

His recent paper, “How to Keep Wisconsin and the U.S. Competitive in a Changing Energy World,” says better planning and more investment are needed to shield the state’s economy from fossil fuels’ risk and volatility.

“Wisconsin will fall behind in global and domestic economic competitiveness unless it moves towards a balanced energy portfolio with less reliance on high-cost coal and more reliance on clean energy technology solutions,” Radloff writes. “That is not the case today in Wisconsin, and in fact, there are troubling signs Wisconsin has slipped behind other states in the path to long-term energy innovation and economic success.”

‘Misguided planning’

Wisconsin may be locked into higher energy prices because of “misguided energy planning in the past” that made long-term commitments to coal plants that are increasingly expensive to operate, Radloff writes.

The report says concerns about electricity supply and reliability in the 1990s and early 2000s led to over-building of coal plants in the state, and customers will be stuck paying for them for the next 20 to 30 years.

They include the We Energies Oak Creek Power Plant, the largest construction project in state history. The $2.2 billion project came in 8 percent over budget. Wisconsin regulators last year approved a rate increase passing most of that overrun on to customers.

Radloff cites a Sierra Club forecast that coal prices will increase about 6 percent per year or 2 percent above inflation over the next decade because of growing transportation, operational, and regulatory expenses.

A need to diversify

The share of Wisconsin’s electricity generated from coal declined to 63 percent in 2010 from 71 percent in 2000. Natural gas increased from 3.8 percent to 8.5 percent during that period, and renewables grew from 1.9 percent to 3.8 percent.

While more coal plants are being converted to natural gas, Radloff cautions that the “silver bullet solution may not be natural gas, despite Wisconsin utilities betting heavily on it.”

Current gas prices are low in part due to over-production, he writes, with drilling companies losing money and likely to retreat if prices don’t go up. And the history of commodity pricing suggests they will at some point.

Meanwhile, policy uncertainty is slowing investment, job creation and innovation in clean energy, the report says.

Most Wisconsin utilities have already fulfilled their benchmarks for the state’s renewable electricity mandate, meaning their “desire to acquire more renewable generation will be minimal to none.”

Potential to lead

“The good news is that Wisconsin still probably can right the ship and move in the direction of technology innovation to position itself for economic growth,” Radloff writes.

The report catalogs dozens of policies that appear to have been successful in other states and countries, from research incentives to grid interconnection rules.

“We’re kind of calling this our cookbook. It’s a set of recipes for advancing clean energy technology,” Radloff said in an interview with Midwest Energy News.

The state already has many of the ingredients to become a leader in biogas, microgrids, energy storage and combined heat and power, Radloff said. What’s missing is a comprehensive state energy policy.

“We need to set some energy goals. We just don’t have a strategic energy policy or plan, and we need one. If you don’t set some goals, you don’t get anywhere,” Radloff said.

A wake up call

The report is one of a number of “wake-up calls that Wisconsin is headed in the wrong direction” on energy issues, said Keith Reopelle, senior policy director for Clean Wisconsin.

Clean Wisconsin has been among the groups lobbying to restore an integrated resource planning process that was phased out more than a decade ago as the state prepared to deregulate its utilities, which never happened.

The Wisconsin Public Service Commission collects utility data for biennial Strategic Energy Assessments, but the documents are mostly a snapshot of current trends, not a chance for long-term planning, Reopelle said.

Without a greater policy focus on expanding clean energy in the state, Wisconsin is in danger of missing out on opportunities in one of the few commercial sectors that continues to grow, Reopelle said.

“It’s not just about growing our clean energy industries,” he said. “It’s also about growing our agricultural industry, our food processing industry,” and other existing industries that could benefit from renewable energy production.

A better approach?

Satya Rhodes-Conway, a senior associate at the Center on Wisconsin Strategy, a nonprofit think tank at the University of Wisconsin-Madison, agrees that Wisconsin lacks a “big picture strategy” on energy.

