EREN Network News

June 20, 2001

News and Events

• EPA Decision Will Mandate Ethanol in California Gasoline
• Shell to Invest Up to $1 Billion in Wind, Solar by 2006
• Indiana Adopts Incentives for Renewable Energy, Efficiency
• Four Utilities Agree to Reduce Load as BPA Deadline Nears
• UC-Davis Team Wins FutureTruck Competition
• Philadelphia Location for DOE Public Meeting Changed

Site News

• Solar Independence

• California Spent $7.6 Billion on Power from January to May

News and Events

EPA Decision Will Mandate Ethanol in California Gasoline
The U.S. Environmental Protection Agency (EPA) last week denied California's request to waive the federal requirement for oxygenates in its reformulated gasoline, essentially forcing California to use ethanol as a fuel additive. California had requested the waiver after announcing that a ban on the use of the oxygenate methyl tertiary butyl ether (MTBE) would take effect in 2003.

An EPA analysis showed that there is significant uncertainty over the change in emissions that would result from a waiver, and decided that it could not grant the waiver within the legal constraints of the Clean Air Act. See the EPA press release, as well as supporting documentation, on EPA's Reformulated Gasoline Web page.

The EPA decision is excellent news for the U.S. ethanol industry, which is already gearing up to meet the new demand. According to the Renewable Fuels Association (RFA), construction on two new ethanol plants began last week, and dozens of other proposed plants will now move forward. The RFA expects the ethanol industry to increase its capacity by 600 million gallons by the end of 2002. For example, Fagen, Inc. will begin construction this year on plants in Oregon, Wisconsin, Iowa, and South Dakota, for a total of 210 million gallons of additional ethanol capacity. Delta-T Corp. expects to begin construction within a year on 8 to 10 ethanol plants that would total 270 to 300 million gallons of additional ethanol production capacity. See the RFA press release.

Considering the EPA decision, the recent announcement that DOE's National Renewable Energy Laboratory (NREL) will be working to increase the efficiency of ethanol production seems particularly well-timed. NREL will work with Broin and Associates, Inc., a major producer of ethanol from corn starch, on a one-year, $446,000 joint project to develop process improvements and evaluate the use of proprietary yeast strains developed by NREL. See the NREL press release.

Shell to Invest Up to $1 Billion in Wind, Solar by 2006
The Royal Dutch/Shell Group of Companies announced last week that it will invest between $0.5 billion and $1 billion over the next five years in "a range of new energy businesses, concentrating primarily on solar and wind energy." Shell expects its solar business to grow at the same rate as the market, which is now growing at 25 percent per year. Shell is also participating in two trial wind projects, totaling 8 megawatts in capacity, and is evaluating new wind energy projects in the United Kingdom, the Netherlands, Morocco and the United States that total 400 megawatts in capacity.

Shell also announced yesterday that it is forming a joint venture with International Fuel Cells to develop, manufacture and sell fuel processors and hydrogen generation systems for emerging fuel cell and hydrogen fuel applications. The new venture, called HydrogenSource LLC, will be headquartered in South Windsor, Connecticut, and is expected to be staffed with 200 people by the end of next year.

See the June 14th, 2001 and June 19th, 2001 press releases on the Shell Web site.

General Motors Corporation (GM) is making similar investments in hydrogen technologies. GM last week entered into a partnership with QUANTUM Technologies, Inc. to develop hydrogen storage devices, and announced a 25-year collaboration with General Hydrogen to work on hydrogen storage, fuel cell vehicle refueling, energy services, advanced materials, power electronics, and electric power production. See the GM press releases June 12, 2001 and June 13, 2001.

Indiana Adopts Incentives for Renewable Energy, Efficiency
The Indiana Air Pollution Control Board adopted a new rule early this month that will create incentives for developing renewable energy and energy efficiency in the state. The Indiana Nitrogen Oxides Control Rule creates a system of tradable emissions credits that will lead to a 66 percent reduction in nitrogen oxide emissions from fossil-fueled power plants by May 31, 2004. Two percent of that emissions credit market will be set aside to create incentives for renewable energy and energy efficiency projects. The Hoosier Environmental Council estimates that the market could generate $2.1 million in incentives. See the state's press release, with a link to the full rule.

Four Utilities Agree to Reduce Load as BPA Deadline Nears
Four utilities served by the Bonneville Power Administration (BPA) recently agreed to reduce their electrical loads. On June 6th, BPA called on its customers to either commit to load reductions or face rate increases of 150 percent or more, beginning in October. BPA set this Friday, June 22nd, as the deadline for the agreements. Last week, Seattle City Light, Benton Public Utility District, and Vera Water & Power all agreed to reduce their electrical demand by 10 percent for one year, starting in October. Puget Sound Energy (PSE) settled on an alternate agreement in which it will buy less power for five years, beginning in October. PSE will exchange 368 average megawatts per year for undisclosed monetary benefits. BPA is still hoping for more load-reduction agreements before the Friday deadline. See the BPA press releases.

UC-Davis Team Wins FutureTruck Competition
A team from the University of California-Davis bested 14 other teams to win DOE's FutureTruck competition last week. Competitors were challenged to increase the fuel efficiency and reduce the greenhouse gas emissions of a General Motors Chevy Suburban, without sacrificing performance or safety. The second-place finisher, the University of Wisconsin, achieved a fuel efficiency equivalent to 28 miles per gallon (a 65 percent improvement), while cutting greenhouse gas emissions in half. See the DOE press release.

See also the FutureTruck press release.

Philadelphia Location for DOE Public Meeting Changed
DOE has announced a last-minute change in location for the public review meeting to be held in Philadelphia. Early this month, DOE announced a series of public meetings to review the programs under its Office of Energy Efficiency and Renewable Energy. Last week, the location of the Philadelphia meeting was changed to the Sheraton Rittenhouse Square Hotel. Meetings are being held in Philadelphia and Denver tomorrow; the final meeting will be in Washington, D.C., on June 26th. See the meeting announcement (with the corrected location) on EREN.

Site News

Solar Independence
This site provides information on a free exhibit that showcases solar energy and energy-efficient technologies for teachers, students, homeowners, and business owners. The centerpiece of the exhibit is a 64-foot-wide American flag made in part from solar panels, which power several of the exhibit's displays. The exhibit will be on display at the Museum of Science and Industry in Chicago, Illinois, between June 30th and July 15th. In addition to including a description of the exhibit and directions to it, the site points visitors to more solar information resources for kids and adults.

For this and other recent additions to the EREN Web site.

Energy Facts and Tips

California Spent $7.6 Billion on Power from January to May
A report issued last week by the California Department of Water Resources (DWR) shows that it has spent more than $7.6 billion over the past five months to purchase electricity. The DWR began purchasing power for California in January on behalf of the state's investor-owned utilities, which were no longer able to pay for it. Over the same time period, only $239 million was passed on to DWR from the utilities' retail customers. The state plans to issue up to $13.4 billion in bonds in September to repay the state's General Fund and to fund future power purchases.

On a positive note, the cost of power has dropped roughly 30 percent since DWR started buying it for the state — from $332 per megawatt-hour in January to $243 per megawatt-hour in May. See the June 15th press release on the DWR Web site.

To help with the power costs in the West, the Federal Energy Regulatory Commission (FERC) on Monday placed curbs on the spot prices for electricity in the 11-state western region. The price curbs apply 24 hours per day, seven days a week, but only apply to short-term purchases of electricity. See the FERC June 18th press release (PDF 31 KB), Download Acrobat Reader

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