Business Meeting #19

Meeting Summary

June 24, 1999 - Burlington, Vermont

Summary and Next Steps

• NWCC will hold tailored workshops in a rural region (TBD) in January and March 2000 on Wind Energy and Rural Economic Development. One for policy makers/economic development professionals, and one (or possibly two) for farmers and grass roots organizations. Next steps: A. Arnold, in consultation with NWCC members, will prepare concept for Steering Committee review in September.
    
• Air Emissions Trading Workgroup will develop a project proposal for review by the steering committee by September.
    
• Transmission Workgroup: will develop three case studies internally: pricing and planning, virtual wheeling, and transmission upgrades by September.
    
• Avian

• Distributed Wind: Summary Document will be mailed out on July 30 for final NWCC "can live with it" review, comments due by September 3, report released by the end of September. Workgroup will determine which technical appendices will be made available as resources documents on NWCC’s website.
    
• Green Marketing:

• Paper II: NWCC members will contact Chuck Linderman at EEI to reach final consensus (This has occurred and consensus has been reached.)
• Paper III: small Workgroup will develop proposal for Green Marketing Demand paper for review by Workgroup in July.

• State Policy Options: A limited number of copies have been printed, and the primary dissemination method will be NWCC’s website starting in July.
    
• Siting: 1998 Edition Permitting Handbook will be reprinted in July.
    
• 2000 Edition Permitting Handbook: suggested changes due by September, and revised document released by June, 2000.
    
• The NWCC agreed to a schedule of on-going and specific outreach activities for 1999-2000.
    
• NWCC will hold monthly steering committee conference calls.

• Hear about and discuss appropriate role for NWCC on Air Emissions Trading, Transmission, and Wind Powering America projects.
    
• Updates on other NWCC projects (Avian, Distributed Wind Energy, Green Marketing, Siting, and State Policy Options).
    
• Commit meeting dates for 1999 and 2000.

Air Emissions Trading: 
Opportunities for Wind Development and the Role for the NWCC
Michael Tennis, ReGen Technologies

• Emissions trading programs attempt to align market signals with environmental goals. Thus far, trading programs have been implemented or are anticipated for: SO2, NOx, VOCs, CO, and GHGs.
  
• There are three basic types of trading programs:

• Cap and trade (allowance) programs
• Open market trading programs
• Emission reduction credit and offset programs

• Conclusions for wind projects:

• Criteria for a project to earn credits:

• Will the emission reductions be "surplus?"
• Will the emission reductions be "additional?"
• Who owns the right to the credit?
• Quantification of emission reductions from

• "displaced" power from the grid or
• compared to cleanest commercially available fossil generation technology (combined-cycle gas turbine).

• EPA supports the renewable energy sector in a variety of ways:

• Promotion and promulgation of output based emission standards
• Promotion of emission trading programs
• Promotion of Clean Air Partnership Fund
• Promotion of greenhouse gas reductions

• EPA fundamentally changed the way air emissions are regulated starting in 1998: EPA promulgated new source performance standards for utility boilers that regulate output in terms of MWh of energy produced rather than lbs./mmBtu of fuel burned. This is an incentive for efficiency and renewable energy, not just emission controls.
    
• Mr. Rapp recommends that wind and renewable energy interests need to make their voices heard when each state develops its State Implementation Plan (SIP). He suggests advocating for a 5-15% set-aside for renewables and DSM to meet emission allowance targets.
    
• The best opportunity for wind and renewables to benefit from trading programs is to promote allowance programs with set-asides and an emission cap that bring renewables into the SIP directly. Credit and allowance trading also provides opportunities for renewables to partner with fossil fuel power plants by: -reducing total emissions, but retaining output; or by –maintaining emissions and increasing output.
    
• Key issue: who owns the credit and how are additions of wind energy treated in the credit allocation process? For example: construction and operation of a new wind plant would offset the demand for fossil fuel electricity, but fossil fuel electricity would get the credit, because they are the regulated entity.
    
• Mr. Rapp recommends sending a letter to air quality offices on the air quality benefits of wind energy.

• Mr. Smith discussed NYSERDA’s pilot NOx set aside program which voluntarily implements the EPA "SIP Call" and "Phase 3" of Ozone Transport Region MOU in 2003.
    
• Basic Premise of the Set-Aside Concept:

• Mr. Wooley is preparing a forthcoming publication for the Renewable Energy Policy Project (REPP) entitled Clean Air Act Incentives for Renewable Energy: A Guide for the Renewable Energy Community. The questions posed by the paper are relevant to today’s discussion:

• Does emission trading have value for the renewable energy industry?
• Is that value large enough to justify the effort to achieve the policy changes needed to make trading useful to renewable energy developers?
• What policy changes are needed in emission trading systems to insure that trading produces significant revenues for clean energy generators?

• Based on his presentation of a hypothetical 3-pollution scenario (CO2 valued at $5 or $60/ton, SO2 valued at $200/ton, and NOx valued at $2000/ton) for a 20 MW wind farm (based on 52,560 MWh/yr. at a 30% capacity factor), Mr. Wooley concluded that emission trading is worth it. CO2 trading value is the driver.

• Emission trading increased the annual revenue of the wind farm by 10%, or $336,384.
• At $60/ton for CO2, emission trading produces $2.5 million in revenue.

• Policy changes recommended by Mr. Wooley:

• Every emission trading mechanism must include a set-aside or direct allocation of emission allowance for renewables.
    
• Current SO2 allowance trading mechanism in the US Clean Air Act must be changed by Congress.

• Make it apply to an annual cap
• Make it apply nationally

• Framework Convention on Climate Change – Congress again has to ratify the treaty.
    
• Emission caps must explicitly account for renewable energy projections – to avoid being robbed of emission reduction benefits.

