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Aggregating Energy Since 2006

Biofuels

Ethanol and biodiesel mostly

Ethanol's Next Hurdle

The Institute for Agriculture & Trade Policy's Ag Observatory blog has a post about ethanol delivery concerns. I have been concerned about this issue as we appear to be overbuilding ethanol.

The industry is counting on boosting the sales of a higher blend of ethanol, E85, a fuel that is 85 percent ethanol and 15 percent gasoline, and is looking for Congress to help increase its availability and use. One bill introduced by Sen. Barack Obama, D.-Ill., a possible presidential candidate, would create a new tax credit to cut the price of E85.

But finding an E85 pump will continue to be difficult. Wal-Mart and other major retailers won't offer the fuel until mid-2008, at the earliest.

Won't the coming glut of ethanol necessarily lower the price? Especially if there is more ethanol than there are pumps... Naturally, this is a poor way to encourage biofuels, but it points to the need for better policies to encourage biofuels so we don't have the fits and starts the wind industry has dealt with in the U.S.

Update: With excess ethanol, perhaps the United States will export it.

There appear to be more problems with creating E85 pumps than politicians are talking about.

A federal tax credit of up to $30,000 was enacted to help defray the cost of converting stations to sell the fuel.

But the opening of new stations was slowed considerably by the decision of Underwriters Laboratories last year to suspend its certification of E85 service-station dispensers. UL, an independent organization that certifies the safety of everything from toasters to gasoline pumps, has decided to develop standards for certifying the pumps but first will have to research the impact of alcohol fuel on pump parts.

Wal-Mart and other major retailers have put off installing E85 pumps at their filling stations until UL finishes the certification process, likely in the second quarter of 2008, said Phil Lampert, executive director of the ethanol vehicle coalition.

That being said, Pennsylvania is doing good work with biofuels, which includes targeting a specific corridor for E85 pumps.

The grant round also includes $75,000 for Greater Philadelphia Clean Cities' E85 Corridor project, which previously received $283,380 in federal funding. The project will convert at least 12 additional fueling stations to provide E85, a blend of 85 percent ethanol and 15 percent gasoline, along a 200-mile corridor stretching from central Pennsylvania to the Philadelphia suburbs.

This is a much better idea than simply incentivizing new pumps everywhere. However, consumers are starting to realize that E85 sharply reduces gas mileage. No one wants to fill up more often. I'm guessing that people will not want to fill up more often even if they were saving money in the process. The whole problem is perception - and we know how often it lines up with objective reality.

Question for the ethanol experts: would E100 cars have more efficiencies due to the higher octane rating possible? Or am I totally out of my element?

CERTs conference summary

The MN CERTs conference was held on Tuesday and Wednesday this week...

 

MN CERTs Local Energy / Local Opportunities

Article Photo

On January 17, 2007 the Minnesota Clean Energy Resource Teams (CERTs) held their annual conference, Local Energy/Local Opportunities, in St. Cloud. CERTs is a program that is funded by several state agencies, private foundations and the University of Minnesota. Here is a brief description of the program from the CERTs web site:

“The Clean Energy Resource Team project is your opportunity to play a role in shaping energy conservation and renewable energy implementation for your region of Minnesota. A growing number of Minnesotans envision an energy future built on using energy wisely and generating energy from local renewable resources like wind, solar, biomass, and even hydrogen from renewable sources. By relying more on community-scale renewable energy resources and energy conservation, communities can help prevent pollution and create local economic development opportunities.”

CONTINUED HERE

 

Saying nice things

Though many of us have already heard about this, I thought I would throw up a post anyway, just in case. Yesterday Gov. Pawlenty announced a target for the state of 25 percent renewable electricity by 2025. It basically ups the ante from our current renewable energy objective of 10% by 2015 and adds some teeth in the form of financial penalties for utilities that fail to the requirement. I'm still not clear on how this differs from the renewable energy standard that has come up recently. Business interests support Pawlenty's version - in fact a Minnesota Chamber of Commerce representative is quoted as saying that it is the "best of both worlds" - it avoids possible rate increases of a "mandate" while growing the renewable energy industry in the state. That leads me to believe that either utilities would be prohibited from passing on the penalties to ratepayers or that the penalties are rather mild.

