1) BPA Proposes Continuing, But Potentially Different, Post-2006 Role in Conservation, Renewables
2) Special Report: Green Building Faces Heady Future, Continuing Challenges
3) NorthWestern Solicits Wind Energy--Once Again
4) Ocean Wave Energy Demonstration in Planning for Northwest Coast
5) Solar Programs, Advocacy, Marketplace Issues and Hydrogen Discussed at National Conference in Portland
Bonneville Power Administration proposes a continuing--but potentially different and in some ways diminished--role for itself in regional energy conservation and renewable energy development after fiscal year 2006.
The federal power marketing agency plans to pursue its relative share of Northwest energy conservation potential, while emphasizing low-cost conservation to minimize wholesale rate impacts. Most regional energy savings would be gained through local endeavors, in BPA's view, although some regionwide approaches would be suitable.
Meanwhile, Bonneville envisions it would facilitate renewables development, through such means as integration services and transmission improvements, but it would avoid buying large amounts of renewably generated power.
These broad concepts are contained in BPA's "Policy Proposal for Power Supply Role for Fiscal Years 2007-2011," released July 7 as part of the agency's Regional Dialogue process on its post-2006 future.
Many details on specific approaches remain to be determined, including the fate of BPA's current primary energy-saving initiatives, Conservation Augmentation and the Conservation and Renewables Discount Program.
The BPA document offers a long-term notion to limit BPA firm power sales, at the lowest cost-based rate, to the existing capacity of the Northwest federal hydropower-based system. Additional loads would be charged a higher, tiered rate, which could influence regional utility conservation and renewables development.
"This draft decision is built around creating an environment in the region that encourages investment in generation, transmission and energy efficiency," said BPA administrator Steve Wright in a news release. "Developing needed infrastructure is the key to a successful, stable energy future for the region."
BPA is seeking public comment on its proposal through Sept. 22; six public meetings also are scheduled around the region. Wright plans to sign a final record of decision on these policies by December.
The Regional Dialogue is an attempt by BPA to "provide clarity around key issues the agency and region will face when the current rate period ends with FY 2006," according to the July 7 proposal. "BPA's immediate goal is to decide issues for the FY 2007-2011 period that prepare the way for setting rates for the next rate period while assuring that the agency's long-term strategic goals and its long-term responsibilities to the region are aligned."
This process began in spring 2002 with a joint proposal from a group of Northwest utilities, centered on resolving litigation over BPA's residential exchange program for investor-owned utilities as well as the longer-range marketing and distribution of energy from the federal system.
BPA slowed the Regional Dialogue in early 2003 to address its financial woes, but Northwest governors in June 2003 urged a resumption. The Northwest Power and Conservation Council weighed in with its recommendations in May, followed by BPA's proposal.
Bonneville first wants to "resolve policy issues that likely will influence the next rate case and which must otherwise be made before 2007." Accordingly, Bonneville's document outlines its thinking on tiered wholesale rates (not recommended as a 2007 proposal, but possibly as a long-range way to limit cost-based firm sales); the duration of the next rate period (likely less than five years, to reduce risks); service to different types of customers; power products; conservation and renewables; and cost-control mechanisms.
Looking further ahead, BPA also proposes to eventually "limit its sales of firm power to its Pacific Northwest customers' firm requirmeents loads at its embedded cost rates to approximately the firm capability of the existing Federal system. BPA is further proposing a policy that firm power service beyond what the existing system can supply would be provided at a higher tiered rate that would reflect the incremental cost of purchasing power to meet those additional loads."
BPA advanced several rationales for this notion, including lower wholesale rates, assurances on load responsibilities and electric infrastructure development, and the sending of market price signals to help utilities render decisions on conservation and other resources.
BPA's proposal expressed general support for continued energy-saving activities, pledging that "conservation will remain a major portion of the agency's resource portfolio in the future." This jibes with the Pacific Northwest Electric Power Planning and Conservation Act, the document noted, while also benefiting the region's energy efficiency infrastructure.
The July proposal spells out five principles for conservation development, but is intentionally unclear on the details. "BPA envisions some form of collaborative planning process in which experienced individuals can develop a fully defined proposal for conservation that can then be brought to the entire region for consideration," it said.
ConAug, C&RD and the Northwest Energy Efficiency Alliance "may provide a solid foundation for establishing viable program elements," the proposal continued. It also said conservation and demand-side management "will be carefully considered" as an alternative to transmission line construction.
"We've got some fairly high-level principles that are critical going forward," BPA energy efficiency vice president Mike Weedall told Con.WEB in June.
First, BPA wants to use the Council's upcoming regional plan to set energy-saving goals. BPA will "continue to be responsible for our share of the region's conservation, and we want to work with others to make sure their shares of conservation also get acquired," said Weedall.
The second principle is localism. Although some regionwide strategies are viable--such as market transformation via the Alliance--"The bulk of the conservation to be achieved is best pursued and achieved at the local level," the proposal said.
Third, cost considerations are key: "BPA will seek to meet is conservation goals at the lowest possible cost and lowest possible rate impacts." The proposal notes C&RD savings cost about $2.2 million per average megawatt, while ConAug comes in about $1.3 million and Alliance savings are around $1 million. "The wide variance in cost per aMW offers a significant opportunity for the region to pursue an important cost-saving option," it said.
BPA also plans to financially support local utility planning and implementation of conservation programs, "with the appropriate level of funding open for discussion."
