Germans Debate Renewable Energy Supports

Conservatives call into question highly successful feed-in tariff

[Originally posted at Red, Green, and Blue on 5.19.08] There is a reason that Germany has half of the world's installed solar generating capacity, and it is not the Northern European country's boundless sunshine. Renewable energy capacity has achieved such tremendous growth because of the German government’s aggressive energy policy.

The policy vehicle responsible for the rapid acceleration of the country's renewable energy capacity, known as a feed-in tariff (FIT), guarantees a fixed-rate of return for homeowners and farmers who install solar, wind, small hydro, biomass, and methane capturing systems and sell their surplus electricity back to the grid. Germany has Europe's highest feed-in tariffs, allowing consumers to earn around 40 euro cents ($0.62) per kWh compared to paying retail rates of 18 euro cents per kWh after taxes and support fees.

Electricity generated through Germany's feed-in law produces about 50 terawatt-hours (billion kilowatt-hours) of electricity per year, or nearly 15% of German electricity consumption (1). This adds an average of only 1.01 euros ($1.69) a month to a typical home electricity bill.

Bu, despite the law's success, conservatives in the German Bundestag want to ratchet back the incentives that support renewable energy development. It seems that the members of the Free Democratic Party (FDP) and the conservative wing of the Christian Democratic Party (CDU) argue that solar generation is growing so fast that it threatens to over burden consumers with high electricity bills, according to an article in the New York Times.

Joachim Pfeiffer, a Member of Parliament who is drafting the plan to cut incentives, says solar power could end up adding 8 euros ($12.32) to a monthly electricity bill, “which would alienate even the most green-minded.”

Opposition to Feed-in Tariff is Not New

But calls for paring back the renewable energy feed-in tariff are nothing new, according to wind energy expert Paul Gipe. Gipe, an outspoken advocate of the FIT and has written extensively on on the subject wrote in an email, "The FDP and the conservative (utility) wing of the CDU have wanted to ratchet back the tariffs all along [and] It's unlikely they will succeed."

Other supporters of the German feed-in tariff point to the unparalleled growth in renewable energy capacity reason enough to maintain the system as it currently stands. "The general target is to mobilise all renewable options, producing a renewable energy mix and reducing the dependency on conventional energy over time," says Hermann Scheer, one of the principal drivers behind Germany’s renewable resurgence.

So far, 15% of Germany's energy comes from renewables, an increase of 11% in just eight years. "We could increase the speed of this growth if it weren't for the barriers we're facing at local and regional levels," says Scheer.

Importantly, Gipe did add that the CDU could grant some concessions by throttling back on the proposed offshore tariffs "which are widely seen as a gift to the utility companies."

I would argue that it would be foolish for Germany to nip the most successful renewable energy policy this planet has ever seen in the bud. Especially with the certain increase in demand for electricity, and the rising pressures on the coal-industry in Germany, Germans may be better off absorbing a slight increase in their electricity bills that is calculable, as opposed to drastic increases used to offset certain shortages.

Other posts about feed-in tariffs and German energy policy:

• "Illinois: Renewable Energy Feed-in Tariff Introduced in House of Representatives"
• "High Winds + Wind Farms = Falling Electricity Prices"
• "Germany to Phase Out Coal Industry; U.S. to Not"

Photo: Jeff Poskanzer via Flickr under a Creative Commons License

DOE Cancels Shipments to Strategic Petroleum Reserve

Colorado Senator is lone dissenter in 97-1 vote

I'm really thankful that Sen. Wayne Allard (R-CO) is not running for another term. Earlier this week, the Senate voted 97-1 to halt shipments to the strategic petroleum reserve, a move that precipitated today's announcement by the Department of Energy that they would cancel shipments beginning in July. The reserve is currently 97% full, holding 701 million barrels of crude.

The lone dissenting vote in the Senate was that of the outgoing Republican Senator from Loveland, CO. Way to be a team player, Wayne. I really like people like people like Sen. Allard who are so principled and have such strong conviction for such a noble cause as this [note heavy sarcasm].

"Voting only to stop filling the Strategic Petroleum Reserve without doing anything to increase domestic production and lessening our dependence on foreign oil is a disservice to the American people," Allard said.

