Category Archives: energy

Turn Off the Tap to Cut Emissions

If you want to save energy and cut greenhouse gas emissions then focus on urban water conservation. That’s according to a new report entitled Drops of Energy: Conserving Urban Water in California to Reduce Greenhouse Gas Emissions (May 2011). The policy paper was produced by the UC Berkeley School of Law’s Center for Law, Energy & the Environment and UCLA School of Law’s Environmental Law Center & Emmett Center on Climate Change and the Environment.

But why urban water conservation for greenhouse gas emissions?

The energy-water nexus has long been established. According to the California Energy Commission, consumption of water in California requires approximately 20 percent of the state’s electricity, 30 percent of its non-power plant natural gas, and 88 million gallons of diesel fuel annually. All of this energy consumption generates a lot of greenhouse gases.

When examining the state’s energy-water balance sheet, urban water usage constitutes more than 70 percent of the electricity associated with water supply and treatment (7,554 gigawatts for urban compared to 3,188 gigawatts for agriculture). Urban water usage also accounts for almost 80 percent of the electricity associated with end-uses of water (27,887 gigawatts for urban end uses to 7,372 gigawatts for agriculture). So it makes sense that if you want to reduce energy use in the state (and associated greenhouse gas emissions), then tackling urban water consumption should be on the agenda. But there are challenges.

Study authors held a one-day workshop in October 2010 to examine barriers to reducing urban water consumption. Participants included Google, Safeway, Walmart, and various energy and water utilities, among others. The group identified four key barriers:

1) Lack of Financial Incentives to Conserve
2) Insufficient Data
3) Lack of Consumer Awareness
4) Lack of Funds for Water Efficiency Measures

The first barrier is a no-brainer and must be fixed. Water rates must be structured so that users pay more as they use more water and conservation measures are rewarded with short payback periods.

Two barriers seem ripe for innovation. The lack of adequate data about water consumption among end users poses a challenge for both policy makers and for consumers themselves. Many consumers are unaware of their water use and the energy savings associated with water conservation in their communities, residences, and businesses.

According to the report, water utilities should provide consumers with relevant real-time information about water use, when feasible. This information could also include users’ consumption patterns and expenses, as well as the aggregate consumption of their similarly situated neighbors or regional consumption averages. It should link consumption patterns with cost and strategies to conserve.

Another recommendation is to make all the data searchable with easy customer access. Interactive calculators and real-time scenarios would help consumers realize that they could reduce water and energy use, along with associated costs and greenhouse gas emissions, through simply lifestyle changes.

Tackling urban water consumption to reduce energy and greenhouse gas emissions will not be an easy task. But the first step is educating consumers about how and where they use water, and how that usage compares with their neighbors.

Desalination and the Dodo bird

For a country with only 1.2 million residents and a record rainfall of almost three meters per year, you wouldn’t think that the tiny island nation of the Republic of Mauritius would have a water supply problem. But as of January 2011, local reservoirs are only at roughly 30-40 percent of capacity and the Minister of Energy and Public Utilities is pushing legislation to encourage local hotels to install desalination units saying that such technology is a reliable alternative to treating fresh water as a result of energy-efficient technologies.

Since 2005, all new hotels in Mauritius are required to accommodate desalination as well as recycling and reuse of water. Some hotels are currently desalinating 800 cubic meters of water per day or roughly 200,000 gallons. In the US, hotels use an average of 209 gallons of water each day per occupied room.

Due to the water crisis, the government has passed regulations restricting the use of potable water to wash vehicles, pavements, buildings, and to water lawns.  Violators could be subject to fines of Rs 200,000 (US$6,800) and up to two years in prison.

Despite plans for two new large water storage projects, the opposition party is also calling for increased desalination noting that the new water sources will not be operational for 10 years. The island nation, located 560 miles east of Madagascar in the middle of the Indian Ocean, has the dubious honor of being the former home of the Dodo bird. Perhaps the descendants of those that drove the Dodo to extinction can learn from the lessons of a changing environment.

Governor’s Signature Could Help Propel Energy Storage Market to $35 Billion

In a state where the legislature is dysfunctional and often prefers to legislate through the initiative process, California lawmakers passed the California Energy Storage Bill – AB 2514.

The bill requires the Public Utilities Commission to set targets for systems that store energy. Such systems are regarded as important for the efficient operation of an electrical grid with high proportion of renewable energy sources like solar and wind. The state’s renewable portfolio standard is currently 20% by 2010, with legislation to increase that to 33% by 2020. Analogous to TIVO’s time-shifting features, energy storage allows users to consume energy generated during non-peak hours. The bill is sitting on Governor Schwarzenegger’s desk and he has until September 30 to sign or veto it. If he chooses not to act, it becomes law.