Finally, Bonneville wants to keep funding education, outreach and low-income weatherization programs, which the proposal describes as successful complements to the conservation portfolio.
BPA proposes a fundamental shift in its approach to renewables, calling for "an active and creative facilitation role ... This signals a move away from large-scale renewables acquisition toward a greater focus on finding ways to reduce the barriers and costs interested customers face in developing and acquiring renewables."
Bonneville now buys the output from 198 MW of renewable resource capacity, almost entirely wind power.
For renewables facilitation, BPA lists several options.
One is integrating renewables into the grid, as with its recent introduction of wind integration services (see Con.WEB, Jan. 30, 2004). "These services, and other intelligent and prudent uses of the flexibility of the Federal hydro system, will serve as the centerpiece of a renewable resources facilitation effort," the proposal said.
Transmission upgrades are another avenue, potentially including new lines "to foster the development of the region's excellent wind resources," as well as more effective use of existing wires.
Continuing the renewables piece of the C&RD is a third possibility.
BPA also floats the prospect of a "limited" role in buying renewable power, as an "anchor tenant" for projects, but cautions that "direct acquisition places the greatest financial demands on BPA and would be subject to rigorous financial and risk tests before approval."
Bonneville proposes to continue its net annual spending on renewables of up to $15 million, plus $6 million yearly through C&RD, though the agency hasn't decided whether the discount program is the right vehicle.--Mark Ohrenschall
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As green building expands around the Northwest and beyond, a heady future beckons for this emerging form of construction.
Green buildings are increasingly viewed as better buildings, with a host of environmental, economic, social and individual human advantages--both documented and prospective.
But as green building gains wider acceptance and greater (though still modest) market penetration, it continues to face a range of barriers and challenges, from cost concerns to marketing to basic inertia to lack of awareness.
Green building has advanced far in a relatively short period, but questions linger: How far will it go? And, will it ever become conventional?
A pair of June events in Portland--an epicenter of green building regionally and nationally--offered some broad perspectives on green building from practitioners in the fields of development, consulting, advertising/marketing and government.
One gathering focused on economics, and the other explored market transformation, although some topics were overlapping between the two.
Together, they spotlighted some vital issues for green building, primarily in the commercial sector.
Strong Growth, But Far to Go
Since the 2000 public inception of the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) rating system, more than 120 buildings have earned LEED certification. About 1,400 projects are LEED-registered, reported senior design consultant Ralph DiNola of Green Building Services. (LEED only applies to commercial buildings, although residential standards are under development.)
LEED projects account for an estimated 4 percent to 7 percent of the market for new commercial buildings, said DiNola, speaking at a June 17 forum titled "Accelerating the Market Transformation of Green Building," presented by ShoreBank Pacific and Cascadia Green Building Council at the Jean Vollum Natural Capital Center.
"With green building, the sky is the limit," DiNola said. Yet, he added, "We have so far to go, so much to do," until, for example, structures that produce more energy than they use are commonplace.
Dennis Wilde, senior project manager for Gerding/Edlen Development, made a similar point at the same forum. "I think we're a long way from sustainability," said Wilde. "I like to view it really as just beginning the process. We're in the crawl phase, the very early stages of what's possible."
Green Building Advantages
Speakers at the Portland events cited many advantages of green building over traditional construction, under the general headings of economy, environment, society and the individual.
"One thing becoming clearly obvious is there's a growing awareness of the value of green buildings," said Joe Van Belleghem, head of Canada-based BuildGreen Development and a USGBC board member. He and Tom Paladino--president of Seattle-based consulting firm Paladino and Co. and also a USGBC board member--gave a June 11 presentation on "The Economics of Green Building," also at the Natural Capital Center.
Van Belleghem is a fervent convert to environmentally responsible development. "I've been a developer for 17 years, and the majority of the time I didn't practice green building," he said; occasionally he would use green measures to satisfy government requirements or gain more density. Van Belleghem said he eventually grew disillusioned with development and quit the business in the mid-1990s, but later returned with a desire to "do something different."
Two weeks into the design of a speculative project, he decided to go green, despite the prospect of added costs and time. "I saw it as an opportunity to distinguish the product in the marketplace," he explained. Then he read "Natural Capitalism" by Amory Lovins. " It really changed my life. I started to understand the value of natural capital, how we really need to look for environmental solutions in how we run business and how we develop solutions, with integrated design and whole system costing."
Van Belleghem listed some green building benefits and examples from his own projects: reduced capital and infrastructure costs, as with waterless urinals that stretch H2O resources; lower operating costs, through such features as daylighting, energy-efficient lighting and flat panel computer screens that lower both electricity and heating loads; improved health with better indoor air quality--he told about an 8-year-old girl with asthma who finally slept through the night at a new green residence; improved productivity of employees working in comfortable, well-lit spaces--over 30 years, he said, a 3.7 percent productivity improvement is financially equal (in labor costs) to a building's entire capital and operating expenses; better community relations, as with a new bicycle trail to a Vancouver Island technology development that addressed local traffic concerns; lower liability risk; and, for tenants, appealing buildings that help attract and keep employees.
And, even aside from cost issues (see below), green building can generate more green for developers, in the form of commercial opportunities.
"Just redefining our value proposition as a company will mean more and more business," said Van Bellegham. "I'm a capitalist. I'm in this to make money, but I'm a natural capitalist."
|Daylight streams into the Clackamas High School entry
on a cloudy afternoon in March 2003.
