Energy Department Announces $30.5 Billion Loan Guarantee Solicitation

Posted on June 30, 2008 by Dennis Pfaff

The U.S. Department of Energy Monday formally put in motion a solicitation process that will provide $30.5 billion in federal loan guarantees for a variety of projects employing advanced energy technologies to reduce air pollution and greenhouse gas emissions.

In a statement, energy officials announced three solicitations that fall into the broad categories of energy efficiency, renewable energy and advanced transmission and distribution, which will qualify for a total of up to $10 billion; nuclear power facilities, for a maximum of $18.5 billion; and advanced nuclear facilities for the front end of the nuclear fuel cycle, an element getting up to $2 billion in guarantees.

Ellen S. Friedman (pictured), a New York energy partner for Thelen Reid Brown Raysman & Steiner, who has recently written about the program, said Monday that the department's announcement and the materials it made available have formally started the clock by setting forth a number of critical deadlines. Those include a Sept. 29 due date for "Part I" applications relating to nuclear facilities. Friedman said the department has recognized that because of the scope and complexity of nuclear power projects, applicants may be unable to submit a fully complete "Part II" application by the December 19, 2008, deadline. Applicants therefore are required by the solicitation to update "substantially complete" Part II applications every 90 days.

In addition, Friedman said:

"This solicitation gets into much more detail and has much more specificity about how they are going to evaluate the applications they receive."

She noted, for instance, that officials have included charts showing what weight will be given to each of the various factors it will use in weighing the projects' qualifications. In each case, creditworthiness of the project is defined as the most significant factor in the department's evaluation matrix.

In the department's announcement, Jeffrey Kupfer, acting deputy secretary of energy, outlined the program's goals:

“Loan guarantees from the department will enable project developers to bridge the financing gap between pilot and demonstration projects to full commercially viable projects that employ new or significantly improved energy technologies. Projects supported by loan guarantees will help meet President Bush’s goal of diversifying our nation's energy mix with energy projects that will improve the environment while increasing energy efficiency.” 

The department said the process was organized into four phases, including application, project evaluation, conditional approval and closing of a loan guarantee agreement. Criteria for awarding the guarantees will focus on the project's ability to "avoid, reduce or sequester" air pollutants or greenhouse emissions; the speed with which the technologies can go into commercial service; the prospects that the guaranteed debt will be repaid and the potential for the long-term success of the technologies in the marketplace.

Friedman cautioned that prospective applicants would have their work cut out for them:

"The department's application requirements force potential applicants to think through and present a complete project finance proposal which must comply in all respects with DOE guidance."

This isn't the last solicitation this year. The department said that later in the summer it expects to issue a similar call for advanced fossil energy projects hoping to qualify for up to $8 billion in guarantees.

    
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Curbing Greenhouse Emissions Good for the Planet, Good for People, Enviros Say

Posted on June 24, 2008 by Dennis Pfaff

As California officials get ready to formally unveil a host of measures to curb greenhouse emissions, environmentalists are working to support the effort, promoting reports showing all the good the effort would do, and demonstrating public support.

The Natural Resources Defense Council on Tuesday weighed in with a study the group said showed that many of the strategies for reducing global warming would also combat other forms of air pollution, saving lives and reducing illnesses. That document followed by just a day the release of a new poll suggesting that people support energy policies to reduce the threat of climate change, even if prices go up.

All of this comes just before the California Air Resources Board is scheduled to hear recommendations from government officials on what the state should do to comply with the state's Global Warming Solutions Act, better known as AB 32. The 2006 law requires the state to reduce its emissions of heat-trapping gases to 1990 levels by 2020, about a 30 percent cut compared to what would otherwise happen. The state has also taken other steps, such as a governor's executive order that requires emissions to be reduced to 80 percent below 1990 levels by 2050 and legislation and rules to reduce emissions from cars and trucks.

The board on Thursday is to get its first overall look at the proposed blueprint or "scoping plan" for implementing the law. Everything from the types of light bulbs people use to the cost of electricity could be affected. 

The NRDC report, which was co-produced by Redefining Progress, said the measures being considered could prevent as many as 700 premature deaths and 18,000 cases of asthma and respiratory illnesses. It calculated a savings of up to $5 billion in health costs for year 2020 alone.