“It’s both the policy but also the uncertainty about the policy that’s really harming our ability to diversity our energy market,” Rhodes-Conway said.

Solar development has been sidelined by shifting rebate programs and wind development has been stalled by disputes over siting rules, for example.

She said she would emphasize energy efficiency first, because it reduces the amount of generation you need to build, but after that diversification should be a bigger priority than it is today.

“You don’t want to rely only on digesters for your electricity, obviously. Nor do you want to rely only on wind turbines, but nor do you want to rely only on coal-fired power plants,” Rhodes-Conway said. “I do think a broader approach, an approach that has more resiliency and redundancy in it is probably a better one.”

The Center on Wisconsin Strategy and Clean Wisconsin are members of RE-AMP, which also publishes Midwest Energy News.

Cleantech competition

While Radloff’s focus was Wisconsin, the same critique could apply to many other states, and the country as a whole.

Pew Environment’s recent Innovate, Manufacture, Compete report described how policy uncertainty is hurting the U.S. clean energy sector. Last week, it reported that China continued to outpace the United States in cleantech investments.

“The center of gravity in the clean energy world has shifted from the United States and Europe to China,” Pew Environment said in its latest “Who’s Winning the Clean Energy Race?” report.

In 2012, China attracted $65.1 billion in clean tech investment, 20 percent more than in 2011. The United States was second best with $35.6 billion invested — a 37 percent drop from 2011.

“While overall progress has been made in the United States over the last decade in substituting renewable energy for legacy high-carbon energy sources, success will not continue without a favorable policy environment,” Radloff writes in his report.

“Wisconsin, like many states, has taken a cautious approach to renewable energy policy and therefore remains a high-carbon coal and petroleum state… If Wisconsin wants to be a winner in the bioeconomy, then creating policy certainty for renewable energy is required.”

Originally published April 25, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/04/25/report-wisconsin-needs-an-energy-plan-to-stay-competitive/

How wind energy helped Iowa attract Facebook’s new data center

(Photo by archerwl via Creative Commons)

(Photo by archerwl via Creative Commons)

After 18 months of courtship and competition, Iowa officials announced Tuesday that Facebook has selected a Des Moines suburb as the site for its next data center.

The social media giant plans to break ground this summer in Altoona, Iowa, on a $300 million data center that could be the first of three facilities there.

Much of the news coverage has focused on the $18 million in tax credits awarded by the state, but Facebook had another reason to “like” Iowa: wind power.

Committed to green power

Technology companies that operate large data centers have been under increasing pressure in recent years to reduce their energy consumption and carbon footprints.

As part of a December 2011 truce with Greenpeace, Facebook adopted a policy that gives preference to building data center in places with access to clean and renewable energy.

A company spokesperson confirmed in an email to Midwest Energy News that access to wind power was a factor in its decision to locate in Iowa.

“We are committed to powering more of our operations with renewables — we’ve set a goal of reaching 25% renewables in our mix by 2015 — and are exploring opportunities in all of the regions we operate data centers,” Alex Hollander wrote.

The availability of wind power is one of the reasons Iowa is now neck-and-neck with the state of Washington as a destination for large data centers, said John Boyd Jr., a New Jersey consultant who helps companies site data centers.

“Our clients are coveting green power,” Boyd said, and the demand is being driven by marketing. “There’s public relations value above and beyond the economic value of wind energy.”

Still, he doesn’t think it’s a leading criteria for siting decisions, he said. More important factors include tax incentives, real estate costs, and electricity prices.

Nebraska, a state with much less wind generation but also low electricity rates, was considered Iowa’s chief competitor for the site.

‘Unfriending’ coal

Facebook began feeling public relations pressure from Greenpeace in 2010, when the environmental group launched its Unfriend Coal campaign, urging Facebook to power its data centers with renewable energy.

The campaign culminated with the December 2011 announcement that the two organizations would be working together to improve energy efficiency and research clean energy solutions for future data centers.

