Why Buy Renewables?
There's more to the story than simple branding. By Deston S. Nokes
"Our long-term commitment to renewable energy is more about contributing to the health of our local economy and less about branding," said Jeff Harvey, chief operating officer for The Holland Inc., which recently purchased 100% wind energy for its 39 Burgerville fast food restaurants in the Pacific Northwest.
"Wind helps our local cattle ranchers because the turbines can be placed on their land," he said. "Because all of our restaurants are located in the Pacific Northwest, and because we buy all local ingredients, our profitability depends on the long-term profitability of our suppliers."
Recent renewable energy purchases by Safeway, Whole Foods and regional fast-food powerhouse Burgerville are just a starting point. The Holland Inc. is in discussions with Momentum Renewable Energy Inc. to develop the first small-scale community wind project in Oregon — a 10-megawatt (MW) project on cattle ranching land in Morrow County.
"A lot of companies have no idea how to go beyond renewable energy credits and own a piece of a project," said Peter
Solomon, Momentum's vice president.
A new subsidiary of engineering firm David Evans and Associates Inc., Momentum is working to build a portfolio of 10- to 50-MW wind projects. "Most of the wind farm development in the Pacific Northwest is in much larger projects," Solomon said. "The businesses we’re working with would never be invited to the table."
Safeway recently purchased 87,000 megawatt-hours of renewable energy credits (RECs) for its facilities, but it too is looking beyond tags. "We’re looking at a couple of specific projects that would generate wind power for our stores," said Doug Condon, who assists with energy operations for Safeway. "In addition to the RECs, we’ll get the power too."
Condon said discussions are in the early stages, but that the benefits of investing in renewable energy facilities include more long-term control over energy supply, fuel diversification, and healthy financial returns over time. "We’re looking at wind so that we’re not just relying upon fossil fuel generation," he said. "If it makes good economic sense, then we’ll move forward."
Renewable energy credits -- the environmental attribute of renewable generation -- remain the primary vehicle of customer participation. Many households and businesses buy renewable energy through their utility bills or through marketers such as the Bonneville Environmental Foundation (BEF).
Patrick Nye, BEF’s director of sales, said it has introduced innovative ways of "greening" companies, events and other special requests, such as weddings and ski lifts. "Today we’re in a situation where consumers are becoming informed about RECs and a good deal of the market is finding us," Nye said.
With or without state mandates, and in an environment devoid of federal direction, the REC market has exploded in interesting new directions. "In 2000, we were excited to have sold 600 green tags," Nye said. "This past year it was 250,000. Every year we seem to double and more providers seem to enter the market.
Cities have taken it upon themselves to invest in cleaner energy. On May 1, Corvallis, Ore., became the first U.S. Environmental Protection Agency Green Power Community on the West Coast because of the amount of renewable energy purchased. The City of Portland is working to boost its clean energy investment and nearly 10% of its citizens are voluntarily buying renewable power from their utility.
Marketers and developers say fluctuating federal policy, or a lack thereof, is creating artificial price increases in building renewable generation. Wind farms continue to be built despite the continued uncertainty over whether or not the wind energy Production Tax Credit (PTC) will be renewed, The PTC, which is due to expire in 2007, has been a critical factor in financing new wind power installations.
"The PTC continues to help drive the development of wind and other more expensive renewables," explained Carrie Plemons, project manager for PPM Energy, a developer of large-scale wind projects headquartered in Portland . "Each time it has expired, there has been a lull in construction activity nationally."
Given that every fuel has a subsidy of one type or another, and the groundswell of popular demand for wind, it strikes many as bizarre that the federal government would keep developers guessing.
"One can not overstate the importance of not letting the PTC lapse," said Chris Taylor, director of project development for Horizon Wind Energy, a Houston-based wind power developer. If we all knew the credit would continue, we could spread development out on a more rational scale so it's more affordable to everyone. Now, all companies are pushing very aggressive timelines.
"Every session, we tell Congress the same thing: give us a long-term PTC to ramp up production."
While the local leadership boosting clean energy is inspiring, one can't help but consider how much more evolved our energy landscape would be with a tad more federal foresight.
Deston Nokes is a Portland, Ore.-based writer and communications consultant specializing in energy, environmental and nonprofit issues. More information about Nokes Communications is available online.
This column has been reprinted courtesy of nw current, a publication of the Northwest Energy Efficiency Alliance. It first appeared in the July 2006 issue of that publication.