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Wednesday, January 28, 2015

Smog and mirrors in West Virginia

Since it was signed into law in 2004, Pennsylvania’s Alternative Energy Portfolio Standard (AEPS) has guaranteed a certain percentage of the electricity sold at retail in the state comes from clean and renewable sources. When fully implemented in 2020, this will mean .5 percent of our electricity will come from solar, 7.5 percent from clean “Tier 1” renewables like wind power, and an additional 10 percent from “Tier II” alternative sources such as waste coal.

According to the Pennsylvania Public Utility Commission's (PUC) 2014 annual report on the program, the 16 MW of solar installed the prior year “resulted in $171 million of investments that help sustain the 2,900 person workforce from 428 companies involved in manufacturing, sales, distribution and installation of solar power components and systems in Pennsylvania.” Similarly for wind, the PUC reported more than 1,000 direct and indirect jobs (including jobs at 28 in-state manufacturing facilities). This is a positive step but we have barely scratched the surface of our potential for solar and wind, and for the jobs and other economic benefits clean power would provide.

For all the good news, Pennsylvania’s AEPS has fallen behind surrounding states. Compared to our program, New York, New Jersey, Delaware, Maryland, and Washington, D.C. all require 20 percent or more renewable energy between 2015 and 2026. Even Ohio is ahead of us with a 12.5 percent standard. While we could be moving forward and joining our neighboring states, opponents of clean energy are hard at work to prevent this.

It looks like our neighbors in West Virginia will succumb to politics and be the first to take a giant leap backwards. The state had enacted a portfolio standard in 2009 that would have required 25 percent of electricity coming from renewable and “alternative” sources. At the time, the coal industry supported and even helped draft the law. (Not surprisingly, they managed to ensure a number of different coal technologies could generate credit under their plan.) Now, the industry has had a change of heart and is claiming the plan threatens jobs.

With economic indicators such as jobs, earnings, consumer spending, and housing starts all up since 2009, are we to believe that this law creates a “jobs problem” that didn’t exist prior to the economic recovery? It wasn’t the technology or economics that changed so much in six years—just politics. One industry representative was quoted as saying this was a reaction to new Environmental Protection Agency (EPA) emissions regulations. That is no doubt true, but there's a bit more to the story...

In its Clean Power Plan, the EPA made sure its targets were achievable by basing them on existing state plans. West Virginia has one of the more complex laws out there so it’s hard to guarantee how much clean renewable energy will result. Although they would probably need to modify their rules to make reductions under the law creditable, it’s possible that the existing law would result in enough clean energy resources being built.

While most folks would think this was good news, it put the state's coal industry between a rock and a hard place. Continuing to support the law they helped draft could be seen as supporting one element of the Clean Power Plan. Worse yet, it would make it much more difficult to peddle the talking point that no element of the plan is achievable. There was only one solution—their own law had to go.

When the industry wants to convince people to vote for more pollution, less clean energy, and worse public health, there is only one way to go: Cloud the issue with smog and mirrors and then threaten jobs.

This might not impact Pennsylvania directly but our own law could very well see a similar challenge. Hopefully, Pennsylvania Governor Tom Wolf and enough of our legislators will see through the industry’s smog screen and keep our AEPS law in place.

Rob Altenburg is director of the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Distributed generation and grid security: Sometimes you have to go back to move forward

For more background on Grid Security, see my previous post from January 7, 2015: "Should we be worried about an attack on our electric grid?"

Electricity has become a Necessity

During the aftermath of Hurricane Sandy in 2012, over 8 million people (myself and other eastern Pennsylvanians included) along the U.S. East Coast lost power for days. The blizzard that just struck New England left thousands without power and shut down the entire island of Nantucket. Now, I fully understand that millions of people around the world go without power on a daily basis. As well, some members of the Amish community right here in Pennsylvania choose to go without electricity and they do just fine. 

But let’s not forget that our country is fully dependent on our electric grid. We need it to run our utilities, to communicate with each other and other countries, to defend our country -- the list goes on and on. So, how is it that one of the most powerful countries in the world still suffers from widespread power outages on a regular basis? There has to be a solution, right?  Well, lucky for us, there are solutions and one of the most recognized solutions is distributed generation.  

What is Distributed Generation?

According to the U.S. Department of Energy (DOE), “distributed energy consists of a range of smaller-scale and modular devices designed to provide electricity, and sometimes also thermal energy, in locations close to consumers.” The devices include “fossil and renewable energy technologies (e.g., photovoltaic arrays, wind turbines, microturbines, reciprocating engines, fuel cells, combustion turbines, and steam turbines); energy storage devices (e.g., batteries and flywheels); and combined heat and power systems.”  

Utilizing clean distributed generation (meaning generation from renewable energy sources and combined heat and power) is the best option because as defined by the Environmental Protection Agency (EPA), it "does not include those types of small generators that have emissions levels (pollutant per kWh) that are higher than an average power plant." Distributed generation from clean renewable energy sources is all about generating energy right at the load demanding the energy. This reduces the amount of energy lost and decreases the need for costly transmission systems and distribution lines that are susceptible to storm damage (and even squirrel chews). 

Distributed generation is not a new concept. In fact, by employing more distributed generation, we would be going back to the beginning to help us move forward. Small, localized generation stations were used before Thomas Edison thought of having one large centralized facility, the first one being the Pearl Street Station in New York City
Distributed generation also works well for microgrids (small localized electric grids that can operate separately from the main electric grid). A microgrid consisting of multiple distributed-generation technologies could be brought together in a concentrated, flexible cluster of power when needed to maintain reliability in situations where the main grid is damaged due to a storm or security issue. In fact, during Hurricane Sandy, a microgrid system at the U.S. Food and Drug Administration (FDA) and General Services Administration (GSA) campus in White Oak, Maryland disconnected from the power grid and kept the campus running while utility-dependent customers in the area remained powerless. During natural disasters, having a microgrid would provide utilities with more time to fix the damaged areas of the grid. 
This all may sound quite complex and costly, but engineers have been working more intensely on interconnection and interoperability issues over the past few years which will allow distributed generation and microgrids to be cost-effectively, securely, and safely deployed.
Distributed generation has other benefits including lowering costs to homeowners and businesses that offset part of their consumption of utility-provided power or sell power back to the grid. Additionally, instead of plugging your refrigerator and other “necessity” appliances into a noisy and costly backup generator, you would have an onsite power source that can easily come online when your electric utility is experiencing an outage. Critical facilities such as hospitals and emergency centers that depend on backup generators during power outages can also take advantage of the more reliable off-grid power from renewable energy. 

