Proposed Legislation to Limit ITC Grants for Renewable Projects
Proposed legislation in the Senate would greatly limit the effectiveness of the grant in lieu of tax credits for renewable energy projects under section 1603 of the American Recovery and Reinvestment Act.
The section 1603 grant currently applies to renewable energy projects, such as wind, solar, geothermal and biomass, that are placed in service before 2011 or for which construction begins in 2009 or 2010 (and that are placed in service by certain dates). In its current form, if a project qualifies for the grant, the Treasury Department is required to pay the grant.
Expressing concern that a significant portion of the grants paid so far have gone to non-U.S. companies, Senator Charles Schumer (NY) and three other Democratic senators have sponsored a bill that would make payment of the grant subject to the discretion of the Treasury Department. It also would make the grant subject to the Buy American requirements of the stimulus bill, and would require that Treasury conduct an analysis of the "domestic job preservation and creation provided by" a project for which a grant application is submitted.
Various trade associations involved in renewable energy (such as AWEA, GEA and SEIA) are taking immediate action to register their opposition. Their focus will be on the incorrect assumptions underlying the proposal (for example, that it does not create U.S. jobs) and that, if enacted, it likely would destroy the effectiveness of the program.
We encourage our readers to register their strong opposition with their members of Congress and with the trade associations with which they are associated. The more opposition that is registered, and the longer the proposal drags out, the less likely it is to be enacted.
Read the March 4, 2010 Stoel Rives Law Alert on this proposed legislation.
Stoel Rives Clients Receive Huge Tax Credit Awards
Stoel Rives would like to congratulate REC Silicon and SolarWorld on their awards of tax credits by the IRS and DOE. These two companies, combined, received over 10 percent of all the tax credits awarded nationwide under section 48C of the tax code.
On Friday, January 8, the Department of Energy awarded to 183 companies $2.3 billion in tax credits for projects designed to expand, re-equip or establish manufacturing facilities for the production of equipment used to produce renewable and other green energy. The $2.3 billion was the full amount authorized by Congress in the stimulus bill as part of new section 48C of the tax code.
Applications for the credit far exceeded the dollar amount of credits available. Stoel Rives is proud to have been directly involved with these companies in preparing the complex applications for the credit. REC Silicon received the largest award of any company -- $154.8 million. SolarWorld received the seventh largest award -- $82.2 million. These credits will provide these companies with a dollar-for-dollar offset against their federal income tax liability.
There is considerable discussion in Congress regarding adding additional funds to the section 48C program, which will permit another round of awards. Please contact your favorite Stoel Rives attorney if you have any questions about these awards or extension of the section 48C credit.
GEA's Geothermal Energy Finance Forum hits New York
On January 14, the Geothermal Energy Association will host a one-day Geothermal Energy Finance Forum in New York. Almost 30 speakers are confirmed for the Forum, including heavy hitters from investment groups and banks, geothermal energy developers, and the DOE and Treasury. Senate Majority Leader Harry Reid (D-NV) will deliver the keynote address. My colleague, John McKinsey, will speak on federal and state legal and regulatory issues associated with the development of geothermal resources. The agenda for the Forum is jam-packed with panels and presentations on cost and financial modeling for geothermal projects; government finance and incentives, including under the American Recovery and Reinvestment Act; project development and design; and risk mitigation, along with myriad case studies from the likes of US Geothermal, Ormat, Ram Power, Raser Technologies, TAS, Vulcan Power, Nevada Geothermal Power, and Enel. Mayor Bloomberg has even proclaimed January 14, 2010 as "New York City Geothermal Energy Day."
CPUC Proposed Decision on TRECs--Comments Due January 19
The California Public Utilities Commission ("CPUC") issued a proposed decision on December 23, 2009 that would, if adopted, allow California investor-owned utilities, energy service providers, and community choice aggregators to purchase renewable energy credits alone, without the associated energy (sometimes referred to as "unbundled renewable energy credits ("RECs)" or "tradable RECs"), to satisfy their obligations under California's RPS. California's largest investor-owned utilities—Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric—would be limited to meeting no more than 40% of their annual procurement targets under the RPS with tradable RECs, and a price cap of $50 would be imposed. The CPUC will revisit both the percentage cap and the cost cap and whether those caps should be revised within 24 months of the decision.
Out-of-state renewable energy projects could be adversely impacted if the proposed order were adopted. The proposed decision would define all renewable generation purchased from out-of-state facilities1 as the purchase of unbundled or tradable RECs, making any out-of-state renewable energy sale subject to the cap that bars the large investor-owned utilities from using such sales to meet more than 40% of their overall RPS obligation. Although the proposed decision states that this classification would apply only to contracts signed on or after the effective date of the decision, contracts signed prior to the effective date would be considered REC-only contracts from the effective date forward, and would be "subject to the limits and rules applying to REC-only contracts" according to the proposed decision. Furthermore, although the purchase of tradable RECs from out-of-state facilities would be permitted, the delivery requirement in the RPS legislation would still have to be met, so a comparable amount of power would have to be imported into the state, along with the RECs. The jurisdiction to determine whether and how this delivery requirement is met, however, still remains with the California Energy Commission.
Comments on the proposed decision are due on January 19, 2010, and reply comments are due January 25, 2010.
For additional information about the history and effect of the proposed decision, see our Stoel Rives alert on the topic.
Technical Correction to Section 1603 Grant May Loosen Rules for Investment by Tax Exempts
On December 2, House Ways & Means Chairman Rangel and Ranking Member Camp introduced a tax technical corrections bill (H.R. 4169). We will likely see an identical version introduced in the Senate very soon.
Included among the technicals are changes to the Grant in Lieu of ITC under section 1603 of ARRA. The most important change is one that allows the grant to be made to certain tax-exempt organizations.
Under current law, the grant may not be made to a governmental entity, tax-exempt entity, certain other entities (including Indian tribes and electric coops), or a pass-thru entity that includes any of the former as an equity owner. This provision has made it impossible for these organizations (or funds that include such organizations) to invest in renewables and receive the grant unless they establish a blocker (taxable) corporation to hold their interest in the project. Many entities are uncertain whether they have the authority to establish taxable corporations.
The technical, if enacted, would provide that a grant may be made to tax-exempt organizations, retirement funds, and to state colleges and universities (but not other governmental entities) if the income from the project is treated as income from an unrelated trade or business (“UBTI”). In most situations, this would be the case where power from the qualified facility was being sold. It is not clear whether this provision would apply if the power was being used for the entity’s own purposes (not sold). Where applicable, the technical will eliminate the need for a blocker corporation in cases where the tax exempt or retirement fund is an investor or where a college or university is selling the power. Note -- the technical does not eliminate the need for a blocker corporation in order for the entity to qualify for accelerated depreciation.
