Weekly Clean Energy Roundup:August 3, 2006

News and Events

States and Utilities Commit to Action Plan for Energy Efficiency
BP and GE Plan to Build Up to 15 Hydrogen Power Plants by 2016
Texas Overtakes California as the Top State for Wind Power
Interior Department Proposes New Rules to Advance Geothermal Energy
Geothermal Power Plants Planned for Idaho, Oregon, and California
Company Plans to Build Cellulosic Ethanol Plant in Georgia

States and Utilities Commit to Action Plan for Energy Efficiency

More than 50 leading organizations have joined together to develop the National Action Plan for Energy Efficiency, which aims to help states and utilities overcome barriers that limit investment in energy efficiency. The action plan, released on Monday, was developed with assistance from DOE and the U.S. Environmental Protection Agency (EPA) and with the participation of electric and gas utilities, utility regulators, state agencies, large energy users, consumer advocates, energy service providers, and environmental and energy efficiency organizations. As part of Monday’s announcement, 72 organizations in 33 states announced commitments to increase their investments in energy efficiency.

The plan builds upon best practices from successful energy efficiency programs already operating in many areas. It recommends recognizing energy efficiency as a high-priority energy resource; making a strong, long-term commitment to implementing cost-effective energy efficiency as a resource; broadly communicating the benefits of and opportunities for energy efficiency; promoting sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective; and modifying policies and ratemaking practices to encourage utilities to invest in energy efficiency. See the action plan, the list of commitments, the EPA press release, and other related documents on the EPA Web site.

BP and GE Plan to Build Up to 15 Hydrogen Power Plants by 2016

BP and General Electric Corporation (GE) announced last week that they plan to jointly develop and build from 10 to 15 hydrogen-fueled power projects over the next ten years. The hydrogen power projects will produce hydrogen and carbon dioxide from fossil fuels such as natural gas, coal, or petroleum coke. The hydrogen will be used as fuel to power turbines that produce electricity, while 90 percent of the carbon dioxide will be captured and permanently stored deep in oil and gas fields, reducing greenhouse gas emissions. See the BP press release and the BP Alternative Energy Web site.

The companies will begin with two hydrogen-fueled power projects that BP and other partners announced over the past year: a 350-megawatt plant in Peterhead, Scotland, and a 500-megawatt plant in Carson, California. The Peterhead project is expected to start operations in 2010, while the Carson project is scheduled for completion in 2011. See the articles from the July 6th, 2005, and February 15th, 2006, editions of this newsletter.

Texas Overtakes California as the Top State for Wind Power

Texas is now the nation’s largest producer of wind power, according to the American Wind Energy Association (AWEA). AWEA’s Second Quarter Market Report, released last week, finds that the Lone Star State now hosts 2,370 megawatts (MW) of wind power capacity, besting the nation’s historic wind power leader, California, by 47 MW. According to AWEA, California has led the nation in wind power capacity since 1981, when the first commercial wind projects were built there. At one time, more than 80 percent of the world’s wind power capacity was located in California. Since then, the world and the rest of the United States have caught up to the Golden State.

AWEA says a total of 822 MW of wind power have been installed thus far in 2006, including wind projects in Alaska, California, Colorado, Hawaii, Massachusetts, Minnesota, Montana, New York, North Dakota, Ohio, Pennsylvania, Rhode Island, and Texas. Texas gained its lead largely through the expansion of the Horse Hollow Wind Energy Center, which grew from 210 MW to just over 500 MW. With more wind power facilities under construction in Illinois, Kansas, Michigan, Maine, Massachusetts, Minnesota, Missouri, New York, Oregon, Washington, and Texas, AWEA expects 2006 to break all records, with 3,000 MW of new wind power capacity installed. Since the U.S. currently hosts 9,971 MW of wind power, the country will undoubtedly draw on more than 10
gigawatts of wind power by year’s end. See the AWEA press release.

Among the notable wind power additions is the Solano County wind project in northern California, which features eight 3-MW wind turbines from Vestas. The Danish company’s V90-3.0 MW wind turbines are the largest yet installed on U.S. soil. Wind turbine sales are also creating new U.S. jobs, as Gamesa just opened a manufacturing facility for wind turbine blades in Pennsylvania that is expected to employ more than 230 people. The Spanish wind turbine company is planning three more manufacturing plants in the state that will employ up to 300 workers. In addition, Knight & Carver is building a wind blade repair and manufacturing facility in Howard, South Dakota, that should begin full-scale production in November. Located in the southeast corner of the state, the facility is expected to employ 46 people. See the press releases from Vestas, the Pennsylvania Department of Environmental Protection, and Knight & Carver.

