Contact us Subscribe Public Renewables Partnership Review previous issues at http://www.wapa.gov/es/nhnewsback.htm Responsibility for the factual accuracy of each press release rests entirely with the individuals or organizations identified on the release.    Week of April 12,2004

• Substantial progress has been made during the past several years. The Pacific Northwest has moved a long way toward making wind a mature technology through data collection, development of analytical techniques, improvement in processes related to transmission access, construction of wind farms, and production of wind-driven electricity.
  
• Transmission access is likely the most important issue facing wind today. A key issue concerns the possibility of buying some firm transmission and some nonfirm transmission to move the wind output from source to load centers.
  
• A second critical transmission issue concerns interconnection of new generation (not just wind). The amount of cost-effective wind in the northwest might depend on the costs of building new transmission to connect wind farms to the grid, as well as any system costs required to deliver wind output to load centers.
  
• Many of the modeling tools needed to analyze integration of wind energy with the grid in the short term (from day-ahead unit commitment through real-time regulation) have been developed and subjected to initial tests. Future efforts should focus on site- and project-specific applications and the development of widely applicable rules of thumb on the cost of this short-term integration (e.g., these costs amount to $2 to $5/MWh of wind output for control areas with a wind-farm capacity of less than 20 percent of system load). Some work remains to validate and improve these models.
  
• Planning (long-term) reserves: Can wind (given its intermittent, unpredictable, and uncontrollable output) qualify as installed capability? If so, under what conditions? How would improvements in wind-output forecasts affect the amount of wind capacity that could qualify as installed reserves?
  
• Contingency (operating) reserves: Should wind farms be responsible for (i.e., be required to pay for) spinning and supplemental reserves? How much contingency reserves should be assigned to wind (e.g., 5 percent of wind capacity, as for hydro resources)? More important, what determines the appropriate assignment of contingency reserves to wind?
  
• How accurate are today's wind-forecasting models, both the persistence models and the meteorological models? How can the accuracy of these models be improved and at what cost? What additional data should be collected at or near each wind farm to improve forecast accuracy? What are the benefits of more accurate forecasts? As examples, how would improved accuracy affect the costs of day-ahead unit commitment (relative to real-time hourly dispatch), the assignment of contingency reserves to wind, the capacity credit given to wind for installed reserves, and the ability to purchase nonfirm transmission?
  
• What are the benefits of increased geographical dispersion of wind farms throughout the Pacific Northwest? Additional data and analytical tools are needed to assess the benefits (based on the lack of statistical correlation among the outputs of individual wind farms) related to lower temporal variation in energy output, improved forecasting of wind output, and perhaps other characteristics.

For more information contact Eric Hirst.

Report on Integrating Large Amounts of Wind With a Small Electric-Power System

Eric Hirst and Jeff Hild just completed a report on Integrating Large Amounts of Wind With a Small Electric-Power System. The report can be downloaded from the Publications page on Eric Hirst’s Web site. Here is a summary of this report:

As the amount of wind capacity installed in the United States increases, integration of wind output with electric-power systems becomes more complicated. Integrating 100 MW of wind capacity with a 30,000-MW power system is much simpler than integrating 2,000 MW of wind with a 3,000-MW system. Wind integration raises issues that do not arise with traditional generating units because of three unique characteristics of wind farms and their output: limited control, relative unpredictability, and temporal variations . These factors require the adjustment of other generating units to account for unanticipated wind outputs.

This report, unlike earlier analyses of wind integration, focuses on large wind farms located in a small utility service area. Specifically, this project considers various amounts of wind, ranging from 200 to 2,000 MW, integrated with a small utility system with a peak demand of less than 5,000 MW.

This project focuses on the revenues a wind farm might receive from selling its energy output to this utility and the costs it might incur for integration. These revenues and costs are analyzed over four periods:

• Day-ahead unit commitment (12 to 36 hours before the operating hour);
• Real-time dispatch (current operating hour);
• Intrahour balancing (sometimes called load following); and
• Regulation.