Denver Post

British MPs Spurn Renewable Energy Feed-in Tariff

I wish the U.S. Congress operated with more of the same ground rules (both official and unofficial) as does the British Parliament. You see, yesterday I found myself watching the House of Commons proceedings as MPs deliberated the merits of a renewable energy feed-in tariff (FIT). I mean they actually deliberated.

I've always gotten a kick out of watching the Prime Minister's question and answer session, and have ever since C-SPAN started carrying it many years ago. But I am less accustomed to watching the rank-and-file debate the specifics of policy. That's why I appreciated the level of back and forth as compared to what I am used to watching from Capitol Hill when they are "debating" policy.

Unfortunately, for those who support FITs as the best mechanism for growing renewable energy capacity, Labour party rebels failed to convince enough of their fellow MPs to support the proposal. According to the BBC, the move, led by Labour's Alan Simpson, was defeated by 250 votes to 210. It had garnered cross-party support with some 276 MPs from all parties signing a Commons motion ahead of Wednesday's vote. 35 Labour MPs voted against the government.

"MPs reject renewable energy move" BBC NEWS (430/07)
Photo: Timothy B. Hurst

British Parliament to Vote on Renewable Energy Feed-in Tariff Today

Ahead of a crucial House of Commons vote on Wednesday, which aims to add a renewable energy feed-in tariff (FIT) to the energy bill currently working its way through parliament, a broad-based coalition says that parliament has no time to waste and must act to adopt more aggressive clean energy policies. Farmers unions, environmental groups, and mechanical engineers, are banding together and displaying the widespread political support for changes in the UK's energy portfolio.

FITs have been introduced in nearly 5A0 countries around the world, and they have been particularly successful in Germany where the guaranteed rate for solar power fed to the grid has made it the world leader with 55% of the global installed solar capacity. And as the evidence from Germany shows, not only is the FIT a powerful tool for building renewable energy capacity, but it is arguably the most cost-effective way of doing so.

The Guardian (4/28/2007)

Earth Day - Wonk Style

Colorado Governor Bill Ritter continued with his ambitious environmental agenda by issuing three executive orders on Tuesday.

• Executive Order D 004 08 establishes reduction goals for greenhouse gas emissions (20 percent by 2020 and 80 percent by 2050, both from 2005 levels); directs the Colorado Department of Public Health and Environment (CDPHE) to develop regulations mandating the reporting of greenhouse gas emissions; and requests the Public Utilities Commission to require each utility under its jurisdiction to submit electric resource plans that include an analysis showing how the utility could achieve a 20 percent reduction in its greenhouse gas emissions from 2005 levels by 2020.
• Executive Order D 010 08 establishes an agricultural sequestration offset program.
• Executive Order B 007 08 establishes a Colorado Climate Advisory Panel.

Also today, Gov. Ritter announced the "Insulate Colorado" program to help homeowners insulate their homes and reduce energy consumption. With 44 statewide partners, Insulate Colorado will provide rebates to participating homeowners up to $300 per project.

Gov. Ritter also announced the first 13 founding Colorado reporters to The Climate Registry. The voluntary registry will "Assist in measuring, tracking and verifying emissions of greenhouse gases (GHGs), the gases that cause climate change. It will also provide the measurement and reporting infrastructure to support voluntary, mandatory, market-based and emissions reduction." Those signers are:

American Energy Assets
Cameron-Cole, LLC
Hogan and Hartson
Kleinfelder, Inc.
Newmont Mining Corporation
Platte River Power Authority
Science Applications International Corporation (SAIC)
Shell Oil Company
State of Colorado
Suncor Energy (USA) Inc.
Symbiotic Engineering, LLC
Tri-State Generation and Transmission
Xcel Energy

Gov. Ritter's Press Release

Will the Renewable Energy Tax Package Get Signed into Law?

[Originally published at CleanTechnica on 4.11.08]By a rather impressive tally of 88-8, the U.S. Senate approved The Clean Energy Tax Stimulus Act (S.2821) as an amendment to HR.3221, which aims to mitigate the economic impact of the current housing crisis.

The renewable energy tax credits were slipped into a housing bill that that did not end up looking the way its lead author, Sen. Chris Dodd really, intended it to, remarking earlier in the week that it was “a housing bill, not a Christmas tree.”

