Vermont Leaders Back Away from Renewable Energy Goals
- Feb 25, 2012 7:22 am GMT
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Some Vermont renewable energy policies and programs are the result of “constituent service” by ambitious legislators to enable the grabbing of as much federal subsidies as possible by Vermont and out-of-state renewables oligarchies, i.e., vendors, project developers, financial-types-selling-tax-shelter LLCs, i.e., the top 1% of households.
These policies and programs have the effect of raising household and business electric rates higher than they would have been, raising the prices of goods and services, and lowering living standards of the other 99%. Whereas they are beneficial for the businesses of the renewables oligarchies, none of them are beneficial for the rest of Vermont’s households and businesses.
Vermont’s households and businesses were just barely making it before the Great Recession. Then the Great Recession occurred and on top of that the billion dollar flood damage of hurricane Irene. As a result, households and businesses are in belt-tightening mode and worried about higher energy costs and gas prices further lowering living standards and profits and making Vermont’s economy even less competitive.
After many complaints, Vermont legislative leaders finally backed away from unrealistic renewable energy, RE, goals, as have leaders in Germany, Spain, the Netherlands, the UK, etc. The main reason for the backing away is the lack of federal subsidies for the huge capital outlays required for RE projects which, as it turned out, produce just a little of variable, intermittent, high-cost energy (3-5 times New England annual average grid prices) that is not all that “clean, green, CO2-free”.
Reps. Klein and Cheney, two legislative leaders on energy issues, announced:
– the Vermont Department of Public Service, VT-DPS, had informed them Vermont would not meet its goal of 20% of its energy from in-state renewable sources by 2017. If all RE projects now in the planning stages are built – highly unlikely – Vermont would be getting about 18% of its energy from renewable sources by 2017.
– they are withdrawing their support for setting a new goal of 30% renewable energy by 2025.
Klein: “You have to balance ambition and what’s doable”.
Cheney: “We don’t want to put out a percentage because it sounds good and not be able to meet it”.
Klein’s statement indicates he would like to give more subsidies to project developers to quickly have more RE, but there is not enough political support for them, likely because people have finally wised up to the drawbacks of RE, such as the costly, environmentally-destructive Lowell Mountain wind turbine facility, and because people think increased energy efficiency is a much better approach for Vermont.
Cheney’s statement indicates she may have helped put out “feel-good” targets for RE in the past, such as poor Vermont having to turn itself inside out to have 90% of its energy from renewables by 2050 (not even rich Germany has such a goal), but has lately realized voters don’t believe in expensive, rah-rah fairy tales.
Klein’s and Cheney’s stature in the legislature and among voters would have increased, if they had been able to point to more RE success to justify the excessive environmental damage, capital outlays and electric rates increases due to RE projects.
Yesterday’s VT-DPS report also states:
– RE projects already operating and in the pipeline add up to 16.5% of Vermont’s energy consumption.
– Five years (2012-2017) is not long enough to plan and build enough new projects to reach the 20% goal.
– RE development is expected to slow because federal subsidies for RE are expiring.
Klein and Cheney have been working since early January on legislation that had set the 30% RE goal for 2025. Klein said he was putting that bill aside to work on legislation to move the state toward mandatory recycling of solid waste. He said he had asked VT-DPS officials to make a new proposal regarding RE.
Hopefully, VT-DPS will put RE aside as well, and will henceforth concentrate on measures for increased energy efficiency for households and businesses, and will end the practice of subsidizing dubious projects, such as the Clean Energy Development Fund, CEDF, providing a $250,000 cash grant to install a poorly-performing, Vermont-made, wind turbine at the politically-well-connected Bolton Valley Ski Resort. Those funds should have been used for energy efficiency upgrades of the housing of about 25 lower-income households that are not politically-well-connected.
Klein and Cheney said they had been hearing a groundswell of concern voiced by households and businesses that RE, which cost 3-5 times the NE annual average grid prices, would drive up electric rates, raise the prices of goods and services and make Vermont even less competitive.
