Archive for December, 2009

A safe investment in 2010: Hot water

Posted on December 31, 2009. Filed under: Solar |

Though written in 2007, an analysis by RENEW’s executive director Michael Vickerman may be even truer today an a few years ago, given the risk involved in “traditional” investments. The analysis shows that an investmnet in a solar hot water system generates a better rate of return than putting money in the bank:

I wrote a column which was highly critical of using payback analysis to figure out whether installing a solar hot water system on one’s house makes economic sense. In almost every example you can imagine, the payback period for today’s solar installations ranges between long and forever. For my system, which started operating in January 2006, payback will be achieved in a mere 19 years using today’s energy prices, though by the time 2025 rolls around, half of Florida might be under water and the rest of the country out of natural gas.

But there’s no reason to let payback length rule one’s ability to invest in sustainable energy for the home or business, especially if there are other approaches to valuing important economic decisions. One way to sidestep the gloomy verdicts of payback analysis is to do what most companies do when contemplating a long-term investment like solar energy — calculate the internal rate of return (IRR) on the invested capital. The definition of IRR is the annualized effective compounded return rate which can be earned on the invested capital, i.e. the yield on the investment.

By using this familiar capital budgeting method, I’m able to calculate an IRR of 6.1%for my solar water heater if natural gas prices rise a measly 3% per annum. That yield exceeds anything that a bank will offer you today. It will likely outperform the stock market this year, which is due for a substantial downward adjustment to reflect the slow-motion implosion of the housing market now underway. And, unless you live in a gold-rush community like Fort McMurray, Alberta, your house will do well just to hold onto its current valuation, let alone appreciate by six percent.

While all investments pose some degree of risk, the return on a solar energy system is about as safe and predictable as, well, the rising sun. Fortunately for the Earth and its varied inhabitants, the center of our solar system is situated well beyond the reach of humanity’s capacity to tamper with a good thing.

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Keep working toward energy independence

Posted on December 30, 2009. Filed under: Energy Policy |

From an editorial in the Sheboygan Press:

Gov. Jim Doyle’s 2006 campaign promise of having four University of Wisconsin campuses completely “off the grid” by 2012 and get their energy needs from renewable sources was an ambitious one.

Unfortunately, it has turned out to be an impossible task.

Doyle said that campuses at Oshkosh, River Falls, Green Bay and Stevens Point were to work toward energy independence as a way to show that it can be done. Doyle has pushed hard for Wisconsin to research and implement alternative energy sources, especially renewable sources — wind, solar and biomass. The goal is to reduce the reliance on fossil fuels, especially oil bought from foreign countries.

The four schools were to start producing their own electricity or buy it from utilities using the renewable sources of energy, Doyle said in 2006. The challenge also would spark energy conservation on the four campuses.

But with just two years to go, the promise far outshines the reality.

Still, there has been significant progress.

UW-Green Bay, which specializes in environmental education, has reduced its energy use by 26 percent since 2005.

UW-River Falls is studying the use of wind turbines on the campus farm to generate electricity. . . .

If the governor deserves any criticism for his promise, it is that he set an unrealistic timetable and did not ensure that there was adequate funding.

But Wisconsin must continue to do the research and find the technology that will not only reduce reliance on fossil fuels, but also ensure that energy in the future will be less costly.

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WI utilities reach renewable-energy goal, nine other states fall short

Posted on December 29, 2009. Filed under: Energy Policy |

From a news release issued by the Public Service Commission of Wisconsin:

MADISON – The Public Service Commission of Wisconsin (PSC) today [December 18, 2009] announced that all 118 Wisconsin electric providers have met their renewable portfolio standards (RPS) for 2008, and 112 providers exceeded the requirements for the year, creating excess renewable resource credits that can be banked and used for compliance in future years. Wisconsin utilities are well on their way to meeting the increase in renewable energy that will be required by 2015.

Our current RPS law requires Wisconsin retail electric providers to produce 10 percent of their electricity from renewable resources by the year 2015. For the years leading to 2015, Wisconsin utilities are required to report their progress in meeting the renewable milestones to the PSC. Wisconsin electric providers continue to take steps towards achieving their renewable energy goals. In 2008, Wisconsin utilities increased the amount of renewable electricity provided by nearly one percent over what was provided in 2007.

