Nuclear Power - Corporate Welfare

Ahh, the things that amaze me........ from The Washington Post's Wonkblog comes the following account of corporate welfare. Yet people worry that subsidies to homeowners for roof top solar is a giveaway......

Why is the Obama administration using taxpayer money to back a nuclear plant that’s already being built?

 By Steven Mufson February 21, 2014



If nuclear power is such a good idea, why does it need financial help from U.S. taxpayers?
This week, Energy Secretary Ernest Moniz announced that the Obama administration would extend a $6.5 billion federal loan guarantee to cover part of the cost of building two new reactors at Southern Co.’s Alvin W. Vogtle site. Thursday he went to Waynesboro, Ga. to finalize the deal. Another $1.8 billion in guarantees could come soon.
The impact: Southern’s Georgia Power subsidiary, which owns 46 percent of the project, will save $225 million to $250 million because the loan guarantee will reduce interest costs. Instead of borrowing from a commercial bank, Southern can now borrow at rock bottom rates from the government’s Federal Financing Bank. And you, gentle reader, the taxpayer, take on all the risk if the project goes bust. Does the name Solyndra ring a bell?
If that’s not enough, Southern is also getting help from the federal production tax credit and other federal incentives that will ultimately save the company an additional $2 billion or so, Southern’s chief executive Tom Fanning said on a Jan. 29 conference call about earnings.
“This is a deeply subsidized project that will cost the taxpayers a lot,” said Ken Glozer, a former Office of Management and Budget senior official who is president of a consulting firm OMB Professionals.
Southern has said it didn’t need the loan guarantee to finish the project. But the guarantee doesn’t hurt.
The company also says that it will pass along the savings in financing costs to Georgia electricity ratepayers, but those ratepayers are already footing a large chunk of the reactors’ construction costs. Usually ratepayers only pay such costs once a generating station is in operation, not while it’s being built. In December, the Georgia Public Service Commission approved a three-year plan to spread out $465 million in rate increases, according to Wells Fargo Securities analysts. Southern said customer rates once the units are in service would rise between 6 and 8 percent, less than the 12 percent increase originally projected for capital costs.
This is all part of a bigger picture. Less than a decade ago, the nuclear industry was anticipating a renaissance, fueled by hopes that climate concerns about fossil fuels would trump safety worries and would help rally support beyond the industry’s usual allies. Congress tried to do its part by approving in the 2005 Energy Policy Act a $17.5 billion program of nuclear loan guarantees.
But even with that help, building a nuclear plant is extremely expensive, and for a single utility, even a large one, to undertake such a project means betting the farm, as former Duke Energy chief executive Jim Rogers once put it. Moreover, costs rose since 2005. While Congress envisioned helping half a dozen reactors or more, the program is now expected to cover only three or four.
Then, if those challenges weren’t enough, the industry was hit by the recession, competition from low natural gas prices, and the Japanese earthquake and tsunami that destroyed three reactors at the Fukushima plant and fanned safety concerns worldwide.
It wasn’t just a perfect storm. It was three perfect storms.
Moniz said the Vogtle project was “not only a major milestone in the Administration’s commitment to jumpstart the U.S. nuclear power industry, it is also an important part of our all-of-the-above approach to American energy as we move toward a low-carbon energy future.”
Many experts say it’s not the sort of milestone Congress and the industry once had in mind. The nuclear industry is nearly halfway through a more than $30 billion construction program, with the two new reactors being built in Georgia, and three others in South Carolina and Tennessee. Like the ones in Georgia, a pair under construction in South Carolina can rely on a state law allowing costs to be passed along to customers while construction is in progress. The fifth is being built by the Tennessee Valley Authority.
But while five reactors are under construction, four others have closed down or announced plans to close down. Two cited competition from natural gas plants and two others faced large repair and upgrading costs. The renaissance seems to be stillborn.
Proponents of nuclear power are still trying, though, and they say that the loan guarantee and production tax credits aren’t any different from what wind and solar projects get. Level playing field and all that. Besides, Southern says, Solyndra was a new company with a new technology whereas Southern has been around for roughly a century and nuclear power plants have been in operation for decades.
“Loan guarantees have been in place for years and are a successful vehicle used by the federal government to ensure investment in critical infrastructure projects,” Marvin Fertel, president of the Nuclear Energy Institute, said.
The Vogtle loan guarantee had been conditionally approved by the Obama administration four years ago, and Southern is already well into construction — although it’s running about 21 months behind schedule according to the anti-nuclear group Public Citizen. (You can see photos of the project’s progress here.) The reactors are Westinghouse AP1000 models, a new generation reactor.
Wells Fargo last month lowered its earnings outlook for Southern, citing “construction risk” from the nuclear reactors as well as a modern coal plant under construction — and over budget — in Mississippi. Now that risk belongs to all of us.
“No doubt, this is a bad deal for the American people who have been put on the hook for a project that is both embroiled in delays and cost overruns and to a company that has publicly stated that it does not need federal loans to complete the project,” Allison Fisher, Outreach Director, Public Citizen’s Energy Program said. “This is a classic case of throwing good money after bad – an unnecessary and unconscionable decision to make with taxpayer money.”

