Renewable Energy in Wisconsin: Anatomy of a Long, Strange Trip …

And Where We’re Headed Next

Michael VickermanRENEW WisconsinOctober 17, 2011

Sierra Club – Great Waters Group Milwaukee, WI

About RENEW WisconsinAdvocates for state-level sustainable energy policies since 1991

One of the architects of the state’s Renewable Energy Standard and ratepayer-funded public benefits program

Top three policy priorities for 2010

* Uniform Permitting Standards for Wind

* Increased Renewable Energy Standard

* Advanced Renewable Tariffs

Developing an on-line Wisconsin Wind Information Center (www.wiwindinfo.net)

An organized voice for renewable energy producers and purchasers!

Windy afternoon (10-14-11)

Butler Ridge project

Hwy 33 east of Hwy 67

How RENEW Promotes Renewable Energy

Strengthening Utility Renewable Energy Requirements Fighting for Funding Security for Focus on Energy Promoting Voluntary RE Purchases Educating Media, Policymakers on RE Benefits Partnering with Proactive Utilities Increasing Renewable Energy Tariffs (buyback rates)

About RENEW Wisconsin Founded in 1991

Nonprofit – funding comes from grants, members

Over 275 members (businesses and individual)

Please join!

Presentation Outline

Survey of Energy Realities – Where I’m Coming from Investing for America’s Future vs. Propping up

America’s Unsustainable Past and Present Images of Sustainable Energy Why Wind Energy is a Plus for Wisconsin Renewable Energy Policy Advances + Reversals

Key Terms and Concepts

Stores (fossil energy) vs. flows (renewables)

On-demand energy vs. as-available energy

The Solar Ration (using the interest, not the principal)

Energy Return on Energy Invested (EROEI) Means transition from highly energetic resources

like petroleum + NG to less energetic renewable resources is like swimming upstream

Hubbert’s Curve (Peak Oil/Peak Energy)

Sources vs. sinks

Energy literacy vs. energy numeracy

Energy Sources

Native to Wisconsin Sunlight

Wood

Manure

Wind

Hydro

Crops (grasses, corn, etc.) Wastes (LFG, wastewater) Geothermal (storage)

Constituting 5% of energy used

Not Native to Wisconsin

Coal

Natural Gas

Oil

Uranium

Geysers

Constituting 95% of energy used

Fossil fuel imports hurt Wisconsin’s economy

$

Wisconsin Energy Trade Deficit

~$8 Billion/Year in 2003.

>$18 Billion in 2010

Overcoming Economics 101

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” – Kenneth Boulding

****************************************

Q. How many economists does it take to screw in a light bulb?A. None. If it really needed changing, market forces would have caused it to happen.

Energy Policy Must Recognize Energy Realities

Supplies of liquid fuels peaked in 2008

Capital is disappearing before our very eyes

Energy and food are the original currencies

The shift from stores to flows is inevitable

Current economy is highly energy-intensive

EROEI must inform decision-making

We can’t afford to prop up existing energy sinks or

engage in wealth-draining military adventures

But Economic Signals Are Confusing – Signs of

Deflation Consumption of energy has declined since 2008

Natural gas prices in a protracted slump

Coal generation has become more expensive – due

to declining mine productivity, rising transportation

costs

Energy markets influenced by other markets (oil

follows the Euro)

Weakness in housing, manufacturing, employment

pull energy prices lower.

Peak Oil SupplyPeak Crude

Peak Unconventional?

Peak DemandPeak Mobility

Peak Shipping

Peak Power?

Peak EconomyPeak Credit

Peak Housing Values

Peak Income

Peak Jobs?

Have We Hit the Wall?

Three Paths to Choose From

Entering the Post-Peak

Environment

Plan A

Business As Usual

Plan B

Green New Deal

Plan C

Curtailment and Community

Capsule Descriptions of Plans

Plan A Complete denial of reality -- recipe for massive political turmoil/social

upheaval in the near future Plan B Purely a substitution strategy -- does

not question premise of existing economy – ignores Jevons’ Paradox

Plan C Recognizes need to downsize economy, de-consumerize citizenry,

and de-specialize society

Renewable Energy Pluses

Energy Security Energy Security Energy Security Price Security Environmental Economic Economic

Native to Wisconsin

Customer generation

Non-depleting

No fuel-based inflation

No air/water emissions

Local contractors/labor

Strengthens tax base

Renewable Energy Minuses Energy Supply Energy Supply Energy Supply Economic Economic

Physics

Difficult to scale up Non-dispatchable Weather-dependent Higher capital costs More labor-intensive (a

blessing in disguise)

Lower EROEI (except for commercial-scale wind) and large hydro

Plan A Value Proposition: Tomorrow’s Wealth Feeds Today’s

Economy

Coal, Natural Gas, Nuclear

Benefits (cheap electricity) front-loaded, costs (environmental mitigation) backloaded

Fuel used today means less available tomorrow EROEI of fuels likely to decline over time Pollution, waste storage not factored into initial

economic analysis

Result: Intergenerational imbalance favors current inhabitants.