From the newsletter of Customers First!:

With a nationwide renewable portfolio standard (RPS) likelier than any other energy policy choice to be included in federal climate legislation, a newspaper survey has found many states—not including Wisconsin—failing to meet their own RPS goals.

In October, USA Today reported that it found nine states where efforts to boost reliance on renewable energy were not making the grade. Thirty-five states have adopted some form of RPS. Some states, the story noted, require utilities that don’t produce or purchase enough renewable energy to pay fees to finance renewable projects. That system allows utilities to comply with program requirements without necessarily adding renewable generation capacity.

States that have already missed or are expected to miss all or part of their mandated targets include Arizona, California, Delaware, Maryland, Massachusetts, New Jersey, New Hampshire, New York, and Ohio. In aggregate, Wisconsin utilities currently obtain roughly 4 percent of their power from renewable sources, against a current-law target of 10 percent by 2015.

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Dane County wants to turn scrap food into energy

Posted on December 28, 2009. Filed under: Biomass, Digesters |

From an article by Dee Hall in The Capital Times:

Discarded food would be collected and turned into energy under a proposal announced Monday by Dane County Executive Kathleen Falk.

The project would be one of the first in the United States to use municipal food waste to generate energy, according to Troy Runge, director of the Wisconsin Bioenergy Initiative, a state-funded program based at the UW-Madison.

The county is seeking a consultant to design a system that would make use of the 30,000 tons of food waste from homes, businesses and institutions disposed of annually in the Dane County Landfill, which gets about 200,000 tons of material a year. Falk said the project could bring in $4 million a year in revenue and create 45 jobs.

The U.S. Environmental Protection Agency calls food waste “one of the least recovered materials in the municipal solid waste stream” and “one of the most important materials to divert from landfills” because it generates methane, a major greenhouse gas. The EPA said food waste is the second-largest contributor to landfills after paper.

Dane County already captures methane from the county landfill and a closed landfill in Verona and burns it to generate electricity, which it sells to Madison Gas & Electric. That arrangement has been around since 1997.

The project announced Monday seeks to segregate food from the rest of the waste stream. The material would be digested at up to three plants around Dane County, according to the request for proposals issued by Dane County last week.

Falk said the project would use discarded fruits, vegetables, meat and other perishables to create methane, which in turn would either be converted into natural gas or burned to generate electricity. The leftover organic material would be packaged for use as fertilizer.

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Teachers’ publication features Jenny Heinzen

Posted on December 24, 2009. Filed under: Economic development, Wind |

An article on RENEW’s president Jenny Heinzen from the Wisconsin Education Association:

Jenny Heinzen’s job isn’t a breeze – though it does rely on it. As a Wind Energy Technology instructor at Lakeshore Technical College in Cleveland, Wis., Heinzen not only teaches about harnessing an alternative form of energy, she’s been part of the push for new wind farms in Wisconsin.

In September, Governor Jim Doyle signed into law a bill calling for uniform standards for wind farms. The bill will create a set of rules overruling any local ordinances on wind farms, potentially setting up a boon for wind projects in the state. Heinzen is part of a group called Wind for Wisconsin, which spurred the legislation. Heinzen said she wants to create wind farms to move Wisconsin forward and keep wind energy technology students in the state.

“The bill, and consequently the new law, was absolutely necessary in order to move forward,” Heinzen said. “The last thing I want is to ship all of my graduates to other states. I want them to have jobs available here at home. And I want Wisconsin to start using more renewable energy, as we have no coal, gas, oil or uranium. But we’ve got wind, sun, water and agricultural wastes that can be used to produce electricity. . . .”

Heinzen is also the president of nonprofit clean energy organization RENEW Wisconsin, and said a state set of standards for wind farms is crucial for their development.

“This has been one of our main topics for the past two years,” she said. “The bill was created in response to a plethora of local ordinances that ultimately restricted, and sometimes killed, wind power projects in this state.”

Heinzen said the best part of her job is watching her students learn and climb, as well as setting them up for success later in life.

“Even better is when they get their job as a technician after, and sometimes before, graduation,” she added.