Check out our Clean Energy Wins: A Policy Roadmap for Pennsylvania Report for more about "Promoting Distributed Generation in Pennsylvania," starting on page 44.  

Proponents of Distributed Generation

In 2005, the U.S. Naval Inspector General stated thatone potentially effective and protective option for improving energy security is distributed generation” and “by distributing smaller generating capacity at multiple locations, the pitfalls of relying on a single remote source of power are greatly reduced.” In 2012, U.S. Representative Roscoe Bartlett (R-MD), Rep. Yvette Clarke (D-NY), Rep. Trent Franks (R-AZ), and Rep. Hank Johnson (D-GA) introduced a resolution to encourage “community based civil defense preparations, including distributed generation of 20% of local electricity needs.” Rep. Bartlett said implementing more distributed generation and being “self-sufficient independent of the electric grid” was in the interest of national security. 

Considering the recent reports on climate change that describe the potential for more devastating natural disasters and reports showing an increase in cybersecurity threats, now (not tomorrow or a few years down the road) is the time to act on implementing widespread distributed generation. 

Jennie Demjanick is energy policy analyst for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

The remarkable thing about street lighting: Part 1

Street lighting and the application of more Light Emitting Diode (LED) technology may be one of the most overlooked efficiency opportunities within the state of Pennsylvania. In this three-part blog series, we will look at savings, both in terms of energy and cost; political and market barriers; and explore a path forward to making sure our state can achieve the energy and cost savings that other states -- and taxpayers within those states -- enjoy.

Our Commonwealth has over 2,600 individual municipalities. The majority of these municipalities do not own or maintain the streetlights within their borders, rather, the EDC (Electric Distribution Company) serving that municipality provides street lighting operation and maintenance based on a monthly tariff. Options to apply new energy efficient lighting applications through these tariffs have been limited despite the cost reductions and efficiency development of LED street lighting technology.

In communities where the street lighting is owned and maintained by the municipality, the obvious savings in electricity and maintenance costs from more efficient and longer lasting LED application has led many to begin the process of conversion. Projects in Philadelphia, Pittsburgh, Bethlehem, Berlin, Harrisburg, Altoona and many other cities and towns are currently underway. Pittsburgh alone expects that a full conversion of 40,000 lights to LEDs would cut $1.7 million off its annual $4.2 million budget. 

To illustrate the potential energy savings from converting utility owned and maintained street and area lighting to LED technology, we can look at the Pennsylvania Electric Company (Penelec). One of seven regulated electric utilities in the state, Penelec is the largest electric utility service territory in terms of land area served. We aren't picking on Penelec but it happens to be the only utility for which we have the lighting inventory (and, for what its worth, this data is not easily obtained). Penelec maintains over 974,000 individual streetlights of varying applications and sizes. These lights utilize High Pressure Sodium (the ones that you probably have in your town, with the orange hue) and Mercury Vapor (that's even older lighting technology with a blue hue) lighting types. The projected annual energy use of these lights is 630 gigawatt hours of electricity per year.

File:Street lights, Jefferson Avenue at night (2899348024).jpg

Now, here's the first "remarkable" thing about street lighting. If you part and parcel out the tested LED lighting technologies available in the market today and apply those as replacements for each of these 974,000 lighting units in Penelec's territory, the energy savings that can be achieved, just for that one service territory, would be about 433 Gigawatt Hours (that's 433,000,000 kWh) per year. This is equivalent to the annual energy that 40,000 homes use in one year. Imagine what the impact could be if the streetlights in all seven of the regulated utility service territories were switched to the advanced LED technologies we have today. 

So, you may be saying to yourself, "It's great that we can save energy, but your advanced LED technologies cost a fortune." Not so fast. There have been substantial breakthroughs in reducing the cost for LED technologies, and you need only peruse the aisles of your local hardware store to prove it.

Domestic LED light bulbs that were $20- $50 per bulb just four years ago are now in the $7-$14 range, and the same holds true for LED streetlights. Units that sold for $300 four years ago can now be purchased for $144. Costs across the board have come down significantly.  And for a utility or municipality, those costs are not just measured in the price for the light. Maintenance savings from the longer usable life, and decreased likelihood of the unit failing, significantly reduce the cost of ownership. Energy savings for a municipality are also a clear piece of the cost puzzle, with your typical High Pressure Sodium streetlight using about 600 kWh per year compared to an LED replacement that uses just one third of that at 175 kWh per year.

All of these cost reductions lead to a second remarkable thing about streetlights. For the first time, the low cost of ownership and low frequency of maintenance provided by LED streetlights means that municipalities can save big money by owning and maintaining their own streetlights over what they currently pay utilities for that service in tariffs.

Read next week's blog post, "The Remarkable Thing about Street Lighting: Part 2," for a more in depth rundown of the costs and savings for typical ownership vs. what utilities charge.

Evan Endres is project manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

Wednesday, January 14, 2015

Climate Change: Lessons from our past

In the environmental field, fifty years ago was a long time ago. Groups like the Sierra Club (1892), the National Audubon Society (1905), the National Wildlife Federation (1936), and others have certainly been hard at work for much longer. Rachel Carson’s classic Silent Spring (1962) is also a little over 50 years old. But the Environmental Protection Agency (EPA), the Clean Air Act, the Clean Water Act, the Endangered Species Act, and the bulk of our environmental laws are all younger than 50. If you had to put an age on our modern concept of environmental protection, it’s probably 40-something.

