Will Minneapolis’ next mayor seek a municipal energy utility?

(Photo by Matt Johnson via Creative Commons)

(Photo by Matt Johnson via Creative Commons)

A long-term contract that allows Xcel Energy to use public right-of-way in its corporate backyard is set to expire at the end of next year.

Whether and under what terms the city of Minneapolis renews the deal could depend in part on the outcome of a wide-open mayoral race.

Six of the nine contenders shared their thoughts on the utility agreement Tuesday at a candidate forum on clean energy issues. (The event’s co-sponsors included Fresh Energy, where Midwest Energy News is based.)

Utility franchise agreements have historically been renewed with little fanfare or controversy, but Boulder, Colorado, may have changed that. In 2011, voters there authorized the city to replace Xcel Energy with a municipal utility if the company wouldn’t meet their clean energy demands.

While Boulder continues to study the costs and logistics for buying Xcel’s infrastructure in the city, a citizens group called Minneapolis Energy Options has been campaigning since last year to put the City of Lakes on the same path if necessary.

Candidates seek more information

At the forum Tuesday, most of the candidates appeared to agree the city should study its options, but they had a range of reservations about what should happen next.

City Council Member Betsy Hodges offered the firmest support for the effort. She was the first to support the citizen campaign, and while she’s unsure whether municipalization makes sense for Minneapolis, she said the city should know its options before it negotiates another long-term franchise agreement with Xcel.

“We are going to need to push them, and push them hard, and we need every tool in the toolbox to do that,” Hodges said.

In April, the City Council voted to spend up to $250,000 on an “energy pathways” study, examining how the city could use utility partnerships, franchise agreements or potentially municipalization to make progress towards its goals for sustainable energy, improved air quality, equity and green jobs.

Whether the city could advance those goals and maintain reliable, affordable electricity better with a municipal utility than with Xcel Energy is a question that will require several years and millions of dollars to fully study. Boulder, a city one-fourth the size of Minneapolis, has so far spent $3.3 million studying municipalization.

Other candidates expressed sympathy for the citizen campaign’s goals but focused their comments on concerns about the costs, feasibility and strategy.

Mark Andrew, founder of a green marketing company, said he supports Minneapolis Energy Options’ objectives but has doubts about its strategy for a possible ballot measure in November before the public understands the issue.

“Every candidate for mayor knows that it’s going to take $350,000, at least, to run a citywide campaign. We have four months until the election,” Andrew said.

Andrew said the group needs more funding and more grassroots support or else they would risk a failed ballot referendum in the fall.

“We’re not naive about the situation,” said Dylan Kesti, Minneapolis Energy Options’ campaign coordinator. The group hired a financial director last week and is on its way to raising more than $300,000 for its campaign. (Initial funding, Kesti said, includes a grant from RE-AMP, which also publishes Midwest Energy News.)

Kesti said they already have support from enough City Council members to put the measure on the ballot in November, and to Andrew’s concern, he said, “Historical precedent says organized people can beat organized money.” He said he was encouraged that most of the candidates support studying the city’s options.

Concerns about cost

Dan Cohen, a former City Council member in the late 1960s and early 1970s, was the only candidate to oppose the effort with a flat-out “No.”

“If we end up buying this utility, not only will it cost billions and billions of dollars,” Cohen said, “it would crowd out … every other capital investment for years and years.”

Xcel Energy told the St. Paul Pioneer Press last week that the cost for the city to buy the utility’s infrastructure would be “a big number,” potentially billions of dollars. Cohen said that type of investment would take away from other needs like roads and bridges.

Don Samuels, a current City Council member running for mayor, said he supports the effort to study the issue, but he, too, has concerns about the costs.

“I don’t think we can just write a blank check,” Samuels said.

Cam Winton, a Republican candidate who works as an attorney for Duke Energy’s wind and renewable energy division, said he would push for a shorter franchise agreement with Xcel, around five years instead of the previous 20-year agreement.

“Once we’ve re-upped under a much shorter time frame,” Winton said, “I absolutely support taking time to research our options. I support looking at what Boulder and other cities have done, and I support crunching the numbers to see what we can do and at what cost.”

Winton also said he believes increasing the use of renewables in the city will increase costs, and that clean energy supporters should be candid about that fact with the public.

Winton acknowledged during the forum that Xcel Energy is a client of his employer, Duke Energy, which operates and maintains wind farms for the utility. Andrew’s green marketing company, GreenMark, also lists Xcel Energy has a recent client.

