Renewing America’s Economy From Crisis to Opportunity

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Steve Clemmer Research Director, Clean Energy Program Union of Concerned Scientists www.ucsusa.org The Southeast & Mid-Atlantic Regional Wind Summit Raleigh, NC September 19, 2005 Renewing America’s Economy From Crisis to Opportunity

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Renewing America’s Economy From Crisis to Opportunity. Steve Clemmer Research Director, Clean Energy Program Union of Concerned Scientists www.ucsusa.org The Southeast & Mid-Atlantic Regional Wind Summit Raleigh, NC September 19, 2005. The problem: Surge of new natural gas plants…. - PowerPoint PPT Presentation

Transcript of Renewing America’s Economy From Crisis to Opportunity

Page 1: Renewing America’s Economy From Crisis to Opportunity

Steve ClemmerResearch Director, Clean Energy Program

Union of Concerned Scientistswww.ucsusa.org

The Southeast & Mid-AtlanticRegional Wind Summit

Raleigh, NCSeptember 19, 2005

Renewing America’s EconomyFrom Crisis to Opportunity

Page 2: Renewing America’s Economy From Crisis to Opportunity

The problem: Surge of new natural gas plants…

Annual Additions to Electric Generation Capacityby Fuel, 1950-2002

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Gig

awat

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Coal and Other FuelsOil and Gas

Source: EIA, Annual Energy Outlook 2004

Page 3: Renewing America’s Economy From Crisis to Opportunity

While US gas productivity declines…

28% Decline in 2003

Source: Richard Levitan: IHS Energy, Petroleum Information Corp., EOG Resources

Page 4: Renewing America’s Economy From Crisis to Opportunity

…Helping to drive gas higher & higher

Hurricane Katrina

8.8 Bcf or 17% of U.S. natural gas production capacity initially lost due to Hurricane Katrina

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$/M

MB

tu (

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Nom

inal

$/M

MB

tu (

Hen

ry H

ub)

Source: LBNL

NYMEXnatural gas futures strip

from 09/13/2005

Daily price history of 1st-nearbyNYMEX natural gas futures contract

Page 5: Renewing America’s Economy From Crisis to Opportunity

High gas prices are hurtingthe economy

EIA: 52% increase in total consumer natural gas expenditures this upcoming winter

– 71% increase in gas home heating bills for the Midwest– 31% increase in fuel oil costs for the Northeast– 17% increase in residential electricity bills for the South

Cut U.S. economic growth by 2.1% a few years ago– Federal Reserve Bank of Dallas

Forcing industrial users like the petrochemical industry to move their operations overseas.

– U.S. chemical workers lost ~78,000 jobs between 2000-2004.– Wall Street Journal, 2/17/04.

Farmers are also feeling the pain because natural gas accounts for 90 percent of fertilizer costs

Page 6: Renewing America’s Economy From Crisis to Opportunity

Increasing dependence on gas imports from overseas…

-1

0

1

2

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1990 1995 2000 2005 2010 2015 2020 2025

History Projections

Canada

LNG

Mexico

Source: EIA, Annual Energy Outlook 2004.

U.S. Natural Gas Net Imports, 1990-2025

Page 7: Renewing America’s Economy From Crisis to Opportunity

New LNG terminals and tankers will increase our vulnerability

Page 8: Renewing America’s Economy From Crisis to Opportunity

Leading to new coal plant proposals and higher carbon emissions

17 advanced IGCC plants

No plans to capture and store CO2

Economic risk of future CO2 limits

Page 9: Renewing America’s Economy From Crisis to Opportunity

Coal has other importantfuel cycle impacts

Mountaintop removal mining in West Virginia

Page 10: Renewing America’s Economy From Crisis to Opportunity

Coal mining jobs declining…

http://www.eia.doe.gov/oiaf/aeo/figure_105.htmlSource: EIA

Page 11: Renewing America’s Economy From Crisis to Opportunity

*

Coal imports a drainon many state economies

$>1 billion$601 million - $1 billion

0-$200 million

$201-$600 million

*Data not availableSource: EIA

Expenditures for imported coal for electricity

Page 12: Renewing America’s Economy From Crisis to Opportunity

Source: Archer C, Jacobsen M, 2003

Myth: The Southeast isn’t windyWind Power Class at 80m

Class 7

Class 6

“The greatest previously uncharted reservoir of wind power in the continental United States is offshore and near shore along thesoutheastern and southern coasts”

