Oregon Prepares to Buoy Up Wave Energy

Credit: U.S. Department of Energy

By Joni Sliger, Energy Fellow

Oregon legislators may soon provide financial support to a wave energy test center planned off the coast of Newport, Oregon, known as the Pacific Marine Energy Center South Energy Test Site (or PMEC-SETS). After the legislature convenes this Wednesday, the Senate Committee on Environment and Natural Resources will begin discussing SB 285, a bill to appropriate $4.6 million for the facility. State funding will (hopefully) supplement a promised grant from the U.S. Department of Energy of up to $40 million. Optimistically assuming that the federal grant (which is “subject to appropriations”) makes it through the Trump administration gauntlet, here’s what Oregon can expect from PMEC-SETS.

PMEC-SETS will be a deepwater test facility for utility-scale wave energy converters. In other words, it will provide the offshore infrastructure necessary for developers to test huge devices that aim to capture energy from ocean waves and transform it into electricity. As shown in the image above, the facility will include anchors off the coast to which wave energy converters can attach for tests; these anchors will connect to the onshore grid network via undersea transmission cables. The plan is for the facility to be fully operational by 2020. According to the DOE, the facility will be a world-class testing facility with the ability to accommodate up to 20 converters at a time and supply up to 20 MW of electricity to the grid. PMEC’s director Belinda Batten describes the testing as “the last step before commercialization” since testing enables developers to prove the seaworthiness and cost-competitiveness of their technologies. By providing a place for developers to test new wave technologies, PMEC-SETS will facilitate the development and growth of the wave energy industry.

As I noted in a previous post, wave energy is a very new technology, but it has huge potential. According to the Bureau of Ocean Energy Management, wave energy could feasibly meet almost a third of the U.S.’s energy needs. Additionally, because over half of the U.S. population lives within 50 miles of a coastline, wave energy could be produced close to where it is consumed, reducing the need for additional transmission infrastructure. To obtain significant generation from wave power, however, more projects need to be deployed. Some projects and testing facilities exist, as shown in the U.S. Department of Energy’s Marine and Hydrokinetic Database's map, but not many: only three sites off the coast of Washington, Oregon, or California are currently testing wave electricity-generating projects, 2 of which are off Oregon’s coast.

Oregon is particularly well-suited to leading wave energy development. The Oregon Wave Energy Trust describes Oregon as “uniquely positioned to be North America’s leader in ocean energy” because of the potential energy of the state’s coast plus the state’s nearby transmission system, transportation infrastructure, ready manufacturing and supply chain, and support from legislators and research institutions. If the new industry takes off, it could provide numerous jobs to Oregon’s communities in addition to the many other benefits of local renewable energy generation. To become a leader in wave energy, Oregon needs to enact SB 285 and support projects like PMEC-SETS.

Putting the Pedal to the Metal for Electric Vehicles in 2017

By Joni Sliger, Energy Fellow

Recharging a Toyota RAV4 electric vehicle
Credit: Warren Gretz / NREL

Vehicle electrification is vital to a clean energy future, and it is a process that may soon accelerate in Oregon. Improving Oregon’s transportation system broadly is one of Governor Kate Brown’s top four action items for this legislative session. Her legislative agenda notes that an improved transportation system is necessary as the “backbone of a thriving Oregon economy” and that it can help the state reach its greenhouse gas reduction goals (currently, to reduce emissions 10% below 1990 levels by 2020 and 75% below 1990 levels by 2050). Transportation is Oregon’s highest emitting sector, according to the Oregon Greenhouse Gas Inventory, and amounts for more than a third of all Oregon’s emissions. To combat climate change and meet Oregon’s greenhouse gas reduction goals, we need a cleaner transportation system; for that, we need vehicle electrification.

Some electric vehicles are present in Oregon, but the market has a lot of room for growth. According to a new online dashboard designed by the Center for Sustainable Energy for the Auto Alliance, Oregon ranks third in the nation for the state’s market share of light-duty electric vehicles, measured from 2013 to 2016. But this market share—the number of electric vehicles out of all vehicles in the state—is still only 1.5%. While the proportion of electric vehicles relative to all vehicles is higher only in Washington and California, the overwhelming majority of vehicles sold are not electric. Oregon has made more progress in deploying electric vehicles than most of the U.S.: for example, despite a relatively small population, Oregon ranks 10th in the nation for number of electric vehicles sold, with 10,825 electric vehicles sold in the state from 2011 to 2016. However, Oregon still needs to do more to electrify its transportation sector. 

