About 11,800 words
We are approaching what’s shaping up to be a global crisis. The supplies of oil and natural gas are dwindling rapidly. What’s left will be of lower quality, harder to extract, and increasingly expensive. The higher cost will be reflected in every facet of our lives, including our utility bills, the price of gasoline, and the goods and services we buy. Meanwhile world population growth spirals upward unabated, creating demand for ever more energy. China, for example, has just come into the automobile age as cars replace bicycles in Beijing.
The general public is not aware of the impending crisis because it’s not well publicized. It’s not happy news. And the ugly reality of the situation is just far enough over the horizon that policymakers can pretend it’s nothing to worry about right now. It probably won’t be a big factor in the next presidential election.
One president told us the truth. In addressing the nation on April 18, 1977, President Jimmy Carter said, “The energy crisis has not yet overwhelmed us, but it will if we do not act quickly. It’s a problem that we will not be able to solve in the next few years, and it’s likely to get progressively worse through the rest of this century. We must not be selfish or timid if we hope to have a decent world for our children and grandchildren. We simply must balance our demand for energy with our rapidly shrinking resources. By acting now we can control our future instead of letting the future control us.”
Carter’s message came just three years after the Arab oil embargo ended. That disruption of our energy supplies shocked the world, caused President Richard Nixon to set the nation on a course of voluntary rationing, and triggered Congressional approval of the Trans-Alaskan oil pipeline. The US production of both oil and natural gas peaked in the early nineteen-seventies and has been falling ever since. Today we’re more than ever dependent on foreign oil.
But the American people are not paying attention. Consumers buy increasingly larger numbers of gas-guzzling SUVs and pickup trucks. Lawmakers refuse to require automakers to produce more fuel-efficient vehicles. We consume more and more energy. We are asleep at the wheel, headed ninety miles an hour down a dead-end street.
In his book The Party’s Over: Oil, War and the Fate of Industrial Societies (New Society Publishers 2003) Richard Heinberg traces the arc of human civilization in terms of energy. He explores each fossil-fuel resource and cites scientific opinion about the supplies we have left and what that portends. He delves into each form of renewable energy and determines the odds that it, either alone or in combination with other renewable resources, might fill the gap. As the book’s title implies, his findings are not good news.
The big question is, “When will global oil extraction peak?” The simple answer is “fairly soon” according to Heinberg. He enumerates the variables and, on the basis of a range of scientific opinion, concludes: “The global peak of extraction for all fossil-fuel liquids is unlikely to occur earlier than 2006, or later than 2015.” Once past that peak, the law of diminishing returns kicks in. Production dwindles. Prices rise. The whole of industrial civilization begins to atrophy, suffering disruptions in food supplies, transportation, communications, and anything else dependent upon energy.
Even some in the oil industry are waking up to reality. In a speech given to oil industry executives at an energy conference in Houston on February 9, 1999, Mike Bowlin, Atlantic Richfield Company’s chief executive officer, said, “We’ve embarked on the beginning of the last days of the Age of Oil. Embrace the future and recognize the growing demand for a wide range of fuels or ignore reality and slowly—but surely—be left behind.” Atlantic Richfield later was bought out by BP, which today is a major player in developing solar energy technology. So is Royal Dutch/Shell. These are the world’s two largest and richest oil companies. They enjoyed combined sales of $358 billion in 2002. If BP and Shell are making significant investments in developing renewable energy products, that ought to tell us something about our future.
The move to increase the use of renewable energy is crucial for other reasons as well. There is growing recognition of the burden imposed by the “external costs” of carbon emissions, which result from generating electricity with coal and natural gas. These are costs to society and the environment that are not accounted for by the producers and consumers of energy and are not included in the market price. External costs include the effects of air pollution on health, buildings, crops, forests, and global warming; smog clean-up efforts; and occupational disease and accidents. The external costs of renewable energy are virtually nil.
Moving away from fossil-fuel generation of power doesn’t necessarily have to cost more. Even without considering external costs, wind energy is already cheaper in Central Texas than power generated by natural gas, the least polluting fossil fuel, said Mike Sloan, president of Virtus Energy Research Associates Inc. Sloan is also president of the Texas Solar Energy Society and executive director of the Texas Wind Coalition.
“It seems like a no-brainer that the more wind we work in and the less natural gas we buy, the customers are doing to save money,” he said. “And we’re taking pollutants out of the air, we’re saving water, and we’re creating more jobs.”
Other factors motivating the increased use of renewable energy include concerns over energy security and dependence on foreign oil that adds substantially to the US trade deficit. Our dependence on foreign oil was underscored as recently as September 24, when OPEC announced its intention to cut production, jolting the stock markets once again.
For all these reasons, our profligate consumption needs to wind down. We need to convert as rapidly as possible to sustainable, renewable forms of energy. Renewable energy produces electrical energy derived from the sun, wind, geothermal, hydroelectric, oceanic waves and tides, and biomass-based waste products such as landfill gas. These alternatives to coal, natural gas, and nuclear power are nonpolluting and virtually unlimited, providing an inexhaustible resource for as long as the sun shines.
The Austin City Council has set us on the right course.
Will Wynn had only been mayor for a week when on June 23 he announced an ambitious goal. He spoke at the Solar Austin Town Hall Meeting, held in conjunction with the National Solar Energy Conference. In a room packed with local proponents, and as part of a panel sprinkled with local and national experts on renewable energy and energy conservation, Wynn said that the combination of Austin’s publicly owned utility, strong base of technology, and academic firepower give Austin a remarkable opportunity in renewable energy.
“The question is, how soon do we put a stake in the ground and declare ourselves the renewable energy capital of the world?” he said.
It can’t be soon enough so far as the mayor is concerned. Wynn even promised the crowd he would use funds from Austin Energy’s strategic reserve, a stash originally set up to reduce debt, if needed to accelerate the clean energy program. That pledge was all the more remarkable because Wynn has been the biggest budget hawk on the city council and at the time he spoke, the city council was wrestling with a massive budget shortfall for the coming fiscal year.
The mayor had no trouble in getting the other council members to support his goal. On August 28, the council unanimously voted for a resolution stating “Austin is extremely well positioned to become the future Clean Energy Capital of the World.”
Of course it wasn’t long before the hecklers began treating Austin’s ambitious new goal like a piñata. A Business Wire report out of Houston carried this item:
“What place or region would you bill as the current ‘Clean Energy Capital of the World?’ Would it be Germany with its installed base of 13,000 megawatts of wind power plus other renewable energy technologies or Denmark with a strong installed base and export trade in renewable supplies worth billions? Or could it be California with its leading-edge installations in a number of technologies and its claim for solar stardom? Maybe a South American country or China with massive ‘clean’ hydroelectric contributions to their national power outputs?
“Well the city which is positioning itself for the title is…Austin, Texas.”
That was the punch line, the end of what the Business Wire writer obviously viewed as some kind of cosmic joke-at Austin’s expense.
Who can blame the writer for poking fun?
The joke’s on Austin for the moment. But it may not be too many years before Austin’s commitment to renewable energy will seem like a stroke of genius.
The August 28 council resolution directed Austin Energy, the city-owned electric utility, to plan for ambitious renewable energy and energy conservation programs, strive for the nation’s leading renewable energy goals, and emphasize development, recruitment, and retention of clean-energy business enterprises. The resolution also directs the utility to mitigate carbon emissions to reduce the negative effects of global warming.
