Michigan Energy Report - April, 2008

Wednesday,April 30, 2008

Renewable energy is on the right track -- the trick is to stay there

Renewable Energy Production Tax Credit Must Continue After 2008

By James A. Croce, CEO NextEnergy

I don’t know much about sailboat racing but I’ve heard yachtpeople speak of a dreaded point in a race where a speeding sloop, under full sail, slips into a “dead spot” on the lake where there is no wind. And all forward motion stops. And they languish, defeated, in a motionless, de-energized piece of flat, still water called “the doldrums.”

There is danger of the same sort lurking just ahead in the renewable energy industry. It’s called the Renewable Energy Production Tax Credit and it is set to expire at the end of 2008 … which is not too far away. A lot of nervous whispering is starting to occur indicating that the expiration of the Renewable Energy Production Tax Credit (PTC) stands to place $19 billion in renewable energy investment in peril and 116,000 U.S. jobs at risk.

Talk about sailing into a dead spot. The outcome of an expiration of this PTC would be disastrous to a very promising new Michigan industry that’s just getting under way. And it would be disastrous on many other fronts as well, not the least of which is Michigan’s agricultural economy. But from an economic point of view, investment in Michigan wind component manufacturing and solar manufacturing and installation would dry up quickly and lethally. Current total installed wind power capacity in the United States is now at about 16,800 MW, or enough to power the equivalent of 4.5 million average households. Wind was the second largest source of new electrical capacity in the nation for the past three years, just behind natural gas. This is no time for the renewable energy industry to stop moving forward. Fortunately, legislation has been introduced by U.S. Senators Max Baucus and Charles Grassley (S. 2886) on April 17, 2008 that includes tax credits for the production of renewable electricity and refined coal through December 2009. But “introduced” does not mean passed. This legislation will need our support.

The American Wind Energy Association (AWEA) credits the industry’s expansion to the stability that the PTC offers, which assures investors and utilities alike. The PTC cures the “boom-and-bust” cycles that have plagued the industry in prior years; cycles which increase costs along the entire supply chain and prevent businesses from growing appropriately and for the long term.

The top five states for total installed wind in 2007 were Texas (4,446 MW), California (2,439 MW), Minnesota (1,299 MW), Iowa (1,271 MW) and Washington (1,163 MW). The top five states with new capacity added in 2007 are Texas (1,618 MW), Colorado (776 MW), Illinois (592 MW), Oregon (447 MW) and Minnesota (405 MW). Michigan is still not on either of those lists, and probably won’t be for awhile, pending the passage of an RPS for our state. Currently, Michigan has only 3 MW of installed wind, ranking 46th among the 50 states.

That’s not to say the Michigan environment won’t change for the better; change is under way. But we’re not there yet. The real play in Michigan wind, once RPS is in place, will be in offshore wind capacity. That is some years out, but that’s where Michigan stands to gain tremendous technological and generation advances that will secure our state’s productivity, safety, and desirability in the decades to come.

The race for leadership in the alternative and renewable energy industry is far from over, and I am confident that there will be far more winners than losers. But the threat of losing momentum is real, and it is up to all of us to see that our lawmakers do not falter at this most crucial point; we must all do our part to see that the Renewable Energy Production Tax Credit continues after 2008. Please contact your federal representatives to make sure that they are aware that the Renewable Energy Production Tax Credit must continue for the betterment of our state and our national economy.

Michigan alternative energy: frustrated now, optimistic longer-term
Members of Michigan's alternative energy community this month expressed a mixture of immediate frustration and long-term optimism about the future of the renewable power industry in our state and nationally. The event, sponsored by the Michigan University Research Corridor and WWJ Newsradio 950, was called "Building a Green Michigan: Carbon Culture at the Crossroads." It attracted a crowd of more than 200 to Wayne State University. One panel at the event featured representatives of Michigan’s traditional industries – autos, steel, glass – and representatives of the emerging energy industry, and how they’re coping with energy changes. View a video highlighting the event and hear podcasts from the event at this link.

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RKA first in nation to biodiesel certification
Romulus-based RKA Petroleum said it's the first company in North America to become "marketer certified" under the BQ-9000 certification, including multiple feedstock based biodiesel. The handling of biodiesel is as critical to fuel quality as proper production. BQ-9000 accreditation helps biodiesel distributors improve their fuel testing programs and reduce any chance of producing or distributing inadequate fuel. The program is a combination of the ASTM standard for biodiesel, ASTM D 6751, and a quality systems program that includes storage, sampling, testing, blending, shipping, distribution, and fuel management practices. More at www.rkapetroleum.com.

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Encore Energy revenue jumps
Brighton-based Encore Energy Systems announced a 65 percent increase in first quarter revenue to $361,130, up from $219,140 a year earlier. Sales for the American geothermal arm of Encore are projected to nearly double and be in excess of $1.4 million this year. This figure does not include sales projections from the company's other operations and projects. Encore owns United States patents for the use of grey water -- defined as wastewater from sinks and tubs, but not toilets -- in geothermal heating systems to both heat and cool buildings. The company also provides conventional geothermal heat exchange systems. More at www.encoreenergyinc.com.

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DTE Energy seeks Michigan renewable energy proposals
DTE Energy has issued a Request for Proposal to purchase Michigan-based renewable energy for the company's GreenCurrents renewable energy program. GreenCurrents provides DTE Energy's 2.2 million electric customers the option of choosing environmentally friendly renewable energy for their homes and businesses. More than 8,000 customers have signed up for GreenCurrents since its inception last April, making it one of the fastest growing voluntary renewable energy programs in the country. A key element of GreenCurrents is to encourage the development and operation of new renewable energy projects in Michigan. Additional information on the RFP is available at www.dteenergy.com/rfp.