However, will the production tax credit and investment tax credit ever make it to the President’s desk to sign?

I would argue that we will see some sort of stripped-down version of the renewable energy tax credits, if any at all. The House has hardened its opposition to this version of the tax-credit extensions, which are estimated to cost $6 billion over 10 years. House leaders have strong objections to deficit-financed tax breaks, and with few exceptions, they have offset lost tax revenue with tax increases or spending cuts elsewhere. But since the President rebuked Congress’ previous attempts at funding the tax credits by rescinding tax breaks for big oil, there hasn’t been much of a discussion as far as where the money for this program will come from. One possible, though unlikely, route that this bill could follow for passage could be if the bill is consistently framed as an economic stimulus package. In that case, the House might be able to bend their pay-go rules. But, that may be a long shot.

“I doubt that the House will accept these extensions without some corresponding offsets,” said Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) on the Senate floor. “This leaves the administration with a key role to play in developing a compromise that will be acceptable to both chambers.”

So we’re leaving this up to the Bush administration to figure out? Yikes.

Community Wind Faces Financing & Market Obstacles

The largest wind turbine in the world owned by a school district is about to go online in Wray, CO. Apparently, the parts for the Americas Wind Energy turbine came from all over the world to tiny Wray, population 2100 and falling. The blades came from Spain, the generator from Holland, the tower from South Korea and the copper wire came from Canada. Ironically, even Americas Wind Energy itself is not an American company, it is Canadian.

After originally deciding on the size and type of turbine needed, the community found they couldn’t buy just one turbine in that size range. Because of the bottleneck in American wind turbine production, the large wind farms and energy development companies are dominating the turbine purchasing market, trying to get their projects online before the end of 2008 when the production tax credit (PTC) is currently set to expire. The current market uncertainty is favoring the large turbine orders, whilst moving small orders to the fringes.

It is possible this bottleneck will loosen as Vestas has just opened its first North American turbine blade facility in Windsor, CO. The wind giant has recently taken an order (pdf) for 109 turbines in the US that they said would not affect any of their existing orders. However, E.ON Climate and Renewable Energy, who placed the order, will not be scheduled to have all 109 turbines up and running by the end of 2008. Their project is not projected to be finished until the middle of 2009.

It is my guess that even if the PTC does not pass this year, it will pass at the beginning of next year, when there is a strong chance there will be a Democrat in the White, and maybe even a filibuster-proof majority in the Senate. It is also quite likely that Congress would extend the PTC retroactively back to the beginning of 2009, as if it never expired. Even if that is the case, there is certain to be some downturn in the renewable energy industry as investors may get a little sheepish without the security of a production tax credit this year.

Fort Morgan Times
Photo: Americas Wind Energy (AWE 52-900)

Feast or Famine Cycles of American Clean Energy Development

[Originally posted at CleanTechnica on March 13, 2008]. In my first post about the feast or Famine Cycles of American Clean Energy Development, I touched upon the up and down nature of federal funding for renewable energy deployment in the late 70s and early 80s. The following examination adds some more context with a historical-institutional perspective of what went down in the early 80’s, how, and why. And in the spirit of some of the earlier posts this week that covered the technology of solar thermal, and the practical application of solar thermal technology to entire neighborood developments, I have decided to follow suit by writing about solar thermal as well. I hope to show that the decline and slow fazing out of federal support for solar thermal research and development during the Reagan and George Bush administrations has had a substantial effect on where the industry is today. More...

BlogNod: Climate Science & Policy Resource Guide

The science has spoken. The debate is over. Climate change is real and human actions are contributing to the acceleration of the buildup of heat-trapping gases like carbon dioxide. Well, that is at least what the American public is being spoonfed by the media, presidential candidates, pundits, and each other. Despite the doom-and-gloom forecasts and the daily stories about threatened polar bears habitats, bleached coral reefs, melting ice caps, rising sea levels and the ultimate demise of our planet, I think this new awareness is largely a good thing. But before we start high-fiving each other and dumping tubs of Gatorade on the scientists contributing to the Intergovernmental Panel on Climate Change (IPCC) report, we have a little unfinished business to take care of.