According to Pike Research, the sale of energy storage technology generates $1.5 billion in annual revenues. This market could become a $35 billion business by 2020, bolstered by more wind and solar farms coming online. Additional technological developments positively affecting the storage market includes the roll out of plug-in hybrid and electric vehicles, and the deployment of smart grid technology.

The AB 2514 roll-out schedule includes:

  • March 1, 2012: CPUC to open rule-making proceeding
  • October 1, 2013: Adopt energy storage system procurement target for load-serving entities
  • October 1, 2014: Adopt target for publicly owned utilities
  • December 31, 2015: Achieve target (load-serving)
  • December 31, 2016: Achieve target (publicly owned utility)
  • December 31, 2020: Achieve second target (load serving)
  • December 31, 2021: Achieve second target (publicly owned utility)

Energy storage is expected to benefit many constituents. According to the California Energy Storage Alliance, it creates value for multiple stakeholders:

  • Customers: reduced energy and demand costs, emergency backup, demand response, improved reliability
  • Utilities: load leveling, T&D relief/deferral, improved power quality, reduced peak generation and spinning reserve needs
  • System Operators: ancillary services, grid integration, improved grid reliability and security
  • Society: more renewables, fewer emissions, healthier climate, more jobs

Sign the bill, Governor Schwarzenegger, and let’s get started.

New Study Says 35% Wind and Solar is Grid Feasible

Today, the National Renewable Energy Laboratory based in Golden, CO released the Western Wind and Solar Integration Study. The goal of the study is to better understand the costs and operating impacts due to the variability and uncertainty of wind, photovoltaic, and concentrated solar power.

The study found that a 35-percent target for wind and solar is technically feasible and does not necessitate extensive additional infrastructure, but does require key changes to current operational practice.

A full copy of the 536 page report is available on NREL’s website.

Farmers Teach Cities how to Save Water

According to the California Department of Water Resources, California agriculture irrigates 9.6 million acres using roughly 34 million acre-feet of water (1.1 trillion gallons) diverted from surface waters or pumped from groundwater. This water produces amazing results.

California produces over 250 different crops and leads the nation in production of 75 commodities. California is the sole producer of 12 different commodities including almonds, artichokes, dates, figs, raisins, kiwifruit, olives, persimmons, pistachios, prunes and walnuts. Most of this production would not be possible without irrigation.

But agriculture often gets blamed for the West’s water woes. The notion that Central Valley farmers are receiving, and wasting, cheap subsidized water at the expense of urban users and the environment is commonly held. But many in the agricultural community are demonstrating water leadership and moving California toward more equitable and efficient water management and use.

The Oakland, California based Pacific Institute recently released a new report and video entitled California Farm Water Success Stories, which analyzes successful examples of sustainable water policies and practices.  The report highlights the best practices of several different agricultural commodities across the state.

Review the California Farm Water Success Stories video.
Watch extended video interviews with each grower.
Download the full report (pdf).

Thanks go to The Pacific Institute for their important work, and the agricultural leaders who are helping to demonstrate that we can make progress on water use in California.

Companies and VCs Pledge $3.5 Billion for Hiring

Fresh off the federal government’s first-year progress report on the American Recovery and Reinvestment Act and its creation of roughly 1.2 million jobs (recipient reported) through December 31, 2009, chip maker Intel announced a $3.5 billion initiative to support investment in U.S.-based growth-oriented industries.

Led by Intel and supported by several venture capital firms and corporations, the Invest in America Alliance aims to invest in technology innovation and job creation.

Intel Capital and 24 venture capital firms plan to invest $3.5 billion in U.S.-based technology companies over the next 2 years. The $200 million Intel Capital Invest in America Technology Fund will target innovation and growth segments such as clean technology, information technology and biotechnology.

Further investment in clean tech appears to be needed. According to analysis by Ernst & Young, using data from Dow Jones VentureSource, 2009 investment in the clean-tech sector hit $2.6 billion with 193 deals, a 50% plunge in dollar amount and a 16% slide in the number of deals compared to 2008.

The LA Times reports that the San Francisco Bay Area led the charge, with $1.2 billion in investments pouring in throughout the year; $295.6 million coming in during the fourth quarter. Southern California came in next, raising $329.5 million in 2009, with $30.5 million invested in the last quarter. New England brought in $283.7 million for the entire year, $38 million of it during the fourth quarter.

The Invest in America Alliance also includes commitments from 17 technology and other corporate leaders to increase their hiring of college graduates, some by as much as two times. Companies joining Intel included Accenture, Adobe Systems Incorporated, Autodesk, Broadcom Corporation, CDW LLC., Cisco, Dell, eBay, Inc., EMC Corporation, GE, Google, Inc., HP, Liberty Mutual Group, Marvell Semiconductor Inc., Microsoft Corporation, and Yahoo!.

The road to job recovery appears to be getting re-paved with dollars.