These revenues and charges are calculated in two different ways. One way simulates the operation of a traditional utility and uses average production costs to calculate the payments. The second approach simulates the operation of DA and RT wholesale markets, as envisioned in the Standard Market Design proposed by the U.S. Federal Energy Regulatory Commission.

As the amount of wind capacity within a utility service area increases, the net value of wind per MWh of wind-energy output declines. This decline is caused by four key factors. First, as more and more wind displaces conventional generation, the utility's production costs decline. As a consequence, each additional MWh of wind energy adds less economic value than the earlier ones. Second, errors in the day-ahead wind forecast can cause physical and reliability problems in real time. For example, if the wind forecast is much higher than actual wind output, the utility will have to quickly ramp up its other generating units (and perhaps bring online units currently not operating) to cover the wind's shortfall. Third, interhour changes in wind energy may require the utility to adjust its other generation to compensate for the wind's variability, Finally, intrahour variability in wind output imposes costs on the utility for load following and regulation.

For the situation analyzed here, small wind farms would receive net payments close to the utility's zero-wind marginal cost, almost $30/MWh. The payment for a 400-MW wind farm would drop to about $23/MWh; a 1,000-MW wind farm would receive only $16/MWh. This decline in payment per MWh of wind energy is caused by the drop in marginal costs that would occur with the addition of any new low-cost generation to the system and the costs of wind integration (i.e., errors in the day-ahead forecast of wind output, interhour variations in wind output, and intrahour variability in wind output). For more information contact Eric Hirst.

BPA Offers Wind Integration Service

BPA has developed and is now offering a Wind Integration Service. To learn more about this service, see their wind integration brochure . Source: John Pease, BPA, 4/9/2004.

WREGIS Draft Operating Rules Distributed; Stakeholder Comments Sought by April 16

DENVER -The Operational Rules Committee of the Western Renewable Energy Generation Information System today released draft interim operating rules that include recommendations on the functions and operating guidelines of a system to track and verify renewable electricity generation in the West.

WREGIS, which is being funded by the Western Governors' Association, the Western Regional Air Partnership and the California Energy Commission, will encompass 11 western states, two Canadian provinces and northern Baja — the area covered by the Western Interconnect.

WREGIS is expected to be operational in 2005. It is envisioned to operate as an independent accounting system and database that will track renewable energy generation and ownership of renewable energy certificates within the Interconnect.

Over the past three months, the WREGIS Operational Rules Committee and Data Interface Subcommittee have conducted weekly conference calls to develop these draft recommendations. More than 600 stakeholders have been asked to participate in the development of the WREGIS tracking system.

"The development of draft operating rules for WREGIS is the culmination of a great deal of hard work and has truly been a collaborative effort." said Pam Inmann, Executive Director of the Western Governors' Association. "The participation of stakeholders, representing a wide range of interests from all areas of the Western Interconnect, has been critical to making determinations about all aspects of how the renewable energy tracking system will function in the West.

"WREGIS will become instrumental in the fulfillment of California's Renewable Portfolio Standard, "said Energy Commissioner John Geesman, chair of the Commission's Renewables Committee. Geesman said "the system will ensure that renewable energy production is transparent, precise and accurate as our state strives to meet its RPS goal of producing 20 percent of its electricity supply from renewable sources by 2010."

Anyone interested in reviewing the draft rules is encouraged to access them via the Web. In addition, you can receive the document directly by signing up for the stakeholder list-serve by sending a blank e-mail. As the development of final operating rules is on a tight timeframe, written comments are requested by no later than April 16th, and should be sent to Jennifer Martin, ORC technical staff.

