EcoLogic Blog

After the morning panel discussion, AWEA held a news conference with the panelists. This is an excerpt of the questions from reporters and bloggers (including one from yours truly) and the panelists’ answers.

Q: General Clark, what would federal energy legislation look like to you?

General Clark:

“Big picture legislation would look like cap and trade legislation, benchmark goals and a timeline, incentives, research and funding, energy efficiency standards apart from the cap and trade system and incentives to promote energy efficiency. If you put those in and probably some other pieces like dealing with the strategic petroleum reserves, you could address energy security in terms of infrastructure and protection.”

Wood didn’t think government was the most effective way to create change. What it should do is create a market, he said, like with renewable energy standards, and then let the market work itself out.

But, Clark responded, you do need a regulatory piece when you’re talking about carbon sequestration or nuclear power. To launch technologies like these, we’ll have to have a public-private partnership.

“…There are winners and losers as you move forward. It’s who gets what, how much, how soon that determines whether these programs work or not. Emphasize the best technology and spread the profit opportunities around in a fair way. Spread it wide enough to pick up the little producers as well as the big producers.”

I thought about the American Petroleum Institute/Newsweek energy series last week at Stanford, and how a few of those panel members said the real test of renewables would come when the price of oil comes back down. And so I asked these panelists: “If the price of oil were to plummet tomorrow, how would this effect renewable energy markets and the political will to keep moving in this direction?”

General Clark answered first, noting that although we’re at a time when the price of oil and the awareness helps the drive towards cleantech, the fundamentals of energy policy – like the cost of oil extraction – don’t change with the price of oil exactly. Oil prices are certainly a stimulus to cleantech, but regardless of the price of oil, it’s still a matter of national security and climate change.

Podesta:

“When I was in the White House [as President Clinton’s Chief of Staff], oil was $13 a barrel…but we didn’t capture what the cost of that all meant to climate change, the economy, and the effect it had on national security like the regimes in the Mid-East. We need to learn from that experience.”

Wood:

“Even at $65/barrel, you could still do corn ethanol and other more efficient fuels profitably. I think we’re there and it’s going to take time to change out the auto fleet but I think we still will.”

Next, a reporter asked whether the climate bill in the Senate could put coal on the right track?

Wood was skeptical that Congress could deal efficiently with a topic as complicated as energy and global warming. Instead, he said, we should have a bill that either says “Coal, you’re over with” or “Coal, you have to get cleaner.” Although there have been a number of states who have just said “no” to coal, he questioned: can we do that as a nation?

Goodell completely agreed with Wood except he thought such a straightforward move on coal would be politically impossible:

“You’re asking politicians to put their finger on the red button…It’s easier to do it if it looks like you’re doing something else rather than to just say what you’re doing. It’s one of the hottest political issues right now.”

Then Podesta made an interesting point: If Congress can’t pass a bill to regulate CO2, the EPA now has the authority to directly regulate CO2 from power plants. “I think [that option] can be a backstop to partisan gridlock.”

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But like the states that have put renewable energy standards in place and are now getting into the dirty details, the details of national CO2 regulation will get at least as messy, especially when we start talking about who’s going to pay for what. So how far down into this new cleantech market does government legislate? Yesterday afternoon, I arrived to a session late but just in time to hear a panelist practically yell:

“If government’s going to create the markets then they can’t set the prices! You either regulate [emissions] or you don’t, but a bill that creates a ‘free market’ and then sets a price or price limit will fail. That’s what Europe did and it didn’t work. Let the market decide.”

Acciona Windpower, a Spanish manufacturer of wind turbines, introduced their new and enormous 3-megawatt (MW) wind turbine and had a full-scale nacelle on display. The nacelle is the part of the turbine that sits on top of the shaft and houses machinery like the gear box, low- and high-speed shafts, generator, controller and brake.

The AW-3000 turbine has the largest swept area of any 3 MW machine on the market. It comes with three rotor diameters options of 328, 358, or 380 feet and a concrete shaft of 328 or 394 feet high. Its nacelle has anti-slip surfaces (good thing from that height), noise insulation and fireproof materials.

This is the “nose” of the nacelle, and those giant gaping holes are where the blades fit in.

In North America, the AW-3000 will be manufactured at a plant Iowa. Acciona says the wind turbine should be available in 2009.