Anyone have any more information?

Regardless, I think this could be a major step forward. I hope that there will be incentives for utilities to go beyond the 25 percent, and that lawmakers won't be prohibited from increasing the percentage in the future.

Opinions?

Ethanol from Sugar

The New Yorker had an interesting blurb on how protectionist trade policies are limiting the market for sugar ethanol in the US. Many of us have heard that the energy balance in making sugar ethanol is much higher than corn ethanol - about eight times higher, meaning that a gallon of ethanol made from sugar requires 8 times less energy inputs than a gallon of ethanol from corn. But the article makes the claim that tariffs designed to protect domestic sugar growers - at the expense of Third World growers - have driven up the price of sugar such that it's not economical to make sugar ethanol in this country. That combined with large tariffs on imported ethanol has protected the corn-based ethanol industry in the Midwest.

Besides aiding US farmers, this policy is justified by the nebulous term "Energy Independence" - even though as a result, instead of importing Brazilian sugar ethanol, we import Venezuelan oil.

I'm curious how much sugar ethanol could physically be produced in this country, assuming it was economical. Anyone up on their sugar farming? Where is it grown?

Farming our Fuel

It has been a busy week this week. I wanted to give a brief update from some things I attended. First, is the Farming our Fuel conference hosted by Minnesota Environmental Initiative (MEI) on the Gustavus Adolphus College campus in St. Peter, MN.

The day long conference (full title is Farming Our Fuel: Growing a Sustainable Ethanol Industry) sought to address the questions: How green is ethanol? What can be changed to maximize environmental benefits AND local economic benefits? What about cellulosic feedstocks? What is the long term role of biofuelsin the State's energy future?

The speakers represented a diverse collection of acedemics, govenment agency reps, environmentalists, and those from the ethanol industry. Conspicuously missing were those representing farming interests. The closest would be a representative from the MN Department of Agriculture and a speaker from the Renewable Fuels Association.

I'll try to give a general gist of what was covered in each session. The only pen I brought died early so perhaps others who were there can leave comments to fill in details. Overall, I think there was a good level of reality and straight talk about the current situation with ethanol and what can/needs to happen in the future.

 The welcoming address and MC duties were handled by Peder Larson. He is an MEI board member and principle in the environmental law practice Peder Larson & Associates, PLC. He was previously Commissioner of the Minnesota Pollution Control Agency (MPCA).

The first session was on the current state of the industry. Bill Lee from the Renewable Fuels Association (RFA) lead off a good recap of the long history of the ethanol industry, the risks experienced by the industry, the role of Minnesota nationally, and the future role of ethanol. The histoy for ethanol as a transportation fuel dates back to the Model T...the first flex fuel vehicle mass produced in the US. The next phase brought failed attemptys to build an economically sustainable ethanol industry after the oil shocks of the 70's. Then there was the era of the "Minnesota Model" based upon small scale, farmer owned ethanol production from the mid-90's to the present. Minnesota's important national role in renewable energy was acknowledged. This ranges from the relatively high availability of E85 and the goal for biofuels to account for at least 20% of transportation fuels in the state (not an E20 mandate as was incorrectly stated several times during the conference) to C-BED and the growth of wind generation to the required used of biodiesel in all diesel sold in the state. The future for the industry involves consolidation, new technology, many more policy efforts and 60 billion gallons of production by 2013. In the first acknowledgement of the limitations of the current production model Lee clearly stated that ethanol production is not now sustainable and it must move toward that. It must move to a low carbon input model involving the use of biomass energy sources in place of fossil fuels (natural gas or coal) and changes in corn agronomy. Myrna Halbach closed out the first session with an over view of the role of the MPCA in regulation of the ethanol industry.