Page 13: Renewing America’s Economy From Crisis to Opportunity

North Carolina has significantwind potential

Page 14: Renewing America’s Economy From Crisis to Opportunity

Offshore Wind Technical Potential

Source: Musial W, Butterfield S., 2004

0

50,000

100,000

150,000

200,000

250,000

300,000

shallow deep shallow deep

5-20 nautical miles 20-50 nautical miles

MW

New England Mid Atlantic California Pacific NW

Total – Shallow: 97,975 MW (8.0% U.S. electricity)

Deep: 809,725 MW (66.0%)

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Offshore Wind Costs are Falling

Source: NREL/DOE Wind Program????

Page 16: Renewing America’s Economy From Crisis to Opportunity

Renewable Electricity StandardsNevada: 20% by 2015, solar 5% of annual

Hawaii: 20% by 2020

Texas: 5,880 MW (~4.2%) by 2015

California: 20% by 2017

Colorado: 10% by 2015

New Mexico: 10% by 2011

Arizona: 1.1% by 2007, 60% solar

Iowa: 2% by 1999

Minnesota: 19% by 2015*Wisconsin:2.2% by 2011

New York:24% by 2013

Maine: 30%by 2000

MA: 4%by 2009

CT: 10% by 2010

RI: 16%by 2019

Pennsylvania:8% by 2020

NJ: 6.5% by 2008

Maryland:7.5% by 2019

21 States + D.C.

*Includes requirements adopted in 1994 and 2003 for one utility, Xcel Energy.

**No specific enforcement measures, but utility regulatory intent and authority appears sufficient.

Washington D.C:11% by 2022

Montana:15% by 2015

DE: 10% by 2019

Illinois: 8%by 2013**

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Most New Wind Capacity Installedin States with Renewable Standards

223

537

207

634

1,264

50

0.1

1

470

44

66

1293.6

176

283

235

2830.2

Source: UCS & AWEA

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12

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48

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0.2 66

53

74% (3,620 MW) in states with RES

New Wind Capacity, 1998-2003 (MW)

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Renewable energyexpected from state standards*

*Projected development assuming states achieve annual RES targets. **Assumes regulatory enforcement of voluntary RES.

0

6,000

12,000

18,000

24,000

30,000

36,000

42,000

Me

ga

wa

tts

Hawaii

California

Nevada

IA & WI

New Jersey

CT & RIMAMaine

Minnesota

AZ & NM

New York

Texas

New renewable energy supported:- 32,000 MW by 2017

CO2 reductions: 77.1 Million Metric Tons

Equivalent to:- 3.7 billion more trees- 11.5 million less cars

Maryland

CO & MT

Pennsylvania

Illinois**

DC & DE

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Texas Wind Spurs New Jobsand Rural Development

Source: Virtus Energy Research Associates, 2002.Source: Virtus, 2003

Texas standard resulted in 913 MW of new wind in 2001

supported 2,500 jobs $11.7 mil./yr in tax revenues to

school districts in 10 counties

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Wind Power CreatesNew Manufacturing Jobs

90 companies in 25 states currently mfg wind turbine components

Southeast & Mid-Atlantic have potential to create 38,260 new jobs

– Assuming 50 GW of wind capacity in US– 9 states in top 20

Foreign companies are building wind turbine mfg plants in US

• Spanish company Gamesa is building new plant in PA, creating 1,000 new jobs over next 5 years & $40 mil. in new investment

• Gamesa CEO credits PA renewable standard, creating market for up to 3,600 MW of new wind