Here are a few of the more innovative and interesting small wind turbines designs I’ve found at Windpower 2008.

This turbine is from Dallas-based BroadStar Windsystems (one of the new American turbine designers I found). This AeroCam turbine can be used on top of urban buildings (picture several of them across the top of a stadium, for example) and even in between typical turbines at a rural wind farm. What’s more, BroadStar claims that this turbine can achieve $1 per watt installed.

This small turbine is from IR Windpower. They currently manufacture both large and small designs throughout Asia, but they’re eying the European and U.S. markets next

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This turbine from KR Windpower stands only about 4-5 feet off the ground. The company is based in Korea, with offices in China and California:

And finally, the always attractive SkyStream turbine by Southwest WindPower. This is the model George Bush Sr. installed at his Kennebunkport home:

The Tuesday morning panel was outstanding: Diverse opinions, common goals, wise thoughts. The following people addressed the question: What’s next in American energy policy?

• John Podesta, President of the Center for American Progress and former Bill Clinton Chief of Staff
• Pat Wood III, Principal of Wood3 Resources and former chairman of the Federal Energy Regulatory Commission
• Wesley Clark, former Supreme Allied Commander of NATO
• Jeff Goodell author of Big Coal

All panelists agreed that the issue of global warming has come a long way, but while American politicians are just coming around to supporting emissions cuts and the change to a cleantech system, foreign competitors have raced ahead: Japan and Germany are solar leaders and Europe has more wind power installed and better policies to support it.

In order for people to better understand the urgency of the issues, General Clark said, we have to connect the dots between cleantech, the price at the pump and national security. In other words, dependence on foreign imports and global warming. And both have foreign policy impacts: they affect U.S. relationships (our refusal to sign international agreements), enable potential adversaries (petrol dollars funding unfriendly regimes) and distort economic development abroad (China needs a lot of energy and will compete with us for it).

Pat Wood agreed, going on to explain his theory he calls “A tale of two Jihads.” The first “Jihad” is against petrol-totalitarians (transport fuels) and the second is against coal (power generation). Neither of these energy sources will be the future of our power supply. Instead, by 2100, Wood predicts wind, solar and nuclear to make up the electricity sector.

Jeff Goodell said that although we frequently hear we have 250 years of coal left in the ground, that number is based on decades-old studies and on current rates of consumption. But even besides all that, the easy coal is gone: what we have left to dig out is going to be far more expensive and environmentally harmful to get.

Carbon capture and sequestration (CCS), he went on, “is often talked about as a no-brainer, like it’s a technology that’s just about ready for prime time. But I think there are a lot of questions about the economics of it and about the scalability of it.”

Clark disagreed that CCS pie-in-the-sky. “It’s a proven technology; they have a facility up in North Dakota. But just as we’re talking about all the details needed to make wind power work, there’s a million and one details to deal with CCS.”

The General is working and advising cleantech investment firms, and explained that while renewables like solar energy are great, “If you go to the Street, [wind] is a really hot sector. They want opportunities in this field.” But we also can’t think we can exclude certain industries in energy policy negotiations:

“There’s something for everyone…as long as we don’t let ourselves get too narrowly focused in the wind energy business, then I think we can bring others with us and get what we need.”

Podesta explained what the wind industry and wind advocates need to do:

“Energy is still a regional issue….what this [wind] industry needs to do in order to really make progress is to break through that and create a national movement to support clean energy. The states that have embraced – including coal producing states – a clean energy future have done so with great results. People who embrace the future and who embrace a clean technology approach to their economy are succeeding politically and succeeding economically.”

Due to a scheduling crunch, Steve Harvey from Cleantegrity and Newstreamz.com and I tag-teamed an interview with Ohio’s Lt. Governor Lee Fisher about renewable energy policy:

Maria Surma Manka: Congratulations on recently passing the advanced energy portfolio standard (AEPS)! Since 87 percent of your electricity currently comes from coal, how were you all able to come together and pass legislation that will so dramatically change Ohio’s electricity mix?

Lt Governor: Credit goes to the governor and energy advisor for this effort. They built a powerful coalition of the environmental and renewable energy sectors, the manufacturing sector, small business and labor. I think developing a broad-based coalition at the outset was key.