The next session focused on the environmental impacts of ethanol production. Todd Portas from NRG, Janette Brimmer from Minnesota Center for Environmental Advocacy (MCEA), Laurel Reeves from Minnesota Department of Natural Resources (DNR), and Mark Lindquist from The Minnesota Project. This session continued the talk by Habach digging into the regulatory environment around ethanol production and the variations being explored. Most discussed were those using coal to produce process energy and co-location of ethanol plants with electricity generation plants. The latter offers the option for a CHP configuration to provide process energy to the ethanol plant. It also faces a severe regulatory hurdle due to the cumulative impacts assesment complicated by the current emissions of coal plants; particularly those grandfathered under the Clean Air Act. Another favorite topic was water use for ethanol production. This has been of interest due to water availability problems for some of Minnesota's current and planned ethanol plants. Halbach presented a graph in her presentation of the water used per gallon of ethanol at all of the current plants in MN. There is considerable variability in the water used ranging from 3.6 gal/gal to 6.1 gal/gal for plants using corn feedstock. This was explained to be due to technical differences but also due to the quality of groundwater available. Poor quality water heavily laden with minerals requires a higher usage rate and results in additional difficulties in handling. The primary release of water from an ethanol plant is through evaporative losses of non-contact water in the cooling towers. Technology is readily available to stem or eliminate those losses but comes at much higher cost.

Following lunch, the keynote speaker was Maurice Hladik from Iogen Corporation. He talked about a possible future of ethanol production by fermentation of cellulosic feedstocks. Iogen, from Ottawa, Canada, is one of the world leaders in the rush to build the first commercial scale cellulosic ethanol plant. They currently have a site selected in Idaho using ag wastes from wheat and barley production.

The first session after lunch was on the paths toward sustainability of biofuels production. Vernon Eidman, U of M Department of Applied Economics, Cecil Massie, senior process engineer at Sebesta Blomberg, and Jim Kleinschmidt from Institute for Agriculture and Trade Policy were panelists. Dr. Eidman talked about the economics driving ethanol production now and the future. He talked about the strong tie between ethanol price and the price of gasoline. Linking this to the per bushel cost of corn, at a $60/barrel price for crude oil, expansion of ethanol production should increase until corn costs about $4/bushel. He also talked about the cost savings experienced by scaling up from 50 to 100 million gallons per year. It's about 3.5 cents per gallon (David Morris later argues that this gain experienced by the producer is small compared to the loss experienced by farmers and local communities).  Another area of economics covered is the cost savings of using coal for process energy instead of natural gas or biomass. It's understandable why firms are looking at it. I didn't catch all of Cecil Massie's talk but it was one of the few that talked much about the gasification approach to biofuel production instead of the fermentation (sugar platform) approach. I think this will be a very interesting battle down the road between the two technologies. Each have advantages, disadvantages, and their strong supporters and advocates. I hope that our policies do not pick one over the other and let them have a level playing field. Finally, Jim Kleinschmidt talked about the next generation of biofuel feedstocks...i.e. cellulosics. They are a much wider diversity and geographic area of supply. The major types of supplies are crop residues, perennial crops, and forest wastes.

The last session was on the future. The panelists were Gene Hugoson, Commissioner fo the Minnesota Department of Agriculture, Michael Noble from Fresh Energy, and David Morris from Institute for Local Self Reliance (ILSR). I missed much of this section catching up with some folks in the hallway but did catch some disagreement over the scale of production plants and the need to maintain a local based, small scale model previously referred to as the Minnesota Model.

Fossil Free Ethanol?

 

Renewable Energy Access is reporting that the first closed-loop ethanol plant using manure and methane to distill the ethanol will begin operations next month.  So it's not exactly fossil free since the electricity for the plant and the agricultural inputs for the corn are fossil-based, but it's getting there, i.e. no natural gas for distillation.  They plan to build 15 more plants like it.

An ethanol plant in Luverne reported earlier in the year that it is aiming to be the first cellulistic plant in the US, not by traditional fermentation and distillation methods, but by gasifying corn stover, skipping the whole issue with breaking down cellulose into usable sugars.

NYTimes Energy Challenge

 

Roughly every two weeks, the NY Times has released a new article on various energy topics in what they are dubbing "The Energy Challenge."

Recent Topics:

  • Global Warming
  • Ethanol
  • Nuclear
  • Coal
  • Solar 

Biodiesel Explained

The Des Moines Register takes an in depth look at Biodiesel. Hat tip to AutoblogGreen for the story.

