The Southeastern region of the United States is an energy conundrum, comprising about one third of the demand in the country, yet having the lowest capacity for renewable energy (about 6%). This discrepancy is an incredible obstacle to any proposed Renewable Energy Portfolio (RPS) aimed at substantially reducing the nation’s carbon emissions. To reach a goal of 15-20% of our power to be produced by renewable energy, we would need roughly 174 TWhrs of energy from various renewable sources. Among the problems with such a suggestion, are the lack of viable renewable energy technologies, outdated transmission lines, and the finances associated with overcoming these obstacles. Renewable energy is the future; unfortunately, our wind and solar technologies are not yet competitive with fossil fuel based alternatives, biomass technology would require a significant shift in our country’s farming focus, and hydroelectric options have been almost completely exhausted.
Wind energy seems quite promising with the only problems being that it is incredibly unreliable, many consider windmills an eye sore, but most importantly, it can only account for a maximum of 11% of the renewable energy demand in the region. Solutions range from building large hydro-storage facilities (using energy produced during low demand to pump water uphill into a reservoir and the producing hydro electric power during peak load hours) and locating wind farms on America’s uninhabited plains or offshore sites. Unfortunately, these all of these technologies will be a moot point unless a complete overhaul of the electrical grid in the southeast occurs with substantial improvements and additions to the transmission lines in order for the Southeast to import renewable energy from neighboring regions of the United States.
Solar technologies are incredibly expensive to produce, yield low efficiency returns, and have not proven to be a viable solution on a large scale without considerable government subsidies. Although there have been recent advancements in multi-layered thin-film solar technologies, it will be decades before solar options become competitive if it happens at all. This is the least cost-effective solution for an RPS demand. By covering every rooftop in the Southeast with solar panels, solar energy can produce a whopping 1.1% of the renewable energy demand.
Biomass may have the most potential out of any of the renewable energy sources. In a perfect scenario where maximum efficiency for electrical production is reached, none of the farmed biomass is used for biofuels, and all farming is directed towards the production of biomass fuels (none of these propositions is remotely likely) the Southeast could provide 27% of its renewable energy needs through biomass. This is a significant amount; however, realistically, it would only reach a fraction of that. The problem that makes this irrelevant is that burning biomass for electricity also produces CO2 pollution and does not qualify for any of the recently proposed RPS’s.
Although hydroelectricity seems like a magic solution to our problems, there may not be a single natural waterway in North America which has not already been exploited. Almost all the rivers have already been dammed for hydroelectric power and flooding controls, in many cases, multiple times. We can continue this process in the Southeast, but there are significant environmental repercussions of such actions. Not only does this disrupt the migration and birthing pattern of many species of fish, but, more importantly, it disrupts the natural flow and movement of nutrient rich sediment (dirt). This may not seem important until one looks at the bigger picture and chain of events in which this sediment fails to reach the deltas of our rivers, fails to fill in the coastlines of our country, then fails to feed the marshes and wetlands in the Southeast. Still not getting the picture? That’s OK, there’s more. Marshes and wetlands are our natural defenses against floods, hurricanes, and storms. The damming of our rivers and disruption of the flow of sediment is THE reason that our country experienced a disaster on the scale of Hurricane Katrina. Further expansion of hydropower through dams seems like a much less viable solution after this is taken into account. However, if it were decided that the dangers and consequences were worth braving, hydroelectric power has the capacity to provide a significant 26% of the renewable demand.
The sum of all these renewable percentages only equates to 65% of the 174TWhrs needed to fulfill an RPS of 15-20% renewable energy supply for the nation. Now, where would the remaining 35% come from? The Southeast Region would have to import that from neighboring states, requiring a massive overhaul of the electrical grid and the construction of high-efficiency, long distance transmission lines on a massive scale. The cost of such a gigantic infrastructure project alone would be staggering, however, the constant and never-ending importation of that much energy would cripple the states’ economies in the region. Even if trade-able carbon emissions were a part of the RPS and transmission lines were not necessary, this would still have a devastating effect on the local economy. Options for the Southeast Region of the United States to produce more than 10% renewable energy are significantly inadequate, so an all-encompassing RPS does not seem feasible with our current technology.