Once comments are received, the ORC will be holding two final conference calls, April 23rd and April 30th, to review and incorporate stakeholder comments as appropriate. These calls are open to any interested participants. Send a blank e-mail to receive detailed information on these calls, or visit the groups' Web page. California Energy Commission Chairman Bill Keese will brief New Mexico Governor Bill Richardson, Chairman of the Western Governors' Association, on the status of the development of WREGIS at WGA's North American Energy Summit April 14 - 16th in Albuquerque, N.M. For more information contact: Chris McKinnon, Western Governors' Association (303) 623-9378; Percy Della, California Energy Commission, (916) 654-5027; or Jeff Burks, Utah Energy Office, (801) 538-5414. Source: Center for Resource Solutions, 4/9/2004.

April 2004 IREC Interconnection Newsletter

The Interstate Renewable Energy Council produces a monthly electronic newsletter called Interconnection Newsletter.

Survey of State Support for Community Wind Power Development

Lawrence Berkeley National Laboratory, in conjunction with the Clean Energy States Alliance has announce the release of the latest installment in the case study series "Case Studies of State Support for Renewable Energy." This latest case study, titled "A Survey of State Support for Community Wind Power Development", describes the various policies and incentives that states are using to support community wind power development - defined here as one or more locally owned, utility-scale wind turbines interconnected on either the customer or utility side of the meter - and how state and federal support influences the types of projects that are developed.

Once primarily a European phenomenon, community wind power development is attracting the attention of an increasing number of states throughout the U.S. for a variety of reasons. In the upper Midwest, for example, "community wind" is seen as a way to supplement and stabilize farmer incomes, and to promote rural economic development in general. In other areas, such as the Northeast, which has to date seen relatively little wind power development, states are turning to community wind as a way to enhance the public's knowledge, perception, and acceptance of wind power.

The majority of this case study focuses on the upper Midwest, and in particular Minnesota, which is both the birthplace and current "hotbed" of community wind power development in the United States. Other states covered include Wisconsin, Iowa, Illinois, Massachusetts, and New York. Experience in these states demonstrates that, with an array of incentives and creative financing schemes targeted at community-scale projects, there are opportunities to make community wind work in the United States. Source: Mark Bolinger, Lawrence Berkeley National Laboratory, 4/7/2004.

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News from Washington

SEC Urges Congress to Increase FY 05 Renewables Funding

The Sustainable Energy Coalition delivered a letter last week calling upon congressional appropriators to "substantially increase" federal support for the "cross-section of renewable energy technologies."

Providing technology-by-technology recommendations, SEC specifically proposed increasing the Department of Energy's renewable energy program budget to $598.5 million in FY 05, which is nearly 60 percent more than the White House's FY 05 budget request and two-thirds more than the actual FY 04 budget.

While the letter, which was delivered to the chairmen and ranking members of the Energy & Water Subcommittees of the U.S. Senate and House of Representatives Committees on Appropriations, acknowledged "the pressures on the federal budget," SEC said the letter's authors stressed that "renewable energy is growing and will continue to grow as alternatives become less plentiful and more expensive." "On a percentage basis, solar and wind energy are the fastest-growing sources of electricity worldwide," said SEC in the letter. "Geothermal, hydropower and biomass play an important role in our electricity mix today and will be even more important components of our generation in the future."

SEC also argued that while "the technologies enabling this ongoing renewable energy revolution were developed in the [U.S.]...lukewarm domestic support for incentives and research means that market share, technical expertise and thousands of new, local jobs in this sector are increasingly moving overseas." Contact: Ken Bossong, SEC, phone 202-293-2898 ext 201. Source: EIN Renewable Energy Today, 4/6/2004.

Wind Power and Air Quality Regulations

Increased use of wind power in a region lowers emissions of smog- and acid-rain-causing pollutants, right? Maybe not as much as one would think. The degree to which a wind farm will actually reduce emissions depends to some extent on our system of pollution regulation. This is an especially problematic issue in states where pollutants are regulated using a "cap-and-trade" system. Since the level of the cap does not change, polluters could, in theory, emit more to bring the level of pollutants up to the cap. Whether that actually happens is the subject of some debate.