The lack of federal subsidies and the spectacle of 10,000-ft-high, no-fly zones, demonstrations on Lowell Mountain and at the Vermont State House, and major blasting on the mountain to build access roads and foundation areas for the 21 wind turbines @ 3 MW each, has dampening the naive, irrational exuberance of many legislators for RE. The turbines are owned by GMP/Gaz-Metro-Canada; environmentally-damaging, health-damaging, noise-emitting, 459-ft tall with 373-ft diameter rotors, on 2,500-ft high ridge lines.
These legislators are likely concerned that their other favorite state programs will be cut to pay for RE subsidies; the past practice of raising taxes and fees on households and businesses for RE is not an option, given the current economic conditions.
Renewables Portfolio Standard Harms Vermont’s Economy: Does the Klein/Cheney withdrawal of their support for the 30% RE goal by 2025 imply the renewables portfolio standard, RPS, will also no longer be a goal? Yes it does, because at the last minute, the RPS had to be deleted from the energy bill to get enough votes to pass the rest of the bill.
The RPS would have REQUIRED utilities to buy a minimum percentage of their energy as RE at 3-5 times New England annual average grid prices, whenever offered, whether they need it or not. It would lead to significant additional increases in electric rates for households and businesses, but would result in miniscule reductions in CO2 emissions, as shown by the above articles.
The RPS was deemed necessary by Vermont’s wind energy oligarchy, because RE is expensive and utilities would not buy it on their own. They have to be forced. Whereas the goal of the RPS is to reduce CO2 emissions, not a single state RPS requires verification of CO2 reduction from any RE project. Legislators simply take lobbyists’ assurances that CO2 emission reductions will be realized.
Even though utilities know the drawbacks of costly, variable, intermittent RE, they, for political and business reasons, often play along with legislature RE schemes to ensure generous electric rate increases; as the sayings go, “you can’t fight City Hall” and “one hand washes the other”.
Vermont utilities typically buy energy under long-term PPAs from in-state and out-of-state producers and buy from and sell to the grid. An RPS requiring utilities to buy 25% of their energy as RE from in-state producers at 3-5 times annual average grid prices reduces their ability to buy low-cost energy from the grid, which would keep electric rates down for the benefit of already-struggling households and businesses and the Vermont economy.
The RPS would have been just another subsidy for Vermont’s renewables oligarchy, but it is not necessary for Vermont, as it already has one of the lowest CO2 emissions per capita and per $ of SGP in the US, courtesy of Hydro-Quebec and Vermont Yankee which supply steady, 24/7/365, low-cost, near-CO2 free energy equal to about 65% of Vermont’s consumption.
In Vermont, the CO2 emissions are commercial 11.1%, energy generation 0%, industrial 23.8%, residential 7.9%, transportation 57.2%, per US EIA and per State Energy Data System. Each Vermonter consumes about 254.5 million Btu/yr; US average 308 million Btu/yr, Europe’s average about 145 million Btu/yr.
What Vermont needs is not RE or an RPS, but:
– Gas-guzzler tax, based on mileage (the lower the mpg, the higher the tax).
– Strict, enforced building energy performance codes (Btu/sq ft/yr for heating, cooling and electricity).
– Time of day, TOD, electric rate schedules. The rates would vary hour-by-hour as daily demand varies. This would flatten the daily demand curve more effectively and at less cost than Efficiency Vermont’s staff of about 180 people and $40 million/yr budget.
These measures would require minimal public funds and subsidies, would quickly create jobs all over the state and would quickly and more effectively reduce Vermont’s CO2 emissions many times more at less cost than any RE buildout; for poor Vermont, increased EE is the most rational approach.
Example of EV subsidizing profitable businesses: The owner of an antiques gallery in Quechee told me he changed out about 130 of his light bulbs to light-emitting-diode types, LEDs, which cost about $50 dollars each. It would have cost him about $6,500, but all he had to pay was the Vermont sales tax of 6%, or $330; EV paid the $6,500, i.e., the rate payers, including the 99% who never shop at his gallery, paid it by means of the EV surcharge on their electric bills. His electric bill went from about $880/month to about $500/month.