Plan C Value Proposition: Today’s Wealth FeedsTomorrow’s

Economy

Solar, Wind, Hydro, BioenergyCosts (expensive equipment) front-loaded,

benefits (fuel, low O&M) backloaded Longer-lived projects Output declines are slight EROEI of energy sources remains constant Environmental constraints increase RE’s value

Result: Intergenerational imbalance favors future inhabitants.

Question: Is there enough stored wealth to finance

energy transition? Yes in nations like Germany, where there is

a national consensus to remake their energy economy.

Doubtful in nations like the U.S., because incumbent economic interests are effectively deploying $$ to neutralize public policy.

Here’s an Economic Development Strategy with No

FutureCasino,

French Lick,

Indiana

This bloated vessel doesn’t even float!!

This is an overscaled, highly entropic operation that devours energy like there’s no tomorrow.

Can RE Run a Residential Golf Resort?

Tesoro,

Port St. Lucie,

Florida

Tesoro’s $48 million clubhouse amid 750 empty lots

“When the depression ends, there will be a pent-up demand for happiness”

--Bobby Ginn

We Have to Stop Outsourcing Energy Capture and Start Doing It Ourselves

My house

This Fire Station Has a Long-Term Future

Madison Fire Station No. 6

Installer:

H&H Solar

This School Has a Long-Term Future

Osceola Middle School

System Designer: Energy Concepts

Installer: Steiner Plumbing

This Church Has a Long-Term Future

Church of the Resurrection

Pewaukee

System designer and installer: Sunvest

So Does this House of WorshipLake Country Unitarian Universalist Church

Hartland

System designer and installer: Sunvest

This Lodge Has a Long-Term Future

Elks Club, Good Hope Road, Milwaukee

This Business Has a Long-Term Future

Liberty Tax Service, Good Hope Road,

Milwaukee

Casino,

French Lick,

Indiana

It would be next to impossible to support this monstrosity with renewable energy, even if all the lights inside were powered with LED’s. Its scale is simply too large.

Observation #1

To run a world on renewable energy, a new infrastructure and set of expectations must be created. Because the EROEI of renewables is less than that of fossil fuels, the new infrastructure must be built with today’s wealth before it is frittered away on socially unproductive products and activities (McMansions, NASCAR, casinos, bank bailouts, etc.).

Observation # 2

The most agonizing decisions that await us will involve determining which elements of our built environment can be supported with renewable energy and which elements cannot. With a lower EROEI, we will not be able to run a world that formerly ran on cheap, abundant fossil fuels. We have little choice but to downsize our buildings, downscale our communities, and reorganize the economy.

Wisconsin Energy Facts

No reserves of fossil fuels

Long supply lines to deliver coal, oil, natural

gas

Primary energy imports valued at $15 billion/yr

Renewable energy is locally available

Why Support Windpower?

Clean Environmental Non-depleting Energy Security Fixed Price Risk Management Creates Wealth Economic

Development Scalable to Utilities Practicality

A sustainable source of wealth for Wisconsin!!

An Often Overlooked Attribute of Wind Power

It doesn’t take any fossil fuel to bring the wind to the turbine blades.

Windpower Strengthens WI Communities

Left: Butler Ridge Right: Glacier Hills

Both projects are along Highway 33 about 40 miles apart

The Importance of a National Energy Policy

Source: American Wind Energy Association, 2011

Iowa: 20% of its electricity + jobs + economic growth

Iowa second-largest state for wind power in the U.S. Now received 20% of its electricity from wind energy

» Iowa employs over 5,000 people in the wind energy industry, many of them in the manufacturing sector

Source: American Wind Energy Association, 2011

Attacks on Wind Energy in Wisconsin in 2011

Introduction of special session bill that would have required unreasonable setbacks of 1,800 feet from property lines. (Note: this was the only Walker proposal not approved by the Legislature.

Suspension of the uniform wind siting rules (PSC 128) by the Joint Committee

for Review of Administrative Rules.

Adoption of SB 81 (“Outsource Renewable Energy to Canada Act”),allowing utilities to count the purchase of electricity from large Canadian hydroelectric facilities toward their Renewable Energy Standard (RES), displacing in-state generation from wind and other renewable energy sources.

Bill introduced (AB 146) to indefinitely extend RES time limits for electric utilities to comply.

Source: American Wind Energy Association, 2011

Wisconsin: Losing Jobs, Economic Wisconsin: Losing Jobs, Economic DevelopmentDevelopment

» State has already seen several wind projects canceled or deferred – total could reach:• Loss of $ 1.8 billion• Loss of 2 million job-hours of construction

Source:American Wind Energy Association,2011

Wisconsin: Losing Jobs, Economic Wisconsin: Losing Jobs, Economic DevelopmentDevelopment

Wind energy industry jobs are leaving Wisconsin for IA, IL, MI, and IN….