Nevertheless, this could be a major change, particularly for colleges and universities that are selling renewable power but which otherwise could not receive the grant.
A cautionary note: the technical has not yet been enacted and it is not clear when it will be. However, to even be introduced, a technical has to have been agreed upon by both tax writing committees, which means its enactment is virtually assured eventually.
Please contact your favorite Stoel Rives attorney with any questions.
Come Visit Us at E3, The Midwest's Premier Energy, Economic and Environmental Conference, on Nov. 17, 2009
As a proud Exhibit Hall sponsor of E3, the Midwest’s premier energy, economic and environmental conference, Stoel Rives LLP would like to encourage you to attend this annual event. Hosted by the University of Minnesota’s Initiative for Renewable Energy and the Environment, E3 will focus this year on the intersection of innovative technologies and policies, environmental benefits and emerging market opportunities across the renewable energy spectrum.
Stoel Rives attorneys Mark Hanson, Bill Holmes and Greg Jenner are part of the event faculty. Mark will moderate a panel presentation on the challenges and opportunities of converting carbon dioxide to fuels. Bill will moderate a panel discussing exactly how sophisticated smart power grids need to be in order to scale up renewables as a major U.S. energy contributor. Greg, meanwhile, will participate in a panel discussion on the most efficient and effective strategies for financing renewable energy projects.
For more information and to register, please visit the following link: http://bit.ly/XUUjJ. We hope to see you there, and encourage you to visit our booth (#24). In addition to our presenters, Debra Frimerman, Kevin Johnson, Kevin Prohaska, Katie Roek, Mary Sennes, Joe Thompson and Vicki Twogood will be available to discuss any questions you may have. Don’t forget to pick up complimentary copies of our Law of Series handbooks, including The Law of Solar, The Law of Wind, The Law of Biofuels, The Law of Building Green, Lava Law,and our most recent additions The Law of Algae and Show Me the Money: The Law of the Stimulus (2d ed).
Minnesota Renewable Energy Projects RFP
The State of Minnesota’s Office of Energy Security (OES) is requesting proposals from organizations that are engaged in or will engage in the manufacture of renewable energy systems or fuels, energy storage systems, geothermal energy systems for heating and cooling, components of these systems, or equipment for the manufacture of these systems or components.
The maximum award is $1 million. Up to a total of $2 million is available to all recipients. OES anticipates that two to six projects will be selected for awards under this solicitation.
All work to be performed within a proposed scope of work must be completed no later than June 30, 2011. An applicant must provide at least 40 percent of the total cost of the proposed scope of work. Applicant’s match may be cash or in-kind.
Each applicant must submit a notice of intent no later than December 4, 2009 to be eligible. Final proposals are due on December 18, 2009. OES anticipates provisional notification of successful applicants no later than January 29, 2010. Final selection will be contingent on determination by U.S. Department of Energy of compliance with the National Environmental Policy Act.
For more information and to download a copy of the RFP, please visit www.energy.mn.gov and click on Active Request for Proposal (RFP).
Demonstration of Low Temperature Geothermal Power Generation
Seeing how Stoel Rives is a Silver Sponsor of the Geothermal Energy Expo, held in Reno until October 7, 2009, it appears timely to talk about some geothermal energy news (click here for conference details, come by and see us at booth #520).
On October 2, 2009, the U.S. Department of Energy (DOE) announced the Geothermal Research Initiative, a program to demonstrate low temperature geothermal electrical power generation systems using oilfield fluids produced at the Rocky Mountain Oilfield Testing Center. This program is moving forward as a collaboration between the Office of Fossil Energy and the Office of Energy Efficiency and Renewable Energy’s Geothermal Technologies Program.
The Geothermal Research Initiative will demonstrate the versatility, reliability, and deployment opportunities which utilize the co-produced water from oilfield operations. These systems are designed to offset the electricity usage of the oilfield while also creating a second use for water which would otherwise be discarded. The DOE believes that the co-produced water can become a significant energy resource with an estimated 10 barrels of hot water being produced along with each barrel of oil in the United States.
The program will produce operational and performance data which will be freely available to the public. The goal of the program is to educate industry and the public about the potential for geothermal energy production from co-produced water and establish the best systems for particular climates.
Avista Seeks Additional Renewable Energy
Avista announced earlier this week that it is seeking proposals from suppliers of renewable energy. Avista wants to acquire roughly 35 average megawatts (aMW) of long-term qualified renewable energy, to be supplied by the end of 2012 . The company is looking for proposals from wind, solar, geothermal, biomass, qualified hydroelectric and other renewable resources that meet Washington's RPS standard.
Avista plans to host a conference call for potential bidders on September 30. Responses to the request for proposals are due by October 23, 2009. The full RFP and instructions for bidders can be found here.
$13 Million Awarded from the Rural Energy for America Program
In an earlier blog, my colleagues, Debra Frimerman and Janet Jacobs reported about the Rural Energy for America Program (“REAP”), in general and specifically in regards to small wind projects. REAP is a Department of Agriculture (“USDA”) program that provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems. Eligible renewable energy systems include those that generate heat, electricity or fuels from wind, solar, biomass, geothermal, hydro power, and hydrogen based feed stocks.
The USDA has announced that it has awarded more than $13 million in REAP funds for 233 renewable energy projects in 38 states. Examples of the awards include a $1.8 million guaranteed loan and $500,000 grant for Milford Wind Energy, LLC; a $435,271 guaranteed loan and $435,271 grant for Unaka Forest Products, Inc.; and a $15,000 grant to Pacifica Marine, Inc.
Continue Reading...
DOE to release eagerly awaited commercial solicitation
On a webinar yesterday, Michael Fraser, Senior Program Manager at the DOE, advised that the DOE plans to release a commercial solicitation for the loan guarantee program later this month or in early October. The current solicitation that is active for renewable energy projects requires that projects satisfy the innovative requirement. A project is defined as innovative only if it has not been employed in three or more similar applications in the US of five years duration. Thus many established renewable energy projects such as those utilizing wind or geothermal technology that is tested and proven, cannot apply under the current solicitation. The release of a commercial soliciation has been eagerly awaited by renewable energy project developers. These loans will be backed by private banks as well with DOE typically only guaranteeing 80-90% of the loan. DOE hopes that this structure will motivate private lenders to perform much of the due diligence necessary and only bring shovel-ready and bankable projects to the table. Interest rates on the loan are anticipated to run at Treasury plus 25 to 75 basis points. This is a very attractive interest rate but there are substantial fees associated with the program that will offset a portion of this value. The other key factor for projects to consider is whether they will be able to meet American Reinvestment and Recovery Act requirements and thus be eligible to have their credit subsidy costs covered by government funding. I am cautiously optimistic that DOE will be successful with these efforts and we will see a flurry of good projects moving forward Q1-Q2 2010 with the assistance of this program.