Bonus fact: The reactor site in Georgia is named after the late Alvin Ward Vogtle Jr., former chairman of Southern. Vogtle was an Army Air Force pilot in World War II, and flew more than 30 missions before crash-landing in North Africa and being taken to a prisoner of war camp in Germany. On his fifth attempt, he escaped by scaling a 14-foot barbed-wire border fence and crossing to Switzerland. The character Steve McQueen played in the 1963 film “The Great Escape” was based on recollections of several veterans, including Vogtle.

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/21/why-is-the-obama-administration-using-taxpayer-money-to-back-a-nuclear-plant-thats-already-being-built/?hpid=z4 

Nuclear Power Subsidies: The Gift that Keeps on Taking

By Sustainable Plant Staff April 26, 2011 03:29:17 pm

 

 

Since its inception more than 50 years ago, the U.S. nuclear power industry has been propped up by a generous array of government subsidies that have supported its development and operations. Despite that support, the industry is still not economically viable, according to a report by the Union of Concerned Scientists (UCS). The report, “Nuclear Power: Still Not Viable Without Subsidies,” found that more than 30 subsidies have supported every stage of the nuclear fuel cycle, from uranium mining to long-term waste storage. Added together, these subsidies often have exceeded the average market price of the power produced.

“Despite the fact that the nuclear power industry has benefited from decades of government support, the technology is still uneconomic, so the industry is demanding a lot more from taxpayers to build new reactors,” said Ellen Vancko, manager of UCS’s Nuclear Energy and Climate Change Project. “The cost of this technology continues to escalate despite billions in subsidies to both existing and proposed plants. Instead of committing billions in new subsidies that would further distort the market in favor of nuclear power, we should focus on more cost-effective energy sources that will reduce carbon emissions more quickly and with less risk.”

Pending and proposed subsidies for new nuclear reactors would shift even more costs and risks from the industry to taxpayers and ratepayers. The Obama administration’s budget proposal would provide an additional $36 billion in federal loan guarantees to underwrite new reactor construction, bringing the total amount of nuclear loan guarantees to $58.5 billion, leaving taxpayers on the hook if the industry defaults on these loans.

The key subsidies for nuclear power do not involve cash payments, the report found. They shift the risks of constructing and operating plants – including cost overruns, loan defaults, accidents and waste management – from plant owners and investors to taxpayers and ratepayers. These hidden subsidies distort market choices that would otherwise favor less risky investments.

The most significant forms of subsidies to nuclear power have four principal objectives:

• Reduce the cost of capital, labor and land through loan guarantees and tax incentives.
• Mask the true costs of producing nuclear energy through subsidies to uranium mining and water usage.
• Shift security and accident risks to the public via the 1957 Price-Anderson Act and other mechanisms.
• Shift long-term operating risks such as radioactive waste storage to the public.

The report evaluates legacy subsidies that helped build the industry, ongoing support to existing reactors, and subsidies available for new projects. According to the report, legacy subsidies exceeded 7 cents per kWh, well above the average wholesale price of power from 1960 to 2008. In effect, the subsidies were more valuable than the power the subsidized plants produced.

“Without these generous subsidies, the nuclear industry would have faced a very different market reality,” said Doug Koplow, the author of the report and principal at the Cambridge, Massachusetts-based consulting firm, Earth Track. “Many of the 104 reactors currently operating would never have been built, and the utilities that built reactors would have been forced to charge ratepayers even higher rates.”

The industry continues to benefit from subsidies that offset its operating costs, which include uranium mining, cooling water, accident liability insurance, waste disposal, and plant decommissioning. The exact value of these subsidies, however, is difficult to ascertain. According to the report, ongoing subsidies range from 13 percent to 98 percent of the value of the power produced. Even at the low end however, subsidies account for a significant portion of nuclear power’s operating cost advantage over competing energy sources.

Subsidies to new reactors could significantly exceed those enjoyed by the existing fleet. In addition to benefiting from ongoing subsidies to existing plants, the Energy Policy Act of 2005 introduced a new suite of subsidies for nuclear power. The report estimates that these subsidies could be worth between 4.2 and 11.4 cents per kWh, or as much as 200 percent of the projected price of electricity when these plants are built.

“All low-carbon energy technologies would be able to compete on their merits if the government established an energy-neutral playing field and put a price on carbon,” said Vancko. “Investing in nuclear power carries the unique risks of radioactive waste storage, accidents, and nuclear weapons proliferation that must be fully reflected in the technology’s costs, which is not the case today.”
Based on these findings, the report recommends that the federal government reduce subsidies to the nuclear power industry. If subsidies are necessary, the government should award them competitively to the most cost-effective low-carbon energy technologies. The report also recommends that the government modernize liability systems for nuclear power and establish regulations and fee structures for uranium mining, waste repository financing, and water usage that fully reflect the technology’s cost and risks.

