Ohio Utilities Commission Adopts Long Awaited Energy Efficiency and Alternative Energy Portfolio Standards

On April 15, 2009 the Public Utilities Commission of Ohio finally adopted the long awaited rules that will govern Ohio's energy efficiency requirements and its Alternative Energy Portfolio Standard (AEPS).  Ohio was one of the last states to have adopted a Renewable Portfolio Standard (RPS)- more broadly defined as a AEPS in Ohio.  However, as one of the largest energy intensive states in the Country the finalization of the rules will surely spur growth of "green energy" related business in Ohio.

As a former regulator, a frequent mantra in describing the decision making process was- "if both sides are unhappy then you know you did your job well."   Well the Commission appears to have followed that mantra in responding to the vast amount of comments that were filed on the rules.  It sided with the Utilities on many issues and it sided with consumer and green groups on many issues.  It rejected many suggestions and complaints by Utilities and it rejected many suggestions and complaints by consumer and green groups.

The rules cover three major aspects of S.B. 221 passed by the Ohio Legislature in the summer of 2008:

  1. Energy Efficiency and Demand Reduction Programs
  2. Alternative and Renewable Energy Portfolio Standards
  3. Greenhouse Gas Reporting and Carbon Dioxide Control Planning

Here is a brief recap of the changes made in response to comments.

Energy Efficiency and Demand Reduction Programs- The Commission completely restructured the rules governing energy efficiency and peak demand reductions.  The Commission revisions where designed to "reflect a focus on the program planning and review process."

  • Cost Effectiveness- added new definitions of "cost effective" and "total resource cost test" that are applied to energy efficiency programs.
  • Procedures for Review of Compliance Plans-  New hearing requirements were added on the planned portfolio of programs offered by an electric utility to meet energy efficiency benchmarks.  The hearing requirement was added in response to criticism that the benchmark review process be opened up and follow traditional Commission rate case procedures.
  • Independent Auditors- Commission requires use of independent program evaluators (hired by the Utility but work at the direction of Commission Staff) to review and verify claimed energy savings and peak-demand reductions
  • Calculating the Baseline for  Measuring Efficiency Improvements- the baseline will be measured by a "rolling average" of the last three years of kilowatt hours purchased instead of a fixed average of 2006 through 2008.  The Commission basically rejected claims by Utilities that using a rolling average keeps raising the bar because it incorporates the energy efficiency improvements each year.  As a result, the Utilities argued the energy saving requirement is closer to 39% than the 22.2% required in S.B. 221
  • Banking "Overcompliance"- Commission will allow Utilities to "bank" over compliance with the energy efficiency benchmark and apply the overcompliance to future years
  • Adjusting for Economic Growth- Baseline can be adjusted to account for either growth or reductions in economic growth.  The idea is to remove the influence of a changing economy on achieving energy efficiency improvements
  • Mandated Efficiency Improvements- Utilities cannot count energy savings that result from customer installed appliances or equipment that are mandated by law including the Energy Independence and Security Act of 2007

Alternative Energy Portfolio Standard- S.B. 221 splits the 25% of electricity energy by 2025 standard into two separate benchmarks- one for "alternative energy" sources and another for "renewable energy sources."  The rules put a lot more teeth into the renewable energy benchmark, including specific interim benchmarks. 

Overall, the Commission did not address significant concern with some of the loose aspects of the Alternative Energy benchmarks.  These include the definition of what constitutes "Clean Coal" as well as what can be counted toward meeting the Alternative Energy Benchmark.  However, as detailed below, the Commission did put teeth into the "cost cap" provisions associated with compliance with either benchmark.