The U.S. Environmental Protection Agency currently regulates sulfur dioxide nationally and nitrogen oxides in a portion of the eastern half of the country with cap-and-trade systems. Under such a system, the state is allocated a certain total level of emissions within industry sectors. The states then determine how they will distribute their total allocations to individual electric generators within the state. A system for allocating and trading emissions allowances is then established so that a company can achieve its emission level through a combination of actual emission reductions and/or purchase of reduction credits from other companies in the trading program that have reduced their emissions below their budget level. The allowances are generally awarded on the basis of fuel inputs-and therefore exclude renewables-except in a few instances where wind and other renewables have been granted allowances from a special set-aside bank.

The cap-and-trade system is generally seen as a cost-effective way to lower emissions in a region. The success that the SO2 cap-and-trade system has had in reducing emissions at a much lower cost than anticipated has made this form of regulation a popular one among program designers, and it is likely that it will be used in more states and for more pollutants in the future. Therefore, wind energy advocates must be actively engaged as new rules are written to make sure that they are written to recognize the contribution that wind projects make in reducing these emissions.

Within the SO2 cap-and-trade system, there was a program to set aside and award allowances for renewables. However, it failed to stimulate project development, because participation was limited to utilities and allowances were awarded at an inappropriately low rate. Therefore, utilities had cheaper compliance options available. The set-aside program expired at the end of 2000. It serves as a model for how not to design a program to incorporate the benefits of wind projects.

One case study that has been closely watched by renewables advocates is the Washington Council of Governments state implementation plan. The Wash-COG SIP was submitted to the Environmental Protection Agency at the beginning of March. If approved by the EPA, it will become the first case in the U.S. in which wind power purchases by a local government are credited for reducing air emissions under a regional air quality plan.

Montgomery Country is planning to purchase 5 percent of its energy requirements from wind energy beginning in July. In this case, the state of Maryland will award renewable energy set-aside allowances to the wind power projects in the region, which will transfer to Montgomery County proportionally for the amount of wind power purchased. Montgomery County will then retire those allowances, reducing the overall amount of NOx emitted in the region. In addition to reductions in ozone-causing NOx, this wind energy purchase will reduce pollutants that are not regulated, such as mercury and carbon dioxide, a key greenhouse gas that contributes to climate change.

"The great thing about this plan," noted Alden Hathaway, director of green power programs at Environmental Resources Trust, a nonprofit organization that initially introduced the measure, "is that a marker has been set down in the Mid-Atlantic region that purchases of renewable energy by local governments provide significant value in terms of local air quality benefits."

Some questions remain to be worked out by stakeholders in the market. On a separate track, a market for renewable energy credits is now emerging. Each REC represents the environmental benefits associated with one megawatt-hour (1,000 kilowatt-hours) of certified renewable energy generation. They are now primarily being sold on a voluntary basis apart from the cap-and-trade emissions markets. In some cases, they are being used to implement state renewable portfolio standards. If wind advocates succeed in having air quality regulations written so that wind power can receive credits for one or more of its pollution-reduction attributes, can the owner of the wind plant continue to sell what is left as a "green credit"? Existing rules-such as the Green-E certification that the Center for Resource Solutions has developed-would not allow the "disaggregation" of the REC for the residential market. There may be a place for separate REC and allowance products in the commercial or industrial markets, but such a market would only work with credible tracking systems that are not fully developed.

On the plus side, the market for emissions allowances could be lucrative and could stimulate a large number of projects. David Wooley, when presenting on behalf of AWEA at the sixth annual green power marketing conference, estimated dollar figures for each of the main pollutants if wind were able to cash in on its emission-free profile:

• SO2 could go for 0.12 cents/kWh,
  
• NOx could sell for 0.15 cents/kWh, and
  
• CO2 could be the main prize at 0.3 cents/kWh if carbon markets continue to develop.