“Given the rate of growth we’re seeing [in data center electricity use], it’s very important to make sure that renewable energy is a component of their growth plan,” said Gary Cook, a senior policy analyst for Greenpeace.

Facebook’s decision to build in Iowa is a sign that their agreement is working, Cook said. It will be the company’s fourth owned-and-operated data center, and second since the Greenpeace campaign. The last one was built in Sweden, also a clean energy hub.

In Facebook’s announcement, it said the Iowa data center “will be among the most advanced and energy efficient facilities of its kind.” It also notes Iowa’s “abundance of wind-generated power.”

Greenpeace in its statement Tuesday praised the site’s potential but said the company needs to work with the local utility, MidAmerican Energy, to increase its renewable energy mix.

“In Iowa, Facebook has chosen a location where it has great potential to power its newest data center with the wind energy that is booming there, but to do so it must show a willingness to work with Iowa’s major utility, MidAmerican Energy, to provide more clean energy to the grid,” it said.

Hydro to wind power

The Pacific Northwest has long been a destination for data centers because of generous tax incentives and cheap hydroelectric power. In Iowa, incentives and low electricity prices are also drivers.

Iowa’s average electricity rate is about 2.5 cents per kilowatt hour below the national average, according to data from the U.S. Energy Information Administration.

How much credit wind energy deserves for keeping prices down is tough to pinpoint, said David Osterberg, executive director of the Iowa Policy Project, a nonprofit research organization that’s studied the rate impact of wind power.

“All you can say unequivocally is nearly a quarter of all the kilowatt hours produced here are from wind, and we still have rates more than 2 cents a kilowatt hour below the national average. I can’t say that one caused the other, but our wind sure didn’t hurt,” he said.

Harold Prior, executive director of the Iowa Wind Energy Association, said data centers’ interest in clean energy could further boost the state’s wind industry as they work to green their impacts.

“I don’t think there’s any question that there will be a number of wind farm developers that are going to be extremely interested in working with these data centers.”

The Iowa Policy Project is a member of RE-AMP, which also publishes Midwest Energy News.

Originally published April 24, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/04/24/how-wind-energy-helped-iowa-attract-facebooks-new-data-center/

Do LED bulbs make turkeys happy? Minnesota farmer smiling either way

(Photo by Vicki Watkins via Creative Commons)

(Photo by Vicki Watkins via Creative Commons)

At precisely 6 a.m. each morning, Mike Langmo’s turkeys experience a perfect sunrise, regardless of the season or weather.

The Central Minnesota turkey farmer installed dimmable, programmable LED lamps last year in one of his two finishing barns, allowing him to simulate natural light patterns indoors.

There’s some evidence that dimming schedules like these can help better regulate the birds’ circadian rhythms, possibly resulting in healthier, more productive flocks.

While “the jury is still out” on some of those claims, says Langmo, he’s already convinced of another benefit of LED lights: cost savings.

“Energy is an out-of-pocket expense for me,” says Langmo, of Lakewood Turkey Farm in Eden Valley, Minnesota.

The LED lamps are 87 percent more efficient than the 100-watt incandescents that used to line the barn’s ceiling. Even after increasing the number of lights, the barn is still using less electricity.

Studying performance

Langmo learned about the technology a few years ago after meeting an LED lighting vendor at a trade show. Today, he’s part of a state-funded study that’s trying to document the performance of LED lighting in poultry barns.

The Minnesota Project, a St. Paul non-profit that works on rural economic issues, received a grant from the Minnesota Department of Commerce in 2011 to evaluate the products’ potential to be included in utility conservation programs.

“Any way that we can help farmers reduce their production costs is beneficial to farmers individually and rural economies in general,” says Fritz Ebinger, The Minnesota Project’s clean energy manager.

The project partnered with Once Innovations, a Twin Cities company that manufactures LED lights for poultry and livestock barns, and recruited a dozen farmers to test out the lights in their barns.

