stimulus money for austin

There have been a number of posts on the blog talking about the stimulus package that is making its way around the Capitol. Emily has a great post on the breakdown of what's in the stimulus package relating to energy. I mean, $900 B is a lot of money, it's good to know what's in it, right? I've been wondering what the stimulus package has in store for Austin though.

Almost by chance, I came across this post from a blog here in Austin, Downtown Austin. Of interest is money to expand the commuter rail line in Austin. It's good to see Austin taking steps to implement better public transportation to reduce fuel consumption, traffic delays and emissions. The neat thing is you can go on to the site and vote for different stimulus items you like. The full website lists the other stimulus items requested for Austin.

What do you think of some of these requests? Is there anything you think Austin could benefit from?

Policy to Unclog the Renewable Energy Development Pipeline

Across the cleantech industry in 2008, the pain was evident. Commercial-scale renewable energy developers suffered as most tax equity players suffered financial losses, thereby losing their “tax appetite”. Seed-stage cleantech suffered as Venture Capitalist’s tightened their purse strings and shifted focus to keeping existing portfolio companies alive. Public equity, both IPOs and follow-on offerings also dried up, forcing many cleantech firms to delay much needed manufacturing scale-up strategies. The nail in the coffin was a massive sell-off in energy commodities due to the downturn in global consumption. Lower demand for coal and natural gas used for electricity generation caused a sell-off to ripple through power markets and the global carbon and emissions markets - dropping carbon allowance prices in the EU-ETS, RGGI, and offset credit prices in the CCX, CCAR, and CDM markets. Renewable Energy Credits (RECs) also sold-off in many U.S. states making electricity produced from renewable energy generation assets less competitive in the market.

According to New Energy Finance, the newly elected Obama administration is looking to appropriate about $78 billion of the still-in-the-works $825 billion economic stimulus package to clean energy, energy efficiency, and smart grid technologies. This impressive amount of funding illustrates the new administrations long-term commitment to energy security and desire to rejuvenate the clean energy industry after a very challenging 2008.

The remaining challenge is to see how effectively new policy out of the House and Senate can deploy this capital. Unfortunately, a critical element to the bill given the current economic conditions has already been tossed out of the Senate’s version.

In the House version, project developers may forgo the benefit of the Production Tax Credit (PTC/ITC) altogether and instead receive the equivalent benefit in the form of a cash grant from a program administered by the US Department of Energy. This component was aggressively lobbied by the wind and solar industry just before Obama’s inauguration.

But in the Senate version, these DOE grants were tossed out. “Appropriating $78 billion dollars to clean energy without the DOE grants is the equivalent of turning the water tap on but not unkinking the hose”, industry lobbyists argue (New Energy Finance, Week in Review, 1/27/2009). This is because the economic downturn has dried up the tax equity that developers need to complete the bottom layers of the capital structure in renewable energy projects. Without sufficient equity capital, the project financing stalls before debt capital can be raised. The option to receive the DOE grants instead of federal tax credits is a quick-thinking patch to the bill that solves for the lack of tax appetite in the market today.

Many industry fingers are crossed that the Senate will recognize the current and foreseeable tax equity shortfall and agree to an alternative incentive structure.

Vehicle-to-Grid (V2G) Technology Aims To Help Electricity Grids Use Renewable Generation

Newly elected President Obama just unveiled his 'American Reinvestment and Recovery Plan'. Part of this plan is a push for renewable energy, including a promise to double it in three years. Possibly more telling and exciting is the inclusion of a commitment for “3,000 miles of new or modernized transmission lines and 40 million 'Smart Meters' in American homes.” The reason this is important is because the current system cannot handle significant increases in renewable energy.

Our nation's industrialization and subsequent use of fossil fuels has given our society access to a switchable utility system. That is, when steam engine train conductors or coal plant operators wished to alter a supply of energy, they could simply add fuels to burn and convert to energy at any time they wished. Because of this, our electric grid is designed to simply deliver peak-load supply, i.e. the grid is built to have the necessary capacity for the maximum energy use on a hot day in the summer. If users are pulling more Watts from the system, grid operators can just switch the system to deliver more Amperes.

Renewable generation technologies including photovoltaic (PV) modules and wind turbines do not follow this model. These sources of energy cannot be controlled such as those provided by fossil fuels. These sources require the sun to shine and the wind to blow, respectively. For grid operators, increasing the use of these sources adds undesirable fluctuations of available energy. This is especially true for localized distributed generation sources such as solar panels on residential homes. Connecting these sources to the grid changes the makeup of the grid in unpredictable ways that make grid operators unable to properly evaluate system load requirements and locate system faults. Additionally, energy consumers cannot be expected to utilize renewable generation at the instant it is most abundant. Consumers are unlikely to dim their lights until the sun is bright or to complete their most power intensive computing when an impeding storm causes high wind speeds. Clearly, our electric grid will need to be updated in order to use more renewable energy.

Vehicle-to-Grid (V2G) technology is one possible way researchers hope to improve the stability and reliability of our grid when incorporating renewable generation. The idea, originating from University of Delaware Professor Willett Kempton, is that the electrification of our transportation fleet goes hand-in-hand with the inclusion of renewable energy in our grid. He and other researchers argue that the Lithium-ion batteries on fully electric and partially electric vehicles can be used to temporarily store and redistribute energy to and from the grid. This means that your future Prius may come with a two-way connection to the grid. Professor Kempton argues that because 95% of vehicles are parked at any given time, a significant number of electric vehicles could potentially end reliable concerns of variable energy supplies.

An analogy with a different technology that you are using as you read this post may help illustrate how this works. Imagine that our information superhighway was changed to where there was no storage involved. Each bit and byte had to be available at all times so it could be delivered instantaneously upon request by the consumer. This is how our energy system works today. However, due to Internet protocols and storage technology, we do not have those requirements. As you access this post you are utilizing storage components within the Internet structure, and as you read this post you are utilizing storage on your personal computer. In fact, one crucial component of a V2G system is information technology that tells the grid when and where to pull and deliver energy.

The city of Newark, Delaware, is now testing a demo V2G system. Professor Kempton envisions a situation where consumers will be compensated by energy companies to enable V2G to pull from their vehicles. The Smart Meters necessary for V2G could also be used to give energy prices that correspond to the demand. This would encourage the public to buy into V2G systems because they could opt to sell energy when the price was highest.

Of course, problems still need to be clarified and researched further including the impact of V2G on the life-cycle on the Lithium-Ion batteries currently installed on electric vehicles. However, hope is increasing for V2G as politicians accept the need to modernize our electric grid as we increase our use of renewable energy.