Kevin Rackstraw of Clipper Windpower believes the range for NOx allowances could sell for as much as 0.3-0.4 cents/kWh. He will be presenting his findings at the Global WINDPOWER conference on Tuesday, March 30 at the "Definition and Control of Green Attributes"
session.

On the other hand, some fear that breaking up a green tag into its many component parts would be too confusing for the market to bear and that, without a certificate registry, there is the potential for fraud, or the appearance of fraud.

To avoid any consumer confidence issues and to clarify a murky market, several jurisdictions are now establishing tracking systems for renewable energy credits. The New England Independent System Operator has developed a generation information system that will track where, when, and from what source each kilowatt-hour is generated. Texas has developed a REC tracking system that it uses for compliance with its renewable portfolio standard. The National Wind Coordinating Committee has also developed RECs trading principles and guidelines.

Exactly what the wind power community would like from various regulatory programs needs to be clearly defined by market stakeholders so that wind energy advocates can participate in a number of regulatory proceedings that are coming up within the year. The threat is that if cap-and-trade systems do not provide meaningful allowances for wind and other renewables, one of the main drivers for project development-the promise of maximum reduction in harmful emissions-could be taken away. The promise if wind is able to win set-asides or other allowances is increased value for wind-generated electricity because companies will be able to use wind power to comply with air quality regulations.

The EPA is pursuing two rules to achieve some of the objectives of the Administration's proposed Clear Skies Initiative bill through rulemaking under existing Clean Air Act authority. The rules would regulate NOx, SO2, and mercury through the cap-and-trade approach. They are scheduled to be finalized by December. In both rules, individual states will have significant potential to allocate allowances to renewable energy.

The Interstate Air Quality Rule is designed to dramatically reduce and permanently cap emissions of sulfur dioxide and nitrogen oxides from electric utilities. It would cover 29 eastern states and Washington, D.C. The full text of the proposed rule and supplemental (when issued in April), fact sheet, press release, and public hearing information are available online. The comment period for the initial IAQR proposal closes at the end of March. A supplemental proposal with more details is scheduled for release in April, with comments due 45 days later.

The Utility Mercury Reductions Rule is designed to reduce and permanently cap emissions of mercury from power plants across the U.S. The UMRR rulemaking proposes two alternatives for achieving the reductions: installation of controls known as "maximum achievable control technologies", or the creation of a market-based cap-and-trade program. The full text of the proposed rule and supplemental (when issued), fact sheet, press release, and public hearing information are available online. The comment period for both initial and supplemental proposals for UMRR closes at the end of April. Additional public hearings will be held on both rules.

In general, by filing official comments on these two rules renewable energy advocates demonstrate their interest in the proceedings and make a claim to participation in further involvement in decisions concerning these rules. Other approaches for making their interests and views known to EPA on these rules include participation in the public hearings and requesting meetings with EPA officials in the Clean Air Markets Division.

The AWEA Board of Directors has recently formed a new subcommittee called, "the Credit Trading Subcommittee" to tackle these issues. Board member Rackstraw is spearheading an effort to submit comments to the upcoming IAQR proceeding.

In addition to the EPA proceedings, last summer New York Governor George Pataki spearheaded efforts to get 10 northeastern states to start work on a program to reduce regional CO2 emissions from power plants. Leaders from states participating in the regional initiative will next convene in September to begin detailed discussions on the development of the initiative. The overall goal of the group is to reach an agreement by April, 2005, on a flexible, market-based cap-and-trade program.

AWEA has also been working with the Business Council for Sustainable Energy in support of Clean Air regulations that would distribute tradable emissions allowances to all generators and efficiency measures based on how much energy output they provide or save consumers. Sen. Tom Carper (D-Del.) introduced a bill in April of last year that would regulate emissions of NOx, SO2, mercury, and CO2 with output-based cap-and-trade systems.