  • RFP- Rejected a suggestion that renewable and alternative energy be procured through a Commission sponsored RFP process to ensure transparency
  • Biomass- with regard to wood resources, the Commission allows use of wood and paper manufacturing waste, urban wood and tree residues, forestry residues, forest management or other land clearing.  However, forest resources must be from "sustainable forest management operations."
  • Clean Coal- the Commission rejected criticism that the current rule would provide credit to technology that is "designed" to reduce CO2 irregardless of whether the reductions are actually achieved.
  • Co-firing- will qualify as a renewable energy resource as determined by the proportion of energy input from the renewable energy resource.
  • "Delivered into this State"- Commission will still require a power flow study and/or deliverability study to show power in the PJM or MISO transmission systems are deliverable into the state.
  • Distributed Generation- renewable energy credits (RECs) generated from distributed energy sources belong to the owner of the equipment
  • "Double Counting"- cannot use one project to meet both the energy efficiency benchmarks and the AEPS
  • "Unbundling"-  Cannot unbundle other positive environmental attributes associated with creation of a REC and sell those attributes separately.  The classic example is you cannot sell the climate change CO2 reductions as well as RECs from one project.  You will have to choose with credits are more valuable
  • Energy Storage- by itself cannot be considered a renewable energy resource
  • Cost Cap- rejected utilities argument that the advanced energy and renewable energy cost caps be aggregated as one 3% cap. Also, rejected claim that the 3% increase is measured by isolating cost of generating the renewable or alternative energy.  Rather, the cost cap is triggered only if overall cost of supplying all forms of electricity rises more than 3% in order to meet the alternative energy or renewable energy benchmarks.  This ruling makes it far more difficult for Utilities to trigger the cost cap provisions.
  • "Catch-up Provision- Commission effectively drops the requirement that future year benchmark compliance requirements be increased by the amount of undercompliance of the previous year due to the 3% cost cap

Greenhouse Gas Reporting Requirements

The Commission rejected concerns raised by Utilities regarding the mandate in the rules to become participating members in the Climate Registry.  The Commission noted that  S.B. 221 requires reporting and tracking of CO2 emissions must be performed.

Green New Deal? Green Trinkets and Empty Packages in the Stimulus Bill

I have been following discussion regarding the green elements of the Presidents Stimulus Package, known as the American Recovery and Reinvestment Act of 2009.  There is certainly a lot directed toward environmentally related projects, especially renewable energy development.  Leading some to call these provisions the "Green New Deal." 

What is the real story behind some of the spending that has been reported?  You certainly can find information all across the web and on government sites that simply lists the amount of money in the bill and which program it has been directed.  However, detail about what the money will really be used for can be hard to find.

Bottom line, some provisions are better than others.  For instance, much of the money directed toward U.S. EPA will pay for existing projects.  This includes prior grant applications, clean ups already under contract or projects previously selected for funding.  So, for many of you expecting great new opportunities for EPA related projects, I don't think the bill offers you that much. (with the exception of diesel engine related grants- see below).

The renewable energy side of the equation is a totally different story.  There are continued and new tax incentives as well as new grant opportunities.  There is a lot in the bill and it will literally pay to stay on top of what is available. 

I.  EPA Side- the American Recovery and Reinvestment Act of 2009 specifically includes $7.22 billion for projects and programs administered by EPA

Below is a description of the major areas of funding as well as an analysis of whether this funding presents new opportunities. EPA has established a web site page with helpful links that discuss the opportunities in the Stimulus Bill relative to the money designated for EPA.

Brownfields:  There is over $100 million directed to U.S. EPA's brownfield redevelopment program.  I was intrigued regarding this new slug of money for it could present another great opportunity for clients outside of the Clean Ohio program.  However, after asking for more details from U.S. EPA, I learned that this money is basically already spent.  The U.S. EPA intends to use it for projects that requested funding back in 2008 but were not funded due to an over abundance of proposals.  While its good news more projects are getting funded, I believe U.S. EPA could have even received better project proposals if they would have allowed for new applications. 

Diesel Emission Retrofits Act (DERA):  The Stimulus directed over $300 million in new money to fund the DERA program. DERA is the federal grant program that pays for diesel engine retrofits, repowers and replacements.  Last years allocation was only $50 million for the entire country.  So the Stimulus does provide real, new money for this program.  U.S. EPA intends to spend the money quickly so watch U.S. EPA's website and Recovery.gov to jump in with your project.

Underground Storage Tank (USTs) Cleanups: $200 million was provided to U.S. EPA's Leaking Underground Storage Tanks (LUST) Program, EPA provides resources to states and territories for the oversight, enforcement and cleanup of petroleum releases from underground storage tanks (USTs). EPA estimates that every year 7,570 new releases occur which just adds to the sites that have not yet been completed.  There could be as many as 116,000 sites requiring clean up actions in 2009. However, it appears the funding will be used to help pay for clean ups of abandoned tanks rather than create a new grant program.  Here is additional detail from the from the Convenience Store News regarding the Stimulus package:

Other measures relevant to c-stores include a final approval of $200 million for the Leaking Underground Storage Tank (LUST) Trust Fund, which assists in the cleanup of abandoned gas stations, but will not pay for inspections or to assist state reimbursements programs.

