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

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

2. And Where We’re Headed Next Michael Vickerman RENEW Wisconsin October 17, 2011 Sierra Club – Great Waters Group Milwaukee, WI

3. About RENEW Wisconsin Advocates for state-level sustainable energy policies since 1991 One of the architects of the state’s Renewable Energy Standard and ratepayer-funded public benefits program Top three policy priorities for 2010 * Uniform Permitting Standards for Wind * Increased Renewable Energy Standard * Advanced Renewable Tariffs Developing an on-line Wisconsin Wind Information Center (www.wiwindinfo.net) An organized voice for renewable energy producers and purchasers! Windy afternoon (10-14-11) Butler Ridge project Hwy 33 east of Hwy 67

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

5. About RENEW Wisconsin Founded in 1991 Nonprofit – funding comes from grants, members Over 275 members (businesses and individual) Please join!

6. Presentation Outline • Survey of Energy Realities – Where I’m Coming from • Investing for America’s Future vs. Propping up America’s Unsustainable Past and Present • Images of Sustainable Energy • Why Wind Energy is a Plus for Wisconsin • Renewable Energy Policy Advances + Reversals

7. Key Terms and Concepts • Stores (fossil energy) vs. flows (renewables) • On-demand energy vs. as-available energy • The Solar Ration (using the interest, not the principal) • Energy Return on Energy Invested (EROEI) • Means transition from highly energetic resources like petroleum + NG to less energetic renewable resources is like swimming upstream • Hubbert’s Curve (Peak Oil/Peak Energy) • Sources vs. sinks • Energy literacy vs. energy numeracy

8. Energy Sources Native to Wisconsin • Sunlight • Wood • Manure • Wind • Hydro • Crops (grasses, corn, etc.) • Wastes (LFG, wastewater) • Geothermal (storage) Constituting 5% of energy used Not Native to Wisconsin • Coal • Natural Gas • Oil • Uranium • Geysers Constituting 95% of energy used

9. Fossil fuel imports hurt Wisconsin’s economy Wisconsin Energy Trade Deficit $ ~$8 Billion/Year in 2003. >$18 Billion in 2010

10. Overcoming Economics 101 “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” – Kenneth Boulding **************************************** Q. How many economists does it take to screw in a light bulb? A. None. If it really needed changing, market forces would have caused it to happen.

11. Energy Policy Must Recognize Energy Realities • Supplies of liquid fuels peaked in 2008 • Capital is disappearing before our very eyes • Energy and food are the original currencies • The shift from stores to flows is inevitable • Current economy is highly energy-intensive • EROEI must inform decision-making • We can’t afford to prop up existing energy sinks or engage in wealth-draining military adventures

12. But Economic Signals Are Confusing – Signs of Deflation • Consumption of energy has declined since 2008 • Natural gas prices in a protracted slump • Coal generation has become more expensive – due to declining mine productivity, rising transportation costs • Energy markets influenced by other markets (oil follows the Euro) • Weakness in housing, manufacturing, employment pull energy prices lower.

13. Peak Oil Supply • Peak Crude Peak Unconventional? • Peak Economy • Peak Credit • Peak Housing Values • Peak Income • Peak Jobs? Have We Hit the Wall? • Peak Demand • Peak Mobility • Peak Shipping Peak Power?

14. Three Paths to Choose From

15. Capsule Descriptions of Plans • Plan A  Complete denial of reality -- recipe for massive political turmoil/social upheaval in the near future • Plan B  Purely a substitution strategy -- does not question premise of existing economy – ignores Jevons’ Paradox • Plan C  Recognizes need to downsize economy, de-consumerize citizenry, and de-specialize society

16. Energy Security Energy Security Energy Security Price Security Environmental Economic Economic Native to Wisconsin Customer generation Non-depleting No fuel-based inflation No air/water emissions Local contractors/labor Strengthens tax base Renewable Energy Pluses

17. Energy Supply Energy Supply Energy Supply Economic Economic Physics Difficult to scale up Non-dispatchable Weather-dependent Higher capital costs More labor-intensive (a blessing in disguise) Lower EROEI (except for commercial-scale wind) and large hydro Renewable Energy Minuses

18. Plan A Value Proposition:Tomorrow’s Wealth Feeds Today’s Economy Coal, Natural Gas, Nuclear • Benefits (cheap electricity) front-loaded, costs (environmental mitigation) backloaded • Fuel used today means less available tomorrow • EROEI of fuels likely to decline over time • Pollution, waste storage not factored into initial economic analysis Result: Intergenerational imbalance favors current inhabitants.

19. Plan C Value Proposition:Today’s Wealth FeedsTomorrow’s Economy Solar, Wind, Hydro, Bioenergy Costs (expensive equipment) front-loaded, benefits (fuel, low O&M) backloaded • Longer-lived projects • Output declines are slight • EROEI of energy sources remains constant • Environmental constraints increase RE’s value Result: Intergenerational imbalance favors future inhabitants.

20. Question: Is there enough stored wealth to finance energy transition? Yes in nations like Germany, where there is a national consensus to remake their energy economy. Doubtful in nations like the U.S., because incumbent economic interests are effectively deploying $$ to neutralize public policy.

21. Here’s an Economic Development Strategy with No Future Casino, French Lick, Indiana This is an overscaled, highly entropic operation that devours energy like there’s no tomorrow. This bloated vessel doesn’t even float!!