Clackamas High, near Portland, is a LEED silver facility.
(Photo by Mark Ohrenschall)
Wilde reported that his firm's commitment to green building has reaped financial dividends.
Gerding/Edlen formed in the mid-1990s with an initial focus on community stewardship, and when the company decided to pursue serious green building for its landmark The Brewery Blocks development in downtown Portland, "We weren't certain it was necessarily all that smart a business decision. We thought it might be business-neutral," said Wilde. "One test we set up was it can't cost more. We have to stay competitive in the marketplace.
"What we've found is it's been a huge boost in our business, our profile as a company," including prominent mention in a USA Today article on green building this spring and frequent citations in other publications, which have generated credibility and trust and spread the word that Gerding/Edlen is "doing good things for our community and doing things from a smart business perspective ... It opens up business opportunities you never imagined."
More than 500,000 square feet of space is leased in The Brewery Blocks, in a soft market, "at rates comparable to or exceeding the marketplace," Wilde said.
Features such as interior light shelves to spread daylight, operable windows, more height in each floor and paints and finishes with minimal volatile organic compounds make for a healthier indoor environment. Those, in turn, translate to lower absenteeism and greater productivity. "We teach that to prospective tenants," he said. "That has some play.
"Typically you can't get more in rent and sales values for green than a typical" building, Wilde continued. But, "If a buyer or tenant are comparing side by side two comparable projects, and you have more [green] features like that in a building, you're going to have a definite advantage in terms of the marketplace."
But, as Wilde and others wondered: If green buildings are so compelling, why aren't they the norm, instead of a small (if growing) phenomenon?
Wilde offered some ideas, starting with the notion of risk. Developers already face myriad risks involving interest rates, costs, markets and clients. "Anything a developer can do to minimize risk is a good thing," he said. "Taking on environmentally responsible building adds more risk ... an unknown factor."
While green buildings may be superior, Wilde said they're not necessarily valued higher for leases or sales. Many developers also are unaware of available green building assistance, from utilities, governments and entities such as the Energy Trust of Oregon and Northwest Energy Efficiency Alliance. Wilde believes more factual documentation of green building benefits--beyond anecdotal stories--also would be helpful.
"Finally, and most importantly, it takes the senior management of a company" to support green building. "You have to be believers." Building owners and investors play a crucial role. "They're the ones that set the context and tell you how far out of the box they're willing to let you go."
A city of Portland green building official agreed. "The success we've seen with LEED comes from the developer/owner who really pushes," said Rob Bennett, green building program manager in Portland's Office of Sustainable Development. "A lot of players can break the system, and revert back to practice as usual. The [building] industry is quite sophisticated, and it varies up and down the supply chain and the knowledge chain."
|A 21.7-kilowatt-capacity solar electric system is installed on the roof
of the Learning Studio at IslandWood environmental learning center
on Bainbridge Island, WA. IslandWood is rated LEED gold.
(Photo by Mark Ohrenschall)
"We're creatures of habit," said Hank Ashforth, chief executive officer of property owner Ashforth Pacific. "Unfortunately for the green building industry, the path of least resistance isn't the one we should be using. Everything we're talking about is, 'How do we go down a different path, breaking that mold?' We've got a mantra in our company: step by step. It's little pieces," seeking to balance the interests of people, profit and the planet.
Van Belleghem has observed a "fear factor" in green building, giving a specific example of stormwater detention ponds, and worries over children drowning and mosquitoes proliferating and spreading diseases. These concerns can be alleviated through design, he added.
He listed other "keys to success" for green building, including persistence, life-cycle costing, integrated design, green champions and, topping the chart, a new model for assessing value. "Trying to effect change solely with numbers is not the best way," said Van Belleghem--a chartered accountant. "We have to change mindsets, ways of thinking."
Green building consultant DiNola shared some cautionary thoughts about the future of green building, acknowledging that these "might shock and concern some of you."
First, he wondered aloud whether green building is simply a fad, showing a slide of pet rocks and knee-high socks.
He thinks the green building community is so caught up in fostering present success it hasn't sufficiently envisioned its longer-term future.
Another question: "Are we too narrowly focused?" DiNola wondered whether green building aficionados are too enamored of structural details, and not looking closely enough at broader environmental, political and economic issues, mentioning huge growth in China and threats to ocean ecosystems.
"There are a number of people who feel the green building movement is exclusive," he contined, displaying a "greener than thou" attitude that threatens to alienate and disenfranchise other important constituencies, such as environmental groups and trade associations. One forum participant alluded to a brewing backlash against green building.
DiNola discussed some primary influences on green building--and potentially negative implications.
One is the availability of financial incentives from utilities and governments, which he called "a double-edged sword" that invites dependency. "The two sides of the coin of incentives are you have to make sure there's enough money to move the market, but not too much money that people get drunk on the benefits of incentives," he said.
Another is the "stick," or regulatory requirements for green building. What if the president ordered all U.S. buildings to meet LEED standards, he whimsically wondered. "You've got the other 96 percent; you're done. Really, is that a good thing?" Only a few audience members raised their hands in the affirmative. This approach raises the specter of government's heavy hand. Also, he added, energy codes essentially establish a maximum standard for most people.
He believes Oregon effectively blends incentives and requirements, along with a "pretty progressive" populace.
One of the biggest ongoing questions for green building is cost. And on this topic, the Portland speakers converged on a theme that building green may or may not require a slight initial premium, depending on specific circumstances, but the longer-term economics are generally favorable.