Comprehensive Energy Plan: Remember Gov. Shumlin’s Comprehensive Energy Plan, several hundred pages of mostly statistical information and little meaningful analysis, prepared by the VT-DPS, unveiled in December 2011. The VT-DPS proposed a goal for Vermont getting 75% of its energy from renewable sources, including 35% from “new renewables” and 10% small-scale generation by 2030; the 75% would be raised to 90% by 2050.
The plan proposes many billions of dollars of investment without sufficient, credible analysis. The report should have been reviewed by INDEPENDENT professionals with decades of energy systems analysis experience BEFORE its release.
Vermont’s s renewables oligarchy, the stakeholders, influenced the writing of the plan to maximize any subsidies and tax-shelter write-offs for the owners of the RE projects. After public comments, the Plan was scrubbed and reissued, but still no year-by-year estimates of capital costs, no schedule of implementation, no year-by-year estimates of quantities and costs of each energy source, no year-by-year estimates of c/kWh impacts on household and business electric rates, no year-by-year feed-in-tariff rates at which the energy of each RE source is to be sold. These are basic items of information, presented in bar graph or pie chart format, that should have been included in any such study.
The PSB did its part and hired an outside consultant to perform a study of the impact of an RPS on future costs; a number of alternatives were studied. Instead of providing the total costs of various alternatives, the results were presented as Alternative A costing x hundred million dollars more than Alternative B, etc., a standard method of obfuscation. The PSB study also lacked the above basic items.
The outside consultant is a pro-RE company that performs such studies for public service boards, etc., of other state governments. The outside consultant likely knows what politicians like to see, and not like to see, in the reports.
The study appears to be little more than useless for a decision maker in the private sector, but for politicians and program administrators it serves as useful CYA to be able to say “we had various RPS concepts studied and the experts are saying this is what other states are doing regarding RPS and I am proposing Vermont should also have an RPS”.
Another example: Opinion polls using loaded questions to get desired focus group responses are used as covers by politicians so they can say: “see, 90% are willing to pay more for energy of the RE measures I am proposing”.
RE industry promoters said they would continue to push for a more ambitious agenda, despite the lack of federal subsidies and RE making Vermont even less competitive.
Gabrielle Stebbins, Renewable Energy Vermont, REV, which gets much of its funding from Vermont’s renewables oligarchy, rebutted business concerns about harm to Vermont’s economy by saying her industry has the potential to add many jobs in the state.
Note: The above job creation statement is a standard PR mantra and a misrepresentation of the truth, as shown below.
Ben Walsh, Vermont Public Interest Research Group, VPIRG, which gets much of its funding from Vermont’s renewables oligarchy, will push Shumlin and legislators to keep campaign promises about supporting RE. “We live in a state where people elected an administration and legislature that … said they were going to build a future of clean energy for Vermonters. We’re still very hopeful that’s what will happen in the end.”
Does Ben really think Vermonters opted for Lowell Mountain’s destruction? Does Ben really think the “Blittersdorf Plan’ of putting wind turbines on 200 miles of Vermont’s ridge lines, equivalent to 200/3.5 = 57 Lowell Mountain’s, at a cost of 57 x $160 million = $9.12 billion is a good idea?
Vermont Yankee and Hydro-Quebec STEADY, low-cost, CO2-free energy is available 24/7/365 at about 5 – 6 c/kWh. New England annual average grid prices are about 5.5 c/kWh, unchanged for about 3 years.
If one puts numbers on some of these “ideas”, it becomes immediately apparent how silly they are; that is the reason the above PSB report does not have meaningful costs for alternatives, only cost differences between one alternative versus another, a standard way of obfuscation and misleading the gullible public to enable some multi-millionaires to profit from federal and state subsidies and write-offs.