November 17: Energy, Economics and Environment (E3) Conference
The University of Minnesota’s annual conference on Energy, Economics and the Environment – E3 – will be held in St. Paul on November 17. Hosted annually by the University of Minnesota’s Initiative for Renewable Energy and the Environment (IREE), this year’s conference will explore current technologies, environmental benefits and market opportunities in renewable energy.
Stoel Rives will be a sponsor of the E3 conference and will, as usual, host a booth at the event. Minneapolis tax partner Greg Jenner will join a panel to discuss “What’s the most efficient and effective strategy for financing renewable energy projects?” To review the agenda and register for the conference, click here.
Free Webinar on Loan Guarantee Program Hosted by DOE
The U.S. Department of Energy is hosting a free webinar on "How to Build a Strong Application" for the DOE Loan Guarantee Program on Tuesday, September 8, 2009 from 1:00 PM - 2:00 PM EST. The webinar is intended to explain the loan guarantee program and help lenders and applicants navigate the application process. DOE will also be providing suggestions on how to create a strong loan guarantee application.
DOE recently released two solicitations under the program for innovative energy efficiency, renewable energy and advanced transmission and distribution technologies and transmission infrastructure investment projects. DOE is particularly interested in wind, closed-loop biomass, open-loop biomass, geothermal, landfill gas, trash-to-energy, hydropower and solar projects that are able to commence construction before September 30, 2011.
DOE will be hosting a series of free webinars on the application process over the next few months.
First Treasury Grants in Lieu of ITC Awarded
Treasury Secretary Tim Geithner and Energy Secretary Steven Chu announced the first awards of cash grants in lieu of the investment tax credit (ITC) today. The total award value was over $502 million. Recipients include projects in Colorado, Connecticut, Maine, Minnesota, New York, Oregon, Pennsylvania and Texas. Click here for a detailed list of the awards announced today. Additional awards will be announced in the coming weeks.
For more information on this program and the application process, please see the Stoel Rives Energy Law Alert: Treasury Issues Guidance on Applications for Grants in Lieu of the ITC and PTC.
Australia passes 20% renewable energy target by 2020
From my colleague Adam Walters:
On August 20 the Australian government announced the passage of a bill quadrupling its Renewable Energy Target (RET) to ensure that 20% (approximately 45,000 GWh) of Australia’s electricity is generated from renewable energy sources by 2020.
How does Australia’s RET Scheme Work?
The RET scheme is an expansion of Australia’s Mandatory RET scheme introduced in 2001, the first of its kind in the world. It works through the creation and sale of Renewable Energy Certificates (RECs) by renewable power generators to “liable parties” (mainly large-scale electricity utilities and consumers), who must provide a designated quantity of REC’s to Australia’s renewable energy regulator to demonstrate compliance and avoid having to pay charges for any shortfall. One of the changes brought about the new legislation is to increase from $40/MWh to $65/MWh.
Renewable energy sources eligible for accreditation under the RET scheme include: solar, wind, hydro, tidal, wave, biomass and geothermal, as well as solar water heaters and other smaller generation units. Hydro has historically dominated Australia’s renewable energy landscape, but recent project announcements and funding opportunities for wind and solar projects signal greater diversification of the industry, particularly for proven technologies.
Continue Reading...NV Energy Issues RFI for Short Term (1 Month to 3 Years) Energy Supply
On August 21, NV Energy issued a press release reminding renewable energy developers of that it has issued a Request of Information (RFI) for renewable energy that can be provided on a short-term basis. This solicitation is separate from NV Energy's recently announced 2009 Renewable Energy Request for Proposals. NV Energy will consider proposals for solar, wind, geothermal, biomass and other resources eligible for portfolio energy credits under the Nevada renewable portfolio standard.
NV Energy is now looking for proposals from entities that can deliver renewable energy to its system on or after Oct. 1, 2009 and for a period of one month to three years.
Parties interested in submitting a response to the RFI, or those seeking more information related to the RFI or renewable energy laws can contact NV Energy at: ShortTermRFI@nvenergy.com . In addition, prospective bidders can email any questions to Ron Helbing, rhelbling@nvenergy.com.
Bidders must submit their responses to NV ENergy's short term renewables solicitaion by 9:00 AM (PPT) on Sept. 2, 2009.
Show me the Money: DOE Proposes Amendments to its Loan Guarantee Program
Today, the Department of Energy (DOE) issued a notice of proposed rulemaking to amend 10 CFR Part 609, the rule regulating the loan guarantee program authorized by section 1703 of Title XVII of the Energy Policy Act of 2005. The two principal goals of section 1703 of Title XVII are to encourage commercial use of new or significantly improved energy-related technologies and to achieve substantial environmental benefits. (See these recent alerts regarding the DOE loan guarantee program and the related application process)
After reexamining Title XVII, the DOE has concluded that the statute does not require a first lien on all project assets. DOE has discovered that its current requirement that it be in lien position is in conflict with the financing structure of many energy projects. For example, many utility scale power plants are jointly owned by public power agencies, cooperative power systems and investor-owned utilities. In these cases, it may not be commercially feasible to obtain a lien on all project assets or the credit of a sponsor may be sufficient to support a more modest pledge of assets.
Furthermore, DOE has found that other parties are interested in participating as co-lenders, co-guarantors, or insurers of Title XVII loans. However, these other parties expect to share, on a pari passu basis, in any collateral securing such loans.
Consequently, DOE proposes two amendments to the current rules:
- Delete the requirement of a first priority lien on all project assets and leave to the Secretary (of DOE) the determination of an appropriate collateral package, as well as intercreditor arrangements; and
- Allow the Secretary (of DOE) to determine if pari passu lending is in the best interests of the United States
Continue Reading...
$22 Million for Community Renewable Energy
The Department of Energy (DOE) announced this week that up to $22 million from the Recovery Act would be allotted to up to 4 eligible communities nationwide in order to encourage utility-scale renewable energy systems that provide clean, reliable, and affordable energy supplies for their communities, while creating jobs and new economic development opportunities. The projects will demonstrate how multiple renewable energy technologies, including solar, wind, biomass, and geothermal systems, can be deployed at scale to supply clean energy to communities. Eligible applicants are local and state governments, Indian Tribes and Tribal Energy Resource Development Organizations or Groups.
