In August of 2012 President Obama issued an Executive Order on Industrial Energy Efficiency and Combined Heat and Power. The Executive Order sets a goal of adding 40 GW of new CHP by 2020, raising the nation’s CHP capacity by 50%. Why would we do that? What is CHP anyway? Continue reading »
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Transmission & Wind: Lessons from the Midwest
January 31, 2013 in Energy Systems, Reports & WhitepapersThe Midwest Independent System Operator (MISO) efforts on transmission planning and wind integration in the last decade provide key lessons on how to expand wind generation while supporting a robust and efficient energy market. MISO now has over 12,000 megawatts (MW) of wind connected within their footprint and recently approved $5.2 billion of ‘multi- value’ transmission projects (MVP’s) that will help deliver up to 21,000 MW more wind energy and other significant benefits to the MISO system.
Some of the key lessons learned are highlighted below:
Transmission Planning
- Transmission planning must address a range of issues and objectives, including reliability considerations, state and federal policy (e.g., state renewable energy policy), economics, off-peak delivery of energy, and capacity requirements. Renewable energy, with the majority being wind generation, is required by state legislation in the MISO region, and transmission can help bring that wind generation at the lowest cost to the consumer.
- Transmission planning must include key stakeholders to help develop a roadmap for the future. In the Midwest, organizations such as the Midwestern Governors Association, the Organization of MISO States (OMS), MISO stakeholders and staff have worked together to develop and inform regional studies. Such studies have enabled Midwestern stakeholders to identify how to achieve state renewable policy mandates and other objectives while providing the lowest overall cost to consumers.
Procedures for Connecting to the Grid Must Favor Projects That Demonstrate Readiness
- In the past, projects in the queue to be connected to the electric grid have been at widely differing stages of readiness, which has had the net effect of bogging down the process. Experience in the MISO footprint illustrates how procedures for projects to ‘queue’ up for connection to the electric grid need to give preference to those projects that have done the most to demonstrate that they are ready to be built, and that align best with the overall development of expected electric generation projects. This will require more cooperation through cost allocation and improved queue processes as higher cost interconnections are required in the future.
Emerging Operational and Market Practices Help Integrate Wind Generation More Economically
- Large balancing areas ease the integration of wind. MISO’s large wind balancing area (i.e., being able to draw on wind from across a large geographic area) demonstrates how a larger area with a relatively low level of wind generation compared to the demand for electricity is more effective than numerous smaller balancing areas with high levels of wind compared to demand. To understand why this is the case, one can think of the fact that it’s generally windy somewhere if you are able to draw from a large enough geography.
- Shorter dispatch periods reduce problems in integrating wind by reducing the error of forecasting wind generation and load. MISO has a real time energy market with a 5 minute dispatch.
- Geographical diversity across MISO’s footprint reduces wind and load variations to improve the wind product. It also adds to the capacity credit (MW allowed for capacity rating in MISO) for wind, but more robust transmission is required to see these benefits. Geographic diversity is also an important component of distributed economic and jobs impacts to the MISO states.
- Improved wind forecasting helps operators of the electric grid have a better understanding of exactly when to expect the wind to blow, thereby avoiding excessive wind curtailments (when operators have to force wind turbines to shut down because their electricity is not needed). It also helps avoid requiring excessive spinning reserve requirements (which is the amount of electricity that power producers must be able to deliver on a moment’s notice, say when the wind dies down). Wind forecasting is used to establish the best available information for wind generators to bid within the Dispatchable Intermittent Resources tariff that requires wind generators to submit a day ahead bid into the energy market, as other generators do. Wind energy is too large a resource and would create large errors if there were not an estimate of the wind energy in the day ahead market.
- Ramping products are being developed to allow generation other than wind to respond to wind variations. The Ramping products supply reserve capacity that can be used to improve the ability of generation to follow the load requirements. Load and generation must match within a small error band.
High Voltage DC (HVDC) transmission may have a place in the future electric grid
- HVDC transmission has the characteristics to produce economic benefits that would support a business case to build the lines from both energy and capacity sources.
- HVDC transmission can improve the energy market efficiency of inter-regional markets by scheduling power flows according the market signals to reduce production costs. The benefits from the HVDC transmission would be able to pay for the transmission plus some margin. A 1.25:1 benefit to cost ratio has been suggested for FERC Order 1000. Load customers receive direct benefits from lower prices or lower production costs. The generators providing the lower cost energy receive increased revenue by supplying the energy.