22. Can RE Run a Residential Golf Resort? Tesoro, Port St. Lucie, Florida “When the depression ends, there will be a pent-up demand for happiness” --Bobby Ginn Tesoro’s $48 million clubhouse amid 750 empty lots

23. We Have to Stop Outsourcing Energy Capture and Start Doing It Ourselves My house

24. This Fire Station Has a Long-Term Future Madison Fire Station No. 6 Installer: H&H Solar

25. This School Has a Long-Term Future Osceola Middle School System Designer: Energy Concepts Installer: Steiner Plumbing

26. This Church Has a Long-Term Future Church of the Resurrection Pewaukee System designer and installer: Sunvest

27. So Does this House of Worship Lake Country Unitarian Universalist Church Hartland System designer and installer: Sunvest

28. This Lodge Has a Long-Term Future Elks Club, Good Hope Road, Milwaukee

29. This Business Has a Long-Term Future Liberty Tax Service, Good Hope Road, Milwaukee

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

31. Observation #1 To run a world on renewable energy, a new infrastructure and set of expectations must be created. Because the EROEI of renewables is less than that of fossil fuels, the new infrastructure must be built with today’s wealth before it is frittered away on socially unproductive products and activities (McMansions, NASCAR, casinos, bank bailouts, etc.).

32. Observation # 2 The most agonizing decisions that await us will involve determining which elements of our built environment can be supported with renewable energy and which elements cannot. With a lower EROEI, we will not be able to run a world that formerly ran on cheap, abundant fossil fuels. We have little choice but to downsize our buildings, downscale our communities, and reorganize the economy.

33. Wisconsin Energy Facts • No reserves of fossil fuels • Long supply lines to deliver coal, oil, natural gas • Primary energy imports valued at $15 billion/yr • Renewable energy is locally available

34. Why Support Windpower? • Clean  Environmental • Non-depleting  Energy Security • Fixed Price  Risk Management • Creates Wealth  Economic Development • Scalable to Utilities  Practicality A sustainable source of wealth for Wisconsin!!

35. An Often Overlooked Attribute of Wind Power It doesn’t take any fossil fuel to bring the wind to the turbine blades.

36. Windpower Strengthens WI Communities Left: Butler Ridge Right: Glacier Hills Both projects are along Highway 33 about 40 miles apart

37. The Importance of a National Energy Policy Source: American Wind Energy Association, 2011

38. Iowa: 20% of its electricity + jobs + economic growth • Iowa employs over 5,000 people in the wind energy industry, many of them in the manufacturing sector Source: American Wind Energy Association, 2011 • Iowa second-largest state for wind power in the U.S. • Now received 20% of its electricity from wind energy

39. Attacks on Wind Energy in Wisconsin in 2011 Source: American Wind Energy Association, 2011 Introduction of special session bill that would have required unreasonable setbacks of 1,800 feet from property lines. (Note: this was the only Walker proposal not approved by the Legislature. Suspension of the uniform wind siting rules (PSC 128) by the Joint Committee for Review of Administrative Rules. Adoption of SB 81 (“Outsource Renewable Energy to Canada Act”),allowing utilities to count the purchase of electricity from large Canadian hydroelectric facilities toward their Renewable Energy Standard (RES), displacing in-state generation from wind and other renewable energy sources. Bill introduced (AB 146) to indefinitely extend RES time limits for electric utilities to comply.

40. Wisconsin: Losing Jobs, Economic Development • State has already seen several wind projects canceled or deferred – total could reach: • Loss of $ 1.8 billion • Loss of 2 million job-hours of construction Source: American Wind Energy Association, 2011

41. Wisconsin: Losing Jobs, Economic Development Source: American Wind Energy Association, 2011 Wind energy industry jobs are leaving Wisconsin for IA, IL, MI, and IN…. Businesses are closing in Wisconsin

42. Snapshot - Midwest Windpower Development Activity Sources: American Wind Energy Association, Windpower Monthly, RENEW Wisconsin

43. Thesis Statement and Corollary Economies of scale are achieved by shrinking the labor contribution relative to output, which explains why utility-scale energy is less expensive than do-it-yourself energy. Distributing renewable energy through customer-sited systems increases job-hours per energy unit produced as well as promoting entrepreneurship and small business development.

44. Economic Development Impacts of Community-Scale RE Revitalizing ourselves through community-scale projects that employ local labor to build a sustainably energized society.

45. From Small Systems – Big Results Example - Germany • Utilities are required to accept power from customer-sited RE systems through fixed, long-term buyback rates • 20% of Germany’s electricity now generated from renewables • 7,000 MW of PV to be installed in 2011 • Germany has more than half the world’s PV capacity • Payoff: 300,000 people employed in the RE sector • Rapidly electrifying freight rail transportation

46. Social Rationale for Mandating Distributed Renewables • Economic Development • Manufacturing • Wealth Creation • Employment and Jobs • Energy Security • Climate Change

47. GHD, Inc. Environmental engineering firm specializing in farm-sited anaerobic digesters Based in Chilton, incorporated in 1989 Notable WI installations: Holsum Dairy (1+2), Quantum Dairy, Lake Breeze, Clover Hill, Statz Brothers, Grotegut, Maple Leaf (1 +2) 73 ADs operating at 38 farms & 19 under construction at 14 farms; found in 13 states Uses a patented two-stage, mixed plug-flow digester design No. of FTE employees: 40 Clover Hill Dairy, Campbellsport, WI - 2006 www.ghdinc.net

48. Green Valley Farm, Shawano Slide courtesy of Focus on Energy

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

50. Renewable Energy Policy Reversals 2010 - 2011 • Clean Energy Jobs Act Goes Down the Tubes • Legislature Slashes 2012 Focus on Energy Budget • New FOE Administrator Suspends Incentives for RE • Legislature Waters Down RES w/ Canadian Hydro • Bill Introduced to Relax RE Credit Banking Rules • Legislature Suspends Wind Energy Siting Rule