EBS had the pleasure of working on this project over the past year and are very happy with the results we’ve seen. This project isn’t using greenwashing like some and while some of the stats are a bit skewed in terms of actual energy offset, the first year’s data will tell all.
They have a robust Measurement & Verification process in place to ensure they meet their targeted Power Usage Effectiveness (“PUE”) which I believe to be below 1.05 – impressive to say the least!
EBS services included energy modeling for LEED and for the Oregon Energy Trust Rebate program. We’ve experience great success working with Gensler and Logicalis on this most impressive Data Center – kudos to the team!
Unprecedented Green Building Dispute Could Cost Developer Millions
Up until yesterday, the biggest green building dispute I had come across was Shaw Development v. Southern Builders. That case involved $635,000 in damages because a project did not obtain the LEED certification necessary to qualify for state tax credits.
That is chump change compared to the Destiny USA green building dispute that is simmering. Because the mega project allegedly failed to incorporate green building components it had promised the the federal government — including LEED certification — the developer may be penalized $2.3 million by the IRS.
I am going to be writing about this example of LEEDigation for some time. This post will cover just the basics but I will be diving into the messy details throughout the week.
In 2004, federal legislation was passed to create a Green Bond program. Under the program, a few developers received tax-free financing for the construction of green building projects. One of those projects was Destiny USA, which is a proposed 4.5 million square foot retail and entertainment complex in Syracuse, New York. The Destiny USA project received $228 million in tax-free Green Bonds. According to Syracuse.com, the tax-exempt status of the financing saved the developer $120 million. In exchange, the developer of the project, Robert Congel made promises about green building features and LEED certification that would be incorporated into the project.
But what happens if the developer does not satisfy his green building promises? We will likely find out within the next year.
According to an incredible article written by Rick Moriarty of the Syracuse Post-Standard, the project will not include many of the promised green building building components:
There is no 45-megawatt electricity generating plant running on “biofuel” made from soybean oil and recycled cooking grease. If there were, it would be the largest such plant in the nation and consume more than one-third of the total U.S. biodiesel supply.
Nor are there 290,000 square feet of solar panels on the mall’s roofs and other surfaces, enough to blanket six football fields.
The fuel cells that were to make 7 megawatts of electricity, five times more than the nation’s largest existing commercial fuel-cell installation? Nowhere to be seen.
Additionally, there is confusion as to whether the project has received its LEED certification, which was also promised.
The Destiny USA developers are facing a month-end deadline to certify to the IRS that the green building promises were met. If the IRS determines the developer did not meet its promises, the project could lose its tax-exempt status — which reportedly saved the developers $120 million — and be slapped with a $2.3 million penalty.
There is so much more to this story. If you are interested, I would advise you to check back over the coming days as new posts will be frequent. I will also be publishing a white paper describing all of the sordid details.
Many are aware of the subsidies, tax credits, and grants available to property owners and utilities to install and utilize alternative energy (i.e., wind, solar, biomass, etc.). Unfortunately, many forget that these technologies need to be manufactured somewhere. The majority of the panels that go into a photovoltaic array and the large blades that make up wind turbines are currently being manufactured overseas, often in China. This directly contradicts President Obama’s plan to spur green job growth with the passage of the Stimulus Bill. Enter the SEAM Act.
The Security in Energy and Manufacturing Act extends an existing tax credit (The Advanced Energy Manufacturing Tax Credit (MTC), which provided a 30% of total project cost credit to help fund projects that expanded, or re-equipped clean energy manufacturing plants. The SEAM Act goes beyond a simple extension of the $2.3 billion program, it redefines it. Infusing an additional $5 billion into the program while substituting grants for tax credits, it will allow smaller startups who haven’t garnered the tax liability to apply for tax credits to offset some of the costs of their planned plants. It also prioritizes purely manufacturing projects over assembly plants.