Authors: Dale Osborn, Consulting Advisor, Midwest Independent System Operator; Jennifer Christensen, Energy Policy Specialist, Great Plains Institute; and Mike Gregerson, Consultant, Great Plains Institute
The United States has an enormous amount of untapped potential for collecting biogas from organic waste streams to produce useful forms of energy. Most of the U.S. biogas development in the last 20 years has used dairy manure as a feedstock source. Development has also occurred at wastewater treatment facilities or food processing facilities with a wastewater stream. Continue reading »
Anaerobic Digestion on Swine Farms: Assessing Current Barriers and Future Opportunities
January 20, 2013 in Reports & WhitepapersNorth Dakota Oil Boom: Key Challenges Facing the State
November 16, 2012 in Carbon Management Author: Brad Crabtree
The Pathway to Commercializing CCS
November 1, 2012 in Carbon Management Authors: Brad Crabtree, Jennifer ChristensenCoal power generation in the U.S. stands at a crossroads. Abundant low-cost natural gas, federal environmental requirements and uncertainty over future regulation of greenhouse gas (GHG) emissions are driving the closure of older, less-efficient coal units and cancellation of planned investments in new coal generation capacity. Continue reading »
Senators come together to achieve a win for energy security, the environment, and the economy
October 10, 2012 in Carbon Management Author: Brad Crabtree
Press Release: The Great Plains Institute commends Conrad-Enzi-Rockefeller bill
September 20, 2012 in Carbon Management, News & PressThe Great Plains Institute commends Conrad-Enzi-Rockefeller bill to increase American oil production and reduce carbon emissions MINNEAPOLIS, MN – Today, Sens. Kent Conrad (D-ND), Mike Enzi (R-WY), and Jay Rockefeller (D-WV) introduced a bipartisan bill to advance the use of carbon dioxide (CO2) for enhanced oil recovery (EOR), an important opportunity to strengthen our national security by reducing dependence on imported oil through increased American oil production; create new jobs and increase investment across the country; and reduce CO2 emissions from a range of industrial sources—all at the same time.
The Great Plains Institute applauds Senators Conrad, Enzi and Rockefeller for introducing legislation that improves the existing Section 45Q Tax Credit for Carbon Dioxide Sequestration in order to secure private sector investment in critical, near-term projects to capture CO2 from power plants and industrial sources for use in EOR projects that increase oil production and reduce emissions through geologic carbon storage.
The bill reflects recommendations from the National Enhanced Oil Recovery Initiative (NEORI), which brings together a broad coalition of leaders from industry, labor, state government, and environmental groups. NEORI is convened by the Great Plains Institute and the Center for Climate and Energy Solutions (C2ES).
Midwestern Ethanol Innovation: Maximizing Process Efficiency and Carbon Reduction
May 20, 2012 in Reports & Whitepapers, Transportation & FuelsAn extension of our work with the MGA Advanced Transportation Fuels Advisory Group, this new white paper provides an overview of opportunities for improving efficiency and environmental performance at corn ethanol plants. Starting with a description of the ethanol production process, we then provide a menu of practices and technologies that can be implemented to reduce energy use, costs and greenhouse gas emissions. We also provide examples of plants that are currently using these practices. While progress on ethanol innovation is being made, there remains a large opportunity for broader adoption of these strategies.
The National Enhanced Oil Recovery Initiative (NEORI) recommends that Congress consider implementing arevenue-positive federal production tax credit to support deployment of commercial carbon dioxide (CO2) capture and pipeline projects. A new, more robust federal incentive is needed to increase the supply of man-made or anthropogenic CO2 that the oil industry can purchase for use in enhanced oil recovery (EOR) to increase domestic production from existing oil fields.
NEORI also recommends that Congress undertake immediate modification of the existing Section 45Q Tax Credit for Carbon Dioxide Sequestration, through legislative action and/or working with the Department of the Treasury to revise Internal Revenue Service program guidance.
To avoid stalling important commercial CO2 capture projects under development, there is an urgent need to improve the functionality and financial certainty of this federal incentive to enable its effective commercial use.
To make 45Q immediately accessible to US companies, Congress should pursue the following changes to the program:
- Designate the owner of the CO2 capture facility as the primary taxpayer;
- Establish a registration, credit allocation, and certification process;
- Change the recapture provision to ensure that any regulations issued after the disposal or use of CO2 shall not enable the government to recapture credits that were awarded according to regulations that existed at the time; and
- Authorize limited transferability of the credit within the CO2 chain of custody, from the primary taxpayer to the entity responsible for disposing of the CO2.
The consensus recommendations below detail the specific 45Q program modifications requested, and the section-by-section summary provides further explanation and context.
Background and Rationale
Section 45Q makes available a per-ton credit for CO2 disposed of in secure geologic storage. The program provides $10 per metric ton for CO2 stored through EOR operations and $20 per metric ton for CO2 stored in deep saline formations. However, due to unforeseen issues in the original statute (§ 115 of the Energy Improvement and Extension Act of 2008), the 45Q program lacks sufficient transparency and certainty for companies to be able to use the credit to secure private financing for projects.
Large-scale expansion of commercial EOR using industrially-sourced CO2 later in this decade requires that critical industrial capture projects begin construction now and enter commercial operation within the next few
years. If Congress makes modest, functional improvements this year to 45Q that result in little or no additional fiscal cost, the program currently authorized at 75 million metric tons of CO2 stored can help several significant EOR projects nationwide secure private sector financing and move forward to commercial operation.
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