Wind Energy CO2 Emission Reductions are Overstated: Because wind energy is variable and intermittent, it requires backup by quick-ramping, open cycle gas turbine generators that ramp up when wind energy ebbs and ramp down when it surges which occurs at least 100 times per day. Such part-load-ramping operation is inefficient and requires extra fuel/kWh and emits extra CO2/kWh. The extras offset a significant part of what wind energy was meant to reduce, as proven by studies of the Irish, the Netherlands, Texas and Colorado grid operations data. The below study explains all in detail.
Gas Energy Much Less Costly Than Wind Energy: Scaling back RE is a rational response to budget realities. It is happening all over Europe. That news will get to Washington, DC, causing Obama to shift course as well, likely towards increased use of natural gas, because:
– it can be quickly implemented on a utility-size scale.
– the US has what Europe does not have: a plentiful, domestic, low-cost supply of natural gas for the next 75-100 years.
In base-loaded mode, gas, at $4/MBtu, used in 60% efficient CCGTs, produces energy at a cost about equivalent to coal, but emits 1/3 the CO2/kWh of coal and no health-damaging particulates. Its energy is steady, 24/7/365.
The owning+O&M costs of wind turbines (useful service life about 20 years), plus wind turbine connection systems to the grid (average CF about 0.3), plus HVDC transmission of the energy to population centers (average CF about 0.3), plus balancing plants (useful service life about 40 years) will be about 2-3 times the cost of an equivalent capacity gas system which would produce about the same quantity of energy 24/7/365, and would use mostly existing plant sites and T&D systems, and would emit about the same quantity of CO2, and have much less environment-damaging, health-damaging, noise-emitting impact.
Surcharges on Electric Bills: A few months ago, Klein and Cheney had called for a 55c surcharge on the electric bills of already-struggling households and businesses to fund the CEDF which is somewhat of a slush fund that provides grants and low-cost loans for mostly politically-favored RE projects.
Few Vermonters knew about the surcharge, because it was low-profiled/not widely publicized; struggling households and businesses were to be hosed again, as they were with the Efficiency Vermont surcharge on their electric bills.
However, Gov. Shumlin, politically astute, had a broader view and signaled he would not approve the surcharge, i.e., another broad-based regressive tax. That surcharge would have been increasing year after year, as has the Efficiency Vermont surcharge, currently about 5% of electric bills and rising, a regressive tax on already-struggling households and businesses.
The reason for the 55c surcharge was the CEDF will be running out of funds, because Entergy, which owns Vermont Yankee , no longer will be paying about $6 million/yr into the CEDF after March 2012. Entergy may have to agree to continue paying into the CEDF as a quid pro quo for a Certificate of Public Good from the PSB.
For comparison: VY annual production about 4,800 GWh/yr of steady, near-CO2-free, 24/7/365 energy; Vermont’s total consumption about 5,600 GWh/yr.
When the CEDF was being set up in 2005, some of the board members making the rules for disbursing subsidies were part of the renewables oligarchy. Some of them, with many CEDF-subsidized RE projects in the CEDF docket, had to resign from the board to avoid conflicts of interest. When board member Evslin suggested subsidies should be prioritized to projects with the highest return, there were howls of protests and veiled threats by other boardmembers about changing the “carefully-crafted” rules; he was voted down.
Net Jobs From Renewables is a Hoax: RE promoters and politicians often tout job creation by RE projects, but do not mention the jobs lost in others sectors of the economy.
Economists have used standard input-output analysis programs for at least 40 years to the determine the plusses and minuses of various economic activities. Numerous studies, using such economic analysis programs, performed in Spain, Italy, Denmark, England, etc., show for every job created in the RE sector, about 2 to 5 times jobs are destroyed in the other sectors.
Also, for every 3 green jobs created in the private sector, 1 job is created in government, but, as a general rule, for every job created in government about 2 jobs are destroyed in the private sector, largely due to added economic inefficiencies; no one would claim government is more efficient than the private sector. In tabular format:
Total job gain from RE subsidies = 3 in RE sectors + 1 in government = 4.