By comparison, this year marks the 50th anniversary of a report called Restoring the Quality of Our Environment issued by the Environmental Pollution Panel of President Lyndon Johnson’s Science Advisory Committee in 1965. In the introduction, the President said “our present efforts in managing pollution are barely enough to stay even, surely not enough to make the improvements that are needed.” Fortunately, the legislature and (once established) the EPA would begin to address many of these issues within the decade.

If our President today were making a speech on climate change, Lyndon Johnson’s quote from 50 years ago wouldn't seem out of place. What we are doing is “surely not enough to make the improvements that are needed.” Hopefully, as was the case in 1965, significant progress is just around the corner. With the soon-to-be-finalized Clean Power Plan, increased attention to methane leakage, and fossil fuel alternatives such as solar power getting cheaper all the time, we have the potential to make significant progress over the next few years.

There is, however, a more direct link between the 1965 report and climate change—Dr. Roger Revelle and his team provided 22 pages of the report that specifically addressed the issue. It began by stating that “man has begun to burn the fossil fuels that were locked in the sedimentary rocks over five hundred million years and this combustion is measurably increasing the atmospheric carbon dioxide.” It then noted that as early as 1899, the geologist Thomas Chamberlin proposed that changes in climate could result from changes in the concentration of carbon dioxide. And it also warned that such climatic changes “could be deleterious from the point of view of human beings.”

To be sure, we have certainly learned a lot about climate change since 1965 but the link between fossil fuel combustion and atmospheric carbon dioxide was already apparent. The report noted, “the data show, clearly and conclusively, that from 1958 to 1963 the carbon dioxide content of the atmosphere increased by 1.36 percent...By comparing the measured increase with the known quantity of carbon dioxide produced by fossil fuel consumption... we see that almost exactly half of the fossil fuel CO2 remained in the atmosphere.”

The report concluded by saying that by dumping all this CO2 in the atmosphere, “Man is unwittingly conducting a vast geophysical experiment.Now, fifty years later, we are seeing the results of that experiment more clearly. I think we can safely say that now is a good time to end this experiment and act on climate.

Rob Altenburg is senior energy analyst for PennFuture and is based in Harrisburg. He tweets @RobAltenburg.

Solar increases home value, PA markets need to keep up

We've become accustomed to hearing about home value increases that residents in solar mega-states like Colorado and California have enjoyed due to the decision to install solar. But we've never been certain of how that same lesson applies to Pennsylvania. A study just released by the Department of Energy’s (DOE) Lawrence Berkeley Laboratory, has widened the scope of their prior investigations to include states in the mid-Atlantic region, namely our own Keystone State. 

The findings hew closely to findings from former studies that focused on Colorado and California. In Pennsylvania, as part of a six-state sampling that included Connecticut, North Carolina, New York, and Massachusetts, homes with solar sold for a premium equivalent of up to $4 per watt based on the size of the solar installation. That means a $15,000 price increase for a newer $3.5 kW solar install. 

Having a study to back up home value increases from home-scale solar is an important step forward but it's not the end of the story. Solar industry representatives and the real estate industry need to work together to consistently and accurately value solar energy as a home improvement that returns real dollars to a property owner. Solar professionals need to do their part to make sure solar owners are armed with accurate information on their installation that can easily and consistently be translated to real estate professionals in the event that they need to sell. 

Solar, as a home feature, needs to find a permanent place in the searchable fields of databases that appraisers use to find "paired comparable" properties for the purposes of home valuation. This includes modernizing Multiple Listing Services (MLS) to include solar, efficiency scores, and other green features and supporting data for all of these. Without that step, home value increases will not be applied consistently and may not come through for the purposes of mortgage home appraisals, a critical step for the growth of a healthy solar (and home energy efficiency) market. 

With proof of a $15,000 premium, there's much to be gained by working together to make sure our solar and real estate industries are keeping up with the Solar Joneses.

Evan Endres is program manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

Wednesday, January 7, 2015

Between the lines of your electric bill

Before the holidays, PennFuture worked with a coalition of other organizations to prepare a series of recommendations for the Public Utility Commission (PUC) on the upcoming Phase III of the Act 129 Energy Efficiency Program. Technical comments like these won’t make the news but the issues are important.

Since deregulation, our local power companies are no longer in the generation business. They are now known as electric distribution companies (EDCs) and are responsible for delivering power, reading meters, maintaining the local lines and poles, responding to outages, and other services that deliver the power. The folks that actually sell power are known as Electric Generation Suppliers (EGSs). You can go to and pick the EGS from which you purchase your power. Since we don’t want dozens of companies all running power lines to every neighborhood, EDCs remain regulated utilities with monopolies in their service areas.

Unfortunately, the way the system is set up, residential customers tend to pay for distribution services based on a cost per kilowatt hour (kWh) just like they pay for generation. This means EDCs stand to make higher profits if customers use more power. So, customers installing renewable energy sources like solar power or energy efficiency measures such as new appliances or LED lights could mean less money in EDC pockets.

Act 129 of 2008 was an important piece of legislation that began to address this issue. It requires Pennsylvania’s EDCs to implement cost-effective measures to reduce energy consumption and demand. Phase I of the program was a great success, ultimately returning nearly $3 to consumers for every dollar spent. We are currently in Phase II of the program and most EDCs are well on their way to achieving their targets. The PUC has begun work on the process of setting the Phase III targets.

While we addressed a number of more technical points in our comments, perhaps the most important issue raised is how we determine what is cost effective. The PUC must evaluate programs using a Total Resource Cost (TRC) test. Because the Act defines this test in terms of “monetary cost,” the PUC has interpreted this to exclude consideration of health and environmental benefits, even when they can easily be monetized. It’s great that Phase I was still highly cost effective under this overly restrictive test but ignoring many of the costs and benefits doesn’t make sense.