Austin has a history of strong concern for the environment, but Wynn’s vision of making Austin the clean-energy capital is about more than reducing the pollution produced by coal, gas, and nuclear power plants. Besides the obvious environmental benefits of renewable energy, it holds the potential for new employment opportunities in research, manufacturing, services, installation and distribution.
The overriding objective is to build a clean-energy cluster that will boost the local economy. It’s an initiative that fits hand-in-glove with Wynn’s goal to create a net gain of 10,000 new jobs during his three-year term as mayor. That would reduce unemployment to about 3.5 percent, Wynn said, a level considered healthy for the economy.
Austin Energy Vice President Roger Duncan said expansion of renewable energy will spawn more local companies in the same way that the city’s programs for energy conservation triggered formation of new businesses starting two decades ago. Duncan ought to know. As a city council member, he was instrumental in starting the city’s energy conservation programs. Later, as a city employee, he has managed the evolution of those programs.
Duncan points to Strand Brothers as just one example of how well-designed energy-related programs can foster the growth of local businesses.
Chris Strand of Strand Brothers said, “When I started in 1978, it was based on an idea of doing energy-conservation improvements on people’s homes. In looking at stuff in the field I saw a big opportunity to make buildings more efficient. The city was going through the nuclear power debates. Was it better to build nuclear plants or conserve energy? Where is future energy going to come from? We argued that it was cheaper to conserve energy than build power plants. With the help of Roger Duncan and activists we got the city to start these programs.” Originally, the company concentrated on making a home’s envelope energy-efficient through the use of insulation, solar screens, caulking, and weather stripping. Later, Strand Brothers moved into heating and air conditioning and it’s now one of the largest companies of its kind in Central Texas.
Mayor Wynn’s goal of using renewable energy to build a larger clean-energy cluster in Austin would supplement what’s already here. For example, Cielo Wind Power, the largest wind-power developer in the Southwest, is headquartered in Austin. So is Green Mountain Energy Company, which claims to be this country’s leading retail provider of less-polluting energy. Just up the road in Round Rock, two Silicon Valley corporations, Cypress Semiconductor and SunPower, are carrying out a joint pilot program to produce two megawatts of solar-cell-based power, enough electricity to supply about a thousand homes annually. If that goes well, they’ll boost production to twenty-five megawatts (although plans call for using manufacturing facilities offshore).
There are others. A study published last November by the Austin Clean Energy Initiative states that eighty enterprises engaged in clean energy are already established here in Central Texas, generating more than $250 million in annual revenue and employing some 2,600 people. The underlying message is, we’ve got something good going on here, so come on down and join the fun.
There are prospects for attracting new businesses. Roger Duncan said that Gamesa Eólica, a Spanish firm that’s one of the top five wind-turbine manufacturers in the world, is exploring opening a sales office here. Austin is also on Gamesa’s list of US cities where it may set up a manufacturing site, Duncan said. A one-megawatt wind turbine installed costs about $1 million, and wind power installations buy them by the scores, if not hundreds. Garnering a manufacturing site of this magnitude would be a big catch indeed.
GreenChoice—A big factor in Austin’s attraction to clean-energy enterprises is Austin Energy’s national reputation as the undisputed leader in marketing renewable energy to its customers, a claim verified by the National Renewable Energy Laboratory in Golden, Colorado.
Some 7,000 residential and 200 business customers have signed up for the Green-Choice program. Since the inception of the program in 2000, Austin Energy has sold more than 500 million kilowatt-hours of renewable energy to its customers. In the year 2002 alone Austin Energy sold 251.5 million kilowatt-hours of renewable energy. That’s more than the next two top US marketers combined. It’s nearly four times the amount sold by the Los Angeles Department of Power and Water in a city of 3.7 million people.
Austin Energy’s success is all the more astounding when considering that Los Angeles has nearly 73,000 customers signed up for renewable energy. The success of GreenChoice lies not in raw numbers of participants. Barely two percent of Austin Energy’s 350,000 customers are enrolled. That’s not even in the top ten utilities for participation rates.
The overwhelming success of GreenChoice is due to the fact that some of Austin’s largest consumers of electric energy are signed up. These include, for example, high-tech firms Advanced Micro Devices, BAE Systems, IBM, Samsung Austin Semiconductor, and Tokyo Electron. Also the Texas Commission on Environmental Quality and the Four Seasons and Hyatt Regency hotels. These are not touchy-feely organizations but hard-headed realists with a keen eye for the future. Large electric customers are signed up mainly for one reason: the program guarantees a fixed GreenChoice charge in lieu of a fuel charge for ten years.
No matter what happens to the price of fossil fuels, GreenChoice customers are locked into a price which may be slightly higher initially, depending on when they signed up and what the GreenChoice charge was at the time. But GreenChoice charges will likely be cheaper over the long haul. It’s an airtight hedge against inflation.
“My personal opinion is some of (these businesses) don’t care if it’s purple power,” said Roger Duncan. “They’re locking in a fuel charge for ten years.”
Green Building—Besides being a leader in the sales of clean energy, Austin Energy has a national reputation for leadership in Green Building, a method of designing and building with health, energy-efficiency, and the environment in mind. Lately, Austin Energy has turned this reputation into a profitable consulting business, including a $250,000 contract to establish a similar program in Memphis, Tennessee, and a $150,000 contract to educate developers in California, Duncan said, “and that’s just a small piece of what’s emerging.”
Energy conservation—Austin Energy’s conservation programs are highly regarded as well. “Last year, more than 13,000 residential customers and 290 businesses made energy-efficiency improvements using Austin Energy incentives,” said the EnergyPlus newsletter inserted into customer billings last month. These improvements saved customers about $2.7 million on their electric bills and reduced the electric load by an estimated 30 million kilowatt-hours a year.
National leadership—Due to the attention gained through the GreenChoice, Green Building, and energy conservation programs managed by Austin Energy, our capital city has been the de facto Clean Energy Capital of the United States. This year, the City of Austin played host to national conferences of the American Wind Energy Association, the American Solar Energy Society, and the National Association of State Energy Officials. The Texas Renewable Energy Roundup was held in nearby Fredericksburg. And the U.S.-Mexico Border Energy Forum X meets in Austin this month.
An imitation movie poster celebrating all this attention proclaims (imagine here the voice of God intoning) “Austin and the Texas Hill Country: Journey to the Center of the Sustainable Earth.”
A strong case for using renewable energy and energy conservation for economic development has been made by the Austin Clean Energy Initiative (ACEI), in what is thought to be a first-of-its-kind study, Enriching Economy and Environment: Making Central Texas the Center for Clean Energy. The study was produced by the University of Texas IC2 Institute and published in November 2002. (This ninety-two page document is available on-line at www.austincleanenergy.org/ace.)
The study states that as world energy demands continue to rise dramatically, and as concerns for global climate change and environmental sustainability continue to grow, renewable energy is coming to the forefront as the best source to meet future demand.
Austin Energy’s strategy is aligned with this thinking.
The new 300 megawatt Sand Hill Power Plant, fueled by natural gas, is scheduled to come on-line this month and the utility hopes that will be the last fossil-fueled power plant it needs. Another 250 megawatts of capacity at the Sand Hill site is listed by the Texas Public Utility Commission as an “announced generation project” to be in service by the summer of 2007, however.