Paladino began his talk with a hypothesis: "LEED can absolutely be achieved on a conventional budget." He continued, "How much more is LEED going to cost? That's the wrong question. The question to be asking is: How green can my building be within the budget I have allotted?" The vast majority of green building projects--he estimated 98 percent--have no extra funding available for green measures.
|Jean Vollum Natural Capital Center in Portland, a LEED gold building.
(Photo by Mark Ohrenschall)
He believes it important to assess a client's priorities for green building benefits; some are keen on an improved working environment, for example, while others primarily want to demonstrate environmental stewardship. "If you can find out the results they care about, those are generally the ones that will stick to the project budget," said Paladino. He also encouraged practitioners to start by pursuing the easier LEED credits, the "low-hanging fruit"--13 points were earned in more than 75 percent of LEED projects he examined.
For building owners, green buildings can help the financial equation with lower utility costs, improved worker productivity and/or quicker leasing rates--with the same overall construction budget, but perhaps shifted, for example spending more on high efficiency glass and less on air conditioning.
"There are a lot of us who are convinced we can create better performing buildings within our conventional budget," while caring for people within them and the environment, he said.
Wilde adamantly agrees. "I think we're going to provide as good or better a product than you can find anywhere else, and I don't think we're going to have to pay a price premium to do it." He acknowledged some added costs for green design, system improvements and materials on The Brewery Blocks--about $850,000--but those were more than offset by some $1.2 million in financial incentives and tax credits.
Wilde said design and construction team collaboration is vital for green building--a point echoed by others, including Paladino, who described this joint approach as more enjoyable and professionally fulfilling.
Some elements of building green invariably cost more, said mechanical principal Paul Schwer of PAE Consulting Engineers. Solar electricity, for example, is "a very expensive way to generate power," though environmentally sound. "The sexier aspects of green development get a lot of press," he said, while techniques such as proper siting and daylighting don't receive nearly as much attention. This contributes to the perception of green building as costly, he believes.
Van Belleghem urged a broader view of green building cost than initial expenses--in his phrase, "whole system costing," using natural capitalism principles. He shared specific examples from his own experiences of a bioswale for stormwater collection, 99-percent construction site waste recycling that included wood chipping, and electricity generated from previously flared methane gas at a landfill--all of which proved economically advantageous. "There's value in waste," he said.
Moving The Market
The June 17 green building market transformation forum announcement carried a subtitled question about how to reach the remaining 96 percent of the market not building green.
Speakers that day and June 11 offered a number of ideas--most, but not all, grounded in optimism for green building's future.
Green building appears to be solidly in the early adopter phase, led by the public sector and some private-sector practitioners. Van Belleghem said 40 percent of new LEED buildings in the U.S. are now private-sector projects, and he predicted accelerated growth in that sector. Governments needed to lead the initial phase, he said.
Seattle and Portland are green building leaders, according to Paladino. These Northwest cities also have large populations of "cultural creatives," which he described as intelligent, informed, environmentally aware people who embrace change. "That's 95 percent of our client base, cultural creatives," Paladino said. "That's who's buying green right now."
So what about the rest of the population?
"We have to focus right now on getting the next 4 percent," said Wilde. "Once we get to 10 percent [market penetration] ... you'll start to see the snowball effect."
DiNola suggested the tipping point for green building might be about 25 percent of the market. He also said 100 percent penetration is unrealistic, given the 25 percent of laggards for any social evolution.
Transforming a market is, of course, to an extent a function of marketing.
Consumers are apt to buy something they want and understand; a compelling deal motivates, too, said Spencer Brown of Euro RSCG Portland advertising and marketing agency, and chairman of the Oregon Entrepreneurs Forum. As an example, he mentioned the concrete home he's building--concrete will add about $1 per square foot to the initial cost, but lifetime energy savings will more than recoup this added expense.
Early adopters tend to sell their circles on the advantages of a particular product or service, Brown noted, expanding the market by word of mouth.
So-called "buzz marketing" can be effective and inexpensive in generating interest, he said.
Still, Brown suggested green building also needs to embrace conventional marketing methods--advertising, public relations and the like--if the movement wants to reach the broad population. "You can use other techniques to get people interested in sustainability--environmental, emotional, ethical, financial reasons why people would migrate to sustainability," he said.
Brown shared examples of market transformations in industries in which he's worked, with potential lessons for green building.
One was the entertainment industry. In the 1980s, he joined a Southern California firm that pioneered videotape (instead of film) for television shows. That firm also envisioned high-definition TV in the early 1980s--two decades too early, as it happened. Brown said company officials were entranced by this "really cool technology," but failed to adequately research this market from consumer and manufacturer perspectives. This ill-fated venture almost doomed the company, he said.
In the 1990s, Brown joined another California enterprise, this one a manufacturer of computer chips with gallium arsenide instead of silicon, enabling more efficient movement of electrons. "The problem we ran into was the fact we didn't really quite know what that mass market was" for gallium arsenide chips. "We were lucky the mass market was able to find us, with cell phones and other communications," he said.
Market Transformation in Progress
Speakers offered some anecdotal tales that suggest a green building market transformation is well in progress.
Wilde told about a fellow developer who, less than two years ago, opined that green building would be a decent market niche, but not a mainstay. Recently, this same person said large-scale residential projects need to incorporate sustainable measures just to stay competitive in the market. "There's a transformative process that's taking place," said Wilde. "We're just on the cusp of it. We can't get satisfied where we are."