Just because costs don’t appear on our energy bills, it doesn’t mean we don’t have to pay for those costs. When children repeatedly miss school because of asthma attacks or other respiratory diseases caused by pollution, parents take more time off from work. The lost productivity contributes to higher prices, the higher medical bills mean higher insurance premiums, and the lost time in school could lead to a lifetime of lower paying jobs for the children. Individually, these costs may seem small but when multiplied by the 30 million asthma sufferers in the country, we see millions and millions of lost days of work or school. On this scale, the costs start to soar. When we add other costs of environmental damage such as lost tourism, costs to maintain clean water, damage to crops, etc., the costs get even higher.

This issue isn’t limited to Act 129. Whenever a program is proposed that will protect public health and the environment, it’s a good bet a polluter will soon be telling us that it “costs too much.” It’s also a good bet that the polluter is only talking about the costs that come out of his pocket, not ours.

Rob Altenburg is senior energy analyst for PennFuture and is based in Harrisburg. He tweets @RobAltenburg.

Should we be worried about an attack on our electric grid?

So, should we worry about attacks to our electric grid? The short answer is yes, but implementing widespread renewable energy and energy efficiency policies could come to our rescue.

Considering the recent hacking incident at Sony, you may be wondering how vulnerable the U.S. is to future attacks. More specifically, how vulnerable is our electric grid to an attack by hackers shutting it down from outside the U.S. or by shooting at or driving/flying into our substations. It turns out that due to aging infrastructure built long before cyber-security was even a word, we are very vulnerable to such an attack.

Our 1970s-era technology has not been upgraded due to fears of interrupting power service. David Kennedy, CEO of TrustedSec, says “The energy industry is pretty far behind most other industries when it comes to security best practices and maintaining systems." A survey by ThreatTrack Security found hackers had breached security at 37 percent of energy companies.

To make matters worse, a lot of utilities are not continually monitoring their systems to see if anything out of the ordinary is occurring. Pacific Gas and Electric Co. finally hired a new security company to protect the Metcalf substation near San Jose, California that was shot at and robbed in two separate incidents. The shootings in April 2013 resulted in over $15 million in damage to 17 transformers and almost caused a blackout in the Silicon Valley.  The following August, equipment and tools were stolen from the substation.  The previous security company had disregarded the fence alarms so no one was ever apprehended for either crime. Jon Wellinghoff, former chairman of the Federal Energy Regulatory Commission (FERC) notes that "It would not be that hard to bring down the entire region west of the Rockies if you, in fact, had a coordinated attack like this against a number of substations.”

Potential Attacks
Our grid can be damaged or destroyed in the following ways, according to the website a nuclear weapon that generates an EMP (Electro-Magnetic Pulse) effect; a geo-magnetic storm from the sun that also can generate an EMP effect; a smaller, localized EMP that can be created with everyday equipment from Radio Shack; cyber warfare; and direct physical attacks. If a terrorist group were to set off a nuclear weapon creating an EMP, which is essentially a huge energy wave strong enough to knock out systems that control electricity flow across the country, the result would be catastrophic.
Another example of a potential attack is referred to as an AURORA which, as noted in the publication POWER, results when a circuit breaker or breakers are opened and closed, resulting in an out-of-phase condition that can damage alternating current (AC) equipment connected to the grid. According to cybersecurity analyst Joe Weiss, "Aurora is the cyber exploitation of the physical gap in protection of the electric grid affecting every substation."

David Whitehead, research director for Schweitzer Engineering Laboratories, says that back in 2007, Aurora was the most fearsome cyber-security threat but utilities are not currently addressing the Aurora concerns because other threats have taken priority. The only good news is that it would take someone with a lot of insight to pull off an Aurora attack because they would have to overcome network password and authentication procedures. Tests were conducted in 2007 to see what an Aurora attack would look like and as you can see in this leaked video, the results were quite destructive to the generator involved.

Current Threats to Our Grid
The head of the National Security Agency and the U.S. Cyber Command has recently stated that “unnamed foreign nations and groups have gained the technical capability to take down control systems that operate U.S. power grids, water systems and other critical infrastructure.” According to Navy Admiral Michael Rogers, "it is only a matter of when, not if, we are going to see something dramatic."
Michael Assante, former chief security officer of the North American Electric Reliability Corp., the U.S. grid security monitor, says attackers “learn how to modify malware, to hide it, to test it to make sure they can get under your radar.” Once they gain access, they can send a signal telling power generators to go offline and even alter the transmission system so that power cannot be distributed.
The cyber-security firm Cylance Inc. has warned that "Iran is the new China" in a report that shows hackers from Iran attempting to enter our systems (“Operation Cleaver”). Eric Cornelius, director of critical infrastructure and industrial control systems at Cylance and a former Department of Homeland Security official, says the attackers possess "the sophistication to cause physical damage if they were so inclined."
According to Fred Hintermister, manager and key member of the Electricity Sector Information Sharing and Analysis Center (ES-ISAC), an industry-run source for cyber intelligence, cyber attacks "arrive in the middle of the night or on a Friday afternoon when operators are changing shifts or when we have low reserve margins on a very hot day in the summer."
The one defense utility control networks do have is that they are all very distinct from one another and hackers would have to figure out the idiosyncrasies of each system. Mike Kuberski, manager of grid protection and automation for Pepco Holdings, calls this feature "security by obscurity."
Changes to Security Protocol
Under the Energy Policy Act of 2005, FERC has the authority to approve mandatory cyber-security reliability standards. FERC recently approved new reliability standards that “require owners and operators of the Bulk-Power System to perform a risk assessment of their systems to identify critical facilities; evaluate potential threats to, and vulnerabilities of, those facilities; and develop and implement a security plan to protect against attacks on those facilities. Additionally, in an attempt to address concerns, the Department of Homeland Security is holding secret meetings with energy company leaders to discuss "ongoing" cyber threats.

To be continued: The threat to our aging grid infrastructure provides another argument for making our grid "smarter" and implementing distributed generation.

