Tech titans Apple, Google, Microsoft and Amazon as well as global brand companies Ikea, Mars, Adobe and Blue Shield Blue Cross Massachusetts told a U.S. court Friday that they need the federal Clean Power Plan for economic reasons.
In two separate Amici Curiae briefs filed in U.S. Circuit Court supporting the EPA’s plan for reducing carbon emissions from the nation’s power plants by 32 percent, the corporate giants said without a “national carbon mitigation plan,” they face “undesirable business risk,” energy price volatility and higher costs.
With these arguments, the businesses seem to have flipped prospects for the Obama administration’s centerpiece climate change policy, which only a month ago looked dim after the U.S. Supreme Court ruled to delay its enforcement.
Since the eight companies collectively employ about 1 million people, account for nearly $2 trillion in market capitalization and are major energy consumers — the tech companies alone use 10 million megawatt hours of electricity a year — they have clout.
Their briefs refute some claims made by 27 states that are plaintiffs in the State of West Virginia, et al vs. U.S. Environmental Protection Agency case challenging the Clean Power Plan as an overreach of federal authority by the EPA in a way that would harm jobs and raise electricity prices.
Among the companies’ most interesting refutations? Their expansion plans depend partly on how they can procure low-carbon electricity.
Solar outpaced natural gas capacity additions in 2015.
The U.S. solar power market grew by 17 percent in 2015, adding more than 7,200 megawatts of photovoltaics and outpacing the growth of the natural gas capacity additions for the first time ever. In all, solar supplied 29.5 percent of all new electric generating capacity in the U.S. in 2015.
The solar sector grew fastest in California, North Carolina, Nevada, Massachusetts and New York, but the market continues to diversify geographically, with 13 states installing more than 100 megawatts of capacity in 2015.
FromUSA Today (Bill Theobald) via the Fort Collins Coloradan:
The annual spending bill negotiated by congressional leaders is stuffed with millions in additional funding for Western needs — from fighting wildfires to fixing national parks and helping deal with the drought.
In addition, a companion bill would extend tax breaks for solar and wind power.
Both bills are expected to be approved by the House and Senate in the next few days.
The budget legislation would fund the government for the rest of the fiscal year that ends Sept. 30. It would reauthorize the popular Land and Water Conservation Fund for three years and appropriate $450 million for the fund to be spent through the Department of Interior and the Forest Service.
The fund has provided $17 billion through its 50-year lifetime to fund more than 40,000 local recreation projects and to buy about 5 million acres of public lands, mostly in the West…
Funding in the budget bill is $50 million more than President Obama requested, a 47 percent increase from last year. More than 50 percent of the money will go for local and state recreation projects.
Alan Rowsome of The Wilderness Society had said Congress would be snatching “defeat from the jaws of victory” if it failed to permanently reauthorize the fund and increase the amount that could be spent.
For wildfires, the legislation includes $4.2 billion for wildfire fighting and prevention programs within the Department of the Interior and the Forest Service. That’s $670 million more than last year and includes $1 billion in firefighting reserve funds.
This provision is sure to disappoint members of the House and Senate — mostly from the West — who have been pushing legislation to revise funding for fighting wildfires. Fighting the most severe fires, under these proposals, would be paid for like other natural disasters such as tornadoes and come from emergency funds.
That would eliminate the need during several recent severe fire seasons to transfer money into firefighting from other activities, including efforts to reduce the number and severity of fires. The bill includes $545 million for hazardous fuels reduction, an increase of $19 million from last year.
Other provisions of interest to the West in the budget legislation include:
National Park Service. The service gets $2.9 billion, up $237 million, including $94 million to reduce the massive maintenance backlog at the parks and to mark the service’s centennial anniversary in 2016.
Drought relief. While no comprehensive drought package is included, $100 million is appropriated for the Bureau of Reclamation to address severe drought in the West.
Tax breaks include five-year extensions of the production tax credit for wind energy and the investment tax credit for solar energy.
Sen. Barbara Boxer of California said the ITC would create about 61,000 jobs in 2017 and retain another 80,000 solar jobs. The American Wind Energy Association estimated extending the PTC would add more than 100,000 jobs in four years in the wind industry.