 

According to the group's analysis, the measures producing the biggest impact on global warming, including cleaner cars and trucks, energy efficiency, renewable energy and so-called smart growth policies, also help generate big cuts in pollutants such as nitrogen oxides, which contribute to smog, and fine particles that cause a variety of health problems. Preventing global warming could also produce its own health-related benefits, such as reducing mosquito and other insect-borne illnesses, deaths from extreme heat and allergies.

The authors of the report recommended that the health benefits and cost savings should be incorporated into the calculations of what it will cost to implement the emissions-cutting plans.

Those costs didn't appear to daunt respondents to the poll, which was commissioned by Next 10, a nonprofit research organization and conducted by Fairbank, Maslin, Maulin & Associates, a California polling firm. According to information released by Next 10, including a memo from the polling company and a slide presentation, 58 percent of all voters said they supported implementing the law even after they were warned it could lead to “increased costs for gas, electricity and some consumer goods.” Support was strongest among Democrats and independents, the poll found, but dropped to 37 percent for Republicans.

The results, which also indicated a large majority believes that global warming is a serious threat to the economy and quality of life, were seized upon by the Environmental Defense Fund, which issued a statement warning that politicians who support delaying the law risks voter wrath. Some Republicans in Sacramento, according to a recent report in the San Francisco Chronicle, have been warning about the economic and budget consequences of strict regulations.

And there's some support for the notion that high energy prices could in fact weaken support for environmental goals. Take, for instance, the recent Rasmussen poll showing that a big majority favors new drilling off the nation's shorelines, a cause recently taken up by presumptive Republican presidential candidate Sen. John McCain. Many of the respondents to the poll said they believed the offshore oil would reduce gasoline prices. Such drilling, of course, has been anathema to green groups for a long time. 

Meanwhile, there's also the matter of just what lifestyle and other changes, as well as pocketbook impacts, could be in the offing for a California where carbon and other greenhouse emissions are constrained. As Climate Law Update has reported, some of the options being considered by regulators could reach far into the state's stereotypical lifestyle.   

Just the other day, one of the key officials involved in the AB 32 planning effort reiterated those proposals (plus supplied summaries of comments already received) in a letter to Mary Nichols, the air board's chairwoman. Public comments on the plan, which is due to become final later this year, will be accepted until August 1.

(Photo: Smoggy Los Angeles from the Griffith Observatory, Wikipedia)
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In Other News (June 23)

Posted on June 23, 2008 by Dennis Pfaff
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Energy Efficiency, Green Building Standards, Get International Notice

Posted on June 11, 2008 by Dennis Pfaff

Interest in energy efficiency, including green buildings, seems to be on the increase as other efforts to combat climate change run up against opposition targeted primarily at  their costs.

By contrast, a recently released study from a pro-green building and appliance group, the American Council for an Energy Efficient Economy, suggests that boosting energy efficiency would actually result in a net benefit for the American economy. Yet, the report -- which itself is a review of dozens of other studies -- concluded that energy efficiency is often left out of the discussion:

"Despite very strong evidence of the many cost-effective investments that could enhance further gains in energy productivity, the national energy and climate policy debates too often overlook the energy efficiency resource. The result is an ongoing series of national modeling assessments that tend to overstate the cost of needed changes in the nation's energy and climate change policies." 

The document comes out at about the same time that energy officials from the world's most powerful countries agreed to embark on a new high-level approach to energy efficiency by establishing the International Partnership for Energy Efficiency. The declaration adopted by the G8group of nations, plus China, India and South Korea, called improving energy efficiency "one of the quickest, greenest, and most cost-effective way to address energy security, climate change, and ensuring economic growth."

There's evidence that just in the building sector alone there's much work to be done. A recent analysis by the federal government's Energy Information Administration, showed that the residential and commercial sectors accounted for the largest increases in carbon dioxide emissions, among end-users of energy. Industrial and transportation, by contrast, have flattened or actually declined slightly.

Some areas are taking the challenge seriously. The city of Los Angeles a few weeks ago enacted a green building ordinance that the city called "the most far reaching plan" of its type by any big city in the nation. The ordinance, which the city hopes will reduce carbon emissions by 80,000 tons by 2012, among other things requires all new projects larger than 50 units or 50,000 square feet meet the "Leadership in Energy and Environmental Design" standards developed by the U.S. Green Building Council.

That group, by the way,  estimates that residential and commercial buildings account for 39 percent of United States carbon dioxide emissions, more than any other sector. 