Developer Art Demuro, who specializes in historic preservation ventures, said architects and engineers now push him to go green and build to LEED standards--a sign that these professional groups have been well-educated in green building practices.
And Paladino, whose firm is hiring green building professionals, finds that young architects and engineers assume green practices are the standard. "They don't know about the alternatives," he said. Academic training for would-be building professionals is beginning to include green, and Paladino believes this trend will increasingly influence the industry.--Mark Ohrenschall
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NorthWestern Energy is once again in the market for wind power.
Montana's largest utility issued a request for proposals July 2 for supply-side energy and capacity resources to serve default supply customers. It specifically welcomes wind power, baseload and dispatchable/shaped proposals, while still inviting other types. Bids are due Aug. 13.
This marks the third time NorthWestern and its Montana Power predecessor have formally sought wind energy--to date, unsuccessfully. A 2001 wind solicitation was eventually abandoned amid questions about the investor-owned utility's choice of supplier. A subsequent 2002 request for wind proposals led to the selection of two prospective Montana wind projects, but negotiations with one developer recently collapsed over pricing (see Con.WEB, June 30, 2004), while contract talks are ongoing with the other.
Wind energy development in the Northwest's windiest state has been stalled by circumstances including NorthWestern's bankruptcy, the expired federal wind energy production tax credit and regulatory issues.
Nevertheless, the utility envisions a significant role for wind power. NorthWestern's resource acquisition plan for default supply customers includes a preferred scenario of 150 MW of wind capacity (which would produce roughly 50 average megawatts of energy), and 5 aMW of annual demand-side management resources starting in 2006. The plan cited a utility interest in bolstering the reliability and lessening the price risk of its current resource portfolio for customers not served by another power supplier.
NorthWestern also plans a separate DSM solicitation this fall.
NorthWestern is the designated electricity supplier for some 300,000 residential and commercial customers in its vast Western and Central Montana service territory that don't receive power from another source, as allowed under the state's electric industry restructuring. The 2004 base case forecast for default supply load is 653 aMW.
Most of the IOU's wholesale supply--450 MW of baseload power--derives from PPL Montana, which bought generating plants from Montana Power. However, NorthWestern's resource acquisition plan for default supply customers found that the IOU's present mix "does not maintain adequate instruments to sufficiently provide reliability and mitigate price risk," according to the RFP.
The plan unveiled in January outlined scenarios for resource acquisitions, which were incorporated into the RFP as "beneficial" additions: up to 100 MW of baseload capacity, 175 MW to 310 MW of dispatchable/shaped resources and 150 MW of wind power, all by June 30, 2007. Beyond mid-2007, the cumulative baseload preferences increase to up to 550 MW.
Soliciting Resource Proposals
Yet the RFP also makes clear NorthWestern will consider other resource options. "The exact quantity and type of resources the Utility procures will substantially depend upon the economic and operational parameters of the bids received and therefore may or may not match the quantity and type of resources identified as beneficial in the Resource Procurement Plan. Furthermore," it continues, "the Utility is not required to procure any specific type of resources and will choose those that contribute to an optimal and balanced portfolio."
Proposals could start delivering power as early as 2005 or after 2007, when a number of NorthWestern energy supply contracts end, according to the solicitation. The utility is open to delivery points anywhere in the Northwest Power Pool region.
Wind bids can offer delivered energy, or shaped and firmed power. And, said the RFP, "The site-specific, verified hourly wind data is critical to the analysis of integration costs and thus overall value to the portfolio." Environmental attributes, also known as green tags or renewable energy credits, must go to the utility, although bidders can buy them back.
After the Aug. 13 deadline for submittal, bids will be evaluated by independent external advisors, who will consider price and non-price factors and generate a shortlist for "the most optimal resources," according to the RFP. The utility hopes to announce a shortlist by Sept. 24.
NorthWestern officials will then conduct "a qualitative and quantitative review of the proposals and their price and risk mitigation attributes within the portfolio," ultimately selecting "the best overall portfolio."
Final selection criteria are, in order: price and value, development and performance risk, and environmental factors, according to the RFP.
Once NorthWestern officials make a decision, negotiations will begin toward memorandum(s) of understanding, which the utility plans to wrap up by late October. Power purchase contract talks will follow, and signed deals will be sent to the Montana Public Service Commission for advanced approval of price, term and amount.
The RFP said NorthWestern "reserves the right to make multiple awards, reject any and all proposals and to waive any formality in proposals received, to accept or reject any or all of the items in the proposal, and award the contract in whole or in part if it is deemed in the Utility's best interest."--Mark Ohrenschall
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An ocean wave energy demonstration is in planning for the Pacific Northwest coast, although it's still unknown whether a project or projects will result.
This venture is spearheaded by the Electricity Innovation Institute, an affiliate of the Electric Power Research Institute, with partners including several Northwest utilities, Bonneville Power Administration and governmental energy agencies.
"It's an energy resource that's just too important to overlook," said E2I's Roger Bedard, noting the recent emergence of international wave energy trials. "The technology is now ready for demonstration in this country to overcome the naysayers."
Potential sites have been identified off the coasts of Oregon, Washington, Maine and Hawaii, and conceptual design along with power and economic assessments are in progress for a demonstration facility in each of three of those states. A decision is expected soon whether to start detailed design, permitting and pursuit of construction financing. The Washington state portion involves environmental review assistance for an already-proposed wave energy pilot venture, a 1-megawatt-capacity plant envisioned off the Olympic Peninsula coast by developer AquaEnergy Group.