“After 50 years,” said Koplow, “the nuclear industry needs to move away from government patronage to a model based on real economic viability. The considerable operational and construction risks of this power source need to be reflected in the delivered price of power rather than dumped onto taxpayers.”
 

 http://www.sustainableplant.com/2011/04/nuclear-power-subsidies-the-gift-that-keeps-on-taking/

 

 

Grid Parity - Tipping Point For Change

   While grid parity is where things are headed there are still many obstacles - starting with dollars and dollars of utility money to fight it. Start in Arizona to see the aggressive tactics used by utilities against grid parity. Grid parity will allow on-site power generation by independent and very small producers (a household) to be part of the discussion of the future of energy production in the United States, instead of  beening dismissed as insignificant. 
   Quality improvements and cost declines in batteries, as the article reports, are a major tipping point to make on-site surplus power generation practical for a growing number of people and businesses. While not mentioned in the article, there are recent significant performance improvements in small scale wind power production systems designed for residential rooftop mounting. With further price drops, a system that combines rooftop solar and wind electric production with battery backup becomes a practical goal for an urban dweller - not just off-the-grid back-to-the-hills people. Adding a solar hot water component further reduces off-site power needs.
    As more individual households become energy producers, the two-way potential of the grid begins to be realized. Up until now, the grid is primarily seen as a one-way street to the consumer. Deregulation has divided distribution from production but a lot of the same folks are still around and they would be happy if it stayed a one-way street. The continuing rise in on-site power production pushes the envelope though. I see two basic realities - first, less distributed power means less revenue and taxes and second, if a micro power producer wants to sell their power, they must be connected to the grid. Connection will cost money. Clearly a realignment of the present utilities vs. solar people paradigm is needed - the grid needs re-imagining with an emphasis on who is to receive the benefit - is it a democratic thing because everyone basically needs it or is it prone to corporate bottle-necks or choke points? 
   The inherent benefit of household power production is people keeping their money - the elimination of the massive wealth transfer from individuals to the corporations that control electricity production and distribution. People do not give up money streams without resistance. Corporations will go to great lengths to protect what they consider to be theirs. Grid parity is change - for forward looking people, it is a key element in a tipping point that can have significant effects on corporate and government revenues. Just as there are currently winners and losers, there are winners and losers to come. Hopefully these issues will soon be more commonly part of the discussion for everyone.
      

Grid parity: Why electric utilities should struggle to sleep at night

By Matt McFarland, Updated: March 25 at 9:02 am

What’s good news for those concerned with climate change, and bad news for electric utilities? That’s grid parity, which is sometimes called socket parity. It exists when an alternative energy source generates electricity at a cost matching the price of power from the electric grid.

As grid parity becomes increasingly common, renewable energy could transform our world and slow the effects of climate change. Advances in solar panels and battery storage will make it more realistic for consumers to dump their electric utility, and power their homes through solar energy that is stored in batteries for cloudy days.

“I think the grid gets disrupted,” said NRG Energy chief executive David Crane. “The only question is do you want to be the disruptor or do you want to get disrupted.”

Our world is increasingly cordless, and power appears likely to follow. While we’re not there yet, the momentum behind distributed energy is building.

The Rocky Mountain Institute has said that tens of millions of commercial and residential customers will have grid parity by 2030 and perhaps 2020. Hawaii is already there as a result of high energy costs associated with being an island.

Other estimates are more aggressive. A 2013 Deutsche Bank report said that 10 states are currently at grid parity: Arizona, California, Connecticut, Hawaii, Nevada, New Hampshire, New Jersey, New Mexico, New York and Vermont. According to a 2013 note by Citi Research, Germany, Spain, Portugal and Australia have reached grid parity.

This shift has benefited from a dramatic drop in the price of solar panels, which dropped 97.2 percent from 1975 to 2012, according to GTM Research.

For electric utilities to truly be challenged, batteries are just as important as solar panels. With batteries excess energy could be stored. Tesla announced in February it’s building a gigafactory, which it envisions producing more lithium ion batteries by 2020 than were produced worldwide in a 2013. The scale of the operation should drive down prices further (Tesla estimates over 30 percent). Some of these batteries will be used by SolarCity, a leader in installing residential solar panels.

SolarCity has a pilot program in California, in which batteries store solar power. It has complained that electric utilities are slowing its rollout. NRG Energy hopes to have a similar product available by the end of 2014.

If utilities are dragging their feet on SolarCity’s initiative, it’s easy to understand why. As solar energy gets cheaper, traditional electric utilities are doing the opposite. The cost of maintaining the electric grid has gotten more expensive, but reliability hasn’t improved. The investments of electrical utilities appear to be poorly spent.

If customers leave electric utilities, it starts a downward spiral. Fewer customers will mean higher rates, which encourages remaining customers to jump ship for a solar-battery system.

Electric utilities appear poorly equipped for how technology will transform the energy industry. For years there hasn’t been an incentive to innovate, in part due to a lack of competition. Plus, making their product cheaper means less revenue, so why innovate?
Meanwhile, energy upstarts are led by forward thinkers with disruptive track records and eyes on society’s big problems, such as climate change and our dependence on fossil fuels for energy. SolarCity chairman Elon Musk co-founded PayPal and leads Tesla, which could transform the auto industry.
NRG’s Crane speaks of having his company mentioned in the same breath as Amazon, Apple, Facebook and Google. It’s radical to imagine anyone feeling passionate about their source of power, but environmental concerns may make it common soon. New devices such as Nest’s popular thermostat are making consumers rethink what to expect from the companies and gadgets that manage their energy.
Crane highlighted the climate change concerns in a recent letter to shareholders: “The day is coming when our children sit us down in our dotage, look us straight in the eye, with an acute sense of betrayal and disappointment in theirs, and whisper to us, ‘You knew… and you didn’t do anything about it. Why?’”