Although it would be nice to, we don't need to convince everybody on the planet that climate change is real and that humans are causing it. But we do need to make sure that the deniers and delayers don't gain any more traction in the public discourse about climate change than they already have - and below are a few bloggers who are doing just that.

• A Siegel at the Energy Smart blog wrote a piece today about General Motors' Vice Chairman Bob Lutz who said "global warming is a crock of $#!T," adding that, "I’m a skeptic, not a denier. Having said that, my opinion doesn’t matter." Well, actually Bob, your opinion does matter, it matters to your stockholders, your machinists, your sales people, your parts suppliers, and to the discourse in general.
  
• If you want some sound data and real science to back up your climate change arguments, I suggest heading over to the Climate and Energy Project blog (CEP), where Maril Hazlett has assembled a noteworthy collection of links and snippets from some of the most authoritative scientific organizations on the planet and their official positions on climate change.
  
• Relatedly, Maril Hazlett has also been doing a remarkable job at the CEP blog of tracking the debate in the Kansas legislature about the landmark Holcomb case. Kansas' legislators are attempting to overturn the Kansas Department of Health's denial of a permit for a coal-fired power plant expansion.
  
• Finally, Craig Rubens at earth2tech has put together a worthy summary of the seven different carbon bills currently being considered in Congress (I know that this is less science than it is policy, but what else would you expect from a wonk like me?!).

Illustration: Biology Science Fair Projects

Feed-in Tariffs: The Quick and Dirty

Quite a lot of people come to ecopolitology looking for information on renewable energy laws called feed-in tariffs (FIT's). Miguel Mendonca, of the World Future Council wrote an excellent post at Celsius, which gave an excellent introduction to FITs and an elaboration of how and why the policy mechanism works. I have excerpted a portion of that post below. For information and guidance on actually drafting a feed-in law, go the Policy Action on Climate Toolkit (PACT) website.

"FIT laws place a legal obligation on utilities to purchase electricity from renewable energy installations. The tariff rate is guaranteed, and in the best examples, for a long period — say 20 years. The tariff rate is scientifically determined for each technology, to ensure profitable operation of the installation.

There are different design options for the law, including tariff degression; this reduces the rates each year — meaning for example that PV gets a lower rate if you install next year than if you install this year. One, it encourages swift take-up; two, it encourages manufacturers indirectly to increase design efficiency. If you are going to receive a lower rate, you want to generate more electricity. This drives innovation, making renewable energy a more rapidly evolving field — which is precisely what we all need.

The costs of the scheme should be shared among all end-users, so that no-one is overly burdened. In Germany (perhaps the most effective system, developed and supported politically since 1990), their law has made them a world leader in renewable energy, generated billions of dollars a year in exports, created in the region of a quarter of a million jobs, saved towards 100m tons of CO2 annually in recent years, and set records for installed capacity across many technologies — all at the cost of around $1.80 per household, per month."

Photo Credit: ChiKurt via flickr

Renewables to Get Another Chance in Congress?

This week, the Senate is doing some tinkering with the recently proposed economic incentive package put forth by the House leadership and President Bush. More specifically, this tinkering would extend the renewable energy production tax credit (PTC) for another year and would extend the solar investment tax credit. The Senate Finance Committee also included energy efficiency incentives to the package. Hopefully, these amendments will not be left by the wayside as they were late last year.

Read more...

Hoosier Daddy? Big Coal

As plans for new coal-fired power plants are being canceled at unprecedented rates, and the possibility of a carbon tax looms large on the American horizon, state legislatures are scrambling to come up with proposals to spur new types of energy development that will not contribute to the planet's rising GHG problem. And in Indiana, despite a recent poll suggesting that 73 percent of Hoosier-state residents were in favor of HB1112, a bill that would have required investor-owned utilities to generate 10 percent of their electricity from renewable sources by 2018, it did not make it out of Committee on Thursday. The Indiana House Commerce, Energy and Utilities Committee defeated the bill by a vote of 8-3. By itself, that does not sound like good news. However, upon further inspection, it turns out that this bill may be better off dead anyway. Why? Coal.