Jennie Demjanick is energy associate for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

Wednesday, December 17, 2014

Yes, Senator Casey, we can

On December 10, Senator Bob Casey issued a statement entitled The Need to Act on Climate Change. The statement began on a very positive note, saying We must take action on climate change because it poses a serious threat to public health, the environment and national security. It then went on to voice support for the Environmental Protection Agency's (EPA) Clean Power Plan and highlighted a number of reasonable points.

With the other member of our U.S. Senate delegation in Pennsylvania, Senator Pat Toomey, completely opposed to limiting carbon pollution, and even our own Pennsylvania Department of Environmental Protection (DEP) opposing many of EPA’s efforts, Senator Casey deserves our thanks for being a voice of reason.

As much as we would like to praise the entire statement, there is one sentence with which we take issue. Midway through the document, the Senator says:
"EPA’s renewable energy target for Pennsylvania imposes an unequal burden on the Commonwealth relative to other states with much greater renewable energy potential, and it wouldn’t be possible to get greater carbon pollution reductions from the other three building blocks in Pennsylvania."
While we can appreciate constructive criticism that fosters debate and will ultimately make a good rule better, this particular statement takes an overly pessimistic view of the EPA’s proposal.

The claim that EPA imposes an unequal burden on us sounds bad, and it is bound to be repeated often by those opposed to the Plan. But, is it really surprising that EPA is proposing more reductions from states that emit more carbon pollution? Sometimes, being unequal is not only fair but also reasonable public policy.

The EPA derived its regional renewable generation targets by averaging existing renewable portfolio standards (RPS) in nearby states. This guarantees that the regional standard will be more moderate than what other states have already found to be achievable. Of the states with existing standards in our region, Pennsylvania is in last place with an 8 percent target—half of the 16 percent average. So, it’s not surprising that we need to do a little extra to catch up. (West Virgina and Virginia are even further behind as neither has a state RPS.)

Because we generate more electricity (and emit more pollution) than many other states, we also need more renewable generation to see the same percentage improvement. Of course, just because it’s unequal doesn’t mean it’s a burden. As a state with more generation, we also have the potential for more cost-effective reductions in many cases. Also, when we consider the benefits of having a clean and inexhaustible energy supply that protects public health and the environment, creates local jobs, avoids volatile fuel prices, and provides a more resilient power grid, the real burden would be remaining dependent on fossil fuels for another generation.

We Can Do It

The second part of the Senator’s statement is not only more troubling but saying that we can’t achieve more from the other elements of the EPA plan is just plain wrong.

The EPA’s plan sets a state’s target by calculating what is achievable using four building blocks (see graphic). These building blocks are simply used as a means to calculate the target. EPA does not require Pennsylvania to use any particular block in its plan nor does it require any particular facility to achieve any specific reduction. States will have the flexibility to choose what measures are best and most cost effective. We could follow the EPA plan; we could choose to pool our resources in a multi-state approach (which could be as much as 30 percent cheaper); and we could even make use of other sources of emission reductions that EPA didn’t consider. Even if we stick to the EPA’s building blocks, we can clearly achieve far more reductions than they have assumed.

We certainly have the potential to exceed EPA’s target for renewable generation (Block #3). Their plan assumes we can get about 35,000 GWh total renewable generation by 2029. Our existing Alternative Energy Portfolio Standard (AEPS) should get us about halfway to that goal with more than 18,000 GWh expected by 2020, leaving us nine years to install the rest. Between solar and wind alone, we have the potential to exceed that target.

A 2009 study showed Pennsylvania could get over 29,000 GWh from on site solar alone and such resources have already become more cost effective. A study from the U.S. Department of Energy showed we could get over 20,000 GWh from offshore wind in lake Erie. Additionally, a study from the National Renewable Energy Laboratory (NREL) showed we could get almost 10,000 GWh from land-based wind. That doesn’t even consider out-of-state resources that could be used if they prove more cost effective.

Not only can we meet the goal, but doing so looks more and more like a smart business choice even without an EPA rule. An analyst at Deutsche Bank recently found that the cost of rooftop solar will reach grid parity in all 50 states by 2016 (ten states are already there.) Our grid operator, PJM, reported that getting 30 percent renewable penetration in our grid (mostly solar and wind) would reduce production costs by up to 16 percent over business as usual and can reduce wholesale electricity prices by over 21 percent.

While we can get all the expected reductions from renewable energy, that isn’t the only option. Contrary to what Senator Casey has said, we can get more reductions than the EPA predicted from many of the building blocks.
  • For redispatch of coal generation to gas (building block #2), we already have. Over the past several years, a number of old coal-fired power plants have either retired or announced their retirement. As as result of low natural gas prices, these are being replaced, for the most part, with new natural gas capacity.
  • For more clean and renewable generation (building block #3), we can take credit for more than just new renewable energy. Because of uprates in capacity at an existing nuclear plant, we are already achieving more than EPA estimated.
  • For energy efficiency (building block #4), we probably have the most potential to exceed EPA’s projections. A recent PUC report prepared by an independent evaluator noted that we could likely triple EPA’s projection with cost-effective measures. These are measures that are already putting roughly $3 into consumers’ pockets for every $1 spent.
The Time is Now

Senator Casey, you said we must take action on climate change. The Clean Power Plan will keep energy cleaner and more affordable. It will create more jobs for Pennsylvania workers. It will protect the health of our citizens, particularly children and the elderly. And, it will help keep Pennsylvania a leader in technology and innovation.

We’ll keep up the fight to reach these goals but your full support would help a great deal. Are you with us?

Rob Altenburg is senior energy analyst for PennFuture and is based in Harrisburg. He tweets @RobAltenburg.