Jackie Cherryhomes, another former City Council member, might have expressed the median view of the six candidates who attended the forum.

“Frankly, I have a little bit of nervousness at the city taking over something as major as an energy company,” Cherryhomes said. “But I think we should wait and see what the study reveals.”

Originally published June 27, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/06/27/will-minneapolis-next-mayor-seek-a-municipal-energy-utility/

Wind-wildlife group begins building bird-death database

(Photo by Gidzy via Creative Commons)

(Photo by Gidzy via Creative Commons)

While the number of bird deaths caused by wind turbines is small compared to other threats like cars and power lines, the wind industry’s impact on wildlife remains under scrutiny.

The latest example came last month, when an Associated Press investigation concluded that the Obama administration is giving a pass to the wind industry by not prosecuting wind farms when eagles are killed in collisions with their turbines. (Oil and power companies have been charged.)

In the future, the American Wind Wildlife Institute (AWWI) hopes to be able to provide better, more precise information about how birds and other wildlife interact with wind farms. For now, though, much of that data is spread out and under wraps.

That’s why AWWI, a five-year-old alliance between 22 wind companies and nine conservation groups, has launched a new project to collect and analyze previously confidential surveys and studies prepared by wind farm operators across the country.

“Our goal is not to identify problems to prosecute,” said Abby Arnold, AWWI’s executive director. “Our goal is to develop a really good analytic tool that experts — biologists, statisticians, ecologists — and the wind industry can use to understand what these impacts are, where they’re occurring, and how we can address them.”

Confirmed eagle deaths at wind farms are extremely rare, but the numbers and public perception are skewed by one set of wind farms in California’s Altamont Pass region, where an average of 67 golden eagles are killed annually. Outside of Altamont Pass, only around 50 golden eagles are known to have been killed anywhere else since the industry began.

The Associated Press story cited a March 2013 study published in the Wildlife Society Bulletin that said more than 573,000 birds are killed by wind turbines each year. The American Wind Energy Association maintains that the actual number is less than 200,000 birds annually.

Either way, the numbers are small compared to other known causes of bird fatalities.

According to the U.S. Fish & Wildlife Service, cars may kill 60 million birds or more each year. Building windows are to blame for more than 97 million bird deaths annually. Communication towers conservatively kill 4 to 5 million birds per year, and it could be ten times more. Power line fatalities could be “as high as 174 million deaths annually.” Pesticides poison at least 72 million birds annually, and up to two million are killed each year in oil and wastewater pits.

One study found domestic cats kill 39 million birds annually in Wisconsin alone, with the national total likely hundreds of millions per year.

Most wind developers are required to conduct wildlife impact studies before and after projects are built. The results are typically seen by local regulators but never broadly disseminated beyond that, in part because wind companies worry opponents will use the results in anti-wind campaigns.

After a successful pilot project, AWWI has started collecting post-construction wildlife impact studies from its members, which include some of the nation’s largest renewable developers. GE Energy, Horizon Wind, and Iberdrola Renewables are among the founding partners, along with the Audubon Society and the Association of Fish & Wildlife Agencies.

The American Wind Energy Association passed a resolution in support of the project two years ago, encouraging its members to participate. A big reason why wind companies may be embracing the project is that the data will be made anonymous before it’s shared with researchers or the public.

Wind firms can go to a web portal to upload studies, but the information will be scrubbed of any references to specific wind farms or companies. What’s left will include details about turbines, surrounding habitat, bird kill counts and survey methods.

Arnold said they hope to collect a critical mass of post-construction studies by the end of the year so that they can begin making it available to analysts next year to begin research with the data. The goal is to eventually have published, peer-reviewed research based on the database.

Among the questions that might be answered, according to Arnold: What is the avian fatality rate at wind farms? How does that rate vary by species? How do different fatality survey methods affect the results? And how do pre-construction estimates compare to post-construction data?

“We agree that these impacts are important,” Arnold said, “and that’s why the wind industry and conservation groups have formed this institute.”

Originally published June 20, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/06/20/wind-wildlife-group-begins-building-bird-death-database/

Firing up Minnesota’s ‘energy-efficiency power plant’

(Photo by pirate johnny via Creative Commons)

(Photo by pirate johnny via Creative Commons)

When it comes to energy efficiency, a kilowatt-hour saved is more than a penny earned.