The Minnesota Project released a mid-point report in November that shows the bulbs, so far, are holding up under the hot and dusty conditions inside a typical turkey barn.

Adoption quickening

LED bulbs contrast with the orange glow from older lights in Greg Langmo's turkey barn in (Photo courtesy Minnesota

LED bulbs contrast with the orange glow from older lights at Lakewood Turkey Farm in Eden Valley, Minnesota. (Photo courtesy of the Minnesota Project)

Once Innovations introduced its AgriShift Poultry Light in January 2010, but initially the lamps were too expensive — $64 per bulb — for most farmers to seriously consider.

Since then, the price has come down considerably, to about $35 per bulb. After utility rebates and other discounts, customers often pay less than $10, according to Brian Babb, head of new business development at Once Innovations.

Sales have also been slowed by the drought and relatively high feed and fuel prices in recent years, which have squeezed farmers’ margins and left them with less cash for investing in lighting or equipment upgrades, says Babb.

“Now that they’re starting to get a little bit of wiggle room, we’re seeing the adoption is starting to quicken,” says Babb.

One factor is federal lighting standards, which are phasing out inefficient incandescent bulbs, but a bigger reason is that more rural utilities are offering rebates for lighting retrofits, he says.

Intense interest

“It’s definitely a hot topic,” says Jake Selseth, an account executive for Great River Energy, which administers conservation programs for 28 rural electric cooperatives in Minnesota.

While there seems to be a lot of interest in LED lighting, Selseth says, most of the applications Great River Energy gets for lighting rebates involve converting to some type of fluorescent bulb.

Neither the Minnesota Turkey Growers Association nor the National Rural Electric Cooperative Association were aware of statistics for agricultural LED use, but Ebinger says the numbers are still small.

Farmers are primarily interested in LEDs because of the energy savings, but some also dislike compact fluorescents and have concerns about mercury contamination if CFLs break inside barns.

LED lamps also give farmers more control over color and brightness, allowing them to schedule dimming programs like the one used in Langmo’s barn.

Healthier birds?

Under the right lighting conditions, “the birds get back into that natural rhythm,” which can lead to less fighting and more efficient weight gain, says Babb.

The Minnesota Project study, however, is looking only at energy savings, performance and durability of the lighting. Other possible benefits to the birds is beyond its scope.

Measuring those other benefits is complicated because of the number of variables involved. Turkey’s temperament naturally varies, and disease and other factors can easily affect the outcomes.

For what it’s worth, Langmo says the turkeys in the LED barn seem to be converting food to weight a little more efficiently than those in another barn with high-pressure sodium lights.

Mohamed El Halawani, an animal science professor at the University of Minnesota, says scientists are just beginning to understand how lighting affects turkeys. His research has shown that a specific wavelength of red light improves reproduction in turkeys.

In general, though, farmers should be skeptical and ask questions about lighting claims and the research that supports them, he says.

Outlook improving

The biggest barrier for LED lighting in poultry barns is cost. Langmo estimated that his lights would pay for themselves in about a year and a half, but they were heavily subsidized by the study and the manufacturer.

Questions also need to be resolved about the quality of light and the amount of bulbs needed. Langmo, for example, doubled the amount of lights after workers complained about being unable to see well enough in the barn.

One goal of the Minnesota Project study is to give rural utilities information so that they can design more successful rebate programs around LED lighting on farms, says Ebinger.

Babb is hopeful this might be the year ag-barn LEDs move beyond the early-adopter phase.

“Once you hit that tipping point of acceptance, it’s going to happen really quick,” says Babb. “We expect to see something in the neighborhood of 50 percent penetration in less than five years.”