Superfund Cleanups: $600 million was provided to U.S. EPA's superfund program.  However, these funds will be obligated mostly through existing contracts and Interagency Agreements.  In 2009 there could be as many as 20 Superfund sites ready for construction, but not funded due to budget shortfalls. The Recovery funds will begin to address those sites, plus accelerate construction at many of 600 sites where work has been limited in the past by funding constraints.

Clean Water State Revolving Fund and Drinking Water State Revolving Fund: $4 billion for assistance to help communities with water quality and wastewater infrastructure needs and $2 billion for drinking water infrastructure needs. A portion of the funding will be targeted toward green infrastructure, water and energy efficiency and environmentally innovative projects. (guidance on the green infrastructure component)

Ohio EPA has begun soliciting projects for its Drinking Water and Wastewater Revolving Loan Programs.  However, projects must already have been planned and reviewed by Ohio EPA for inclusion on project planning lists.  For instance, drinking water projects must be on the Drinking Water Project Priority List (PPL).

II.  Renewable Energy- the American Recovery and Reinvestment Act of 2009 bill is anticipated to provide around $43 billion for renewable energy in the form of tax breaks and other incentives

The extended entry includes a summary of the renewable energy incentives and investment as assembled by the American Council on Renewable Energy (ACORE). (the link provides you a hard copy of the ACORE document- which does a great job of assembling the relevant information for renewable energy incentives- or see the extended entry for a summary).

Tax Incentives
Three-Year Extension of Production Tax Credit (PTC): The bill provides a three-year extension of the Production Tax Credit (PTC) for electricity derived from wind facilities placed in service by December 31, 2012. The tax credit extends to other renewable energy sources such as geothermal, biomass, hydropower, landfill gas, waste-to-energy and marine facilities placed in service by December 31, 2013.

Investment Tax Credit (ITC) Accessible to All Renewable Energy: The bill provides project
developers of wind, geothermal, biomass and other technologies eligible for the PTC, the option
of instead utilizing the 30% ITC that previously only applied to solar and other clean technology
projects.

Repeals Subsidized Energy Financing Limitation on ITC: The bill would allow businesses
and individuals to qualify for the full amount of the ITC, even if their property is financed with
industrial development bonds or other subsidized energy financing.

Grant Program in Lieu of Tax Credits: The bill allows project developers to apply for a grant
from the Treasury Department in lieu of the ITC. The grant will be equal to 30% of the cost of
eligible projects that start construction in 2009 or 2010. It will be issued within sixty days of the
facility being placed in service or, if later, within sixty days of receiving a grant application.

Increases Credit for Alternative Fuel Pumps: The bill increases the size of credits for
installing alternative fuel pumps at gas stations from 30 to 50% ($30,000 to $50,000) for taxable
years 2009-2010.

Advanced Energy Manufacturing Credits: The bill provides $2 billion worth of energyrelated
manufacturing investment credits at a 30% rate.vi These credits apply to projects creating
or retooling manufacturing facilities to make components used to generate renewable energy,
storage systems for use in electric or hybrid-electric cars, power grid components supporting
addition of renewable sources, and equipment for carbon capture and storage (CCS).

Plug-in Electric Drive Vehicle Credit: The bill increases the tax credit for qualified plug-in
electric drive vehicles for the first 200,000 placed in service. The base amount of the credit is
$2500. Batteries with at least 5 kilowatt hours of capacity have a credit of $2917. The credit is
further increased by $417 for every kilowatt hour in excess of 5 kilowatt hours, but cannot
exceed $5000.viii The credit is allowed to be taken against the alternative minimum tax (AMT).ix
Five Year Carry-Back Provision for Operating Losses of Small Businesses: The bill would
extend the carry-back period for net operating losses (NOL) from two to five years for tax years
2008 and 2009. An eligible NOL includes the NOL for any taxable year ending in 2008 or if the
taxpayer chooses, any taxable year beginning in 2008. An election under this provision may only
be taken for one taxable year.

Extends Bonus Depreciation: The bill extends, through 2009, the temporary increase of bonus
depreciation to 50% that Congress enacted last year. These write offs can be applied to capital
expenditures ranging from $250,000 to a newly increased threshold of $800,000.
 

