Catching the waves for Oregon’s energy future

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Politicians, fishermen and advocates work to make wave energy a reality

Making waves: ocean energy begins to ripple into renewables

Oregon’s state house in Salem, Ore. (Gloria Oh, Medill)

SALEM, Ore. – More than 360 miles of coastline and strong ocean currents make Oregon the perfect state to charge up Department of Energy estimates that waves could potentially provide up to 15 percent of U.S energy by 2030.

Construction begins on the country’s first commercial wave energy facility later this year as part of Oregon’s commitment to renewable resources.

After much debate, the state legislature mandated in 2007 that the three biggest generators of electricity in Oregon produce 5 percent of their energy from renewable resources by 2011, 15 percent by 2012, 20 percent by 2020 and 25 percent by 2025.

But wave energy, despite its high potential, is too new to be part of the state’s renewable portfolio. So the buoy generators to be installed at Reedsport could give the first private prognosis about matching potential and reality for this new form of energy.

The array under development by Ocean Power Technologies includes 10 buoys with a grid-connected potential capacity of 50 megawatts, according to OPT. The buoys will be installed off the coast of Reedsport. A typical coal-fired plant may have a capacity of about 300 megawatts.

Even if the buoys are a success as energy generators, coastal states face a heated debate about how much ocean territory to give to them since they compete for space with the fishing industry.

“Our legislature saw the writing on the wall and decided that it was better that they craft it than the citizens,” said Rebecca O’Neill, senior policy analyst at the state Department of Energy.

Both government officials and utility lobbyists agreed on the course. They preferred working together to make sure utility concerns were addressed before new laws took hold.

Jason Heuser, the legislative liaison for Eugene Water and Electric board, the third largest utility in Oregon, called the discussion a “robust” process, involving heated debate among all the people affected by this legislation, from environmental groups to energy utilities.

“I think the lawyers ran out of ink,” Heuser joked.

The law stepped through quite a few versions – and visions – before all parties signed on.

Scott Bolton, vice president of government affairs at Pacificorp, another of the big three utilities in the state, said there were a lot of questions to be answered in the process.

Bolton said that one concern was, “If this is going to become a law, if this is going to become a mandate, how do we balance interests? How do we do so in a way that’s customer-friendly?”

For Eugene Water and Electric, the problem was that it was already generating much of its electricity without fossil fuels. According to its figures from 2010, the company generates 70 percent of its electricity through hydropower. If hydropower wasn’t included as a renewable energy resource, it could seem tantamount to categorizing it as a fossil fuel. Luckily, the legislation included some exemptions for hydropower.

“What we said is basically, anything that’s not old and high impact counts,” O’Neill said. Meaning, hydroelectric plants built 50 years ago, before strong environmental laws had been created, did not count because they weren’t as energy-efficient as modern plants. However, if a utility made efforts at older plants to lower their impact or to increase their efficiency, the utility could still count the plants’ power towards its renewable portfolio goals.

In fact, because of how much of Eugene Water and Electric’s power was generated through hydropower, the company plans to meet more of the standards through energy efficiency rather than new forms of energy.

“We have incentives that we offer to do weatherization and new energy efficient lighting projects,” Heuser said.

For Pacificorp, not as big a hydropower player, the concerns were different.

“We wanted to make sure that the statute reflected that renewables would be evaluated on a cost effective basis for rate recovery,” Bolton said. The company wanted to ensure that any new renewable energy facilities would be cost effective to use and maintain.

Legislators worked hard revising the renewable energy portfolio standard so that all stakeholders were satisfied. (Gloria Oh, Medill)

The company also pushed for renewable energy credit banking, or REC banking, as it’s more commonly known. REC banking ensures that renewable energy created before the statute went into place, such as Pacificorp’s wind energy sources, could be counted towards the percentage that the utility is trying to reach. Bolton said it was important that the policy allows recognition of procuring “a lot of renewables early, kind of like your minutes on your cell plan that you can roll over.”

Both utilities wanted to make sure that they weren’t being forced into buying energy that they didn’t need just to make up a percentage.

“It’s an important consumer protection for us,” Bolton said. “Otherwise we would be in the market buying for compliance according to exactly what the law required, which makes it a seller’s market.”

According to Bolton, Pacificorp is currently at about 17 percent renewable. SOME 40 percent of that is purchased outside of its portfolio of energy generation, from other, smaller generators, and 60 percent is generated from within its portfolio.

“We’re unique in some senses. All of our utilities are subject to the renewable portfolio standards, so we didn’t exempt anybody, but we did say that if you serve more than 3 percent of our state load, then you’re required to do the lion’s share of the work,” O’Neill said.

Twenty-nine states and the District of Columbia have some version of renewable portfolio standards. California holds the highest standard, calling for 33 percent renewable energy by 2020, while Colorado enacted 30 percent as its renewable portfolio goal for 2020.

“The general trend is that states who have economic or near-economic renewables have already enacted RPSs,” said Larry Mansuetti with the Office of Electricity Delivery and Energy Reliability at the U.S. Department of Energy. Other states with less obviously economical possibilities are less likely to enact that kind of legislation.

One problem that some states have run into is that natural gas prices are unusually low right now. A warm winter meant less gas was used, leaving a large stockpile over the summer and heading into the fall, and sustained high output of natural gas has also contributed to the price drop. When one form of energy is so cheap, it can be difficult to convince consumers to invest in pricier forms of energy.

It’s one of the reasons wave energy is not yet part of anyone’s portfolio. Because the technology is still in its early stages, it’s unclear how much the energy will cost, what the best method to generate it will be or, at worst, whether it’s going to be possible to make it practical technology to use.

“It certainly could be part of our energy future. We’re waiting to see if and when it becomes commercially viable. Definitely there’s lots of research and development going on in Oregon, and we’re keeping tabs on that,” Heuser said.

Bolton thought the developments of new kinds of renewable energy were going to be necessary to help utilities continue reaching their goals.

“There needs to be a renewable base load, always-on type of resource. We don’t have that yet. Can geothermal take that place or biomass or wave energy?”

None of these technologies are quite ready for that big a role yet, and as Bolton pointed out, “It’s hard to pick a horse.” He called wave energy “interesting” and said Pacificorp had supplied a grant to Oregon State University to help them with research in wave technology. They’re also very aware of all the developers that have been attracted to the area because of Oregon’s high potential for wave energy.

“The issue with wave is that it doesn’t have that maturity yet. They’re still testing to see what works and how to optimize. Until you can really buy something off the shelf and compare its cost versus the next option and make a prudent decision, you’re not going to do it.”

Bolton said Pacificorp was well-positioned to take advantage of wave energy, but didn’t expect to see it get much use “this side of 2020.”

Still, with consumer interest and legislation like this, it provides extra motivation to see what becomes of wave energy. Utilities will have to find renewable sources of energy somewhere because of this legislation. It might be a challenge, but for legislation wherein, as Heuser put it, stakeholders “negotiated the heck out of it,” the state of Oregon is well on its way to ensuring a renewable future for its residents.

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