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Wednesday, June 16, 2010

DOE Announces $60 Million in Grants

DOE Awards $60 Million in Recovery Act Funds to Local Clean Energy Efforts

DOE announced on June 11 that 20 communities have been selected for more than $60 million in funding under the American Recovery and Reinvestment Act to implement local energy efficiency and renewable energy programs. Local governments, nonprofit organizations and quasi-governmental organizations in 18 states are among the recipients for the competitive grants, administered under DOE's Energy Efficiency and Conservation Block Grant (EECBG) program. States receiving funds include Alaska, California, Colorado, Connecticut, Florida, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, New Mexico, New York, Oregon, Pennsylvania, Vermont, and Washington.
These awards were open to local communities that were not eligible to receive the initial, population-based formula grants under the EECBG program. Specifically, the funding supports projects that deliver energy efficiency retrofits in residential and commercial buildings and establish financing programs for energy efficiency improvements. Other activities will include transportation programs that conserve energy through trip reduction strategies and alternative transportation options, projects to increase recycling, efforts to reduce the energy demands of delivering and supplying clean water through water efficiency and conservation measures, the installation of energy-efficient street lights, and the integrated deployment of renewable energy systems in conjunction with energy efficiency retrofits to existing buildings.
The award recipients were selected through a competitive review process that took into account the expected energy savings and reduced emissions impacts of the projects, leveraged investments from other non-federal sources, and whether the project could be replicated and expanded to contribute to a sustainable market for energy efficiency nationally. Projects that proposed innovative approaches and identified and addressed ways to overcome institutional, regulatory, or market barriers were also favored. See the DOE press release and the EECBG Web site.

DOE Offers Loan Guarantees to Geothermal Projects in Nevada and Oregon

Photo of a complex of pipes in the desert.
Both the Nevada and Oregon geothermal projects will employ binary-cycle technology, like this existing plant in Nevada.
Credit: Patrick Laney, INL
DOE recently offered loan guarantees for geothermal power projects located in northwestern Nevada and southeastern Oregon, drawing on funds from the American Reinvestment and Recovery Act. Geothermal power plants generally draw on underground reservoirs of hot water or steam, using that energy to drive a turbine, which spins a generator to produce power. For the Nevada plant, DOE announced on June 15 a conditional commitment to provide a partial guarantee for a $98.5 million loan to the Nevada Geothermal Power Company (NGP). The company is the developer of Faulkner 1, a 49.5-megawatt (MW) geothermal power project at NGP's Blue Mountain site in northwestern Nevada. DOE is acting as loan guarantor for up to 80% of the $98.5 million loan to NGP for the Blue Mountain project. NGP has a 20-year power purchase agreement to sell electricity and renewable energy credits from the project to NV Energy (formerly the Nevada Power Company).
NGP's Blue Mountain project is the first to access a DOE loan guarantee through the Financial Institution Partnership Program (FIPP), a program supported by the Recovery Act. In a FIPP financing, long-term lenders apply on behalf of the project sponsors or developers and are required to hold at least 20% of the credit exposure to the project. FIPP was designed to expedite the loan guarantee process for renewable energy generation projects that use commercial technologies, while expanding the capacity for financing U.S. renewable energy projects. For the Blue Mountain project, John Hancock Financial Services is the lead lender and the applicant for the DOE loan guarantee. See the DOE press release and DOE's Loan Guarantee Program Web site.
For the Oregon plant, DOE announced on June 10 the offer of a $102.2 million conditional commitment for a loan guarantee to U.S. Geothermal, Inc. to construct a 22-MW power plant. The project could be the first commercial geothermal power plant in the state, and the electricity generated will be sold to Idaho Power Company under a long-term power purchase agreement. The project will use an improved technology to extract energy from the geothermal hot water more efficiently. In typical "binary-cycle" geothermal power projects, geothermal hot water is used to vaporize a secondary ("binary") fluid that is then directed through a turbine to generate electricity, after which it is condensed and reused, forming a closed cycle. U.S. Geothermal's supercritical binary geothermal cycle is designed to be more efficient than other systems in extracting heat from the geothermal hot water, thereby increasing the output of the power plant. The technology could help extract more energy from existing sites, while sites that previously would not have been considered for geothermal projects could now be feasible to develop. The company estimates that the planned project will create 150 jobs during the 20-month construction period and employ 10 skilled full-time workers when it begins operating in 2012. See the DOE press release and DOE's Geothermal Technologies Program Web site.