Last month, we were puzzled over whether the problems with biodiesel in cold weather have been overcome. It would appear that the answer is: sorta.

The biggest knock against biodiesel has been its cold-weather performance. As temperatures drop, both petrodiesel and biodiesel can form wax crystals that clog fuel lines and filters. At severe temperatures, diesel fuel turns into a gel and can't be pumped. Biodiesel's cold-weather performance is even worse than conventional diesel's. Consumer perceptions weren't helped when B2 users experienced plugging of fuel filters last fall in Minnesota, which as of 2005 required most diesel sold in the state to contain at least 2 percent biodiesel.

Distributors and drivers historically have overcome cold-flow problems with conventional diesel by adding kerosene or cold-flow additives, using fuel-line heaters or storing vehicles indoors. Biodiesel advocates believe that more experience with appropriate blends and strict quality control can address cold-flow problems.

Biodiesel seems to trash ethanol in the energy balance arena.

Considerable research has probed whether renewable fuels burn more fossil fuels in their production than they give off when burned. A July report for the National Academy of Sciences found that biodiesel yields 93 percent more energy than the fossil energy invested in its production. That's much better than ethanol, which has a plus-25 percent energy balance, and both are better than gasoline.

However, it seems like ethanol wins in the availability of feedstock race.

Demand for biodiesel is strong, and the overall U.S. market for diesel fuel is huge. But there simply aren't enough oil crops and animal fats available to supplant much of it. For the 2005/06 crop year, biodiesel production accounted for 5 percent of soybean-oil use. That's expected to rise to 13 percent for 2006/07, representing about 8 percent of U.S. soybean production in 2006, according to testimony by Keith Collins, USDA chief economist, before a Senate committee last month. It becomes a vicious cycle: Increased biodiesel demand is expected to push up prices for soybean oil, which in turn raises production costs, making biodiesel less price-competitive.

With Honda's new cleaner diesel technology, biodiesel will certainly see increased investment.

Update: The NY Times has a story about diesel that talks about the new Honda model and how it meets the Tier II Bin 5 regulations.

Report from U of M Renewable Energy Workshop Oct. 12

I attended the Renewable Energy Workshop today sponsored by the U of MN Electrical Engineering Department. As expected, it was largely technology-focused, with some general discussions of the challenges facing renewable energy here and elsewhere. (And a good buffet style lunch). Here a few salient points of the talks I attended.

A Power Grid for the Hydrogen Economy - Thomas Overbye, U of Illinois

The speaker talked about his research into superconducting transmission lines. The idea behind the project is to supplement our existing grid with a network of underground high voltage DC transmission lines made with superconducting material. The benefit of using superconductors is that the current density can be much higher, so fewer transmission lines have to be built. Line losses would also be minimized.

Each line would consist of a superconducting core for carrying the electricity with an outer ring of liquid hydrogen, which would act both as a coolant and an energy storage mechanism. During times of low electricity demand, excess electricity from renewable sources would be used to create the hydrogen via electrolysis.

Though such a grid is technically feasible, cost is a major issue, though the speaker was quick to note that anything transmission related is expensive. He quoted a figure of roughly $2.5 million per mile to install these cables. Water scarcity may also be an issue in some places.

Lessons from Norway - an unlisted speaker, didn't get his name

(A grad student actually did this talk in place of his professor, who was scheduled to speak but couldn't make it.)

This talk mainly focused on the challenges facing Norway in meeting its future electrical demand and making use of its vast renewable energy potential (enough to supply twice that of its current annual consumption.) Currently, 99% of Norway's generation comes from low cost hydropower. However, similar to here, demand is outpacing supply. More supply will have to be brought on in coming years.

I was struck by how similar the challenges facing renewable energy are to here - public resistance (in the case of wind), cost (wind energy is still more significantly more expensive than hydropower), and political uncertainty (will subsidies continue?) Norway is also facing transmission limitations, just like here.Especially of note is that public resistance to wind energy projects has increased in recent years, for all the typical reasons - avian mishaps, other wildlife impacts, and aesthetics.

