Over 285 people crowded into the “Spinning Green Energy into Gold” conference this week in Mechanicsburg and heard speakers describe the potential environmental and economic benefits of Pennsylvania’s new Alternative Energy Portfolio Standards.

The standards, adopted last year, require 18 percent of the electricity sold in Pennsylvania to come from renewable or environmentally beneficial sources by 2020.

“This conference is unabashedly about some of you getting rich,” said John Hanger, President and CEO of PennFuture, organizer of the conference. “This is about turning opportunities into profits. This statute creates the demand for renewables, now the supply will follow.”

Saying Pennsylvania has done “real work, made real progress and put real things on the ground” to back up its commitment to make Pennsylvania a leader in renewable energy generation, DEP Secretary Kathleen McGinty said, “The deal is not done. We have to keep our eye on the ball and cannot be distracted by (energy) prices going up and down.”

McGinty pointed to Brazil as an example of a country that focused on a goal she said the United States should have—to be independent of foreign oil.

In the 1970’s the United States imported 25 percent of its oil needs and Brazil imported 85 percent. Now, McGinty said, the U.S. imports 60 percent of the oil we use and Brazil imports none. It is now totally independent.

PPL Chairman, President and Chief Executive Officer William F. Hecht provided the other keynote address for the conference.

“Pennsylvania is clearly at the forefront of efforts to ensure an electricity supply that not only encourages economic development and jobs, but also leads to a cleaner environment,” said Hecht.

Hecht said Pennsylvania’s deregulated electricity market was a key development in promoting a restructuring of the state’s electric industry.

“The Public Utility Commission estimates Pennsylvanians have saved more than $5 billion as the result of electricity deregulation,” said Hecht. “Pennsylvania’s next generation of power plants will be built with investors, rather than ratepayers, taking the risks.”

Key to the success of the Alternative Energy Portfolio Standards, Hecht said, was allowing electric companies to acquire renewable generation supply from a variety of sources through a renewable energy credit system, just like the “cap and trade” system has worked to reduce sulfur dioxide and nitrogen dioxide emissions at the lowest possible cost.

The Public Utility Commission is now going through the process of developing regulations to implement the Alternative Energy Portfolio Standards Act and dealing with issues like setting up the credit system, providing for interconnections and net-metering.

The credit system, easy interconnections and net-metering requirements are critical to the success of the Alternative Energy Portfolio Standards Act because they allow companies or almost anyone who meets the requirements to become a renewable electricity generator that can be used by a utility to meet the Portfolio Standards, according to Todd Foley, BP Solar.

The Department of Environmental Protection is charged with developing guidelines for what constitutes qualifying renewable energy generation or generation with net environmental benefits. DEP said it will have a revised version of these guidelines out within a few weeks for public comment. (Watch the Energy and Technology Development webpage for more information.)

It is estimated that from 3,600 to 4,000 megawatts of renewable electric generating capacity will need to be constructed in Pennsylvania to meet the requirements of the Energy Portfolio Standard by 2020. (PaED 11/21/04)

Two types of energy sources are specified in the law.

Eight percent must be Tier I energy sources: solar photovoltaic energy, wind power, low-impact hydropower, geothermal energy, biologically derived methane gas, fuel cells, biomass energy and coal mine methane. There is a specific requirement that

photovoltaic make up 0.5 percent of the portfolio.

Ten percent of electric portfolios must be from Tier II energy sources: waste coal, distributed generation systems, demand-side management, large-scale hydropower, municipal solid waste, generation of electricity by utilizing by-products of the pulping process and wood manufacturing process, including bark, wood chips, sawdust and lignin in spent pulping liquors, and integrated combined coal gasification technology.

Based on projects already built and announced, the Tier II standard has already been largely met, so most of the attention in the future will be focused on the development of Tier I energy sources.

Speakers at the conference estimated about $10 billion in new investment will have to be made to meet the Alternative Energy Portfolio Standards requirements.

A number of speakers from DEP and other groups noted the Commonwealth was working hard to maximize the benefits of that $10 billion investment by attracting renewable energy equipment manufacturers and engineering services to Pennsylvania, like the Spanish windmill maker Gamesa. (PaED 9/24/04)

“America desperately needs an energy policy that addresses the need for new power plants, boosts the reliability of the nation’s transmission system, and provides a market-based framework for the development of environmentally-friendly power supplies,” said Hecht concluding his remarks.

Hecht said he hopes Pennsylvania’s actions will lead the way.

NewsClip: McGinty Talks About Opportunities and Challenges in Energy

5/27/2005