© The Washington Post Company

http://www.washingtonpost.com/blogs/innovations/wp/2014/03/25/grid-parity-why-electric-utilities-should-struggle-to-sleep-at-night/

The Battle To Control Solar Power

     A number of years ago when I told friends with solar power interests that I wanted my system to have batteries, some would question my sanity - you live in the city, connecting to the grid is easy, they would say. I tried to tell them that they were missing something - even though I live in the urban core, being capable of being powered completely from off the grid is a worthy goal with numerous advantages. The most basic is that allows one to be a true producer - relying on the grid at night should be seen as a back-up, not a first line strategy.
    In this article from Bloomberg, we are shown California electric utilities that are rejecting battery supported solar electric systems from grid inter-connections on technical reasons when more likely their objection is rooted in a non-ability to envision a different business model that includes micro users/producers. That smart meter is not so smart.

Battery-Stored Solar Power Sparks Backlash From Utilities

By Ehren Goossens and Mark Chediak - Oct 8, 2013

California’s three biggest utilities are sparring with their own customers about systems that store energy from the sun, opening another front in the battle that’s redefining the mission of electricity generators.
Edison International (EIX), PG&E Corp. and Sempra Energy (SRE) said they’re putting up hurdles to some battery backups wired to solar panels because they can’t be certain the power flowing back to the grid from the units is actually clean energy.
The dispute threatens the state’s $2 billion rooftop solar industry and indicates the depth of utilities’ concerns about consumers producing their own power. People with rooftop panels are already buying less electricity, and adding batteries takes them closer to the day they won’t need to buy from the local grid at all, said Ben Peters, a government affairs analyst at Mainstream Energy Corp., which installs solar systems.
“The utilities clearly see rooftop solar as the next threat,” Peters said from his office in Sunnyvale, California. “They’re trying to limit the growth.”
California is the largest of the 43 states encouraging renewables by requiring utilities to buy electricity from consumer solar installations, typically at the same price that customers pay for power from the grid. The policy, known as net metering, offers a way for households to reduce their bills. It underpinned a 78 percent surge in the state’s residential installations in the second quarter from a year earlier, according to the Solar Energy Industries Association.

Battery Costs

Solar systems with batteries attached have gained a foothold in the market as costs fall, allowing customers more flexibility for using their own power at night or when local supplies fail. The systems average about $12,000 to $16,000, adding about 25 percent to the cost of rooftop power plants, according to Outback Power Inc., an Arlington, Washington-based provider of battery-backed solar systems.
Matthew Sperling, a Santa Barbara, California, resident, installed eight panels and eight batteries at his home in April.
“We wanted to have an alternative in case of a blackout to keep the refrigerator running,” he said in an interview. Southern California Edison rejected his application to link the system to the grid even though city inspectors said “it was one of the nicest they’d ever seen,” he said.
“We’ve installed a $30,000 system and we can’t use it,” Sperling said.
Utilities say the storage systems open the possibility of fraud. The issue is whether all the electricity being sold through the net metering program is generated only by renewable sources, as required. Consumers in theory can fill the batteries with power from the grid and then send it back designated as renewable energy. With the solar-battery systems, there’s no way to determine the source of the energy. Solar suppliers say that’s not happening.

Storage Rules

Power-market regulations and the industry’s ability to monitor flows from solar systems haven’t kept pace with the technology, said Gary Stern, director of regulatory policy at Southern California Edison, a unit of Edison International.
“Our rules are not really caught up to effectively include issues with energy storage,” Stern said in a phone interview from Rosemead, California.
The company doesn’t want to “discourage solar” and is working with regulators to come up with “reasonable policies” for battery-storage systems, said Vanessa McGrady, a Southern California Edison spokeswoman.
State regulators are aware of the problem and are working on guidance to offer both solar installers and utilities, according to Terrie Prosper, a spokeswoman for the California Public Utilities Commission in San Francisco.

‘Some Complaints’

“There have been some complaints from developers in Southern California Edison’s territory that Edison has inconsistently applied the benefits of net energy metering to energy-storage projects,” Prosper said in an e-mail. The commission is working with all three utilities “to provide formal direction on these issues in the coming months.”
The utilities said they would approve systems that have panels and batteries if they had two meters to verify that only solar energy is sold to the grid. Such a configuration would boost installation costs by at least $1,300, according to Neal Reardon, the state utility regulator’s interim supervisor of customer generation.
The dispute is expanding as California promotes wider use of batteries. Regulators in June proposed that the top three utilities procure 1.3 gigawatts of storage capacity by 2020. The state has set a goal of obtaining 33 percent of its power from renewables by 2020, the nation’s strongest requirement. With more electricity coming from intermittent sources such as wind and sunlight, storage systems will be an important tool to manage the grid.