Mid-2006 would be the earliest debut for a demonstration plant under the E2I project, Bedard told Con.WEB. E2I initial reports suggest a 0.5-MW-capacity project, although specific size, cost and locations remain undetermined.
Ocean wave power is touted as a clean, abundant renewable resource that can tap the immense energy contained in endless wind-generated waves. The Northwest Power and Conservation Council in the early 1990s suggested a technical potential of up to 2,500 average megawatts from regional ocean wave energy, at an estimated cost of 22 cents per kilowatt-hour generated.
But the Council has not substantially updated that assessment, and wave energy uncertainties continue regarding costs, technology, siting, transmission, environmental impacts, maintenance and durability in harsh marine conditions, among other issues.
Demonstrating Wave Power
The Electricity Innovation Institute engages in public-private research and development, and exploring the feasibility of offshore wave energy is one of its current ventures, according to Bedard.
"E2I EPRI strives to initiate momentum towards the development of a sustainable commercial market for this technology in the U.S. and thus provide economic benefits and job creation," said its recent assessment of wave energy conversion devices.
E21 has examined candidate sites off the four participating coastal states, and reviewed ocean wave energy technologies (see below for more details).
A key upcoming milestone is deciding whether to move ahead with detailed design, permitting and financing on chosen sites using specified technologies, Bedard said. State participants will take the lead in those decisions. Plant construction would require another assent.
E2I is undertaking this venture in collaboration with utilities and government agencies, including, in the Northwest, Bonneville Power Administration, Snohomish County PUD, Puget Sound Energy, Seattle City Light and Tacoma Power.
BPA's Mike Hoffman described his agency's involvement as "reasonably minimal at the moment. We're just trying to get a sense of what it would take for EPRI to do a demonstration project." Bonneville has no inclination to fund an Oregon pilot wave energy plant, which he estimated could cost up to $1 million. But Hoffman said the federal power wholesaler would like to gauge interest, and potentially help obtain other means of support.
Snohomish County PUD also is curious about ocean wave energy, as part of its larger exploration of adding more renewable energy resources to its system, the PUD's Chris Fate told Con.WEB. This wave venture is one of the PUD's chosen EPRI initiatives, he said, and since the AquaEnergy project is already in progress, the utility opted to allocate its contribution toward the environmental assessment.
Prospective Sites, Technologies
In scouting locales for a demonstration plant, E2I looked at criteria including wave energy resource characteristics, ocean bottom conditions, electric system infrastructure, local manufacturing capabilities to build a prototype, potential conflicts with other marine uses, regulatory issues and community support.
It identified and detailed features of prospective sites in each of Oregon's seven coastal counties: Astoria in Clatsop County; Garibaldi, Tillamook County; Newport, Lincoln County; Cushman, Lane County; Reedsport, Douglas County; Coos Bay, Coos County; and Brookings, Curry County.
For Washington, E2I scrutinized Neah Bay in Clallam County; Hoquiam in Grays Harbor County; and South Bend in Pacific County.
E2I did not examine Aqua Energy's proposed site in Makah Bay, also in Clallam County. "We're certainly advocates and proponents of that" project, said Bedard, but the institute won't have any significant direct role.
AquaEnergy is seeking approvals from Olympic Coast National Marine Sanctuary (the proposed plant site lies about three miles offshore, in OCNMS waters) and the Federal Energy Regulatory Commission, as well as a federal matching-fund grant for research, development and field monitoring. The project timetable depends on funding, AquaEnergy chief executive officer Alla Weinstein told Con.WEB. Clallam County PUD has agreed to buy the generated power (see Con.WEB, April 29, 2003).
As for technology, E2I is considering four general types, according to Bedard. One involves floats or buoys moving up and down with waves to produce electricity, as AquaEnergy proposes. Another takes energy-productive advantage of back-and-forth wave motions, like the Pelamis model from Ocean Power Delivery. A so-called overtopping device creates an offshore reservoir of sorts and generates power, hydrolike, as collected water flows back to the ocean; the Wave Dragon is an example. The fourth potential technology is known as oscillating water column, in which rising and falling waves within an enclosure generate airflow that powers a turbine.
"We're looking at all four," said Bedard, although he believes the Pelamis is the most commercially ready device at the moment.
A vast range of energy-production capacities are potentially available, according to Bedard, from as small as 20 kilowatts to as large as 4 MW. "We don't yet know the optimum size, minimum cost or maximum cost-effectivity," he said. "The technology is too immature right now."
Ocean Wave Power
Generating electricity from ocean waves has been explored for decades, but commercial-scale production has proven elusive.
Ocean Power Delivery conducted European sea trials of the Pelamis earlier this year. Energetech began construction this spring on a facility off Australia; company chief executive officer Tom Denniss called it "the first plant in the world to make wave energy commercially viable."
This resource has considerable promise, at least in theory. Waves contain highly condensed energy--the average Northwest wave can produce 25 kilowatts per meter of crest, according to E2I. This allows smaller machines than needed for wind power, Bedard said.
Waves also roll along more consistently than the wind blows or the sun shines--Bedard calls it "the least intermittent of all the intermittent renewable energy technologies." However, the E2I reports assume a 40 percent annual capacity factor, which is only slightly higher than--and in some cases comparable to--wind energy.