One way to galvanize the market is through public investment. For example, the Mayor of Portland is one of four West Coast mayors working together to support the transition to electric vehicles. In a Request For Information (RFI) to auto manufacturers, the mayors announced their interest in obtaining or leasing up to 24,000 electric vehicles. The mayors propose to change city fleets to electric vehicles, hoping to lead by example by adopting electric vehicles. Additionally, they hope such high demand will help the young market transition to mass production, eventually resulting in lower prices for all consumers. The bid for the RFI is due March 1, so manufacturers still have time to submit proposals.

While we can hope for legislators to act this session to further support vehicle electrification, they have also taken action recently. Last session, Oregon legislators passed the Clean Electricity & Coal Transition Act. As my colleague, Andrea Lang Clifford, wrote last year, the new law requires the state’s utilities to propose EV charging infrastructure programs, which the PUC may approve if it finds the proposals to be prudent investments of ratepayers’ money. As Andrea noted, this is an incremental step, heavily dependent on the PUC’s views of prudency. While the utilities submitted their proposals in late December 2016, the PUC has yet to rule on them. Among the proposed actions are (1) pilot projects for new charging infrastructure (including charging stations five electric Tri-Met buses); (2) educational campaigns, including showcasing electric vehicles at car shows; (3) additional research into the technologies involved; and (4) a rate change for vehicle charging to incentivize the market switch. (You can read Pacific Power’s applications here and here; PGE’s here; and Idaho Power’s here). The PUC is set to have hearings on most of these applications in early February and decide whether the proposed actions are worth the cost to the ratepayers, so stay tuned to learn how the PUC rules on these proposals.

This year, Oregon legislators are ready to work on major transportation legislation. Hopefully, legislators will advance vehicle electrification and continue moving Oregon towards a clean energy future. 

Offshore Wind: Costs and Considerations for Future Development

By Joni Sliger, Energy Fellow

A floating wind turbine near Portugal.
Credit: Senu Sirnivas / NREL

As I reported last week, offshore wind energy will soon be flowing to the residents of Block Island, Rhode Island. Yet some continue to question the costs of Block Island Wind Farm (BIWF): will this project benefit the electricity consumers as much as it benefits the industry?

Financing renewable energy projects is no small feat. Developers typically need to lock in a contract proving to stockholders and regulators that the investment will be recovered. In part, financial difficulties explain some of the failed offshore wind projects of the past, such as Oregon’s WindFloat Pacific. The WindFloat Pacific project would have created floating offshore wind turbines near Coos Bay, Oregon (where the ocean floor is too deep for anchored turbines like at BIWF). Competing with low electricity prices from cheap hydroelectric, however, the project was unable to secure a contract from a power purchaser. (Note though that hydroelectric power generation has its environmental problems and is not a guaranteed long-term electricity source.) Without such a contract and lacking regulatory approval, the Windfloat Pacific Project stalled.

At Block Island, BIWF did not have to compete with cheap hydroelectric power. Instead, the islanders rely on imported diesel fuel, costing about $0.50/kwh currently, or five times the average electricity rate in the U.S. of $0.10/kWh. Under BIWF’s contract with utility National Grid, rate-paying islanders’ current electricity prices will drop to $0.30/kWh. Mainlanders, in contrast, who receive the excess wind energy, will face above-market rates in order to finance the $440 project. But some continue to question whether the price difference for the islanders reflects the whole story and will truly result in greater savings for the islanders or the state. (For an inside look at some of the intricacies of ratemaking, you can read about one of the Public Utility Commission meetings discussing BIWF here.)

According to the Rhode Island Public Radio, the true value of BIWF will not be clear for several years. While analysts can consider the current price of diesel fuel (the island’s previous fuel source) and compare it to the contractual price for offshore wind energy, the price of diesel varies. Long-term price stability is one of many benefits of renewable energy sources. Renewables offer additional benefits as well, many of which have not historically been considered in ratemaking, such as lower emissions and greater independence from global markets. For example, consider this proposal to build offshore wind farms in order to mitigate hurricane damage by reducing wind speed at a projected net cost of...zero. Yet whatever the net cost of a project, it is the upfront cost that can be daunting to developers, utilities, and regulators.

Fortunately, according to a new study just published in Nature Energy, the cost of each type of wind energy (onshore, offshore, and offshore floating) is projected to drop substantially in the coming decades. From 2014 to 2030, experts project a 24-30% reduction in costs; by 2050, they project a total reduction of 35-41%. While future costs are difficult to predict with much accuracy, the study surveyed 163 experts, the largest elicitation study on energy ever conducted. 