This Act comes at a key time, as there are hundreds of projects that applied for credits under MTC that were denied because funding ran out so quickly. Like the “Cash for Clunkers” program, the actual interest in MTC far outweighed initial projections, proving that it was a successful program.
But why, you might ask, should we focus on clean technology manufacturing. According to the Act’s author, Representative Phil Hare from the 17th congressional district in Illinois,
“As clean energy becomes one of the world’s largest industries, forecasted at over $2 trillion annually, advanced energy manufacturing will offer one of the best chances for the U.S. to restore its manufacturing base and create good-paying jobs domestically.”
This is only one of the many reasons why the US needs to spur clean manufacturing jobs. Over the past several decades this nation has seen its manufacturing base erode. Losing out to cheaper Chinese products, the manufacturing industry, one of the largest employment sectors in the US has seen the largest decline in jobs over the past ten years. According to the United States Department of Labor, in 1998, the manufacturing sector employed the second highest number of workers, over 17.5 million. Sense then, the industry has seen a 2.6 percent annual decrease in jobs, which is double the rate of decline of the next-to-worst sector. Advanced energy manufacturing offers a unique opportunity to pursue an environmentally responsible agenda while creating many permanent, high-paying jobs that are desperately necessary to revive an employment powerhouse in serious decline. With the promise of huge green job creation numbers to live up to, why not focus on the area of biggest potential.
The demand side makes an even stronger case to up clean technology manufacturing. With the new requirement that 25% of each state’s energy portfolio must come from clean, renewable energy being mulled over in Washington, and with the potential for a Carbon Cap and Trade system being introduced, the demand for huge new solar and wind farms will take off. Couple that with the improvements that are being made to the efficiencies of these technologies pushing them towards being on par with coal in terms of the production price per kW, and you start to have not only an environmental reason, and a government mandated reason, but also an economic reason. Maybe the one positive that came of out of the recent oil spill in the Gulf, is that it quieted some “Drill baby Drill” proponents. Clearly an increase in off-shore drilling is not the answer to our energy situation; why not look to an abundant and everlasting source, the sun, which creates not only solar power, but wind power as well.
Looking before the future, at the present, renewable energy production is already taking off. According to the U.S. Energy Information Administration, over the past ten years, wind energy production has increased an average of 24% annually. Over that same time period, energy production from crude oil has decreased an average of 2.4% annually. While crude oil reserves are running out, and the potential for wind and solar production is only increasing, let’s start focusing our efforts and our money on a sector that has some potential. For those of you who wonder where all this money could come from, look no further than the oil industry, which receives huge subsidies from the government so they can continue searching for an archaic fuel source that is destroying our environment. Estimates are that US Oil companies receive, according to Greenpeace, between $15 billion and $35 billion a year from tax payers in the form of avoided taxes.
The Southeastern region of the United States is an energy conundrum, comprising about one quarter of the demand in the country, yet having the lowest capacity for renewable energy (about 6%).This discrepancy is an incredible obstacle to any proposed Renewable Portfolio Standard (RPS) aimed at substantially reducing the nation’s carbon emissions. To reach a goal of 15% of each state’s power to be produced by renewable energy, we would need roughly 186 terrawatt hours of energy from various renewable sources to satisfy the Southeast Region’s needs. Among the problems with such a suggestion, are the lack of viable renewable energy technologies, outdated transmission lines, and the finances associated with overcoming these obstacles. Renewable energy is the future; unfortunately, our wind and solar technologies are not yet competitive with fossil fuel based alternatives, biomass technology would require a significant shift in our country’s farming focus, and hydroelectric options have been almost completely exhausted.
