Are utilities moving quickly enough to cut carbon emissions?

Posted on 05/17/2013 by Dan Haugen

The smokestack at the #4 unit of the Boswell Energy Center near Cohasset, Minnesota is seen in this 2006 photo. (Photo by Than Tibbetts via Creative Commons)

The smokestack at the #4 unit of the Boswell Energy Center near Grand Rapids, Minnesota is seen in this December 2006 photo. (Photo by Than Tibbetts via Creative Commons)

In January, northern Minnesota electric utility Minnesota Power announced a new direction forward for its generation portfolio.

The company’s “Energy Forward” plan calls for adding wind and hydropower, retiring one coal-burning unit, and converting two others to natural gas. Along with continued conservation efforts, the investments are projected to lower the utility’s carbon emissions 30 percent by 2015 compared to 2005 levels.

It’s the years beyond that, however, that worry climate activists.

That’s because Minnesota Power has also proposed investing more than $350 million on an air-quality project at the utility’s largest generator, a 585-megawatt coal-fired unit near Grand Rapids, Minnesota, known as Boswell 4.

The project, which has the support of the Minnesota Department of Commerce, would bring dramatic reductions in particulate matter, sulfur dioxide, and mercury emissions, which would mean less haze over the region’s scenic lakes and forests and a lower risk to residents for respiratory and neurological health problems.

But it could also financially commit the company to burning coal for another two decades, during which the unit could spew more than 6 million tons of greenhouse gases at a time when scientists warn major reductions are needed to avert the most catastrophic effects of climate change.

‘We need much bolder action’

A coalition that includes Fresh Energy, the Sierra Club, the Izaak Walton League, and the Minnesota Center for Environmental Advocacy is asking the Minnesota Public Utilities Commission to require an in-depth study of carbon and other environmental impacts. A public comment period is open until Monday, May 20.

All four groups are members of RE-AMP, which also publishes Midwest Energy News (which is based at Fresh Energy).

If Boswell 4 were to continue to operate past 2030, it’s less likely Minnesota Power will be able to continue the pace of the carbon reductions it’s achieving through 2015.

In that context, the Minnesota case provides an example of a much larger concern — not just in the Midwest, but also globally.

“We need much bolder action,” said Frank O’Donnell, president of Clean Air Watch, a Washington, D.C., advocacy group that is not directly involved in the Boswell 4 case. “Incremental steps like those proposed by Minnesota Power are probably not enough to avoid catastrophic climate change.”

Minnesota Power is on track to exceed the state of Minnesota’s goal of a 15 percent reduction in carbon emissions by 2015. Once it finishes implementing its plan, its generation mix will consist of one-third renewables, one-third natural gas and one-third coal — down from about 60 percent coal today.

“We think we’re certainly hitting on all cylinders,” said Al Rudeck, Minnesota Power’s vice president for strategy and planning.

Rudeck said the utility has a successful conservation program that routinely meets the state’s 2 percent annual requirement. And it continues to add renewables, including 400 megawatts of wind power from the Bison Wind Energy Center in North Dakota and a 250-megawatt purchase agreement from Manitoba Hydro.

The company is retiring a 75-megawatt coal unit at its Taconite Harbor facility and converting two 55-megawatt coal units at its Laskin Energy Center to a natural gas peaking plant.

Even if the company can continue to find more opportunities such as these to keep pace with Minnesota’s voluntary state goal of 80 percent carbon reductions by 2050, will that be enough to avoid extreme climate change?

While it is difficult to project the exact impact of rising carbon emissions, recent research suggests targets like Minnesota’s may be too hopeful.

In February, the journal Energy Policy published a paper by Netherlands researcher Michel den Elzen that concludes developed nations need to cut carbon emissions in half by 2020 to have a “medium chance” of preventing climate change’s worst impacts.

And in November, PricewaterhouseCoopers projected that in order to avoid jumping over the guardrail from uncomfortable to dangerous climate change, the global economy needs to cut its carbon intensity 5.1 percent every year from now until 2050. The average annual rate since 2000 has been 0.8 percent.

