US Senate committee finds it tough going

Steve Barlas

Like the house, the US senate is also pushing forward with a renewable electricity standard (RES) as part of its Energy Bill. Sen. Jeff Bingaman, chairman of the senate energy committee, had to reduce the res to 15% by 2021, to get enough votes to pass the provision and include it in the broader energy bill the committee passed. Steve Barlas reports.

Bingaman himself had pressed for a 20% requirement, still less than the 25% President Obama has advocated. The 15% Senate number is roughly equivalent to what is in the House bill, which dictates a 20% RES by 2020. But that 20% could include greenhouse gas savings due to electric efficiency measures for up to 5% of the 20% total. States could additionally petition the federal Government to lower the renewable/efficiency mix to 12%/8%.

Although Bingaman had to agree to a 15% RES to get enough votes to pass an RES mandate in his committee, he told Sen. Byron Dorgan (D-N.D.), whose amendment to increase the RES to 20% was defeated, that he, Bingaman would work with Dorgan on the Senate floor to increase the 15% RES.

Renewable energy groups have been under whelmed by the Senate Energy Committee RES, as they were in the case of the parallel House provision. “The President's goal of doubling renewable energy in three years has no chance of being achieved with the current RES proposals,” says Ed Lowe, general manager for renewable energy and market development at GE, the largest wind turbine manufacturer in the US market. “To drive renewable energy in the near term, a stronger RES is the most direct and immediate policy option.”

Denise Bode, CEO of the American Wind Energy Association, emphasises, “without a strong RES the US will fall behind China and Europe – both of which have aggressive and binding renewable energy targets in place.” Under current RES bills, Bode said, some 75% of new green jobs will be created in China and Europe.

Interior department approval of solar projects under fire

Even if Congress decides on a less-than-optimal (from the renewable industry's standpoint) RES, the federal Government's Bureau of Land Management (BLM) will have to start clearing solar energy development applications. Although 200 solar applications have been filed with the BLM, zero has been approved.

The two solar projects at BLM that have made the furthest progress in the approval process are both located in Southern California and are currently undergoing environmental review. They are the Ivanpah Solar Energy Generating System and the Solar Two Project.

The BLM's foot-dragging on solar (and to a lesser extent, wind) applications explains why both the Senate and House will probably pass BLM “renewable license expediting” bills, either as free-standing legislation or as part of the combo energy/climate change bills both houses are working on. The Senate seems ready to move first by including a public lands section in the Energy Committee's omnibus energy bill called the American Clean Energy Leadership Act. That is the bill which also includes the 15% RES. The BLM provisions in that bill build on some announcements Interior Department Secretary Ken Salazar has already made.

Salazar announced that US$41 million of funding from the American Recovery and Reinvestment Act of 2009 (ARRA) - the stimulus bill Congress passed in February - will be used to expedite the processing of renewable energy permits. The ARRA also included grants to developers of solar projects, but the Department of Energy (DOE) can only give those grants to projects whose construction begins by 31 December 2010. Hence, those grants will go to waste unless the BLM, which is part of the Interior Department, makes progress on solar applications requesting use of public lands. Salazar has also announced his intention to open four Renewable Energy Coordination Offices, with smaller renewable energy teams, in other western states.

The Senate provisions essentially require more such offices to be opened, and to be staffed with personnel whose salaries are paid by “any royalties, fees, rentals, bonus bids, or other payments from wind or solar development.” Those monies would go into a special fund called the BLM Wind and Solar Energy Permit Processing Improvement Fund.

The BLM's performance on solar applications was on full view during hearings held by the House Natural Resource Committee's energy and mineral resources subcommittee in southern California in May. There, Steven Malnight, vice president, renewable energy, Pacific Gas & Electric Company, praised Salazar's initial steps to speed up BLM's review of solar and wind applications.

As opposed to approving zero solar applications, the BLM has approved 192 right-of-way grant authorisations for wind energy projects, 28 for development and 164 for site testing only. “The stated intent to ‘cut red tape by expediting applications, processing, reviews and permitting of renewable energy projects’ is a positive step forward for the challenges solar development faces, and builds off the ongoing work by BLM to develop a comprehensive approach to solar projects in the Mojave Desert region and the West,” said Malnight. Since early 2008, PG&E has entered into five solar contracts, three using solar PV technology and two using solar thermal (or concentrated solar power) technologies. One of the PV facilities, Sempra's El Dorado facility in Boulder City, Colorado, has achieved commercial operation, while the other solar facilities are still being developed.