The only part of the coalition that I think it’s fair to say was probably not involved was the utility industry. But in fairness to them they certainly were willing to engage in spirited debate. I think regular communication to coalition members was key to getting the legislation passed. Also, it had bipartisan support in the legislature (we have a Republican Senate and a Republican House).

Steve Harvey: Was there any contention on the energy efficiency piece [requiring utilities to achieve energy savings of 22.5 percent by 2025 and reduce peak energy demand one percent in 2009, then .75 percent per year through 2018]?

Lt. Governor Fisher: It was very important to have energy efficiency as part of the AEPS. We had pretty broad-based support on this and leading that effort was Duke Energy. In fact I think their CEO has described energy efficiency as “the fifth fuel.”…So while there was a general feeling that expanding and diversifying our energy portfolio was important, conservation and energy efficiency was indispensable in achieving our success and our self efficiency.

Steve Harvey: What are some of the best practices to help start-ups or new energy companies get going? Is there an infrastructure beyond taxes?

Lt. Governor Fisher: We have Edison centers in Ohio to help companies be more entrepreneurial and provide mentoring and coaching. We partner with nonprofits who have entrepreneurs in residence and who provide coaching and assistance to any young company in the state. Many are early-stage manufacturing companies but we’re starting to see more renewable energy ones.

Maria Surma Manka: Do you think renewable energy can help revitalize small, rural communities in Ohio and the Midwest? How?

Lt. Governor Fisher: Ohio’s manufacturing and agriculture base, as well as our strategic location and well-built infrastructure, gives us a home court advantage when it comes to growing and attraction renewable energy industry. We are number four in railroads, number four in highways, we have a huge amount of freight that goes along Lake Erie and the Ohio River…and our number one industry is agriculture. All of this intersects well with biofuels, wind, solar. Add access to the largest bodies of fresh water in the world and you have a unique advantage. On top of that, we’re making economic stimulus investments, so rural, urban and suburban areas stand to benefit.

Maria Surma Manka: What’s your favorite renewable energy?

Lt. Governor Fisher: My favorite color is green. So any renewable energy that’s considered “green” is my favorite one.

Photo credit: Ohio.gov

Carpe Ventem: “Seize the Wind”

The American Wind Energy Association (AWEA) held a press conference about the growing investment in wind energy and the Department of Energy’s report that 20 percent of America’s energy can come from wind by 2030.

Panelists included: Kansas Governor Kathleen Sebelius, Andy Karsner from the DOE, Randy Swisher of AWEA, Vestas CEO Ditlev Engel, GE Energy’s vice president for renewables Vic Abate, FPL Energy’s senior vice president of development Michael O’Sullivan, Horizon Wind Energy’s chief development officer Gabriel Alonso and Hunter Armistead of Babcock and Brown.

In his opening remarks, Engel explained why the United States is such a big market for Denmark-based Vestas, the world’s largest producer of wind turbines:

“The U.S. is our largest market, but having [wind energy] potential and realizing it are two different things. The U.S. has great potential. So this 20 percent report from the DOE is very important to plan what needs to be done. We need more long-term views. ”

He also noted that we need to stop calling wind power “alternative energy:” “What’s the alternative if you don’t go in this direction?” he asked, alluding to the dramatic energy changes that need to take place to slow global warming.

Gabriel Alonso from Horizon agreed that the U.S. is still very attractive despite the obstacles. We have some of the best wind resources in the world and we have a good infrastructure (although it needs improvement) and 29 states with renewable energy standards. So the fundamentals of the industry all come together: The resources, demand and need.

Again, a big topic of discussion was the production tax credit (PTC) that’s in a bill President Bush won’t sign (for other reasons; he supports the PTC). An AP reporter asked whether the uncertainty of the PTC effects the investments of foreign companies in the U.S. Abate responded “clearly it does.” For example, because there’s policy instability in the U.S., GE focuses on building capacity in Europe, China and India. They need to diversify the technologically across the globe to offset uncertainty at home.

A reporter from Reuters asked whether the PTC could drive too much investment in wind and drain subsidy money from the Treasury. Andy Karsner from the DOE answered that the more we scale the wind power industry, the more it will cost the Treasury. “So if we want to scale wind, we’ve got to have policies that aren’t based on a particular technology. That’s why policy has to be technology-neutral.”