Businesses are closing in Wisconsin

Source:American Wind Energy Association,2011

Snapshot - Midwest Windpower Development

ActivityState Operating

capacity (in MW)

Under construction (in MW)

Iowa 3705 589

Minnesota 2518 271

Illinois 2435 563

Indiana 1339 --

Wisconsin 469 167

Missouri 459 --

Michigan 164 223

Ohio 106 334

Sources: American Wind Energy Association, Windpower Monthly, RENEW Wisconsin

Thesis Statement and Corollary

Economies of scale are achieved by shrinking the labor contribution relative to output, which explains why utility-scale energy is less expensive than do-it-yourself energy.

Distributing renewable energy through customer-sited systems increases job-hours per energy unit produced as well as promoting entrepreneurship and small business development.

Economic Development Impacts of Community-Scale RE

Revitalizing ourselves through community-scale projects that employ local labor to build a sustainably energized society.

From Small Systems – Big Results

Example - Germany

Utilities are required to accept power from customer-sited RE systems through fixed, long-term buyback rates

20% of Germany’s electricity now generated from renewables 7,000 MW of PV to be installed in 2011 Germany has more than half the world’s PV capacity Payoff: 300,000 people employed in the RE sector Rapidly electrifying freight rail transportation

Social Rationale for Mandating Distributed Renewables

1) Economic Developmenta. Manufacturing

b. Wealth Creation

c. Employment and Jobs

2) Energy Security

3) Climate Change

GHD, Inc. Environmental engineering firm specializing in farm-sited anaerobic digesters

Based in Chilton, incorporated in 1989

Notable WI installations: Holsum Dairy (1+2), Quantum Dairy, Lake Breeze, Clover Hill, Statz Brothers, Grotegut, Maple Leaf (1 +2)

73 ADs operating at 38 farms & 19 under construction at 14 farms; found in 13 states

Uses a patented two-stage, mixed plug-flow digester design

No. of FTE employees: 40

Clover Hill Dairy, Campbellsport, WI - 2006

www.ghdinc.net

Green Valley Farm, Shawano

Slide courtesy of Focus on Energy

Renewable Energy Policy Successes

1999 -2009

1999 - Focus on Energy (Renewable Energy Program) 2002 – We Energies Renewable Energy Commitment 2006 - Renewable Energy Standard (10% by 2015) 2006 – Strengthened Focus on Energy 2006 – State of Wisconsin RE Purchase Requirement 2009 – Wind Energy Siting Law

Renewable Energy Policy Reversals

2010 - 2011

Clean Energy Jobs Act Goes Down the Tubes Legislature Slashes 2012 Focus on Energy Budget New FOE Administrator Suspends Incentives for RE Legislature Waters Down RES w/ Canadian Hydro Bill Introduced to Relax RE Credit Banking Rules Legislature Suspends Wind Energy Siting Rule

We Energies Does About Face on Renewables

2006 Press Release

We Energies announces PSC approval of voluntary renewable energy program

$60 million on RE over a 10-year period ($6 million/year)

Commitment based on agreement w/ RENEW not to oppose Elm Road coal plants

2011 Web Site Notice

We Energies unilaterally terminates program halfway through the 10-year period

Nonprofit Recipients of We Energies’ Renewable Energy

Incentives

Village of Cascade (wind) Shorewood Schools (SHW) MKE Public Library (PV) MSOE (PV) City of Brookfield (PV) City of Wauwatosa (PV) Concordia Univ. (PV) Growing Power (PV)

Renewable energy system hosts Lawrence Univ. (PV, wind) MATC (PV, wind) Waukesha Cty TC (PV) Ft. Atkinson Schools (PV, SHW,

wind) Dozens of churches (PV) City of Racine (PV) Racine EcoJustice Ctr. (PV,

wind)

What You Can Do

Demand an explanation from We Energies for its decision to terminate its renewable energy commitment halfway through the program.

Help RENEW publicize We Energies’ refusal to honor its commitments.

What You Can Do (cont.)

Fight the rollbacks (retreat from renewables) Contact your legislators The Governor’s office The PSC

Carol Stemrich: carol.stemrich@wisconsin.gov DOA Energy Division

Kevin Vesperman: kevin.vesperman@wisconsin.gov

Never Give Up!

Butler Ridge viewed from the Town of Addison Our vision of rural Wisconsin

Michael Vickerman

RENEW Wisconsin 608.255.4044

mvickerman@renewwisconsin.orgwww.renewwisconsin.org

http://renewwisconsinblog.org/www.madisonpeakoil-blog.blogspot.com