For further reading:

• The official web site for the Clean Air Markets Division of EPA is where you can find latest updated info on EPA rules.
  
• The AWEA Web site has some basic information on green power.
  
• Many of the ideas in this article were explored by Ed Holt in the Green Power Newsletter, Number 8, available online.
  
• David Wooley's presentation is available online.
  
• The Center for Resource Solutions has recently produced a document entitled Regulators Handbook on Tradable Renewable Certificates.
  
• The Renewable Energy Policy Project summarizes existing Clean Air Act programs that directly or indirectly promote renewable energy.
  
• David Wooley wrote a paper for REPP entitled, A Guide to the Clean Air Act for the Renewable Community.

  Source: AWEA Windletter, 3/26/2004.

Bill Containing Stopgap PTC Stalls in Senate

A "corporate tax reform bill"-containing a stopgap extension of the wind energy production tax credit (through 12/31/04)-became bogged down in the Senate this week over unrelated issues involving overtime pay for workers.

After failing to gain the 60 votes needed to limit debate and move forward on the corporate tax bill, Senate Majority Leader Bill Frist (R-Tenn.) chose to stop action on that bill rather than be forced to allow a vote on Sen. Tom Harkin's (D-Iowa) overtime pay amendment. The upshot is that a key avenue for gaining a PTC extension this year-outside of stalled energy policy legislation-has been blocked at least temporarily.

Dorgan/Coleman 3-Year PTC Amendment was Ready to Go: Had the corporate tax bill (S. 1637) remained under consideration on the Senate floor, Sens. Byron Dorgan (D-N.D.) and Norm Coleman (R-Minn.) were prepared to offer an amendment to extend the PTC for a full three years (through 12/31/06). Also joining in support of this bipartisan amendment were Sens. Maria Cantwell (D-Wash.), Patty Murray (D-Wash.), Jeff Bingaman (D-N.M.) and Ben Nelson (D-Neb.). The Dorgan/Coleman amendment-which may be brought up during future consideration of the
corporate tax bill or other legislation-calls for:

• Extending the PTC through 12/31/06 (a 3-year extension);
  
• Maintaining the PTC inflation adjustment provision;
  
• Creating an exemption from the requirements of the Alternative Minimum Tax (AMT) for the first four years of turbine operation;
  
• Expanding the PTC to include solar, geothermal, small irrigation hydro power, municipal solid waste, and additional forms of biomas; and
  
• Allowing municipal and cooperative utilities access to tradeable PTCs (no other entities would be eligible for such treatment)

AWEA continues to support passage of the energy policy bill (S. 2095) and is working every available avenue to gain the longest possible PTC extension at the earliest possible time.

IRS Sets PTC Inflation Adjustment at 1.8 Cents for 2004: In a separate development, the PTC will remain at 1.8 cents for calendar year 2004. The announcement was made March 24 by the Internal Revenue Service, which is required to recalculate the inflation adjustment factor once every year. Source: Wind Energy Weekly #1085, 3/25/2004.

3-Year PTC Advancing as Part of Senate Corporate Tax Bill

A full 3-year Production Tax Credit extension (through 12/31/06) may advance through the U.S. Senate as part of a package of energy tax incentives now attached to a corporate tax bill (S. 1637). Momentum began to pick up on Wednesday, April 7, when Senate Republican leaders chose to separate the energy tax provisions from long-stalled energy policy legislation (S. 2095) and attach them to the corporate tax bill. "This is a significant step forward," said AWEA legislative director Jaime Steve. "It creates a realistic opening for the PTC to be in effect again, possibly as early as June of this year."

The corporate tax bill-seen by Republicans and Democrats as legislation that must pass this year-would repeal a tax break for exporters that has been deemed an illegal trade subsidy by the World Trade Organization. The European Union has imposed a 6 percent penalty payment on some U.S. exports, and the penalty is set to increase by 1 percentage point a month, up to a maximum of 17 percent. The penalty would be removed when the bill becomes law.