Planning for Renewable Energy at a MN Utility - Glen Skarbakka, Mgr of Resource Planning, Great River Energy

The speaker talked about the challenges of meeting GRE's rapidly growing load (about 100 MW/year) while incorporating renewables. GRE's load is mostly residential, meaning that demand goes way up in the summer, but varies a lot day to day, depending on weather. This makes it a challenge to use wind energy, which is not dispatchable in the traditional sense (though forecasting has gotten highly accurate.)

I was mostly impressed by GRE's goals to reduce its CO2 emissions to 2000 levels by 2020, as well as doubling its renewable objective of 10%. The speaker admitted that meeting the first will be extremely challenging, to say the least.

Wind Energy - Present Projects and Potential in Minnesota - John Dunlop, American Wind Energy Association

The speaker talked about how wind turbine technology has advanced over the last 20 years and how wind energy continues to grow rapidly in the US and elsewhere. He also provided a nice summary of the recent situation with the Dept of Defense blocking new wind farms due to concerns over radar. The report finally came out on Sept. 27, 143 days late. It didn't really say anything that could not have been written in one day - only that wind farms can interfere with radar. It didn't offer any mitigation measures to help current or future projects move forward. Sounded like a great use of taxpayer dollars.

Update on CapX 2020 - Terry Grove, GRE

The CapX project is an ongoing transmission planning project involving all major utiltiies in Minnesota, planning transmission needs through 2020. I already knew how long this process takes, but the uninitiatied would probably be shocked. Though, there are good reasons it takes this long. The Certificate of Need process for the first group of lines, mainly to improve reliability, alone will take through 2008. Then route permits have to be aquired, which will take through 2010. During this time, lots of meetings are held with city governments, landowners, and other agencies. The proposed Brookings -SE Minnesota line alone will require that 200,000 landowners be notified. This is just a massive undertaking.

From what I've heard, the last round of tranmission construction was an extremely drawn out and painful process. It will be even worse this time around, due to the industry restructuring that has occured since then. Now, independent power producers can bid in new projects to the MISO queue. Most of these projects fail to get off the ground, since banks won't supply the financing until a power purchase agreement is signed - a chicken and egg problem - meaning that planners don't know where new generation will actually be.

Results of Research Funded by NSF, Xcel Energy, and ONR - Ned Mohan, Electrical Engineering, U of MN

Ned gave an overview of renewable energy-related research in the EE department, then talked mainly about a matrix converter his research team developed. The converter can be used with any variable speed generator, including wind turbines and will boost power output by 1.5X of nameplate ratings. This would also eliminate the problem of bearing currents in typical motors, which eventually destroy the bearing and represent a major maintenance headache. Ned also talked about the benefits of using silicon carbide (SiC) in power electronics, which improves device performance by 10-100 times over plain silicon (Si). The cost of SiC continues to fall, making the use of this material more feasible.

Skepticism About Distributed Generation

When one has made a decision to kill a person, even if it will be very difficult to succeed by advancing straight ahead, it will not do to think about doing it in a long, roundabout way. One's heart may slacken, he may miss his chance, and by and large there will be no success. The Way of the Samurai is one of immediacy, and it is best to dash in headlong.

-Ghost Dog: The Way of the Samurai

 

So Al Gore’s speech at NYU on September 18 got me thinking about Distributed Generation. For those who haven’t read it yet, an archived webcast and the full text can be found here.
It was a terrific speech, by the way, and I could occupy a lot of space praising it, but that wouldn’t be very interesting. After all, you probably liked it too. But it was one issue that got me thinking, and which gave the impetus for this post. What I really want to talk about today is Distributed Generation, or DG. Gore gave voice to some ideas that are very widespread among left-leaning energy advocates, and many of those ideas deserve closer consideration.

I’m using this post to flesh out some of my critiques of the idea of Distributed Generation. Fundamentally, in reference to the quote above, I think DG advocates are setting out to solve the wrong problem. Our problem is not large-station electricity generation, our problem is climate change and energy security. Its my feeling that in dealing with climate change we are likely to deploy carbon-neutral energy technologies using the same large station (or refinery) production and distribution model that we use right now.