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Governor backs off energy goal for 4 UW campuses

Posted on December 23, 2009. Filed under: Climate change, Coal, Energy Efficiency, Energy Policy |

From an article by Ryan J. Foley in the Wisconsin State Journal:

Gov. Jim Doyle has backed off a campaign promise that four University of Wisconsin campuses will be energy independent by 2012 after determining it was not practical as proposed.

Weeks before he was re-elected in 2006, Doyle said campuses would “go off the grid” by becoming the first state agencies to purchase or produce as much energy from renewable sources as they consume. He said they would achieve that by replacing fossil fuels with cleaner energy sources like solar, wind and biomass.

The goal has since been changed to require the campuses to sharply reduce their carbon dioxide emissions, instead of ending them altogether or going off the grid entirely, by 2012. The change came into public view this month during a Board of Regents meeting.

Some university officials say the original plan never made much sense because “going off the grid” would have required them to start producing their own electricity instead of buying it from utilities, which was not feasible or cost-effective.

At the same time, they credit the challenge with spurring them to conserve energy, study alternative fuels, and purchase more renewable sources from the utilities that provide their electricity.

Doyle told reporters Wednesday his original vision may have been unrealistic because of the challenges associated with producing energy on campuses, but the program would still motivate students and university employees to reduce pollution.

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Think Tank Flunks Renewable Energy Analysis

Posted on December 22, 2009. Filed under: Climate change, Energy Policy |

December 22, 2009

Michael Vickerman
RENEW Wisconsin

Madison, WI (December 22, 2009) In response to a recent report from the Wisconsin Public Research Institute (WPRI) concluding that policies to increase renewable energy production would be prohibitively expensive, RENEW Wisconsin, a leading sustainable energy advocacy organization, today issued a critique documenting the faulty assumptions and methodological errors that undermine the credibility of that finding.

WPRI’s report, titled “The Economics of Climate Change Proposals in Wisconsin,” reviewed the proposal in the Governor’s Global Warming Task Force to increase the state’s renewable energy requirements on electric utilities to 25% by 2025, and estimated a total cost in excess $16 billion. RENEW’s analysis, which is available at, uncovered a disturbing pattern of “methodological sleight-of-hand, assumptions from outer space, and selective ignoring of facts” that render WPRI’s cost estimate to be completely unreliable.

“It appears that WPRI’s $16 billion number was pulled out of thin air, and that its analysis is nothing more than a tortured effort at reverse-engineering the numbers to fit the preordained conclusion,” said Michael Vickerman, RENEW Wisconsin executive director.

Specifically, RENEW identified four significant errors in WPRI’s analytical approach. The critique says:

 It relies on a grossly inflated electricity sales forecast that is completely detached from current realities.
 The final cost estimate includes all the generation built to comply with the current renewable energy standard, a clear-cut case of double-counting.
 The authors fail to account for existing renewable generation capacity that is not currently being applied to a state renewable energy standard.
 There is a high likelihood that the savings from the renewable energy standard are undervalued, because the authors fail to model plant retirements in their analysis.

“In the final analysis, it would be too generous to describe the analytical approach taken here as incompetent or slipshod,” Vickerman said. “What we have here instead is disinformation, pure and simple, and it should be called out as such, especially as the Legislature begins consideration of arguably the most important economic development and environmental protection initiative in many years.”


RENEW Wisconsin is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives.

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Energizing Fort Atkinson’s schools from the sun and earth

Posted on December 21, 2009. Filed under: Geothermal, Solar |

From a case study of energy installations at Fort Atkinson schools by Michael Vickerman:

By Michael Vickerman, RENEW Wisconsin

As a result of educating themselves on the connection between energy use and atmospheric pollution, several school districts in Wisconsin are taking increasingly aggressive steps to conserve energy as well as produce a portion of what they use on-site. Some have embraced ground source heat pump systems (Fond du Lac High School), while others have installed solar hot water systems (Osceola Middle School) and solar electric systems (Paul Olson elementary school in Madison). Not to be outdone, Wausau East High School recently installed a 100 kilowatt (kW) Northwind turbine, which is now the largest wind generator attached to a school building in Wisconsin.