Spending money on energy conservation has been a better investment for most utility ratepayers than building new power plants and transmission lines.

In Minnesota, utility conservation programs have returned an average of 8 cents per kWh for every 1.5 cents spent, according to the Center for Energy and Environment (CEE), a nonprofit that promotes efficiency.

Yet the two are rarely compared head-to-head in planning discussions. Savings are generally seen as an accounting adjustment to be made before decisions about how much and what kind of new generation to add to the system.

A subtle change to a state statute this spring seeks to change that by making Minnesota’s “energy efficiency power plant” a part of future energy planning debates.

Mike Bull, policy and communications director for the CEE, said the changes will likely be incremental at first, but the aim is to change the way utilities and regulators think about efficiency.

“We’re trying to pull it out, make it visible, and make it a clearer choice between supply- and demand-side resources,” Bull said.

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

‘You didn’t see it’

Every few years, regulated utilities in Minnesota need to get approval for a long-term resource plan, a forecast of future electricity demand and how the utility intends to supply enough power to meet that load.

Utilities also file regular energy conservation plans that outline how they expect to satisfy the state’s energy efficiency target, which asks utilities to achieve annual energy savings equal to 1.5 percent of sales.

The projected impact of those conservation plans gets subtracted from utilities’ long-term electricity demand forecasts early on in the resource planning process, said Bull, who previously worked as a resource planner for Xcel Energy.

“You didn’t see it. It was just a mathematical change in the load forecast. It wasn’t a visible option for comparing against supply-side resources,” he said.

As a result, there’s been little consideration given to whether it might be a better deal for customers if the utility spent money on lowering electricity use instead of building new power plants.

As part of a broader jobs and energy bill this spring, the Minnesota Legislature said that conservation should be considered an “energy resource,” and a preferred one at that:

“The legislature finds that energy savings are an energy resource, and that cost-effective energy savings are preferred over all other energy resources. The legislature further finds that cost-effective energy savings should be procured systematically and aggressively in order to reduce utility costs for businesses and residents, improve the competitiveness and profitability of businesses, create more energy-related jobs, reduce the economic burden of fuel imports, and reduce pollution and emissions that cause climate change.”

Bull said it clarifies that conservation isn’t only about meeting the state’s efficiency target. Efficiency, he says, should also be pursued above and beyond 1.5 percent whenever it’s more cost-effective than building new power plants and transmission lines.

“It’s to solidify its place in the resource hierarchy,” Bull said. “[What] we were looking to do with that language was to make it more clear that energy efficiency should be the first resource that’s turned to as we collectively do resource planning for our utilities.”

What happens next

One challenge early on will be figuring out how to compare efficiency projects side-by-side with generation projects. The state’s energy office is already discussing how it will measure cost and reliability on the same scale, Bull said.

The changes also clarify that the 1.5 percent annual efficiency target isn’t the sole responsibility of utilities; that the state can and should pursue savings “without direct utility involvement,” such as through codes and appliance standards, Bull said.

The Legislature also instructed the state’s Division of Energy Resources to conduct a series of meetings and produce a report on some of the questions and challenges that lie ahead for the state’s energy efficiency goals.

Among the questions to be addressed is how efficiency should be incorporated into resource planning and certificate-of-need proceedings in the state. The report is due to legislators on January 15.

While it’s still unclear how conservation will factor into those discussions, Bull said it makes sense for the Public Utilities Commission to consider efficiency in them:

“If it can be shown that energy efficiency resources are available to a utility at a lesser cost than, say, a supply side resource, than I think everybody’s better off if the commission encourages the energy efficiency resource.”

Originally published June 19, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/06/19/firing-up-minnesotas-energy-efficiency-power-plant/

Minnesota home sale listings to include efficiency scores

Home buyers in Minnesota can now get a peek under the siding. (Photo by Amy Doran via Creative Commons)

Home buyers in Minnesota can now get a peek under the siding. (Photo by Amy Doran via Creative Commons)

Like an MPG sticker in new car windows, a new home energy efficiency rating is about to start showing up on real estate listings in the Twin Cities.

NorthstarMLS, whose database lists home sales for Minnesota and western Wisconsin, introduced a new field this month for sellers to add a home energy efficiency score.

Home Energy Ratings System, or HERS scores, have become an industry standard for measuring a home’s efficiency, from the furnace to attic insulation.

The new feature will let Realtors, and eventually the public, search and sort home listings based on their efficiency rating. It also added a field to note other green certifications.