Falling Prices

Demand for the systems may grow as prices decline. Battery costs are forecast to fall 57 percent to $807 a kilowatt-hour in 2020 from $1,893 for a kilowatt-hour of storage capacity now, according to data compiled by Bloomberg. The global market for solar systems combined with energy storage will rise to $2.8 billion in 2018 from less than $200 million this year, according to Boston-based Lux Research Inc.
About 391 megawatts of solar panels were fitted at customer sites across the state last year, according the California Solar Initiative. The price to install residential projects has declined 15 percent to $3.71 a watt in the second quarter from $4.35 a year earlier according to the Washington-based trade group SEIA.
Battery systems are the latest innovation that’s unraveling the traditional monopoly utilities have enjoyed in supplying consumers with electricity. Two decades ago, federal regulators opened the system to independent power producers, eating away at the utility’s control of generation. The battery systems will put more customers out of reach.

Rejected Applications

“What we are seeing now as a fairly rare event may be more common by the end of the decade,” said Southern California Edison’s Stern.
Mainstream began hearing in May that Southern California Edison was rejecting some of its clients from the net metering program. As many as 60 projects with panels and batteries have been turned down by California utilities, the company estimated.
PG&E Corp. (PCG), the owner of California’s biggest utility, has also rejected standard net metering applications from customers with both panels and batteries, and referred them to another program that requires an interconnection fee.
“The key is that the full retail net energy metering credits and subsidies are only available to renewable facilities,” Lynsey Paulo, a PG&E spokeswoman, said in an e-mail.
San Diego Gas & Electric, a unit of Sempra Energy, said it hasn’t received any such applications, and it would deny them if it did. Sempra slipped less than 0.1 percent to $85.43 at the close in New York. PG&E climbed 1.5 percent and Edison gained 1.1 percent.

‘State of Flux’

“Technically, a customer who now has a combined system that includes both rooftop solar panels and battery storage, the battery storage may not qualify for net energy metering under current rules,” said Stephanie Donovan, a spokeswoman for San Diego Gas & Electric. “The rules are in a state of flux.”
Mainstream’s Peters said Southern California Edison is now rejecting systems that are identical to ones it had approved in the past. The developer had been installing two to three solar-storage projects a week in Southern California at the start of this year. That’s dropped to zero in recent weeks, and some orders have been canceled.
“Net metering is the lifeblood of solar in America,” Peters said. “That’s why this seemingly inconsequential issue is getting so much attention.”
Solar panel owners aren’t trying to “game the system,” said Adam Browning, executive director of the San Francisco-based lobbying group Vote Solar Initiative. “The next step is that people with solar and batteries will find a way to make it work without utilities.”
To contact the reporters on this story: Ehren Goossens in New York at egoossens1@bloomberg.net; Mark Chediak in San Francisco at mchediak@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

http://www.bloomberg.com/news/2013-10-07/battery-stored-solar-power-sparks-backlash-from-utilities.html

Aiming 4 Zero

Feature: Absolute Zero

Despite the downturn, home builders take lead role in energy and water efficiency.

Source: BIG BUILDER Magazine
Publication date: 2011-07-01

By Steve Doyle and Cary Lowe

Photo: Courtesy Toll Brothers

SOLAR STRATEGY: Toll Brothers is making solar panels available on homes in several of its communities, including Vista del Verde in Yorba Linda, Calif. The solar panels don't add extra dollars to the sales price since they are owned by a third party and leased to the homeowners.

In most endeavors, striving for a score of zero is a fool's errand.

In green home building, however, it is the gold standard. The trick is to keep it from becoming fool's gold.

Despite the housing downturn and its drag on home builders, real progress has been made toward achieving the goal of building homes that consume no net energy. Unquestionably, some of this progress has been forced by the government. Still, the home building industry, battered as it has been, is taking a leading role in the movement toward reducing consumption of energy and water resources. It is realistic to expect that, over the next few years, energy use in new homes will approach zero, and water use will drop to a level one could call insignificant.

Using California as a case study, consider how far the industry has come. Homes built in the last few years use 25 percent less energy, and generate 25 percent less greenhouse gas emissions, than those built just 20 years ago. This results from relatively simple improvements in building materials, construction techniques, insulation, and appliances.

Similarly, recently constructed homes use one-third less water indoors than those built in the mid-1970s, simply due to installation of more efficient fixtures. These are production homes, using standard features. The numbers are even more impressive for homes which incorporate custom, high-efficiency features, and photovoltaic or other onsite power generation facilities.

New homes in California account for a growth of only about 1 percent of the total housing stock in a given year during strong economic times—and only a third of that during the current recession. About 60 percent of homes statewide predate any meaningful energy conservation requirements, and more than 80 percent predate water-conservation standards. Achieving significant improvements in energy and water efficiency in the residential stock would require retrofitting large numbers of those older homes. That will happen over time, driven by the utility cost savings associated with such efficiencies.

Meanwhile, new housing stock begins to demonstrate the efficiencies that can be achieved and, over time, R&D in new-home building will gradually make them more affordable.

Much of this improvement in home efficiency has been driven by changes in the California Building Standards Code, contained in Title 24 of the California Code of Regulations. What began as a set of standards and requirements related to safety and structural integrity has evolved to address environmental issues of concern to the state and its residents. This has focused most heavily on achieving greater energy efficiency.