“Conservation will be our first priority to meet new load growth,” Duncan said. The next priority would be to support loads with renewable energy sources. The additional Sand Hill plant has been on the drawing board for some time. Austin Energy’s long-term strategic plan, which is being drafted for presentation to the city council in November, will determine what new fossil-fueled power plants are slated, if any.
“Saving a watt is better than creating one,” said Gary Schmitz, a spokesman for the National Renewable Energy Laboratory. “It’s a major part of our overall research efforts here.”
But nobody needs to tell that to the City of Austin. At some point during the era of political battles over whether to build the South Texas Project, a nuclear power plant, someone came up with the concept of a “conservation power plant.” Austin Energy’s rebate programs for energy conservation projects are pegged to the amount of energy that doesn’t have to be generated as a result. It’s a terrific investment that defers construction of new power plants and results in more comfortable buildings that are cheaper to operate.
The tremendous success of these programs is evident in the results: “Since the inception of the city’s energy conservation programs in 1982, more than 776 million kilowatt-hours of electricity have been saved-enough electricity to annually power about 52,000 homes,” said Ed Clark, Austin Energy’s vice president for corporate communications.
The results of these conservation programs are commendable. But in some respects the city has been shoveling sand against the tide. Disturbing trends have been well documented over the years by a knowledgeable and persistent critic of the conservation programs. As a consultant, Paul Robbins helped to write Austin’s first energy-conservation plan in the early nineteen-eighties. In the mid-eighties he worked as a city employee for a few years to put energy conservation programs into practice. Now turning fifty, Robbins has devoted half his life to studying and writing about renewable energy, energy conservation, and environmental issues. Since 1995 he has published five volumes of The Austin Environmental Directory, each one crammed with pithy, well researched essays, some of them supplemented by more in-depth analyses on his web site (www.environmentaldirectory.info).
In the Directory for 2000, Robbins published “The Environmental Report Card,” a twenty-eight-page analysis that among other things evaluated the city’s performance in conserving energy. To be clear, this was a macro analysis judging the big picture of what everyone in Austin is doing, not just Austin Energy’s program management. The report showed that energy used per-square-foot of building space had fallen twenty-one percent between 1973-the year of the OPEC energy crisis-and 1997. So far, so good.
During the same period Austin’s population increased 104 percent while consumption of electricity increased 261 percent. The disproportionately large jump in consumption stemmed from a dramatic increase in square-feet-per-person’s living space. More space requires more energy consumption for heating and cooling.
In addition, the number of all-electric residential customers jumped from six percent in 1972 to thirty-nine percent in 1997. Commercial buildings increased electric heat from four percent of customers in 1979 to thirty-nine percent in 1997. “Electric heat is so draining that in 1989, the winter peak demand (the highest hour of usage in heating season) for Austin’s utility came within six percent of its summer peak. For a utility in the United States, this is uncommon,” Robbins stated dryly.
Increasing industrialization, more homes equipped with air conditioners, and a growing number of home computers added to the load as well.
The bottom line nets out to 172 percent worse.
Of course most of the trends Robbins traced are beyond the city’s control. If not for the success of the city’s conservation programs things would be far, far worse.
But Robbins argues that despite everything, the per-capita use of energy has risen while the level of funding for energy conservation programs has remained rather static.
Elaine Hart, Austin Energy’s senior vice president for finance and corporate services, provided budget figures for the most recent five years. The total funding for conservation rebates and incentives over that period have inched up and down. The actual spending rose eight percent from 2000 to 2003 (from $7.5 million to $8.1 million). The budget approved for fiscal year 2004 fell four percent to $7.8 million.
Unfortunately in the view of some, the 2004 budget sliced $300,000 from the duct diagnostic and sealing program, leaving just $200,000 in the fiscal year 2004 allotment. Chris Strand of Strand Brothers thinks that will result in missed opportunities to reduce the waste of energy.
“We’ve been testing duct systems in apartment buildings and we’re finding the worst scenarios because the tenants pay the bills and the quality of the infrastructure isn’t great,” Strand says. “The average home leaks twenty-seven percent of its energy in its ducts, and in a lot of these apartments we’re finding fifty- to eighty-percent leakage. It’s unbelievable. Some are fine, but there’s a huge opportunity out there.”
The city council’s August 28 resolution directed Austin Energy to develop, in the lingo of the electric industry, “the nation’s leading Renewable Portfolio Standard.” In plain English, that is a directive to set the nation’s most aggressive goals for utilizing renewable energy in lieu of other forms of generation.
The very idea of Austin trying to be the number-one utility in the nation for utilization of renewable energy is, even as an abstract concept, audacious. But even more so when considering that Austin Energy currently gets little more than three percent of its electric power from renewable energy sources. And even that number is somewhat inflated. Wind power is limited by the variable nature of wind and restrictions imposed by inadequate transmission capacity to deliver all the power that can be generated by West Texas wind farms.
Counting the contracts for additional wind power approved by the city council September 25, Austin Energy will have access to about 193 megawatts of renewable energy from all sources. This is enough to allow Austin Energy to supply five percent of its total electric load with renewables by 2005, Roger Duncan said.
Today some entire states already generate many times that amount of renewable energy. Maine, for example, gets about twenty-nine percent of it electric power from hydroelectric facilities, according to the US Department of Energy. For Austin to match that percentage of renewable energy might take decades.
Austin 20 by 2020—On September 25 the city council adopted a second resolution and established a goal for Austin Energy to achieve a minimum of twenty percent of its energy from renewable sources by 2020. This would make Austin Energy’s goal one of the most aggressive renewable energy programs in the country that does not include hydroelectric power.
Austin Energy is being pragmatic about that caveat regarding hydroelectric power for an important reason: Austin’s only source of hydroelectric power is generated by Small Hydro of Texas Inc., a privately-owned plant near Cuero on the Guadalupe River that can generate a maximum of 1.8 megawatts. The 281 megawatts of hydroelectric power the Lower Colorado River Authority (LCRA) is capable of generating from its six dams is used solely to help supply the needs of the agency’s own wholesale customers, and none is made available to the City of Austin.
The city council on September 25 also authorized Austin Energy to enter a Memorandum of Understanding with the World Wildlife Fund, to partner with other utilities in taking a responsible approach to global warming by supporting essential reductions in CO2 (carbon dioxide) emissions from the power sector. Roger Duncan said that Austin Energy “will be the first utility to sign up under the World Wildlife Fund initiative,” known as the “PowerSwitch! Challenge.” The World Wildlife Fund hopes to ensure that industrialized nations set in motion a permanent downward trend in domestic emissions of CO2 as a first step toward substantial reductions by 2010.
In keeping with the PowerSwitch! initiative, the City of Austin will publicly support binding, mandatory limits on CO2 emissions, Duncan said. But the city will not support specific legislation being debated in Congress over whether to make emission reductions voluntary or mandatory.
The goal of meeting a minimum of twenty percent of the city’s energy needs with renewable sources by 2020 equates to adding about one percent each year, which is the pace the utility has set since it started the GreenChoice program in 2000.