A new kind of International Climate Change Agreement is on the horizon

For more information on COP 20, see my previous post from December 3, 2014: COP 20: U.S. optimistic about establishing a new international climate change pact

Last weekend, delegates from nearly 200 countries signed a preliminary global climate agreement (the “Lima Call for Climate Action”) committing each nation to reducing carbon pollution. The agreement affirmed the Conference of the Parties’ (COP) “determination to strengthen adaptation action.” A formal legal agreement (to be legally enforced under the U.N. Framework Convention on Climate Change) will be negotiated and hopefully signed next year at COP 21 in Paris, France and then implemented in 2020. 

It is refreshing to see that the U.S. and China were finally able to come to an agreement a few weeks ago, even if COP 20 discussions were still quite tense.  Here in the U.S., we tend to put a lot of the blame on China for its high greenhouse gas (GHG) emissions. However, that is an unfair assessment, especially considering that a lot of the items we purchase in the U.S. are made in China. American consumerism, particularly during this time of the year, is a significant part of the problem. We want more and more material items and expect China to produce them as quickly as possible. Now that the two nations have sort of come to an agreement, it is time for individuals to step up and make a change as well.

The new agreement will be unlike prior agreements such as the Kyoto Protocol and the Berlin Mandate in that it will bind more than just the “industrialized” or “developed” Annex I countries to carbon emission reductions.

The “Lima Call for Climate Action” states that the COP “underscores its commitment to reaching an ambitious agreement in 2015 that reflects the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances.” “Common but differentiated responsibilities” (CBDR) is the phrase used in U.N. agreements to attempt to describe the roles of countries based on their level of development.

According to Professor Ellen Hey, the core principle is having a “global partnership linked to the duty to cooperate, in which states are to take on obligations based on their situation as determined by their contribution to environmental degradation and their access to technological and financial resources with developed states taking on a special responsibility.”

In addition to the presence of the U.S., inclusion of non-Annex I countries in the new agreement is a significant development. Climate change is a global issue and CO2 reductions should be mandated across the board. The biggest polluters, such as the United States and China, should clearly have the largest CO2 reduction mandates, but we can no longer afford to keep developing countries out of the mix.

Without a binding agreement requiring developing countries to limit emissions, there is nothing preventing them from increasing emissions as they continue to industrialize. Developing nations can continue to grow by using the most efficient renewable energy sources, but the developed nations need to help them obtain those sources by providing technological knowledge and financial aid.

Professor Hey emphasized that point by saying that developed countries have an obligation to help developing states adapt to climate change and because of the principle of “common but differentiated responsibilities,” they are encouraged to do so. Yet, there is still a strong divide between developed and developing nations so between now and next December, countries will need to discuss how they will finance the necessary mechanisms to achieve the required emission reductions. 

Compromise and hope for the future

According to Robert Stavins, the preliminary agreement represents “both a classic compromise between the rich and poor countries, and something of a breakthrough after 20 years of difficult climate negotiations.” He goes on to say that “a new way forward has been established in which all countries participate and which, therefore, holds promise of meaningful global action to address the threat of climate change.” In addition, Sierra Club Executive Director Michael Brune stated that the conclusion of COP 20 “marks another step forward on the path to a significant agreement in Paris, though there is much more left to be done.” 

Climate change is a global issue that requires participation from all the nations of the world, and we are pleased that the U.S. is finally coming to this realization. What we need to do now is seriously consider implementing cost-effective measures such as energy efficiency and renewable energy that will put us on the right path toward achieving essential GHG reductions.

What to look for in the coming months

Each country now has to submit its Intended Nationally Determined Contributions (INDC) by the end of March 2015 (June at the latest), which will include how they will further reduce CO2 emissions (have to go beyond what they are currently doing). Each nation’s INDC will be listed on the UNFCCC website as they come in. Meetings with technical experts will also continue in order to properly assess measures such as energy efficiency, renewable energy, and carbon capture and storage (CCS) that will aid reductions.

Jennie Demjanick is energy associate for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

Wednesday, December 10, 2014

Pollution and the Pareto Principle

In 1906, the economist Vilfredo Pareto noticed what has come to be called the Pareto principle, or the 80-20 rule. This is the observation that for a variety of events around 20 percent of the causes are often responsible for around 80 percent of the results. This rule of thumb has been applied to a wide range of subject matter including economics, human resources, safety, natural disasters and many others.

Polluters often try to use this rule to their advantage. We frequently hear the claim that a pollution control program isn't "effective" because relatively few facilities are found to be violating a standard. We also hear polluters discuss their average emissions, which lets them avoid discussing how high the peaks are.

When we drive down the road, we don't notice the air pollution from most of the cars around us. Fossil fuel cars are all emitting pollutants to some degree, but a fairly high percentage of them are meeting or exceeding the applicable emission standards. Every once in a while, however, we see (or smell) one car that is emitting way more pollution than any of the others. This is an example of the Pareto principle—most of the emissions come from relatively few cars. We need to be sure it is cars like that which we identify and fix.

In most cases, the solution is to have most or all of the cars do a simple emissions test. Having such a test creates reductions in different ways: There will be a certain number of high emitting cars that will fail the test and will be fixed; there will be some owners who know their cars will fail and will repair or replace those cars before even taking the test; and, there will be some owners who will be a little bit better at regular maintenance and will avoid having any problems in the first place.

While more people can probably relate to this idea in the context of vehicle inspection, it works in other areas, too.

A recent study out of the University of Texas at Austin notes that, in natural gas production, 19 percent of the pneumatic controllers studied accounted for 95 percent of the gas and methane emissions. That suggests the Pareto principle applies to methane leakage as well.

In Pennsylvania, drillers and processors of gas from the Marcellus shale reported using 9,491 pneumatic controllers in 2012. If we have a similar pattern to what was found in the Texas study, that would mean that a little over 1,800 controllers would be responsible for the majority of the emissions. Or, on average, about 60 high-emitting controllers for each Pennsylvania county with active Marcellus wells.

The DEP has some requirements for leak detection, but it is far from a comprehensive program. Just as with cars, a stronger program would not only help catch high emitters, but it would send a signal to operators that it's worth it to prioritize maintenance, thus preventing problems in the first place. It's a small step, but it would be a step in the right direction.