An agreement announced late on Thursday, April 8 between the Senate's Republican leader, Bill Frist (R-Tenn.), and its Democratic leader, Tom Daschle (D-S.D.), could allow the full Senate to vote on the bill containing the PTC shortly after Congress returns on April 19 from its spring break. The House's corporate tax bill (HR 2896) has been blocked by disputes over its balance between tax cuts for domestic manufacturers and benefits for multinational corporations. House leaders have been hoping for Senate action that could help propel their version of a corporate tax bill. The House bill currently does not contain any of the energy tax items grafted to the Senate's corporate tax bill. Once the Senate and House pass their own versions of corporate tax legislation, the bills would go to a conference committee responsible for hammering out their differences and forging a compromise bill for the president to sign into law.

The PTC language as contained in the energy tax section of the Corporate Tax bill calls for:

• Extending the PTC through 12/31/06 (a 3-year extension from the previous expiration date of 12/31/03);
  
• Eliminating the PTC inflation adjustment provision starting January 1, 2005 (in other words, the inflation adjustment provision of current law would apply to any wind project placed in service on or before 12/31/04);
  
• Creating an exemption from the requirements of the Alternative Minimum Tax for the first four years of turbine operation;
  
• Expanding the PTC to include solar, geothermal, small irrigation hydro power, municipal solid waste, and additional forms of biomass; and
  
• Allowing a tradable credit for only the following tax exempt entities: rural electric cooperatives, publicly-owned utilities, Indian Tribal governments, and the Tennessee Valley Authority.

AWEA's consistent goal is to gain the longest possible PTC extension at the earliest possible time. In addition, AWEA is working to fully restore the inflation adjustment factor contained in current law. Source: AWEA Wind Energy Weekly, 4/9/2004.

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State Activities, Marketing & Market Research

New Economy Focuses on Energy Ideas - Abstract

In a recent article written by Ken Silverstein Director, Energy Industry Analysis and published by UtiliPoint, entitled: New Economy Focuses on Energy Ideas, there were several interesting comments made. I’m providing a few of those comments here for your information.

• "What will be the big job generator of the next decade?" asks former President Bill Clinton, in speech last year in Washington, D.C. "What's our information technology answer to this new decade? My favorite is energy … There is by common consent a trillion dollar untapped market for clean energy and conservation technologies..."
• Venture capital investment in the United States for energy technology-related start-up companies reached $428 million during 2003, about even with the $435 million raised during 2002, says Nth Power, a San Francisco-based energy venture capital firm. The 2003 figure represents 2.3 percent of the total $18.2 billion in venture capital investments made in the United States last year. Worldwide, energy technology venture capital funding totaled $526 million. That's down from $584 million in 2002, with 84 deals completed last year and averaging $6.26 million each. That compares to 55 deals averaging $10.61 million during 2002.
• While there are no hard numbers as to what the utility industry is allocating in the aggregate to venture-capital enterprises—as opposed to research and development—the evidence suggests that their budgets have been cut way back. The average R&D investment per utility dropped from about $9 million in 1995 to $3.4 million in 2000, according to UtiliPoint's analysis of FERC Form-1 filings. According to PG&E's FERC Form-1 filings, it reduced its R&D budget from $18 million in 1995 to zero in 2002.
• Energy is the fuel that makes the entire economy run. While the “New Economy” is still maturing, some concepts have emerged that could spawn viable enterprises. In the eyes of today's venture capitalists, it appears particularly true for such ideas related to power grid optimization and renewable energy. But more capital is necessary to bring creative thinking to market. Some venture capital firms are spotting those possibilities.
• Meanwhile, utilities have to know what is happening in every corner of the marketplace—and that includes America's garages. It's risky and the extent of a utility's involvement should be carefully considered. But it could be prudent to properly finance R&D, especially in areas that will affect the strategic units of the company—over the short and long terms. The ones that don't exploit those opportunities could be bypassed by those that do.