California 20 by 2017—Achieving twenty percent by 2020 in Austin is an ambitious goal—but not quite number one, even after omitting hydroelectric power. The State of California adopted an Energy Action Plan last year that set a goal of reaching twenty percent renewables by 2017.
Laura Doll, who was chief administrative officer of Austin’s electric utility for fourteen years, is now chief executive officer of California’s Consumer Power and Conservation Financing Authority. Doll said California’s goal for renewables does not include hydroelectric power either. But she said that for Austin to set a goal of twenty percent by 2020 would be “very aggressive.”
“It’s one thing for a state like California to take this on. We have a lot of renewable potential with things like wind, geothermal and biomass,” Doll said. “For Austin to do it on its own is very, very significant and noteworthy.”
While Austin Energy’s goal of reaching a minimum of twenty percent renewables by 2020 is ambitious, it nevertheless falls short of the expectations of some people.
20 by 2010—The city’s Resource Management Commission recommended that twenty percent renewables be attained by 2010—a full decade earlier.
30 by 2010—Solar Austin, a coalition of citizens, businesses and organizations working to make Austin a leading solar city, wants thirty percent renewables by 2010.
30 by 2020—Council Member Brewster McCracken, speaking at the August 28 city council meeting, advocated setting renewable energy goals “of at least twenty percent by 2010 and thirty percent by 2020.”
Roger Duncan said none of the goals that exceed the council’s directive are attainable. “I don’t think these are realistic for a number of reasons. I don’t think it’s physically or financially possible to do these. Even achieving twenty percent by 2020 is ‘a real stretch goal,'” he said. “There’s certainly people who don’t think that’s achievable. I think we can.”
Tom “Smitty” Smith is director of Public Citizen Texas. Public Citizen is a member of Solar Austin and is coordinating Solar Austin’s clean-energy campaign. Citing historical precedent, Smith said, “Alexander Wooldridge convinced the city to develop the dam that created Lake Austin (then called Lake McDonald). Even though the dam seemed by many ahead of its time, it led to prosperity and led to power and light for the city for a generation or more. It’s time for us to do the same thing in our generation.” The dam to which Smith refers was built with voter approval (by the lopsided margin of 1,354 to 50) of a construction bond for $1.4 million in 1890, when Wooldridge was president of the Austin Chamber of Commerce. When generation facilities were completed at the dam in 1895, the result was illumination of Austin’s thirty-one moonlight towers and electrification of the city’s streetcar system.
Smith’s focus today is not on hydroelectric power but other forms of renewable energy, particularly solar. The City of Austin has already constructed solar photovoltaic projects generating electricity at Austin-Bergstrom International Airport, Austin Convention Center, Palmer Events Center parking garage, Howson Branch Library, Ebenezer Baptist Church, Wild Basin Wilderness Preserve, and Hostelling International-Austin.
Solar Austin wants a lot more of these projects and is calling for two percent of Austin Energy’s annual budget to be dedicated to solar projects. For fiscal year 2004, which began October 1, Austin Energy’s total operating budget is $885 million, said Elaine Hart, vice president for finance and corporate services. Two percent of that amount earmarked for solar projects would be $17.7 million. Virtually no money was in the approved 2004 budget for solar projects.
Duncan said there are physical limitations on how many photovoltaic cells are being manufactured, and “the price is an order of magnitude higher than any other renewable.” This from a man who is unabashedly in favor of developing solar power. At the opening plenary session of the National Solar Energy Conference in late June, Duncan said, “Solar will become the dominant source of energy on the planet. Physics is on our side.” In another session at that conference he said that advances in nanotechnology manufacturing would be a key to developing low-cost solar power. “Nanotechnology” according to one definition, “offers the opportunity to build completely optimal systems, which utilize the smallest amount of matter and energy possible to perform a desired task.” Nanotechnology manufacturing for solar panels hasn’t arrived yet, however. The immediate problem is how to fund and complete solar projects that are not currently cost-competitive with other forms of energy.
Despite the obstacles, Austin Energy has started to work on a solar energy program as part of its strategic planning process, Duncan said. The objective is to figure out how to provide cost-effective incentives that would trigger high-profile solar photovoltaic projects in commercial and residential buildings. “We need to show people that photovoltaics are real and produce electricity,” he said.
Chip Wolfe, cofounder of the Austin Clean Energy Initiative, is confident that Duncan will be pushing hard for a solar program. “We expect Roger will be announcing a solar plan within weeks that is competitive with other cities in the United States,” Wolfe said.
Any program Austin Energy comes up with needs to work better than the Solar Loan Program launched in April for single-family homes. The program has had not one taker, said Mark Kapner, energy services manager for Austin Energy. The reason is the high price and low return for solar photovoltaic projects. A solar photovoltaic (PV) system that costs $6,000 to $8,000 would return a savings of only about $160 a year in electricity costs.
“There’s enough people out there to keep three (solar energy) companies in business installing PV systems,” Kapner said. “People are not doing that to save money, but because it’s part of their values to make their own electricity. That’s the market for solar today. It’s not a market driven by economics, but by a desire to turn sunlight into electricity and own it, and to sometimes see the meter turn backwards. It’s psychic, not dollars and cents.”
The high cost of solar photovoltaics is the very reason why solar advocates are recommending that Austin Energy make sizable investments in PV installations—to create a demand that will help drive down the price and make this technology competitive with other renewables. Recognizing the economic development potential of solar energy is crucial, Tom Smith said. “Those utilities who make commitment to purchasing solar in large quantities now will find themselves being the host to the solar manufacturing industry to provide jobs tomorrow. That’s our goal, to assure Austin will be host to those manufacturing facilities.”
The importance of putting political muscle into shaping Austin’s solar future is paramount.
Daniel Shugar, president of California-based PowerLight Corporation, a leading designer, manufacturer and installer of grid-connected solar electric systems, was one of the speakers at the Solar Austin Town Hall Meeting here in June. “Japan has seventy-five percent of the sun we have (in this country) and their program is a hundred times bigger,” Shugar said. “Why? Because they have the will. They have limited resources and must make it happen.”
San Francisco voters have the will, too. In November 2001 they approved a $100 million revenue bond for renewable energy and energy efficiency projects. The first solar project funded through this initiative was installation of a solar roof on San Francisco’s Moscone Convention Center. The roof, composed of PowerLight, Sanyo and Shell solar equipment, will produce 675 kilowatts of electricity. Shugar said this one project generates more than twice the amount of solar power produced by all of Austin solar projects combined.
The Vote Solar Initiative (votesolar.org) that gained passage of San Francisco’s revenue bond hopes to replicate this program throughout the United States, to empower city governments to implement large-scale, cost-effective solar projects.
In addition to Mayor Wynn’s pledge to use funds from Austin Energy’s strategic reserve if need be, another untapped source of funds may be readily available to kick-start solar or other renewable energy initiatives. On March18, the city’s Resource Management Commission passed a resolution recommending a Clean Energy Fund be created. Money for the fund could come from $28.4 million in bonds authorized by voters in 1983 for the generation of electricity from renewable energy sources. These bonds were never issued, according to the resolution.
Some solar-power projects could conceivably pay for themselves. PowerLight’s Shugard recommended the installation of solar panels above parking spaces at locations such as the airport. He said that drivers would willingly pony up an extra fee to shade their cars from the hot Texas sun. And the cash flow from parking fees, plus the sale of the electricity generated by the solar panels, would pay for the investment.