Interior Department Proposes New Rules to Advance Geothermal Energy

In response to the Energy Policy Act of 2005, the U.S. Department of Interior proposed new rules last week to encourage geothermal energy development on public lands. The proposed rules would offer simplified royalty calculations, share royalties with counties where production occurs, and require more competitive leasing. The proposed regulations establish a fee schedule rather than royalty payments when the geothermal energy is used directly to heat buildings or for aquaculture or greenhouses. When the energy is used to produce power, the royalty payments will be based on a percentage of the gross proceeds from selling the electricity. And while royalties are currently divided evenly between the state and federal governments, the new rules will give half of the royalties to the state and split the remaining half between the county and federal governments.

The rules would also require competitive leasing on nearly all federal lands that are designated for geothermal development. If no bids are received, then the lots will be offered non-competitively for two-year periods. The Bureau of Land Management (BLM) currently administers about 350 geothermal leases; 55 of those are producing geothermal energy, of which 34 are power plants. The BLM has been expediting the application process for geothermal leases, issuing more than 200 leases since 2001, compared to 25 leases in the previous five years. See the Department of Interior press release.

The BLM and the Minerals Management Service (MMS), both of which are part of the Interior Department, published two separate sets of rules in last week’s Federal Register. The proposed rules will be open for public comment until September 19th. See the proposed rules from the BLM and the MMS.

Geothermal Power Plants Planned for Idaho, Oregon, and California

A renaissance in geothermal power production is well underway, as new geothermal power plants are proposed or under construction in both new and old locations. U.S. Geothermal Inc. broke ground this weekend on a 13-megawatt (MW) geothermal power plant in Raft River, Idaho. The site is both a new and old geothermal location: it will be the first commercial geothermal plant in Idaho, but it’s also the site of a DOE geothermal test facility that operated between 1974 and 1982. See the U.S. Geothermal press release (PDF 39 KB).

Nevada Geothermal Power Inc. is also planning to push into new territory with plans to build the first geothermal power plant in Oregon. A recent review of the geothermal resource at the company’s Crump Geyser Geothermal Project in south-central Oregon set the minimum capacity for power production at 40 MW and found it likely that the site can produce 60 MW of power. Based on the results, the company intends to press ahead with exploratory drilling into the geothermal reservoir. Northwest Geothermal Company has also set its sights on Oregon. The company, a joint venture of Davenport Power LLC and Vulcan Power Company, aims to develop a 120-MW power plant on the western flank of Newberry Volcano, 25 miles south of Bend, Oregon. Last week, the company signed a contract to provide geothermal power to the Pacific Gas and Electric Company (PG&E). See the press releases from Nevada Geothermal Power, Davenport Power, and PG&E.

PG&E has also signed a contract for geothermal power in the more traditional stomp
ing grounds of southern California. Iceland America Energy (IAE) plans to build a 50-MW plant near the Salton Sea in California‘s Imperial Valley. Meanwhile, a Canadian company plans to bring geothermal development back to California‘s oldest geothermal site, The Geysers in northern California. Western GeoPower Corp. has acquired a lease for a section of the geothermal area where PG&E formerly operated a 62-MW plant. Steam pressure declined at the plant in the 1980s, and the plant was shut down in 1989 and eventually dismantled. But thanks to a project to inject water into the steam field, Western GeoPower believes the site could now support a new 30-MW power plant. See the IAE Web site and the Western GeoPower press release.

Company Plans to Build Cellulosic Ethanol Plant in Georgia

Xethanol Corporation announced last week that it plans to build a full-scale cellulosic ethanol plant in Augusta, Georgia, by mid-2007. The company is in the process of purchasing a manufacturing complex from Pfizer pharmaceutical company to serve as the site for the new plant, which will be able to produce 50 million gallons of ethanol per year from forest products. PRAJ Technology, an India-based leader in ethanol technology, will provide detailed engineering services, process design, and licensing for the plant, and will also supply vital sections of the process plant. Xethanol has also retained The Facility Group to act as the engineering, procurement, and construction contractor for the new plant. The company is in the process of securing enough feedstock from the forest products industry to allow the plant to operate at full capacity when it starts producing ethanol next year. See the Xethanol press release.