Indiana's energy portfolio is 95 percent dependent on coal. HB1112 was the first time for renewable energy legislation to be voted on in Indiana that did not include incentives for coal. The bill was scuttled in committee because the Chair (also the bill's sponsor), refused to hear amendments that would include incentives for the elusive technologies of 'clean coal.' Rep. Dave Crooks (D-Washington) said, "My desire was that if we're going to debate a renewable energy bill in this state it needs to be a pure renewable bill." Crooks failed to garner the support of his vice-chair, Rep. Kreg Battles (D-Vincennes) who said, "I've made it very clear that I will support renewables, but I don't want to put clean coal at a disadvantage."

Jesse Kharbanda, executive director of the Hoosier Environmental Council said the vote would have been a 'golden opportunity' for Indiana to send a message to out-of-state investors that Indiana was open for renewable energy business. "Sadly that welcome message was not sent," said Kharbanda.

I understand why environmental groups would want a renewable energy standard in Indiana, but I am surprised they are crying so loudly about the defeat of this particular one. First off, a 10% renewable energy standard is rather paltry. Second, there is no such thing as clean coal. There are, however, plenty of other clean technologies that do need investors and policy support. Coal's heyday is near its end. And I applaud Rep. Crooks for taking a stand against Big Coal.

Crooks indicated that it is still possible for a renewable energy bill to be revived this session, but that it was not very likely.

Inside Indiana Business
Indianapolis Star
Photo: j3net via flickr

Feds Give Thumbs-up to Cape Wind

According to the 718-page Draft Environmental Impact Statement (EIS) released today by the Minerals Management Service, the proposed wind farm would have little lasting impact on wildlife, navigation and tourism - claims that Cape Wind supporters have been making since the project was proposed seven years ago.

Read more...

Colorado: The 2008 State of the Green State Address

Denver - For the second year in a row, Colorado environmental leaders were delighted to learn that green issues were one of the central themes of Governor Bill Ritter's State of the State Address. Considering that the Governor, as well as both houses of the legislature are held by the Democrats, my guess is that he will get most or all of his environmental agenda passed.
In addition to covering renewable energy, natural resources, energy efficiency and carbon proposals, the Governor also announced the winners of the first ever Excellence in Renewable Energy Awards. I was very happy to see that one of Fort Collins' hometown heroes, New Belgium Brewery brought home the prize in the large business category. (If a brewery can make you feel good about yourself for buying a beer, they might just have a customer for life :)

Excerpts and more from the Colorado State of the State Address:

• "In 2007, we saw nearly 650 megawatts of wind farms built on Colorado's Eastern Plains -- enough energy to power nearly 250,000 homes."
• "Vestas Blades picked Colorado for its first North American wind blade manufacturing plant. This means hundreds of new jobs for Colorado. Thanks to companies like Vestas, Ascent Solar and Abengoa, thanks to world-class research institutions, the next generation of new-energy technology is being developed right here in Colorado."

Summary of Governor Ritter's latest proposals for Colorado's New Energy Economy

• Pass a net-metering law would allow homeowners and businesses to earn credits on their energy bill by selling power back to the grid.
• Initiate a "Go Solar" program would require utilities to give homeowners a rebate when they purchase solar power equipment.
• Create a Colorado Carbon Fund that would assist with the financing of various GHG emission reduction efforts. The fund would be financed with voluntary contributions.

Complete text of speech
Politics West

WFC Unveils Climate Change Policy Toolkit

The World Future Council has just rolled out their new PACT website at www.onlinepact.org. The very cool new site will serve as an online community for the diffusion of climate relevant policy knowledge. According to Miguel Mendonça at the World Future Council, PACT is a free online resource designed to speed up the exchange and utilization of best policy practices to mitigate the dangers of climate change.

The first policy domain covered by the PACT concerns Feed-in Tariffs (FITs), which are used to cheaply and rapidly accelerate the deployment of renewable energy installations. The site offers a means of assisting legislators and advocates with the initial development of, or improvements to, a FIT law for their country or region. These draft laws can be developed by lawyers and used for local debate, and the site offers the user legal text for each of the core elements of a good FIT.