Successful applicants will be awarded financial assistance to support the implementation of an integrated renewable energy deployment plan for a community, and the construction of renewable energy systems. DOE expects each project to also have substantial private sector investment in addition to the funds from DOE. Completed applications are due September 3, 2009 and the DOE will select awardees by the end of November 2009.
Show me the Money: Applications Available for the Washington State Energy Program
Washington previously received $60.9 million in Recovery Act funding for its State Energy Program (“SEP”). The Washington Legislature later provided $38.5 million to the Washington State Community, Trade and Economic Development (“CTED”) agency to administer a loan and grant program for eligible projects in the areas of energy efficiency, renewable energy and clean energy innovation (see our earlier blog entry here for more details). The deadline for submitting a notice of intent to apply is July 27, 2009 at 5:00 p.m. Pacific time, and the application is due August 17, 2009 at 5:00 p.m. Pacific time.
I attended an informational meeting held by CTED on July 13, 2009. The meeting provided an overview of the loan and grant program, as well as funding details, eligibility guidelines and evaluation criteria. Eligible projects can receive between $500,000 to $2 million in loans and grants in the first round, with the requirement that applicants provide other sources of funding at least equal to the amount of the loan or grant request. The non-SEP funding may include amounts spent or committed to the project since January 1, 2009. Projects will be evaluated based on the feasibility and quality of the project plan, the experience and qualifications of the project team, the ratio of matching funds to SEP funds, job creation, and energy savings/production. CTED intends to announce award decisions in September 2009.
Treasury Issues Guidance on Applications for Grants in Lieu of the ITC and the PTC
The American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in February, permits an applicant to receive a grant from Treasury in lieu of claiming investment tax credits (ITCs) or production tax credits (PTCs).
Today the U.S. Treasury Department issued much-anticipated guidance concerning applications to receive cash grants in lieu of claiming income tax credits for certain renewable energy projects. Although the guidance includes a sample application form, the U.S. Treasury has stated that it will not accept applications until August 1.
If you have questions about today's Treasury Department guidance and grants in lieu of ITCs or PTCs, contact:
Chris Heuer at ckheuer@stoel.com
Greg Jenner at gfjenner@stoel.com
Carl Lewis at cslewis@stoel.com
Kevin Pearson at ktpearson@stoel.com
Adam Kobos at ackobos@stoel.com
Show me the Money: Applications Available now for Washington's State Energy Program
On July 1, 2009, Washington State’s Department of Community, Trade and Economic Development (“CTED”) issued application guidelines and forms for its State Energy Program (“SEP”) (available by clicking here). The American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) provided $60.9 million in new funding for Washington’s SEP. Subsequently, the Washington Legislature allocated $38.5 million to CTED to administer a loan and grant program for energy efficiency and renewable energy program (see our client alert, available here, regarding the legislative action).
Continue Reading...Stoel Rives Expands Its San Diego Office
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We welcome energy attorneys Morten Lund and David Quinby to the firm’s San Diego office as members of the Energy and Telecommunications group. They join attorneys Howard Susman and Brian Nese. The San Diego office has relocated to a larger space at 12265 El Camino Real, Suite 303, to accommodate further expansion (new contact information below). |
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The California energy team's capabilities also include real estate, land use and permitting, equipment procurement and construction, state and federal regulation, environmental matters, and dispute resolution. Stoel Rives has received a national ranking for its Renewables and Alternative Energy practice from Chambers USA: America's Leading Lawyers for Business (2009), rating among the top law firms in this category. The firm has been at the forefront of growth in renewables in recent years and represents many of the industry leaders in solar, wind energy, geothermal, biomass, hydroelectric, ocean, combined-cycle natural gas, carbon sequestration and biofuels project development in California, the United States, Canada and abroad. For more information about the Stoel Rives Renewable Energy Group, visit www.stoel.com/renewableenergy or contact: Howard Susman at |
Show me the Money: Florida, Idaho, and Kansas State Energy Programs Received $77.1 Million from the Recovery Act
On June 24, 2009, the Department of Energy (“DOE”) announced more than $204 million in Recovery Act funding to ten states for their State Energy Programs ("SEPs").
Here is a summary of how the monies will be used in Florida, Idaho, and Kansas:
Florida's SEP will fund energy efficiency, renewable energy, and alternative fuels projects in the state. Florida will deploy these funds through several loan and grant programs to promote the commercialization of new clean technologies. Florida was awarded $50.4 million, and will receive an additional $63 million after demonstrating successful implementation of its SEP.
Idaho's SEP will launch a set up new programs, including the Renewable Energy Business Development Program, to further renewable energy development in the state while creating new jobs and stimulating the economy. Further, new zoning regulations will be created to attract renewable energy developers and projects. Idaho received $11.4 million and will receive more than $14 million in additional funding after demonstrating successful implementation of its SEP.
Kansas's SEP will launch several initiatives to boost energy efficiency in commercial buildings, increase financial options for renewable energy, and increase cost savings for individual homeowners in its state. A portion of the money will also be deployed to create a new utility rate price plan and to fund an energy audit rebate plan. Kansas received $15.3 million and expects to receive an additional $19 million after demonstrating successful implementation of its SEP.
My colleagues are blogging on the other states that received funds.
Labor Unions Target Renewable Energy Development
My partner Dennis Westlind recently posted this article to our sister blog, the Labor & Employment Group's World of Work:
Labor unions are seeing a rare growth opportunity in green power. Despite the recession, there has been a building boom in green energy, in particular solar and wind projects. As reported recently in the New York Times, labor unions see something in green energy for them as well, and they're using intense political pressure to get it.
When a new solar or wind project is being built, a union will approach the builder and demand that it use only union labor on the project. If the builder agrees, the union then urges local regulators to quickly approve the project; if the builder refuses, however, the union then raises myriad environmental concerns with regulators in an attempt to stall or even completely derail the project. Apparently, a union-built solar installation won't have the same impact on the habitat of the short-nosed kangaroo rat or the ferruginous hawk as a non-union one. Right.
These tactics aren't new; labor unions have made aggressive use of the environmental laws for years to put pressure on traditional energy producers to use union labor. But, with union membership in an overall decline, unions are desperate to maintain relevance in the growing green economy.