DOE-Backed Project Will Demonstrate Innovative Geothermal Technology

As part of DOE's Geothermal Technologies Program, two geothermal companies, AltaRock Energy and Davenport Newberry, announced plans on June 8 to conduct a demonstration of Enhanced Geothermal Systems (EGS) technology at a site located near Bend, Oregon. The purpose of this project is to extract energy from an underground "hot spot" in the Earth's crust by creating an underground reservoir of water near the hot spot. The demonstration will take place on an existing federal lease located outside the Newberry National Volcanic Monument, about 30 miles south of Bend. The companies will seek to extract energy from the Newberry Volcano, a 500-square-mile dormant volcano with a magma chamber thought to lie only 1-3 miles below the surface. Backed by a recent DOE grant of $21.45 million in American Reinvestment and Recovery Act funds, as well as $22.36 million from the AltaRock-Davenport partnership, the project will also benefit from the research efforts of faculty and students at several universities, as well as scientists from DOE's Lawrence Berkeley National Laboratory and the U.S. Geological Survey. All project plans will be reviewed by DOE, the U.S. Bureau of Land Management, the U.S. Forest Service, and Oregon State officials, and the agencies will issue permits only when satisfied that the Newberry project complies with strict standards.
EGS is a process of extracting heat from the Earth by creating a subsurface fracture system and circulating water through these fractures using deep well bores. Creating an EGS reservoir requires improving the natural permeability of rock by injecting water into the rock at high pressures. Once the reservoir is formed, water pumped into deep injection wells is heated by contact with the rock and returns to the surface through production wells, similar to conventional geothermal systems. A 2007 study led by the Massachusetts Institute of Technology estimated that with suitable investments and improvements to existing technology, EGS could supply up to 10% of U.S. electricity needs within 50 years, at prices competitive with fossil-fuel fired generation but with very low greenhouse gas emissions. See the AltaRock Energy press release (PDF 146 KB) and fact sheet (PDF 199 KB), as well as the description of EGS technologies from DOE's Geothermal Technologies Program and a description of the Newberry Volcano from the U.S. Forest Service. Download Adobe Reader.
Meanwhile, a similar effort in Australia continues to hit setbacks on the road to creating a commercial EGS power plant. Geodynamics, Ltd. first started drilling wells for its EGS system in South Australia's Cooper Basin back in early 2003. The company suffered through many drilling problems at its "Habanero" wells, which were meant to power a 1-megawatt power plant. In April 2009, as the project neared completion, the Habanero 3 well experienced a blowout, which was ultimately attributed to hydrogen embrittlement of the high-strength steel used in the well. In April of this year, the company announced a new plan to drill a 3-mile-deep well at its nearby "Jolokia" site, then return to the Habanero site to drill two new wells that will be deeper than the now-abandoned existing wells. The company will then return to drilling at the Jolokia site. Geodynamics now hopes to begin producing power at the Habanero site by early 2012. See the Geodynamics press release (PDF 140 KB).