An even bolder idea was voiced by Mayor Wynn. In an interview with The Good Life, he said there are fifty acres of flat roofs in downtown Austin, with no trees to get in the way. If the city adopted a policy to cover those rooftops with solar PV cells, he said, overnight there would be a demand created for “a million square feet of solar panels.”
“I’m told that solar panel technology is not that different from the silicon-wafer-chip process,” Wynn said, alluding to the idea that some of Austin’s vacant wafer fabrication plants could be converted to manufacture solar photovoltaic panels. “Perhaps specifications could be written in such a way that it makes sense to relocate or open a new facility here in Austin. Meanwhile there’s hundreds of local jobs created for products our customers will be buying anyway.”
Though not triggered by the mayor’s comments, a related project is underway to launch a Solar Photovoltaic Training Academy, said Austin Energy’s Michael McCluskey, senor vice president for wholesale and retail markets. If all goes as planned, classes will be starting in January at Hostelling International-Austin, one of the facilities in Austin that has a solar photovoltaic system in operation. Classes to be taught by consultant John Hoffner would focus on how to install grid-connected systems that will safely interconnect with Austin Energy’s distribution system.
Funding for this venture was provided by the State Energy Conservation Office, McCluskey said, and Austin Energy’s sponsorship will end after the successful launch. Fees should be adequate to sustain Academy operations after that, he said. All of which indicates that if the demand for solar PV systems should increase, skilled solar installers-one component of the hoped for clean-energy cluster-should be available.
But Austin Energy will not be able to gallop toward attaining a dominant percentage of its electric generation from renewable resources. The biggest obstacle is what the electric industry calls “stranded investment.” The city has billions of dollars invested in conventional power plants, much of it in the form of debt. Mayor Wynn, though strongly advocating renewable energy, said the utility faces a significant risk in how it times the decommissioning of coal, natural gas, and nuclear plants as renewable energy takes an increasing share of the load.
“How do you anticipate those trends that enable you to systematically and in a consistent way deconstruct what utilities spent a hundred years constructing? It’s very much an opportunity for Austin but for a time will be disruptive as hell from a business viewpoint,” Wynn said.
One advocate for renewable energy suggested that a way out of this financial bind would be to look at selling off some of Austin Energy’s existing generation facilities, noting that the city’s 580 megawatt ownership interest in the coal-fired Fayette Power Plant would bring top dollar into today’s market. Selling it also might forestall other utilities’ plans to build a coal-fired plant, which would tend to reduce overall regional emissions. San Antonio, for example, currently is planning to build a 750 megawatt coal plant.
Meanwhile, the decommissioning process has been set in motion, albeit slow motion. The city council has already directed that two units at the natural-gas-fired Holly Power Plant be shut down by the end of 2004. Austin Energy will be coming back to the council at some point for a decision as to when to take the other two units off-line, permitting the entire facility to be decommissioned by 2009.
New technologies for solar power were proudly exhibited at the National Solar Energy Conference held here in June. Among these was a display for a giant solar-power tower made by Boeing Energy that generates utility-scale volumes of power from molten salt. Uni-Solar showed off its line of solar shingles. Major industry players including Shell Solar and Sharp Electronics Corporation displayed photovoltaic modules. Solargenix Energy, formerly Duke Solar Energy, showcased its Power Roof Tracking System that offers absorption cooling, space heating, hot water and daylighting for commercial installations.
Just as these and other technology companies continue to find new ways to generate power from renewable sources, so do technological advances offer new ways to reduce energy consumption.
Some of the latest energy-saving technologies being used by Austin Energy include the Power Partners program, in which some 26,500 thermostats placed in customers’ homes allow the utility to send a radio signal that cycles off air conditioners for short periods during peak loads. In addition, the utility is installing thousands of energy-saving traffic lights, pedestrian-crossing signals, and building-exit signs that collectively will save about $1.6 million annually.
VendingMiser devices are being installed on 1,400 soda machines to power down the machine’s compressor, fan and lights when it senses the forty-foot area around the machine is unoccupied.
These technologies barely scratch the surface of what’s being worked on for the future. The US Department of Energy (DOE) has established a goal for achieving the technical capability by 2025 to construct Net Zero Energy Buildings at low incremental cost by combining conservation with renewable energy. Net Zero Energy Buildings would combine state-of-the-art, energy-efficient construction and appliances with renewable energy systems such as solar water heating and electricity. The combination could result in buildings that, while connected to the electric grid, would produce as much energy as they consume on an annual basis.
Buildings offer a mother lode of potential for saving energy. According to DOE, buildings account for one-third of the country’s total primary energy consumption (including two-thirds of the electricity consumption and one-third of the natural gas consumption) and buildings are responsible for thirty-five percent of carbon dioxide emissions.
“With our nation’s annual energy bill for residential and commercial buildings reaching $265 billion in 2000, the economic impacts of lowering energy use can be enormous,” states a DOE draft multi-year plan for emerging technologies. Once developed, technologies that allow construction of Net Zero Energy Buildings could also be retrofitted to existing buildings. The DOE’s emerging technologies initiative will address every aspect of buildings, including heating, cooling and ventilation; air infiltration, insulation and windows; lighting, water heating, controls and appliances.
As an operating utility, Austin Energy does not itself invest in research, but it does serve as an urban laboratory for the early pilot testing of new technologies in a real-world setting. One example of this is the 200 kilowatt fuel cell installed at the Rebekah Baines Johnson Health Center. Announced in September 2002, Austin Energy stated this was the first fuel cell installed in Texas that feeds power directly into the electric grid. Fuel cells produce electricity through an electro-chemical process, rather than through combustion of fuel, and are virtually pollution-free.
A hidden factor looms large in determining how much renewable energy can be put into Austin Energy’s system. So far, the Green-Choice program has been entirely voluntary. The customers who signed up were enthusiastic about clean energy and savvy about the long-term savings potential. But with only two percent of Austin Energy’s customers enrolled in GreenChoice now, and with ambitious goals to reach a minimum of twenty percent renewables by 2020, voluntary participation by people willing to pay more for energy is probably not a big enough base. This could change if natural gas prices keep rising as they have been, pushing the fuel charge higher than the GreenChoice charge. But until that happens, we’re not likely to see a stampede, especially with the minimal marketing being done for GreenChoice.
Enter the critic. Paul Robbins is so passionate about energy and environmental issues that in 1990 he drafted five proposed amendments to the City Charter, then launched a petition drive to get them on the ballot. With help from Texas Citizen Action, 17,000 signatures were gathered, enough to force an election on May 4, 1991. Voters considered charter amendments that would have created dedicated funding sources to support programs for: energy efficiency, development of renewable energy resources, conservation of water and wastewater, recycling, and environmental protection to include air and water quality.
All five measures were soundly defeated. But in time the underlying ideas have worked their way into the fabric of Austin’s environmental ethic and into various programs sponsored by the City of Austin. These programs still don’t have dedicated funding sources and are thus not immune from city council tinkering, but they do enjoy popular support.
With regard to the GreenChoice program, Robbins said that with purely voluntary participation Austin Energy will never reach its aggressive goals for deploying renewable energy. “I think it should be rate-based,” Robbins says.