“I believe the extension of tax credits for solar and wind energy is a game changer,” Boxer said.
Wind farm Logan County
Solar panels, such these at the Garfield County Airport near Rifle, Colo., need virtually no water, once they are manufactured. Photo/Allen Best
From the Glenwood Springs Post Independent (Heather McGregor):
Bill Nelson and Michelle Foster, members of the Battlement Mesa Metro District board, cut a bright yellow ribbon Thursday to celebrate the completion of a solar array that will power the district’s water treatment plant.
“I am pleased with the fact that we have clean energy involved here. Solar is a wonderful source of energy,” said Nelson.
The array of 1,422 panels, rated at 440 kilowatts, will power all of the water treatment plant’s electrical demand on a yearly basis. Battlement’s is the fourth water plant in Garfield County to be net-zero for electricity, along with plants in Rifle, Silt and Carbondale.
“Solar energy is good for Garfield County,” said Garfield County Commissioner Mike Samson, noting that solar arrays create employment and pay for themselves with energy production.
“Renewable energy diversifies and builds the economy,” said Stuart McArthur, Parachute Town Administrator and chair of Garfield Clean Energy.
The fossil-fuel industry—which, for two centuries, underwrote our civilization and then became its greatest threat—has started to take serious hits. At noon today [November 6, 2015], President Obama rejected the Keystone Pipeline, becoming the first world leader to turn down a major project on climate grounds. Eighteen hours earlier, New York’s Attorney General Eric Schneiderman announced that he’d issued subpoenas to Exxon, the richest and most profitable energy company in history, after substantial evidence emerged that it had deceived the world about climate change.
These moves don’t come out of the blue. They result from three things.
The first is a global movement that has multiplied many times in the past six years. Battling Keystone seemed utterly quixotic at first—when activists first launched a civil-disobedience campaign against the project, in the summer of 2011, more than ninety per cent of “energy insiders” in D.C. told a National Journal survey that they believed that President Obama would grant Transcanada a permit for the construction. But the conventional wisdom was upended by a relentless campaign carried on by hundreds of groups and millions of individual people (including http://350.org, the international climate-advocacy group I founded). It seemed that the President didn’t give a speech in those years without at least a small group waiting outside the hall to greet him with banners demanding that he reject the pipeline. And the Keystone rallying cry quickly spread to protests against other fossil-fuel projects. One industry executive summed it up nicely this spring, when he told a conference of his peers that they had to figure out how to stop the “Keystone-ization” of all their plans.
The second, related, cause is the relentless spread of a new logic about the planet—that we have five times as much carbon in our reserves as we can safely burn. While President Obama said today that Keystone was not “the express lane to climate disaster,” he also said that “we’re going to have to keep some fossil fuels in the ground rather than burn them.” This reflects an idea I wrote about in Rolling Stone three years ago; back then, it was new and a little bit fringe. But, this fall, the governor of the Bank of England, Mark Carney, speaking to members of the insurance industry at Lloyds of London, used precisely the same language to tell them that they faced a “huge risk” from “unburnable carbon” that would become “stranded assets.” No one’s argued with the math, and that math indicates that the business plans of the fossil-fuel giants are no longer sane. Word is spreading: portfolios and endowments worth a total of $2.6 trillion in assets have begun to divest from fossil fuels. The smart money is heading elsewhere.
Which brings us to the third cause. There is, now, an elsewhere to head. In the past six years, the price of a solar panel has fallen by eighty per cent. [ed. emphasis mine] For years, the fossil-fuel industry has labored to sell the idea that a transition to renewable energy would necessarily be painfully slow—that it would take decades before anything fundamental started to shift. Inevitability was their shield, but no longer. If we wanted to transform our energy supply, we clearly could, though it would require an enormous global effort.
Don’t you just love renewable energy capital markets moving the polluters out of the picture?
Here’s a report about the impending bankruptcy of Arch Coal from Elizabeth Shogren writing for The High Country News. Here’s an excerpt:
There’s no question that the president’s Clean Power Plan and his other air pollution regulations cloud the future of the industry. But coal’s bleak present has much more to do with other factors; chief among them the low price of natural gas and bad business decisions that the country’s biggest coal companies made in recent years. “These are undoubtedly difficult, if not unprecedented, times for the coal sector,” Glenn Kellow, chief executive officer of Peabody, the world’s largest coal company, reportedly said on the company’s recent earnings call.