Direct Spending
Total Direct Spending for Renewable Energy and Energy Efficiency: The bill provides $16.8
billion in direct spending for renewable energy and energy efficiency programs over the next ten
years.

Grid Development: The bill provides $11 billion to modernize the nation's electricity grid with
smart grid technology.xiii This includes $4.5 billion for the DOE Office of Electricity Delivery
and Energy Reliability for activities to modernize the nation's electrical grid, integrate demand response equipment and implement smart grid technologies.xiv In addition, $6.5 billion is
provided for two federal power marketing administrations to assist with financing the
construction, acquisition, and replacement of their transmission systems.xv The bill also
increases federal matching grants for the Smart Grid Investment Program from 20% to 50%.

R&D, Demonstration Projects: The bill provides $2.5 billion for renewable energy and energy
efficiency R&D, demonstration and deployment activities.

Advanced Battery Grants: The bill provides $2 billion for grants for the manufacturing of
advanced batteries and components. This includes the manufacturing of advanced lithium ion
batteries, hybrid electrical systems, component manufacturers, and soft-ware designers.xviii
Defense Energy and Efficiency Programs: The bill provides $300 million to the DOD for the
purpose of research, testing and evaluation of projects to energy generation, transmission and
efficiency.xix The bill provides an additional $100 million for Navy and Marine Corps facilities
to fund energy efficiency and alternative energy projects.

Study of Electric Transmission Congestion: The bill requires the Secretary of Energy to
include a study of the transmission issues facing renewable energy in the pending study of
electric transmission congestion that is due to be issued in August 2009.xxi
Bond and Loan Programs

Clean Energy Renewable Bonds (CREBs): The bill provides $1.6 billion of new clean energy
renewable bonds to finance wind, closed-loop biomass, open-loop biomass, geothermal, small
irrigation, hydropower, landfill gas, marine renewable, and trash combustion facilities.xxii Onethird
of the authorized funding will be available for qualifying projects of state/local/tribal
governments, one-third for public power providers and one-third for electric cooperatives.

Renewable Energy Loan Guarantee Program: The bill provides $6 billion for a temporary
loan guarantee program for renewable energy power generation and transmission projectsxxiv
that begin construction by September 30, 2011.xxv Up to $500 million of the overall $6 billion
can be used for the development of leading edge biofuels that have been demonstrated and have
commercial promise to substantially reduce greenhouse gas emissions.xxvi

PUCO Delay Creates Uncertainty in Ohio's Renewable Energy Market

On August 20, 2008, the Public Utility Commission of Ohio (PUCO) put forth proposed rules governing alternative and renewable energy sources.  The rules main purpose was to govern implementation of the State's new Advanced Energy Portfolio Standard (AEPS) established in Senate Bill 221.  The AEPS is broader version of a renewable portfolio standard (RPS) adopted by other states which mandates a certain percentage of power come from designated renewable energy sources.

The PUCO set a very aggressive public comment period in an attempt to finalize the rules quickly.    The comment period closed on September 26, 2008.  In the short month long comment period, the PUCO received hundreds of pages of divergent comments on the proposed rules. (See my prior post: Issues with proposed rules governing the AEPS)  Since closure of the comment period, the PUCO has failed to developed a second version of the rules. 

Today, a company filed a new letter on the docket which discusses the real world impacts of the delay in finalizing the rules governing the administration of the AEPS in Ohio.  Until the rules are finalized, no one knows what the renewable energy credit (REC) market will look like in Ohio.   A REC is the certificate issued to generators of renewable energy sources.  The certificate can be sold to the utilities to meet their compliance requirements with the AEPS.  REC are seen as a way to encourage renewable energy development.

The problem is that there are so many questions left regarding the construction of the rules, no one can set a reliable price for RECs. S.B. 221 contained a cap on REC prices of $45 per megawatt which certainly is the ceiling on REC prices in Ohio.  However, that leave a huge range in potential prices that is highly dependent on the construction of the rules.

The compliance period for the AEPS in Ohio begins in 2009.  Without an established market projects will get delayed.  This will make it far more difficult for Utilities to comply with the AEPS mandates.  In 2009, Utilities must develop or purchase .25 % of their total generation capacity from renewable energy sources.  While a quarter of a percent may seem tiny, in an energy market as big as Ohio's there will be a significant need for RECs.