Show me the Money: Conneticut and Utah State Energy Programs
Today, the Department of Energy (“DOE”) announced more than $204 million in Recovery Act funding to ten states for their State Energy Programs ("SEPs").
Here is a summary of how the monies will be used in Connecticut and Utah:
Connecticut will use its SEP funding to further a variety of programs. Examples include the deployment of alternative-fuel vehicles and in-home energy audits. In-home energy audits involve a specialist performing an energy assessment, weatherizing the home, and installing energy conservation devices. After demonstrating successful implementation of its plan, the state will receive an additional $19 million, for a total of $38 million.
Utah will use its SEP funding to collect data about potential renewable energy resources in the state and to improve energy efficiency. The energy efficiency program will provide financial incentives to upgrade residential, commercial, public education, and government buildings. New construction developments will also qualify for rebates if they meet specific energy efficiency goals. After demonstrating successful implementation of its plan, the state will receive an additional $17 million, for a total of $35 million.
My colleagues are blogging on the other 8 states that received funds today.
Stanford Sees Results in Geothermal Reservoir Characterization
In October 2008, the Department of Energy (“DOE”) agreed to provide $43.1 million for 21 research projects to research, develop and demonstrate enhanced Geothermal Systems (“EGS”) which are next-generation geothermal energy technologies capable of producing baseload electricity across the United States. DOE's geothermal technologies program works in partnership with U.S. industry to establish geothermal energy as an economically competitive contributor to the U.S. energy supply. With cost share by the applicants, the public-private investments came to approximately $78 million.
One of the recipients selected by the DOE was Stanford University in California whose proposal included the development of reservoir engineering approaches including nanotechnology. This week Stanford announced that it had developed a method to learn more about the fracture systems in geothermal reservoirs by using tiny particles (nanoparticles) as tracers to characterize fractured rocks. The ultimate goal of the Stanford project is to utilize the nanoparticles as sensors to characterize subsurface fractures.
You can learn more about the DOE’s geothermal program at http://www1.eere.energy.gov/geothermal/
Navy Seeking Proposals for Geothermal Investigations
The Naval Air Warfare Center has issued a presolicitation for geothermal investigations at Eastern Lava Mountains, Almond Mountain, and Southern Slate Range Naval Air Weapons Station China Lake, California.
The investigations shall be conducted in two phases. The first phase consists of a geologic field study, fault trenching, thermochonologic sampling and analysis, and geologic modeling. The second phase will be for resource refinement, drilling support, and other exploration.
The final request for proposal is expected to be issued on June 22, 2009. For more information, contact sue.casey@navy.mil and reference solicitation # N6893609R0076
Show me the Money: Seminar for Identifying Funding for Renewable Energy Projects
The American Recovery and Reinvestment Act provides almost $94 billion dollars in direct and indirect spending to clean energy company and projects. See Show me the Money: A Guide to Sources of Funding through the American Recovery and Reinvestment Act.
On June 17, 2009, I will be speaking in Cle Elum, Washington about how to get your project "shovel ready" for Stimulus Funding. The seminar will also include sessions on identifying sources of funding and application mechanics.
Show me the Money: $256 Million Investment to Improve Energy Efficiency
On June 1, 2009, the Department of Energy ("DOE") announced plans to deploy $256 million from the American Recovery and Reinvestment Act ("Recovery Act") to be used to improve the energy efficiency of the American economy. Three recent DOE Funding Opportunity Announcements ("FOAs") have been issued in conjunction with this Recovery Act announcement. Additionally, a related FOA has been announced using funds appropriated outside of the Recovery Act. The recently announced funding will support projects in three areas: (1) sustainable energy infrastructure and energy efficient industrial technologies, (2) improved energy efficiency for information and communication technology and (3) advanced materials in support of clean energy technologies and energy-intensive processes.
Click here for more complete details.
Show me the Money: $350 million in Stimulus Funds Available Now for Geothermal Projects
On May 27, 2009, President Obama announced that the Department of Energy ("DOE") would deploy $350 million from the American Recovery and Reinvestment Act ("Recovery Act") to be used to expand development, deployment, and use of geothermal energy throughout the United States. Four recent DOE Funding Opportunity Announcements ("FOAs") have been issued in conjunction with this announcement. The recently announced Recovery Act funding will support projects in five areas: (1) geothermal demonstration projects, (2) enhanced geothermal systems ("EGS") research and development, (3) innovative exploration techniques, (4) the creation of a national geothermal data system and a resource assessment and classification system, and (5) ground source heat pumps.
For more specific information, see this alert
LLC Law Monitor
Renewable energy developers often use limited liability companies (LLCs) as project companies and to form entities for other purposes. My partner Doug Batey has started a new law blog that will likely be helpful to those charged with setting up, understand and maintaining these LLCs. Here's today's announcement:
Stoel Rives LLP is pleased to introduce its new LLC law blog, LLC Law Monitor, at www.llclawmonitor.com
The LLC Law Monitor focuses on the rapidly developing laws affecting limited liability companies. LLCs are a popular form of business entity and are a relatively new development in the law. LLC statutes vary from state to state, and cases of first impression are being decided by state courts every month.
In light of this new and evolving legal environment, Stoel Rives has launched LLC Law Monitor to provide business executives, attorneys, accountants and other professionals engaged in or working with LLCs with timely updates and insights on the new and developing laws shaping this burgeoning business sector.
LLC Law Monitorauthor Douglas L. Batey has nearly 30 years of experience advising executives on corporate and business legal matters. His experience includes counseling clients in a wide range of industries on company formation, mergers and acquisitions, and general corporate governance matters.
We hope that you will find the LLC Law Monitor helpful.
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Douglas L. Batey |
Apply Now for REAP Grants and Loan Guarantees
The USDA announced today that it is accepting applications under the Rural Energy for America Program (“REAP”). REAP provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems.
REAP funds are available in the following amounts:
- Grants for energy efficiency projects are available for up to the lesser of $250,000 or 25% of the project costs.
- Grants for renewable energy systems are available for up to the lesser of $500,000 or 25% of the project costs.
- Grants for feasibility studies for renewable energy systems are available for up to the lesser of $50,000 or 50% of the costs of the study.
- Loan guarantees are available for up to the lesser of $25 million or 75% of the project costs.
Applicants must be agricultural producers or rural small businesses. Agricultural producers are farmers or ranchers that obtain more than half of their gross income from agricultural operations. Small rural businesses are small businesses, as determined in accordance with the Small Business Administration's small business size standards, located in rural areas. Applications are due July 31, 2009.