In addition to rising market confidence and falling market prices, offshore wind also has the benefit of the federal government’s attention: the Department of Energy and Department of the Interior recently released the National Offshore Wind Strategy: Facilitating the Development of the Offshore Wind Industry in the United States. Calling offshore wind energy development a “significant opportunity” for the nation, the report identifies 34 actions for the DOE and DOI to take in order to “facilitate responsible, robust, and sustainable offshore wind development in the United States.” With supportive governance, competitive market prices, and visionary developers already taking the plunge into offshore wind development, offshore wind energy may soon be coming soon to a coast near you. 

SB 1547: A Step on Oregon’s Path to Reducing Greenhouse Gas Emissions:

By Andrea Lang, Energy Fellow

 

Credit: Oregonlegislature.gov

Last Wednesday’s passage of SB 1547, called the “Clean Electricity and Coal Transition Act,” marked a historic first step towards reducing Oregon’s carbon footprint. The bill is the first in the nation to attempt to completely eliminate coal from a state’s electricity supply, and may be the first of many steps on the path towards getting Oregon on track to meet its goal of reducing greenhouse gas emissions to75% below 1990 emission levels by 2050. This blog explores what the bill achieves and outlines future strategies Oregon could pursue to achieve its emission reduction goals. 

What does the bill do?

The Clean Electricity and Coal Transition Act contains a number of components aimed at reducing carbon emissions. To summarize, the bill: (1) requires the state’s two investor-owned utilities to eliminate coal-fired generation from their retail electricity mix in Oregon by 2035 (with an exemption for short-term wholesale purchases), (2) increases the state’s renewable portfolio standard to require that 50% of Oregon’s electricity comes from renewable sources by 2040, (3) creates a community solar program, and (4) allows utilities to propose transportation electrification projects. 

What other policy options are available?

There is no doubt that the bill improves on existing policies to reduce Oregon’s carbon emissions. However, this bill should not be the “end of the line” in terms of Oregon’s actions to address climate change. In fact, when lawmakers and advocates discussed a previous and nearly identical version of SB 1547 in the Senate Committee on Business and Transportation in February, Oregon Public Utility Commissioner Susan Ackerman stated that she thought there were better policies to address greenhouse gas emissions. Specifically, she identified cap-and-trade and carbon tax policies as being effective, low-cost ways to reduce emissions in the state, and also said that she thought such policies could coexist with and supplement the Clean Electricity and Coal Transition Act. 

Cap-and-trade programs, such as the program currently in place in California, work by mandating a cap on emissions, allocating emission allowances, and allowing emitters to buy and sell those allowances. By creating a finite number of tradable emission allowances, cap-and-trade policies create an incentive to reduce emissions by establishing a market for buying and selling allowances. Oregon had considered enacting a cap-and-trade policy this year, but the bill did not make it out of committee. 

A carbon tax is the other obvious policy option for Oregonians to consider as a next step. This relatively straightforward policy would involve levying a per-ton tax on carbon dioxide emissions. As a result of the tax, emitters are forced to consider whether the benefits gained from emitting carbon are greater than the cost of the tax. In addition, the revenues generated could be used to offset other tax burdens, mitigate the effects of climate change, or support other efforts to reduce emissions. A Congressional Budget Office study concluded that carbon taxes can be up to five times more effective than a cap-and-trade system, but voters often find the idea of a “tax” hard to swallow, making such policies politically difficult to enact.  However, British Columbia has already adopted a carbon tax, and Washington is currently considering one as a result of a successful ballot initiative. 

Adoption of either of these policy options could be the next step in reducing Oregon’s carbon emissions once Governor Brown signs the Clean Electricity and Coal Transition Act into law.

Is piecemeal policy-making enough?

In addition to considering individual policies to address carbon emissions, it is time for Oregon to carefully assess whether its existing energy governance framework is sufficient to address the problems facing the state. Climate change, along with a rapidly transforming electricity system, likely necessitates a reform of the state’s energy governance. For example, New York is attempting to reform its energy system through its “Reforming the Energy Vision” (REV) initiative. The REV aims to develop a comprehensive strategy to evaluate the ways the electricity system is changing or should change, and to address those changes. As we explained in our Countdown to 2050 Report, Oregon is sorely lacking a comprehensive policy framework to facilitate the transition to a 21^st century energy system. Continuing to enact piecemeal policies without adopting a comprehensive strategy and establishing an effective governance system to properly implement such policies is ineffective. 

