DOI/DOE MOU for Offshore Renewable Energy Projects, Part 2
To follow up on my colleague Janet Jacobs' blog on this exciting topic, here's some more detailed information about the MOU, especially as it relates to marine and hydrokinetic ("MHK") technologies:
The United States Department of Energy’s Office of Energy Efficiency and Renewable Energy (“EERE”) and the United States Department of the Interior’s newly-renamed Bureau of Ocean Energy Management, Regulation, and Enforcement (“BOEMRE”) (see Note below) signed a Memorandum of Understanding for the Coordinated Deployment of Offshore Wind and Marine and Hydrokinetic Energy Technologies on the United States Outer Continental Shelf (the “MOU”).
The purpose of the document is to prioritize and facilitate environmentally-responsible deployment of commercial-scale offshore wind and MHK energy technologies on the Outer Continental Shelf (the “OCS”) through collaborative efforts. In a recent blog, I mentioned that the DOE has committed $15.36 million to help researchers and developers alike to bring various MHK technologies closer to commercial deployment. This MOU represents yet another effort to spur the growth of the burgeoning offshore renewable energy industry.
An interagency working group has been tasked with developing an action plan that addresses the deployment of offshore renewable energy projects, including both offshore wind and MHK technologies, within 30 days. The action plan will outline how the BOEMRE and EERE can work together to streamline leasing and regulatory processes on the OCS for those sites with high energy resource potential. The MOU also outlines how the agencies will share information and undertake collaborative activities such as stakeholder engagement, technical and environmental research, joint evaluation of standards and timelines for development, and the dissemination of information to decision makers.
Note: On June 21, 2010, DOI Secretary Ken Salazar issued Order 3302 renaming the Minerals Management Serivce the BOEMRE.
DOE Issues RFI on Wind Energy Workforce Development Roadmap
The DOE has issued a Request For Information ("RFI") to get the public's input on the development of a Wind Energy Workforce Roadmap, which will provide details on the current workforce landscape in the wind industry as well as future steps necessary to train and develop a green workforce for the sector. Ultimately, the Roadmap will help shape policy objectives and the overall development of a wind energy workforce.
Here is the link to the RFI: https://www.fedconnect.net/FedConnect/?doc=DE-FOA-0000392&agency=DOE
DOE Awards $24 Million for Algal Biofuels Research
On Monday, the DOE announced that is had awarded up to $24 million to three research consortiums for the commercialization of algae-based biofuels. The three consortia include partners from academia, national laboratories, and private industries located across the country. Projects are expected to continue for three years.
The three awardees are:
- The Sustainable Algal Biofuels Consortium led by Arizona State University, will get up to $6 million for testing the acceptability of algal biofuels as replacements for petroleum-based fuels, investigating the biochemical conversion of algae to fuels and products and analyzing the physical chemistry properties of algal fuels and fuel intermediates.
- The Consortium for Algal Biofuels Commercialization led by the University of California, San Diego, will receive up to $9 million developing algae as a robust biofuels feedstock by focusing on algal crop protection, algal nutrient utilization, and genetic tools.
- The Cellana, LLC Consortium led by Cellana, LLC, of Hawaii, will also receive up to $9 million for examining the large-scale production of fuels and feed from microalgae grown in seawater, new algal harvesting technologies with pilot-scale cultivation test beds, and for developing marine microalgae as animal feed for the aquaculture industry.
DOI/DOE MOU for Offshore Renewable Energy Projects
Yesterday, the Department of the Interior (“DOI”) and the Department of Energy (“DOE”) entered into a Memorandum of Understanding (“MOU”) to bring together resources and expertise from both agencies as the US develops commercial-scale offshore wind and water energy projects on the U.S. Outer Continental Shelf.
The wind and water resources off the US’ coastline are vast yet largely untapped energy potential. According to DOE's “20% Wind Energy by 2030” report, offshore wind alone has the potential to produce 54,000 megawatts by 2030. The MOU allows for priority leasing and more efficient regulatory processes (including permitting) for sites with high, commercial-scale offshore wind and water power development potential.
California Solar Initiative Handbook Update: Warranty Requirements
Morten Lund reports:
The California Solar Initiative Handbook was updated June 8, 2010. The new version can be found by clicking here.
Of particular interest are changes to Section 2.4 (warranty requirements). These changes are not necessarily substantively significant, but may require some manufacturers and contractors/installers to conform their warranty language in order to ensure continued eligibility for CSI payments.
Treasury Department Issues Additional Guidance Regarding Cash Grant Begin Construction Requirement
The U.S. Treasury Department today released on its website additional guidance regarding the "begin construction" requirement for qualifying for the 30% ARRA cash grant. To qualify for the grant, a project either must be placed in service in 2009 or 2010 or, if construction begins on or before December 31, 2010, must be placed in service by a specified credit termination date (December 31, 2012 for large wind projects; December 31, 2013 for biomass, certain geothermal and other projects; and December 31, 2016 for solar and other projects). For the Stoel Rives Energy Tax Alert on the topic, click here.
Midwest ISO Final MVP Cost Allocation Proposal Won't Charge Generators for New Transmission Needed for Wind Energy
From our colleague Sarah Johnson Phillips:
Much to the relief of wind developers in the Midwest, the Midwest ISO has backed off a plan to charge new and existing generators 20% of the cost of new transmission needed to meet renewable energy development goals.