Wave energy also promises economic development in coastal communities, though Bedard did not have specific numbers.
Local public support for ocean wave energy is vital, Bedard said, and apparent in the AquaEnergy project and in Maine, where traditional fishing and shipbuilding industries are in decline.
A significant concern, cited by both Hoffman and Bedard, is the hardiness of wave energy devices amid big winds, swells and other challenging elements of the ocean environment. "Quite a bit of work was done in the 1970s and quite a few [machines] didn't survive," said Bedard, although he added many current technologies are designed to withstand extreme forces.
Another unknown, he said, is the cost of installation and operations/maintenance for these offshore energy-generating stations.
Ocean wave energy also faces other issues.
One is environmental impact. AquaEnergy's proposal, for example, has generated concerns among OCNMS officials about its potential effect on sediment dynamics, seafloor habitat, marine mammals and ocean views in the federal marine sanctuary.
Another matter is transmission connections, particularly for high-volume ocean wave energy development. Washington's ocean coast is essentially bereft of high-voltage transmission, noted senior resource analyst Jeff King of the Northwest Power and Conservation Council, while the Oregon coast is reasonably well-served with high-voltage wires and available transmission space to deliver electricity east to load centers.
King believes that if technology and cost concerns are resolved, the biggest barriers to Northwest ocean wave energy are environmental and transmission questions.
The Council's 1991 power and conservation plan suggested a regional technical potential for ocean wave energy of 400 MW to 2,500 aMW, while cautioning that several factors--maintenance, capacity factors, line losses and siting limitations--could diminish the actual number. The Council hasn't thoroughly examined ocean wave energy since, King said, given the relatively high costs and apparent lack of major technological advances. "It's tough to consider this as an available resource," he said, but it's worth monitoring.
"I think a demonstration project would be great," said King. He believes wave power and offshore wind energy in the shallow southern Strait of Georgia are "the two ocean energy technologies that conceivably might show some promise in the Northwest."--Mark Ohrenschall
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The National Solar Energy Conference gathered in Portland in mid-July, and among the myriad topics addressed were local initiatives, regulatory advocacy, public benefits funding programs, the role of the marketplace and subsidies, and solar's potential in a hydrogen economy.
David Garman, U.S. assistant secretary of energy, made the following assessment after his 25 years as a Washington, D.C. energy policy wonk: "The distributed solar future must come from the bottom up."
Although the federal government will continue to support solar research--the U.S. Department of Energy's National Renewable Energy Laboratory plans to begin construction this fall on a facility dedicated to that purpose, with the goal of reducing solar generation costs to 6 cents per kilowatt-hour by 2020--"The white knight policy to compel the adoption of solar isn't coming anytime soon," and must happen through building codes, state commissions, neighborhood advocacy and other local measures, Garman said at the National Solar Energy Conference in Portland July 12.
Bill Spratley, executive director of Green Energy Ohio and a former consumer advocate in utility proceedings, sees his state as a prime example. Its grassroots solar movement is trying to make a dent in the big baseload coal and nuclear plants with no high-ranking public solar champion and very few incentives available--about $500,000 in renewables grants and $853,000 in loans. His group is using its limited funding to create strategic influence by assembling a business group of diverse interests, including farmers and a major utility, to improve solar's economic and political image, and by pushing high-visibility projects such as an installation on the governor's residence where community and business leaders and the general public regularly visit.
One of the biggest failings in the solar industry is its huge disconnect from the regulatory community and process, according to another consultant and former consumer advocate, Chris Cook of E3 Energy Services.
Advocacy at the regulatory level in some states can be extremely expensive, requiring attorneys and full-time attendance at proceedings, according to American Solar Energy Society chair Tom Starrs of Bonneville Environmental Foundation. Cook and Starrs said solar advocates in each state should focus efforts where they can find sympathetic ears--in the legislatures or at regulatory bodies--and at the regulatory level should combine with environmental interests and consumer advocates to gain a stronger voice, and support utilities in their rate requests for distribution system upgrades, which could aid solar over time.
Solar developments from state-level public benefits fund programs, which are sometimes more focused on efficiency programs, are beginning to make inroads as well, according to representatives at the conference from programs in Oregon, Massachusetts, Connecticut and Wisconsin.
The Oregon Energy Trust hopes to reach 1 megawatt of installed capacity by the end of this year after meeting its first-year goals and helping lower average installed costs below $7 per watt, according to the Trust's Kacia Brockman. Meanwhile, the Oregon Solar Energy Industries Association has tripled in size in the last two years, said Christopher Dymond of the Oregon Office of Energy.
But installed costs are rising again as the availability of incentives dries up, however. After receiving only a few applications in the initial months of the program and discovering there was little industry marketing, the Energy Trust raised its incentives. Now that application rates have picked up it will have to lower them again, but it is considering tiered incentives for larger installations and performance-based incentives.
Using Market Power to Push Solar
Some solar power advocates don't believe government subsidies are good for solar markets.
Jim White of Chelan County PUD is one of those who fear the market distortion of subsidized rebates that reduce initial costs without assuring performance levels "will do for PV what tax credits did for solar water heating"--destroy the market when they evaporate, he said at the conference on July 13.
Market-based programs that offer value for the environmental benefits of renewable energy, however, like green tags or renewable energy credits, are usually not set up for small-scale solar users, according to Doug Boleyn of Cascade Solar Consulting, who helped establish the Northwest Solar Cooperative. These credit markets are often available only in certain areas and are designed for larger-scale generation, offering credits that have usually been either too expensive or too cheap to encourage solar to enter these markets, or to spur solar development.