The United States has pledged to reduce carbon emissions 17 percent below 2005 levels by 2020. As of 2011, the country had achieved a 7 percent reduction (though that progress was aided by the recession). One way for the U.S. to meet its 2020 goal, according to PricewaterhouseCoopers: replace all coal-fired generation with natural gas, which emits significantly less carbon dioxide per unit of energy produced.

Continuing to burn coal may not make these targets impossible, but it certainly makes them more difficult to hit.

“We are very concerned with what we call life-extension projects at coal plants,” said Beth Goodpaster, an attorney for the environmental groups intervening in the Boswell 4 case. “When you’re putting over $350 million into a coal-fired power plant, you are making it ever so much harder to … phase it out.”

‘We think that we have a better plan’

Goodpaster said they don’t believe Minnesota Power has fully evaluated all of the possible alternatives, such as replacing the unit with a mix of energy conservation, renewables, natural gas, and grid power purchases. Those it did consider were evaluated too narrowly, without considering health and environmental costs, she said.

Jessica Tritsch, an organizer for the Sierra Club’s Beyond Coal campaign, said Minnesota Power needs to study a broader range of alternatives that include things such as energy conservation, wind and solar power. “We’re not convinced Minnesota Power has fully studied those options.”

Minnesota Power spokeswoman Amy Rutledge quickly dismissed the environmental groups’ allegations.

“It’s clear that their agenda is really to shut down every baseload power plant in the state,” Rutledge said. “We think that we have a better plan.”

Minnesota Power’s plan is the result of a process that, as required by regulators, seeks out the lowest-cost, reliable generation mix that meets environmental regulations. Rudeck said an all-conservation option isn’t a suitable replacement for the Boswell 4 unit.

“If that was the best option for customers, the resource [planning model] would pick it,” Rudeck said. “Clearly it doesn’t.”

The Minnesota Department of Commerce agrees. In comments filed Tuesday, the department’s Division of Energy Resources said the emissions-reduction project at Boswell 4 is “reasonable” for meeting state and federal mercury rules, and that it believes the project is in the public interest.

The utility’s Boswell 4 evaluation compares the emissions-reduction project with two natural gas alternatives, which it concludes would be more costly to customers.

Until Congress or the U.S. Environmental Protection Agency decide to regulate carbon emissions from existing coal-burning power plants, the company isn’t under any legal obligation to consider climate impacts. Minnesota recently postponed a rule to require carbon accounting in utility planning.

The environmental groups say that conservation and renewables can win in an economic comparison with fossil fuels. They want state regulators to deny the Boswell 4 upgrades, let it retire in 2016 when new federal mercury rules take effect, and replace it with wind, solar, efficiency, gas and grid power purchases.

“You could have showed us why those other options are impossible,” Goodpaster said.

Minnesota Power studied retirement options for its coal-fired power plants last year, however, and state officials say that study, and the Commerce Department’s own calculations, show that replacing Boswell 4 isn’t possible without increasing costs, even under “extreme assumptions” about carbon and fuel prices.

“[I]nitial Department analysis determined that, at the expected level of environmental compliance costs, retiring Boswell 4 is not a cost-effective option,” the state’s Division of Energy Resources said in its coal-diversification study comments.

It’s the environmental costs that concern the petitioners:

“The decision to retrofit [Boswell 4] rather than retire it or replace it with a natural gas plant would, over time, result in the emission of an enormous amount of additional air pollutants, especially greenhouse gases,” the environmental groups say in their filing. “Continued emissions of GHG are contributing to the environmental and public health problems caused by climate change which are numerous, severe, and irreversible.”

EPA official: Carbon rules for existing power plants ‘on the table’ in 2014

Posted on 04/12/2013 by Environment and Energy Daily

(Photo by Michael M. via Creative Commons)

By Jean Chemnick

Acting U.S. EPA Administrator Bob Perciasepe said on a call with reporters Wednesday that the agency would collaborate with states to curb greenhouse gases from existing power plants in an effort that would start in fiscal 2014.

On the call to discuss EPA’s new budget proposal, Perciasepe said the agency continues to review comments on its proposed new source performance standard for future power plants. The agency faces a statutory deadline Saturday to finalize the rule, but EPA hasn’t sent it yet to the Office of Management and Budget for review.

When the new power plants rule is finished, Perciasepe said, EPA looks forward to “working with states on existing sources, but we’re not there yet.”