• The NWCC could develop a list of principles to help wind energy and renewables get full consideration as credit trading schemes develop.
    
• NWCC can help refine an effective message that insures that renewables are properly treated in decision making processes.
    
• The NWCC could participate in REPP by critiquing the Air Quality Paper Series to insure quality coverage of wind issues.
    
• The NWCC could help educate air quality regulators by providing good information on wind energy. Timing is essential. NWCC needs to understand what decisions are coming up at which times so that members can plug in effectively. (A calendar of key decision making timelines.)

• Emissions Trading Workgroup will review a draft of REPP clean air overview paper in July to add wind/renewable perspective.
    
• In July and August EM Workgroup will discuss the scope of the Workgroup develop a project proposal for presentation to the steering committee by September.
    
• The Workgroup will seek to expand sector participation to include utility, consumer advocates, and state and federal representation. Rick Weston and Rich Sedano expressed interest. All four panelists expressed interest.

• Establishing new sources of income for American farmers, Native Americans, and other rural landowners.
    
• Meeting the growing demand for clean sources of electricity.

• Provide at least 5% of the nation’s electricity from wind by 2020
    
• Double the number of states with more than 20 megawatts of wind capacity to 16 by 2005, and triple that number to 24 by 2010.
    
• Increase wind’s contribution to Federal electricity use to 5% (1,000 MW) by 2010.

• NWCC will explore holding tailored workshops in a rural region (TBD) in January and March 2000 on Wind Energy and Rural Economic Development. One workshop will be geared towards policy makers/economic development professionals, and one or two will be geared towards farmers and grass roots organizations.
    
• NWCC staff will write up a scope of work for the NWCC Summit on Rural Wind Development.
    
• NWCC agreed to work in concert with DOE’s Wind Powering America program.

• Pricing transmission services (70% postage rate and 30% distance-based).
    
• An ISO that can order the construction of transmission lines when needed (yet to be tested though).

• AUDIENCE AND TONE - Some favored targeting a wider audience, while others preferred educating NWCC internally first before reaching out to a larger audience. One member commented that case studies are a good vehicle for illustrating problems and providing examples of how those problems were solved or addressed in a particular context. In response to questions, proposal authors emphasized that NWCC case studies should not be advocacy pieces; they should frame issues so that other regions can answer the questions posed for themselves.
    
• UNIQUENESS OF TEXAS – Some asked if Texas is too unique to write a case study with relevance outside of Texas, while others suggested Texas is an important story on how transmission problems were solved, with relevance to other regions. In one member’s opinion, transmission is hard to build consensus around and Texas may have gotten lucky on transmission. One member suggested that a multi-state transmission example would be helpful. Another member suggested that the pricing and planning case study should answer the question: how did wind do so well in Texas without advocates at the transmission meetings? A partial explanation was offered: small isolated towns did not want high energy costs.
    
• TRANSMISSION UPGRADE CASE STUDY DISCUSSION – Ultimately, there was solid support for case studies one and two. Members endorsed case three, but some additional questions on case study three were raised, such as the cost of the project, the political sensitivity of issue, and whether NWCC can add value in a neutral way. Some took issue with how "dangerous" transmission constraints are in general. Others cautioned that NWCC should think carefully about how to develop a crafty public message that justifies system upgrades instead of promoting wind markets. In response to some of these issues, several members pointed out that transmission upgrades can be an important ally of wind. Despite the benefits upgrades can have for fossil fuel generation, some felt it is a mistake for environmentalists to view wind energy as an alternative to transmission upgrades.
    
• OTHER ISSUES – In the discussion of the virtual wheeling case study, one member stated that credibility (i.e. of "green" or "clean" energy claims) is an important consideration much in the same way it is important with green energy marketing. In addition to the three issues identified in the case study proposal, members called attention to additional barriers that can prevent wind from dispatching into an ISO, e.g. bid minimums and PX rules. One member asked for a definition of a feasible transmission distance.

• Avian Metrics Document under final NWCC "can live with it" review, comments due by July 30, report to be released in September.
    
• Proceedings of Fort Collins Avian Workshop document to be ready by July, 1999.
    
• Proceedings of National Avian-Wind Power Planning Meeting III document to be ready by December 31, 1999.
    
• Avian "Perspectives" fact sheet to be produced by September 1999.
    
• "Avian-Wind Research Status" to be produced by September 1999.
    
• National Avian-Wind Power Planning Meeting IV to be held in February 2000 (location TBD)

• The Workgroup decided not to produce a 10 page summary of Avian-Wind Research. This may be addressed at the Planning Meeting #4.
    
• The Workgroup decided not to plan for an Avian-Wind Forum at this time. There is not sufficient need or demand.
    
• The next revised edition of the Wind Permitting Handbook will incorporate relevant information from the Avian Metrics document.
    
• The Workgroup will continue to meet on a periodic basis; likely in conjunction with NWCC Business meetings.

• Bat mortalities were recorded at one wind generation site. The Workgroup will continue to keep appraised of this issue and it may be a topic for the next Wind-Avian Planning Meeting.
    
• Avian impacts from telecommunications towers is a topic of increasing concern to the USFWS. A meeting is scheduled for late June between telecommunications representatives, USFWS, and other stakeholders. Steve Ukeritch is attending the tower meeting and will keep the Workgroup updated.
    
• The Federal Aviation Administration (FAA) requires safety lights to be placed on structures over 200 feet in height, including wind turbine towers and blade tips. The lights attract birds and may cause some avian mortality as birds fly into spinning turbines. This has been reported in Wisconsin and Texas. This may be a topic for the next Wind-Avian Planning Meeting.
    
• A member asked whether wind-moth interactions are a problem. The Workgroup will discuss this at its next meeting.

ADJOURNMENT – The meeting adjourned at 3:30 PM.