Robbins said that a GreenChoice program that requires voluntary participation to purchase renewable energy is shortsighted and self-defeating. By analogy he noted that motorists are not given the option to buy a car without a catalytic converter. “Voluntary environmentalism will only get you so far,” he said.
“The only reason we have renewables in Austin is because people are paying extra. They’re paying extra because society won’t take the responsibility for it. If the cost of renewables were put into the electric utility’s rate base, the effect on rates would be negligible,” Robbins said.
Austin Energy’s Roger Duncan responded: “We’ve started out like (other utilities) asking that the people who are the most interested (in renewable energy) to bear the cost and we’ve been extremely successful with that so far. I am not certain you can continue that without moving over and putting it into the rates, but that’s a policy decision for the city council.”
Mayor Wynn understands the situation perfectly. Addressing the challenges of outreach and education needed to get a quantum leap in the numbers of Austin Energy customers signed up for GreenChoice, he told the crowd at the Solar Austin Town Hall Meeting, “It will take true grass-roots demand. I’m proud of the 7,000 GreenChoice customers we have, but we need 250,000. For Austin to get ahead of the curve at the right time, the benefit is incalculable for the economy and the environment.” The question of putting renewable energy into the rate base did not come up at that session.
An even more pointed criticism that Robbins levels against the GreenChoice program is that the city government does not buy renewable energy for its own use. Robbins estimates that operations such as water and wastewater, street lights, traffic signals, and city offices add up to about three percent of Austin Energy’s electric load.
Duncan conceded it’s true the city doesn’t buy its own product “because of the problems we’re having getting enough green power supplied to meet our GreenChoice customers’ demand right now. As we get more supply on hand and the price comes in closer to what the (conventional) fuel charge is, then we’ll look at adding city facilities…It’s a question of price and supply right now.”
Because of delays in constructing wind projects in West Texas and delays in upgrading the transmission lines to funnel the power here, Austin Energy has been buying renewable energy on the open market from time to time to fulfill its commitment to GreenChoice subscribers, said Mark Kapner. He said this is likely to continue into next year, until more of the contracted wind projects come on-line.
Texas utilities were ordered to get serious about renewable energy as a result of Senate Bill (SB) 7, the electric industry restructuring bill that became law in 1999. SB 7 recognized that Texas electric utilities already had 880 megawatts of renewable energy generators on-line in 1999, and ordered that number be increased to 2,880 megawatts by 2009. That goal applies only to investor-owned utilities. “What electric co-ops and municipally-owned utilities do doesn’t count toward that number,” said Terry Hadley, spokesman for the Texas Public Utility Commission.
The Commission, following the intent of the legislation, wrote rules that would ensure that the 2,000 megawatts of new renewable energy would be achieved, Mike Sloan said. The mechanism was to create valuable financial incentives called Renewable Energy Credits, which would create a market demand for renewable energy. “Renewable Energy Credits were envisioned to validate compliance” in reaching the goal, Sloan said. “The obligation is on the retail electric providers in the retail market.”
Austin Energy and the Lower Colorado River Authority were interested in renewable energy long before the passage of SB 7. In 1995, the LCRA invested in the first commercial-scale wind project in Texas. That was the 35 megawatt Texas Wind Power Project near the town of Van Horn, in Culberson County. Austin Energy buys 10 megawatts of wind power from that project. The LCRA also buys 81 megawatts from two other wind projects in West Texas.
SB 7 restructured the wholesale electric market and triggered a torrent of wind projects. Three utility-scale wind projects were completed in 1999 totaling 139 megawatts.
In 2001, five more wind projects were added totaling 827 megawatts. What’s remarkable is these five installations accounted for nearly twenty-two percent of all wind power projects installed in the world in 2001, based on DOE figures of 3,800 megawatts installed worldwide that year.
A power plant fueled by natural gas takes about two years to build, a coal plant about five years. Wind projects can go up practically overnight. The King Mountain Wind Ranch in West Texas has a capacity of 278.2 megawatts and was the largest wind-power project in the United States when built in 2001, according to the Austin-based consulting firm Virtus Energy Research Associates Inc. Yet this project developed by Cielo Wind Power took just a year to construct. That was slow by Cielo’s standards, said company President Walter Hornaday.
The King Mountain Wind Ranch consists of 214 Bonus Energy turbines perched atop bluffs that rise 3,100 feet above sea level. Each turbine is capable of generating 1.3 megawatts of electric energy. The turbine’s three blades sweep through an arc that reaches 299 feet above ground level, knifing through the skies of West Texas. (The University of Texas tower is 307 feet tall; the statue atop the State Capitol reaches 311 feet above ground level.)
Hornaday said it costs about three times more to build a wind power facility than a gas-fired power plant because of the cost of turbines. The higher capital cost means higher taxes, too, unless the counties provide tax breaks (a common practice).
Cielo Wind Power is a privately-owned company that has developed more than $600 million in projects in the last four years, partnering with oil companies and utility affiliates to capitalize construction. The only cost of fuel, so to speak, for a wind project is the landowners’ royalties, he said. “Wind is as conservative a generation investment as you can make.”
Mike Sloan of Virtus Energy Research Associates said that the installation of wind power surged so much as a result of SB 7 that by the end of 2001 there were wind farms capable of generating a total of 760 megawatts of electricity in the vicinity of McCamey, in Upton County. The wind projects were built there because of the high quality of the wind resources. But transmission lines in that area were originally built to serve a small population (the entire county had just 4,030 people according to the 2000 census) and power the oil rigs that dot the landscape. The wires could carry only about 300 megawatts.
The last West Texas wind project came on-line in December 2001. Now nearly two years later, not one new project has been added in that area. Wind developers would have installed far more wind turbines there if they hadn’t spotted the transmission problems, Sloan said.
It should be noted that power plants, renewable or not, are often sited in rural areas where transmission facilities are not equipped to handle the new generation. Utility companies routinely make requests for transmission upgrades to accommodate the new plants. But gas- and coal-fired plants take so long to build there’s a built-in, long lead time that allows timely transmission work to proceed. Also, plans for fossil-fueled plants often get cancelled due to rapidly changing market conditions.
The rapid-fire construction of wind projects offers virtually no lag time and historically these projects are rarely cancelled. The old timeline for building new wires is not well suited to the new demands. In response to the problem, the Lower Colorado River Authority has jumped in to accelerate construction of transmission-line improvements. But it’s going to take time.
Stuart Nelson, manager of asset development for the LCRA’s Transmission Services Corporation, said the transmission capacity in those lines around McCamey currently is about 400 megawatts. The capacity should reach 550 megawatts by the end of this year, he said, but the lines won’t be able to handle the peak generating capacity of 760 megawatts of wind power that’s already installed before the spring of 2005. By the time all transmission upgrades are completed by mid-2005, Nelson said, the lines will be able to carry about 900 megawatts. He noted, however, that on any given day the capacity of transmission lines vary with the ambient temperature and wind. Cool or windy days make it possible to carry more juice, while hot, still days cause lines to heat up and sag, and reduce how much power can be carried.
The delay in beefing up the wiring is downright sinful to anyone interested in quickly jacking up the amount of renewable energy that can be fed into the electric grid to replace power generated by pollution-spewing fossil-fueled plants.