Rob Altenburg is senior energy analyst for PennFuture and is based in Harrisburg. He tweets @RobAltenburg.

RGGI Part Two: Lack of Pennsylvania participation is one of RGGI’s biggest flaws

For more background on RGGI, see my previous post from November 19, 2014: "What is RGGI and why should PA be interested?"

The Regional Greenhouse Gas Initiative (RGGI) is responsible for a reduction in regional power sector carbon dioxide (CO2) pollution by over 30 percent. Emissions trading is one of the best available options to reduce ghg emissions at the lowest cost possible and, as a result, lessen the overall cost of dealing with climate change. The fact that the European Union and California are using cap and trade emphasizes its potential to effectively and dramatically decrease ghg emissions. 

RGGI and other regional cap and trade programs are great examples of utilizing the “bottom-up approach” when it comes to climate change mitigation. According to Robert N. Stavins, Albert Pratt Professor of Business and Government, Harvard Kennedy School, “the bottom-up approach could be an important part, or perhaps even the core, of the future of U.S. climate policy, at least until there is meaningful action at the federal level.”  If state cap-and-trade systems link, they may become “the (interim) de facto national climate policy architecture.”

If PA does become a member, how will that benefit RGGI?

Even though RGGI has made significant progress in reducing CO2 emissions, it has its flaws. The major economic issue is that, just like any other free market, the carbon market fluctuates and, every so often, hits bottom. Other issues with the program include low prices for allowances, declining interest in future trading, and one original member state (New Jersey) that has already dropped out. 

Another issue with trading is carbon leakage, which involves driving carbon sources out of the market into an area with no control. Leakage undercuts the viability of RGGI. For instance, one of the reasons why New Jersey resigned from RGGI is due to Pennsylvania not being a member. According to Sara Bluhm, vice president of energy and environmental affairs at the New Jersey Business and Industry Association, "Our biggest problem was that Pennsylvania was never part of the program.” Since a lot of New Jersey's pollution comes from out of state, including Pennsylvania, New Jersey was not reaping enough benefits under RGGI. 

According to New Jersey’s Former Democratic Committee Chairman, Upendra Chivukula, “retreating from RGGI was a tactical blunder and we believe it is crucial that New Jersey rejoin.” He recognizes that getting Governor Chris Christie’s support is the biggest issue because he has used his executive powers three times previously to keep his state out of RGGI. However, if Pennsylvania joins that could quite possibly put “political pressure on New Jersey Gov. Chris Christie (R) to reconsider his state's decision to leave RGGI,” says Peter Shattuck, a director for market initiatives at Environment Northeast. 

Proponents of RGGI have suggested that there may have been political motives involved in the governor’s decision considering the persistent rumors he will be running as a Republican candidate in the 2016 Presidential election.  

New Yorkers would also be happy if the Keystone state joined RGGI because that would reduce leakage from New York into Pennsylvania, meaning utilities will no longer have an incentive to buy cheaper power from our state. According to Stavins, "for RGGI to work as it's supposed to, you need power generation in Pennsylvania to be covered as well."

Additionally, as a big coal state, Pennsylvania's joining RGGI could cause a domino effect of other large states with similar energy profiles entering into RGGI or other multi-state initiatives. According to Jackson Morris, an energy analyst at the Natural Resources Defense Council, “this could be especially true with states like Virginia and Ohio that are not in RGGI but, like Pennsylvania, are part of the PJM Interconnection, the regional transmission organization (RTO).” 

Furthermore, based on data from the U.S. Department of Energy (DOE), California and Texas are the only states that release more total CO2. That is significant because there are a lot of states much larger than ours that release fewer CO2 emissions. If Pennsylvania joins RGGI, it would be a “revolutionary development” and the state could benefit as well. RGGI could help Pennsylvania go beyond its CO2 reduction goals and make a serious difference in the amount of ghg emissions in the region.

Most importantly, there is something wrong with this picture. Right now, there is a gaping hole in the RGGI program where Pennsylvania and New Jersey should be. We should consider filling in the region component of the REGIONAL Greenhouse Gas Initiative. Otherwise, they may as well call it the New England/DelMar Greenhouse Gas Initiative. 

Jennie Demjanick is energy associate for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

Wind and solar least cost, lowest risk form of electricity

Ceres, an organization that champions sustainable investments and sustainable corporate leadership, recently released an update to its groundbreaking 2012 report, Practicing Risk-Aware Electricity Regulation: What Every State Regulator Needs to Know. The report looks at key trends that continue to reshape the U.S. electricity industry, and analyzes changing costs and risk profiles of energy resources (especially renewable energy). 
In this 2014 update, authored by utility industry and finance experts, utility scale solar joins onshore wind as the least cost—and least risk—resource for the generation of electricity save for energy efficiency, which will always fall into the least cost resource category. Distributed solar (think rooftop solar) with incentives also significantly improved its ranking for reduced costs.  
The riskiest investments for utilities—the ones that could cause the most harm to ratepayers and investors—are large base load fossil fuel and nuclear plants. In contrast, energy efficiency, distributed energy, and renewable energy are seen as more attractive investments that have lower risks and cost.
In addition to the updated rankings, the report goes on to highlight trends for which utilities and regulators need to prepare.  This includes grid integration of distributed generation sources such as rooftop solar.

Wednesday, December 3, 2014

COP 20: U.S. optimistic about establishing a new international climate change pact

Right now, delegates from the U.S. are meeting with delegates from roughly 200 countries (all parties to the United Nations Framework Convention on Climate Change (UNFCCC)) at the 20th session of the Conference of the Parties (COP 20) in Lima, Peru. They will be in meetings until December 12 and, if all goes well, each country’s delegates will decide their future emissions reduction targets (after 2020) and develop the first draft of a new international pact to be signed at COP 21 in Paris next year.  

