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The Answer May Be Blowing in the Wind

by Cristina Foung

My favorite green product of the week: Southwest Windpower Skystream 3.7 Wind Turbine

What is it?
The Skystream 3.7 is a residential wind generator that hooks into grid-tied homes. It has an estimated energy production of 400 kWh per month (at 12 MPH or 5.4 m/s). Its rotor measures 12 feet and towers are available ranging from 34 to 70 feet.

Why is it better?
The wind industry, ranging from offshore wind projects to residential turbines, has been steadily growing. Southwest Windpower manufactures the Skystream 3.7 which is the first all-inclusive wind generator with controls and an inverter built right in.

For the average single family home, it can produce about half of all electricity needs (or course that depends both on how much electricity you use and the average wind speeds in your area). But that’s not too shabby in terms of reducing your carbon footprint.

I also hear Skystreams are quiet, easy to install (or easy to work with dealers to get them installed), run in very low winds, and are easy to maintain. All good things, for sure. I can’t wait to stop by Robin Wilson’s house in San Francisco to see hers in action.

Where can you find it?
Southwest Windpower has a network of dealers worldwide that retail the Skystream 3.7. See the website for information on where to buy. A complete ready-to-install package with a 34 foot tower costs $8,725.00.


Besides her green products column on Cleantech Blog, Cristina is a passionate advocate for green living at the Green Home Huddle at Huddler.com, which focuses on electric cars, energy efficient appliances, and other green products.

Big, Green Power is Flowing – But Where Are the Power Lines?

I had the opportunity recently to speak with Stuart Hemphill, the Director of Renewable and Alternative Power for Southern California Edison (SCE), the power company for Los Angeles and Southern California, on SCE’s activities and views of renewable and green power. SoCal Edison is a subsidiary of Edison International (NYSE:EIX). Stuart has a direct team of 40 staff working entirely on developing and managing new renewable generation, not including the teams across the company that support from legal, operations, transmission, and marketing.

One of big challenges for SCE in building its renewables portfolio is that even though they already stand at 17% of total generation from renewables (which Stuart touted as placing SCE the farthest ahead of any US utility), customer demand in SoCal is growing rapidly – 4 of the top 10 fastest growing counties in the country are in SCE service territory.

But SCE is working to do its part. They have been the leading purchaser of renewable power for the last 20 years and don’t intend to relinquish the crown any time soon. In 2006 they purchased 13 Billion kwh of electricity, about 17% of their needs. More than half of this green power is geothermal, with solar and wind making up the rest. 50% of the power was produced locally in Southern California itself, with most of the rest from Northern California, and the remainder from surrounding states.

The geothermal resources that make up the bulk of their green power come from three regions: The Geysers in Northern California – primarily developed by Calpine; The Salton Sea (better known for its status as a massive migratory bird stopping place and an environmental headache) – primarily developed by Ormat (NYSE:ORA) and CalEnergy; and Eastern California/Western Nevada in the Mammoth Lakes region – primarily developed by Caithness Energy. The wind power comes from all over the state.

In Stuart’s mind, the biggest issue is not supply of green power but transmission. He says they have plenty of contracts in the pipeline. But it takes roughly 7 years to permit and build major transmission lines, and the California RPS itself is less than 7 years old.

So even though SCE has several big lines proposed and under review, he considers it a major limitation to rolling out green power plants. This makes sense, as by their nature renewable power plants have to be built where the ground is hot, the wind blows, or the sun shines, not where the people and the transmission lines are. He reiterated, permitting is a real challenge.

As an example, SCE has a $1.8 billion transmission project to Tehachapi just north of L.A. which has finally received initial approval. They have a 1,500 MW wind contract in place in the region with Alta Wind Power, waiting on getting the transmission built. This is the single largest wind power contract ever developed (it was signed in December of 2006). The Tehachapi region already has 800 MW of wind generation (I drove through the pass just a few months ago – and am always awed by the site of spinning wind turbines), but Stuart says SCE believes there is the potential to get 4,500 MW more, if the transmission is built to bring it down to L.A.