GE manufactures blades in Pensacola FL and has office in Greenville, SC

South Carolina, 4,964

North Carolina, 4,661Tennessee,

4,233

Alabama, 3,571

Georgia, 3,532

Virginia, 3,386

Florida, 3,371

New Jersey, 2,920 Pennsylvania,

7,622

REPP, 2004

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Wind dominates under national renewable electricity standard

Wind generation = 6-10% of US electricity use by 2020

Wind Capacity under a National Renewable Electricity Standard

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2005 2010 2015 2020 2025

Gig

awat

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20% by 2020 RES

10% by 2020 RES

Source: UCS, using EIA model

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Renewable Energy Creates Jobs

Nearly twice as many jobs as fossil fuels

98,960

190,180

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50,000

100,000

150,000

200,000

Renewable Energy Fossil Fuels

Jo

bs

20% by 2020 RES 10% by 2020 RES

Source: UCS, using EIA model

Page 23: Renewing America’s Economy From Crisis to Opportunity

Renewable energy conserves natural gas supplies

= 1/4 of residential gas use

Source: UCS, using EIA model

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2005 2010 2015 2020

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llio

n c

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ic f

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20% by 2020 RES

10% by 2020 RES

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Renewable energy saves electric & natural gas consumers money

Cumulative Natural Gas and Electricity Bill Savings (10 percent by 2020 RPS)*

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5

10

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2005 2010 2015 2020

Bill

ion

2002

$

Natural Gas Bill Savings

Electricity Bill Savings

*Excludes Transportation.

$5.4 billion gas savings

$22.8 billion electricity savings

Source: UCS, 2004.

Savings in all customer classes:Res.: $7.9 bilComm.: $11.3 bilInd.: $9 bil

EIA: 10% RES saves $23 billion20% RES saves $49 billion by 2020

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All regions of thecountry save money

Total cumulative savings = $38 billion by 2025

Source: UCS, 2004.

Mid-Atlantic$4.0 billionMountain:

$2.8 billion

California: $4.3 billion

Northwest: $1.7 billion

East South Central: $1.6 billion

East North Central: $6.1 billion

West North Central: $1.8 billion

West South Central: $10.5 billion

South Atlantic: $4.0 billion

New England: $1.4 billion

(10 percent by 2020 RES)Cumulative Energy Bill Savings* by U.S. Census

Region,

Page 26: Renewing America’s Economy From Crisis to Opportunity

Renewable Energy Reduces Emissions and Compliance Costs

Carbon Dioxide Emissions, U.S. Power Plants

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500

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1,500

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2,500

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3,500

2005 2010 2015 2020

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Business as Usual

20% by 2020 RES

Source: UCS, using EIA model

Reduces growth in U.S. CO2

emissions by 59%

Page 27: Renewing America’s Economy From Crisis to Opportunity

More votes for renewable fuels vs.electricity standard

Both policies require a percentage of energy from renewable sources…but they have received different levels of support at the federal level:

*Votes in favor of the Domenici amendment.

**Votes in favor of the Bingaman/Coleman amendment.

RES** - 52 VotesRFS* - 70 Votes

Two Votes One Vote No Votes

Senate votes to amend the 2005 Energy Bill:

The RFS by 2012 was passed with the final Energy Bill. The RES was rejected by the House in conference committee.

Page 28: Renewing America’s Economy From Crisis to Opportunity

Conclusions

Wind and other renewable energy sources can conserve natural gas supplies and provide a hedge against future prices increases and supply shortages

Wind power can provide insurance against future limits on greenhouse gas emissions

Wind power can provide significant energy diversity and security benefits

Wind power can strengthen the US economy and rural areas Renewable energy can meet a significant portion of US electricity

needs and save consumers money Efficiency AND renewables = best combination. UCS Clean

Energy Blueprint: up to 31% less natural gas; 27% reduction in gas price

Any policy evaluation of RE should extend beyond the power sector, to include gas sector impacts as well