Yet if one measures success by substantial reductions in energy expenditures and emissions reductions, there is one school district in Wisconsin that stands head and shoulders above its peers: Fort Atkinson. Serving 2,700 school-age children in a community of 12,000, the Fort Atkinson School District operates six buildings: four elementary schools, one middle school and a high school. School officials have made no secret of their aspiration to make Fort Atkinson the most energy-efficient and self-sufficient K-12 district in the state.

Since 2005, Fort Atkinson has rigorously pursued a sustainable energy agenda that integrates, in a systematic and complementary fashion, continuous monitoring of consumption, aggressive building efficiency measures, and renewable energy capture. As articulated in its 2009 energy plan, the district’s principal goals for 2010 are nothing if not ambitious:
+ Pare energy costs by 20% from 2005 levels;
+ Lower carbon emissions by 25% from 2005 levels;
+ Obtain EnergyStar certification for all six schools; and
+ Install on-site renewable production at all six schools.

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Litany of errors mars analysis of bill to enact recommendations of global warming task force

Posted on December 18, 2009. Filed under: Climate change |

From a news release issued by the coalition for Clean, Responsible Energy for Wisconsin’s Economy (CREWE):

(MADISON, Wis.)—The coalition for Clean, Responsible Energy for Wisconsin’s Economy (CREWE) on Tuesday released a fact sheet detailing the errors with the Wisconsin Policy Research Institute’s (WPRI) November 12th report on the adverse economic effects of the Governor’s Task Force on Global Warming recommendations.

“The WPRI report is so wildly flawed that it has no place in any legislative debate on the task force recommendations,” said Thad Nation, executive director of CREWE. “Not only does the report analyze many policies that aren’t even included in the Clean Energy Jobs Act, but it takes a piecemeal approach, failing to analyze the cumulative effect the policies will have on our state.”

Among the errors included in the report, titled “The Economics of Climate Change Proposals in Wisconsin”:
• 8 of the 13 policies analyzed aren’t included in the Clean Energy Jobs Act
• Models policies that would impact the state’s general fund, despite the fact that the Clean Energy Jobs Act includes no tax increases
• Ignores the fact that low carbon fuels will be produced in Wisconsin and other
Midwestern states, while conventional gasoline is largely imported from overseas
• Fails to take into account decreased electricity demand due to energy efficiency and conservation investments outlined in the recommendations.

In addition, the authors of the report used a “black box” economic model to come to their conclusions – meaning the reader is only given the inputs and outputs, without any knowledge of how the statistical analysis was done. In order to allow others to properly analyze the report’s conclusions, the model that was used should be made publicly available for review.

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Local business, S. Korean firm to work on wind farm

Posted on December 17, 2009. Filed under: Economic development, Wind |

From an article by Karen Rivedal in the Wisconsin State Journal:

A local wind energy business is introducing a major new international player into the wind industry in North America, starting with a six-turbine wind farm expected to be built northwest of Madison next year.

Wave Wind LLC of Sun Prairie, formed in 2007, is partnering with Hyundai Heavy Industries — the world’s largest ship builder and a diversified industrial manufacturer based in Seoul, South Korea, with more than $15 billion in annual sales — to develop the wind farm and perhaps up to 15 other projects throughout the country.

“We’re bringing them into the market,” said Tim Laughlin, president and co-founder of Wave Wind, at 4589 Highway TT. “It’s important for us to do this, and it’s great for the wind industry.”

Under the agreement forged between the two companies this fall, HHI will make the parts for the six turbine generators — in that company’s first-ever foray into turbine manufacturing — and Wave Wind will transport the pieces from the port of Houston to Wisconsin.

Wave Wind then will assemble the generators, together with blades and towers made by U.S. manufacturers, and erect the structures on leased farmland permitted for wind energy and located about 15 miles northwest of Madison. Laughlin said he couldn’t be more specific about the site because the legal details were still being finalized.

It will be the first wind farm owned and operated by Wave Wind, which previously has been more of a service provider for clients including wind farm developers and turbine manufacturers. The company has completed 26 jobs in 12 states and two foreign countries since 2007, most of them involving turbine assembly or maintenance for small to mid-sized wind projects, plus some project planning and material handling, transport and storage.

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