He added, “But that’s certainly something that will be on the table in this next fiscal year.” →

Study: U.S. biofuels policy pushes GHG emissions overseas

Posted on 03/28/2013 by Dan Haugen

Forests give way to farmland in Brazil. A new study says climate benefits from U.S. ethanol mandates are largely negated as other countries clear forests and grasslands for agricultural use. (Photo by BBC World Service via Creative Commons)

The U.S. ethanol mandate is successfully lowering the nation’s greenhouse-gas footprint — but likely to cause a slight increase in emissions around the globe, according to the latest study of biofuels’ climate impact.

The analysis comes from researchers at Duke University’s Nicholas Institute for Environmental Policy Solutions, in a paper published this month in the journal Energy Policy.

“We find a very modest effect, but if you think that the ethanol mandate is a big winner in terms of its greenhouse gas implications, it doesn’t appear to be,” said Brian Murray, a co-author and the institute’s director for economic analysis. →

Dominion CEO: Despite Wisconsin plant closure, nuclear key to climate goals

Posted on 02/21/2013 by Greenwire

Dominion’s Kewaunee Power Station in Wisconsin will close this spring. (Photo by Lenka Reznicek via Creative Commons)

By Hannah Northey

The president and CEO of Dominion said Wednesday that nuclear power will play a key role in meeting President Obama’s goal of lowering carbon emissions — despite the president’s silence on the energy source during his State of the Union speech.

“When President Obama … indicates his priority is decreasing greenhouse gases, we have to pay attention to this,” Thomas Farrell said at a Platts nuclear energy conference in Washington, D.C. “And when he establishes this national agenda without mentioning the role of nuclear power … we have to pay attention to that, too.”

Obama dedicated a significant portion of his address to energy and climate change but drew the ire of some industry groups and lawmakers for not mentioning coal, nuclear power or hot-topic issues like the Keystone XL oil pipeline project (E&E Daily, Feb. 13).

Any environmental movement that is “anti-carbon” will also need to be “pro-nuclear,” Farrell said, noting that activists like James Hansen of NASA are embracing nuclear energy. →

Report: Midwest filled with coal plants that can’t compete

Posted on 11/14/2012 by Dan Ferber

The Otto E. Eckert Station in Lansing, Michigan is among the power plants the Union of Concerned Scientists says is “ripe for retirement.” (Photo by David Shane via Creative Commons)

The Midwest is full of coal plants that can’t compete economically with cleaner energy sources and could readily be retired over the next several years, according to a report released yesterday by the Union of Concerned Scientists (UCS).

The report spotlighted 353 coal-fired generating units nationwide that are among the walking dead—plants which would be more expensive to upgrade with modern pollution control equipment than to simply close. Those plants produce 59 GW of electricity.

Add in another batch of plants that produce 41 GW and are already slated for closure, and a full 30 percent of the nation’s coal-fired generation capacity could be retired by 2020, the group concluded.

Four Midwestern states—Ohio, Indiana, Michigan and Wisconsin—were among the top 10 states with the most coal-fired generation capacity that could be phased out. →

Commentary: Be cautious linking extreme weather to climate crisis

Posted on 11/13/2012 by guest contributor

A flooded parking garage in New York City following Hurricane Sandy. (Photo by dsgray16 via Creative Commons)

By Amy Luers
For the Daily Climate

Many climate advocates hope that the recent bout of extreme weather will awaken Americans to the dangers of climate change.

Advocates and scientists have pointed to superstorm Sandy and the Texas drought as clear and present signs of the climate crisis. Although the public does seem to be taking notice, I fear these efforts could backfire if we do not proceed cautiously with our framing around extreme weather and climate change. Our challenge to solve the climate crisis could become more difficult in the end.

How? Let’s consider where efforts to tie extreme weather to climate crisis might lead: →

Report: Hydro emissions can rival those of natural gas

Posted on 05/02/2012 by Frank Jossi

The Seven Sisters Dam in Manitoba. (Photo by Miss Barabanov via Creative Commons)

As states grapple with the question of whether to count hydropower as renewable energy, a recent report says dams can emit greenhouse gases at a rate far greater than wind and solar, and can nearly reach those of natural gas combined-cycle plants in their first years of operation.

