Energy Analysis Newsletter — March 2010
Energy analysis at the National Renewable Energy Laboratory (NREL) encompasses a broad range of energy analysis in support of the U.S. Department of Energy's (DOE) Office of Energy Efficiency and Renewable Energy (EERE), NREL programs and initiatives, and the analysis community. Here is the latest news on energy analysis activities at NREL:
March Seminar: Butanol - Next-Generation Biofuel Views
On March 11, NREL's Strategic Energy Analysis Center (SEAC) and DOE/EERE's Office of Planning, Budget, and Analysis (PBA) will present a seminar (in Golden, Colorado) highlighting butanol and its characteristics. Butanol is often touted as among the best next-generation biofuels, with particularly strong support among the oil companies. Used as a solvent and precursor to everything from cosmetics to paint, this higher-order alcohol may have significant benefits over ethanol. Advantages as a fuel include higher energy content and greater compatibility with downstream infrastructure. In addition, the Environmental Protection Agency (EPA) has already approved up to 12% butanol-gasoline blends, and proponents claim 100% butanol can be combusted without engine modification. This could greatly benefit the approximately 300 million cars that make up America's installed base. In this seminar, Sam Nejame (Promotum) will discuss how butanol could become a "plug-and-play" replacement for gasoline. He'll also discuss the advances that may finally make renewable manufacture of butanol economically viable. The seminar will also highlight significant players such as Butamax (a BP/DuPont joint venture), trends, and issues that need to be overcome.
For more information on the seminar series — including log-in and call-in information for remote access — visit the Web site.
TAP Webinar: U.S. Community Wind Market
The Technical Assistance Project (TAP) for state and local officials will sponsor a Web seminar on April 28 that will look at the market for midsize wind turbines. The presentation, which will be from 3 to 4:15 p.m. (ET), is titled "Midsize Wind Turbines for the U.S. Community Wind Market." State and local officials can learn about DOE efforts to create and manufacture domestic midsized wind turbines—with rated capacities between 100 kilowatts (kW) and 1 megawatt (MW)—for the community wind market in the United States. At this Webinar, NREL's Trudy Forsyth will outline the DOE Midsize Wind Turbine Development Project, explain how this turbine size seems to fit the budgets of most existing community wind projects, and give some examples of community wind projects.
You can register to attend the seminar, read about the presenter, and find links to background materials and reports on the TAP Section of the U.S. Department of Energy (DOE) Weatherization and Intergovernmental Program Web site.
Publications and Web Sites
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Storage and Renewable Electricity Generation
NREL's Paul Denholm, Erik Ela, Brendan Kirby, and Michael Milligan recently published the report "The Role of Energy Storage with Renewable Electricity Generation" (PDF 1.2 MB).
Renewable energy sources, such as wind and solar, have vast potential to reduce dependence on fossil fuels and greenhouse gas emissions in the electric sector. Climate change concerns, state initiatives including renewable portfolio standards, and consumer efforts are resulting in increased deployments of both technologies. Both solar photovoltaics (PV) and wind energy have variable and uncertain (sometimes referred to as "intermittent") output, which are unlike the dispatchable sources used for the majority of electricity generation in the United States. The variability of these sources has led to concerns regarding the reliability of an electric grid that derives a large fraction of its energy from these sources as well as the cost of reliably integrating large amounts of variable generation into the electric grid. In this report, we explore the role of energy storage in the electricity grid, focusing on the effects of large-scale deployment of variable renewable sources (primarily wind and solar energy).
Community Greening Policy Planning Guide
NREL analyst Elizabeth Doris recently published "Community Greening: How To Develop A Strategic Energy Plan" (PDF 789 KB).
This guide provides an overview of strategic electricity planning for communities, using a step-by-step approach to develop a strategic energy plan. This method has a high chance of success, because it is based on stakeholder buy-in and political commitment. Not all communities will need to follow all steps, but the process is designed to incorporate all parties, maximize solution-based thinking, and develop a plan that can be carried out by community leaders. There are many specific programs and consultancies available to assist in various parts of the planning process.