In 2008 Ohio generated 13,000 megawatts of power.  A quarter percent means the REC compliance market in 2009 will be around 32,500 megawatts.  This is certainly enough to drive a significant amount of project develop in the State. 

Until the rules are established, the market for RECs will be uncertain.  Without this needed certainty many will delay moving forward with projects.  Of the states with an RPS, Ohio was one of the last states to establish an RPS.  This has meant Ohio has been late to the game in attracting investment and green jobs related to the renewable energy market.  The rules need to be finalized quickly so that Ohio doesn't lag further behind. 

 

Progress in Ohio on Renewable Energy Job Creation...But What Next?

Governor Ted Strickland made his State of the State speech today.  While almost the entire speech was focused on education there were a few interesting nuggets relative to Ohio's progress in developing green jobs. 

"Over the last three years, Ohio has led the nation with 350 new or expanded facility projects in the renewable energy sector.

 Take solar energy, for example. The Toledo area has become an international center for solar research and production, with more than 6,000 people working in the solar industry. First Solar and Xunlight (Zun-light) both launched major expansions just this past year.

 All across the state we’ve seen advanced energy creating opportunities."

Later in the speech Strickland discussed Ohio's efforts to incorporate energy efficiency requirements into new government buildings:

Together we took the school building program that Governor Taft and the legislature created, and we expanded it to fund hundreds of new and renovated school buildings. And our new schools are being built to efficiency standards that will reduce our energy costs for the life of the building. In fact, Ohio has the largest energy efficient school building program in the nation.

The Governor should be commended for creation of a Renewable Energy Portfolio Standard (Ohio calls it an "Advanced Energy Portfolio Standard").  His initial proposal was greatly improved upon in the Legislature.  However, the rules governing implementation of the RPS seem to be currently stuck at PUCO after the Commission was flooded with comments on how to improve them.  Without improvement we stand to lose the momentum gained through passage of the energy legislation.

The Governor also included Advanced Energy Grant Funding in the Job Stimulus package passed recently.  However, the size of the grants ($250,000 for non-coal projects) seem to be too small to attract major new development to the State.

Is Ohio losing the momentum on attracting green jobs and economic development? 

President Obama has made clear his priority is renewable energy, climate change and green jobs.  Given Ohio's importance in the election this seems like a perfect fit to start getting Ohio out of its economic crisis and create the jobs of the future. Unfortunately, the Governor included no new proposals or ideas for how to build on Ohio's recent momentum in his State of the State address. 

Many states recognize the huge changes that are coming as a result of climate change and energy.  Unfortunately, Ohio lags these other states in developing and attracting the talent to truly lead in these areas.  As purely anecdotal evidence, when I attend national conferences that discuss these issues I will sometimes be the sole representative from Ohio. Meanwhile the New England States and West Coast dominate these conferences. 

Granted I don't attend every conference in these areas, but Ohio has certainly not lead on renewable energy.  It was the 26th state to pass an RPS.  Ohio has not lead at all on climate change. Its efforts have been focussed on resisting rather than improving climate change proposals

When the major policy changes on climate change and renewable energy are put forward, where do you think the jobs will go? 

 

Local Zoning Can Tie Up Small Solar and Wind Projects in Red Tape

When a former Secretary of State (George Shultz) and a Vice President (Al Gore) can't seem to navigate local ordinances to install solar systems on their own homes, what are the chances for everyone else? 

These are two high profile examples cited in a recent report that discusses streamlining the local approval process for solar and small wind projects-  Taking the Red Tape Out of Green Power.  

After interviewing experts from around the Country regarding various local impediments, the study includes seven principle recommendations:

  1. Remove barriers to photovoltaics (PV) systems from building and zoning codes.
  2. Simplify PV permit application forms and review processes.
  3. Adopt flat permit fees or fee waivers for PV and small wind systems.
  4. Incorporate information about wind energy opportunities into municipal comprehensive planning.
  5. Establish small wind turbines as permitted uses, with appropriate design guidelines, performance standards, and review processes.
  6. Ease permitting processes by establishing statewide interconnection standards and educating building and electrical inspectors about proper installation procedures for distributed renewable energy systems.
  7. Adopt legislation at the state level mandating consistent and appropriate permitting requirements for distributed renewable energy systems.