Wikipedia describes DG thus:

Distributed generation is a new trend in the generation of heat and electrical power. The Distributed Energy Resources (DER) concept permits "consumers" who are generating heat or electricity for their own needs (like in hydrogen stations and microgeneration) to send surplus electrical power back into the power grid - also known as net metering - or share excess heat via a distributed heating grid.

 Here’s what Gore says on the subject.

Today, our nation faces threats very different from those we countered during the Cold War. We worry today that terrorists might try to inflict great damage on America’s energy infrastructure by attacking a single vulnerable part of the oil distribution or electricity distribution network. So, taking a page from the early pioneers of ARPANET, we should develop a distributed electricity and liquid fuels distribution network that is less dependent on large coal-fired generating plants and vulnerable oil ports and refineries.

 So the main point of DG is that we rely more and more on homes and businesses producing their own electricity, and possibly selling electricity onto the grid and less and less on large station power generation (how we, by and large, do things now). Gore extends DG to include distributed (presumably somewhat larger scale) biofuels production as well. The main arguments are security (Gore’s argument), greater energy efficiency through the use of combined heat and power, and economic/self-reliance benefits (producing your own power, yeah!).

I think a lot of DG advocates miss some glaring problems.

DG and Economies of Scale

One problem with DG is that it would rely on small-scale power generation. This is actually put forward as one of the main BENEFITS of DG by many advocates. What these advocates miss is that the economics of energy production are absolutely dominated by economies of scale.

Let’s use wind as an example. A 1MW turbine produces cheaper electricity than a 200 KW turbine. And a large scale project produces cheaper electricity than a small scale project. The reasons for this are fairly intuitive. There are a lot of fixed costs that must be paid whether you’re building a large project or a small project – feasibility studies, wind measurement, planning, running around securing financing and power purchase agreements, paying to secure all of the cement manufacturing capacity in your county to pour the bases for the towers, etc. A larger project produces more kWhs, and the fixed costs can be divided over more kWhs, making the levelized cost of power cheaper.

But if you don’t believe me, you can use NREL’s online Wind Energy Finance Calculator.

To prove my point, I calculated the real levelized cost of energy for a 500 kW project (small), and for a 100 MW project (200 times bigger). I used all of the default assumptions, and only changed the size of the project.

Small (500 kW) real LCOE – 64 cents/kWh

Large (100 MW) real LCOE – 1.29 cents/kWh

So the electricity from the small-scale project is about 60 times more expensive, give or take. Its also about 6 times more expensive than retail grid electricity at about 7 cents/kWh. So in asking people to adopt small-scale distributed wind, we’re asking them to pay a LOT more for electricity than they would pay for grid electricity. Note also that, according to this calculator, a large scale project sells electricity that’s probably cheaper than even WHOLESALE electricity.

Economies of scale differ for various energy technologies, but are almost always a factor. The optimal size for pulverized coal plants, for example, is on the order of 1000 MW or larger. Gas turbines burning natural gas or fuel oil have low capital cost, and are therefore more economical at small scale. But because the levelized cost is more expensive then large station power, and they can be quickly ramped up and down, they are typically used only for peaking power.

Solar power is also cheaper at scale. Home or business scale photovoltaic panels produce electricity at around 20 cents/kWh (around 3 times higher than retail electricity). Only large-scale concentrating solar can produce electricity at anywhere near retail rates.

I could go on and on. The fact is that I can’t point to a DG technology that delivers electricity at a rate that is cheaper than, or even close to, the cost of grid power.

Economies of scale aren’t going away. If we have a limited amount of money to spend, as a society, on dealing with climate solutions, the cost of individual solutions must be a factor. Until we see the new cheap solar panels or fuel cells that we constantly hear are 6 months away (how’s that for a “Friedman”?) may not be able to afford the deployment of DG on a large scale.

Giving Up our Great Renewable Energy Resources

Another damning aspect of DG is that it may mean giving up most of our greatest renewable energy resources. Renewable energy resources like wind, solar, and biomass are not uniformly abundant around the nation. And, unfortunately, many of the best resources fall far from population centers. To stick with the wind example, taking advantage of the vast wind resource of the Great Plains likely means building large transmission lines connecting the wind resource with the potential users of that wind energy (or building large hydrogen pipelines, or building infrastructure for some other energy carrier).