The need for space heating and cooling has been dramatically reduced by more efficient air-conditioning units, improved wall and attic insulation, heat-resistant windows, better sealing of ductwork, and passive energy design systems. Energy use related to domestic water has been reduced through more efficient water heaters, recirculating hot water systems, and insulated pipes. Electrical demand has been further reduced by installation of more efficient lighting fixtures and domestic appliances. (On the other hand, increasing consumer desire for the newest and best in electronic gadgetry continually adds to the per-person demand for electrical power.)

In recent years, as water supply has become an increasingly critical consideration in connection with new development, Title 24 has focused on water conservation as well, setting standards for more efficient plumbing fixtures and water-using appliances.

Photo: Brookfield Homes

Energy conservation:-Tight ducts (less than 6% leakage) -Radiant barrier roof sheathing-Tankless water heaters-R-30 or 38 ceiling insulation-Low-E windowsRenewable energy: -Photovoltaic solar panels (optional)Water conservation: -WaterSense bath faucets-Low-flow showerheads-Tankless water heaters-Insulated hot water loop lines-Water-sensitive landscaping-Dual-flush toilets (optional)

Photo: Brookfield Homes

How LowCan You Go? Houses in Brookfield Homes' Rockrose community extend 35 percent above California's energy-efficiency standards. The eco-savvy homes focus on energy efficiency, water conservation, indoor air quality, as well as other environmentally friendly features. As part of Brookfield's focus on water conservation and environmentally friendly features, its Rockrose community showcases native and drought-tolerant plants. The builder also engages prospective home buyers with its sales office displays that tell its eco-savvy story.

This trend toward increasing conservation and efficiency requirements was accelerated by enactment of A.B. 32, the California Global Warming Solutions Act, in 2006. With about 22 percent of greenhouse gas emissions in California attributable to residential and commercial buildings, clamping down further on energy consumption is vital to meeting the emissions reduction standards of A.B. 32.

That has been a prime driver behind the California Green Building Standards Code, now incorporated into Title 24. As part of a broad array of environmentally friendly building requirements, the new code includes requirements for accurate sizing of heating and cooling systems, sealing and insulation of ductwork, and sealing of openings between conditioned and unconditioned space. It also includes changes for plumbing fixtures that will result in a 20 percent reduction in potable water use, as well as weather or moisture-based outdoor irrigation controllers.

In addition to satisfying environmental regulatory requirements, these kinds of features will produce substantial cost savings for homeowners. The average California household consumes about 5,900 kilowatt hours per year. Based on typical utility rates, reducing their electrical consumption by one-third would result in an annual savings of about $375. Because electrical rates are tiered, with higher per-unit costs for higher levels of consumption, a household using 10,000 kilowatt hours per year would save nearly $1,000 annually.

Similarly, a typical new single-family home consumes about 59,000 gallons of indoor potable water and about 115,000 gallons for outdoor irrigation annually. Reducing the indoor use by 20 percent pursuant to the new code, combined with an achievable reduction of 40 percent in outdoor irrigation, would save about $300 annually. Again, because of tiered water rates, the savings would be much greater for homes with more fixtures and more landscaping.

Some home builders are taking the quest for efficiency significantly further. Brookfield Homes' Rockrose community in Carlsbad, Calif., is incorporating standard features that reduce energy consumption by 35 percent below Title 24 requirements. These features include radiant barrier roofs, more thermal-resistant windows, quality installation of insulation, insulated and tightly sealed ductwork, tankless water heaters, and highefficiency furnaces. Photovoltaic solar panels are available as an option.

Water consumption is reduced further by the use of dual-flush toilets, looped and insulated hot water lines, high-efficiency irrigation controllers, and drought-resistant landscaping.

Other builders are trying different approaches.

Toll Brothers is introducing a variety of energy-saving options but is focusing particularly on renewable energy generation. The company is making photovoltaic solar panels available on homes in several projects, including in the Vista del Verde community in Yorba Linda, Calif., at no increase in sales price, by having the panels owned by a third party and leased to homeowners, who then receive lower-cost electricity. Toll similarly is making available geothermal heating and cooling systems in projects such as the Hills at Southpoint in Durham, N.C. KB Home is installing solar panels as a standard feature in several new projects. Pacific Housing is taking this a step further in a Sacramento project, installing a battery storage system as a backup to rooftop solar panels.

Surprisingly, these kinds of features are not significantly impacting housing affordability. Taking into consideration all rebates and tax credits available, construction costs in the Brookfield project are only increased by $1.50 per square foot on a net basis, allowing it to remain one of the most affordable new housing developments in San Diego County. This project also benefits from the moderate, coastal Southern California climate; such energy efficiency improvements would cost considerably more in the warmer inland climate zones.

In Phoenix and other markets, Meritage Homes has been able to include an array of energy-saving features, including solar energy, while keeping sales prices under $230,000 for a 3,000-squarefoot home, by incorporating these elements into their standard design rather than adding them as options. Moreover, as an optional upgrade, they are offering sufficient additional solar panels to eliminate electrical service costs.