Yesterday, the Midwest ISO released its final cost allocation proposal, which it will file with the Federal Energy Regulatory Commission on July 15, 2010. In the final proposal, the cost of Multi-Value Projects (MVPs) will be spread evenly to load throughout the MISO footprint on an energy basis. MVPs are transmission projects needed to support renewable energy development, other policy drivers, or have multiple benefits such as reliability and market efficiency. Previous cost allocation proposals would have allocated 20% of the cost of MVPs to new and existing generators. That potential cost burden and resulting cost uncertainty had caused some wind industry observers to speculate that wind projects would abandon the Midwest for other parts of the country where transmission is cheaper.
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Geothermal Projects Recent Beneficiaries of DOE's Loan Guarantee Programs
U.S. Energy Secretary Steven Chu recently announced conditional commitments to provide loan guarantees in connection with two geothermal projects located in Oregon and Nevada. Specifically, on June 10, 2010, Secretary Chu announced that the Department of Energy offered a $102 million conditional commitment for a loan guarantee to U.S. Geothermal, Inc. to construct a 22 megawatt geothermal power project in Malheur County in southeastern Oregon. The project is slated to use an improved technology to extract energy from rock and fluids in the earth's crust more efficiently. In addition, U.S. Geothermal estimated that the planned project will create 150 jobs during the 20-month construction period and employ 10 skilled full-time workers when it begins operating in 2012.
On June 15, 2010, Secretary Chu announced that the Department of Energy offered a conditional commitment to provide a partial guarantee for a $98.5 million loan by John Hancock Financial Services to the Nevada Geothermal Power Company ("NGP") for a 49.5 megawatt geothermal project in Humboldt County in northwestern Nevada (the "Blue Mountain Project"). This conditional commitment is the first access to a loan guarantee through the Financial Institution Partnership Program ("FIPP"), which was launched by the Department of Energy on October 7, 2009. Under a FIPP financing, the Department of Energy provides a guarantee for up to 80 percent of a loan provided by qualified financial institutions to a renewable energy project utilizing commercial technologies. In connection with the loan guarantee for the Blue Mountain Project, John Hancock Financial Services was the lender-applicant and lead lender. The Blue Mountain Project "consists of a geothermal well field, fluid collection and injection systems that enable energy to be extracted from rock and fluid below the Earth's surface, and a power plant that converts geothermal energy into electricity." The electricity generated by the project will be sold to Nevada Power Company under a 20-year power purchase agreement.
Massachusetts Suspends In-State Requirement for Renewable Energy Generation and Modifies Solar Carve Out
From our colleagues Beverly Pearman and Jeremy Sacks:
Massachusetts Department of Public Utilities (“DPU”) has modified the two programs challenged by TransCanada Power Marketing Ltd. (“TransCanada”) in a federal law suit. TransCanada filed its complaint on April 16, 2010, alleging that portions of the Green Communities Act that were intended to increase in-state renewable energy resources were unconstitutional because they favor Massachusetts producers in violation of the Commerce Clause. The Commerce Clause generally prohibits states from enacting laws that burden out-of-state businesses in order to give a competitive advantage to in-state businesses.
The first modification came in early June as a result of settlement negotiations. Massachusetts modified the Solar Carve-Out program to grandfather in rates for Alternative Compliance Payments (“ACP”) that were contractually committed or renewed before January 1, 2010. ACP are paid by electric companies that do not hold the required amount of Solar Renewable Energy Credits (“SRECs”) that must be produced only by facilities located in Massachusetts. In exchange for this rule change, TransCanada dismissed its claims challenging the Solar Carve Out on June 9, 2010, but continued to press forward with its Commerce Clause challenge to a Request for Proposals for Long-Term Contracts for Renewable Energy Projects (the “RFP”) issued by the Massachusetts Department of Energy Resources (“DOER”) this year.
Upcoming Webinar: The Race to Solar: Who's In It to Win It?
The Race to Solar: Who's In It to Win It?
Tuesday, June 22, 2pm ET
Shift Worldwide's panel of industry and investment experts, including Stoel Rives’s Greg Jenner will discuss the Race to Solar between the US and China in an interactive, 60-minute virtual panel (vPanel) discussion. Topics include international markets, investor advisories, the competitive landscape and more.
For more information or to register, please visit: http://www.vpanels.com/schedule_vpanel.html
$6 Million for Short Term Wind Energy Forecasting
Yesterday DOE announced that up to $6 million to be awarded to one or two teams over two years to improve short-term wind energy forecasting, which will enhance the ability of utilities and electricity grid operators to forecast wind power generation.
One to two competitively-selected recipient team(s) will work with DOE and the National Oceanic and Atmospheric Administration (“NOAA”) to deploy atmospheric measurement systems, and demonstrate the value of these forecasting improvements for electric utility operations. The recipient team(s) will include wind plant operators, wind forecasting and meteorological services companies, electric utility system operators, and research organizations.
DOE will provide $3 million this year - $2 million to NOAA to fund its technical support of the selected projects and $1 million to the selected team. DOE also anticipates providing an additional $3 million in fiscal year 2011 to NOAA and the recipient team(s) to complete the project.
Go to the FedConnect Web site for additional details.
Kauai's Electric Utility Faces Civil Suit and Criminal Charges For Bird Fatalities
From our colleagues Greg Corbin and Barbara Craig:
On March 24, 2010, four conservation groups filed a complaint against Kauai’s electric utility, Kauai Island Utility Co-op (“KIUC”), alleging that KIUC’s power lines, utility facilities, and street lights “take” threatened Newell’s Townsend’s shearwaters (Puffinus Auricularis Newelli) (“Newell’s shearwaters”) and/or endangered Hawaiian petrels in violation of the Endangered Species Act (“ESA”). The civil complaint, filed in the U.S. District Court for the District of Hawaii, alleges that KIUC has failed to secure the necessary ESA incidental take permits and, despite years of promises, has failed to implement protective measures that are needed to prevent the “take” of the listed birds.
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