The listings service says the move is in response to growing awareness about energy costs, which for an average U.S. homeowner exceed property taxes and homeowners insurance.

MPG for homes

“I don’t think consumers would think to buy a car without having an idea of what your mileage is going to be,” said James Vagle, executive director of MN Green Path, a Twin Cities green-building program.

And yet home buyers have historically had relatively little information about how much they can expect to pay for heating and cooling after they move into a new home.

Utilities will typically disclose the high, low and average bill for the past year, and sellers sometimes provide copies of recent bills if asked, but they can say as much about the owner as the home.

HERS scores give an objective measure of how leaky or tight a home is and how efficient its heating and cooling systems are based on a series of tests and inspections.

Residential Science Resources in Eagan is the largest HERS rating organization in the Twin Cities, scoring more than 200 homes per month, mostly new construction.

Account executive Ross Anderson said the process starts before the builder breaks ground. Building plans are entered into a software program that projects the home’s likely energy use.

Inspectors visit the construction site at least twice to review framing and insulation. After the home is completed, infrared cameras, blower door and duct blaster tests are used to confirm the rating.

A standard home built to meet the 2004 International Residential Code gets a score of 100. A home that produces as much energy as it uses gets a score of zero. The lower the score, the more efficient.

In Minnesota, the energy code is tougher than the 2004 standard, but so are the winter heating seasons. A standard new home built today in the state scores around 80.

Older homes can get a HERS rating, too, but because they were built to older codes are unlikely to have a good score without significant upgrades.

Catching on

Most homes are not rated, though the inventory of homes with HERS scores is growing, especially for new construction.

This spring, in the Builders Association of the Twin Cities’ most recent Parade of Homes showcase, about 30 percent of homes on the tour had a HERS score.

Vagle, who is also public policy director for the Builders Association of the Twin Cities, said home builders are anticipating growing demand for the efficiency score.

“We see value in supporting that apples-to-apples comparison,” Vagle said. “Consumers are going to want to have this.”

NorthstarMLS is also following the lead of other regions, where homes listed with green certifications have sold for a premium, Vagle said. Other states to include HERS scores in home sale listings include Illinois, Nebraska, Arizona, Colorado, and Florida.

Anderson said his company’s ratings business is growing, and that he expects it could surge if Minnesota adopts a proposed building code update that would require blower door tests on new homes.

The price of a blower door test averages around $300, while a HERS rating, which includes a blower door test, costs between $500 and $1,000 for a new home. Utilities often help pay for the audits, too.

Value to buyers

A good HERS score can potentially increase the value of a new home, too. Anderson said appraisers for new homes have been more willing to incorporate the added value of efficiency when the builder can show a third-party certified rating.

Whether the scores raise the value of homes in the eyes of Twin Cities house hunters remains to be seen.

Samantha Strong, founder of a Minneapolis realty, Metamorphosis, that specializes in sustainable homes, said even among her progressive clientele, HERS isn’t a well known metric.

“You have people who geek out on it, but the reality is the general public just wants a house that’s in a good neighborhood that’s safe and that gives them warm fuzzies,” Strong said.

Strong hopes the ratings catch on, and thinks they might if homes listed with HERS ratings end up selling for more in less time than other homes.

Gaining traction may be tough in the short term because of the lack of homes on the market today compared to the number of prospective buyers. Sellers have little incentive to pay for detailed energy reports, and buyers have little time to request information or else they risk losing out to another bidder.

“It’s a tough sell right now,” Strong said, “but I’m sure we’ll hit more of a stable market at some point in the next few years, and then it will help differentiate your home.”

Originally published June 14, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/06/14/minnesota-home-sale-listings-to-include-efficiency-scores/

Minnesota to ask: What is the value of solar power?

(Photo by Melanie Cook via Creative Commons)

(Photo by Melanie Cook via Creative Commons)

Utility customers who own solar panels are doing society a favor, helping to cut carbon emissions and ease transmission line congestion, among other benefits.

Or, they’re power-grid freeloaders, lowering their own electric bills but sticking everyone else with a bigger share of costs for infrastructure they still depend on after dark.

These two competing views of solar power have led to rising tensions in recent years over policies for connecting customer-owned solar arrays to the grid.

Minnesota’s new solar law could help shed some light on that debate.