A review of recent articles from around the Ohio shows zoning ordinances pertaining to solar and wind projects have become a hot topic.  Local governments would be wise to examine the study to determine ways to draft ordinances and administer local permit processes to encourage development of renewable energy projects. (See Dispatch:  "To avoid fights, set rules for windmills now")

Granville- debate over allowing solar panels in a historic district.

Morrow CountyEstablished zoning ordinances governing utility scale wind projects, but local governments ignore standards for small scale wind project. 

Hamilton County Planning and Zoning Officials- Consider an array of zoning regulations including restrictions on height, noise and placement for energy-generating windmills, solar panels and outdoor furnaces. Example regulations:

  • Windmills may not exceed 100 feet in height, cannot be in front or side yards, and their noise may not exceed 62 decibels between 10 p.m. and 7 a.m. (roughly the volume of a conversation).
  • Solar panels on roofs may not be taller than the highest point of the roof. Detached solar panels may not exceed 14.5 feet.

Clermont County- Windmills and outdoor furnaces are lumped into the "accessories" category of the zoning code which means there is a 14-foot height limit without a permit.

City of Columbus-  According to an article appearing in Ohio Planner's News (November/December 2006 Issue) discussed some Ohio zoning code application to solar and small wind turbine projects.

The City of Columbus staff recommends that the request for a solar installation be preceded by “preliminary zoning clearance review,” which is an official way of saying, “bring in your request and a map of the property.” According to the plans examiner, a solar installation would probably be handled under local code enforcement by your contractor (under the engineered systems section) and comply with the National Electric Code regulations per Article 690 Solar Photovoltaic Systems and Chapter 14 of the Ohio Mechanical Code.
 

The City of Columbus also states that, “A wind tower as a principal use on residentially zoned property does require a use variance (Council variance) because said use is not permitted in many districts. However, a wind tower as an accessory use to a principal dwelling may be permitted but most certainly is subject to specific development standards…” Notice the distinction between “principal use” (the only use for the property) and “accessory use” (a use that fulfills a need for the house) and the ability to avoid a variance. The distinction is critical for easy success in the hearing process.

For additional Resources:

Wind:  The American Wind Energy Association (AWEA) has a web site that goes state by state discussing various aspects of small wind projects.  The AWEA also has put together various resources to assist in permitting small wind projects as well as local policies to encourage their development.

Solar:  GE has a list of frequently asked questions about residential solar projects.  However, there is also plenty of information provided at the state level regarding residential solar project.  For example, the Ohio Department of Development also has made available resources for Ohioans interested in installing solar panels on their home, including the Ohio Consumer Guide to Buying a Solar Electric System.

See http://www.green-energy-efficient-homes.com/green-electricity.html for more information on green energy options for your home.

 

 

(Photo:  Great Valley Center Image Bank/everystockphoto.com)

 

 

Ohio Job Stimulus Package- Advanced Energy Grants and Loans Available

On Friday, November 7th, the Ohio Air Quality Development Authority (OAQDA) held a bidders conference to launch the Advanced Energy/Job Stimulus Program.  The Job Stimulus package set aside $150 million (over three years) to increase the development, production and use of advanced energy technologies in the state.

Those interested can begin filing applications for either grants or loans through the web portal on OAQDA's web page.  Unlike other competitive programs decisions will be made on a rolling basis, there is no deadline for filing applications.  However, $150 million is not a lot of funding for the types of projects involved, therefore it is likely available funds will dissipate quickly. 

The program has two separate pots of money:

  • $66 million for clean coal technology projects administered through OAQDA’s Ohio Coal Development Office (OCDO).  Grants can be for up to $5 million for each project  The funding set aside for these projects is similar to other funding opportunities that have been provided by the OCDO.  Proposals will be reviewed by staff, outside reviewers and the Technical Advisory Committee and approved by OAQDA;
  • $84 million for renewable energy and energy efficiency projects. Grants will be awarded in amounts from $50,000 to $250,000.  Loans will be $1 million to $2 million.  Funding will be in three $28 million annual appropriations administered by OAQDA. Projects will be reviewed by staff and outside reviewers, the Development Finance Advisory Council, approved by OAQDA.  Before funding can be awarded Legislative approval is necessary through the Controlling Board.
     