Originally published April 17, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/04/17/do-led-bulbs-make-turkeys-happy-minnesota-farmer-smiling-either-way/

In Iowa, researchers seeking a stronger, lighter power line

Lighter power lines would require fewer transmission towers, which can make up half the cost of a new line. (Photo by Michael Kappel via Creative Commons)

Lighter power lines would require fewer transmission towers, which can make up half the cost of a new line. (Photo by Michael Kappel via Creative Commons)

Alan Russell calls today’s transmission lines — clusters of steel wires surrounded by strands of aluminum — “a bundle of compromises.”

The steel is heavy and doesn’t conduct electricity well, but it’s needed to support the aluminum, which would otherwise sag too much under the weight of its load.

It’s bulky and unwieldy, but utilities have used the combination since the 1960s, building strong, tightly spaced towers to hold it up off the ground.

Russell, a materials scientists at the U.S. Department of Energy’s Ames Laboratory in Iowa, is part of a team that’s working on a next generation power cable — one that’s lighter, stronger, and more conductive.

The lab is about to begin several months of testing to confirm the strength of their new material, a metal composite made from aluminum and calcium. If they can prove the material has the properties they think it does, the discovery could lead to lower costs for transmission projects.

A ‘eureka’ moment at breakfast

The potential breakthrough came out of two decades of basic research on metals composites — combinations of two or more metals that have unique characteristics.

“We have seen amazingly high strengths from these, and yet they still conduct electricity well,” says Russell. “That’s an odd and rare combination. Usually in metals, the stronger you make it, the worse the conduction of electricity becomes.”

In 2008, Russell and his colleague Iver Anderson began experimenting with a material made of aluminum infused with tiny specks of iron to improve its strength. It showed some promise, but after two years of trial and error they were still unable to form it into wires.

A few years ago, a new idea came to Russell after pouring milk on his cereal one morning: What if they used calcium instead of iron? Calcium is abundant, inexpensive, lightweight, and among the best conductors there is. (Only gold, silver, copper and aluminum are more conductive.)

The researchers combined aluminum with small calcium granules and successfully formed the new material into wires without it cracking or breaking. The wires were highly conductive and relatively strong, but they were limited by the size of calcium particles.

The smaller the particles, the stronger the composite material. The smallest commercially available calcium granules are fairly coarse, about 1.5 millimeters wide. Ideally, Russell and Anderson wanted a calcium metal powder with particles no more than 0.1 millimeter wide.

At that size, though, calcium metal powder becomes hazardous to manufacture. Calcium is reactive with water, and a fine powder can react with humidity in the air, creating the possibility of explosions similar to what can happen in a grain elevator.

The lab has designed a machine for safely creating calcium powder, using a method called centrifugal atomization, which they think could be scaled up to meet demand from power line manufacturers if their aluminum-calcium cables prove to be superior.

Advantages

The Ames lab power lines conduct AC power as well as the steel-aluminum status quo, but they appear to be at least 10 percent more efficient than existing lines at conducting DC power, according to Russell.

The cables are likely to cost about twice as much as steel and aluminum lines, but Russell thinks power companies will be able to more than make up that premium through lower tower costs. The aluminum-calcium lines weight less, so they’ll require fewer and smaller towers to support them.

“I can make my towers more widely spaced and have fewer towers per mile, which is a massive cost savings,” says Russell. “Half the the cost of the whole line is those towers.”

The material’s strength could make the lines more resilient in extreme weather, too.

Now that they have a supply of calcium powder, the Ames Lab will spend the next several months testing the strength of its aluminum-calcium cables. After that will come a battery of other tests to determine about 20 other properties.

Russell says he was one the phone last week with someone from a major cable manufacturer that’s interested in their work and interesting in helping to fund it. If everything goes well, the cables could be on the market as soon as 2018.

Originally published April 10, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/04/10/in-iowa-researchers-seeking-a-stronger-lighter-power-line/

Are feed-in tariffs a ‘subsidy’ for a small group of utility customers?

(Photo by Kevin Baird via Creative Commons)

(Photo by Kevin Baird via Creative Commons)

When a business or homeowner lowers their electricity bill by installing solar panels or wind turbines, do they drive up other customers’ utility bills?