As part of a broader solar energy bill signed last month by Gov. Mark Dayton, the Gopher State will soon give utilities an alternative to paying customers the retail electricity rate for their unused solar power. Instead, utilities will be able to pay a different rate based on the “value of solar” to their system, including cost-savings to other ratepayers and broader environmental benefits.

The state’s energy office will come up with guidelines for utilities that want to calculate a value-of-solar tariff, and the utilities’ studies will need to be approved by utility regulators.

Benefits for utiliies

Solar energy supporters who lobbied for the option (including Fresh Energy, where Midwest Energy News is based) are betting that a closer look at the economics of solar will ultimately show that customer-owned arrays are undervalued by utilities. They also hope it might help defuse some of the opposition to distributed solar by allowing utilities to untangle customers’ solar generation from their monthly electricity bills.

“With the value of solar, the utility doesn’t lose any of its energy sales, and they pay precisely what that solar is worth to their system,” said John Farrell, a senior researcher with the Institute for Local Self-Reliance, which advocates for distributed generation. It’s a way to grow solar “that does not blow up the utilities’ model for doing business.”

Most customer-owned solar arrays have been installed under an arrangement known as net metering, in which utilities run customers’ electricity meters backwards to compensate them for any unused solar power they generate.

Utilities tend to dislike net metering because it lowers electricity sales. When you subtract kilowatt hours from solar customers, you’re left with less revenue to pay for “fixed costs” like power plants and transmission lines, and utilities could be forced to make up the difference by raising rates. That’s led to growing resentment and opposition against solar in some states.

In California, for example, utilities are pushing to roll back the state’s net-metering policy, which they say is shifting costs onto customers who don’t own solar arrays.

Solar advocates argue that those claims don’t take into account the value of a broad range of benefits that customer-owned solar provides, from environmental benefits to delaying the need for new power plant and transmission line upgrades. A January 2013 study by the Vote Solar Initiative concluded that solar customers in California are providing “small net benefits” to all utility customers.

Mixed results in Texas

Minnesota passed the nation’s first net-metering law in 1983. Now, it’s also the first to adopt a statewide value-of-solar policy, which has so far only been tried at the municipal utility level.

Texas-based Austin Energy introduced the first value-of-solar tariff last fall. The progressive, city-controlled utility believed it was underpaying customers for solar power and calculated the new, higher rate to more fairly compensate photovoltaic owners.

This spring, another Texas municipal utility, San Antonio’s CPS Energy, proposed its own value-of-solar tariff, but unlike Austin’s it would actually pay customers less than the retail, net-metering rate for solar power.

Minnesota’s law is the first at the state level, which is why solar advocates nationwide are watching it develop and hoping it sets a good precedent.

“The proof will obviously be in the pudding, when we see the regulatory process that develops this rate, but what we’ve seen so far, what actually made it through the legislative process is really impressive,” said Annie Lappé, solar policy director for Vote Solar, a California non-profit that advocates for solar power.

An open process

One reason Lappé is optimistic is that in Minnesota the value-of-solar rates would be set in an open, inclusive, state-facilitated process, rather than behind a utility’s closed doors. “We don’t just want a monopoly utility, whose main interest is maintaining shareholder profits, in charge of essentially setting solar policy,” Lappé said.

The first step is for the Minnesota Department of Commerce to come up with a methodology for calculating the value of solar tariff. The department has until January 31 to submit a proposal to the Minnesota Public Utilities Commission.

The formula must reflect value to the utility, its customers, and society. Specifically, that includes “the value of energy and its delivery, generation capacity, transmission capacity, transmission and distribution line losses, and environmental value.” It may also include local economic benefits, grid congestion benefits or other factors.

After the department establishes a methodology, and the state’s Public Utilities Commission has approved it, public utilities can use it to calculate the value of solar to their systems. The utilities would be required to file studies with the utilities commission, and after a public comment period the commissioners would decide whether the utility correctly applied the methodology.

“The filings that they make are going to be a great opportunity to learn more [about the economics of solar], at least I’m hopeful they will be,” Farrell said.

That’s if the public gets to see the calculations.

“Having participated in PUC proceedings before, I’m aware that a lot of times utilities basically dump a number and say, well, this is what we got and the information about how we got there is proprietary. It really does depend a lot on what kind of formulas [the state] comes up with and whether they require the utilities to disclose how they arrive at their answers.”