This is true for biomass as well. In urban areas, where most energy is used and most people live, there are serious limits on the potential biomass supply. Take the Twin Cities as an example. There is a famous district heat project in St. Paul (District Energy) that has recently switched from coal to biomass as an energy source. Other projects are being planning, including Rock Ten and the south Minneapolis project formerly run by the Green Institute. Those projects are reportedly having great challenges in finding a sufficient supply of biomass because District Energy has secured much of the available supply of urban wood trimmings and the like. So we’re reaching the limited of the DG biomass potential in the Twin Cities, and supplying only a small fraction of the metro area’s biomass needs.

Utilizing the country’s biomass supply on a large scale probably means having projects in rural areas – with cheap land, fertile soil, and lots of biomass, and transporting products like cellulosic ethanol to demand centers. This will likely be wonderful for rural areas, but its not DG.

Solar energy may one day be an exception to this, but right now economics and the efficiency of panels stand in the way.

Conclusion

My point is not to argue that DG shouldn't be done. I think there are many niche applications for DG. In rural areas and small rural communities, for example, there will be applications for Distributed Generation from renewables, possible in combination with combined heat and power. I know some people who are very excited about their rooftop solar panels, and they don't really care that they're paying a lot for the electricity. I also think that there are credible scenarios under which DG could play a larger role in our energy system, provided there are some really fundamental technological innovations. I think that the vision of mass-produced, highly efficient, renewable DG technology, similar to Personal Computers, is pretty exciting to contemplate. But lets not fool ourselves. This kind of thing is a ways off, whereas there are a variety of large-scale carbon-neutral technologies that are commercial or near commercial and could be deployed over a relatively short time frame.

There are many energy advocates who feel that large station electricity generation is bad by its very nature. There are some who offer DG as an alternative, and even use the DG alternative as a rationale for fighting new transmission and new large energy projects. In the MN legislature last year there was infighting between those who wanted only community, small-scale wind development and those who wanted 20% renewable energy standard which would require a lot of large-scale projects.

All that said, I think that macro-scale analysis of power generation technologies, resources, and demands, will reveal that DG is likely to play a small role in the near term. DG can't be used as an excuse to fight large carbon neutral energy projects.

I welcome comments, and hope this starts some discussion.

 

Shrieking for Energy

The "Coalition for Affordable and Reliable Energy" (CARE), a coal lobby marketing firm, has decided that laptop discoveries about coal will incite women to shriek out loud about "American Energy".

No spontaneous support shrieks have been reported on the Washington DC metro, where the advertisement is running.

There is a lot of support for "American Energy," including "American Energy Independence," "American Energy Security," and my favorite, "Americans for American Energy" (as opposed to Russians?!). The biggest "American Energy" front runners are wind energy, biofuels, and coal. No word yet on whether the European wind energy industry is thinking of changing their name in light of this development.

Minnesota energy historians may remember a similar "energy-excitement" marketing genre from the Padilla Speer Beardsley marketing firm (lesser known as Vanilla Pears and Birdseed), which was hired by the MN Department of Agriculture for their 2004 MN State Fair booth, which featured renewable energy.

Nothing says stereotype like white people in birkenstocks (and that lady second from the right is really whooping more than shrieking).  And no marketing campaign is cheaper than when you gather everyone in the office for the main photo op.  No word on whether the Dept of Ag feels shorted that they weren't invited to be in the picture.

Contrast that with the opposite trend for this Latin American wind energy campaign.

Now we're talking enthusiasm.  There's a wind turbine.  There's a guy.  Wind energy.

Details of the emerging energy marketing genre wars are unknown at this time, but will no doubt be vetted in future advertisements at other random locations where people are fairly oblivious to the point.

Consumer Reports

The October Issue of Consumer Reports contains an article titled "The Ethanol Myth. Consumer Reports' E85 Tests Show That You'll Get Cleaner Emissions but Poorer Fuel Economy... If You Can Find It."