Total job loss in private sector due to RE subsidies = 3 times (2 to 5), due to 3 RE jobs created + 2, due to 1 government job created = 8 to 17
Net job LOSS due to RE subsidies = (loss 8 to 17) – (gain 4) = 4 to 13
Such job “creation” is unsustainable. Whether these government jobs are good or bad, needed or not needed, is irrelevant.
Note: This is not the case with increased energy efficiency subsidies. They create jobs in the EE sector, but also create a net increase of jobs in the other sectors, because the reduction of energy costs enables more spending on other goods and services.
Example of job shifting due to RE subsidies in Vermont: In late 2009, the Vermont legislature created the SPEED program to offer premium prices to project developers of RE; without premium prices their projects would not be viable.
Under the Vermont SPEED program it would take about $228.4 million of scarce funds to build 50 MW of expensive renewables capacity that would produce just a little of variable, intermittent and expensive energy that would make Vermont’s economy less efficient at exactly the time it needs to become more efficient.
According to the VT-DPS, the SPEED program has fallen far short of its goal of building 50 MW of RE projects for about $228.4 million. After 3 years, just 7.1 MW of RE projects costing about $32 million has been built, and is producing just a tiny quantity of energy, and has created only about 3-5 net jobs.
The VT-DPS evaluated the program in 2009 and issued a white paper which stated about 35% of the $228.4 million would be supplied by Vermont sources, the rest, mostly equipment by non-Vermont sources, such as wind turbines from Denmark and Spain, PV panels from China, inverters from Germany; i.e., creating jobs abroad with Vermonter’s money!
There would be spike of job creation during the 1-3 year construction stage (good for vendors) which would flatten to a permanent net gain of 13 full-time jobs (jobs are lost in other sectors) during the O&M stage.
Note: Legislators and the VT-DPS were irrationally-exuberant thinking the entire 50 MW would be built in 1-3 years; bureaucrats should not be doing the planning that would be more expertly done by the private sector.
It gets worse. Under the SPEED program, these projects sell their energy to the grid at 3-5 times NE annual average grid prices for 20 years; the high-priced energy is “rolled” into a utility’s energy mix, resulting in higher electric rates for households and businesses, higher prices of goods and services, fewer jobs, lower living standards, less tax collections.
Most of the larger SPEED projects, up to 2.2 MW, are owned by the top 1% of households that work with lobbyists, politicians and financial advisers to obtain generous subsidies for their tax-sheltered LLC projects that produce expensive energy at high cost/kWh and avoid CO2 at high cost/lb of CO2; inefficient crony-capitalism under the guise of saving the world from global warming and climate change. No wonder Vermont’s households and businesses are rebelling.
Energy Efficiency First, Renewables Later
A much more economically-viable and environmentally-beneficial measure to reduce CO2 would be increased energy efficiency. A 60% reduction in Btu/$ of GDP is entirely possible with existing technologies. Such a reduction would merely place the US on par with most European nations.
It would be much wiser, and more economical, to shift subsidies away from expensive renewables, that produce just a little of expensive, variable, intermittent energy, towards increased EE. Those renewables would not be needed, if those funds were used for increased EE.
EE is the low-hanging fruit, has not scratched the surface, is by far the best approach, because it provides the quickest and biggest “bang for the buck”, AND it is invisible, AND it does not make noise, AND it does not destroy pristine ridge lines/upset mountain water runoffs, AND it would reduce CO2, NOx, SOx and particulates more effectively than renewables, AND it would not require any distribution network build-outs, AND it would slow electric rate increases, AND it would slow fuel cost increases, AND it would slow depletion of fuel resources, AND it would create 3 times the jobs and reduce 3-5 times the Btus and CO2 per invested dollar than renewables, AND all the technologies are fully developed, AND it would end the subsidizing of renewables tax-shelters at the expense of rate payers, AND it would be more democratic/equitable, AND it would do all this without public resistance and controversy.
The real issue regarding CO2 reduction is energy intensity, Btu/$ of GDP; it must be DECLINING to offset GDP and population growth. To accomplish this energy efficiency needs to be at the top of the list, followed by the most efficient renewables of which hydro power is the best and residential small wind is the worst, in fact, it is atrocious. EE is so good that it should be subsidized before any and all renewables, because it is much more effective per invested dollar.