Once regulators approve a utility’s proposed value-of-solar rate, customers who install solar arrays, unlike with net metering, would continue being charged for all of the electricity they use — their meter wouldn’t run backward on sunny days. Instead, a second meter would be installed on their solar system and the utility would purchase all of that electricity at the value-of-solar rate, which would be locked in for 20 years.

Utilities would recalculate the value-of-solar tariff every year, and the rate could not be lower than the regular retail rate for the first three years after the program starts. After that, solar will have to prove its value in order to receive a premium.

Lappé and Farrell are confident, based on recent studies, that if the process goes as intended it will prove that solar customers aren’t freeloaders but actually making undervalued contributions to the electricity system.

“If you get the methodology done well, we’re not too concerned about the value of solar falling below retail rates,” Lappé said.

That isn’t the same as a subsidy. Customers who own solar arrays would merely be paid for the value they generate for the utility, ratepayers and society. Should utilities opt to try value of solar, Farrell hopes it will bring that value to light.

“[The desire was] to make it much easier for people to go solar, and to create a market and a financing mechanism,” Farrell said, “and the other part was to bring a lot more transparency to the value of solar and distributed power to the grid system.”

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

Originally published June 10, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/06/10/minnesota-to-ask-what-is-the-value-of-solar-power/

With more solar on the way, does Xcel need more gas peakers?

(Photo by Kate Ausburn via Creative Commons)

(Photo by Kate Ausburn via Creative Commons)

As the population grows, the economy improves and the climate warms in its service territory, Xcel Energy projects rising demand for electricity on hot summer days before the end of the decade.

On April 15, the Minnesota utility proposed meeting that new peak demand by building three 215-megawatt natural gas power plants — one in the Twin Cities and another two in North Dakota.

Six weeks later, though, Xcel and other investor-owned utilities in Minnesota were presented with a new legislative mandate to generate 1.5 percent of their electricity from solar by 2020.

The state’s new solar standard is expected to spur development of an estimated 450 megawatts of solar power over the next six and a half years, which raises the question: does Xcel still need all three of those gas peaking plants?

The Minnesota Public Utilities Commission, which has already agreed to the need for more generation, will meet today to consider whether some of that need could be met with solar power instead of fossil fuels.

The commission is charged with choosing the best plan for ratepayers from five possible proposals, including Xcel Energy’s natural gas plants and a renewable developer’s plan to install more than 30 solar arrays strategically spread across Xcel’s territory.

The renewable company, Geronimo Energy, says its 100-megawatt distributed solar project could economically supply about a seventh of the additional generation capacity Xcel Energy expects to require by 2019.

Other options include proposals by Invenergy and Calpine Corp. to expand existing natural gas plants in Cannon Falls and Mankato, respectively, and a bid by Great River Energy to sell its surplus electricity to Xcel customers.

A coalition of environmental and policy groups, including Fresh Energy, the Sierra Club, the Izaak Walton League and the Minnesota Center for Environmental Advocacy (all of which are member of RE-AMP, which publishes Midwest Energy News) have intervened in support of Geronimo Energy’s solar proposal.

‘Two different types of resources’

Xcel Energy expects to add about 275 megawatts of solar capacity by 2020 in order to meet Minnesota’s new solar standard, but complying with the law is unlikely to change its need for new natural gas peaking plants, a company official said.

“That’s an interesting question,” said Laura McCarten, Xcel Energy’s regional vice president. However, “it’s not a one-to-one replacement [between] solar and natural gas. They’re two different types of resources.”

McCarten said the utility needs more power that it can flip on when electricity demand is highest. “We call it dispatchable. You can turn it on when you need it and you have very high confidence that it’s going to be there.”

Even though its electricity demand is highest on hot summer afternoons, Xcel Energy doesn’t have the same confidence that solar power will be there at those times that it has with a conventional natural gas peaking plant.

This confidence level is given a score, known as a “capacity credit,” during the utility’s planning process. How much generation capacity can they expect when they need it? For solar, during peak hours, the utility only gives credit for about half of a system’s maximum output.

After discounting solar for its capacity credit, Xcel Energy doesn’t think it will be able to depend on more than about 140 megawatts of generation from solar during hours of peak demand. And that’s after it’s finished complying with the standard.

“The natural gas peakers that we’ve proposed are to serve a need in the 2017 to 2019 timeframe. We certainly won’t have all the solar installed by then,” McCarten said.

Geronimo Energy, though, says its solar project could supply almost half of the 150 megawatts the utility will need by 2017. The 100-megawatt project would be completed by the end of 2016 and receive a capacity credit for 72 megawatts, the developer said.