Cambridge, Mass.-based Synapse Energy Economics, Inc. found that large scale hydropower using reservoirs have lifecycle emissions, as measured over a 100 year span, in excess of wind, solar, and run-of-the-river hydro. Reservoirs in northern climates can add substantially to GHG emissions if they cover land that is filled with boreal forests that serve as carbon sinks.

Commissioned by the Conservation Law Foundation, “Hydropower Greenhouse Gas Emissions: State of the Research” does not suggest hydropower pollutes more than traditional fossil sources such as coal, natural gas or diesel. But in the short term the GHG emissions from hydro – in at least three of the first 10 years of operation – exceed those of a natural gas combined-cycle plant, said Christophe G. Courchesne, staff attorney for the CLF’s Concord, N.H. office.
→

Ohio could pit cogeneration against wind farms

Posted on 04/13/2012 by Dan Haugen

We made an error of omission in last week’s regional round-up of RPS legislation, leaving out a significant bill that’s working its way through the Ohio legislature.

Ohio’s Senate is expected to begin testimony next week on SB 315, which, among other things, would change the definition of renewable energy to include combined-heat-and-power, or cogeneration, projects.

Cogeneration can create big energy savings by simultaneously generating electricity, mechanical power or thermal energy. A 2008 report by the U.S. Department of Energy’s Oak Ridge National Laboratory identified Ohio as one of five states with the most CHP technical potential.

Wind advocates worry that classifying energy from cogeneration projects as renewable will pit them against wind farm developers, some of whom have already invested years of planning in projects to meet the state’s renewable targets.

“The rules of the game are changing after they’ve already invested tens of millions of dollars,” says Dayna Baird, a lobbyist who represents the American Wind Energy Association (AWEA) in Ohio.

A little background on Ohio’s renewable portfolio standard:

The 2008 law requires Ohio utilities to draw 25 percent of their electricity from “alternative energy” sources by 2025. The portfolio is split in half, with an expectation that 12.5 percent come from renewable sources and another 12.5 percent come from “advanced energy resources,” which includes nuclear, “clean coal,” and combined-heat-and-power. On the renewable side, there is another requirement that half of the standard, or 6.25 percent of a utility’s overall portfolio, comes from in-state projects.

The problem for cogeneration supporters is that in the “advanced energy” portion of the portfolio standard, unlike with renewables, there are no incremental benchmarks that utilities need to meet. Utilities don’t have any requirements under the law until 2025, and as a result there has been virtually no activity.

The thought among provisions backers is that by moving cogeneration over to the renewable column, utilities and industries will begin investing in projects.

But Baird wouldn’t expect a quick reaction even if the bill passes in its current form. That’s because on the renewables side, where utilities have annual benchmarks to meet, there has already been enough investment to satisfy all of the in-state renewable requirements through 2015.

About half a dozen major wind farms are in the planning stage — and have been for years — to help utilities meet their requirements after 2015. Allowing utilities to opt for cogeneration projects instead could threaten the economics of some of those projects.

“There’s just not enough headroom in the in-state [renewable] requirements to include both,” says Baird.

The bill, which contains several other energy related proposals, is widely expected to pass, probably in the next five to six weeks. Renewable energy advocates are working to incorporate compromise amendments, though.

Jed Thorp, chapter manager for the Sierra Club in Ohio, says his and other environmental organizations are generally supportive of cogeneration and want to see it deployed wherever possible, but they don’t want to see it pitted against other forms of renewable energy.

“We don’t want to hurt the wind folks,” says Thorp. “If cogeneration were to be called renewable, that would, I think, put a serious dent in wind in Ohio.”

Instead of the current proposal, the Sierra Club is trying to build support for leaving cogeneration classified as an “advanced energy” source, but adding new year-by-year benchmarks in that category.

Baird says AWEA would support that route, but she doesn’t believe it’s politically feasible. One of the other potential compromises she is pushing for would add cogeneration to the renewable category but also increase the the size of the in-state portfolio from 6.25 percent to something higher.

The Ohio Senate Energy and Public Utilities committee was expected to begin proponent testimony on the bill on Wednesday.