Electric Power Industry Facing Water-Use Disclosure Risk

The U.S. electric power industry withdraws an estimated 136 billion gallons of freshwater per day for generating and then cooling the steam that drives electric turbines. That’s roughly 41 percent of the country’s total withdrawals according to the U.S. Geological Survey.

Recent guidance from the U.S. Securities and Exchange Commission indicating that “changes in the availability or quality of water…can have material effects on companies,” and therefore must be disclosed, points to a future where the electric power industry will be forced to more fully disclose their water risks, which appear significant.

A new report from Ceres, a national coalition of investors, environmental groups, and other public interest organizations, provides a comprehensive assessment and ranking of water disclosure practices of 100 publicly-traded companies. The report examines eight key sectors exposed to water related risks:  beverage, chemicals, electric power, food, homebuilding, mining, oil and gas, and semiconductors.

Murky Waters: Corporate Reporting on Water Risk was issued in February 2010 and is available for download from the Ceres website. For the electric power industry, study authors highlight significant physical, regulatory, and litigation risks related to water.

  • Physical Risks: water scarcity, unpredictability of supply, amount/timing of flows for hydropower, and increased demand for carbon capture and storage.
  • Regulatory Risks: cooling water discharge temperature controls, denial of construction permits based on water availability, and wastewater discharge standards.
  • Litigation Risks: lawsuits over water withdrawals or inter-state water rights.

Ceres, with data support from Bloomberg and analytical support from UBS Limited, considered five key categories of disclosure: water accounting, risk assessment, direct operations, supply chain, and stakeholder engagement. Thirteen U.S.-based electric power companies were chosen on the basis of the size and water intensity of their generation assets. Companies included:

  • AES Corporation
  • American Electric Power
  • Constellation Energy
  • Dominion Resources
  • Duke Energy
  • Entergy
  • Exelon
  • Florida Power & Light Group
  • NRG Energy
  • PG&E
  • Pinnacle West/APS
  • Southern Company
  • Xcel Energy

Findings

The electric power sector showed weak water risk disclosure overall, with an average score of 19 out of 100. Pinnacle West/APS, an Arizona-based utility, achieved the highest level of disclosure in the sector with 38 points; Florida Power & Light  provided the most limited disclosure, receiving eight points.

1. Disclosure of Water Accounting Fewer than half (six out of 13) of the electric power companies reviewed provide data on water withdrawals.

2. Disclosure of Risk Assessment With the exception of NRG Energy, all the electric power companies surveyed disclose some level of physical risk related to water scarcity. All the companies report their exposure to water-related regulatory risks.

3. Disclosure of Direct Operations The electric power companies provide limited disclosure on water-related management systems and policies. Seven of the 13 companies report actions taken to reduce water withdrawals, with PG&E and Southern Company providing the most detailed disclosure. None of the companies disclose quantified targets to reduce contaminants in wastewater discharged from power plants.

4. Disclosure of Supply Chain Only one company – Entergy – provides information on collaboration with its non-fuel suppliers on water management. None of the companies disclose efforts to engage or assess fuel suppliers on water impacts or risks.

5. Disclosure of Stakeholder Engagement Eight out of the 13 electric power companies reviewed report engaging with stakeholders on water management.

The report concludes with several recommendations to the electric power sector:

  • Better inclusion of water risks in financial filings
  • More detailed risk assessments
  • Water accounting data that puts performance in context
  • Disclosure of management strategies and systems
  • Setting and disclosing reduction targets
  • Addressing water risks in the supply chain
  • Engaging critical stakeholders
  • Seizing opportunities to develop water-related product strategies

While carbon emissions have dominated the environmental disclosures in the recent past, water use, availability, and associated risks are likely to quickly gain center stage.

Obama Folds Up TARP; Redirects Money to Energy Jobs

In a speech delivered yesterday at The Brookings Institute, President Obama announced a series of proposals to boost job growth. Acknowledging that the federal government must be fiscally prudent, he indicated that additional funding would come from “savings” from the Troubled Asset Relief Program or TARP.

According to the Associated Press, the Administration now estimates that the TARP will cost about $200 billion less than the $341 billion the White House estimated in August. The lower estimate reflects faster repayments by big banks and less spending on some of the rescue programs as the financial sector recovered from its free fall more quickly than anticipated.

In the world of make-believe money, that means $200 billion available to spend on other programs. The President announced three focus areas: assistance to small businesses through tax cuts and other financial incentives to hire workers; additional infrastructure (e.g., highway, transit, rail, aviation, and water) investments; and energy efficiency and clean energy investments.

For the third focus area, here’s a White House summary:

New incentives for consumers who invest in energy efficient retrofits in their homes. Smart, targeted investments in energy efficiency can help create jobs while improving our energy security and saving consumers money. The President today called on Congress to consider a new program to provide rebates for consumers who make energy efficiency retrofits. Such a program will harness the power of the private sector to help drive consumers to make cost-saving investments in their homes.