Some of the tips provided to bidders during the conference include:

  1. "Tipping Point"-  Explain why a grant award or loan would be the tipping point in the project.  Would it help get the project through a difficult time?  Would funding allow some type of breakthrough? Would it lead to a possible major expansion in Ohio?
  2. Jobs, Jobs, Jobs-  The main point of the funding is to stimulate job growth in the Ohio.  Therefore, you must be prepared to demonstrate that the project will generate jobs immediately.  New jobs will be favored over retained jobs.  Better if the are considered "foundational jobs"- meaning the project will lead to more jobs in the future.  Also, want to see better paying jobs.  
  3. Leverage- The State wants to see that a grant award will other funding in the project.  Private funding is favored over other public financing.  The higher the leverage the better the application will be viewed. 

Applications can be made through the web portal.  To start the process applicants must only fill out a "letter of intent" which requires only minimal information.  OAQDA said at the bidders conference it is there goal to weed out unfundable projects early in the process. 

One other note, if you are going to pursue a coal grant, be advised that similiar with other funding through the OCDO, you will be required to sign a royalty/payment agreement.  OCDO is required by statute to seek a recovery for investing in research and development projects.  While I understand it is in the statute,  this requirement discourages businesses looking for funding that will accelerate commercial deployment of a proven technology. 

 (Photo: Great Valley Center Image Bank/everystockphoto.com)

Obama's Environmental Agenda Collides with the Economy

Have you ever heard of the irresistible force paradox?  What would happen if an irresistible force met an in-movable object?  I think this paradox may describe what will happen when the Obama Administration's environmental agenda meets the reality of the economy. 

Remember a few months back when oil peaked around $140 a barrel.  Of course you do...But do you also remember the momentum that the green movement due to the reality of limited resources and escalating energy prices.  Everything looks possible- a shift to renewable energy, energy conversation, higher gas mileage vehicles, and climate change legislation.

Now, only a few months later and oil is around $60-70 a barrel (I just filled up my gas tank for $1.90 per gallon)  We saw an economic meltdown the likes that has not been seen since the Great Depression.  How did this effect the momentum (the irresistible force) behind the Green Movement.  Let's take a sampling of recent headlines....

  • Many Solar Energy Firms Likely to Fold During Economic Crisis- Analysts say nearly three-fourths of all solar energy companies could go out of business due to extremely tight credit, intense competition to produce solar panels, and falling prices.
  • Local Government's Reconsider Costs of Green Building Mandates- The poor economy means tight budgets for most local governments.  This has forced local governments to begin questioning the costs associated with mandating LEED certification on new construction.
  • T. Boone Pickens Places Wind Farm On Hold-  The dramatic drop in the cost of natural gas and the global credit crunch makes wind less competitive, according to Pickens.  As a result, he is putting on hold or scrapping plans for his massive 4,000 megawatt wind farm in Texas. (comment:  I guess Mr. Pickens is still a business man and not just motivated by getting us off of foreign oil)
  • Renewable Energy Blues-  As reported in the Wall Street Journal, "when fossil fuel prices were soaring, things like offshore wind farms suddenly looked appealing, and guaranteed electricity prices from wind farms looked like a bargain. But with fossil fuel prices headed south and capital getting more expensive, renewables are losing some of their glow." (see also "Clean Energy Meltdown, Now GE is Bailing")
  • Will EU Member States Use Economic Meltdown to Avoid Climate Targets-  When the economic crisis spread to Europe, the EU's ambitious goals on Climate Change were second guessed.  The current EU target of a 20% reduction in emissions by 2020 is set to automatically increase to 30%. Recently, Poland, Greece, Hungary, Slovakia, Romania and Bulgaria have opposed an increase in reduction targets.   Other EU countries are also second guessing their commitments. As reported in the Wall Street Journal, Germany’s foreign minister said recently: “This crisis changes priorities.” 

Exit polling from yesterday's election indicated that around 60% of the people who cast their vote made their decision based on issues associated with the economy.  After a quick search I could not even find where the environment ranked as a motivating issue.  I'm willing to bet it was a non-issue for the majority of the voters.

When the Obama Administration takes office and develops their environmental agenda it is likely to include: strong climate change legislation, renewable energy mandates, and policies that will not favor fossil fuels.  However, that Agenda will meet an immovable object that will likely cloud Obama's entire first term...the economy.  What emerges from the collision is anyone's guess.