Texas is lousy with winds that could generate electricity. Indeed, the potential capacity for wind power in Texas has been estimated by the Texas State Energy Conservation Office at 525,000 megawatts of electricity-nearly five times the amount of electricity consumed in the state. The agency states that the Panhandle, mountainous parts of West Texas, and perhaps even the lower Gulf Coast contain areas with winds suitable for electric power generation.
“Why aren’t we adding more wind power?” said Mike Sloan. “Because of the transmission system. We don’t have a good system going forward to get transmission in the ground, so wind developers are not willing to take the risk in building these projects.”
This limitation exists in spite of the $1.3 billion invested in transmission and distribution lines over the past five years, according to testimony of the Public Utility Commission of Texas before the House Regulated Industries Committee on August 22.
The Electric Reliability Council of Texas, the agency managing the grid that carries eighty-five percent of Texas’ electric load, nevertheless recognizes there are “significant transmission constraints.” These constraints are being addressed, says a September 2 legislative advertisement sponsored by the Association of Electric Companies of Texas Inc., a trade association representing all investor-owned electric utilities in Texas.
Another major hold-up for wind power is the legislative delays in renewing the federal Production Tax Credits, which are currently worth approximately 1.9 cents per kilowatt-hour. The tax credits were intended to enable wind energy to compete with conventional energy sources. Any turbine that’s installed and generating electricity in 2003 will qualify for the tax credit for ten years, Cielo’s Hornaday said. But the tax credits are scheduled to expire at the end of this year.
No one knows for sure whether Congress is going to act to renew the tax credits. On September 17, the National Journal’s CongressDaily reported that House leaders are considering waiting until next year to tackle the tax credits, but if they do so the credits may be made retroactive in 2004 to cover the gap.
What happens to Cielo Wind Power’s contracts, approved by the Austin City Council on September 25, if the tax credits aren’t renewed? Construction stops cold.
As long as tax credits must be fought over in every session of Congress instead of being given a long-term guarantee, wind power construction will wax and wane with the whims of lawmakers.Meanwhile Hornaday tries to remain optimistic. “Long-term, I’m confident that Congress will understand the value of wind power,” he said.
US Representative Lloyd Doggett, D-Austin, agrees. “The financial and environmental benefits gained through harnessing wind power cannot—and should not—be overlooked,” he said.
While the Congress works its way toward an end-of-year adjournment, wind developers and renewable energy advocates in Texas can only wait and hope. But it’s not only Texans who are keeping their fingers crossed.
The United States has a vast potential for both solar and wind power, as well as geothermal and biomass sources. North Dakota, as well as Midwestern states including Texas, have been called the “Saudi Arabia of wind power,” although that same phrase has been used to refer to other regions of the world, from Cape Cod to New Zealand to Inner Mongolia.
It’s a scientific fact that the United States has the natural resources to be entirely self-sufficient utilizing only renewable energy and energy conservation. But the power shift from the conventional plants that use coal, natural gas and nuclear fuels will entail a slow and financially difficult transition.
In The Party’s Over, author Richard Heinberg’s exhaustive analysis indicates that a fundamental and monumental reordering of national priorities is needed to put massive resources into developing renewable energy before existing fossil fuels are exhausted. Even if that happened, Heinberg and many others cited in his book are doubtful there’s enough time to make the transition without suffering major disruptions to our economy and way of life. The longer we wait, the more certain we’ll suffer consequences of disastrous proportions. We’re facing the question of whether earth can sustain the global population. We’re facing the potential collapse of governments, if not civilization itself.
Can Austin achieve the distinction of being the Clean Energy Capital of the World, given that other regions are so far ahead in terms of renewable energy? The Austin Clean Energy Initiative’s study would answer yes. This study quantifies markets, identifies the numbers of potential jobs that could be created, and identifies the need for incentives tailored to the industry. Based on eighty responses to a survey conducted in connection with the study, the clean energy sector appears to be mainly an industry of startups.
The study suggests that communities should create a profile of a clean energy company, identify all applicable incentives, and then market them to attract these businesses. Incentives are so vitally important that the IC2 Institute prepared a separate twenty-five-page draft report for the Austin Clean Energy Initiative. Clean Energy: Opportunities for Local Government in Central Texas, dated May 13, states that Texas now derives very little revenue from the related manufacturing segment. This can be changed.
As an example of what might be done, the report outlines a brief case history of the Danish company Vestas, which develops, manufactures, and installs wind turbines. Vestas American Wind Technology Inc. decided to locate a new plant in Portland, Oregon, because of the promise of long-term wind development in that region and because of incentives offered by state and local governments. The company’s largest worldwide plant should open there with 1,200 new jobs, the report states.
The Greater Austin Chamber of Commerce has weighed in recently with a major economic development initiative if its own. “Opportunity Austin: A Five-Year Economic Development Strategy,” was unveiled September 16. The study by Market Street Services Inc. of Atlanta sets a five-year goal of creating 72,000 jobs and a $2.9 billion aggregate increase in payroll.
To accomplish these goals, the report focuses on a dozen specific areas of opportunity. One of these is to “stimulate entrepreneurship and new enterprises in ‘next wave’ sectors, including nanotech, biotech, and clean energy.” Mayor Wynn was dismayed over how the Chamber’s report categorized clean energy.
“I was frankly a little disappointed to see (clean energy) labeled as an emerging sector,” Wynn told The Good Life. “It seems in hindsight to be appropriate that we in city government, and me as mayor and a citizen, put more emphasis on clean energy than the chamber, which has a broader field they are working in. I was pleased to see (clean energy) in the report but I tend to see it as more than an emerging market. (That designation) won’t keep me from working hard on clean energy.”
Chip Wolfe of the Austin Clean Energy Initiative also thought the Chamber’s report slighted clean energy. “We think it provides a more viable opportunity for Austin, a greater potential for jobs in the near term, and a better branding for Austin than the Chamber report would indicate,” Wolfe said.
As to the need for incentives for clean energy companies, as advocated by the Austin Clean Energy Initiative, Wynn said the framework approved by the city council in June could accommodate incentives, “not cash out of pocket but a return on demonstrable value.”
“What excites me on the clean energy front is it’s already a sizable cluster across the nation but there’s no center for that cluster,” Wynn said. “There’s no (equivalent to) Detroit for the auto industry or a Silicon Valley (for clean energy enterprises). It won’t remain that way. Some clustering of companies is how the American economy tends to work on a macro scale. Shame on us if we don’t capitalize on it.”
This is one of those rare moments in history in which local leaders have had the uncommon foresight to latch onto a problem of immense importance, outline a sensible course of action, and initiate the first steps to pull us back from the brink of disaster. But we’ve only taken baby steps so far.
Yes, a power shift to renewable energy is about cleaning up air pollution. Yes, it is about jobs. But these objectives, worthy as they may be, pale in comparison to the approaching end of the fossil fuel era. New technologies and new discoveries may add to the known reserves but are unlikely to make much of a difference, Heinberg states.
It must be emphasized that Heinberg is not a scientist but a journalist and educator. His conclusions are based on a wide array of informed scientific opinion. The most glaringly pessimistic views are drawn from geologists who have spent their lives in the oil business. I.F. Ivanhoe, who himself has fifty years of experience in petroleum exploration, calls this group Cassandras, after the mythological Trojan princess who could foretell the future but was doomed never to be believed. Many of the eighteen scientists listed in this group are academics, policy analysts, and retired geologists no longer constrained by company policies.