Both Arch Coal and Peabody Energy paid billions of dollars to acquire metallurgical coal mines when prices of this type of coal, which is used to make steel and other metals, were soaring. The price has since collapsed, leaving the companies swamped in debt and their stock prices a small fraction of what they used to be. In Arch’s case, it spent $3.4 billion in 2011 to buy International Coal Group, Inc., acquiring 13 mines in the eastern United States. At the time, the only company more invested in metallurgical coal was Alpha National Resources, (remember that name), which was buying Massie Energy for $7.1 billion. That same year, Peabody shelled out $5.2 billion for metallurgical coal mines in Australia.
The companies borrowed to buy these metallurgical coal mines, with the expectation that Asia, especially China, would gobble up all the metallurgical coal they could produce. What they didn’t count on was the price of metallurgical coal spiraling downward due in part to increased supplies of metallurgical coal from other countries and slower growth in China. Now U.S. metallurgical coal sells for less than half what it did in 2011.
Arch’s debt comes due next year. Scrambling to avoid bankruptcy, Arch tried to get creditors to renegotiate its debt, but the effort collapsed at the end of last month. Peabody has until 2018, and yet its stock has fallen from more than $1,000 in 2011 to less than $13 this fall.
The West is largely a bystander to this high drama, except that the companies that produce the most coal in the West are caught in the middle of it. Profitable mines owned by these companies in Wyoming’s Powder River Basin likely still will operate under whatever slimmed-down companies emerge from bankruptcy or under new ownership. But underground mines, where it costs more to extract the coal, may be less lucky. Peabody’s Twentymile mine in northwestern Colorado reportedly already has experienced significant reductions in production.
Mines in the West are not immune from the other main factor vexing the coal industry: low natural gas prices. Coal’s share in electricity production dropped from 50 percent in 2005 to 39 percent in 2014, and natural gas overtook coal as the biggest electricity producer for two months this year. The Energy Information Agency expects an 8 percent decrease in total coal consumption in 2015 compared to 2014, mainly driven by electric companies shifting to low-cost natural gas. Retirement of coal-fired power plants due to the Obama administration’s Mercury and Air Toxics Standards contributed, but to a lesser degree, according to the Energy Information Agency. “The big story here is gas and how cheap it is,” says Robert Godby, associate economics professor at the University of Wyoming who focuses on coal.
Water intensity of energy but also why the West has so few water markets
The value of water depends upon context. To somebody in a desert, absent a drink for three days, nothing could be more valuable. In a flood, the value of the water would lie in its absence.
In Western states, where scarcity more generally prevails, we’re still fumbling with how much value to assign water. Stacy Tellinghuisen brings this observation to her work in evaluating water issues at the nexus with energy for Western Resource Advocates, an environmental non-profit. WRA in 2011 issued a report “Every Drop Counts: Valuing the Water Used to Generate Electricity.”
In a conference call sponsored by The Biomass Monitor, Tellinghuisen said that one of the few water markets exists in northern Colorado. There, in the area north from Denver, many cities and farms get water diverted from the Colorado River via an elaborate diversion structure called the Colorado-Big Thompson project. Completed after World War II, the C-BT was intended to provide water to expand agriculture. Now, the water has mostly been purchased for municipal use in the Boulder-Greeley-Fort Collins area.
Water prices spiked between 2000 and 2008, said Tellinghuisen, reviewing the report that WRA did several years ago. “The price increased significantly, and that was largely due to significant drought in 2001 and 2002, combined with additional population growth in the region,” she said.
“I think that trend is a really relevant when you think about climate change and continued municipal growth across the West,” she added.
Why does this more highly developed market exist in northern Colorado? And why is it absent elsewhere?
Tellinghuisen explained that she thinks it’s because of the unusual nature of the C-BT. The project was finished at one time, water becoming available in the form of shares. This is in contrast with water availability in so many other places governed by the doctrine of prior appropriations. Appropriation dates vary greatly, as do allotments and other factors.