“We think it can displace one of these peaking plants,” said Betsy Engelking, Geronimo Energy’s vice president.

‘Just common sense’

Engelking knows Xcel Energy’s needs well. She joined Geronimo Energy last year after serving more than seven years as Xcel’s director of resource planning.

Geronimo Energy filed its plan as part of a competitive acquisition process set up by state utility regulators a decade ago requiring Xcel Energy to consider whether better options exist for ratepayers before building its own power plants.

Today, the commission is expected to review the five proposals for completeness before referring them to an administrative law judge, who will establish the facts to be used in the commission’s decision later this year.

Geronimo Energy is proposing to build ground-mounted solar arrays at 31 sites across Xcel Energy’s territory. Each installation will range in size from about 2 megawatts to 10 megawatts, and they’ll total 100 megawatts of capacity.

The systems won’t tie up capacity or rack up fees on long-distance transmission lines. Instead, they’ll be built at or near existing local distribution stations where demand is forecast to rise.

“We think the costs are going to be competitive without considering any bells and whistles,” Engelking said.

By “bells and whistles,” she was referring to solar or renewable energy credits that utilities use for meeting state requirements. Geronimo filed its proposal a month and a half before the Minnesota Legislature passed the 1.5 percent solar standard.

Engelking said Xcel views wind and solar as a separate niche, and that it’s time for the utility to start considering them head-to-head with conventional sources. In this case, solar generation can match Xcel’s demand as well as natural gas, she said.

“We’re presenting evidence that shows how high the correlation is,” Engelking said. “Some of it is just common sense. When does Xcel have its peak energy needs? When it’s hot and sunny out.”

‘It’s not an exact science’

Geronimo Energy intends to dispute the 50 percent capacity credit that Xcel assigns to solar. Engelking said the utility could count on solar generating at between 70 percent and 80 percent of its maximum output during hours of peak demand.

Xcel Energy declined to comment specifically on Geronimo’s solar proposal. “That whole evaluation is underway, and I don’t think we would say anything about that until it’s concluded,” McCarten said.

On whether the utility is undervaluing solar’s capacity credit, Rick Evans, Xcel’s regional government affairs director, said it’s a judgement call based on performance history, and that the company is partially limited by what regulators and MISO will approve.

“It’s not an exact science. It’s one where reasonable and very smart people sit down and have long debates,” Evans said.

That debate is likely to play out over the next several months. Some of the most important numbers remain under wraps. Cost estimates and projected kilowatt hour prices in the public proposals have been redacted as trade secrets for now.

Solar advocates are convinced, though, that the economics for peaking power are tilting in their favor.

John Farrell, a senior researcher at the Institute for Local Self-Reliance and a leading expert on distributed generation, said he’s skeptical about Xcel Energy’s assumptions, including its forecasts for natural gas prices.

“I think they are operating mostly on inertia here with their approach to meeting their peaking needs,” Farrell said. “It seems relatively ridiculous that there’s so little attention being paid to solar compared to how willing they are to just step up and build another natural gas plant.”

Originally published June 06, 2013 at 06:00AM at Midwest Energy News http://www.midwestenergynews.com/2013/06/06/with-more-solar-on-the-way-does-xcel-need-more-gas-peakers/

Can a Minnesota company make the case for wind-to-hydrogen?

A wind-to-hydrogen demonstration project in Scotland. (Photo by James Morrison via Creative Commons)

A wind-to-hydrogen demonstration project in Scotland. (Photo by James Morrison via Creative Commons)

(Midwest Energy News, June 3, 2013)—For all the theoretical promise of pairing wind energy with hydrogen production, no U.S. project has ever made it to full commercial scale.

In Minnesota, that may be about to change.

Hydrogen has long been studied as a potential solution to wind’s timing problem, which is that wind generation tends to be highest at night when demand for electricity is low.

Through electrolysis, in which electricity is used to split water into oxygen and hydrogen, surplus wind power at night could be converted to hydrogen, which could then be used in a fuel cell to generate electricity the next day during peak demand.

A handful of pilot projects have demonstrated the technology works, but no one in this country has succeeded in making it economically viable.

A Minnesota project developer believes it may have the answer: Supplementing hydrogen energy storage with sales of “carbon-free” hydrogen for industrial uses. Continue reading “Can a Minnesota company make the case for wind-to-hydrogen?”