Dan Haugen is an Energy Journalism Fellow at Midwest Energy News. Contact him at dan@danhaugen.com.

Photo by Jimmy Emerson via Creative Commons

New report shows mixed rate impact from renewables

Posted on 04/12/2012 by Dan Haugen

How do state renewable energy mandates affect electricity rates?

The national data remain a Rorschach test for supporters and opponents of the policies.

Richard Caperton, Center for American Progress

The latest attempt to bring the picture into focus comes from a policy paper released Wednesday by the Center for American Progress.

Author Richard Caperton examines the average annual electricity rate increases in states before and after they adopted renewable standards. He then compares those to the average increases in states that don’t have renewable standards.

Of the 22 states where enough data exist, 12 saw electricity prices increase at a slower rate, relative to the national average, after they adopted a renewable standard. The other 10 states saw steeper relative rate increases.

Caperton says, correctly, that the results refute generalizations from some conservative groups that the policies lead to dramatic increases in utility rates.

“There are no data showing that these standards cause electricity rates to skyrocket,” the report says.

However, there are also no conclusive data proving renewable standards aren’t leading to modest increases in some places — almost half the states saw sharper relative rate increases after adopting the policies. The paper only concludes that the data it compiled doesn’t indicate a nationwide pattern of renewable standards leading to rate increases.

Hard to generalize

It’s difficult to generalize about how renewable standards affect electricity rates on a national or state level. The policies set targets and determine what sources qualify, but it’s up to utilities to decide the right mix of wind, solar, biomass or other projects they’ll use to meet the targets.

So it’s the decisions made at the utility level about what and when to buy that affect the return on capital investments and ultimately rates for customers.

For example, when Minnesota lawmakers asked utilities last year how the state’s renewable standard was affecting rates, the responses were mixed.

Xcel Energy, the state’s largest utility, said its renewable investments had been cost-effective and helped keep prices about 0.7 percent lower than they would have been otherwise. Meanwhile, Minnkota Power saw a nearly 16 percent increase in its average wholesale power rate in 2010 – after the company locked in expensive wind contracts, betting incorrectly that the price would continue to rise.

“There are all sorts of things that go into electricity rates and all sorts of reasons why different states have different rates,” Caperton said in an interview Wednesday. ”What I like to say is that when somebody tells you that your rates in a state are low for one particular reason or high for one particular reason, you’re probably being misled,” he said.

Midwest results

In Iowa, electricity rates were increasing 0.31 percent faster than states without renewable standards before 2000, the target date for the state’s policy, which was implemented in 1997. Since then, Iowa’s electricity rates have increased 0.92 percent slower than those states, according to Caperton’s analysis.

Before-and-after annual electricity rate data wasn’t yet available for Michigan, Minnesota or Missouri.

Three other Midwest states with renewable standards, Ohio, Illinois and Wisconsin, saw their average annual electricity rates increase faster relative to other states after implementing their policies.

In at least one of those states, there’s an explanation for that increase that has nothing to do with renewables. In Illinois, residential electricity rates were frozen from 1997 to 2006 as part of the state’s transition to a deregulated utility market, in which consumers can now choose their electricity supplier.

The report shows that Illinois’ electricity prices were increasing 1.43 percent slower than other states from 1990 to 2008, but for more than half of those years the state’s rates were held artificially low. Since 2008, when Illinois implemented its renewable standard, rates have increased 0.42 percent faster than other states.

“There is no way you can attribute the purchase of renewable resources in any way shape or fashion to what’s going on with utility rates in Illinois. You just can’t,” says Arlene Juracek, acting director of the Illinois Power Agency, which oversees the state’s renewable portfolio. “We’ve been buying one-year [renewable energy credits] that are practically free.”

Caperton says the wide variety of experiences states have had with renewable standards doesn’t point to any clear pattern between renewables and rates. That said, the numbers also don’t point to the doomsday scenario some critics have predicted.

“What I think there is evidence for is that these are affordable,” Caperton said. “The impact on rates is tough to discern from national data, and they do lead to more clean energy investment.”

Editor’s note: An earlier version of this post incorrectly stated that Iowa’s renewable energy standard took effect in 2000.