Doing Business with Indian Tribes
My colleagues Michael O'Connell and Stephen Kelly, both of whom have a great deal of experience representing clients engaged in energy and natural resources transactions with Indian tribes, are putting on a webinar entitled "Doing Business with Indian Tribes." Since the best private lands are often already spoken for, renewable energy developers are looking more and more at developing projects on public lands and Tribal lands. The Webinar that Mike and Steve are presenting will discuss doing business with tribes generally, but their presentation will be relevant to those seeking to develop renewable energy projects in partnership with Indian tribes or on tribal lands.
Details are as follows:
Please join Stoel Rives attorneys Michael O’Connell and Stephen Kelly for a webinar on Doing Business with Indian Tribes on Wednesday, June 10, 2009. They will conduct a lively, interactive program that will cover:
There are over 550 federally recognized Indian tribes. Indian tribes engage in a broad range of business transactions governed by a complex array of federal, tribal and state laws. Stoel Rives is pleased to offer a webinar that will offer you tools to recognize the unique legal status of Indian tribes and how it affects business transactions with Indian tribes.
- Tribes and tribal business structures
- Contracting, sovereign immunity, and dispute resolution
- Leases, easements, and other agreements for use of tribal land
- Tribal and federal environmental reviews and approvals
- Taxation issues
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When: |
Wednesday, June 10, 2009 |
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Complimentary (lunch included) |
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Or at your computer. Information on how to access the webinar will be provide to those who register. |
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Parking: |
We will validate parking for most nearby parking garages. |
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RSVP: |
Space is limited! Register online by Monday, June 8. |
Washington's American Recovery and Reinvestment Act Comprehensive Application
On May 11, the Washington Department of Community, Trade, and Economic Development (“CTED”) filed an application with the United States Department of Energy to receive American Recovery and Reinvestment Act (“ARRA”) funds for Washington’s State Energy Program (“SEP”). The application contains funding for renewable energy, energy efficiency, and farm energy assessments. Once the SEP is approved, funding will commence through CTED with advice from the Clean Energy Leadership Council.
Continue Reading..."Show Me The Money"
We announce the publication of a guide to federal clean energy funding opportunities under the $787 billion American Recovery and Reinvestment Act (“ARRA”). Titled “Show Me The Money,” the guide reviews the various programs and potential sources of federal funding for clean energy companies and projects. The guide addresses funding opportunities under the ARRA for each of the following energy industry areas: wind, solar, biofuels, biomass, smart grid, transmission, geothermal, marine and hydrokinetic, green building, energy efficiency, advanced battery and fuel cell technology, clean energy equipment manufacturing, green vehicles and clean coal. The guide also contains information about some of the funding opportunities and updates at the federal and state level which we will continue to track closely.
President Obama Clamps Down on Lobbyists and First Amendment
On March 20th, President Obama issued a directive to the heads of executive branch departments and agencies. The directive is aimed at achieving the laudable goal of ensuring merit based decision-making for grants and other forms of stimulus funds provided by the American Recovery and Reinvestment Act of 2009 (usually referred to as the Stimulus Bill). It seems that while candidate Obama promised repeatedly during his campaign to limit the influence of lobbyists in Washington DC, the passage of the Stimulus Bill has sent record numbers of lobbyists to D.C. to scramble for federal dollars.
In apparent response to this, President Obama has singled out registered lobbyists and regulated their contacts with the executive branch. His directive provides that “executive department or agency officials shall not consider the view of a lobbyist registered under the Lobbying Disclosure Act of 1995, concerning particular projects, applications, or applicants for funding under the Recovery Act unless such views are in writing.” Officials are directed to inquire regarding the possible presence of registered lobbyists both upon the scheduling and commencement of phone calls and in-person conversations “with any person or entity concerning particular projects, applications, or applicants for funding under the Recovery Act.” If any registered lobbyists are detected, the directive forbids them from attending the meeting or participating in the phone call.
Not surprisingly, the American League of Lobbyists (ALL) has objected to the Obama Administrations restrictions. In a demonstration that politics does indeed sometimes make strange bedfellow, ALL has been joined by the ACLU and the Citizens for Responsibility and Ethics in Washington (CREW). In a letter to the President released Tuesday, these three groups requested that President Obama rescind the constitutionally offensive provisions of the directive immediately.
As tempting a political target as they may be, registered lobbyists have a place in our political system and rights under our Constitution. The President should heed the groups’ advice and tailor his directive to enable transparency while not muzzling any voices--including those paid to advocate.
A Superconductor Pipeline for Renewable Energy
Among all the interesting presentations at this month's AWEA transmission and wind workshop, American Superconductor's presentation about developments with superconducting transmission lines was particularly noteworthy. Superconducting direct current lines offer greater efficiency, as well as siting and aesthetics benefits, but have historically fallen victim to much higher costs when compared to traditional overhead transmission lines. However, with talks of extra-high voltage "green superhighways" transmitting renewable energy from the nation's interior to load zones, it appears from American Superconductor that the costs of a 5 GW, 200 kV superconductor line are nearly equivalent to 765 kV overhead lines when built on a 1,000 mile scale. Perhaps we will see a superconducting pipeline instead of an extra-high voltage overlay.
For more information about the viability of superconducting transmission lines, look for American Superconductor's White Paper in the near future.
Stoel Teams with EUCI to Present Law of Renewable Energy Webinars
Stoel Rives LLP is teaming up with EUCI to present a series of webinar’s based on our series of “Law of” books about renewable energy. The Law of Renewable Energy web conferences will address the major legal issues associated with the development of renewable energy projects. The web conferences will include the following topics:
Tax and Project Finance Structuring Issues for Renewable Energy Projects
April 27, 2009
Real Estate and Site Rights for Renewable Energy Projects
May 11, 2009
PPAs for Renewable Energy Projects
May 18, 2009
Siting and Permitting for Renewable Energy Projects
June 1, 2009
EPC, Major Component, Construction and Balance of Plant Contracts for Renewable Energy Projects
June 8, 2009
Regulatory and Transmission Issues for Renewable Energy Projects
June 15, 2009
Please sign up here if you’d like to get your own copy of any book in our “Law of” series. We update the “Law of” books regularly, and we'll have copies of the Law of Wind (5th edition) at Booth No. 3148 at the AWEA conference in Chicago on May 4-7, 2009. In addition, please sign up here if you’d like to receive our Stoel Rives Energy Law Alerts and other periodic updates.
New tax credit for "qualifying advanced energy project"
Although this blog is focused on renewable energy, manufacturers in the renewable space should be aware of a new tax credit included in the stimulus bill. The provisions is complicated and unlike most tax credits. Nevertheless, its benefits, especially for manufacturers on the cutting edge, may be too great to ignore.