Boleyn partnered with BEF in 2002 to try to fix this market gap by forming the Northwest Solar Cooperative, which has grown solidly since its inception. The co-op buys the small-scale solar green tags from new installations for 10 cents per kilowatt-hour, aggregates them and sells them to BEF, which markets green tags on a larger scale. BEF can then blend the solar benefits into its green tag products for the segment of its market that wants to support small-scale solar, without dramatically increasing the price of the tags. This arrangement in turn helps solar equipment dealers in the Northwest market their products by telling customers that if they install a system, the cooperative will pay them for the benefits of the green tag.
|These grid-connected solar panels are on the city of
Ashland (OR) Civic Center, part of a 30-kilowatt-capacity
solar electric system at four local sites--one of the biggest
of its kind in the Northwest.
(Photo by Mark Ohrenschall)
The program has experienced substantial growth this year, with 36 applications to date, up from 10 in all of 2002, with the steepest increase in Washington state, which lacks other statewide solar incentive funding. The co-op's installed capacity has jumped from 16.5 KW at the end of 2002 to more than 90 KW.
In states that do offer solar incentives, however, the question of ownership of the tags can get murky. In Oregon, for instance, if a solar producer accepts incentives offered by the system benefits charge administrator--the Energy Trust--then the Trust keeps the tags for the environmental benefits, making the producer ineligible for membership in the co-op. The co-op is considering expanding to more states--if BEF can find enough green tag buyers.
Chelan PUD's White believes 10 cents/KWh from green tags won't have much more of an impact than the subsidized rebates he criticized, however. Chelan's SNAP (Sustainable Natural Alternative Power) program allows the rewards to fluctuate with the market and the green power output.
|(Courtesy of Chelan County PUD)|
SNAP is similar to a voluntary utility green power program in that customers opt to pay extra on their monthly utility bills to support green power. But SNAP operates more like a market, in that each green power producer is paid a percentage of these extra funds equal to the percentage of the total green power output that they produce. When more customers donate, green power producers get paid more, but when more projects join the program, each participant's take goes down. This year, SNAP paid solar producers 72 cents/KWh, down from $1.50/KWh two years ago.
And by the end of June, there was scheduled to be more grid-connected solar power in Chelan County than in any other Washington county, according to White.
Solar power needs a self-sustaining way to break into the market, he said, but ultimately it should be able to get away with being somewhat more expensive than grid power, since "solar is to electricity as bottled water is to tap water."
Hydrogen from The Sun
Donald Aitken, senior energy consultant for the Union of Concerned Scientists, told the conference July 11 about his "best guess" that a main motivator of the solar community--the point where demand for oil will irreversibly exceed supply--is little more than a decade away. Thus, he called for swift implementation of efficiency and renewable energy.
While most oil executives would probably add at least a few decades to Aitken's timeline, his comments energized the conference's debate on how to bring the hydrogen economy forth economically and renewably.
Florida Solar Energy Center director emeritus David Block said that if you asked him six months ago, he was a staunch hydrogen supporter. And while he's still a strong advocate, the way forward continues to become "fuzzier, rather than clearer" since President Bush brought public attention to it in his 2003 State of the Union speech.
It is clear solar energy and hydrogen production are the "perfect partnership," with hydrogen as the ideal storage medium for the sun, but not in the way most people think today, Block said--not from photovoltaics, or any form of electrolysis.
A simple look at the economics of energy conversion shows that hydrogen produced by electrolysis costs two to three times more than hydrogen produced from natural gas reformation, which already costs about triple the price of the natural gas used. Hydrogen produced by electrolysis from photovoltaic electricity costs seven or eight times more than hydrogen from natural gas. Even with very high natural gas prices, Block concluded, electricity--especially solar electricity--is too valuable as electricity to use in hydrogen production, except when the generation resource doesn't match the load profile, in which case storing the energy as hydrogen can have value. In the long run, photoelectrochemical and photobiological hydrogen production from water will be the most important methods, but research and development in this area is still in its infancy.
An almost equally important obstacle to hydrogen is that currently there is no value added for its use other than environmental benefits, which won't propel the fuel to the forefront, Block said. Homes are already electrified and gasoline already performs at least as well as hydrogen could in cars, from a consumer standpoint.
Electrolysis still has its adherents, however. Raymond Hobbs of Arizona Public Service reported that his company's Hydrogen Power Park is selling hydrogen produced via electrolysis from renewables integrated through the electric grid for $2.25 per gallon of gasoline equivalent.
Northwest Hydrogen Alliance founder (and former Bonneville Power Administration top official) Jack Robertson's plan to harness off-peak hydro power from the Columbia River at less than 2 cents/KWh would produce hydrogen at less than $2 per gallon of gasoline equivalent, he said, and would supply the fuel for both transportation and distributed, clean-burning, urban peak-shaving electricity needs.
ECD Ovonic founding president and chief executive officer Stanford Ovshinsky argued that the complete hydrogen economy energy loop already exists with photovoltaics and solid metal hydride storage. ECD Ovonic's triple-junction photovoltaic cells are specifically designed to split water molecules by absorbing a greater spectrum of the sun's light and producing higher voltage and current, and the company's solid metal hydrides provide safe and simple storage methods that don't necessitate billions of dollars in new hydrogen pipeline infrastructure, he said.--Ben Gilbert
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