Heinberg notes that those who are optimistic that new technologies or new discoveries will save the day (he calls this group Cornucopians) are economists and lobbyists who argue that price signals will push capitalists to find profitable and workable solutions. This group also includes our own government experts in the US Geological Survey, Energy Information Agency, and DOE, which post forecasts far more optimistic than Cassandras believe to be true. The Cassandras view these official government figures as “essentially political statements designed to convey the message that there is no foreseeable problem with petroleum supply and that the American people should continue buying and consuming with no care for the future.”
In a presentation at the National Solar Energy Conference in Austin, Heinberg outlined three possible plans, here highly abbreviated:
(1) Be the last one standing—Use our military and economic might to seize control of the world’s petroleum. This is the path we’re following. Is it a coincidence that Iraq has the world’s second largest oil reserves?
(2) Power down—Devote our remaining resources to maximize renewable energy. Restrict competition and share resources between consuming and producing nations.
(3) Wait for the silver bullet—Since there is none, to choose this path is to guarantee plan one.
The choice of which path to follow is up to each of us. The sensible thing is for everyone to bone up on the issues and decide. But do it quickly. Once we’ve passed peak production, the cost of everything begins to rise inexorably as we wring the last drop out of the drying rag of resources.
We need to heed the wisdom of a Saudi saying: “My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel.” Saudi Arabia contains the world’s largest oil reserves. If the Saudi’s can sit on all those resources and clearly see the bottom of the oil barrel, what of America, whose oil and natural gas extraction peaked thirty years ago?
We need to be moving like Paul Bunyan and swinging our biggest ax to clear any obstacle in our path to a sustainable energy economy. The stranded costs in our existing power plants can be amortized over time. Our transmission system can be upgraded to accommodate renewable sources of power where needed. Our renewable energy programs must be plugged into the utility’s rate base to benefit all customers and spread the extra marginal cost, if any. And our lawmakers in Washington must be persuaded to guarantee production tax credits permanently.
Ken Martin was among the first Solar Explorer subscribers. He signed up for GreenChoice as soon as the program was announced. His GreenChoice charge is 1.7 cents per kilowatt-hour. The current GreenChoice charge for new customers is 2.85 cents per kilowatt-hour. Austin Energy is in the midst of a three-step increase in the fuel charge that applies to customers not signed up for GreenChoice. That fuel charge is projected to hit 2.79 cents per kilowatt-hour in January, depending on the market conditions. Austin Energy has not yet decided whether the GreenChoice charge for the latest batch of renewable energy will remain at 2.85 cents per kilowatt-hour. You may e-mail Ken at [email protected] mag.com.
Find out more about Richard Heinberg’s work at www.richardheinberg.com.
The US Department of Energy has set a goal of having the technology in hand by 2025 to construct a Net Zero Energy Building, a building that while connected to the electric grid would produce as much energy as it consumes on an annual basis. Pliny Fisk and Gail Vittori, co-directors of the Austin-based Center for Maximum Building Potential Systems (Max’s Pot for short) have already spent more than twenty-five years doing research and hands-on projects in the field. While they may not have achieved Net Zero yet, they’ve sure learned a thing or two about building with a view to sustainability.
As the originator of the concept and principal consultants, they laid the groundwork for what became the City of Austin’s nationally recognized Green Building program, which brought recognition to both the city and Max’s Pot at the 1992 Rio Earth Summit. That stirred interest to the point that now there are dozens of cities using the Green Building program, many of which have never heard of Max’s Pot. Which is sort of how Fisk and Vittori see their jobs. They’re the catalyst for good things to happen, spreading the seeds of innovation to take root and grow far and wide.
Today Vittori is a board member of the US Green Building Council, a coalition of leaders from across the building industry working to promote buildings that are environmentally responsible, profitable, and healthy places to live and work. In a sense, Green Building is another facet of all programs that involve energy efficiency. But it goes beyond mere efficiency in how buildings operate to address the types of materials used to construct the building and to account for complexities such as the energy costs of transporting and constructing the building. This is a huge consideration that may be overlooked by even some of the people who are designing and building structures that are highly energy-efficient to operate.
It is in a sense shortsighted, Fisk says, to put so much thought into wringing all the efficiency you can out of a structure without considering how much energy was gobbled up in merely extracting, transporting, and manufacturing the materials. Think of, for example, a house built with framing lumber from Canada, metal roofing from West Virginia, marble countertops from Italy, floor tiles from Saltillo, Mexico, and koa wood furniture from Hawaiian acacia trees and you begin to get the idea.
It was this kind of realization that motivated Max’s Pot to seek a grant from the US Environmental Protection Agency some eight years ago to develop a complex analytic tool called BaselineGreen™, which indicates what a planner or architect needs to zero in on to identify the aspects of a construction project that “offer the greatest potential for environmental improvement of the project’s total life-cycle impact.” That’s how BaselineGreen™ was described by one of Max’s Pot’s co-developers of the project, Gregory A. Norris of Sylvatica, an environmental consulting firm based in North Berwick, Maine. Fisk said BaselineGreen™ has been used for high-profile projects at the Pentagon and the University of Texas Health Sciences Center in Houston, and in the City of Seattle.
A project currently being explored at Max’s Pot is called GroHome Systems, a construction method that holds promise as a quick, cheap and easy way to put up a structure in a short order with minimal impact on the building site. “We’re trying to cut through the assumption that you need a thirty-year mortgage and must spend most of your money on money (for interest charges in financing),” Fisk said.
Typical Max’s Pot. Keep it simple, keep it cheap, make it do the most with the least.
Over the last decade the Lower Colorado River Authority and the City of Austin have been putting increased emphasis on obtaining sources of renewable energy to augment their conventional power plants. These agencies currently own or have contracts to purchase renewable energy as shown below.
It should be noted that the megawattage of renewables shown is the amount that could be fed into the electric grid only if all nonrenewable generating sources were operating at full capacity and transmission facilities were capable of delivering that power to the desired end users. Except for the power generated by landfill gas facilities, however, the electric power from renewable sources are never generated at the full capacity listed. The power from wind farms is constrained by the variable nature of the winds, the lack of storage, and a lack of sufficient transmission capacity to deliver all the power generated by West Texas wind facilities. The generation of hydroelectric power is limited by factors such as the amount of rainfall, flood control, and downstream demands for water.
City of Austin
• Wind: 179 MW.*
• Landfill gas: 11 MW.
• Hydroelectric: 1.8 MW.
• Solar: less than 1 MW.
• Subtotal renewables: 192.8 MW
• Gas: 1,868 MW.
• Coal: 580 MW.
• Nuclear: 400 MW.
• Subtotal nonrenewables: 2,848 MW.
• Total capacity: 3,041.8 MW.
• Renewables: 6.33 percent*
Lower Colorado River Authority
• Hydroelectric: 281 MW.
• Wind: 106 MW.
• Subtotal renewables: 387 megawatts.
• Gas: 1,308 MW.
• Coal: 1,025 MW.
• Subtotal nonrenewables: 2,333 MW.
• Total capacity: 2,720 MW.
• Renewables: 14.22 percent
* Includes 93 MW approved by city council September 25, 2003, the contracts for which must still be negotiated.
These articles were originally published in The Good Life magazine in October 2003