As these kinds of offerings become more commonplace in the home building industry, the question will be how far such efficiency can be taken, particularly by production builders. The goal of many developers, consumers, and environmentalists is to be able to produce homes that are net zero with regard to resource impacts, i.e., homes with on-site features that reduce consumption to zero, through some combination of efficiency and renewable energy generation.

To achieve such net zero results with regard to energy will require taking significant additional steps in most cases. These might include thicker exterior walls, heat-resistant roof tiles, higherefficiency heating and cooling equipment, conditioned attic space, passive heating and ventilation features, fewer and better insulated windows, strategic orientation of the structure, and planting of deciduous trees. In all likelihood, it also will require installation of on-site energy generation facilities, particularly photovoltaic solar, geothermal, solar water heating, and/or wind turbines. This is all readily doable now, but at a cost of $40,000 to 50,000 for a typical new detached home.

Photo: Courtesy KB Homes KB Home is another builder installing solar panels as a standard feature in several of its new projects, including Newbury at the Enclave in Eastvale, Calif.

At the same time, an energy savings greater than that available from a full range of green building features can be obtained by simply locating homes in walkable communities or transit-oriented locations, as energy use and greenhouse gas emissions associated with vehicular transportation typically exceed those of the house itself. Such locational considerations will be increasing in significance in California, in particular, as the state implements not only the mandates of A.B. 32 but also other statutory requirements for reduction of vehiclerelated environmental impacts.

Bringing water consumption down to net zero is more challenging. Significant reductions can be achieved by using the lowest-flow fixtures indoors, planting the most drought-resistant landscaping, and using both collected stormwater and domestic gray water for irrigation. However, in the absence of onsite water treatment capability, net zero will not be achievable.

Individual zero-energy custom homes are popping up, especially in areas with temperate climates, and a handful of zero-energy subdivisions are being built. These homes typically also receive LEED certifications and come with a certain cachet of environmental consciousness.

It is reasonable to ask, however, whether achieving zero-energy status and near-zero water status is a particularly worthwhile goal.

Noted new urbanist architect Andres Duany has taken the lead in criticizing LEED and other similar programs for requiring large expenditures to meet extreme standards, when nearly the same level of environmental gain can be achieved at far less cost. Achieving that last increment comes with a highly disproportionate price tag. Just as a given level of energy reduction can be achieved through retrofitting older homes at one-eighth the cost of achieving the same reduction in already more-efficient new homes, the cost of taking a standard new home to a zero net energy level could instead pay for signifi- cant energy reductions in several new homes. Furthermore, new urban, infill, and transitoriented developments already substantially reduce their energy use footprint simply by virtue of their locations, and therefore should be viewed as effectively below net zero compared with new homes in locations that generate high vehicle miles traveled.

Zero net energy is a lofty goal, and its application to even a small percentage of new homes serves as a proving ground for new technologies and new design methods, some of which can be applied to production homes. It is not, however, a feasible or practical approach for all new housing. Nor should it be.

We can accomplish far more in the way of reducing our energy and water use by applying more cost-effective methods on a larger scale, to both new housing and the existing housing stock. This will take political courage, however, because new homes do not have a political constituency, while existing homes certainly do.

Until conservation and efficiency become real goals for the general public throughout the country, new housing alone will bear the financial burden, to the detriment of both housing affordability and environmental goals.

BB Steve Doyle is president of Brookfield Homes, San Diego. Cary Lowe is a San Diego land use lawyer and planning consultant.

http://www.bigbuilderonline.com/Industry-news.asp?articleID=1603853&cid=NWBD110712002

Home Wind Power

New, interesting wind turbines - from SF Chronicle:

Taking tiny steps toward capturing the power of wind

San Francisco startup offers small turbines as one way to offset the cost of electricity

Kelly Zito, Chronicle Staff Writer

Sunday, June 24, 2007

On many afternoons, the wind saws so strongly through Chris Beaudoin's neighborhood above the Castro district that he can lean directly into it and not fall over. So, after 20 years of watching the trees whip and bundling up in thick sweaters to walk the dogs, he's buying a residential wind energy system he hopes will cut his power bill by 30 percent.

The heart of this system will be two graceful turbines that look like oversize Ikea lamps. They are the brainchild of Todd Pelman, a marine and energy engineer by training and a resident of another of San Francisco's notoriously windy neighborhoods. His new Bernal Heights business, Blue Green Pacific, seeks to capitalize not only on San Francisco's wind, but on its other plentiful natural resources -- open-minded residents like Beaudoin and the desire to be one of the greenest cities around.

Whether Pelman's "micro-wind" project is successful may also depend on something else San Francisco has in abundance -- red tape and high costs.

"When you're doing something like this, you continually doubt," Pelman said. "But I know a lot of successes in our marketplace have been just that -- disruptive technology or trying to create demand for something that doesn't quite exist."

Pelman, a 34-year-old with thick, black sideburns who looks more like a lead guitarist than an engineer, spends a lot of time in the garage. Not ripping power chords, but monitoring the performance of the first and only working Blue Green Pacific wind turbine. Installed on his roof, the prototype's name is Maggie, after the youngest child from "The Simpsons." The production model, which Pelman is working on now, will be Lisa, the next-oldest Simpson.