Effective CO2 emission reduction policy requires that all households eagerly participate. Current subsidies for electric vehicles, residential wind, PV solar and geothermal systems benefit mostly the top 5% of households that pay enough taxes to take advantage of the renewables tax credits, while all other households are required to pay for them by means of fees and taxes or higher electric rates; the net effect is much cynicism and little CO2 reduction. Improved energy efficiency policy will provide much greater opportunities to many more households to significantly reduce their CO2 emissions.
Energy efficiency will have a much bigger role in the near future, as energy system analysts come to realize that tens of trillions of dollars will be required to reduce CO2 from all sources and that energy efficiency will reduce CO2 at a lesser cost and more effectively. Every household, every business can participate.
For example: There is a massive energy source right at our fingertips — but, so far, this resource remains largely untapped. This energy resource is available in every state, every city and every town, does not require mining and drilling and costly power plants, makes no noise, is invisible, does not harm the environment and fauna and flora and creates more jobs than renewables per invested dollar.
The majority of our existing building stock is old and most are inefficient buildings that are destined to be in service at least 25 years or longer. Reducing the energy that is normally wasted in existing buildings offers more potential for cost-effective energy savings and CO2 emission reductions than any renewables strategy. Here are some data:
Annual Energy Use for Heating, Cooling and Electricity of Inefficient Government Buildings
NY State Office Building Campus/SUNY-Albany Campus; average 186,000 Btu/sq ft/yr. Source: a study I did in the 80s.
Vermont State Government buildings; average 107,000 Btu/sq ft/yr.
Not much can be done with such buildings other than taking them down to the steel structure and start over.
Annual Energy Use for Heating, Cooling and Electricity of Efficient Corporate Buildings
Building energy demand management using smart metering, smart buildings (including increased insulation and sealing, efficient windows and doors, entries with airlocks, variable speed motors, automatic shades on the outside of windows, Hitachi high efficiency absorption chillers, plate heat exchangers, task lighting, passive solar, etc.) were used in the Xerox Headquarters Building, Stamford, CT, designed in 1975 by Syska & Hennessey, a leading US engineering firm.
Result: The energy intensity is 28,400 Btu/sq ft/yr for heating, cooling and electricity, which compares with 50,000 Btu/sq ft/yr, or greater, for nearby standard headquarters buildings. Source: a study I did in the 80s.
France and Germany are building high-rise office buildings that average less than 10,000 Btu/sq ft/yr.
China is building net-zero-energy, high-rise office buildings designed by Skidmore, Owens, Merrill, a leading US architect-engineering firm in Chicago, Illinois.
Energy Efficiency Benefits:
– Will make the US more competitive, increase exports and reduce the trade balance.
– Usually have simple payback periods of 6 months to 5 years.
– Reduce the need for expensive and highly visible transmission and distribution systems.
– Reduce two to five times the energy consumption and greenhouse gas emissions and create two to three times more jobs than renewables per dollar invested; no studies, research, demonstration and pilot plants will be required.
– Have minimal or no pollution, are invisible and quiet, are peaceful; no opposition groups demonstrating against them, something people really like.
– Are by far the cleanest energy development anyone can engage in; they often are quick, cheap and easy.
– Have a capacity factor = 1.0 and are available 24/7/365.
– Use materials, such as for taping, sealing, caulking, insulation, windows, doors, refrigerators, water heaters, furnaces, fans, air conditioners, etc., that are almost entirely made in the US. They represent about 30% of a project cost, the rest is mostly labor. About 70% of the materials cost of expensive renewables, such as PV solar, is imported (panels from China, inverters from Germany), the rest of the materials cost is miscellaneous electrical items and brackets.
– Will quickly reduce CO2 at the lowest cost per dollar invested AND make the economy more efficient in many areas which will raise living standards, or prevent them from falling further.
– If done before renewables, will reduce the future capacities and capital costs of renewables.