DOI and 10 East Coast States Form an Offshore Wind Energy Consortium

Photo of a line of tall three-propeller turbines in the ocean.
Offshore wind turbines such as these could be deployed along the U.S. East Coast if a new consortium succeeds.
Credit: Siemens
The U.S. Department of the Interior (DOI) and the governors of 10 East Coast states signed a Memorandum of Understanding (MOU) on June 8 that formally establishes the Atlantic Offshore Wind Energy Consortium. The new consortium will promote the development of wind resources on the Outer Continental Shelf (OCS) along the East Coast, primarily by coordinating state and federal efforts relating to permitting, environmental studies, technical and financial barriers, and the infrastructure needed to deploy and maintain offshore wind power plants. The MOU was signed by the governors of Maine, New Hampshire, Massachusetts, Rhode Island, New York, New Jersey, Delaware, Maryland, Virginia, and North Carolina. DOI's new Bureau of Ocean Energy Management will oversee the development of wind power and other renewable energy resources on the OCS. In addition, DOI will establish a new renewable energy regional office, located in Virginia, to coordinate the development of wind and solar energy and other renewable energy resources in the region. See the DOI press release and the MOU (PDF 28 KB), which is posted on the Web site of Virginia Governor Bob McDonnell. Download Adobe Reader.
Several offshore wind energy projects have been proposed for East Coast states, positioning the region to tap into the potential of U.S. wind power. For example, on April 21, DOI approved Cape Wind, a 130-turbine wind power project in Nantucket Sound off the Massachusetts coast. In addition, NRG Bluewater Wind has proposed wind power projects off the coasts of Delaware, Maryland, and New Jersey; Deepwater Wind is involved with projects off the coasts of Rhode Island and New Jersey; and a public-private partnership in New York State is developing a 350-megawatt offshore wind project. The Long Island - New York City Offshore Wind Project would be located about 13 nautical miles off the Rockaway Peninsula, which is in the New York City borough of Queens. Meanwhile, a recent study by Stony Brook University and the University of Delaware finds that linking a string of East Coast offshore wind plants with a transmission line would help to smooth out power fluctuations caused by the weather. The University of Delaware is also teaming up with DOE's National Renewable Energy Laboratory (NREL) to develop a test site for commercial wind turbines off the Delaware coast. See the Web sites for Cape Wind, NRG Bluewater Wind, Deepwater Wind, and the Long Island - New York City Offshore Wind Project, as well as the press releases from Stony Brook University and NREL.
The Atlantic coastal region isn't the only site with gusts of offshore wind power activity. On June 4, the New York Power Authority (NYPA) announced the start of a multi-phase review process for five proposals vying to construct the Great Lakes Offshore Wind project, which would be located in the New York State waters of Lake Erie or Lake Ontario. NYPA expects to pick a developer by early next year, followed by about five years of permitting and construction before the project achieves commercial operation. And in May, the General Electric Corporation (GE) and the Lake Erie Energy Development Corporation (LEEDCo) made public their long-term partnership, aimed at the development of an offshore wind farm near Cleveland, Ohio,. Under the new partnership, GE will provide direct-drive wind turbines to LEEDCo's proposed 20-megawatt offshore wind project in the Ohio waters of Lake Erie. The project is targeted for completion in late 2012. See the press releases from NYPA and LEEDCo (PDF 396 KB).

BLM Announces Solar Energy Rental Rates for Public Lands

The Bureau of Land Management (BLM) released on June 10 a rental schedule for solar energy right-of-way authorizations on public lands. The move was intended to provide the solar energy industry a level of certainty about the costs associated with projects on the public lands, while ensuring a fair return to taxpayers for the use of the lands. The solar rental schedule was developed based on review and analysis by DOE, BLM, and the U.S. Department of the Interior using models that evaluated the effects of various rental rates on different kinds of solar projects. The BLM is required by the Federal Land Policy and Management Act (FLPMA) to collect an annual rental payment for right-of-way authorizations on the public lands. FLPMA also requires that rents for these authorizations reflect the fair market value for the use of the public lands.
The solar rental schedule includes a "base rent" for the acreage of public land included within the right-of-way authorization, payable on the date of issuance, and a "megawatt (MW) capacity fee" based on the power capacity of the project, due when the facility starts operation. The base rents, computed using a per-acre rental fee, vary by county based on rural land values published by the National Agricultural Statistics Service. The annual rates, spelled out for six western states, range from $15.70 per acre in certain counties in Arizona, Nevada, and New Mexico, to $313.88 per acre in California's San Bernardino County. The annual MW capacity fee is $5,256 for each megawatt of photovoltaic (PV) solar power; $6,570 for each megawatt of concentrator PV systems and concentrated solar power without storage, and $7,884 for each megawatt of concentrated solar power with an energy storage capacity of 3 hours or more. The new rents are effective immediately. See the BLM press release, the BLM's instruction memo on the rents, and a description of solar technologies from DOE's Solar Energy Technologies Program.

Energy Connections

Study by DOE, NERC Examines High-Impact Risks to the U.S. Power Grid

Although some high-impact risks to the U.S. electrical grid are so rare that they have not yet occurred, they have the potential to significantly affect the grid's reliability, according to a new report from DOE and the North American Electric Reliability Corporation (NERC). The report examines three types of threats to the power grid: coordinated cyber and physical attacks, pandemics, and electromagnetic disturbances, including geomagnetic disturbances and electromagnetic pulses. While the report notes that certain protections and mitigations are already in place to address these risks, it is also meant to help the electric sector, utility regulators, and the federal government to further prepare for the potential threats.
The 120-page report identifies 19 "Proposals for Action" directed to NERC, DOE, the electric industry, and nearly 15 government agencies and non-governmental organizations across North America. These proposals are designed to guide ongoing efforts to more fully address these risks, laying a strong foundation for future action. The proposals provide important insights into the issues facing the electric sector, focusing on the need for more effective public-private partnerships, better information sharing, expanded research and development activities, and prioritized protection of key nodes on the system. See the NERC press release.

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