In the "CR Quick Take," the article states: "Despite avid support of the Bush administration and major American car companies, E85 is unlikely to fill more than a small percentage of U.S. energy needs." Since when has the Bush administration "avidly" supported anything but war and oil?

The article got off on the wrong foot with me, highlighting several negative "factoids" that CR came up with from the "battery of tests" that they put the 2007 Chevy Tahoe through. Example: "E85 emits less smog-causing pollutants than gasoline, but provides fewer miles per gallon, costs more, and is hard to find outside the Midwest." If a reader were to read just the title and the "CR Quick Take" for the article, they would get the impression that ethanol is at best useless and at worst causing more harm than good.

A few pages further on, however, the article redeems itself a bit with some good critiques about how CAFE standards are calculated for E85 vehicles and the importance of more fuel-efficient vehicles in general, and ends with a more positive outlook on the potentials of cellulosic ethanol. Pretty heady stuff for Consumer Reports.

The Great Corn Rush

The Star Tribune featured ethanol in an above-the-fold front page story with a two-page spread inside in today's Sunday paper. The story, titled The Great Corn Rush, details the economic benefits that towns recieve from the construction of new ethanol plants. It is sort of a classic story of a small town benefiting from a big new industry until they realize that it's just like any other business and a lot of profits are leaving the town limits.

There is also an adjacent story talking about how tax payers have to "pick up the tab" for every new ethanol plant that gets built because of the "millions of dollars of state subsidies" ethanol recieves. Where is the story about how many subsidies fossil fuels recieve?

Also: Where's the above-the-fold story on the economic benefits of wind??

Ethanol in Rural Areas

The Pioneer Press delves into the history of ethanol subsidies and who is benefiting from today's ethanol boom. It highlights the important role of governmental policy (subsidies and mandated use) in the ethanol industry.

At this point in time though, we must question who is benefiting from the government subsidies and if that is who we want to benefit.

"All of energy is subsidized," said Hatch. "Oil is subsidized in terms of $30 billion (a year) in credits and incentives. Ethanol is. Wind energy is."

Hatch says the state should promote local ownership, which provides the greatest local benefit. "If the outsiders are coming in, they're coming in because it's profitable — they don't need a subsidy."

Much like Windustry focuses on bringing the economing benefits of renewable energy to rural areas, we should work to make sure our local rural communities benefit both from a healthier environment and economically. The way things are set now, it looks like ethanol's contribution to the vitality of rural areas is diminishing.

Yet as the ethanol industry changes, so do its economics, and not in ways that will help rural areas:

More outside investors. Once, almost all of Minnesota's ethanol plants were owned by local farmers, who delivered their corn, collected any profits and spent much of the money locally. Now, almost all of the new plants are owned by distant investors and corporations, and most of those profits will leave the community.

Fewer jobs: New factories do provide jobs, but ethanol is not a labor-intensive industry, and it's becoming less so. A massive new plant producing 100 million gallons a year — twice the size of any plant now operating in Minnesota — would need only 50 to 55 employees, according to an Iowa State University study.

Biotech Switchgrass

The NY Times has an article looking at attempts to bioengineer crops for easier conversion to biofuels.

Seems like current efforts are mainly focusing on switchgrass, corn, and soybeans, but they are also looking to certain trees. I continue to find this surprising. Don't trees require too much water to make them poor candidates for creating biofuels?

Developing energy crops could mean new applications of genetic engineering, which for years has been aimed at making plants resistant to insects and herbicides, but would now include altering their fundamental structure. One goal, for example, is to reduce the amount of lignin, a substance that gives plants the stiffness to stand upright but interferes with turning a plant’s cellulose into ethanol.

This creates fears of new crops breaking free from corporate control and reproducing in the wild. I wonder if this is as big a threat as from bioengineering disease resistance. By this I mean, wouldn't reducing the amount of lignin make the plant less competitive in the wild? I would think plants have evolved so much lignin because it is a survival strategy...

With so many people clamouring about high gas prices and the need for energy independence, I wonder how much proper testing these new varieties will receive. I am guessing they will rushed through as we desperately try to cut oil imports.

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