The FIT policy mechanism is now in place in 47 countries, states and provinces around the world, with the greatest success coming in Germany and Spain. A major benefit of the spread of FITs is that they bring many more players into the energy production market, including homeowners, small businesses, cooperatives, farmers and businesses. The decentralization of energy production that occurs as a result of a healthy FIT is challenging the traditional dominance of utility-scale energy generation and transmission. FITs are often politically popular amongst the masses, but less so with the utilities and corporations that stand to lose out on the revenue. Other than one bill introduced in Michigan, powerful interests in the U.S. have, thus far, all but quashed any discussion of FITs. American lawmakers are preferring instead to go with the renewables portfolio standard (RPS or RES), which mandates minimum levels of electricity utilities must supply from renewable sources.

Small Wind Remains in Farm Bill

Renewable energy advocates are clearly disappointed with the recently passed version of the 2007 energy bill. Yes, there is an important increase in auto fuel efficiency, but considering that CAFE hasn't been upped in nearly 30 years, I don't think Congress should be patting themselves on the back too hard for that one. However, a little piece of renewable energy legislation may have sneaked into the farm bill without too many Republicans noticing, and it just might have a chance of getting passed into law.

The version of the farm bill passed by the Senate on Friday contains a small wind tax provision - the first in more than 20 years. The provision is a 30% investment tax credit (up to $4,000) for the installation of small wind systems. The credit is available for farmers, small businesses and homeowners for new wind systems up to 10 kw. This may be another piece of evidence of a farm bill in energy bill's clothing.

The tax-credit has remained a part of the farm bill despite an attempt to scuttle it. Sen. Ken Salazar (D-CO) and others defeated an amendment sponsored by Lamar Alexander (R-TN) that would have limited the small wind investment tax credit to farmers and small businesses, thus excluding owners of rural residential property and commercial property suitable for small wind from taking advantage of what has traditionally been viewed as a burden. It comes as no surprise to see Sen. Alexander championing the anti-wind cause once again. The Senator from Tennessee has been surprisingly outspoken about wind energy policy in the U.S., even going as far as suggesting that it ruins mountaintops (to say nothing of the practice of 'mountaintop removal' in TN and other coal-heavy states). It is also interesting to note that Alexander owns property on Nantucket Island in MA, not far at all from the proposed Cape Wind project. Coincidence?! I think not.

I suppose I shouldn't be trumpeting this small victory too loudly, President Bush hasn't signed the bill into law yet, so I suppose there is also a chance that the small tax credit will get axed from the bill just like all of the other renewable energy legislation.

Video: 30 Years of Rhetoric in 3 Minutes

I found this on YouTube - a Barack Obama campaign ad that highlights how politically useful it is for presidents to tout the need for American energy independence.



Obama says he'll bring energy leadership... Somebody needs to.

BC Advisory Council Endorses Feed-in Tariff for Renewables

An advisory council to British Columbia Premier Gordon Campbell has issued a report suggesting that the province adopt feed-in tariffs (FITs) to generate growth in new sources of renewable energy. The report suggests that the province should adopt:

“Legislation that governs the energy system mandates that higher rates be paid for power supplied by deploying emerging technologies. This guaranteed rate allows for the development of the project. As the technology becomes more viable, the incentive rates are lowered until over time that particular technology becomes commercially competitive."

FITs have had a tremendous impact on growing renewable energy production throughout Europe, but in Germany especially. The German Renewable Energy Sources Act introduced in 2004 mandated such a system. High electricity rates coupled with guaranteed purchase agreements have contributed to the explosion of micro-scale wind and solar energy in Germany. According to the report:

“Appropriate feed-in tariffs can be a powerful stimulus to the industry. Of all the different measures used to encourage development, tariffs have been the most successful at developing renewables markets and domestic industries, and achieving the associated social, economic, environmental, and security benefits."

Presently, the only hope for a FIT-type policy mechanism is in the Michigan state legislature, where such a bill has been proposed. As it currently stands, legislatures in the U.S. have clearly favored renewables portfolio standards (RPS) as the policy mechanism of choice. I believe the RPS is a step in the right direction, but the exclusions for municipalities and electric co-ops make it so that a goal of 15-20% renewable energy only applies to about 60% of the electricity purchasing public. But these mandatory quotas are creating a stable arena for large-scale utilities to continue to dominate energy production and transmission.

For more on feed-in tariffs and renewable energy policy in Canada, the U.S., and Europe, visit Paul Gipe's Wind-Works page.

Photo Credit: Paul Gipe