That’s the perennial claim made by utilities that oppose policies that would require them to compensate customers for electricity they generate.

Most recently in Iowa, utilities argue that feed-in tariff and net-metering rules benefit a small group of customers at the expense of everyone else.

“The concept of subsidizing somebody’s electricity at the expense of others is one our boards around the state have not been able to get behind,” Tim Coonan, a lobbyist for the Iowa Association of Electric Cooperatives, said last month after a feed-in tariff bill for small wind cleared an Iowa Senate committee.

Also last month, a spokesperson for Pacific Gas & Electric told Midwest Energy News that under California’s policies, poor households “subsidize the more affluent community” of homeowners who can afford to install solar panels.

The subsidy argument, however, is one that is overused and understudied, according to distributed power advocates.

“It’s a claim that needs a lot more investigation before it is reasonable to take it at face value,” says John Farrell, a senior researcher with the Institute for Local Self-Reliance and a leading expert on customer- and community-owned clean energy.

In California, ‘it’s actually the opposite’

A recent cost-benefit analysis of California’s net-metering policy found some customers paying slightly more as a result of others’ solar panels, but on average the state’s electricity customers were benefiting from the customer installations more than the systems’ owners.

In other words, California customers who have used solar panels to lower their electric bills are the ones subsidizing everybody else.

“They found despite utilities’ claims … about customers not paying their fair share of the fixed costs, it’s actually the opposite,” Farrell said.

The January 2013 report, prepared by consulting firm Crossborder Energy for the Vote Solar Initiative, looked at a broader range of benefits than most utilities acknowledge. For example, customer-owned solar panels can lower transmission costs and postpone local equipment upgrades.

California’s net-metering policy requires utility meters to run forward and backward for customers that generate their own power. The state’s major utilities claimed the rule would push billions of dollars of additional costs onto ratepayers who don’t participate in the program.

“We conclude that the utilities’ concerns with the impacts of [net-metering] on nonparticipating ratepayers are unfounded,” the Crossborder Energy report says.

The analysis studied the impact on residential and commercial customers of Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison. When fully implemented, the average PG&E residential customers would likely pay a few cents more per month because of the policy.

All other customers, including PG&E’s commercial customers, would likely see benefits. Averaged across all three utilities, it creates a “small net benefit” for residential customers, and clear cost savings for commercial, industrial and institutional customers.

‘It’s really complicated’

So does that mean Iowa utilities are wrong to say that paying for customers’ wind power will push costs onto other customers? Not necessarily.

“In the end, it’s really complicated. You can’t take that study from California and generalize it for any utility,” Farrell said.

The variables range from grid congestion to rate structures. Without a specific cost-benefit analysis, you can’t just assume customer-owned generation adds costs, he said.

Paul Gipe, a California solar analyst who tracks feed-in tariff policies, says they’re simply a way to pay for new generation.

“This is exactly the same as when a private company, an electric utility, for example, is approved by its regulator to build a conventional power plant ‘in the public interest’,” says Gipe. The costs and benefits are studied, and if regulators think the plant is in the public’s interest, they will approve it even if it results in new costs for customers.

In a way, feed-in tariffs offer ratepayers more predictability and protection than conventional power plants, which usually come with a guaranteed profit margin for utilities, says Gipe. Feed-in tariffs require utilities to pay a certain rate for a set amount of time, but it isn’t adjusted upward if generation costs turn out to be higher than expected.

Buying solar power from utility customers is no more a subsidy for renewables than paying to build a gas or coal plant is a subsidy for fossil fuels, Gipe says. A subsidy is research dollars and tax credits for nuclear and fracking technology — not paying a fair price for generation, he says, and the distinction matters.

“The word ‘subsidy’ has a negative political connotation,” says Gipe. “Because of that, the word subsidy should be used correctly.”

Originally published April 05, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/04/05/are-feed-in-tariffs-a-subsidy-for-a-small-group-of-utility-customers/