Taxpayers who qualify are entitled to a 30 percent tax credit for investment in a “qualifying advanced energy project." A "QAEP" is defined as one that reequips, expands or establishes a manufacturing facility that produces:
1. property designed to produce energy from the sun, wind, geothermal, and other renewable resources,
2. fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles
3. electric grids to support the transmission of intermittent sources of renewable energy, including storage of such energy,
4. property designed to capture and sequester carbon dioxide emissions,
5. property designed to refine or blend renewable fuels or to produce energy conservation technologies, and
6. new qualified plug-in electric drive motor vehicles (and components),
The program is to be established by IRS, in consultation with Energy Department, on or before August 26, 2009.
Once the program is established, the Secretary of Treasury is to award certifications for tax credit. Applications must be submitted within 2 years, and applicants will have one year from the date their application is accepted to provide evidence that requirements for certification have been met. After certification awarded, an applicant has 3 years to place project in service.
The following are the criteria for certification:
-- Reasonable expectation of commercial viability
-- Greatest domestic job creation (both direct and indirect)
-- Greatest net impact in reducing air pollutants, greenhouse gases, etc.
-- Greatest potential for technical innovation and commercial deployment
-- Lowest levelized cost of energy generated or stored or of measured reduction in energy consumption or greenhouse gas emissions
-- Shortest project time from certification to completion.
The credit generally applies only to construction, etc. after February 17, 2009.
The credit is new and unlike anything IRS has ever administered before. Therefore, it is reasonable to expect that IRS will take some time to get the program fully functional. Nevertheless, it makes considerable sense to begin assembling materials that explain the company’s project and address the criteria for selection. In addition, it would be advisable to submit any applications as soon as possible after the program is established.
Stoel Rives would be pleased to assist in planning for and submitting applications for the credit.
Stimulus Bill Funding for Data Center and Telecom Technology Energy Efficiency, Smart Grid, Enhanced Geothermal Systems, and More
The American Recovery and Reinvestment Act of 2009, also known as the “Stimulus Bill,” allocated billions of dollars in funding for renewable energy, energy efficiency, energy storage, and other projects under the energy and climate change umbrella. Of the vast sums of money available for such projects, $16.8 billion goes to the U.S. Department of Energy’s (“DOE”) Office of Energy Efficiency and Renewable Energy (“EERE”). Another $4.5 billion in direct spending on smart grid demonstration projects will be overseen by DOE’s Office of Electricity Delivery and Energy Reliability.
On March 5th, DOE’s EERE Industrial Technologies Program (“ITP”) released a Notice of Intent to issue funding for technologies that increase the energy efficiency of server-based information and communication technology (“ICT”) systems housed in data centers and telecommunications central offices. The solicitation seeks proposals for projects that would increase the efficiency of IT equipment, software, power systems, and cooling systems. The solicitation also extends to the demonstration and field-testing of pre-commercial technologies in these areas, as well as in distributed generation or alternative power technologies used to power ICT systems. ITP intends to release the solicitation sometime this month.
DOE also recently announced its intention to issue a Funding Opportunity Announcement (“FOA”) for smart grid demonstrations. In addition, DOE issued two FOAs for enhanced geothermal systems (“EGS”). The EGS FOAs offer up to $84 million over six years, including $20 million for the 2009 fiscal year. Check out our recent Energy Law Alert for more information on DOE funding for smart grid demonstrations and enhanced geothermal systems.
Because of the relatively short window for responding to FOAs, DOE recommends that prospective applicants complete several one-time pre-application steps. Information on submitting applications is available at www.grants.gov.
California PUC Proposes Criteria to Evaluate the Viability of Proposed RPS Projects
Under California’s Renewable Portfolio Standard, investor-owned utilities only have until 2010 to procure 20% of their power from renewable sources (although certain flexible compliance measures do apply). There are concerns that the rapidly-approaching deadline is leading utilities to sign power purchase agreements with projects that are not viable and may never achieve commercial operation. To help prevent this going forward, the California Public Utilities Commission Energy Division has proposed project viability criteria to evaluate each project bidding into California’s RPS program. Utilities would be required to score potential RPS projects based on developer experience in project financing, RFOs, and facility ownership and operation; technical viability; and project-specific viability criteria such as equipment procurement, project development lead time, transmission lead time and cost of transmission interconnection, site control, permitting, and pricing structure. The project viability score could be taken into account in PPA approval by the CPUC and in gaging whether to excuse utilities that fail to meet RPS goals. Scoring projects based on viability criteria has the potential to affect who successfully participates in the RPS solicitation process and the types of technologies that are selected as RPS projects. Comments on the CPUC proposal are due on February 27, 2009. Read more about the proposal in my colleagues’ recent Renewable Energy Law Alert.
Dingell Unseated; Waxman to Head House Energy and Commerce Committee
In a move that could have a significant impact on the energy sector (and create a buzz among political science departments) nationwide, Representative Henry Waxman (D-CA) has dethroned Representative John Dingell (D-MI) in his nearly 28-year post as chairman of the influential Committee on Energy and Commerce. The 137-122 secret vote has shaken up the seniority system that has driven the caucus for decades. It also replaces a long-time friend of the auto industry with someone who has been championed by environmentalists for his positions on clean air and global warming.
Waxman’s ascension to the Energy and Commerce Committee chairmanship is particularly significant because the committee shepherds legislation on climate change, energy, and health care—all of which are key priorities of the Obama Administration. Waxman (who also has a strong leadership record on health care issues) has pushed for aggressive targets for carbon emissions reductions, more stringent auto emissions standards, and a national cap-and-trade program. Although Dingell recently proposed legislation that would impose gradual reductions in greenhouse gas emissions, Waxman has put forth much more ambitious climate change legislation.
Also of note is Obama’s recent appointment of Philip Schiliro, a longtime aide to Waxman, as the new White House director of Congressional relations. This appointment is considered to be significant in that it provides Waxman with a direct channel to the White House. Congressional insiders have also noted that House Speaker Nancy Pelosi is a close ally of Waxman’s. This web of connections underscores the potential for the Obama Administration and Congress to work closely together to usher in major changes to U.S. climate change policy.