The road to the turbine-topped yellow house on Roscoe Street began in Germany, where Pelman worked as an engineer on consumer products. Knowing he and his wife would be moving to the blustery neighborhood above the Interstate 280 gulch, he started shopping for a wind turbine in a part of the world known for its use of renewable resources. But, after finding few options, he decided to build his own.

Rather than the typical, horizontal-axis, windmill-style turbines most people think of -- the Altamont Pass wind farm is a prime example -- Pelman's steel, aluminum and plastic machine has a vertical axis and no sharp blades.

It looks as though someone has sliced a hollow cylinder from top to bottom and twisted the two pieces around a pole, reminiscent of the double-helix of a DNA strand.

The 7-foot-tall turbine and generator on the roof capture the power and send it to an inverter that converts direct current to alternating current. From there, it feeds into the electrical panel, where it helps offset power supplied by PG&E.

If Pelman can reach his efficiency targets, a one-turbine system could contribute about 10 percent of a typical home's annual energy needs, or about 300 to 600 kilowatt hours per year. Adding more turbines -- Beaudoin is scheduled to have two -- increases the energy output.

It also increases the price, particularly for startup technology that requires expensive manufacturing in a high-cost place of business. Pelman estimates he will have sunk $200,000 of his own money into the project by the time he starts production, he hopes within the next year. The target price for a one-turbine system is $5,000 (not including state and federal rebates that could knock about $1,500 off the price).

Beaudoin will pay about $18,000 for his system. However, he will receive technological updates down the line, and his unit will provide Pelman and San Francisco with valuable data about the viability and scale of the system. Armed with that information, Pelman anticipates that he can raise money from Silicon Valley, where alternative-energy technology is the latest thing.

"A solar unit to take care of all my electrical needs would be about $75,000," said Beaudoin, a flight attendant whose work brings him to countries where wind and solar energy sources are the norm. "I figured why not experiment with wind and see where it goes? I think there's more flexibility there, and although it doesn't generate as much, you don't know where it will go."

"We have to start stepping up to the plate on this micro-scale," he added. "This resource that we use is finite."

For the average household, a $5,000 system would pay for itself in eight to 11 years, depending on the price of conventional energy, Pelman said.

San Francisco officials are publicizing their push to harness as much wind and sun -- and even tidal -- power as possible in a bid to reduce carbon emissions and become known as the most eco-friendly city in the United States.

Last week, Mayor Gavin Newsom announced the third city-supported study of tidal power in two years and the Board of Supervisors approved measures requiring that 51 percent of San Francisco's power come from renewable sources by 2017. Next year, the city's Public Utilities Commission plans to break ground on a 12-story headquarters using wind and solar power to satisfy nearly all of its energy needs.

But while solar has been used in urban and suburban environments for decades, wind power is less proven.

Renewable energy designer Reinhold Ziegler, who is working on the PUC building and who helped develop the Altamont Pass project, argues that in cities, wind power may be better suited for commercial buildings, which reach higher into dependable wind streams and have more surface area for turbines.

"There's so much turbulence and obstruction in San Francisco, it's unclear how these (residential turbines) will work," Ziegler said.

Clearly, wind turbines won't work in every neighborhood. In fact, Pelman received a call from a would-be customer in the Mission District, but there wasn't enough wind to make it feasible.

"There's not going to be hundreds of megawatts of small wind coming out of San Francisco," said Johanna Partin, renewable energy program manager for San Francisco's Department of Environment. "But if it does become affordable for building owners and allow them to offset their entire electricity usage, it's a good thing."

San Francisco's topography, which helps create the gusts and microclimates Pelman and others so covet, also creates its well-known views. That means clearing planning and building hurdles and overcoming any neighborhood opposition.

Pelman worked closely for more than a year with his neighbors, his city supervisor and planning officials to win approval for his turbine in Bernal Heights, which has among the strictest rules on height requirements.

Although Pelman points to the "visual noise" of satellite dishes, chimneys, vents and antennas, it is clear that until specific codes governing turbines are written, wind turbines and their impacts will have to be dealt with on a case-by-case basis.

Pelman and the Audubon Society are also monitoring his turbine to see whether it kills any birds (there have been none so far). Pelman said the vertical axis and opaque appearance of his turbine are safer for birds than traditional turbines.

Building a business, building a market, building community support are just some of the challenges Pelman faces.

He acknowledges the rise and fall of the renewable- energy revolution after the 1970s oil crisis. But his sense as a businessman, a power engineer and a consumer tell him that this time, it's different.

"There's certainly the possibility that it's a trendy thing, especially if energy prices stay low and go dormant," he said.

"But the reality is it's undeniable that the way we conventionally make and use electricity and our relationship with energy are not sustainable. In the end we have no choice," he said.

"I know our efforts have an impact in opening this market up. The extent of that impact will have to be determined, but we have to try."

E-mail Kelly Zito at kzito@sfchronicle.com.

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/06/24/BUG3OQK6MJ1.DTL

This article appeared on page C - 1 of the San Francisco Chronicle

Todd Pelman shows how the turbine on his roof works. His startup, Blue Green Pacific, makes the units for individual homes. Chronicle photo by Kurt Rogers

Photo: KURT ROGERS / THE CHRONICLE

Generating energy from your rooftop. Chronicle graphic