Solar projects, however, raise more complex environmental issues than wind projects. “Because of its land disturbance footprint, the potential effects of proposed solar energy developments on wildlife habitats and sensitive species, such as the threatened desert tortoise, merit special attention and concern,” explained Jim Abbott, acting California state director, Bureau of Land Management. Water use is also an issue in solar approvals, particularly in relatively dry areas such as California's Mojave Desert where the Ivanpah project would be sited on 3,900 acres. Some solar energy technologies require relatively greater amounts of water to cool thermal power plant turbines (used to convert solar-derived heat into electricity). These “wet-cooled” systems can require 10–15 times the water of “dry-cooled” systems, which cool using forced-air.

Energy department announces new renewable grants

The Energy Department has started rolling out the renewable energy grants - mostly for research and demonstration projects - authorised by the economic stimulus ARRA Congress passed in February. Announcements were issued at the end of May for solar and geothermal programs, with the department laying out the specifics of what it is looking for. A similar announcement for wind programs was expected in June, although some of the wind programs have been informally previewed. For a description of the panoply of programs, see: http://www.energy.gov/recovery/funding.htm. Only US companies will be eligible for these grants.

In the solar area, the DOE will be offering US$117.6 million spread over three programs. In each area, grants can go as high as US$5 million. The three areas include research in photovoltaic (PV) technology development (US$51.5 million); barriers to use of solar energy in cities…the Solar Cities program, for short (US$40.5 million); and improving the reliability of concentrating solar power technologies and enhancing the capabilities of DOE National Laboratories to provide test and evaluation support to the solar industry (US$25.6 million).

In the area of PV research, for example, the Energy Department wants to fund the development of the necessary modelling tools (and a database of high penetration PV scenarios on distribution systems); monitoring, control and integration systems to enable cost-effective widespread deployment of small modular PV systems; and the integration of PV and energy storage into Smart Grid applications.

The Recovery Act included US$350 million in new geothermal investments, dwarfing previous Government commitments. There is US$140 million earmarked for demonstrations of cutting-edge technologies to advance geothermal energy in new geographic areas, as well as geothermal energy production from oil and natural gas fields, geopressured fields, and low to moderate temperature geothermal resources. Enhanced

Geothermal Systems (EGS) Technology Research and Development will get US$80 million. Projects that include exploration, siting, drilling, and characterisation of a series of exploration wells that use innovative exploration techniques, will be funded to the tune of US$100 million. There is an additional US$30 million for a nationwide assessment of geothermal resources, development of a nationwide data system to make resource data available to academia, researchers, and the private sector, and development of a geothermal resource classification system for use in determining site potential.

While the geothermal and solar grants will generally stay below a US$5 million/per threshold, the wind area has attracted substantial investment, in the form of US$45 million download to one company for the development of a large drivetrain testing facility, which will feature an instrumented dynamometer test stand. This will enable the wind industry to develop, test and validate large-scale land-based and off-shore wind turbine drivetrain systems domestically.

The average size of wind turbines installed in the USA in 2007 increased to roughly 1.65 MW. However, turbines have already been developed that range in the 2.5 MW to 3.5 MW capacity sizes, with plans being developed for even greater power ratings. The larger wind turbines have outpaced the availability of US-based testing facilities for gearboxes.

New federal funding agency for clean energy projects

Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy Committee, tried and failed in 2008 to convince Congress to create a new finance agency within the Energy Department to take over the renewable energy loan guarantee program launched by the 2005 energy bill. That loan guarantee program has stalled badly, a situation new Energy Secretary Steven Chu has tried to ameliorate, with apparently only modest success. Only one conditional loan guarantee has been offered, to Solyndra, Inc. for a US$535 million loan guarantee to build a manufacturing plant for solar panels.

The economic stimulus bill provided an additional US$6 billion for renewable loan guarantees, which could support about US$60 billion in loans. There are another 15 renewable applications sitting at the Energy Department waiting for action; but they have been waiting for some time.

Members of Congress from both parties now acknowledge that the 2005 Energy Policy Act provision providing US$2 billion for loan guarantees was imperfect in a number of respects. Energy Secretary Chu has been trying to change some of the regulations around the program. But Bingaman and like-minded Republicans such as the top GOPer on the Energy Committee, Sen. Lisa Murkowski (R-AK) want a more radical revamping in the form of a new, independent Energy Department agency called the Clean Energy Deployment Administration (CEDA).

It would function like a bank, and would be able to bring to bear a much wider range of credit assistance than just loan guarantees. The agency would provide various types of credit to support deployment of clean energy technologies including loans, loan guarantees and other credit enhancements - as well as secondary market support to develop products such as clean energy-backed bonds that would allow less expensive lending in the private sector.

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