Tap fees are one way of measuring the value of water. They are the costs of getting the right to hook into the water-delivery infrastructure of a city or other jurisdiction. In theory, tap fees would be more-or-less uniform across a metropolitan area, just as the price of bread varies only marginally from one store to the next. In practice, said Tellinghuisen, there is great variability. She cited the example of Denver, which charges $5,000 for a tap fee, as compared with one of Boulder’s suburbs, where the cost is $25,000.
Even within individual cities, water can be valued very differently. Southern Nevada Water Authority has specified rates for existing users. How then to explain the current efforts by Las Vegas to extend pipelines hundreds of miles away to tap aquifers along the Nevada-Utah border? The cost of that water would necessarily be much higher.
Water consumed in generating electricity also varies greatly. Coal-fired power plants used significant quantities, typically 500 to 600 gallons per megawatt of production, while nuclear power plants use on the order of 700 gallons per megawatt. Combined-cycle natural gas plants use less, 180 to 200 gallons per megawatt.
Dry-cooling techniques for fossil-fueled generation can reduce water use by up to 90 percent, and more electrical production now comes from natural gas, instead of coal, resulting in a net reduction in the water footprint of energy.
In the renewable sector, biomass plants vary greatly, between 400 and 500 gallons per megawatt. Wind and solar use virtually none, except for concentrated solar—which uses a lot of water.
Recent years have brought greater awareness of the water intensity of various forms of electrical production. Investor-owned utilities, the primary providers of electricity in Colorado and other states, are governed by state-appointed public utility commissions, and those utilities in recent years have begun describing water impacts in the resource-planning documents they are required to submit to regulators.
Arizona Public Service was among the first to begin disclosing water impacts, but others now do so, too. Statutes delegating authority to PUCs provide authority to consider water, said Tellinghuisen, but there’s also a broadening understanding of the water-energy nexus among energy companies and government regulators.
Why does it matter?
“It comes back to a zero-sum game,” said Tellinghuisen. Virtually all rivers in the West are tapped out. For expansion of water use for one purpose, other water uses must be curtailed. While there are laws that govern the transfer, meaning a new power plant couldn’t just seize water, causing cities and farms to go dry, it is part of societal choices. WRA obviously thinks that the minimal water use of renewables is a major argument for increased renewables.
From the Rifle Citizen Telegram (Heather McGregor):
Crews are setting foundations, erecting racks and installing solar panels in a wave of activity at the Silt Water Treatment Plant. The 234-kilowatt solar array is slated to be in service and powering the plant by Dec. 31, according to Katharine Rushton, commercial sales associate for Sunsense Solar.
The new solar array will offset 100 percent of the plant’s electrical use on an annual basis.
It’s being financed with a power purchase agreement and renewable energy credits from Xcel Energy, so it cost the town just $3,500 in upfront fees.
The solar system will save the town an estimated $102,000 over the next 20 years, or about 15 percent of the plant’s total annual electric costs, and it will lock in electric rates for 20 years.
Work on the project started Nov. 3. It’s the first of three major solar energy systems being installed in Garfield County in 2014 and 2015 by Sunsense, a Carbondale solar developer and contractor. Together, the systems will add up to 1 megawatt of renewable energy capacity.
Next up after the Silt project are arrays that will power the Battlement Mesa Metro District water treatment plant and Roaring Fork High School in Carbondale.
The Silt array includes 756 solar panels, each capable of generating 310 watts of electricity. A bank of eight inverters will convert the direct current electricity to alternating current, so the power can be used by the plant’s equipment or fed back onto the Xcel Energy power grid.
Facing a tight, two-month timeline, the crews are closely following each other for all three phases of building the ground-mounted array, Rushton said.
The foundation contractor, Lyons Fencing of Rifle, set the footers. The Sunsense crew erected the framework and solar panels, and is now finishing off the electrical wiring. Expert Electric of Rifle is handling the alternating current aspects of the project.
Sunsense is also partnering with Garfield Clean Energy to install an energy data logger at the plant as part of the project. It will measure electricity use and solar production in 15-minute intervals for display on the Garfield Building Energy Navigator website.