Expansion of successful oversubscribed Recovery Act programs to leverage private investment in energy efficiency and create clean energy manufacturing jobs. The Recovery Act included historic investments that have helped to build the foundation for a clean energy economy. The Administration supports expanding programs for which additional federal dollars will leverage private investment and create jobs quickly, such as industrial energy efficiency investments and tax incentives for investing in renewable manufacturing facilities in the U.S.

Consumer incentives for energy efficiency improvements are similar to the Department of Energy’s Energy Efficiency and Conservation Block Grant program. To date, the DOE has awarded more than 1,700 grants, totaling over $1.9 billion. A running list of U.S. states, territories, local governments, and Indian tribes that have received monies is available on the program website. The redirected TARP money would be expected to fund additional programs.

Some DOE stimulus programs have been oversubscribed resulting in the cancellation of anticipated funding rounds,  such as with Phases II and III of the Smart Grid Investment Grants. Additional TARP monies will be used to fund certain programs, with the President calling out industrial energy efficiency and renewable manufacturing facilities.

The industrial funding appears to be in addition to the $155 million directed to industrial energy efficiency projects at 41 locations across the country announced in November. The renewable manufacturing component seems to be in addition to ARRA’s previous $2 billion worth of energy related manufacturing investment tax credits. Those credits are aimed at projects creating or retooling manufacturing facilities to make components used to generate renewable energy, storage systems for use in electric or hybrid-electric cars, power grid components supporting addition of renewable sources, and equipment for carbon capture and storage.

Faster repayment by big banks of TARP monies is welcome. Strategically allocating repaid TARP monies to fund energy infrastructure programs with long-term benefits is worthwhile.

Another $620 Million for Smart Grid

The second of the two main smart grid funding announcements (DE-FOA-38) from DOE was issued today by Secretary Chu while visiting Columbus, Ohio. According to the Department’s press release, the award includes $620 million for projects around the country to demonstrate advanced smart grid technologies and integrated systems that will help build a smarter, more efficient, more resilient electrical grid. The 32 demonstration projects include:

  • large-scale energy storage
  • smart meters
  • distribution and transmission system monitoring devices
  • range of other smart technologies

A complete project list (pdf) is available on the DOE website.

Big winners appear to be Battelle Memorial Institute ($88 million), AEP Ohio ($75 million), LADWP ($60 million), and ConEd ($45 million), among others. The goal of the funding is to demonstrate technologies in regions across the U.S. that “embody essential and salient characteristics of each region and present a suite of use cases for national implementation and replication.”

Last month, the Department announced $3.4 billion in funding as part of its smart grid investment program.

Secretary Chu also released a video to YouTube discussing the benefits of Smart Grid.

Finding a Home for California’s Renewables

Back on November 17, 2008, just two weeks after Obama’s election, California Governor Arnold Schwarzenegger issued Executive Order S-14-08, which required that all retail sellers of electricity in California serve 33 percent of their load with renewable energy by 2020. This increase in the State’s renewable portfolio standard (RPS) made California the leader in renewable energy standards.

As part of the order, the California Energy Commission and the California Department of Fish and Game agreed to expedite the development of RPS-eligible renewable energy resources in the state. The two agencies formed the Renewable Energy Action Team (REAT), which created a “one-stop” process for permitting renewable energy generation power plants. The federal Bureau of Land Management and the U.S. Fish and Wildlife Service signed a Memorandum of Understanding with the two state agencies to support the REAT.

In March 2009, Secretary of the Interior Ken Salazar signed Order 3285 establishing the development of renewable energy as a priority for the Department of the Interior. The Act encourages the production, development, and delivery of renewable energy as one of the Department’s highest priorities.

Then in October 2009, Governor Arnold Schwarzenegger signed a memorandum of understanding with Secretary Salazar to expedite the siting of renewable energy projects in California on federal land. California was the first state to sign an MOU with the Department of the Interior to cooperatively develop long-term renewable energy plans and to sheppard eligible projects through state and federal permitting processes. These eligible projects can receive 30 percent federal tax credits under the American Reinvestment and Recovery Act.

Schwarzenegger’s Executive Orders also initiated the Desert Renewable Energy Conservation Plan (DRECP) process. The DRECP aims to protect and conserve the natural resources within the Mojave and Colorado Desert regions. It also allows solar and other qualified RPS energy development in a manner that avoids or minimizes environmental impacts.

Under the DRECP, California Department of Fish and Game and US Fish and Wildlife Service will help identify the “best” areas to site renewable energy, while avoiding conflicts with endangered species and sensitive areas. That report is due out by December 2010.

To achieve the common goal of siting more renewable energy facilities, various state and federal agencies must work together to balance energy and environmental needs.