Thus, it’s important that the passage of the Clean Electricity and Coal Transition Act does not make renewable energy and climate advocates complacent. To be sure, the bill is a useful step in the right direction, but it’s only one of many steps on the path to meeting Oregon’s emission reduction goals and transitioning to a 100% renewable power grid.

Transportation Electrification: A Primer on One of the Less-Reported Provisions of Oregon’s Proposed Clean Electricity and Coal Transition Bill

Credit: NREL.gov

By Andrea Lang, Energy Fellow

              

The Oregon Legislature is likely to vote on the proposed Clean Electricity and Coal Transition bill in the next few days (either as HB 4036 or as SB 1547). Although the most controversial parts of the bill focus on transitioning Oregon off of coal and increasing the state’s renewable portfolio standard, the bill addresses a number of other energy-related issues. Among these is a provision that aims to accelerate transportation electrification. So what is transportation electrification, who wants it, and what would this bill do to advance it?

What is transportation electrification?

Transportation electrification refers to the gradual shift away from gasoline-fueled vehicles towards vehicles that are fueled instead by electricity. It’s worth noting at the outset that although this sounds like a shift from old technology to new technology, it is absolutely not. Energy.gov provides a great timeline of what has happened with electric cars, but here are some highlights: the first electric successful electric car appeared in the U.S. in 1890, and by 1900, one-third of cars on the road were electric. But the debut of the more affordably priced Ford Model-T in the early 1910s contributed to an explosion of sales and the corresponding infrastructure—gas stations—to support gas-fueled vehicles. One of the biggest barriers to more widespread deployment of electric vehicles today is that existing infrastructure favors gas-fueled cars because there are many more gas-stations than there are electric plug-in stations to charge electric vehicles; in short, owning a gas-fueled vehicle is simply more convenient. Thus, transportation electrification efforts are largely focused on developing that infrastructure.

Who wants transportation electrification?

Transportation electrification is a popular idea for both utilities and environmentalists, so it’s no surprise that a provision addressing it appears in a bill negotiated as a compromise between both sets of interests. On the utility side, Edison Electric Institute (an association representing investor-owned utilities across the country) published a report in 2014 explaining the benefits of transportation electrification for utilities and recommending ways that utilities can lead in developing that infrastructure. The report noted that energy efficiency efforts will continue to cut into utilities’ retail sales, but that transportation electrification could increase load (demand), ensuring sales long into the future. In addition, the report recognized that the government is likely to mandate increased electric vehicles in the future, and that utilities should therefore by at the forefront in shaping the market for transportation electrification.

For environmentalists, a move towards electric vehicles is vital for reducing transportation emissions. The transportation sector is Oregon’s largest-emitting sector, contributing 39% of the state’s total emissions. Although electric vehicles will not be carbon free until the electric grid is carbon free, electric vehicles in Oregon annually generate roughly 1,500 lbs. of CO₂ equivalent (a number that will drop the greener our grid becomes), compared to the roughly 11,600 lbs. emitted by gasoline vehicles. Clearly, shifting to electric vehicles on Oregon’s relatively low-carbon electricity grid would be a huge step towards reducing emissions from the transportation sector.

What would this bill do to advance transportation electrification in Oregon?

The bill would require Oregon’s Public Utility Commission (PUC) to direct the state’s two large investor-owned utilities to submit applications for programs to accelerate transportation electrification. Essentially, the bill allows utilities to propose development of electric vehicle charging infrastructure projects that utilities could recover in their rate bases if the PUC determines that such proposals are prudent. A similar provision in California has resulted in that state’s PUC approving $67 million in utility spending on 5,000 electric vehicle charging stations. At the same time, the California PUC rejected a $654 million proposal to build another 25,000 stations. Clearly, the amount of charging infrastructure development that would occur in Oregon under the bill will depend on the PUC’s actions related to utility electrification proposals.

According to the parties that negotiated the proposed bill, the transportation electrification provision of the proposed bill would be an incremental step in helping Oregon develop electric vehicle charging infrastructure. I agree. Depending upon how the PUC would view the prudency of utility proposals, it may be a pretty small incremental step. To ensure a more robust transformation, Oregon should build on work already proposed in the state’s “Energizing Oregon” roadmap that includes a comprehensive and organized strategy to advance the electric vehicle market in Oregon.