Wind energy seems quite promising with the only problems being that it is incredibly unreliable, many consider windmills an eye sore, but most importantly, it can only account for a maximum of 11% of the renewable energy demand in the region.Solutions range from building large hydro-storage facilities (using energy produced during low demand to pump water uphill into a reservoir and then producing hydro electric power during peak load hours) and locating wind farms on America’s uninhabited plains or offshore sites.Unfortunately, all of these technologies will be a moot point unless a complete overhaul of the electrical grid in the southeast occurs with substantial improvements and additions to the transmission lines to transport renewable energy from isolated areas of the Southeast Region.
Solar technologies are incredibly expensive to produce, yield low efficiency returns, and have not proven to be a viable solution on a large scale without considerable government subsidies.Although there have been recent advancements in multi-layered thin-film solar technologies, it will be decades before solar options become competitive if it happens at all.This is the least cost-effective solution for an RPS demand.By covering every rooftop in the Southeast with solar panels, solar energy can produce a whopping 1.1% of the renewable energy demand.
Biomass may have the most potential out of any of the renewable energy sources.In a perfect scenario where maximum efficiency for electrical production is reached, none of the farmed biomass is used for the production of liquid biofuels in cars, and all farming is directed towards the production of biomass fuels (none of these propositions is remotely likely) the Southeast could provide 27% of its renewable energy needs through biomass.This is a significant amount; however, realistically, it would only reach a fraction of that.The problem that makes this irrelevant is that burning biomass for electricity also produces CO2 pollution and does not qualify for any of the recently proposed RPS’s.
Although hydroelectricity seems like a magic solution to our problems, there may not be a single natural waterway in North America which has not already been exploited.Almost all the rivers have already been dammed for hydroelectric power and flooding controls, in many cases, multiple times.We can continue this process in the Southeast, but there are significant environmental repercussions of such actions.Not only does this disrupt the migration and birthing pattern of many species of fish, but, more importantly, it disrupts the natural flow and movement of nutrient rich sediment (dirt).This may not seem important until one looks at the bigger picture and chain of events in which this sediment fails to reach the deltas of our rivers, fails to fill in the coastlines of our country, then fails to feed the marshes and wetlands in the Southeast. Still not getting the picture? That’s OK, there’s more.Marshes and wetlands are our natural defenses against floods, hurricanes, and storms.The damming of our rivers and disruption of the flow of sediment is THE reason that our country experienced a disaster on the scale of Hurricane Katrina.Further expansion of hydropower through dams seems like a much less viable solution after this is taken into account.However, if it were decided that the dangers and consequences were worth braving, hydroelectric power has the capacity to provide a significant 26% of the renewable demand.
The sum of all these renewable percentages only equates to 65% of the 174TWhrs needed to fulfill an RPS of 15-20% renewable energy supply for the nation.Now, where would the remaining 35% come from?The Southeast Region would have to import that from neighboring states, requiring a massive overhaul of the electrical grid and the construction of high-efficiency, long distance transmission lines on a massive scale.The cost of such a gigantic infrastructure project alone would be staggering, however, the constant and never-ending importation of that much energy would cripple the states’ economies in the region. Even if trade-able carbon emissions were a part of the RPS and transmission lines were not necessary, this would still have a devastating effect on the local economy.Options for the Southeast Region of the United States to produce more than 10% renewable energy are significantly inadequate, so an all-encompassing RPS does not seem feasible with our current technology.
Numbers and percentages courtesy of:
Hadley, Stanton W., Key, Thomas., Deb, Rajat. May 2009.Power Transfer Potential to the Southeast in Response to a Renewable Portfolio Standard: Interim Report 2.
Many are aware of the subsidies, tax credits, and grants available to property owners and utilities to install and utilize alternative energy (i.e., wind, solar, biomass, etc.). Unfortunately, many forget that these technologies need to be manufactured somewhere. The majority of the panels that go into a photovoltaic array and the large blades that make up wind turbines are currently being manufactured overseas, often in China. This directly contradicts President Obama’s plan to spur green job growth with the passage of the Stimulus Bill. Enter the SEAM Act.
Recent Comments