Governor Schwarzenegger Strikes Again: 33% RPS by 2020 and Streamlined Renewable Energy Permitting in California
Governor Schwarzenegger’s been keeping busy on California’s big-ticket environmental issues. Yesterday the Governor’s office issued Executive Order S-14-08, with the laudable goal of accelerating the development of renewable energy resources . . . not to mention bolstering California’s economy with clean-tech jobs. Governor Schwarzenegger announced the Order at what will be the largest solar panel manufacturing facility in North America. The Governor’s remarks on his Executive Order highlighted that investing in renewable energy projects will help us fight climate change, “while driving the state’s green economy.”
Executive Order S-14-08 calls for California to get 33% of our electric energy from renewable sources by 2020. The current Renewable Portfolio Standard (RPS), instituted in SB 107 in 2006, requires that 20% of California’s power come from renewable sources by 2010. Unlike the current RPS, the Governor's new target applies to both investor-owned utilities and public utilities. A recent ballot initiative in California, which would have applied California's RPS to public utilities, failed on November 7th, after being opposed by a broad coalition of environmental groups and renewable energy industry groups. The Governor says he will propose legislation that will codify the 33% RPS for all retail sellers of electricity.
The Order also implements an MOU signed yesterday by the California Energy Commission (CEC), the California Department of Fish and Game (DFG), the U.S. Bureau of Land Management (BLM), and U.S. Fish and Wildlife Service.
Starting in February 2009, renewable energy projects should enjoy a streamlined project approval process before a special joint unit of DFG and CEC. But exactly how will these two agencies “immediately create,” as the Order directs, a one-stop process for permitting renewable energy generation power plants? For thermal power plants over 50 MW, including geothermal and solar thermal facilities, the CEC already is, supposedly, the one-stop shop.
Continue Reading...Congress Extends PTC and ITC--More Analysis to Follow
In an email alert that we just sent out, my colleagues in the Stoel Rives Tax Section report:
Today the House passed, and President Bush signed into law, H.R. 1424, which includes the Energy Improvement and Extension Act of 2008 (the Act). The Act contains the much-anticipated extension of the production tax credit (PTC) and investment tax credit (ITC) sunset dates.
The Act extends the PTC placed-in-service sunset date for certain wind and refined coal facilities until December 31, 2009, and extends the PTC placed-in-service sunset date for certain other qualifying facilities until December 31, 2010. The Act also expands the PTC to include certain marine and hydrokinetic renewable energy facilities placed in service on or before December 31, 2011.
The Act extends the ITC placed-in-service sunset date for solar, fuel cell and microturbine property until December 31, 2016 and expands the ITC to include combined heat and power system property, qualified small wind energy property, and geothermal heat pump system property.
In addition, H.R. 1424 contains a variety of other renewable energy tax provisions, including provisions allowing the energy credit to offset alternative minimum tax liability; increasing the amount of the biodiesel and renewable diesel fuel credits and extending the sunset dates until December 31, 2009; authorizing new clean renewable energy bonds and qualified energy conservation bonds; and extending the energy efficient commercial buildings deduction and the new energy efficient home credit.
Our Tax Section is working on preparing a more detailed analysis of the tax aspects of HR 1424. If you'd like to receive updates concerning H.R. 1424 and other renewable energy and clean tech issues, please subscribe to our Renewable Energy Mailing List.
Portland General Electric's RFP Garners offers of 3,000 MW
The Portland Business Journal is reporting that Portland General Electric Company received 38 offers in its April 2008 RFP totaling up to 3000 MW in renewable energy.
Continue Reading...Low Temperature Geothermal Electricity Production
UTC Power equipment collects heat from a lower temperature source and uses it to vaporize a fluid with a lower vaporization temperature than water. That vapor then drives a turbine. In Alaska, at Chena Hot Springs Resort UTC Power equipment now supplies all the electricity the resort needs and its heating as well. The system there works with water at 165 degrees Fahrenheit!
By being able to produce heat and power with water below 225 degrees, UTC Power’s technology opens up a much larger area for potential geothermal energy production. The next key step will be to see a commercially developed facility demonstrate sustainable production at an acceptable cost. (Chena Hot Springs was supported by various groups and is considered a demonstration project by many and not a commercial project.
Visit UTC power and read about Chena Springs.
Lava Law
Lava Law is Stoel Rives’ “Law of” book for Geothermal Energy. Like all our “Law of” Books, it has chapters covering all relevant issue areas involved in the development of geothermal energy. We recently updated Lava Law as well so its current as well as relevant.
Download Lava Law - Legal Issues in Geothermal Energy Development.
Or email Angel Giovannone at amgiovannone@stoel.com to request a copy be mailed to you..
Better, visit our booth at the Geothermal Energy Association Trade Show October 5-8 in Reno Nevada. We’ll give you a copy and we can talk.
Is Geothermal Energy Really "Renewable" Energy
This might be an esoteric discussion point, but theoretically speaking, the geothermal resource of the earth could be considered a limited and fixed resource that does not renew itself. The temperature of the earth at the center may reach 10,000 degrees Fahrenheit but it is much cooler the closer you get to the surface. We tap into geothermal heat where it is close enough to the surface and hot enough to make it economic and efficient to do so. The question is, though, when we remove heat from the earth, is it a reservoir with a finite capacity, or is it a renewing resource? In other words are we depleting it?
The answer, according to Gerald Bawden, a Ph.D. Geologist with the United States Geologic Survey and Rick Adair, an energy industry writer with Newsdata Corp with a Ph.D. in Earth Science is that the heat in the earth is mostly a function of both radioactive decay of elements in the earth and a natural process occuring wherein the solid innner portion of the core is steadily crystalizing its outer liquid portion. That’s great news in the moral debate about whether geothermal energy is renewable since it means that the earth is still adding heat. So, as we continue to find and use more geothermal energy, we can rest assured that we are not depleting a limited reservoir. Of heat anyway. Many geothermal power plants that use water/ steam deal with the fact that the water resource in the area beneath plant may be limited. Fortunately the condensed steam can be injected back down to the heat source and various sources of non-potable water can be injected as well.
From a legal perspective, there is not much debate. Most laws passed so far that attempt to define renewable energy include geothermal energy. California’s Renewable Portfolio Standard (RPS) for instance, includes Geothermal electricity production as one type of renewable energy that the investor owned utilities can contract with to help meet their minimum required amount of renewable electricity.
2008 Geothermal Energy Association Annual Trade Show
The 2008 Geothermal Resources Council meeting and Geothermal Energy Association Trade Show is set for October 5-8 in Reno, Nevada. It’s the largest Geothermal Energy meeting in the world, by far and is well attended by the industry. You can find Stoel Rives geothermal practitioners in attendance as we exhibit and sponsor at the show.
More information and registration for the 2008 Geothermal Energy Association Trade Show.