He also took pains to mention a recently signed contract with Sempra Energy (NYSE:SRE) for a wind project which Sempra is developing in Baja, Mexico – I believe one of the only, if not the first cross-border Mexico – US wind farm projects.

They are also active in large scale solar – SCE buys 90% of the country’s solar energy now, according to Stuart, and has signed two recent agreements (2005) with Stirling Energy Systems and (2007) with California Sunrise to buy more solar power – both also waiting on transmission according to Stuart.

Stuart told me that SCE has $17 Billion in capital to be spent over the next 5 years in transmission and distribution to address these issues, but much of the solution lies in the hands of more aggressive stances by regulators and environmental groups, not just SCE. This isn’t just an SCE problem. The US has invested heavily in generation capacity in recent years, but our T&D investment has lagged – and the regulatory, environmental and political hurdles to get new power lines built may be even steeper than those for new power plants.

I asked why they weren’t building the new renewable power plants themselves. He indicated that they were prepared to, but currently saw no need because developers are really active these days – in the last 5 competitive solicitations they have received excellent response (including the 2007 solicitation). In short, there is plenty of interest and capital to build green power plants for SCE, and they have their hands full getting it to market.

When we got to talking about the future of energy in California, Renewable Portfolio Standards, greenhouse gas emissions and upcoming issues that concerned them, Stuart highlighted a few. SCE feels that while it is working hard to do its part, Energy Service Companies (ESCOs) as a group currently produce virtually zero percent of their eligible power from green sources as defined in the California RPS – but like the major investor owned utilities (SCE, PG&E (NYSE:PCG), and Sempra) ESCOs are also supposed to be generating 20% of their power of renewable sources by 2010. Stuart wasn’t sure where that supply was going to come from given long lead times to develop projects. We did discuss whether Renewable Energy Credits (RECs), which don’t currently qualify under California RPS standards, could play a role. Both he and I are personally fans of RECs and view this as an emerging area for opportunity and debate. If the free market is going to help meet our green power objectives, it needs more regulatory permitted tools to do so (the paradox of that statement notwithstanding).

We both also clearly see renewables as part of the overall solution for reducing greenhouse gases. Stuart quickly highlighted carbon credits, energy efficiency and reforestation as the other legs of that broader solution from a utilities’ perspective. But when I put to him the question of what should we be doing first on greenhouse gas emissions, he stated flat out that energy efficiency is the first area in his mind. “Energy not consumed is the best way of reducing any source of emissions.” Of course, SCE is a leader in energy efficiency, too. They don’t intend to be left behind there either.

I must admit, throughout the conversation I was struck by their insistence on maintaining a leadership position in clean energy for SCE. I guess this is just part of the California ethos about leading the nation in environmental issues.

And before I let him go, Stuart asked me to make sure to mention that they are always looking for new renewable power suppliers, and always looking to hire in renewables, so come find him. Their information is located at www.sce.com/renewables, and he can be reached at stuart.hemphill@sce.com.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.

Pepsi Generation

by Richard T. Stuebi

Today, PepsiCo (NYSE: PEP) announced that it was buying from Sterling Planet about 1.1 billion kwh worth of renewable energy credits (RECs) per year for the next three years to offset 100% of its corporate electricity requirements in the U.S., thereby making Pepsi the largest buyer of green power in the U.S.

Press release

According to reportage in the USA Today (article), PepsiCo will spend about $2 million on this REC purchase. That seemed like a steal to me: Pepsi probably got $20 million worth of good PR just by showing up with good press on the front page of USA Today‘s Money section.

PepsiCo’s action will serve as a catalyst to expedite development of renewable energy projects in the U.S. Since wind is generally the most economic form of renewable energy, windfarms will likely constitute the lion’s share of the new capacity that is added to serve PepsiCo’s needs. By my calculations, using some generic assumptions, I estimate that the Pepsi REC purchase could trigger about 350 new megawatts of wind development.

Given the high visibility impact that Pepsi was able to achieve at relatively low cost with their green commitment, I suspect that many other large retail and consumer products companies will be following suit in the coming weeks and months. If so, we could see many more megawatts of new renewables — primarily new wind — being built in the U.S. to serve the large corporates, which are now in a race to appear more green than their peers.

Richard Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.