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Ford says near-term tech can boost MPG 20 percent
Ford Motor Co. says near-term technological advances can boost fuel economy by up to 20 percent. Andreas R. Schamel, Ford's chief engineer for research and advanced engineering, told the Society of Automotive Engineers 2008 World Congress this month about the automaker's EcoBoost technology. EcoBoost, which mates advanced direct injection technology and turbocharging with a gasoline engine, can deliver up to 20 percent better fuel economy, 15 percent lower CO2 emissions and superior driving performance versus larger displacement engines. The technology will be spread across Ford's lineup from small cars to large pickups.

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Hybrid test center coming to Auburn Hills
FEV Inc., the United States subsidiary of the German powertrain designer, announced the installation of eight new hybrid powertrain development test cells in Auburn Hills. FEV said the cells were believed to be the only non-automaker full hybrid powertrain test cells in the United States. FEV says the sites expands its technical capability to accommodate the sharp increase in hybrid powertrain development by its customers. FEV employs about 300 people at its North American Technical Center in Auburn Hills.

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Detroit Grand Prix to feature green racing initiatives
The term “going green” is a common one in motorsports vernacular used to indicate the official start of racing, but the Detroit Belle Isle Grand Prix is taking it to a whole new level in 2008. With momentum building for the Aug. 29-31 celebration of family fun and world-class racing on Belle Isle, the Grand Prix isn’t just preparing for the roar of high-performance engines on Labor Day weekend. Through many of its official partners, including the actual racing leagues competing on Belle Isle -- the American Le Mans Series, the IndyCar Series and the SCCA Pro Racing SPEED World Challenge GT Championship, new to the event in 2008 -- the Grand Prix is ready to “go green” like never before with a number of ecologically-friendly initiatives, including all vehicles using 100 percent ethanol. More at www.detroitgp.com.

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Ann Arbor Web site shows homes' solar power potential
The city of Ann Arbor announced a new online service for residents that evaluates their home's solar-energy potential. The new program assesses 21,000 Ann Arbor homes, identifying 18,000 solar candidates. Residents can get their free solar analysis by visiting www.a2gov.org, selecting "my property information," and clicking on the "solar potential" tab. An analysis of solar potential for 21,000 addresses is available in a user-friendly format thanks to a partnership of several city units and the University of Michigan, and will help Ann Arbor achieve its goals of 5,000 solar roofs and 20 percent renewable energy by 2015.

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UM's fall semester to focus on energy future
The University of Michigan's College of Literature, Science and the Arts announced that its fall semester will have the theme "Energy Futures: Society, Innovation and Technology." Coordinated by LSA's Center for the Study of Complex Systems and LSA Student Government, the theme semester will feature internationally renowned scholars in political science, economics, sociology, anthropology, psychology, public policy and survey research, who will examine the cultural, historical and social aspects of energy policy. A course will be offered in the social science of energy and other courses will include energy components. A writing contest entitled "Where Were You When the Lights Went Out?" will ask students to write fiction, nonfiction, poetry or drama about experiences with energy failures. Students will be invited to participate in campus-wide competitions to create energy innovations. On May 6, the groups will begin this discussion with a free public workshop on "Energy in the Social Sciences," at 8 a.m. to 5 p.m. at the Michigan League Ballroom, 911 N. University Ave. For information on the workshop, contact Shelly Sherman, (734) 763-7401 or sacs@umich.edu. To register for the workshop, visit: www.isr.umich.edu/carss/about/registration.html.

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Hybrid registrations rose in 2007
U.S. hybrid vehicle registrations rose 38 percent in 2007 to a record 350,289, according to data to be released this month by R.L. Polk & Co., a Southfield-based automotive marketing and research company. Hybrids made up just 2.2 percent of the U.S. market share for the year, but they were growing steadily even as overall sales declined 3 percent. Lonnie Miller, director of industry analysis at Polk, said rising gas prices may affect some buyers, but they're not the main driver of hybrid sales. Instead, he thinks sales jumped in 2007 because buyers had more options, including the new Nissan Altima, Saturn Aura and Lexus LS600h hybrid sedans and hybrid versions of the Chevrolet Tahoe, GMC Yukon and Mazda Tribute sport utility vehicles.

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DTE offers land for food plantings for the needy -- and for biofuels
A DTE Energy/Gleaners Community Food Bank partnership will result in the food bank using buffer land surrounding some electric facilities to grow vegetables to help fight hunger in Southeastern Michigan. The first garden, now being prepared for planting at the energy company's Carter Substation in Auburn Hills, will be 4,500 square feet. Gleaners has recruited students from the Kennedy Center in Pontiac to tend the garden. In addition to the volunteer gardeners, the land will be offered to farmers to grow organic crops, corn for ethanol or soy beans for biodiesel, with a portion of the profits donated to Gleaners.

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Pixel purchases pitched for building green home
A man in Michigan is hoping he's found a creative way to finance a home purchase and help the environment at the same time. Jim Sullivan of Wyoming has created a Web site called the "MillionPixelGreenMakeOver.com." The page is broken up into 10,000 100-pixel blocks; Sullivan sells the pixel blocks off for $100 each, which comes out to $1 per pixel. People can use the pixel blocks they buy to display an ad or logo linked to their own site. Sullivan said he'll use the proceeds to buy a home somewhere in West Michigan and renovate it to green standards. Included will be the use of solar power.

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