Why COP 20 matters for the U.S. and the rest of the world

COP 20 is especially important since the United Nations' top climate scientist, Rajendra Pachauri, has recently stated, “the world has already used up 65 percent of its "carbon budget"-- that is, the estimated maximum amount of carbon dioxide that can be spewed while still keeping the most dangerous climate disasters at bay.” We only have 1,000 gigatons of CO2 left in the budget until we see global temperatures rise more than 2 degrees Celsius above pre-industrial levels. According to Pachauri, “What we really need to do is come up with an equitable, ethical, implementable set of actions.” Even so, there has been some discussion about abandoning the goal of keeping global rise in temperatures below 2° C.

The U.S. has been lagging behind other developed countries on addressing climate change. As you may already know, our country did not ratify the Kyoto Protocol, mainly because China was not a party to it. However, delegates from other large nations remain hopeful considering that the United States and China recently entered into an agreement wherein the U.S. agreed to cut greenhouse gas emissions (GHGs) 26 to 28 percent below 2005 levels by 2025, and China pledged to peak emissions by 2030.

In addition to the new reduction targets, the U.S. has also pledged to put $3 billion into the International Climate Fund and proposed rules such as the Clean Power Plan. Paul Bledsoe, a climate and energy fellow at the German Marshall Fund, says, “The U.S. position is more deeply respected around the world than ever before, because all the major nations are convinced the administration genuinely wants an equitable agreement.”

On the other hand, some delegates, especially those from small island countries like the Marshall Islands which are particularly susceptible to sea level rise, say the U.S. can and should go further in reducing its emissions.  Yet, according to Stern, “The U.S. target is actually extremely ambitious and quite comparable to the European target if you analyze it.”  Additionally, he notes that the Obama administration developed a target that could be delivered using executive authority under the Clean Air Act (CAA), without requiring “legislation that would be great to have but we don't know whether it would be enacted.”

If the U.S. meets the reduction target, it will increase our rate of decarbonization by about 2.8 percent a year. Stern went on to say that an “ideal agreement would see countries aggressively 're-up' their targets every five years, but the deal must be grounded in every country deciding how far it can cut emissions” and not require countries to enact certain targets to meet the goal of keeping temperatures below 2° C.

Other nations, and former UNFCCC Executive Secretary Yvo de Boer, are also finding it hard to forget the U.S.’s failure to enter the Kyoto Protocol when President Clinton was in office. de Boer is hoping COP 20 will not be “Kyoto revisited.”  Seychelles Ambassador Ronny Jumeau has even mentioned that “When using a 1990 base line -- a year that the United States rejects but that many other countries in the U.N. talks use -- the proposal amounts to a 10 percent emissions cut compared to Europe's proposed 40 percent below 1990 levels.”

What to watch for at COP 20

As far as energy developments are concerned, at one of the meetings, the International Energy Agency (IEA) will present its report entitled The Way Forward: Five Key Actions to Achieve a Low-Carbon Energy Sector, which proposes five actions and implementation options for decarbonizing the energy sector.

In addition, on December 9, the World Energy Council will present the key findings of the Global Electricity Initiative (GEI), which lays out the views of the utility sector, representing more than 80 percent of the global installed generating capacity.

Jennie Demjanick is energy associate for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

Pennsylvania's first Solarize campaign couldn't come at a better time

Solar is cheaper than it's ever been. Large-scale solar projects are seeing prices that are stunning utilities and shifting the utility business model, or at least business decisions, faster than ever. Price parity is within reach in just a few years in many major markets. And even residential solar continues its cost decline.

However, as I've blogged in the past, a lack of consistent policy signals and the expiration of grant programs has led to a solar slowdown in Pennsylvania, despite having the lowest cost solar we've ever seen.

Enter Solarize Allegheny County (Allegheny County is where the City of Pittsburgh is located, for all our friends back east). This non-profit project, spearheaded by clean energy marketing group, SmartPower, aims to sweeten the solar deal once again by using price reduction achieved by group purchase of solar, solar education, and solar marketing. The Solarize model has accelerated deployment of solar in markets across the county but this will be the first comprehensive Solarize campaign executed in Pennsylvania.

The model works by getting a group of would-be solar purchasers educated in a non-pressure community environment where their questions and concerns around solar are addressed. They then pool their buying power and select an installer as a group.

The cost reductions come not only from bulk purchase of equipment and blitz installation but also by reducing the solar installer's often substantial, customer acquisition costs. Customer acquisition costs are the time and money it takes for a solar sales representative to find new customers, explain the various solar details, and wait for them to make the final decision. Yes, it adds up.

One more catch: Consumers only have a limited time frame to throw their hat in the ring to benefit from the reduced price, and since folks don't want to miss that train, they make their decision faster. Consequently, Solarize has been proven to reduce the cost of solar for those who participate by as much as 20 to 30 percent in many markets.

The Solarize Allegheny County project is starting its first phase with three communities, or Pittsburgh city neighborhoods, in Allegheny County. Additional phases will follow. But if you're a reader from Allegheny County, consider leading your neighborhood to participate in Pennsylvania's First Ever Solarize Campaign. The deadline is December 12.

At a time when solar education is essential to bringing solar out of the early adopter phase and into the Pennsylvania mainstream, this campaign has the dual benefit of raising the profile of solar and educating consumers. As a solar advocate, I constantly hear misconceptions about solar energy in Pennsylvania, from "It doesn't work well enough" to "I need batteries" and "Solar is illegal, isn't it?" This education, combined with the group purchase cost reduction provided by Solarize, on top of already low prices, is exactly what's needed.

The fight for appropriate state and federal policies that expand and defend the solar market, along with other renewable energy opportunities, needs to continue. Victories in these arenas will give the already successful Solarize model even more to capitalize on, leading ever more people to adopt solar. Likewise, appropriate incentives and healthy market signals, when re-established, will need Solarize models to educate, further reduce costs, and expand solar beyond early adopters.

As this fight continues, Pennsylvania's first Solarize campaign couldn't come at a better time.

Evan Endres is project manager for PennFuture and is based in Pittsburgh. He tweets @ER_Endres.