Policies and RE Manufacturing
SEAC analysts Eric Lantz, Frank Oteri, Suzanne Tegen, and Elizabeth Doris recently published the report "State Clean Energy Policies Analysis (SCEPA): State Policy and the Pursuit of Renewable Energy Manufacturing" (PDF 655 KB).
Future manufacturing of renewable energy equipment in the United States provides economic development opportunities for state and local communities. However, demand for the equipment is finite, and opportunities are limited. U.S. demand is estimated to drive total annual investments in renewable energy equipment to $14-$20 billion by 2030. Evidence from leading states in renewable energy manufacturing suggests that economic development strategies that target renewable energy sector needs by adapting existing policies attract renewable energy manufacturing more than strategies that create new policies. This report discusses how state marketing strategies for acquiring renewable energy manufacturers are likely best served by an approach that: (1) is multi-faceted and long-term, (2) fits within existing broad-based economic development strategies, (3) includes specific components such as support for renewable energy markets and low barriers to renewable energy deployment, and (4) involves increased differentiation by leveraging existing assets when applicable.
Insuring Solar Photovoltaics
NREL analysts Bethany Speer, Michael Mendelsohn, and Karlynn Cory published the report "Insuring Solar Photovoltaics: Challenges and Possible Solutions" (PDF 1.1 MB).
Insuring solar photovoltaic (PV) systems poses certain challenges. Insurance premiums, which can represent a significant part of overall annual operating costs for PV developers, can affect market competition. The market for certain types of insurance products is limited. Historical loss data is lacking in the United States, and test data for the long-term viability of PV products under real-life conditions is limited. Insurers' knowledge about PV systems and the PV industry is uneven even as the industry introduces innovative contractual structures and business models. Interviews conducted for this report with PV project developers, insurance brokers, and underwriters suggest government actions aimed at better testing, data collection, and communication could facilitate the development of a market for PV insurance products. This report identifies actions by governments, national laboratories, and other stakeholders that could accelerate the development of insurance products in support of PV systems, including increased technology understanding in the insurance industry, increased access to PV historical loss data, and advanced industry standards, among others.
Third-Party Power Purchase Agreements
Katharine Kollins of Duke University worked with NREL analysts Bethany Speer and Karlynn Cory to publish the report "Solar PV Project Financing: Regulatory and Legislative Challenges for Third-Party PPA System Owners" (PDF 1.5 MB).
Residential and commercial end users of electricity who want to generate electricity using on-site solar photovoltaic (PV) systems face challenging initial and O&M costs. The third-party ownership power purchase agreement (PPA) finance model addresses these and other challenges. It allows developers to build and own PV systems on customers' properties and sell power back to customers. However, third-party electricity sales commonly face regulatory and legislative challenges. The definitions of electric utilities and electric services may compel third-party owners of solar PV systems to be regulated by state regulators — an uncertainty that these developers will not be willing to take. Third-party owners face an additional challenge if they may not net meter, a practice that provides significant financial incentive to owning solar PV systems. Finally, municipalities and cooperatives in states with deregulated electric generation may worry about the regulatory implications of allowing an entity to sell electricity within their service territories. This report summarizes these challenges, when they occur, and how they have been addressed in five states. This paper also presents alternatives to the third-party ownership PPA finance model, including solar leases, contractual intermediaries, and standardized contract language, among others.
Analysts Meet With Stakeholders
SEAC analyst Gail Mosey is leading a project between NREL and the U.S. Environmental Protection Agency (EPA) to evaluate the feasibility of developing renewable energy production on Superfund, brownfields, and former landfill or mining sites. Superfund sites are the most complex, uncontrolled, or abandoned hazardous waste sites identified by EPA for cleanup due to the risk they pose to human health or the environment. Brownfields are properties at which expansion, redevelopment, or reuse may be complicated by the presence of contaminants. EPA is investing more than $650,000 for the project that pairs EPA's expertise on contaminated sites with the renewable energy expertise of NREL. The project is part of the RE-Powering America's Land initiative, which aims to decrease the amount of green space used for development, reduce greenhouse gas emissions, and provide health and economic benefits to local communities, including job creation.
For the latest updates on information regarding energy analysis, visit the Energy Analysis Web site.