The representative from Babcock and Brown chimed in that incentives are a good thing. Besides, the government also incentivizes the oil, gas, nuclear industry and wind is a relatively small cost. “There may be a better way, but this is what we have to work with now.”

Photo courtesy of AWEA

Thomas Dorr was appointed by President Bush and became the Undersecretary for Rural Development in 2005. Just before he went on stage at the WINDPOWER opening session, the Undersecretary was generous enough to answer a few of my questions backstage amid some packing trunks.

Maria Surma Manka: How can wind power help revitalize rural America?

Undersecretary: Wind is an environmental and very cost-effective energy resource that’s located in rural areas. This is a smart opportunity for rural investment that creates high value jobs, sustaining industries and overall revitalizes rural economies.

The global energy [needs] demand energy and strong economies. Rural areas are an obvious solution.

Maria Surma Manka: What do you think about the biofuels controversy? Are you optimistic?

Undersecretary: We are quite cognizant that there are extraordinary price pressures on fuel and energy. But we don’t believe they’re the cause of the cost increase in food. Public and private sector research shows that the amount of grain used for biofuels is having an impact of 3-10 percent on food’s price increase. In other words, it’s a part of the problem but certainly not the whole problem.

This campaign to smear biofuels is disingenuous. We’re trying to be forthright and get out the real facts and figures. We are certainly going to have price issues with biofuels and it’s going to be disruptive.

We’ve gone through this before, remember. In the 1970s there was increase in the demand for grain in the foreign markets. The price of corn and soybeans skyrocketed. We imposed price controls and freezes and that precipitated the debacle in energy prices.

We’re going to have to deal with short term stress and strain. But long term, we have to have alternative energy sources to displace our dependency on fossil fuels. Globally, the world can produce 85 million barrels of oil a day – but the world demand is 87 million barrels of oil. At this point, it would be foolish to back off finding alternative fuels.

Maria Surma Manka: Lots of people are excited about the prospect of fuel from algae. Do you think it’s simple enough to be cost-effective on a small scale?

Undersecretary: Algae is clearly going to be a resource. Currently it’s being grown in massive areas of land or even in vats. I think that the technology is still a ways down the road, but given the price of crude oil and the entrepreneurial innovation we’re seeing, I do think it’s going to be an important part of our energy mix.

Maria Surma Manka: What’s your favorite renewable energy?

Undersecretary: All of them, as long rural American can have equity in the process and reap the benefits!

Photo credit: USDA

This is a blade of utility-scale wind turbine - the size you might see at a large wind farm that provides energy for a big electric utility. The blade is made by the Danish company Vestas, the largest turbine manufacturer in the world. This week the company announced its new research and development facility will be located in Houston.

Next, the fiery and riveting Department of Energy (DOE) assistant secretary Alexander “Andy” Karsner (who was in the wind power business before going to the DOE) spoke passionately about the PTC:

“Take note all you media people out there. The [Bush] administration supports the extension of the PTC. We believe the PTC should be durable, reliable, improved…unreliable policy does nothing more than stave off growth in job creation…If we’re going to use tax policy, we at least have to make it reliable and durable.

But why would the [U.S. House of Representatives] put the same legislation before the president there or four times if you know it’s going to be vetoed but then bury the PTC in it?… It’s an old trick to use veto bait during an election year. The President just wants a clean bill with the PTC! The Senate did it and was more mature about it. Why can’t the House deliver on the same thing?

We want these things to succeed and out of the basket of politics. It is not the government’s role to select electricity winners. We need neutrality of government that ensures delivery of the attributes that we seek.

That means policy that’s carbon weighted and leans to emissions-free sources.”

He went to talk about the need of natural gas and wind power to be energy partners (using natural gas as a back up to variable wind power). “We are going to need every drop of domestic natural gas and we’re going to need wind.”

He concluded:

“We are facing a new energy reality. We are in a new and unknown era where we need your leadership. Urgency is what matters. All reports say we have 10 – 15 years to cut emissions to the point needed. We’ve got the first 7 percent of the next 10 years in the last days of this administration. Even if people are taking about lame duck, it doesn’t mean government can sit back and not take action [on the PTC].”