Dan Haugen is an Energy Journalism Fellow at Midwest Energy News. Contact him at dan@danhaugen.com.

Readers react to Minnesota 100% renewable report

Posted on 03/16/2012 by Dan Haugen

What a 100-percent renewable electricity system in Minnesota might look like on a week in January.

Monday’s post, “Could Minnesota get by on 100 percent renewables?,” has generated quite a few comments. A report released this week by the Institute for Energy and Environmental Research (IEER) claims the state could meet all its electricity needs through wind and solar, provided they were matched with the right mix of energy storage and efficiency improvements. I decided to check back in with Arjun Makhijani, IEER’s president and senior engineer, and ask him to respond to some of your questions and comments.

PwrSavy commented “As I understand it, if you’re relying on typical [compressed air energy storage]; they couple with combustion turbines when supplying energy, so this is not a ’100% Renewable’ scenario… unless that is you’re burning some kind of biofuel.”

On this point, the reader is correct, says Makhijani. The scenario described in IEER’s report actually does rely on a small amount of natural gas for generating power from the compressed air energy storage. The amount of natural gas used in generating from compressed air storage is about one fifteenth the amount of gas used in a conventional natural gas combustion plant.

“The amount of natural gas is so small that I believe it could be replaced with biogas,” says Makhijani.

Another option that could become economical at some point is pairing compressed air storage with hydrogen powered generation.

Mary is alarmed about how expanding commercial wind farms in the state could affect bats and birds. “If we pepper this state with the turbines required to produce enough energy to provide for households alone, we will have an environmental disaster of biblical proportions down the road,” she writes.

Makhijani says improved turbine design has largely resolved the problem of bird collisions at newer facilities. He thinks the bat issue is a bigger problem and one that we need to pay attention to. He hopes that careful siting of wind farms might help reduce the impact.

“I think wind farms should be carefully sited, and I think we do have the luxury of doing that in Minnesota because the available resources are enormous,” he says.

About a third of the state’s land area is rated as having relatively high wind potential by the National Renewable Energy Laboratory. The state’s total wind generating potential, depending on turbine height, is 20 to 30 times the state’s current consumption, says Makhijani. Achieving the 12,000 to 15,000 megawatts of wind capacity called for in his report would require developing on about 5 percent of the state’s high-wind-potential land.

“It’s not huge. It’s not negligible,” Makhijani says.

Mouli Vaidyanathan comments that the data used in the report to estimate Minnesota’s solar potential is about 10 percent to 15 percent optimistic. “Such over estimates could harm our renewable energy industry in over promising and under delivery.”

While the report includes an Average Solar Radiation map for Minnesota, Makhijani says they didn’t calculate the state’s solar potential based on land area. Minnesota is unlikely to have large-scale PV or concentrated solar thermal, he says. Instead, the more likely application of solar is smaller, distributed installations on commercial rooftops, of which there are more than enough to provide the kind of solar capacity called for in the report.

“The solar generation in our scenario is not very big. It serves mostly to reduce the variability of the renewable resource rather than as a big source of supply,” Makhijani says. “Solar generation plays a role of moderating the storage requirement and the seasonal variability of your renewable resource. It improves the economy of the system.” That’s because solar generation tends to peak with demand on hot summer days when air conditioners are running.

Rolf Westgard doubts whether the state could ever build enough storage to moderate wind and solar’s variability. “There is no storage supply to compensate for the erratic nature of those sources. Imagine a warm muggy summer night when all AC’s run and there isn’t a ‘breath of air’.”

Makhijani admits building energy storage will be expensive and challenging. Under his report’s scenario, the state would need about a $9 billion investment in storage. Siting issues would undoubtedly arise, although he believes enough sites do exist. The state could shrink its storage requirements by further improving efficiency and expanding the use of demand dispatch, in which customers agree to have certain appliances or equipment powered off for short intervals when electricity demand is high, usually in exchange for a discount.

“The whole idea was to show that you can actually run a renewable system though all of the erratic supply and all of the variability in the existing demand with out doing anything to the existing demand,” says Makhijani. “You can get through all of these warm muggy nights.”

(Also, as noted previously, the IEER is a member of RE-AMP, which also funds Midwest Energy News.)

Tag Archives: climate policy