                 

All of this comes as countries struggle with trying to reduce their greenhouse gas emissions in the face of economic pressures such as skyrocketing fuel prices. Opponents of the Lieberman-Warner climate change bill, which would impose a cap-and-trade system to reduce emissions seized on the potential costs of the measure (although backers say it could cost more to do nothing) in their successful attempt to derail the legislation in the U.S. Senate the other day.

However, the private energy efficiency group's report concluded that a 20 percent to 30 percent efficiency gain in the United States economy by 2030 could produce a net increase of between 500,000 to 1.5 million jobs. Based on the studies, policies leading to greater efficiency would likely increase the nation's gross domestic product by 0.1 percent by that year, the report said.

It's not the first time that the organization, which is backed by a large number of public and private entities, including utilities and state and federal agencies, has tried to raise the profile of energy efficiency programs. Last month, it issued another report suggesting that the country could cost-effectively reduce energy consumption by up to 30 percent during the next quarter-century. In a statement accompanying the report, the organization said the "hidden U.S. energy efficiency boom," had already slashed energy consumption to half of what it was in 1970, as measured against dollars of economic output.

In its announcement of the new international energy efficiency effort, the U.S. Department of Energy said the partnership would serve as "a high-level forum for facilitating a broad range of actions." The actual declaration also promoted the idea that participants would exchange information in a number of areas, including building standards and codes, and methods for energy measurement, auditing and verification. It also would have as a goal developing public-private partnerships for improving energy efficiency and "enabling" joint research and development into energy efficient technologies.

 (Photo: U.S. Environmental Protection Agency Kansas City Science and Technology Center, LEED-certified building; Wikipedia) 
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Department of Energy and EPRI Team Up to Study Efficiency

Posted on March 11, 2008 by Dennis Pfaff

The U.S. Department of Energy recently announced it had worked out a cooperative arrangement with the Electric Power Research Institute, a nonprofit whose research is supported by electric utilities, to look at ways to promote energy efficiency.

One primary goal of the agreement was to promote widespread adoption of  "demand response" programs to curtail energy use during peak periods. Officials also drew connections between the agreement and efforts to deal with climate change.   

A memorandum of understanding between EPRI and the energy department called on them to coordinate efforts to support research related to demand response and energy efficiency in buildings and on other projects, such as developing ways for utilities to account for carbon dioxide reductions. The document notes that the private institute has launched an initiative to gain the support of up to 50 utilities "to enable expansion of programs, activities and technologies to encourage greater energy efficiency and widespread adoption of electric demand response."

In a DOE statement announcing the initiative, EPRI Senior Vice President Michael W. Howard said the pact, which the memorandum described as non-binding, would "facilitate the development of energy efficiency technologies needed to help slow, stop and ultimately reverse the nation's carbon footprint."

(Department of Energy photo showing March 6 signing ceremony: L-R: Kevin Kolevar, assistant secretary for electricity delivery and energy reliability, DOE; Alexander Karsner, assistant secretary for energy efficiency and renewable energy, DOE; Michael Howard, senior vice president of research and development, EPRI)

  

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New Mexico Governor Signs Energy Efficiency Law

Posted on March 6, 2008 by Dennis Pfaff

New Mexico Gov. Bill Richardson, himself a former secretary of energy, has signed legislation in that state requiring electric and natural gas utilities to beef up their efforts to improve energy efficiency.  Under HB 305, by 2014, utilities must achieve a minimum of 5 percent energy efficiency savings compared to 2005, and 10 percent by 2020.

A key provision in the bill requires the state's utility regulators, the New Mexico Regulation Commission, to provide utilities with ways to make a profit from "cost-effective" programs that are "financially more attractive to the utility than supply-side utility resources."

In a statement upon signing the bill, Richardson, who unsuccessfully sought the Democratic presidential nomination this year and who served as Energy Secretary under President Clinton, lauded the measure:

 “This bill is good for the environment and good for New Mexico's energy consumers. We will now guarantee that utilities will provide more energy efficiency to New Mexico consumers. In the long-run, this requirement will be less costly than building and operating new power plants.”

Programs that New Mexico utilities could fund under the program include rebates for appliances and home weatherization assistance. The bill also provides a mechanism for alternate goals to be set if a utility demonstrates it cannot meet the legislation's minimum requirements.   

(Photo: Gov. Bill Richardson, from Wikipedia) 

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