Source: Abstract from UtiliPoint, 3/25/2004 via The Power Report, 3/25/2004.

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For more information on marketing and research go to: http://www.nrel.gov/analysis/emaa/index.html

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Grants, RFPs & Other Funding News

National Oceanic and Atmospheric Administration

National Oceanic and Atmospheric Administration Grants Management Division, NOAA Climate and Global Change Program for FY 2005 Full Announcement 1, Grant. Source: Grants.gov Opportunities Posting Update, 3/25/2004.

Defense Energy Support Center Issues a Renewable Energy Certificate RFP

The Defense Energy Support Center has issued a Renewable Energy Certificate RFP on behalf of 4 EPA facilities - Las Vegas, NV; Duluth, MN; Grosse Isle, MI and Washington DC. The RFP is available on DESC's Web site. Technical information is due May 17 and pricing is due May 24. Please contact Andrea Kincaid (703) 767-8669, if you have questions regarding the RFP. Also, a reminder that the GSA/EPA REC RFP for Massachusetts and Rhode Island sites is available online. Technical information for this RFP is due on April 22 and prices are due on April 27. For more information contact: Chandra Shah, Senior Project Leader, National Renewable Energy Laboratory, Federal Energy Management Program, 303-384-7557.

Administrative Agent for Alternative Manure Technology Project Funds

USDA, Natural Resources Conservation Service, Vermont State Office, Administrative Agent for Alternative Manure Technology Project Funds, Modification1. Source: Grants.gov Opportunities Posting Update, 4/8/2004.

Plant Wide Assessments Grant

DOE, All Departmental Locations, All DOE Federal Offices, Plant Wide Assessments Grant. Source: Grants.gov Opportunities Posting Update, 4/8/2004.

Heating/Cooling Devices Based on Waste Heat Recovery

DOE, All Departmental Locations, All DOE Federal Offices, Area of Interest 2 - Heating/Cooling Devices Based on Waste Heat Recovery Grant. Source: Grants.gov Opportunities Posting Update, 4/8/2004

Geothermal Outreach

DOE, All Departmental Locations, All DOE Federal Offices, Geothermal Outreach Modification3. Source: Grants.gov Opportunities Posting Update, 4/8/2004

Department of Agriculture Grants Available

The Rural Business-Cooperative Service invites applications for FY 2004 funding under the Rural Economic Development Loan and Grant program. This program provides grants and loans to Rural Utilities Service electric and telephone utilities to assist in developing rural areas from an economic standpoint. Entities wishing to apply for assistance should contact a Rural Development State Office for application materials. Approximately $10 million is expected to be available for grants of up to $300,000. Approximately $14.9 million is expected to be available for zero-interest loans of up to $450,000. More information and a complete listing of Rural Development State Offices are available. Source: Amanda Ormond, 4/6/2004.

GSA Requests Proposals for Renewable Energy Certificates

The General Services Administration recently announced it is requesting proposals from renewable energy generation suppliers to provide renewable energy certificates to GSA facilities in Massachusetts and Rhode Island as well as an EPA lab in Narragansett, RI.

According to GSA, the successful offerer will supply RECs that are Green-e certified for a contract term of one year beginning May 1, 2004, with the availability of two one-year options and an additional extension period of up to six months. The annual REC requirement for the solicitation is 6.7 million kWh divided into two separate pricing groups

GSA said responses to the solicitation are due by April 22. "The government will be giving preference to RECs being generated in the states of Massachusetts, Connecticut and Rhode Island," said GSA. "The government intends to award a contract to the offerer that offers the lowest price for RECs for each pricing group and meets the solicitation's minimum technical requirements." Contact: Ken Shutika, GSA, phone 202-260-9713. Source: EIN Renewable Energy Today, 4/2/2004.

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