(Photo: Flickr Transplanted Mountineer)

Ohio Trying to Sieze Green Jobs to Jump Start its Economy

A report released today by the U.S. Conference of Mayors estimates that job growth associated with green industries could be the fastest growing job market over the next few decades.  As reported in Time Magazine:

A major shift to renewable energy and efficiency is expected to produce 4.2 million new environmentally friendly "green" jobs over the next three decades, according to a study commissioned by the nation's mayors.

By 2038, another 4.2 million green jobs are expected to be added, accounting for 10 percent of new job growth over the next 30 years, according to the report by Global Insight, Inc.

"It could be the fastest growing segment of the United States economy over the next several decades and dramatically increase its share of total employment," said the report, obtained Wednesday by The Associated Press.

Ohio, with its long history of manufacturing and its heavy reliance on fossil fuels, has been slower to embrace green ideas as means of turning its economic fortunes around.   However, the drumbeat of bad economic news has more Ohio leaders looking for new opportunities to jump start Ohio's economy.  From 2000 to 2007, Ohio lost 209,000 jobs.  During that same period Cleveland lost 63,000 jobs based upon a report compiled using Department of Labor statistics

The single largest development was passage of legislation (S.B. 221) this summer that created a renewable portfolio standard, advanced energy portfolio standard and energy efficiency requirements. However, a review of recent local news stories and events shows the Buckeye State is beginning to focus on developing a green economy:

  • Cincinnati Wants to Lead Green Roof Movement in U.S.- The City Council on Wednesday became the first in Ohio with a plan to channel grants and loans to residents and businesses to replace tar and shingles with vegetation.
  • Columbus Summit on Sustainability and the Environment-  MORPC, the Columbus metropolitan planning organization, held a successful multi-day summit at the Columbus Convention Center.  Over 500 individuals attended that event that had a wide range of presentations relating to sustainability. 
  • Eight Major Green Projects in Northeast Ohio- They include attracting fish to the Cuyahoga River shipping channel through installation of plants along the bulkhead, deconstruction of abandoned homes to recycle the materials, local food from urban community gardens, etc.
  • Wind Turbines on Lake Erie- Cuyahoga County officials this week rolled out the first three reports from their $1 million study of a grand vision -- erecting two to 10 wind turbines in the lake off Cleveland's shore.  Constructing off-shore wind power in fresh water is seen as a possible economic driver in Northeast Ohio.
  • Ohio State University Participates in Solar Decathlon- 20 university teams will participate in the 2009 Solar Decathlon. The teams, chosen from the United States, Canada, and Europe, will each receive $100,000 from DOE to design, build, and operate energy efficient, solar-powered homes.  The Solar Decathlon is an international, biennial competition that challenges university teams to design and build energy efficient solar-powered homes.
  • Ohio Has 28 Solar Sites as Part of National Solar Tour-  Green Energy Ohio organized the tours in Ohio as part of the American Solar Energy Society.  The tours are from October 3-5.
  • Ohio Gov. Recognizes U. of Toledo Solar Power Leadership-

 

Renewable Energy World Leader....China

Surprised? I was after hearing the old reports of China building a new coal plant once a week.  China has long been the favorite scapegoat for those arguing the United States shouldn't address climate change without their participation.  But it appears China may be changing direction. 

As reported in the Guardian, the Climate Group released a study that concludes China is the world's leading producer of energy from renewable sources

 Here are some of the fun (and surprising) facts reported in the Study:

  1. China leads the world in installed renewable capacity at 152 gigawatts
  2. Approximately 820 solar PV were produced in China in 2007, second only to Japan
  3. It is the leading world exporter of wind turbines
  4. China investments in renewable energy as a percentage of GDP are almost equal to Germany's, the world leader
  5. China's energy efficiency standards for cars is 40% higher than in the United States
  6. China is the third largest producer of ethanol

Clearly, the goal of the Climate Group was to produce a study to combat the arguments raised in the United States that support inaction on climate change without India or China.  However, one statistic highlighted in the Study deserves some additional discussion. 

In 2007, China emitted 5.1 tons of CO2 per capita compared to 19.4 tons for the United States.  While the United States per capita number justifies action, so does the potential for China to grow its emissions. 

China has 1.2 billion people compared to the United States 300 million.  China has already overtaken the US in total emissions with 1/3 of the emissions per capita because it has four times more people.  Without mandatory caps, what will China's emissions be once 1/2 their population drives cars, purchases more of latest electronics, and have more income to travel?